D entered into lease with P, who owned apartments, to rent an apartment from May of 1972 to April 1974.
D paid P security deposit and half of first month's rent. There was also a rent concession for the first six weeks.
D wrote to P 18 days after lease began to say that he was supposed to be married, but the engagement was broken off and that he had no funds of his own to pay for the apartment because he was a student. He asked to be released from the lease and said he would forfeit the money already paid. P did not answer.
A third party came to ask about renting the apartment and was turned away.
P did not reenter or show the apartment until August 1973, and rented it beginning in September 1973 at half the rate D would have paid.
Prior to re-letting, P sued D for $7,590, the total amount due for the full two year term of the lease. Amended to ask for amount due from May 1972 to September 1973.
D counterclaimed to demand repayment of security deposit and claimed P did not mitigate damages.
Procedural History
Trial judge found for D. Held that P had a duty to mitigate damages and that his failure to respond to D's offer of surrender was tantamount to an acceptance.
Appellate Division reversed.
Supreme Ct reversed, held for D, duty to mitigate damages.
Issues
Is a landlord seeking damages from a defaulting tenant under a duty to mitigate damages by making reasonable efforts to re-let an apartment wrongfully vacated by a tenant?
Holding/Rule
A landlord seeking damages from a tenant who has abandoned a lease is under a duty to mitigate the damages by making reasonable efforts to re-let the apartment.
Reasoning
In Riverview Realty v. Perosio, a similar controversy arose. Lower courts held for landlord because of precedent.
SC granted certification and held that damages must be mitigated by the landlord, and that courts are trending in this direction.
The distinction between a lease for ordinary residential purposes and an ordinary contract can no longer be considered viable.
Attention must shift to the intentions of the parties, as with normal contracts.
It makes no sense to allow a landlord to treat a vacant, abandoned premise as the property of the tenant and recover full rent when he could easily just re-let the property.
There is no reason to believe that absent the vacancy the landlord could have succeeded in renting a different apartment to interested individuals (such as the ones in this case that visited asking about the apartment).
A landlord must treat the vacated property as if it were one of his other vacant stock.
Landlord must show reasonable diligence in attempting to re-let the premises (he has burden of proof). Trial court should consider:
Whether the landlord offered or showed the apartment to the tenant or advertised it in local newspaper.
Tenant can rebut such evidence by showing that there were suitable tenants who were rejected.
Each case must be judged on its own facts.
Here, P could have avoided the damages that eventually accrued and D was relieved of his duty to continue paying rent.
