Monday, January 6, 2014

Reid v. Mutual of Omaha Insurance Co. case brief

Reid v. Mutual of Omaha Ins. Co. case brief summary
776 P.2d 896 (1989)

Defendant commercial tenant appealed from the judgment in a nonjury trial of the Third District, Salt Lake County (Utah), which found it liable to plaintiff landlord for breach of a lease for office space.


  • The court found that the evidence supported the rejection of the constructive eviction claim asserted by defendant. 
  • The court affirmed the determination that defendant breached the lease agreement by vacating the premises and failing to pay rent. 
  • The court held that Utah law imposed a duty upon landlords to mitigate their damages by reletting premises after a tenant has wrongfully vacated and defaulted on the covenant to pay rent.
  • The court found that leases are essentially commercial transactions, contractual in nature and that the economies of both the state and the nation benefited from a rule that encourages the reletting of premises, which returns them to productive use, rather than permitting a landlord to let them sit idle while it seeks rents from the breaching tenant. 
  • The court affirmed the judgment to the extent that it was based on rents that accrued through the date of trial. 
  • The court reversed that part of the trial court's order which awarded plaintiff damages for rents that accrued after the trial, without imposing on plaintiff a continuing affirmative duty to mitigate accruing losses.

The court affirmed the judgment of liability in favor of plaintiff landlord for breach of the lease, but reversed in part on the determination of damages against defendant commercial tenant because plaintiff had a continuing affirmative duty to mitigate losses not only through the date of trial but also afterwards.

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1 comment:

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