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LLC v. Panther Pressure Testers, Inc.

Supreme Court of North Dakota

May 26, 2016

Cheetah Properties 1, LLC, Plaintiff and Appellant
v.
Panther Pressure Testers, Inc., Defendant and Appellee

Page 424

          Appeal from the District Court of McKenzie County, Northwest Judicial District, the Honorable Robin Ann Schmidt, Judge.

         Lisa M. Dynneson (argued), Williston, ND, for plaintiff and appellant.

         Matthew J. Kelly, Bozeman, MT, for defendant and appellee; submitted on brief.

         Lisa Fair McEvers, Daniel J. Crothers, Dale V. Sandstrom, Carol Ronning Kapsner, Gerald W. VandeWalle, C.J.

          OPINION

Page 425

         Lisa Fair McEvers, Justice

          [¶1] Cheetah Properties 1, LLC appeals from a district court judgment finding Panther Pressure Testers, Inc. did not willfully hold over on a commercial lease agreement for the purpose of awarding double damages, and from a district court order denying it an award of reasonable attorneys' fees. We affirm the district court's judgment concluding Cheetah was not entitled to an award of double damages under N.D.C.C. § 32-03-28. We reverse the district court's order denying attorneys' fees and remand for proceedings consistent with this opinion.

         I

          [¶2] Cheetah Properties 1, LLC and Panther Pressure Testers, Inc. entered into a commercial lease agreement with an initial term that commenced on April 15, 2014, and ended on December 31, 2014. The parties negotiated monthly rent was due on the first of each month. The lease provided for late fees of $100 per day, starting on the fifth day of the month, if Panther did not timely pay rent. The lease contained a renewal provision that provided the lease shall automatically renew for successive one-year terms, until either party provided the other with written notice that the lease shall terminate. The lease provided that the written notice " must be received no later than the first day of the month sixty (60) days in advance of the month in which the Lease shall be terminated by either party." Among Cheetah's remedies in the event of a default, the lease agreement provided the tenant agree to pay the cost of reasonable attorneys' fees in connection with recovering possession of the property.

          [¶3] On January 19, 2015, Cheetah brought an eviction action to recover possession of the property under N.D.C.C. § 47-32-01(4).

Page 426

In the complaint, Cheetah sought damages for: (1) delinquent charges for late payment of rent owed up to December 31, 2014; (2) for Panther's willful holdover " in an amount double the yearly value of the Premises for the time of Defendant[']s withholding" under N.D.C.C. § 32-03-28; and (3) for any physical damage to the property caused by Panther vacating the premises. Cheetah also sought an award of reasonable attorneys' fees under the lease. Panther vacated the property by January 31, 2015.

          [¶4] According to testimony, on October 17, 2014, Cheetah provided Panther the required sixty-day notice under the lease not to extend the lease beyond the initial term, which ended December 31, 2014. On November 18, 2014, Panther requested to extend its tenancy four months beyond the end of the initial term. On December 10, 2014, Cheetah rejected Panther's request for a four-month extension. However, Cheetah offered to extend the tenancy for an additional month to January 31, 2015, on conditions that (1) Panther bring its delinquent rent current; and (2) Panther timely make the January 2015 rent payment. Cheetah requested Panther confirm in writing its agreement to the conditions. As to the first condition, the letter specifically stated: " Panther is presently delinquent with the rent payment for the month of December." The letter did not reference any delinquency regarding the November rent payment. Testimony revealed that, as of December 10, 2014, Panther had not paid rent and late fees for November or December. On December 31, 2014, Panther delivered two $22,000 checks to Cheetah. Cheetah applied the payment to delinquent rents for November and December.

          [¶5] According to testimony, Cheetah did not receive January rent from Panther when it became due. On January 6, 2015, Cheetah served Panther with notice of intent to evict. In the notice, Cheetah alleged Panther defaulted under the terms of the lease by holding over after the expiration of the lease on December 31, 2014, and demanded that Panther return possession of the property to Cheetah. Panther delivered an additional $22,000 check to Cheetah for January rent. Cheetah held the check, but did not deposit it.

          [¶6] At the eviction hearing, Panther argued it mistakenly held over. According to Panther, it held over under the belief that making a January rent payment allowed occupancy until January 31, 2015. The district court returned lawful possession of the property to Cheetah and awarded it $22,000 for January 2015 rent and $8,200 for delinquent rent and fees under the lease. The district court declined to impose double damages under N.D.C.C. § 32-03-28 based on its finding that Panther's holding over was not willful. After the district court entered its order for judgment, Cheetah moved for an award of reasonable attorneys' fees under the lease and under N.D.C.C. § 28-26-01(1), N.D.C.C. § 47-16-13.6, N.D.R.Civ.P. 54(e), and N.D.R.Ct. 3.2. The district court denied Cheetah's request for an award of reasonable attorneys' fees. Cheetah appeals from the district court's judgment and the order denying an award of reasonable attorneys' fees.

         II

          [¶7] Cheetah argues the district court's finding that Panther's holding over was not willful for the purposes of awarding double damages under N.D.C.C. § 32-03-28 is clearly erroneous. The parties do not dispute that Cheetah was entitled to possession under N.D.C.C. § 47-32-01(4).

          [¶8] " An eviction to recover possession of land may be maintained when a lessee holds over ...


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