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Vermont Small Business Development Corporation v. Fifth Son Corporation

January 25, 2013

VERMONT SMALL BUSINESS DEVELOPMENT CORPORATION
v.
FIFTH SON CORPORATION, J. MICHAEL HENZEL, MAD PARTNERS, LLC AND CHRIS PIERSON
MICHAEL S. KUPERSMITH, J.



On Appeal from Superior Court, Washington Unit, Civil Division

The opinion of the court was delivered by: ¶ 1. Dooley, J.

Vermont Small Business Development Program v. Fifth Son Corporation, Henzel, Mad Partners, LLC and Pierson (2012-070)

2013 VT 7

Supreme Court

PRESENT: Reiber, C.J., Dooley, Skoglund, Burgess and Robinson, JJ.

Appellant landlord appeals a partial summary judgment order concluding that his eviction of appellee tenant from a property was wrongful, as well as the trial court's ruling on a post-trial motion that tenant was not liable to landlord for rent that accrued post-eviction. Because landlord's notice of default was defective, and because a wrongful eviction releases a tenant from liability for rent accrued post-eviction, we affirm.

¶ 2. Mad Partners, LLC and Chris Pierson (collectively, lessor) leased a restaurant and residential condominium to defendants Fifth Son Corporation and J. Michael Henzel (collectively, lessee) for a two-year period beginning January 1, 2009. Until March 2010, lessee operated a restaurant called "Miguel's at Sugarbush" in the leased commercial building, and stayed in the condominium irregularly.

¶ 3. Lessor and lessee signed two separate leases, one for the restaurant and one for the condominium, but each lease provided that default on either one would allow lessor to exercise default rights under both. The leases differed, however, in how lessor was to give notice if he wished to exercise such rights. Article XI of the restaurant lease provided that in the case of an "Event of Default," which included nonpayment of rent for a specified period,

Lessor . . . may give written notice to Lessee specifying the occurrence giving rise to such Event of Default . . . and stating that this Agreement and terms hereby demised shall expire and terminate on the date specified in such notice, which shall be at least twenty (20) days after the giving of such notice . . .

It went on to describe how lessee could cure the default before that specified date.

¶ 4. Article 5 of the condominium lease, by contrast, provided:

If the Lessee shall neglect or fail to perform any of its covenants, and in particular if any monthly installment of rent be overdue and unpaid, the Lessor may, immediately or at any time thereafter, give notice pursuant to State statutes for Lessee to vacate the premises .

¶ 5. Article XIII of the restaurant lease contained a "survival clause," whereby:

No expiration of the term of this Lease or repossession of the Leased Premises by reason of an Event of Default shall relieve Lessee of its liability and obligations under this Lease, all of which ...


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