Star Development Corporation v. Urgent Care Associates, Inc.
2014 Mo. App. LEXIS 488
Mo. Ct. App.2014Background
- SDC owns Liberty Landing; Urgent Care leased space and signed a guaranty by Ochs.
- Lease required monthly rent plus CAM, insurance, and taxes with annual true-up for CAM.
- Lease extended in 2007 to 2010; after expiration Urgent Care became a month-to-month tenant under same terms.
- Urgent Care vacated in April 2011; SDC learned of vacancy in March 2011 and began marketing space after notification.
- SDC filed damages and attorney’s fees claims in Oct 2011; court awarded rent, CAM, taxes, late charges, and fees; Urgent Care and Ochs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether late charges were penalties or liquidated damages | Urgent Care argues the 15% late charge is a penalty | SDC asserts the clause is compensatory for admin costs | Late charges upheld as compensatory liquidated damages |
| Whether Urgent Care owed thirty-day written notice to terminate month-to-month tenancy | Urgent Care argues notice was permissive | SDC contends statute requires written notice | Notice required; April 7, 2011 notice effective May 7, 2011; owed April and May 2011 rents and charges |
| Whether SDC waived its right to collect late charges | SDC’s conduct showed waiver by accepting late payments | No clear waiver; non-waiver clause and forbearance do not imply waiver | No waiver; non-waiver clause and conduct did not demonstrate waiver |
| Attorney’s fees on appeal; remand for reasonableness | SDC seeks appellate fees under lease provision | Fees should be reconsidered if late-fees reversed | Appeal- fees sustained; remanded for reasonableness of amount |
Key Cases Cited
- Paragon Group, Inc. v. Ampleman, 878 S.W.2d 878 (Mo. App. 1994) (liquidated damages must be a reasonable forecast of harm and not a penalty)
- Luna v. Smith, 861 S.W.2d 775 (Mo. App. 1993) (liquidated damages require compensation for anticipated harm, not punitive intent)
- Diffley v. Royal Papers, Inc., 948 S.W.2d 244 (Mo. App. 1997) (unenforceable penalties when labeled as late penalties and harm is easily measurable)
- Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976) (standard to affirm when substantial evidence supports verdict)
- Brittany Sobery Family Ltd. P'ship v. Coinmach Corp., 392 S.W.3d 46 (Mo. App. 2013) (unambiguous contract language reflects intent; parol evidence limited)