JERVIS LEWIS V SARAH M CROSS
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STATE OF MICHIGAN
COURT OF APPEALS
JERVIS LEWIS and GUSSIE LEWIS,
UNPUBLISHED
July 15, 2008
Plaintiffs/Counter-DefendantsAppellees,
v
SARAH M. CROSS and NOUREDDINE HADJ
SADOK,
No. 276062
Livingston Circuit Court
LC No. 05-021791-CZ
Defendants/Counter-PlaintiffsAppellants.
Before: Sawyer, P.J., and Jansen and Hoekstra, JJ.
PER CURIAM.
Following a bench trial, the trial court awarded plaintiffs $107,077 on their claim for
breach of a lease agreement, and found no cause of action on defendants’ counterclaims for
breach of contract, constructive eviction, and misrepresentation. Defendants appeal as of right.
We affirm.
I. Standard of Review
The trial court’s factual findings at a bench trial are reviewed for clear error. MCR
2.613(C). A finding of fact is clearly erroneous when, although there is evidence to support it,
the reviewing court is left with a definite and firm conviction that a mistake has been made,
giving due regard to the trial court’s special opportunity to observe the witnesses and judge their
credibility. In re BZ, 264 Mich App 286, 296-297; 690 NW2d 505 (2004).
II. Findings of Fact
Defendants first argue that the trial court clearly erred in finding that additional repairs
were not necessary before the first freeze. This finding is supported by the report of plaintiffs’
expert, Piet Lindhout, who opined that the water migration was caused by water backing up in
the gutter and freezing due to winter conditions and that the problem should be addressed before
winter. We agree that the trial court erred to the extent that it found that defendants’ expert,
Bruce McCullen, also indicated that repairs were not required before the first freeze. McCullen
did not indicate that winter conditions were a cause of the moisture penetration or specify a
timeframe for any repairs. Nonetheless, any error in this regard was harmless because McCullen
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agreed with Lindhout that moisture was entering the building at the gutter, and Lindhout’s report
provided an explanation for this condition. Kyser v Kasson Twp, 278 Mich App ___;
___NW2d___ (Docket No. 272516, issued 5/6/08), slip op at 9.
Defendants also argue that the trial court clearly erred in finding that they were using
over 7,000 square feet of the leased premises. The court found that “the condition of the
premises did not prevent Defendants from using 7,312 square feet of retail space as a
‘showroom.’ ” Although defendants assert that the front area that was used as a showroom was
only 6,000 square feet, defendants’ promotional materials listed their showroom as being 7,000
square feet, and defendant Sarah Cross sent out a promotional email stating that their business
had over 7,000 square feet. In light of this evidence, the trial court’s finding is not clearly
erroneous.
III. Constructive Eviction
Defendants argue the trial court erred in finding no cause of action on their claim for
constructive eviction. We disagree.
A constructive eviction occurs when there is a disturbance of the tenant’s possession by
the landlord, the premises are rendered unfit for occupancy for the purposes for which they were
demised, or the landlord deprives the tenant of the beneficial use and enjoyment of the property,
in whole or part. Panagos v Fox, 310 Mich 157; 16 NW2d 700 (1944); Belle Isle Grill Corp v
Detroit, 256 Mich App 463, 474-475; 666 NW2d 271 (2003); De Bruyn Bros Realty Co v Photo
Lith Plate Service Corp, 31 Mich App 487, 489; 188 NW2d 111 (1971).
First, contrary to what defendants argue, the record does not indicate that the trial court
applied incorrect legal standards in evaluating this claim. The court recognized the applicable
principles recited in Belle Isle, supra, and never indicated that a necessary element of such a
claim is the existence of a health hazard.
Although defendants claimed that they were unable to use the rear 4,000 square feet of
the leased space because of the roof problems or a health hazard from mold, the trial court
viewed both photos and a video of the area. It found that one wall was wet and stained, but that
defendants’ claims that there was standing water on the floor and that the condition posed a
health hazard were not credible. As the trial court found, plaintiffs made repairs after being
notified of the roof leak, and environmental reports indicated that there was no health hazard.
After considering the evidence and affording deference to the trial court’s credibility
determinations, we find no clear error in the trial court’s finding that the condition of the
premises did not amount to a constructive eviction.
Defendants also assert that their constructive eviction claim was based on other
unresolved problems with the building, e.g., broken lighting, a hole in the front lawn, and broken
glass. However, these problems did not render the premises unfit for occupancy for the purposes
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for which they were demised or deprive defendants of the beneficial use and enjoyment of the
property.
Accordingly, we affirm the trial court’s verdict of no cause of action on defendants’
constructive eviction claim.1
IV. Rent Abatement
Defendants argue that the trial court erred in determining that they were not entitled to
abate rent during the period of repair or restoration. We disagree.
