OAKWOOD ANIMAL KINGDOM, INC. v. KNOX BINGO HALL, INC.
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RENDERED: JULY 30, 2004; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-000592-MR
OAKWOOD ANIMAL KINGDOM, INC.
and GARY S. CROWE
APPELLANTS
APPEAL FROM HARDIN CIRCUIT COURT
HONORABLE JANET P. COLEMAN, JUDGE
ACTION NO. 00-CI-01025
v.
KNOX BINGO HALL, INC.
APPELLEE
OPINION
REVERSING
** ** ** ** **
BEFORE:
COMBS, Chief Judge; TACKETT, Judge; and EMBERTON,
Senior Judge.1
COMBS, CHIEF JUDGE.
Appellants, Oakwood Animal Kingdom, Inc.
(Oakwood), and Gary S. Crowe appeal from an order of the Hardin
Circuit Court entered on January 27, 2003.
1
The court awarded
Senior Judge Thomas D. Emberton sitting as Special Judge by assignment of
the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution
and KRS 21.580.
the sum of $8,830.60 to Knox Bingo Hall, Inc., pursuant to the
terms of the parties’ rental agreement.
We reverse.
The appellee has failed to file a brief on appeal.
Under the provisions of CR2 76.12(8), this Court has three
options to consider as possible responses or penalties.
We may:
(i)accept the appellant’s statement of the
facts and issues as correct; (ii) reverse
the judgment if appellant’s brief reasonably
appears to sustain such action; or (iii)
regard the appellee’s failure as a
confession of error and reverse the judgment
without considering the merits of the case.
We have declined to invoke any of those possible penalties and
instead have considered the merits of the case.
On April 2, 2000, the parties entered into a written
agreement for the rental of space in which Oakwood would conduct
charitable gaming sessions.
The hall was to be rented for
limited periods as set forth in separate rental pricing
agreements.
basis.
The rental payment was calculated on a per session
The agreement provided the following rates:
1.
rent for each morning session would be $390.00;
2.
rent for each afternoon session would be $640.00;
3. rent for each evening session held Monday through
Thursday would be $940.00;
4. rent for each evening session held Friday,
Saturday, or Sunday evening would be $1040.00;
2
Kentucky Rules of Civil Procedure.
-2-
5.
at $815.00.
rent for each midnight session would be calculated
In a separate provision, the agreement recited:
“Tenants[‘] agreed upon rental session(s) and rate(s) is
attached hereto as Exhibit A, and incorporated by [r]eference as
if fully restated herein.”
Attached to the agreement were two
documents, each entitled “Exhibit A Rental Pricing Agreement.”
The first document provided as follows:
The TENANT leases the Knox Bingo Hall,
Inc.’s premises for the following bingo
session:
Date:
Thursday
Session: 7:30
Rental Amount:
940.
Less goods and services provided by TENANT
i. Janitorial Services 50.00
ii. Security Services
80.00
Total:
810.00
The document was signed by Gary Crowe as tenant.
document provided as follows:
The TENANT leases the Knox Bingo Hall,
Inc.’s premises for the following bingo
session:
Date:
Friday
Session: 7:30
Rental Amount:
$1040.
-3-
The second
Less goods and services provided by TENANT
i. Janitorial Services 50.00
ii. Security Services
80.00
Total:
910.00
This document, too, was signed by Gary Crowe as tenant.
Shortly after the agreement was executed, the owner of
Knox Bingo Hall was indicted for violation of Kentucky’s gaming
laws.
Oakwood quickly sought to terminate its agreement as its
revenues apparently suffered from the adverse publicity that
followed the indictment.
There is a discrepancy in the
pertinent dates and activities surrounding Oakwood’s notice of
termination.
Oakwood recites in its brief that it sent Knox
Bingo Hall a certified letter containing its notice of
termination on May 20, 2000 (Appellant’s brief, p. 1); that the
last bingo session was conducted in the hall of May 19, 2000 (p.
2); and that the lawsuit was filed against it on June 19, 2000
(p. 2).
The complaint filed by Knox Bingo Hall omits these
pertinent dates completely while apparently seeking damages for
the thirty-day notice period.
