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Tri-City Assocs., LP v. Belmont, Inc.

Supreme Court of South Dakota

April 16, 2014

TRI-CITY ASSOCIATES, LP, Plaintiff and Appellant,
v.
BELMONT, INC., a South Dakota corporation and JOSEPH Z. ERBA, Defendants and Appellees

Considered on Briefs February 18, 2014.

Page 912

APPEAL FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT PENNINGTON COUNTY, SOUTH DAKOTA. THE HONORABLE ROBERT A. MANDEL, Judge.

MARK F. MARSHALL of Bangs, McCullen, Butler, Foye & Simmons, LLP, Rapid City, South Dakota, Attorneys for plaintiff and appellant.

STAN H. ANKER, JORDAN D. BORDEWYK of Anker Law Group, PC, Rapid City, South Dakota, Attorneys for defendants and appellees.

ZINTER, Justice. GILBERTSON, Chief Justice, and KONENKAMP, SEVERSON, and WILBUR, Justices, concur.

OPINION

Page 913

ZINTER, Justice

[¶1] Belmont, Inc. leased unfinished commercial real-estate space from Tri-City Associates, L.P. The parties later filed claims against each other for breach of the lease. The circuit court entered a judgment in favor of Belmont on all claims. The court reasoned that although both parties failed to fulfill certain obligations under the lease, Tri-City materially breached the lease, thus excusing Belmont from performance. Tri-City appeals contending that its failure to complete its initial construction obligations and its failure to deliver the space in " broom clean" condition were excused by the lease's " as is" clause. Tri-City also contends that it was excused by Belmont's failure to give notice of breach and an opportunity to cure. We reverse and remand for the circuit court to enter findings of fact and conclusions of law on the effect of Belmont's failure to give notice of breach and an opportunity to cure.

Facts and Procedural History

[¶2] Tri-City was the owner and developer of a shopping center in Rapid City. Belmont was formed to operate a meat and produce business in Rapid City. In May 2006, Belmont and Tri-City entered into a commercial real-estate lease for a space in the shopping center that Tri-City was developing. The lease was to start on August 1, 2006.

[¶3] A " work letter" attached to the lease allocated some of the initial construction work between Tri-City and Belmont. That work was necessary to ready the premises for occupancy and use in Belmont's meat and produce business. The work letter also required Tri-City to provide the premises in " broom clean" condition. The work letter further recited that Belmont had inspected the premises and was taking them in " as is" condition.[1]

Page 914

Nevertheless, there is no dispute that Tri-City did not complete its allocated portion of the initial construction, nor did it deliver the premises in ...


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