Wallis v. Falken-Smith
136 A.D.2d 506 (1988)
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Rule of Law:
When a tenant breaches a lease and the landlord sues for unpaid rent, the burden of proof is on the tenant to demonstrate that the landlord failed to make reasonable efforts to mitigate damages.
Facts:
- Defendant entered into a two-year lease for an apartment owned by Plaintiff.
- During the lease term, Defendant moved to California and ceased paying rent.
- Defendant's real estate agent presented two prospective tenants to the Plaintiff.
- Plaintiff rejected one prospective tenant who wanted to install a hot tub on the apartment's terrace.
- The second prospective tenant withdrew her interest after her architect advised her the apartment's layout was unsuitable.
- Plaintiff spent $3,000 on numerous newspaper advertisements, some of which described the apartment as being 'For [a] Quiet, Creative Person'.
- Several prospective tenants with families expressed interest in the apartment after seeing the advertisements.
- The apartment was ultimately sublet to a couple.
Procedural Posture:
- Plaintiff landlord sued Defendant tenant in the Supreme Court, New York County (a trial-level court).
- Following a nonjury trial, the court entered a judgment in favor of the Plaintiff for $15,000.
- Plaintiff, as appellant and cross-respondent, appealed the judgment to the Supreme Court, Appellate Division, seeking a larger damages award.
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Issue:
Does a tenant meet their burden of proving a landlord's failure to mitigate damages by presenting evidence that the landlord rejected certain prospective subtenants and placed advertisements with arguably restrictive language?
Opinions:
Majority - Memorandum Opinion
No. A tenant does not meet their burden of proving a landlord failed to mitigate damages when the evidence shows the landlord's actions were reasonable under the circumstances. The tenant carries the burden of proving that the landlord could have avoided or reduced damages. Here, the landlord's rejection of a prospective tenant who wanted to install a hot tub was within his rights. The second prospect withdrew on her own. Furthermore, the advertisements, while not perfectly drafted, were reasonably designed to attract inquiries, as evidenced by the fact that several people, including families, responded and the apartment was ultimately rented. Given the slow real estate market at the time, the landlord's reasonable, albeit imperfect, efforts were sufficient to satisfy any duty to mitigate.
Analysis:
This decision reinforces the legal principle that the defaulting tenant, not the landlord, bears the burden of proving a failure to mitigate damages. It provides practical guidance on what constitutes 'reasonable efforts' by a landlord, granting them significant discretion in rejecting tenants for legitimate reasons and in crafting advertisements. By setting a high evidentiary bar for tenants, the ruling strengthens the landlord's position in breach of lease cases and clarifies that a landlord's mitigation efforts need only be reasonable, not perfect or optimal, to be legally sufficient.
