The Law School Authority

ISBEY et al, v. CREWS, et al Case Brief

Summary ISBEY et al, v. CREWS, et al, Ct. of App N Carolina [1981]

Relevant Facts: Pls (lessors), and Dfs, (lessees), entered into a lease agreement which was a renewable 5 yr lease. Two provisions declared that the Dfs would use the premises as a physicians office and for dialysis and no other purpose.  The second stated Dfs could not sublet or assign w/o written consent. Dfs made all rent payment through 8-15-80, but vacated in May.  They sought permission to sublet but were denied by the PLs.

Legal Issue(s): Whether the Dfs breached when they refused to make the rent payment for Sept; and whether there exists a genuine issue of material fact as to the amt of loss (pls)?

Court’s Holding: Yes there was a breach, and No there is no issue of material fact.

Procedure:   Trial Ct Summary for Pls; Dfs appealed.  Affirmed.

Law or Rule(s): 1)  An issue is material if the facts as allege would constitute a legal defense, or would affect the result of the action, or would prevent the party against who it is resolved from prevailing in the action.  2) The measurement of damages for a breach of K is the amt which would have been received if the K had been performed.

Court Rationale: A tenant for an estate for years may be absolutely barred from transferring his term by either assignment or sublease if there is an express covenant forbidding such.  The lease in the present case contains such an express restraint, forbidding the lessee from alienating the premises “without the written consent of the lessor,” no where did the lease state that such consent would not be unreasonably withheld. Dfs did breach when they refused to make the Sept rental payment and Pls are entitled to recover damages.

The non-breaching party has a duty to mitigate his damages upon breach of a contract.  When the T abandons and fails to pay the LL can recover only those damages he could not w/ reasonable diligence avoid by re-letting. If LL fails to use r. diligence his recovery is limited to the difference btwn what he would’ve received and the FMRValue.  The burden is on the breaching party to prove that the nonbreaching party failed to exercise r. diligence. The record here is devoid of any evidence that the Pls failed.

Plaintiff’s Argument: There are no genuine issues of material fact in dispute an as a matter of law the Pls are entitled to judgment accordingly with damages.

Defendant’s Argument: Pls unreasonably refused to consent to the sublease as proposed; and the amount of damages involves issues of material fact which would alter the outcome.

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