Court of Appeals of Missouri, Eastern District, Fourth Division
from the Circuit Court of the City of St. Louis Honorable
Jason M. Sengheiser
VAN AMBURG, JUDGE
(Landlord) appeals the trial court's judgment in favor of
LXS Investments (Tenant) in this action for unlawful
detainer. We reverse and remand.
owns real estate in the City of St. Louis. Tenant operates a
restaurant called The Drunken Fish. In 2006, the parties
entered into an agreement for the lease of commercial space
at One Maryland Plaza in the Central West End neighborhood.
As relevant here, that agreement provided as follows:
Default: In the event of any failure of Tenant to
pay any rental due hereunder within thirty (30) days after
the same shall be due, or any failure to perform any other of
the terms, conditions, or covenants of this Lease to be
observed or performed by Tenant for more than ten (10) days
after written notice of such default ... Landlord, besides
other rights or remedies it may have, shall have the
immediate right of re-entry ... . ... Landlord does not waive
its right to pursue any other right or remedy to which it may
be entitled ... .
Waiver. The waiver by Landlord of any breach of any
term, covenant, or condition ... shall not be deemed to be a
waiver of such term, covenant, or condition. ... The
subsequent acceptance of rent hereunder by Landlord shall not
be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant, or condition of this Lease, other than
the failure of Tenant to pay the particular rent so accepted.
… Time is strictly of the essence of Tenant's
performance of all covenants and agreements ... and in the
payment of all sums to be paid.
2015, the parties entered into an amendment to the original
lease providing in pertinent part:
Renewal Option: Provided Tenant is not then in
default and has not been in default during the term of this
Lease and any prior option term, whether or not Landlord
shall have notified Tenant in writing of such default and
whether or not such default shall have been cured by
Tenant, ... Tenant shall have the right and option ...
to extend the term of this Lease [for five years commencing
January 1, 2017].
6. ... In the event of any conflict between the
Lease and this First Amendment, the terms and conditions of
this First Amendment shall control.
2016, Tenant notified Landlord of its intent to renew the
lease for another 5-year term. Landlord rejected Tenant's
attempt to renew, citing Tenant's failure to perform
certain obligations during the existing term (e.g., to pay
rent on time, furnish insurance policies and maintenance
agreements, maintain windows, hydroflush sewer lines,
maintain grease traps). Tenant refused to vacate the
premises, asserting that it wasn't in default because
Landlord never provided Tenant notice as contemplated in the
Default clause. Landlord responded that notice wasn't
required under the Renewal clause and filed suit against
Tenant for unlawful detainer.
trial, Tenant testified as follows. Tenant negotiated a lower
rent rate under the amendment due to the condition of the
premises, and Tenant had since spent approximately $200, 000
on improvements. Though Tenant had not read or complied with
the lease in the aforementioned respects, it had always
maintained the policies, paperwork, and utilities in
question, it just hadn't provided proof of the same to
Landlord because Landlord never asked. Though some rent
payments were posted after the due date, Tenant generally
paid rent when it received an invoice, and, under the lease,
late charges didn't apply until five days after the due
date. Tenant suggested that Landlord was attempting to get
out of the lease for a more lucrative deal. Tenant argued
that its renewal was effective and enforceable - Landlord
wasn't entitled to refuse. Landlord admitted that it had
accepted late payments in the past but noted that the Waiver
clause reserved Landlord's rights as to any instances of
non-compliance. Landlord argued that, notwithstanding the
Default clause, the Renewal clause specifically predicated
Tenant's right to renew upon the absence of
non-compliance, regardless of notice.
trial court entered judgment in favor of Tenant, reasoning
that a conflict between the Renewal and Default clauses
created an ambiguity, which should be construed against
Landlord as the drafter. Thus, the court interpreted
"default" in the Renewal clause to first require
notice as provided in the Default clause. As such, the court
concluded that Tenant was not in "default, " so
Tenant effectively exercised its option to renew. Landlord
appeals and asserts that the trial court's interpretation
is erroneous as a matter of law.