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VND12/19/2003
AFFIRMED.
[ ] VND is appealing a Southeast Judicial District Court judgment denying summary eviction of Leevers Foods, Inc., under N.D.C.C. ch. 33-06. After a hearing on the motion for eviction, the district court found there had been no material breach of the written lease by Leevers, as required by N.D.C.C. * 33-06-01(8), found Leevers was entitled to equitable relief from the termination of the lease because of its substantial investment in the leased premises, and denied summary eviction. VND argues the district court erred in allowing Leevers to present counterclaims and affirmative defenses to its summary eviction claim. VND also argues that Leevers admitted it breached the lease and that these breaches were sufficient for summary eviction in that they were material. Finally, VND argues that Leevers' substantial investment in the leased property does not entitle it to equitable relief from the termination of the lease. Because this case is not suitable for summary eviction, we affirm.
I.
[ ] Leevers is a North Dakota corporation that operates a supermarket in Jamestown known as Leevers County Market. VND is a limited liability company and owns a shopping mall in Jamestown known as Park Plaza Mall. Leevers entered into a lease on November 27, 1981, with the former owner of the Park Plaza Mall, Paul J. Bjornson. On October 21, 1997, VND purchased the Park Plaza Mall and assumed the lease.
[ ] The lease provides for monthly rental payments of $10,417.00. Leevers leases approximately 57.22 percent of the space available for tenants in Park Plaza Mall and pays 57.22 percent of the common area maintenance charges for the Park Plaza Mall in addition to its monthly rent. Leevers claims it has paid approximately one million dollars in monthly rent and maintenance charges since October 21, 1997. Leevers also contends it made long-term capital investments estimated at 3.9 million dollars. These investments include fixtures and other leasehold improvements of 1.8 million dollars, including $142,000 paid for improvements to the Park Plaza Mall parking lot. VND claims that maintenance charges of over $20,000 are unpaid, owing, and continuing to accrue.
[ ] Leevers claims it has not paid its maintenance charges because of past overcharges. Leevers investigated and found it was likely that the common area meters supplied utilities for other tenants in the Park Plaza Mall. On January 16, 2001, Leevers notified VND of this problem and gave VND an opportunity to cure. On January 29, 2001, VND asked Leevers to give proof of its allegations. On March 25, 2002, Leevers provided proof of $20,597.00 in overpaid utilities and stated it would deduct overpayments from future bills for the maintenance charges. On March 29, 2002, Leevers claims VND gave it an accounting, providing credit to Leevers for the overpayment of maintenance utilities from October of 1997 forward; Leevers claims VND acknowledged a $17,580.19 credit. VND denies acknowledging a credit. VND informed Leevers that any deductions of maintenance overpayments by Leevers would be treated as a separate default of the lease. Leevers began applying the alleged credit to its monthly maintenance statements. Leevers did not send a notice of default to VND with regard to the maintenance charges.
[ ] Leevers claims it has paid for a pro-rata share of all-risks insurance on the building in addition to maintaining its own liability insurance under the lease. Leevers notified VND that it was no longer going to pay for 57.22 percent of VND's cost of purchasing liability insurance, claiming the language of the lease did not require this payment. Prior to the hearing, Leevers agreed to resume paying for this
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