This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C1-00-1985

 

 

Midway Warehouse Limited Partnership,

Respondent,

 

vs.

 

Ramsey Action Programs, Inc.,

Appellant.

 

 

Filed June 5, 2001

Reversed

Huspeni, Judge^*

 

Ramsey County District Court

File No. C898005234

 

 

Daniel R. Kelly, Felhaber, Larson, Fenlon & Vogt, 601 Second Avenue South, Minneapolis, MN 55402-2534 (for respondent)

 

Larry E. Reed, Hassan & Reed, Ltd., 1000 Reed Professional Center, 2311 Wayzata Blvd., Minneapolis, MN 55405 (for appellant)

 

 

            Considered and decided by Halbrooks, Presiding Judge, Lansing, Judge, and Huspeni, Judge.

 

U N P U B L I S H E D   O P I N I O N

HUSPENI, Judge

            Appellant terminated a lease with respondent and was required to pay buildout costs in the amount of $192,000.  Appellant challenges the district court’s subsequent award of attorney fees arguing that (1) fees are not provided for in the lease; (2) fees were not properly pleaded by respondent; (3) fees are barred by res judicata; (4) fees were unreasonable; and (5) the district court lacked jurisdiction to award appellate attorney fees.  Respondent moved to strike portions of appellant’s brief.  Because we conclude that under the circumstances of this case attorney fees were not provided for in the lease, we reverse the award and do not address the other issues raised by the parties. 

FACTS

On June 30, 1994, appellant Ramsey Action Programs, Inc., entered into a lease agreement with JLT Warehouse Limited Partnership, predecessor in interest of respondent Midway Warehouse Limited Partnership.  The ten-year lease commenced September 1, 1994, after which time appellant began to lose money and funding.  On January 27, 1997, two years and five months into the lease term, appellant sent respondent notice that appellant intended to terminate the lease, effective August 1, 1997.  On February 17, 1997, appellant reiterated the August 1 termination date and indicated that it may want to move out earlier if respondent could find another tenant.  On May 21, 1997, respondent wrote to remind appellant that, under the terms of the lease, appellant was responsible for costs associated with the buildout of the premises and set a payment deadline of June 6, 1997. 

On June 19, 1997, appellant brought an action for a declaratory judgment to avoid an obligation to pay buildout costs.  Four days later, appellant wrote respondent, declaring the August 1 termination date in their previous letters to be in error, and informing respondent that it had always been appellant’s intention to terminate effective September 1, 1997.  Appellant dismissed the declaratory judgment action after respondent insisted on dismissal as a condition preliminary to any discussion regarding lease renegotiation. 

Several times over the course of the next few months, appellant attempted to negotiate a new lease with respondent.  Each time, respondent did not respond.  On August 21, 1997, appellant reiterated its intent to vacate the premises by September 1, 1997.  Respondent replied, insisting, once again, that appellant pay buildout costs and declaring that respondent would “pursue all remedies available to enforce the lease.”  Respondent then brought suit claiming damages of $192,000 for buildout costs and sought summary judgment on that claim.^[1]

The district court interpreted the lease as requiring appellant to pay buildout costs if it gave its termination notice within the first three years of the lease, even though the actual termination occurred after expiration of three years.  Furthermore, the court concluded that both appellant’s initial notice and its amended notice were given within the first three years of the lease.  The district court granted respondent’s motion for summary judgment in the amount of $192,000. 

            On appeal of the award, this court affirmed; the supreme court denied further review.  One week following the supreme court’s denial of review, respondent served and filed its motion for attorney fees.  Following a subsequent hearing, the district court awarded respondent attorney fees in the amount of $35,396.13.  Appellant’s request for reconsideration was denied, and this appeal followed.

D E C I S I O N

I.

            Appellant argues that the district court erred in concluding that respondent was entitled to fees based on the lease agreement.  A lease is a contract to be construed according to the rules of contract interpretation.  Amoco Oil Co. v. Jones, 467 N.W.2d 357, 360 (Minn. App. 1991).  Interpretation of a contract is a question of law, which we review de novo.  Veerkamp v. Farmers Coop. Creamery, 573 N.W.2d 715, 717 (Minn. App. 1998); see also Plaza Assocs. v. Unified Dev., Inc., 524 N.W.2d 725, 728 (Minn. App. 1994) (construction and effect of a contract is an issue of law), review denied (Minn. Jan. 25, 1995). 

            It is a fundamental principle of our common law jurisprudence that each party must bear responsibility for his own attorney fees “in the absence of a statutory or contractual exception.”  Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn. 2000); see also Barr/Nelson, Inc. v. Tonto’s, Inc., 336 N.W.2d 46, 53 (Minn. 1983) (“We have long held that attorney fees are not recoverable in litigation unless there is a specific contract permitting or a statute authorizing such recovery.”). 