Section 18 of the parties’ lease provides:
Destruction of the premises. If the premises are partially damaged or
destroyed through no fault of the lessee, the lessor shall, at its own expense,
promptly repair and restore the premises. If the premises are totally destroyed
through no fault of the lessee or if the premises cannot be repaired and restored
within 120 days, either party may terminate this lease effective the date of the
destruction by giving the other party written notice of termination within 10 days
after the destruction. If such a notice is given within that period, this lease shall
terminate and rent shall be adjusted between the parties to the date of the
surrender of possession. If the notice is not given within the required period, this
lease shall continue, without abatement of rent, and the lessor shall repair the
premises. [Emphasis added.]
Initially, we disagree with defendants’ argument that this provision is not applicable
because the evidence showed that the damage to the building was attributable to plaintiffs’ lack
of maintenance. Unambiguous contractual language must be enforced as written. Coates v
Bastian Bros, Inc, 276 Mich App 498, 503; 741 NW2d 539 (2007). Section 18 applies to all
situations where the premises are partially damaged. There is no basis for excluding situations
where damage allegedly results from inadequate maintenance by the lessor.
Under section 18, because the lease was not terminated by either party, there was to be no
rent abatement while the roof repairs were being made. We disagree with defendants that
plaintiffs waived section 18. Section 29 of the lease contains an anti-waiver clause that provides:
Waiver. The failure of the lessor to enforce any condition of this lease
shall not be a waiver of its right to enforce every condition of this lease. No
provision of this lease shall be deemed to have been waived unless the waiver is
in writing.
Defendants are correct that section 29 did not prevent the parties from mutually agreeing
to waive the anti-abatement provision and modify their lease to allow for the abatement of rent.
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In light of our decision, it is unnecessary to address defendants’ arguments regarding damages.
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To establish the waiver of a contract provision, one must show by clear and convincing evidence
that the parties mutually agreed to waive both the particular contractual term and any anti-waiver
clause. Quality Products & Concepts Co v Nagel Precision, Inc, 469 Mich 362, 372; 666 NW2d
251 (2003). As explained in Quality Products, supra at 372-373:
[I]t is well established in our law that contracts with written modification
or anti-waiver clauses can be modified or waived notwithstanding their restrictive
amendment clauses. This is because the parties possess, and never cease to
possess, the freedom to contract even after the original contract has been
executed.
However, the freedom to contract does not authorize a party to unilaterally
alter an existing bilateral agreement. Rather, a party alleging waiver or
modification must establish a mutual intention of the parties to waive or modify
the original contract. This principle follows from the contract formation
requirement that is elementary to the exercise of one’s freedom to contract:
mutual assent.
Where mutual assent does not exist, a contract does not exist.
Accordingly, where there is no mutual agreement to enter into a new contract
modifying a previous contract, there is no new contract and, thus, no
modification. Simply put, one cannot unilaterally modify a contract because by
definition, a unilateral modification lacks mutuality.
In this case, the evidence did not show that the parties mutually assented to an agreement
to abate rent. The evidence showed that defendants submitted different proposals and
calculations for rent abatement, but there was no evidence that plaintiffs ever assented to
defendants’ various proposals. Defendants contend that plaintiffs offered to abate rent by 20
percent. However, that offer was limited to a three-month period, and was conditional on
plaintiffs bringing the balance of their rent payments current, which they did not do. Because the
evidence failed to show that the parties mutually assented to an agreement to abate rent, the trial
court properly concluded that section 18 of the lease was enforceable and did not permit any
abatement of the rent.
V. Mitigation of Damages
Defendants argue that the trial court clearly erred in finding that plaintiffs made
reasonable efforts to mitigate their damages. Because this issue involves the trial court’s
determination of damages at a bench trial, we review the issue for clear error. Triple E Produce
Corp v Mastronardi Produce, Ltd, 209 Mich App 165, 177; 530 NW2d 772 (1995).
A plaintiff has a duty to mitigate damages by making efforts that are reasonable under the
circumstances to minimize the economic harm caused by the wrongdoer. Lawrence v Will
Darrah & Assoc, Inc, 445 Mich 1, 15; 516 NW2d 43 (1994). The burden was on defendants to
prove that plaintiffs failed to mitigate their damages. Lawrence, supra at 15.
Defendants vacated the premises in November 2005. Plaintiffs thereafter attempted to release the premises and also sent out letters to other occupants of the industrial park informing
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them that the building was for sale. Plaintiffs showed the building to at least four people in
December 2005 and January 2006. Plaintiffs accepted a purchase offer for the property in
February 2006, and closed on the sale in May 2006.
In light of the evidence of plaintiffs’ quick efforts to either re-lease or sell the property,
and the evidence that plaintiffs accepted a purchase offer only three months after defendants
vacated the building, the trial court did not clearly err in rejecting defendants’ argument that
plaintiffs failed to mitigate their damages
VI. Hearsay Ruling
Lastly, we find no merit to defendants’ argument that the trial court erroneously excluded
testimony of Christine Cross as hearsay. Contrary to what defendants argue, the record does not
indicate that the trial court excluded the testimony. Rather, Cross was able to testify about her
conversation and the trial court never struck her testimony or indicated that it would be
disallowed. Accordingly, we reject this claim of error.
Affirmed.
/s/ David H. Sawyer
/s/ Kathleen Jansen
/s/ Joel P. Hoekstra
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