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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Sengul v. CMS Franklin, Inc. (12/9/2011) sp-6624

Sengul v. CMS Franklin, Inc. (12/9/2011) sp-6624

        Notice: This opinion is subject to correction before publication in the PACIFIC  REPORTER. 
        Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 
        303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email 


SAMUEL SENGUL,                                  ) 
                                                )       Supreme Court Nos. S-13552/13582 
                        Appellant and           ) 
                        Cross-Appellee,         )       Superior Court No. 1JU-06-00979 CI 
        v.                                      )       O P I N I O N 
CMS FRANKLIN, INC. and                          )      No. 6624 - December 9, 2011 
ROBERT MANUS,                                   ) 
                        Appellees and           ) 
                        Cross-Appellants.	      ) 

                Appeal from the Superior Court of the State of Alaska, First 
                Judicial District, Juneau, Patricia A. Collins, Judge. 

                Appearances: John M. Rice, Law Offices of John M. Rice, 
                P.C.,    Juneau,    for  Appellant/Cross-Appellee.          Paul     M. 
                Hoffman, Hoffman Silver Gilman & Blasco, P.C., Juneau, for 

                Before:   Carpeneti,   Chief   Justice,   Fabe,   Winfree,   Christen, 
                and Stowers, Justices. 

                FABE, Justice.
                CHRISTEN, Justice, dissenting.


                In   late  April  2006    Samuel    Sengul    leased  a  commercial      storefront   in 

downtown Juneau to Robert Manus, who was acting on behalf of CMS Franklin, Inc. 

----------------------- Page 2-----------------------

The   building   was   under   construction   when   Sengul   and   CMS   entered   into   the   lease 

agreement, but the lease provided that Sengul would deliver the property to CMS in a 

specified improved condition by the time the lease commenced on June 1, 2006.  The 

lease also included a rent abatement provision, which is at issue in this case because the 

building was not in the promised improved condition until approximately June 8, 2006. 

Manus did not pay any rent, nor did he mention the rent abatement provision when he 

took possession of the building, when the lease commenced, or when he opened CMS's 

store in mid-June.  Sengul finally demanded rent in late July, but Manus refused to pay, 

claiming abatement.  In September, Manus had still not paid any rent, and Sengul put a 

lock on CMS's store door and placed signs demanding rent in the store windows. Manus 

had the lock cut off, but began to move the inventory out of CMS's store, vacating it and 

returning the keys to Sengul two days after the lockout.               Sengul then sued CMS and 

Manus for unpaid rent. 

                The   superior   court   determined   that   CMS   had   waived   its   right   to   rent 

abatement and owed Sengul unpaid rental amounts for the time that Manus had occupied 

the building.    But the superior court also concluded that Sengul's lockout amounted to 

constructive eviction and awarded CMS damages as a refund for work performed on the 

premises that CMS was unable to benefit from after the constructive eviction. 

                We     agree   with   the   superior   court   that  Sengul's     actions   constituted 

constructive eviction, but we disagree that CMS waived its entitlement to have the rent 

abated.   We remand for the superior court to recalculate the damages owed to CMS. 

                                                  -2-                                             6624

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        A.      Facts 

                On or about April 30, 2006, Samuel Sengul and the president of CMS 

Franklin,   Inc.   (CMS),   Robert   Manus,   entered       into  a   five-year   lease  for  part   of   a 

commercial   storefront   building   in   downtown   Juneau.        The   building   was   still   under 

construction   when   Sengul   and   CMS   entered   into   the   lease   agreement.     The   parties 

apparently hoped that the storefront would be completed by mid-May 2006 in time for 

the   beginning   of   the   2006   summer   tourist   season,   but   the   lease  contained   certain 

provisions outlining how the lease terms would change if the storefront was not in a 

specified improved condition by the time the lease was set to begin on June 1, 2006. 

Several provisions of the lease are relevant to this appeal. 

                First, the lease provided:      "Subject to completion of Landlord Work and 

vacant,    'broom-clean'      delivery   of  Store   Space    2  to  Lessee,   with   a  certificate  of 

occupancy in place for the Building, this Lease commences on June 1, 2006."   The term 

"Landlord Work" was defined in section 3.01(E) of the lease, which required Sengul to 

deliver the building to CMS in "[v]anilla box, finished condition."              This included: four 

walls painted to CMS's color specification, the floor ready for carpet or wood tiling, a 

fully finished bathroom, and "[a]n official certificate for occupancy of the Building . . . 

permitting [CMS's] use and occupancy." 

