Amoco Oil Company v. Jones

Llewellan Jones (defendant) had leased the right to operate a gas station from Amoco Oil Company (Amoco) (plaintiff) since 1968. The lease agreement signed by the parties required Jones to keep the property and premises in good repair and to perform upkeep necessary to keep the premises in good condition, aside from the standard wear and tear. Additionally, the agreement allowed Amoco to terminate the lease or choose not to renew it upon the occurrence of a variety of events, including the destruction of part or all of the premises. On December 24, 1985, fire broke out at the gas station causing substantial damage to the structure. Later, it was declared that neither Jones nor Amoco was at fault in causing the fire. However, the lease agreement did not specifically address the parties’ rights and obligations if the premises were significantly damaged by fire. Nevertheless, Amoco terminated the lease agreement because of the fire damage. Amoco then brought suit against Jones for breach of the lease agreement and specifically for failing to return the station to Amoco in as good a condition as received by Jones. At trial, Amoco’s expert witness, a general contractor, testified that the repairs to restore the property were estimated at $118,850. At the close of the evidence, the trial court directed a verdict in Jones’ favor. In doing so, the court noted that the lease agreement did not contain a covenant that Jones was obligated to restore the property to its original state in the event of severe fire damage. Amoco appealed.