Berg v. Wiley

264 N.W.2d 145 (Minn. 1978)

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Nature of the Case

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Facts

Tenant leased commercial property from Wiley (D), so he could operate his pool hall. The lease provided for a five-year term and specified that the tenant agreed to bear all costs of repairs and remodeling and to make no changes to the building structure without prior written authorization from D and to operate the establishment in a lawful and prudent manner. D maintained the right to retake the premises if tenant failed to meet the conditions of the lease. Berg (P) took assignment of the lease from the prior lessee on May 1, 1971, and she opened the Family Affair Restaurant on the premises. P incorporated in 1973 and assigned her interest in the lease to Family Affair Restaurant, Inc. The assignment of the lease was made with the consent of D, and the prior tenant was, in fact, P’s brother who operated the pool hall at the location. D objected to P's continual remodeling of the restaurant without procuring written permission and her consequent operation of the restaurant in a state of disrepair with alleged health code violations. D demanded in writing that P finish remodeling and make the needed repairs to the leased premises in two weeks in order to avoid health code violations. D gave P two weeks to make these repairs, or he would retake the premises, and P claimed to have closed the premises to comply. The Minnesota Department of Health also produced an order on the same day for P to comply with the health code. In fact, P continued to operate the restaurant without complying with the health code or with D’s demands. After the two-week deadline set by D and the Department of Health had passed, D entered the property while P was not present and attempted to change the locks. When D was discovered, P asked that he leave and P dismissed her employees and put a sign on the window saying that she was closed for remodeling. D returned again, and P summoned the sheriff to keep order. The dispute was mediated at the status quo by the police and the sheriff. D then came back again when P was not present with a police escort and changed the locks. P found herself locked out on July 16, 1973, and the lease was not due to expire until December 1, 1975. The premises were relet to another party. P brought an action for lost profits, damage to chattels, and wrongful eviction. D counterclaimed on the basis of abandonment. The court found that D’s reentry was not peaceable as a matter of law. The jury then awarded P money for lost profits and loss of chattels, holding that P neither abandoned nor surrendered the premises. D appealed.