Reed v. Classified Parking System
232 So. 2d 103 (1970)
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Rule of Law:
Under Louisiana law, a lessor has an implied warranty to maintain the leased premises, including replacing worn-out structural components and essential equipment due to normal wear and tear, and failure to do so for a material defect that seriously disturbs the lessee's possession can justify the cancellation of a lease and sublease.
Facts:
- From 1930 until 1956, Mr. and Mrs. John B. Hutchinson (original lessors) operated The Auto Hotel, a multistoried parking garage, at 520 Edwards Street in Shreveport, Louisiana.
- On May 15, 1956, the Hutchinsons leased The Auto Hotel to Classified Parking System (defendant-sublessor) for the purpose of operating an automobile parking and storage garage.
- On December 1, 1958, Classified Parking System subleased the premises to Robert B. Reed, Rutledge H. Deas, Jr., and Shreve-Park, Inc. (plaintiffs-sublessees) for the same purpose.
- The man-lift, installed with the building in 1930, became inoperable in December 1964 and required almost complete replacement, having operated beyond its expected lifespan.
- The roof of the parking garage leaked prior to 1956, continued to leak at the time of the 1958 sublease, and progressively worsened, becoming acute shortly before January 1963; plaintiffs had no notice of the leaking condition at the time of the sublease.
- In September 1963, the Hutchinsons placed a hot-mix asphalt topping on the roof, which cracked within two weeks, causing continued and worsening leakage.
- Around the same time in September 1963, the Hutchinsons installed a new electrical panel because the old one was damaged by water infiltration, but electrical problems persisted, with lights failing and circuits shorting.
- As a result of the roof leakage, chunks of concrete fell from ceilings, water dripped onto parked cars causing damage, and an alkaline substance stained vehicle finishes, requiring extensive cleaning and repair by the sublessees.
Procedural Posture:
- Robert B. Reed, Rutledge H. Deas, Jr., and Shreve-Park, Inc. (plaintiffs-sublessees) initiated an action in the trial court to cancel their sublease with Classified Parking System (defendant-sublessor).
- Classified Parking System filed an answer denying liability and a third-party demand against Mr. and Mrs. John B. Hutchinson (original lessors) for cancellation of the original lease if the plaintiffs' demand was granted.
- The Hutchinsons answered with a general denial and filed a reconventional demand against Classified and a third-party demand against the plaintiffs, seeking reimbursement for roof and electrical repairs and an order for Classified and plaintiffs to place the man-lift system in operable condition.
- The trial court rendered judgment overruling all exceptions, rejecting the principal demand and third-party demand for cancellation, rejecting the Hutchinsons' demands for reimbursement for roofing and electrical work, but granted the Hutchinsons' demands against Classified and plaintiffs (in solido) to install an operable man-lift (or a monetary alternative judgment), and granted a like award to Classified against plaintiffs for the man-lift.
- Plaintiffs and defendant Classified Parking System appealed from the trial court's judgment.
- The Hutchinsons answered the appeal, seeking a reversal of the judgment insofar as their demands for reimbursement for roofing and electrical work were rejected.
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Issue:
Does a lessor's failure to replace a worn-out essential man-lift and to repair a structurally defective roof, which renders the premises unsuitable for its intended use as a first-class parking garage and causes damage, constitute a breach of duty that warrants cancellation of both the lease and sublease, despite clauses requiring the lessee to maintain the premises and accept them 'as is'?
Opinions:
Majority - Bolin, Judge
Yes, a lessor's failure to replace worn-out essential equipment and repair structural defects, which renders the premises unsuitable for its intended use, does warrant cancellation of the lease and sublease, even if the lease requires the lessee to maintain the premises and accept them 'as is.' The court determined that the obligation to maintain equipment under lease Article 14 did not include replacing worn-out equipment, such as the man-lift, which had exceeded its expected lifespan. The plaintiffs were not negligent in the man-lift's care, as evidenced by their attempts to contract maintenance and subsequent insurance cancellation, indicating the equipment was beyond repair. Therefore, the obligation to furnish new equipment fell on the Hutchinsons. Regarding the roof, the court held that lease clauses requiring a lessee to accept premises 'as is' and assume responsibility for 'any repairs whatsoever' do not extend to structural defects. Under Louisiana Civil Code Articles 2692 and 2695, lessors have an implied warranty to maintain the premises, and expert testimony confirmed the waterproofing membrane, a structural component, was beyond its expected life. The Hutchinsons' temporary repair in 1963 was unsuccessful. The court found that the combination of the inoperable man-lift (essential for a first-class garage), the persistent and worsening roof leakage causing concrete to fall, electrical failures, and damage to parked cars constituted a serious disturbance of possession, rendering the premises unsuitable for their intended use. Citing Civil Code Article 2729 and precedents like Boutte v. New Orleans Terminal Co., the court concluded that the sublessees (Reed et al.) were entitled to dissolution of their sublease, and the lessee (Classified) was likewise entitled to cancellation of its original lease with the Hutchinsons.
Analysis:
This case clarifies the scope of a lessee's repair obligations versus a lessor's implied warranty in Louisiana, particularly when lease clauses attempt to shift all repair burdens to the lessee. It establishes that 'maintenance' does not equate to 'replacement' for worn-out essential equipment, nor does 'accepting premises as is' absolve the lessor of responsibility for inherent structural defects. The decision underscores that when a lessor's failure to uphold their fundamental duties renders the property unfit for its intended purpose, lease cancellation is a valid remedy, emphasizing the importance of habitability and fitness for use in commercial leases.
