3637 Green Road Co., Ltd. v. Specialized Component Sales Co., Inc.

Facts

P filed a complaint against D seeking $7,368.75 in damages plus statutory interest and costs as a result of its alleged breach of a month-to-month commercial lease. Attached to the complaint was a statement of account showing that monthly rent of $1,473.75 had been invoiced from January 1, 2011, through March 1, 2013, but had not been paid from November 2012 through March 2013, totaling $7,368.75. D admitted that there was a month-to-month lease for the premises but denied that it owed P any amount under the lease. D claimed a setoff based on P's retention of D's security deposit and rent P received from subsequent tenants of the premises. On April 17, 1981, P and D entered into a lease for warehouse and office space. The original lease was for a term of three years, beginning on June 1, 1981, and terminating on May 31, 1984, at a monthly rent of $1,600, with an option to renew the lease for another three-year term at a monthly rent of $1,882. The original lease contained a written waiver provision and a no-oral-modification provision: No waiver of any condition or legal right or remedy shall be implied by the failure of Lessor to declare a forfeiture, or for any other reason, and no waiver of any condition or covenant shall be valid unless it is in writing signed by Lessor. * * * Paragraph 42 states: This Lease contains the entire agreement between the parties, and any other agreement hereafter made shall be ineffective to change, modify, or discharge it in whole or in part unless in writing and signed by the party against whom enforcement of the change, modification or discharge is sought. * * * The parties executed six written extensions to the original lease. The parties agree that from the expiration of the sixth lease extension until October 31, 2012, D was a month-to-month tenant; however, the parties dispute the amount of the monthly rent that was owed during the tenancy and when the lease terminated. P argues that it was entitled to the monthly rent of $1,824 for the entirety of D's month-to-month tenancy. During that tenancy, P agreed to reduce the rent on the premises to $1,473.75 but no written agreement was executed confirming the rent reduction. D paid the reduced monthly rent of $1,473.75 from 'roughly 2004' until October 2012. There were no protests from P. In September 2012, P told D it needed to vacate suite 2B by October 31 or pay an additional $1,800 a month in rent, i.e., $1,800 a month in addition to the rent it was currently paying for that space and suite 3A because 3637 Green Road had located a new tenant for suite 2B. D began taking steps to vacate the premises. P did not provide any written notice to D of its termination of the month-to-month lease. P argued that it was entitled to recover (1) the difference between the $1,824 monthly rent specified in the fifth lease extension and the $1,473.75 month rent paid by Specialized Component Sales from January 1, 2011, through October 17, 2012, and (2) $1,824 in monthly rent for November 2012 through March 2013. P requested that it be awarded $15,000 in damages. D asserted that it had paid all the rent due through October 2012 and that because its security deposit exceeded the $1,473.75 monthly rent, the security deposit covered the November 2012 rent. The trial court issued a judgment awarding P $1,196.50 in damages plus interest and costs on its complaint. It held that the parties had orally agreed to reduce the monthly rent due under the lease to $1,473.75, that P terminated the month-to-month tenancy as of October 31, 2012, and that D vacated the premises on December 3, 2012, when it turned in the keys for the premises. D owed rent for the months of November and December 2012 (totaling $2,947.50) which, when offset by its $1,751 security deposit, resulted in a net damages award of $1,196.50. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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