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Alta Vista Props., LLC v. Mauer Vision Center, PC

Supreme Court of Iowa

October 31, 2014

ALTA VISTA PROPERTIES, LLC, Appellant,
v.
MAUER VISION CENTER, PC, Appellee

On review from the Iowa Court of Appeals. Appeal from the Iowa District Court for Black Hawk County, David F. Staudt, Judge. A commercial landlord appeals a summary judgment ruling interpreting the parties' lease as prohibiting the landlord from showing the property to prospective purchasers until ninety days before the end of the lease term.

Corey R. Lorenzen and Kate B. Mitchell, Beecher, Field, Walker, Morris, Hoffman & Johnson, P.C., Waterloo, for appellant.

Diane Kutzko, Donald L. Johnson, and Scott M. Wadding, Shuttleworth & Ingersoll, PLC, Cedar Rapids, for appellee.

MANSFIELD, Justice. All justices concur, except Appel, J., who takes no part.

OPINION

Page 723

MANSFIELD, Justice.

This case requires us to interpret a commercial lease. Our task is to determine whether the landlord is authorized to enter the leased property to show it to potential buyers. The tenant argues that access is not permitted until ninety days before the end of the lease term. The tenant relies

Page 724

on a lease provision entitled " SIGNS," which provides that the landlord may erect " For Rent" or " For Sale" signs during the last ninety days of the tenancy and that the tenant must permit prospective tenants or buyers to enter during that time. The tenant maintains this is the only time the landlord can access the property to show it to potential buyers.

The landlord disagrees. The landlord relies on lease provisions that make the tenant's use of the premises " non-exclusive" and give the landlord the right to sell the property, mortgage it, or assign the lease interest at any time during the lease term. The landlord contends that the right to sell the property encompasses the right to show the property during the lease term at reasonable times to prospective buyers.

Upon our review, we agree with the landlord's interpretation of the lease. Therefore, we vacate the decision of the court of appeals, reverse the judgment of the district court, and remand with instructions to the district court to enter summary judgment in favor of the landlord.

I. Background Facts and Proceedings.

On October 23, 2003, Mauer Vision Center, PC as tenant and I4NI, L.L.C. as landlord entered into a written lease for a building located at 124 Second Street N.E. in Waverly, together with the use of the improvements thereon. The lease had a term of fifteen and one-half years. The lease included the following provisions:

12. SIGNS.
A. Tenant shall have the right and privilege of attaching, affixing, painting or exhibiting signs on the Leased Premises, provided only:
(1) Any and all signs shall comply with the ordinances of the [City of Waverly] and the laws of the State of Iowa;
(2) Such signs shall not change the structure of the building; and
(3) Such signs, if and when taken down, shall not damage the building.
B. Landlord, during the last ninety (90) days of this Lease, or any extension, shall have the right to maintain in the windows or on the building or on the premises a " For Rent" or " For Sale" sign, and Tenant will permit, at such time, prospective tenants or buyers to enter and examine the premises.
13. ASSIGNMENT AND SUBLETTING. Landlord may assign all or any part of its rights under this Lease to any grantee or mortgagee. . . .
. . . .
18. COVENANT FOR QUIET ENJOYMENT. Landlord covenants that Landlord's estate in said Premises is in fee simple; and that the Tenant on paying the rent herein reserved and performing all the agreements by the Tenant to be performed as provided in this Lease, shall and may peaceably have, hold and enjoy, the non-exclusive use of the Leased Premises for the term of this Lease.
19. RIGHT TO MORTGAGE. Landlord shall have the right to mortgage all of its right, title, and interest in said Premises at any time without notice, subject to this Lease.
. . . .
24. CHANGES TO BE IN WRITING. . . . This Lease contains the whole agreement of the parties.
. . . .
27. RIGHT OF FIRST REFUSAL. In the event Landlord receives an offer to purchase the building that includes

Page 725

the Leased Premises during the term of this Lease or any renewal term which Landlord is willing to accept, Landlord shall first give notice of such offer to Tenant. Tenant shall have the right to elect to purchase the building that includes the Leased Premises on the same terms and conditions contained in such offer by giving written notice of its intention to exercise its right within five (5) days after receipt of written notice of such offer from Landlord. Tenant's failure to give notice of its intention to exercise its right of first refusal within the five (5) day period shall cause this right of ...

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