While the judgment of the trial
court relies on the 30-day notice period in assessing damages,
it recites relevant dates as June 1 – June 30 as the basis of
the judgment rather than calculating the thirty-days’ notice
-4-
period from the day after the last session was held; i.e., from
May 20 through June 20.
On June 19, 2000, Knox Bingo Hall filed a complaint in
Hardin Circuit Court, seeking $8,730.60:
$7,690 for unpaid
rents and the two additional sums of $890 and $150.60 for checks
on which Oakwood stopped payment.
Knox also sought lost profits
from concession sales, costs, and attorney’s fees.
Following a
bench trial, the court determined that Oakwood and Crowe owed
rent for the abandoned June sessions as claimed by Knox Bingo
Hall.
However, the trial court did not award any amount for the
hall’s lost concession sales.
This appeal followed.
The appellants contend that the trial court erred as a
matter of law by interpreting the parties’ rental agreement to
require thirty-days’ notice for proper termination.
They also
contend that the trial court erred by permitting the plaintiff
to prosecute its claim in absentia and by permitting the
plaintiff to call a witness who was not timely identified
pursuant to the court’s pretrial order.
(We note that a party in
a civil action may choose not to be present at the trial of the
case and may elect instead to be represented solely by counsel.)
Because our analysis of the nature of the agreement itself
resolves the appeal, the remaining arguments need not be
addressed.
-5-
The construction of a written instrument is a question
of law, which is subject to our de novo review.
Cinelli v.
Ward, Ky. App., 997 S.W.2d 474 (1998).
In its analysis, the trial court relied on the
following provision of the rental agreement:
Either party hereto may cancel any unused
bingo sessions provided for under this lease
by giving thirty (30) days (sic) written
notice prior to such scheduled leased
session to the other party. (Emphasis
added.)
The trial court concluded that the quoted provision required
Oakwood and Crowe to give notice on or before June 1, 2000, in
order to terminate their rental agreement effective June 30,
2000.
In essence, it held that the written notice of May 20,
2000, was ineffective to terminate the appellants’ obligation to
pay rent for sessions to be held June 1 through June 30, 2000.
Oakwood argues persuasively that the absence of a
definite term in the lease has created a tenancy at will,
terminable at will as to the period mutually understood to
govern the rental agreement.
Such an arrangement is deemed to
be a “periodic tenancy” pursuant to KRS3 383.695, which provides
in part as follows:
(1)
3
The landlord or the tenant may
terminate a week-to-week tenancy by a
written notice given to the other at
least seven (7) days before the
Kentucky Revised Statutes.
-6-
(2)
termination date specified in the
notice.
The landlord or the tenant may
terminate a month-to-month tenancy by a
written notice given to the other at
least thirty (30) days before the
periodic rental date specified in the
notice.
Oakwood argued that its tenancy was from one bingo session to
the other and that, therefore, the interval of mere days between
sessions constituted adequate notice pursuant to the statute.
Its letter of notice followed its last session by one day.
We have discovered no evidence to support the implicit
finding of the trial court that the parties had agreed to a
reservation of space to be rented and held by Oakwood for
sessions scheduled in advance up to and including June 30.
The
only evidence before us indicates that Oakwood and Crowe rented
space for a single Thursday and a single Friday evening with no
commitment to schedule space beyond those two sessions and no
concomitant promise by Knox to hold space for Oakwood for any
specific sessions.
We conclude that the “agreement” itself was
essentially a price schedule.
This price schedule set a series
of rates for whatever intermittent, periodic sessions Oakwood
might elect to hold rather than guaranteeing a definite
reservation of space for a definite term.
It was not a contract
for tenancy requiring a specific notice provision in order to
-7-
terminate a tenancy.
Periodic occupancy under these
circumstances does not amount to a tenancy requiring notice for
termination.
We hold that Oakwood gave adequate notice of its
intent to cancel usage of the hall as that usage was a matter of
session to session.
No rental amount is due or owing.
Therefore, we reverse the judgment of the Hardin
Circuit Court.
ALL CONCUR.
BRIEF FOR APPELLANT:
NO BRIEF FOR APPELLEE
Willie M. Neal, Jr.
Radcliff, Kentucky
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