Richard Barton Enterprises, Inc. v. Tsern

928 P.2d 368 (1996)

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Nature of the Case

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Facts

Barton (P) and Tsern (D) entered into an agreement for an earnest money and offer to lease, and then six days later the parties executed a lease for the first and second floors of a commercial building in Salt Lake City. D agreed to a rent of $3,000 per month for the one-year lease. D was required to deliver the property on December 1, 1991. The terms of the earnest money agreement were expressly incorporated into the lease. That was modified with typed in terms that other than in line 32 and 33, P shall accept the building in “as is condition.” Lines 32 and 33 required D to repair the leaky roof and fix the freight elevator. P wanted to establish an antique dealership. P needed the freight elevator to store some of his larger pieces. P’s need for the elevator was communicated to D a number of times both pre and post signing of the earnest agreement. D took possession of the first floor on December 1 but the second floor was given over on December 20 when a holdover tenant finally left. The elevator did not work, and D had not entered into a contract to have it repaired, and the roof had not been repaired. D eventually had the elevator repaired by Kimball but only told them to make it go up and down and strictly limited Kimball to $5,000 in expenses for the repairs. D expressly refused to make certain repairs advised by Kimball to make the elevator operate reliably and safely. These issues were not communicated to P. D ordered Kimball not to discuss the limitations with P. The city inspector ordered the elevator shut down on January 24, 1992, after it had worked for only 15 days. Kimball made an additional repair on February 13^th, and it operated until March 14^th. On April 10^th, a state inspector found the elevator, not in compliance with state law and ordered it shut down until it could pass inspection. D refused to spend the $5,552 to make those repairs. The elevator never operated after March 14^th despite P’s continued demands. P tendered less than full rent for the months of January and February and P cashed the checks. P filed a complaint for declaratory relief to establish D’s duty to repair. D counterclaimed with a three-day notice to pay in full or quit. The court found the elevator had not been repaired to good working order and entered judgment against D for the cost to repair. Citing Wade, the court ruled that P was entitled to rent abatement of $2,000 a month plus accrued interest and that P’s damages should be deducted from the purchase price of the building. Judgment was entered against D for $100,000.