Rose v. Freeway Aviation, Inc.
1978 Ariz. App. LEXIS 616, 120 Ariz. 298, 585 P.2d 907 (1978)
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Rule of Law:
A lessor's general covenant to 'maintain' leased premises, in the absence of any other controlling language in the lease, obligates the lessor to rebuild the premises if they are destroyed.
Facts:
- On March 1, 1970, Freeway Aviation, Inc. (lessor) and Richard Rose (lessee) entered into a five-year lease for a building Rose used for airplane repair.
- The lease agreement stipulated that Freeway was responsible for 'maintaining the leased premises in at least a good condition as they are presently.'
- In late 1973, a Freeway employee operating a gasoline truck struck and extensively damaged the building's doors and frame.
- Despite repeated requests from Rose, Freeway never repaired the damage caused by the truck.
- In September 1974, a windstorm completely demolished the already-damaged building.
- Following the storm, Rose requested that Freeway rebuild the structure, but Freeway refused, claiming the lease had been terminated by the building's destruction.
Procedural Posture:
- Richard Rose commenced an action for breach of lease against Freeway Aviation, Inc. in the trial court.
- The parties filed cross-motions for summary judgment on the issue of Freeway's liability.
- The trial court granted partial summary judgment on liability in favor of the plaintiff, Richard Rose.
- Freeway Aviation, Inc., as appellant, appealed the trial court's judgment to the intermediate appellate court.
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Issue:
Does a lessor's general covenant in a lease to 'maintain' the leased premises obligate the lessor to rebuild the premises after their complete destruction by a natural disaster?
Opinions:
Majority - Richmond, Chief Judge
Yes. A lessor's general contractual covenant to 'maintain' the leased premises includes an obligation to rebuild the premises after their destruction. The court rejected Freeway's argument of supervening impossibility, holding that a promisor can assume the risk of a thing's continued existence through the contract. The court reasoned that 'maintain' is a broader term than 'repair,' and its ordinary dictionary definition includes to 'rebuild' and 'replace.' Citing established common law, the court held that because Freeway did not include any language in the lease to limit this general covenant, the plain and ordinary meaning of the word 'maintain' controls, creating an obligation to rebuild.
Analysis:
This decision establishes a significant default rule for the interpretation of commercial leases in this jurisdiction, placing a heavy burden on lessors. It clarifies that a simple covenant to 'maintain' creates a far greater obligation than a covenant to 'repair,' extending to complete rebuilding after a catastrophic loss. The case underscores the critical importance of precise drafting in contracts to allocate risk, as lessors must now explicitly limit their maintenance duties if they wish to avoid the costly obligation to rebuild after total destruction. This precedent influences how courts will interpret undefined, common terms in contracts, favoring their broad, ordinary meaning unless expressly restricted by the parties.