                The lease set the rent at $10,000 per month through May 31, 2007, with 

increases each year thereafter.  CMS was to pay rent "commencing on the first day of the 

term of the lease."     CMS also had to pay Juneau sales tax on the monthly rent, which 

amounted to an additional $500 per month.  But the lease included a rent abatement 


                If   Lessor's    Work     [defined    in  Section    3.01(E)]    is  not 
                completed by May 15th, 2006, and the Leased Property is not 

                                                  -3-                                            6624

----------------------- Page 4-----------------------

                 delivered to Lessee in vacant, finished condition for Lessee's 
                 sole possession and improvements, then Lessor shall abate 
                the    rent   per  month    for  the  first   year   of   the  lease  by  an 
                 additional   3   days   for   every   day   of   delay. If   the   Leased 
                 Property is not delivered in vacant, finished condition with 
                 Lessor's Work completed by June 1, 2006, a rent abatement 
                 of 4 days will apply for each day the Leased Property is not 
                 finished   to   the   standard   set   forth   in   Landlord's   Work,   E., 
                below. If the Leased Property is still not delivered in finished 
                 condition with Landlord's Work completed by June 15, 2006, 
                 Lessee at its option, may cancel this Lease or   continue to 
                receive a 4 day abatement for each day of non-delivery. 

                 In addition, the lease included terms and conditions related to default.  It 

defined default as including failure to pay rent within ten days of Sengul providing notice 

that rent was due.     And it provided that upon default, Sengul, "in addition to any rights 

and remedies that may be given . . . by statute," could "choose to do the following, singly 

or in combination:       (a) After legal process on notice, reenter the Leased Property and 

take   possession   thereof   and   remove   all   property   from   the   same,   except   inventory." 

Finally, the lease contained a provision regarding waiver, which stated: 

                         No failure by either Lessor or Lessee to insist upon the 
                 strict performance by the other of any covenant, agreement, 
                term,     or  condition     or  to  exercise    any   right   or  remedy 
                 consequent upon a breach thereof shall constitute a waiver of 
                 any such breach or of such covenant, agreement, term, or 

                 CMS took possession of the building on or about April 30, 2006.                   At that 

time, contractors were still working on the building and, among other things, there was 

no certificate of occupancy.         Over the next few weeks, a contractor made repairs and 

adjustments to both Sengul's and CMS's retail spaces in the building. Due to issues with 

the sprinkler system, Sengul was unable to obtain a certificate of occupancy for the 

storefront until June 8.  Sengul opened his store that same day, but CMS did not open its 

                                                    -4-                                              6624

----------------------- Page 5-----------------------

store until about a week later, apparently because it was waiting for the contractor to 

finish certain improvements to the space. 

                Though CMS occupied the storefront for the next month and a half, it did 

not make any rent or security deposit payments to Sengul.  According to Sengul, he and 

Manus spoke two or three times in June and July, and Manus stated:                  "I know I'm late. 

I'm going to pay you in full, and I'm going to make it up to you."                Manus, however, 

claims that Sengul did not ask for rent until late July and alleges that he responded that 

CMS did not owe any rent because the building was not ready until mid-June, and thus 

the rent was abated. 

                On July 25 Manus sent a letter to Sengul's attorney, contending that rent 

should have been abated due to the delay in having the building ready; he conceded that 

CMS   owed   Sengul   the   security   deposit.     Sengul's   attorney   responded   to   Manus   in 

August,   explaining      that   Manus   was   not   entitled  to  rent   abatement   because,   "[b]y 

accepting     possession    of   the  property   and  failing   to  provide   any   sort   of   notice  to 

Mr.   Sengul[,]   [CMS]      .  .  .   waived  any  right   it   may  have  had  to  a  penalty  under 

section 3(D) of   the lease."      The letter also warned that if CMS did not pay the full 

amount of rent and security deposit within ten days, Sengul would consider the lease in 

default and would seek all legal remedies, including eviction. Manus replied to Sengul's 

attorney on August 16, again claiming that the rent should have been abated and offering 

to pay $8,000 to remain in the storefront through the end of September. 

                On September 4, 2006, Manus or one of his staff arrived at CMS's store to 

find that Sengul had placed a cable lock on the front door.              Manus immediately called 

a contractor, who came to the store and broke the lock.             Manus was locked out of the 

store for a couple of hours before the contractor cut the lock off.              Sengul also placed 

signs in CMS's store window reading "Your Rent is Due. Pay it" and similar statements. 