            Appellant terminated the lease effective September 1, 1997, exactly three years after the commencement of the lease.  The original dispute arose because appellant believed that, by waiting until after the initial three-year period to actually terminate the lease, the buildout costs would be avoided.  The dispute became one of contract interpretation, and this court determined that the initial three-year period applied to the date of notice of termination and not the actual termination itself.  Midway Warehouse Ltd. Partnership v. Ramsey Action Programs, Inc., No. C3-99-1821, 2000 WL 687763, at *3 (Minn. App. May 30, 2000).  This court also concluded that the lease contract was unambiguous.  Id. at *4.  Once appellant exhausted its right of appeal, the buildout costs were paid. 

            Respondent essentially contends it is entitled to attorney fees because of appellant’s termination of the lease and the resolution of the subsequent dispute over whether appellant became responsible for buildout costs based on the date of its notice of termination versus the date of actual termination of the lease.  We disagree. 

            The district court relied on Article 19 of the lease, entitled “Default,” and specifically, 19(C), entitled “Damages,” to support its award of attorney fees.  That provision states in part:

If Landlord repossesses the Premises or terminates the lease, then Landlord reserves the right to accelerate the unpaid rent and bring such actions for the recovery of any deficits in Base Rent, additional rent, and other charges imposed under this lease which remain unpaid by Tenant to Landlord * * * including all court costs and reasonable attorney’s fees of Landlord incurred in recovering the deficit and in recovering the Premises. 

 

Respondent would have us read this provision broadly so as to entitle respondent to recover fees for virtually any disagreement or dispute over terms of the lease.  But the language of a lease must be given its plain meaning and interpreted “in the context of the entire agreement.”  Carlson Real Estate Co. v. Soltan, 549 N.W.2d 376, 379 (Minn. App. 1996) (quoting Hydra-Mac, Inc. v. Onan Corp., 450 N.W.2d 913, 916 (Minn. 1990)), review denied (Minn. Aug. 20, 1996).  We must, therefore, read the above provision in the context of Article 19 as a whole, and within the context of the entire lease agreement. 

            Article 19(C) begins with the phrase, “If Landlord repossesses the Premises or terminates the lease * * * .”  A fair reading of that entire provision indicates that it refers to the landlord’s right to terminate the lease, re-enter the premises, repossess the premises, bring an unlawful detainer proceeding, and/or relet the premises, while concurrently seeking damages in the event of a default by the tenant.  But here, it was appellant that terminated the lease, surrendered the premises, and gave respondent advance notice that it was going to do so. 

Appellant was never in “default” as contemplated under Article 19.  The provisions of Article 19 apply to deficits in monies owed prior to any termination of the lease.  Those provisions are clear and susceptible of only one interpretation.  We conclude that the landlord cannot terminate a lease, repossess and re-enter the premises, or bring an unlawful detainer proceeding, and thus invoke the damages provisions of Article 19(C), if the tenant has already properly terminated the lease and surrendered the premises, as was the case here.  Any “default” or “breach” of the lease by appellant, if there was one, occurred subsequent to appellant’s proper termination of the lease and surrender of the premises.  Read in context, Article 19 applies only to defaults occurring prior to a tenant’s proper termination of the lease and surrender of the premises.  See Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 493 (Minn. 1998) (“[t]he cardinal purpose of construing a contract is to give effect to the intention of the parties as expressed in the language they used in drafting the whole contract” (quotation omitted)). 

The language of Article 19 cannot be construed to apply to the circumstances of this case.  Respondent landlord was not in a position to repossess the premises or terminate the lease once appellant had already surrendered the premises and properly terminated the lease.  The circumstances of this case do not come within the provision for attorney fees stated in Article 19 of the parties’ lease.  

Finally, we note that the lease contains no general attorney fees provision.  But that does not mean we can read Article 19(C) to fulfill the role of general attorney fees provision.  Leases are “often in a standard form which leads naturally to the omission of terms which are not standard.”  Bussard v. College of St. Thomas, Inc., 294 Minn. 215, 225, 200 N.W.2d 155, 162 (1972).  The provision for attorney fees in Article 19(C) cannot reasonably be construed to fulfill the role of a general attorney fees provision. 

II.

            Because we conclude that, under the facts of this case, attorney fees were not provided for in the lease, we need not address appellant’s alternative arguments regarding whether the request for attorney fees was properly pleaded, barred by res judicata, unreasonable, or must fail because the district court lacked jurisdiction to award appellate attorney fees.  With regard to respondent’s motion to strike certain portions of appellant’s brief, we have resolved the issue of whether attorney fees should have been awarded by relying solely on language of the lease agreement.  There is no argument as to the admissibility of that document.  Therefore, we need not address respondent’s motion to strike.^[2] 

            Reversed.