Review the actual cases of Rockstad v. Global Finance & Investment Co., 41 P.3d 583 (Alaska 2002) and Wessells v. State of Alaska, Department of Highways, 562 P.2d 1042 (Alaska 1977)
Generally, a tenant must pay the rent even if he or she refuses to occupy the property or moves out, as long as the refusal or the move is unjustifiable and the lease is in force. In these cases, the Alaska Supreme Court interpreted rent-payment default and notice provisions in a commercial lease. After reading the case, you will respond with answers to the following questions using your critical thinking and moral reasoning skills:
These questions are to be answered based off of the two cases: Rockstad v. Global Finance & Investment Co., 41 P.3d 583 (Alaska 2002) and Wessells v. State of Alaska, Department of Highways, 562 P.2d 1042 (Alaska 1977)
Legal principles expressed in Wessells case apply to the facts and issues of the Rockstad case:
The two-step analysis that has been used in the Wessells case is applicable in determining what the different lease terms mean. The primary principles that have been used in the Wessells case are applicable to Rockstad case by finding out if the lease is equivocal and if the lease is clear and unequivocal.
As has been quoted in the case, “Three main principles inform the lease-interpretation process: First, ambiguities are construed against the party that supplied and drafted the form. Second, ambiguities are construed against the lessor. Third, a construction of an ambiguous provision which permits the continued performance of a lease is favored.”
While applying these principles, it must be considered to give effect and rational meaning to each provision of the instrument. Moreover, it must also be attempted to interpret the lease terms cordially while trying to avoid interpretations that result in conflicts among the provisions.
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Basis for disagreement between the majority and the dissent in the Rockstad case:
There are two bases for the disagreement between the majority and the dissent in the Rockstad case:
The dissent tries to show that majority’s interpretation is textually not possible by molding it in a meaningless way and then replacing the weird rephrasing of the text “use of default” mentioned in subsection 15.4. The supposed textual issue can be easily solved by selecting the more meaningful phrasing “Renewed Default” in the same section. “The commission by Tenant of any failure to tender rent before notice of untimely payment described above a second time and within two (2) months following the time when Tenant has been given notice of such a failure to tender rent before notice of untimely payment under Section 15.2 and has cured the same within the permitted time.” This rephrased text does not cancel out anything in 15.4 subsection, but restrains from nullifying the actual idea in section 15 of defining and using the word “default” throughout the lease, inclusive of its use in subsection 15.4.
Though the dissent does not refute that subsection 15.4 is vague, it solves the same by providing the meaning of “default” as has been used in the article. The approach, however, has three limitations. It is paradoxical to use “default” in the context of its ordinary meaning, as it appears in a contract, the purpose of which is to define the word with a special meaning. Secondly, the approach of the dissent synthetically separates the word “default” from its immediate modifiers “described above,” which clearly refers to the definition of default in the subsection. Thirdly, the approach of the dissent misses considering the three canons of construction that advice to resolve vagueness or ambiguity in support of continuity and against the lessor and the drafter.
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Conclusions and supporting arguments for each position:
The conclusion and supporting arguments for each position are discussed below.
Rockstad’s initial brief argued that the delayed payment wasn’t a default, but the final reply did not address this significant point. During the discussion, his counsel substantiated that Rockstad does not argue that the delayed payment in the month of August was a default. Since he further conceded the issue and no second default was found, it can be concluded that Rockstad committed a first default.
The superior court concluded that the breach involved in the case was not enough at the time to declare the termination of the lease. It concluded that Rockstad had indeed breached the strict terms in the lease agreement, thereby jeopardizing the lease itself.
The conclusion makes it least important to address the arguments put forward by Rockstad that challenges other essential aspects of the order passed on by the court on the basis of a second default. It is also not important to consider his claim that the court went wrong while it failed to allow him the fees of the prevailing party’s attorney.
Therefore, considering the final statement that Rockstad did not make a renewed default and the final judgment to vacate the cost order, it is not necessary to solve the problem of the scope of the cost order.
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Holding is of interest to landlords who want their tenants to make timely payments of rent:
In the given case, the holding is of interest to landlords who want their tenants to make timely payments of rent on grounds that there are few predefined lease provisions with rent. According to these provisions, the landlords wanting their tenants to make timely payments of rent would be favored if a case is filed in the court. The provisions are as below:
“Section 4 of the lease comprises two subsections dealing with rent. Subsection 4.1 sets the minimum monthly rents, specifies that the rent is ‘payable in advance, on the first (1st) day of each month,’ and requires the rent to be paid ‘without notice or demand ․ to [the] Landlord’.”
“Subsection 4.2 Late charge: If any [rent] payment is not paid within ten (10) days of the due date, then there shall be added as additional rent an amount equal to Four percent (4%) of the delinquent payment for the month or portion thereof after the date it was due, provided, however, if such sum and late charge are not paid in full on the tenth (10th) day of the month, such sum shall commence to bear interest at the rate of Ten and One-Half percent (10.5%) per annum until paid in full.”
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Size of the business affect a court’s interpretation of a lease’s terms:
The relative size of the business must not affect the court’s interpretation of the lease terms. The court should not practice leniency because this would impact the faith of the parties on the superior court of law and justice. Moreover, if it gets affected by the size of the business this would open the roads for many other defaulting large-sized businesses. The court should be equal to all and abide by the provisions that allow justice to those who deserve it. However, if there are certain issues related to the business on human grounds, for example, if the owner is severely ill and has no one to look after; the decision to punish the business might affect the health of the owner. In such cases, courts usually practice some leniency by giving an expanded time period to clear their defaults and penalties.
Review the actual cases of Rockstad v. Global Finance & Investment Co., 41 P.3d 583 (Alaska...