JEFFREY KREGER аnd LEA ANN KREGER, Plaintiffs and Respondents, v. DANIEL FRANCIS and CHRISTINA L. FRANCIS, Defendants and Appellants.
No. 94-388.
Supreme Court of Montana
Decided June 15, 1995.
As Amended on Denial of Rehearing July 27, 1995.
52 St. Rep. 493 | 271 Mont. 444 | 898 P.2d 672
Submitted on Briefs March 23, 1995.
For Respondents: Joan E. Cook, Miller & Cook, Great Falls.
JUSTICE WEBER delivered the Opinion of the Court.
This is an appeal from a decision of the Eighth Judicial District Court, Cascade County granting judgment in favor of Jeffrey Kreger and Lea Ann Kreger for reasonable attorney‘s fees and costs incurred. We reverse.
We restate the issue on appeal:
Did the District Court err when it ruled Jeffrey and Lea Ann Kreger did not waive their rights to terminate a lease for Daniel and Christina Francis’ breach of the terms of the lease when Jeffrey and Lea Ann Kreger accepted full payment of rent?
On August 1, 1993, appellants, Daniel Francis and Christina Francis (Renters) entered into a written rental agreement with respondents, Jеffrey Kreger and Lea Ann Kreger (Landlords). The lease was for a term of six months and included the following provision:
9. We agree to obtain renters insurance for all property leased to us before moving into premises.
Renters applied for and obtained a policy of renters insurance on their belongings at the rented address. The policy of renters insurance was subsequently cancelled by the insurance company, effective October 1, 1993, because the Renters had a bad credit rating. Renters were unable to obtain further coverage.
Landlords accepted $600.00 on or about the first day of each month the Renters remained in possession—October, November and December of 1993. Renters vacated the premises at the end of December 1993, after the first trial in Justice Court.
The Justice Court ruled in fаvor of the Landlords and awarded costs and attorney‘s fees in the amount of $452.50 to the Landlords. Renters appealed to District Court and a de novo bench trial was conducted on June 14, 1994. On June 28, 1994, the District Court entered judgment for Landlords and against Renters concluding acceptance of the monthly rent from Renters by Landlords did not waive Landlords’ right to terminate the Rental Agreement for the Renters’ failure to оbtain renters insurance. The District Court awarded costs and attorney‘s fees to Landlords.
From the District Court‘s June 28, 1994 decision, Renters appeal. Did the District Court err when it ruled Jeffrey and Lea Ann Kreger did not waive their rights to terminate a lease for Daniel and Christina Francis’ breach of the terms of the lease when Jeffrey and Lea Ann Kreger accepted full payment of rent?
The District Court found that the rent was pаid current as of the date the Renters vacated the premises. The court concluded the following as a matter of law:
3. Acceptance of the monthly rent from Tenants [Renters] by the Landlord did not wаive their right to terminate the Rental Agreement for the Tenants’ [Renters‘] failure to obtain Renters Insurance. Acceptance of the payment of rent is a waiver of a claimed breach of a Rental Agreement, only if that claimed breach is the nonpayment of rent.
Section 70-24-423, MCA .
The court‘s interpretation of
Waiver of landlord‘s right to terminate for breach. Acceptance by the landlord of full payment of rent due with knowledge of a tenant‘s default or acceptance by the landlord of a tenant‘s
performance that varies from the terms of the rental agreement constitutes a waiver of the landlord‘s right to terminate the rental agreement for that breach unless оtherwise agreed after the breach has occurred. The acceptance of partial payment of rent due does not constitute a waiver of any right.
Renters point out Landlords aсcepted full, current monthly rental payments from Renters for three months after the expiration of the renters insurance policy. Renters allege there was never an arrearage of rent аnd there was never any understanding other than that the payments were made for the current month‘s rent. Renters argue the plain language of
Renters conclude the District Court erred in awarding costs and fees to Landlords because Landlords had no grounds to bring an eviction suit against Rеnters. Renters request this Court reverse the District Court‘s judgment and award costs and fees to Renters.
Landlords argue they did not waive any breach by accepting the rent due and the District Court came to the correct conclusion of law. At no time did they agree the provision of renters insurance was waived. Landlords contend all of their conduct indicates they did not accept the varied performance of the Renters and that they intended to treat the varied performance as a default.
Landlords argue, according to Renters’ analysis, all landlords must refuse payment of rent or else they fоrgo remedies for a breach. Additionally, Landlords contend that a proffered payment of rent must be accepted by the landlord under the landlord‘s duty to mitigate damages.
Our standard of review of the District Court‘s conclusion of law is to determine if the District Court‘s interpretation of the law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-475, 803 P.2d 601, 603-604.
We have held, “where the language of the statute is plain, unambiguous, direct, and certain, the statute spеaks for itself.” State ex rel. Palmer v. Hart (1982), 201 Mont. 526, 530, 655 P.2d 965, 967. The language of
Landlords accepted the rent on the first day of the month to whiсh it would be applied. We hold that, for each month where Landlords accepted full rent, Landlords waived their right to terminate the lease for failure to obtain renters insurance.
The District Court‘s interpretation of
Renters have requested сosts and attorney fees be awarded to them. Attorney fees are authorized by statute or by contract. Joseph Russell Realty Co. v. Kenneally (1980), 185 Mont. 496, 505, 605 P.2d 1107, 1112.
(1) In an action on a rental agreement or arising under this chapter, reasonable attorney fees, together with costs and necessary disbursements, may be awarded to the prevailing party nonwithstanding an agreement to the contrary.
(2) As used in this section, “prevailing party” means the party in whosе favor final judgment is rendered. (Emphasis added.)
The subject Lease/Rental Agreement does not authorize an award of attorney fees; and, under the circumstances of this case, we conclude an award of attorney fees is not appropriate.
The judgment awarding attorney‘s fees and costs to Landlords is reversed.
JUSTICES GRAY, NELSON and LEAPHART concur.
JUSTICE TRIEWEILER dissenting.
I dissent from the majority opinion. I would affirm the District Court‘s conclusion that:
Accеptance of the payment of rent is a waiver of a claimed breach of a Rental Agreement, only if that claimed breach is the nonpayment of rent.
Section 70-24-423, MCA .
To conclude, as the majority has, that acceptance of rent waives some breach other than nonpayment of rent, will lead to absurd results, is contrary to other provisions in the Landlord and Tenant Act, and is obviously contrary to the intention of the Legislature.
The majority opinion refers to
In construing
When
Fоr example, where rental property is repeatedly damaged by a tenant, contrary to a contractual provision that it be maintained in good condition, a landlord would have to forego future rental payments during the potentially lengthy time it may take to evict the tenant for property damage. Not only does the landlord in that situation sustain property damage, but also the incomе which may be necessary to satisfy the landlord‘s own financial obligations with regard to the property. Surely, this was never the Legislature‘s intention. Obviously this result is contrary to the statutory requirement that a landlord mitigatе his or her damage. For these reasons, I would affirm the District Court‘s conclusion that acceptance by the landlord of payment of rent waives a tenant‘s default only when that default is based on failure to pay rent.
CHIEF JUSTICE TURNAGE and JUSTICE HUNT join in the foregoing dissenting opinion.