Gardiner v. Anderson
436 P.3d 237
Utah Ct. App.2018Background
- Landlord (Gardiner) leased a warehouse to Tenant (Anderson) for a two-year term; Lease prohibited subletting without Landlord’s prior written consent and included an enforcement provision awarding the prevailing party attorney fees.
- Tenant immediately entered an oral sublease (and later a written sublease for part of the term) to a Subtenant and collected substantially higher rent than Tenant owed Landlord.
- Landlord discovered the unauthorized sublease in 2015, served a notice to cure (demanding $30,000), then terminated the Lease when Tenant did not cure; Tenant vacated promptly as provided by the Lease’s default provisions.
- Landlord sued for unlawful detainer, breach of lease, and unjust enrichment seeking excess-rent damages (about $53,100) and treble damages; Tenant moved for dismissal or summary judgment and filed a verified memorandum describing the facts.
- The district court granted summary judgment for Tenant, holding the Lease and Utah unlawful-detainer statute did not provide for recovery of excess rents from a nonconforming sublease; denied Tenant’s fee request; awarded Landlord fees for motions to strike (without written findings).
- On appeal, the Court of Appeals affirmed summary judgment for Tenant, reversed the district court’s conclusion that the Lease did not trigger Utah’s reciprocal-fee statute, remanded to determine whether Tenant should recover fees as the prevailing party, and remanded to require findings supporting the fee award to Landlord for the motions to strike; it also awarded Tenant fees on appeal.
Issues
| Issue | Plaintiff's Argument (Landlord) | Defendant's Argument (Tenant) | Held |
|---|---|---|---|
| Whether Tenant’s verified memorandum complied with Utah R. Civ. P. 56 and could be considered on cross-motions for summary judgment | Verified memorandum failed Rule 56 because it did not cite particular parts of the record and impermissibly verified conclusions; court should have denied Tenant’s motion on its face | Even if imperfect, the verified memorandum satisfied the rule’s purpose and the court could consider it when both sides filed cross-motions | Court did not err in considering the verified memorandum; summary judgment affirmed on other legal grounds |
| Whether Landlord can recover excess rents collected by Tenant from an unauthorized sublease as damages for breach of lease | Landlord argued he would have consented to the sublease if Tenant paid him the excess rent; seeks damages equal to the difference between sublease and lease rent | Lease contains no provision awarding excess sublease rents; Landlord had an adequate contractual remedy (notice to cure, termination), and there is no legal basis to award the excess rent absent contract language | Landlord’s claim for excess rents fails as a matter of law; summary judgment for Tenant affirmed |
| Whether the Lease’s enforcement clause precludes awarding attorney fees to the non-defaulting prevailing party (i.e., whether reciprocal-fee statute applies) | Landlord argued the Lease’s "defaulting party" language means only non-defaulting party may obtain fees and Tenant (as defaulting party) should not recover fees even if prevailing | Lease expressly provides that the "defaulting party shall pay ... reasonable attorney’s fees, which the prevailing party may incur"; Utah’s reciprocal-fee statute applies where a contract allows at least one party to recover fees | Court of Appeals reversed district court: reciprocal attorney-fee statute is triggered; remanded to determine whether Tenant as prevailing party should recover fees |
| Whether the district court properly awarded attorney fees to Landlord for motions to strike without findings | Tenant argued award lacked statutory or contractual basis and court failed to make findings supporting the fee award | Landlord obtained fee order below and contends award was proper | Court remanded for the district court to revisit and provide findings of fact and conclusions of law supporting any award of fees for the motions to strike |
Key Cases Cited
- Alexander v. Brown, 646 P.2d 692 (Utah 1982) (rule that damages aim to place nonbreaching party in position as if contract performed)
- Kramer v. Pixton, 268 P. 1029 (Utah 1928) (general principle that for every wrong there is a remedy)
- Toll v. Tannenbaum, 982 F. Supp. 2d 541 (E.D. Pa. 2013) (refusal to grant equitable relief for expected contract benefit absent an agreement)
- Long Building v. Buffalo Anthracite Coal Co., 74 N.Y.S.2d 281 (N.Y. Spec. Term 1947) (equitable accounting for subtenant receipts denied where adequate legal remedy exists)