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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 Intermountain vacated.

Rule of Law


Holding and Reasoning (Zimmerman, J.)

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