Dealers Hobby, Inc. v. Marie Ann Linn Realty Co.

255 N.W.2d 131 (1977)

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Facts

Linn Realty (D) leased a warehouse then under construction to P for storage purposes. The commercial lease was for a term of 15 years at the monthly rate of $1,166.66. As part of the lease, D had the duty at its own expense to maintain in good repair the roof and exterior structure, except as to damage caused by the negligence of the tenants, its agents, employees, invitees, or guests. On April 30, 1973, after a heavy rain, a small portion of the roof collapsed, and as a result, damage was caused to some of P's property stored in the building. One thousand square feet of the warehouse was rendered unusable by the leakage. An inspection on May 3, 1973, by city officials disclosed that the building did not comply with the city building code in several particulars, and an 'Official Notice of Unsafe Building' was issued by the City's Building Inspection Department. Neither party was aware of any defects in the building prior to the collapse. P continued to use a vast majority of the warehouse for storage during the 18-day period in which the premises were being repaired. When this work was completed, the parties renewed the lease, and P continued its occupancy. In October 1973, P initiated this action seeking recovery for damages caused to its merchandise and inventory stored in the building, together with incidental damages which totaled $16,037.94. P also sought to recover $193,082.23, which sum allegedly represented the difference between the fair rental value of the premises as warranted and the fair rental value of the premises as they actually existed for the entire duration of the lease prior to the collapse. D claimed that P waived any building defects by continued occupancy and payment of rent. D filed a cross-petition against Abild Construction Co., the contractor that built the warehouse, seeking indemnity and contribution. Ds then filed a motion for partial summary judgment seeking dismissal of that portion of P's petition which sought damages for retroactive diminution of the fair rental value of the premises based on the implied and express warranty theories. Prior to trial, Ds paid $16,921.41 for incidental damages. The trial court dismissed the remaining portions of the petition as moot. P appealed.

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