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Reid v. Mutual of Omaha Ins. Co.
Supreme Court of Utah
776 P.2d 896 (1989)
In 1980, Mutual of Omaha (Mutual) (defendant)
leased property from Reid (plaintiff) for a term of five years. Soon after, the
adjacent space was leased to Intermountain Marketing (Intermountain). Mutual
complained to Reid that Intermountain’s employees were too noisy, occupied all
of Mutual’s parking spaces, and otherwise interfered with Mutual’s operations.
In 1982, Mutual vacated the premises, and Reid sued to recover unpaid rent for
the remainder of the lease term. Mutual counterclaimed for constructive
eviction based on Reid’s failure to address the former’s complaints regarding
Intermountain. During litigation, Reid remodeled Mutual’s former space and
leased it to Intermountain for the remainder of the five-year term. Several
months later, however, Intermountain filed for bankruptcy and vacated, after
which the property remained unoccupied. The trial court rejected Mutual’s
constructive eviction claim and awarded Reid the total rent due for the
remainder of the lease term minus rents received from Intermountain for the subject
premises. Mutual argued on appeal that it was only liable for the rent that was
due between Mutual’s last payment and the reletting to Intermountain because
the reletting amounted to an acceptance of the breach and a mutual termination
of the lease. Mutual also argued that even if it was liable for rents after the
reletting to Intermountain, Reid had a duty to seek a replacement tenant after
Rule of Law
Holding and Reasoning (Zimmerman, J.)
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