Articles Posted in Landlord - Tenant

by
Tok Hwang owned a lessee interest in, and related improvements on, a commercial lot (the leasehold) near the Denali National Park entrance. Hwang leased the lot from a third party for $20,000 annually. Hwang subleased the leasehold to Alaska Fur Gallery, Inc. in April 2012. The sublease (the lease) provided that Alaska Fur would pay $55,000 annual rent for a three-summer term. The disputed provision stated, in full: “Lease includes an option to purchase premises with lease amount to be applied to negotiated purchase price.” When the sublessee attempted to exercise the option the lessee declined to sell, claiming the option was unenforceable. The sublessee sued, seeking, among other things, to enforce the option provision. The superior court held that the provision was too uncertain to enforce either as an option or as an agreement to negotiate. The sublessee appealed; but finding no reversible error in the superior court’s decision, the Supreme Court affirmed. View "Alaska Fur Gallery, Inc. v. Hwang" on Justia Law

by
In September 2003, Bachner Company Inc. entered into a contract with the Alaska Department of Administration, to lease portions of the Denali Building in Fairbanks. After a ten-year lease term and a one-year renewal, Bachner alleged that the State was in default on its rent payments, and it filed suit in superior court to recover. The State moved to dismiss the complaint, arguing that the claim was governed by the Alaska State Procurement Code and that Bachner had failed to exhaust its remedies under the code before filing suit. The superior court agreed and granted the State’s motion to dismiss. Bachner appealed. After review, the Supreme Court concluded the procurement code covered a rent dispute over an ongoing lease, that the Bachner's claim fell under the procurement code, and Bachner had to exhaust its administrative remedies before filing suit in superior court. View "Bachner Company Incorporated v. State, Dept. of Administration" on Justia Law

by
Arthur Kinnan lived in a residence as part of a substance abuse treatment program operated by Sitka Counseling. Funding for that program ended, and Sitka Counseling informed Kinnan that he would be required to vacate. Kinnan filed suit against Sitka Counseling and two of its staff members, unsuccessfully alleging several torts based on the defendants’ conduct when removing him from the premises, violations of Alaska’s Landlord Tenant Act, and deprivation of constitutional rights under 42 U.S.C. 1983. Kinnan argued on appeal to the Supreme Court that the superior court wrongfully denied a continuance to allow him to seek counsel, wrongfully excluded the testimony of a late-disclosed witness and two affidavits, and improperly facilitated questioning regarding Kinnan’s mental disability. The Supreme Court concluded that any error resulting from the exclusion of Kinnan’s witness was harmless and saw no abuse of discretion in the superior court’s denial of Kinnan’s continuance, its exclusion of the affidavits as hearsay, or its consideration of Kinnan’s mental disability. Furthermore, the Court also rejected Kinnan’s argument that the superior court’s adverse rulings created an appearance of judicial bias. View "Kinnan v. Sitka Counseling" on Justia Law

by
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

by
Gas producers that lease land from Alaska must pay royalties calculated on the value of the gas produced from the leased area. The royalty may be calculated in one of two methods: the “higher of” pricing or contract pricing. “Higher of” pricing is the default method of calculating royalties and is calculated using market data and the prices of other producers. The Department of Natural Resources (DNR) usually does not calculate the royalty payments under “higher of” pricing until years after production. Under contract pricing, the lessee’s price at which it sells gas is used to determine the royalty payment. Appellant Marathon Oil requested contract pricing from 2008 onward and sought retroactive application of contract pricing for 2003-2008. The DNR approved contract pricing from 2008 onward but denied the retroactive application. The superior court affirmed the DNR’s decision. On appeal to the Supreme Court, Marathon argued that the statute that governs contract pricing permitted retroactive application of contract pricing. Upon review of the arguments and the applicable legal authority, the Supreme Court concluded that though the statute was ambiguous, it would defer to the DNR’s interpretation. Accordingly, the Court affirmed the superior court’s decision to uphold the DNR’s order. View "Marathon Oil Co. v. Dep't. of Natural Resources" on Justia Law

by
Chilkoot Lumber Company, a commercial landlord (Chilkoot) and its tenant, Rainbow Glacier Seafood (Rainbow) resolved their lease dispute by settlement and entered the terms of the settlement on the record at trial. Rainbow did not follow through with its duties under the settlement agreement. After the time for performance by Rainbow had expired, Chilkoot moved the court to enforce the agreement. The superior court denied the motion to enforce. On reconsideration, the parties tentatively agreed to reinstate the settlement agreement with new deadlines for performance. When they could not agree on new deadlines, the superior court entered an order that enforced the settlement agreement as modified by Rainbow’s proposed deadlines. Chilkoot subsequently violated the order, and the superior court ordered it to pay $1,000 per day it violated the agreement. Chilkoot appealed to the Supreme Court, arguing that the superior court erred by imposing its own deadlines and sanctioning Chilkoot $1,000 per day. Upon review of the record, the Supreme Court reversed the superior court’s order. The Court held it was an error for the lower court to conclude that the parties had not reached a settlement agreement and to deny Chilkoot’s motion to enforce the agreement. Furthermore, the Court found that the court’s sanctions against Chilkoot were "coercive and remedial, rather than punitive." The Court reversed the superior court’s order and remanded the case for further proceedings. View "Chilkoot Lumber Co. v. Rainbow Glacier Seafoods, Inc." on Justia Law