Anyconnect US, LLC v. Williamsburg Place, LLC
2021 CA 000044
| Ky. Ct. App. | Nov 4, 2021Background
- AnyConnect US, LLC leased Suite 220 at 9400 Williamsburg Plaza for a three-year term (Nov. 1, 2016–Oct. 31, 2019); rent rose from $4,354/mo (year 1) to $5,340/mo (years 2–3).
- Tenant stopped paying rent beginning November 1, 2017 (first month of increased rent).
- Landlord sent a December 8, 2017 written notice referencing the lease, demanding payment, and stating the lease "will be terminated" and Tenant must vacate by December 18 if rent was not paid; Tenant vacated by that date.
- Landlord sued April 2018 for unpaid rent through the lease term ($128,160); trial court granted summary judgment to Landlord for the full amount, prejudgment interest, costs, and attorney’s fees.
- On appeal, the Court of Appeals affirmed Tenant’s liability for unpaid rent and prejudgment interest, but reversed the award as to the amount of damages (mitigation unresolved) and reversed the attorney’s fees award; case remanded.
Issues
| Issue | Landlord's Argument | Tenant's Argument | Held |
|---|---|---|---|
| Effect of Landlord’s Dec. 8, 2017 notice — did it "terminate" the lease and extinguish future rent? | Notice merely invoked lease remedies, gave cure opportunity, and perfected forfeiture/right of reentry under lease. | Notice constituted termination of the lease and thus extinguished Tenant’s future rent obligations. | Notice complied with lease terms; Tenant forfeited the lease by failing to cure and vacating; forfeiture did not extinguish Landlord’s right to damages for future rent. |
| Whether Landlord may recover future rent after retaking possession (i.e., are remedies exclusive)? | Lease permits retaking possession "without prejudicing" right to damages; can seek future rent as damages. | Tenant argued landlord’s repossession limited remedies and precluded future rent. | Remedies are not exclusive; Landlord may pursue rent accruing under the lease as damages. |
| Duty to mitigate and whether summary judgment on damages was appropriate | Landlord had listed property with leasing agent and mitigated. | Tenant argued Landlord failed to mitigate and that termination precluded mitigation rights (e.g., Tenant’s assignment/sublet right). | Landlord owes duty to mitigate after reentry; genuine issues of material fact remain about adequacy of mitigation, so summary judgment on damages was improper. |
| Entitlement to attorney’s fees under lease paragraph 23(d) | "Costs, damages and expenses" includes attorney’s fees. | Attorney’s fees must be expressly provided by statute or contract; paragraph 23(d) does not expressly mention attorneys’ fees. | Under the American Rule, contractual recovery of fees must be explicit; paragraph 23(d) is not sufficiently express—attorney’s fees were not recoverable. |
| Prejudgment interest on awarded rent | Rent claim is liquidated under lease terms; prejudgment interest is mandatory from each payment due date. | Tenant argued interest should be limited to rent due through vacatur and that award timing/amount was discretionary. | Rent was a liquidated debt; prejudgment interest is awarded as a matter of right and runs from each missed rent due date. |
Key Cases Cited
- Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476 (Ky. 1991) (summary judgment standard and appellate review)
- Frear v. P.T.A. Indus., Inc., 103 S.W.3d 99 (Ky. 2003) (contract interpretation governed by parties’ intent; ambiguity rules)
- Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381 (Ky. 2002) (contract construed as whole; give effect to all terms)
- Berry v. Riess, 121 S.W.2d 942 (Ky. 1938) (forfeiture/reentry provision interpreted as voluntary surrender without excusing damages)
- Jordon v. Nickell, 253 S.W.2d 237 (Ky. 1952) (lessor’s duty to mitigate after reentry)
- Superior Steel, Inc. v. Ascent at Roebling’s Bridge, LLC, 540 S.W.3d 770 (Ky. 2017) (contractual language must expressly provide for attorney fees)
- Deal v. First & Farmers Nat’l Bank, Inc., 518 S.W.3d 159 (Ky. App. 2017) (statutory language silent on fees does not authorize attorney’s fees)
- 3D Enters. Contracting Corp. v. Louisville & Jefferson Cnty. Metro. Sewer Dist., 174 S.W.3d 440 (Ky. 2005) (prejudgment interest awarded as matter of right on liquidated claims)