Covalt v. High
New Mexico Court of Appeals
675 P.2d 999 (1983)
Louis Covalt (plaintiff) and William High (defendant) were both officers and shareholders in a corporation called CSI. In 1971, they orally agreed to form a partnership. The partnership purchased a parcel of land and, in February 1973, leased it to CSI for a five-year term. When that term expired in 1978, the parties agreed that CSI would remain as tenant and the rent would be increased to $1,850 per month. In December 1978, Covalt resigned from CSI and began to work for a competitor. He then demanded that CSI’s rent be increased to $2,850. High declined to renegotiate the lease. Covalt sued High, seeking lost rental value among other relief. The trial court found that fair rental value for the property would have been $2,850 or higher, and that CSI was able to pay it. The court ruled that High’s failure to go along with the increase was a breach of fiduciary duty. It awarded Covalt $9,500 in lost rental value plus prejudgment interest. High appealed.
Rule of Law
Holding and Reasoning (Donnelly, J.)