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Stowe v. Realco Limited Liability Co.

Court of Appeals of Kentucky

May 11, 2018



          BRIEFS FOR APPELLANT: Dwight O. Bailey Flatwoods, Kentucky.

          BRIEF FOR APPELLEE: Laura L. Mays, Kristen K. Orr Lexington, Kentucky.



          NICKELL, JUDGE

         Edgar A. Stowe, d/b/a Ed's Auto ("Stowe"), appeals from the Greenup Circuit Court's April 8, 2015, order which concluded he breached the terms of a commercial lease agreement, found the provisions of KRS[1] 383.160 did not apply, and granted summary judgment in favor of Realco Limited Liability Company ("Realco"). Following a careful review of the record, the briefs and the law, we affirm.

         On April 1, 2008, Realco and Stowe entered into a one-year lease agreement for a commercial building located in Ashland, Kentucky. The lease explicitly stated the option to renew was intentionally omitted. Nevertheless, on January 22, 2009, the parties entered into an amendment of the lease extending the term for an additional year but leaving all other terms and conditions unaltered. The amended term was to expire on March 31, 2010. The lease agreement contained a provision related to the failure to vacate at the expiration of the lease term, which stated as follows:

23. Holding Over. If at the expiration of the Term or Renewed Term Tenant continues to occupy the Premises with or without Landlord's consent, the tenancy under this Lease shall become month to month, at 200% of the total monthly rental payable by Tenant during the immediately preceding twelve month period, terminable by either party on thirty (30) days written notice. The Tenant shall be subject to all other of the conditions of the previous Lease excepting the rent and term thereof and shall be further subject to any changes which Landlord has given Tenant in writing during any thirty (30) day period for the following thirty (30) day period.

         At the end of the term, Stowe did not vacate the premises.

         On June 16, 2010, Realco informed Stowe in writing it was terminating the lease effective August 31, 2010, pursuant to its rights under Section 23 of the lease agreement. On July 12, 2010, Realco informed Stowe it had not received his rental payment for July and demanded immediate payment including a late fee. On August 4, 2010, Realco notified Stowe once more of the termination date, the continued delinquency of July's rent and late fee, and gave notice of the failure to receive rent for August. Another letter was sent approximately one week later demanding immediate payment for all past due rents. Additional letters demanding payment and vacation of the premises were sent over the following weeks. Stowe failed to respond to the communications, did not tender payment of any amounts due, and refused to vacate the leased premises. Realco filed a forcible detainer action seeking to have Stowe ousted from the premises for his breach of the terms of the lease and refusal to voluntarily leave. On October 4, 2010, the trial court granted Realco's request and gave Stowe seven days to vacate. Stowe left that same day.

         Realco filed the instant action on December 8, 2010, seeking payment of unpaid rent and a judgment for its damages occasioned by Stowe's breach of the terms of the lease agreement. Realco was initially granted default judgment but the trial court granted Stowe's motion to vacate the default and permit the matter to proceed in the normal course. Stowe answered the complaint and filed a counterclaim for damages resulting from Realco's alleged breach of the lease agreement and other wrongdoings related to its dealings with Stowe. After a period of discovery and motion practice, Stowe moved for summary judgment on his counterclaim and sought a ruling the lease term had been extended to March 31, 2011, by operation of KRS 383.160.[2] The trial court denied the motion, explicitly holding the statutory provisions of KRS 383.160 were inapplicable and the "hold-over" language of paragraph 23 of the lease controlled. In subsequently denying Stowe's untimely motion to reconsider, the trial court specifically reaffirmed its reasoning for the previous ruling.

         Realco then moved for summary judgment alleging it was undisputed a valid and enforceable contract existed, Stowe breached the contract, and Realco sustained damages resulting from the breach. In response, Stowe alleged factual disputes existed and again urged the court to find KRS 383.160 applicable, relying on the same arguments and authorities previously presented. Shortly thereafter, Stowe filed a motion "to apply KRS 383.160(1)" parroting his earlier filings and adding no new arguments or authority. The trial court granted summary judgment in favor of Realco upon again specifically concluding KRS 383.160(1) was inapplicable and finding Stowe breached a valid and enforceable lease. Stowe's subsequent motion to alter, amend or vacate, premised on his continued reliance on application of KRS 383.160, was denied. This appeal followed.

         Stowe presents three allegations of error in seeking reversal. First, he contends the trial court erred in refusing to apply KRS 383.160. Second, he argues the trial court's ruling on interpretation of the lease and application of KRS 383.160 directly contravenes the holding of Masterson v. DeHart Paint and Varnish Co., 843 S.W.2d 332 (Ky. 1992). Finally, Stowe alleges summary judgment was improvidently granted. We disagree and affirm.

         As an initial matter, we note Stowe's failure to comply with CR[3] 76.12(4)(c)(v) which requires "a statement with reference to the record showing whether the issue was properly ...

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