Sengul v. CMS Franklin, Inc.

In late April 2006 Samuel Sengul leased a commercial storefront in downtown Juneau to Robert Manus, who was acting on behalf of CMS Franklin, Inc. The building was under construction when Sengul and CMS entered into the lease agreement, but the lease provided that Sengul would deliver the property to CMS in a specified improved condition by the time the lease commenced on June 1. The lease also included a rent abatement provision, which was at issue in this case. The building was not in improved condition until approximately June 8. Manus did not pay any rent, nor did he mention the rent abatement provision when he took possession of the building. Sengul finally demanded rent in late July, but Manus refused to pay, claiming abatement. In September, Manus had still not paid any rent, and Sengul put a lock on CMS's store door and placed signs demanding rent in the store windows. Manus had the lock cut off, but began to move the inventory out of the store, vacating it and returning the keys to Sengul two days after the lockout. Sengul then sued CMS and Manus for unpaid rent. The superior court determined that CMS had waived its right to rent abatement and owed Sengul unpaid rental amounts for the time that Manus had occupied the building. But the court also concluded that Sengul's lockout amounted to constructive eviction and awarded CMS damages as a refund for work performed on the premises that CMS was unable to benefit from after the constructive eviction. Upon review, the Supreme Court agreed with the superior court that Sengul's actions constituted constructive eviction, but the Court disagreed that CMS waived its entitlement to have the rent abated. The case was remanded for the superior court to recalculate the damages owed to CMS. View "Sengul v. CMS Franklin, Inc." on Justia Law