Sengul v. CMS Franklin, Inc.
265 P.3d 320
Alaska2011Background
- In April 2006 Sengul leased a still-under-construction storefront to CMS Franklin, Inc. (CMS) for five years, with completion of Landlord Work and delivery in vacant, finished condition by June 1, 2006.
- The lease provided a monthly rent of $10,000 plus $500 monthly sales tax and contained a rent abatement for delays in delivering the premises in finished condition.
- CMS occupied starting April 2006; occupancy occurred before a certificate of occupancy was issued, which happened on June 8, 2006, enabling CMS to open a store around mid-June 2006.
- Sengul locked CMS out on September 4, 2006, posted payment-demand signs, and CMS moved its inventory and vacated by September 6, 2006, after which the space remained vacant until May 2007.
- Sengul sued CMS for unpaid rent; CMS counterclaimed for rent abatement, breach of contract, and several tort and covenant claims.
- The superior court found CMS entitled to rent abatement but waived due to CMS’s delay in claiming it; the court also found constructive eviction due to the lockout and awarded CMS damages for improvements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the lockout constituted constructive eviction | CMS | Sengul | Yes; lockout was a substantial interference constituting constructive eviction |
| Whether CMS waived its right to rent abatement | CMS | Sengul | CMS did not waive abatement entitlement; remand to recalculate damages |
| How damages should be calculated after abatement | CMS | Sengul | Use monthly rent values; offset unpaid rent against improvements on remand |
| Whether Manus can be personally liable | CMS | Sengul | Issues abandoned; not addressed on the merits |
Key Cases Cited
- King v. Petroleum Servs. Corp., 536 P.2d 116 (Alaska 1975) (lockout cases differ when tenant hasn’t abandoned premises)
- Carr-Gottstein Foods Co., 182 P.3d 1131 (Alaska 2008) (non-waiver provisions don’t always foreclose waiver by conduct)
- Dillingham Commercial Co. v. Spears, 641 P.2d 1 (Alaska 1982) (long acquiescence may indicate implied waiver despite non-waiver clause)
- Milne v. Anderson, 576 P.2d 109 (Alaska 1978) (implied waiver may be shown by direct conduct or estoppel; high factual standard)
- Anchorage Chrysler Ctr., Inc. v. DaimlerChrysler Corp., 129 P.3d 905 (Alaska 2006) (contract interpretation and waiver principles applied in lease disputes)