Manus testified that whenever he tried to remove the signs, Sengul or his staff would put 

                                                  -5-                                            6624

----------------------- Page 6-----------------------

them back up.  Sengul also allegedly threatened to put the lock back on the door the next 


                Manus began moving CMS's inventory from Sengul's building to another 

store location down the street later that same day.   The next day, CMS's attorney sent a 

letter to Sengul's attorney, claiming that "[w]ithout notice or cause, [Sengul] on Monday 

improperly and illegally padlocked the premises; by doing so precluded CMS access to 

inventory; [and] committed slander and committed tortious interference with CMS's 

business activities and contracts." CMS's attorney informed Sengul's attorney that CMS 

was moving out of the building and that Sengul could pick up the keys the next day. 

Manus   removed   the   entire   inventory   from   the   store   before   the   end   of   the   day   on 

September 6. 

                The storefront space CMS had leased remained vacant from September 6 

until May 2007.  In May 2007 Sengul leased the space to another tenant for $14,800 per 

month,   approximately   the   same   amount   that   CMS   would   have   owed   beginning   in 

June 2007 pursuant to the lease had CMS continued to rent the space. 

        B.      Proceedings 

                On September 13, 2006, Sengul sued CMS and Manus.                   Sengul claimed 

that CMS was liable for the full amount of lease payments over the five-year term of the 
lease.1  CMS responded that the rent should have been abated because it could not open 

for business until mid-June, and that Sengul constructively evicted CMS in September. 

CMS      also   counterclaimed      for  breach    of  contract,   intentional    interference    with 

prospective business, breach of the implied covenant of good faith and fair dealing, and 


        1       Sengul also alleged that Manus should be individually liable for any debts 

of CMS. 

                                                 -6-                                              6624 

----------------------- Page 7-----------------------

                On January 14, 2009, the superior court held a bench trial.             The superior 

court explained that CMS had been entitled to rent abatement, but found that Manus had 

waived this right by failing to raise the issue with Sengul earlier in the course of the 

lease. The superior court thus concluded that CMS owed rent for June, July, August, and 

part of September. 

                Turning to the alleged constructive eviction, the superior court observed 

that Sengul's self-help actions of locking CMS's store door and placing signs in the 

windows were, although permitted by statute, prohibited pursuant to the terms of the 

lease.    The superior court concluded that CMS had been constructively evicted as of 

September 6 when Manus returned the store's keys to Sengul. 

                Thus, while Sengul was awarded the value of the unpaid rent ($33,570 ), 

the superior court awarded CMS damages equal to the cost of renovating the storefront 

space because "these improvements would have been of value to [CMS] but for the 

constructive      eviction."    The     superior    court   calculated    the   amount     of   CMS's 

improvements as $53,365.09, offset that amount by the unpaid rent owed to Sengul, and 

awarded CMS $26,795.09, plus costs and prejudgment interest.                   Sengul appeals, and 

CMS cross-appeals. 


                  Whether   a   party's   actions   constitute   constructive   eviction   is   a   mixed 

question of fact and law; we apply our independent judgment to the question of law and 
review the trial court's factual findings for clear error.3 

        2       $10,500 for the months of June, July, and August, and six days' worth of 

rent at $345 per day for September 1 through September 6. 

        3       See Ben M. v. State, Dep't of Health & Soc. Servs., Office of Children's 

Servs., 204 P.3d 1013, 1018 (Alaska 2009). 

                                                  -7-                                              6624 

----------------------- Page 8-----------------------

                Questions of contract interpretation are questions of law that we review de 

novo, but findings of fact on questions created when the meaning of contract language 
is dependent on conflicting extrinsic evidence are reviewed for clear error.4 

                A superior court's determination whether waiver occurred is a question of 
fact that we review for clear error.5 


                Sengul argues that the superior court: (1) erroneously concluded that the 

lockout     constituted    constructive    eviction;   (2)  erroneously     found    that  CMS     made 

improvements to the storefront that justified a damages "setoff"; (3) failed to determine 

Manus's personal liability; and (4) improperly calculated damages.                In response, CMS 

maintains   on   cross-appeal   that   the   superior   court   incorrectly   determined   that   it   had 

waived its entitlement to rent abatement. We consider the constructive eviction issue and 

the waiver issue in turn. 

        A.      Sengul Constructively Evicted CMS. 

                The superior court concluded that Sengul constructively evicted CMS by 

"[p]adlocking Manus'[s] door and advising that he would do it again the next day, along 

with posting multiple 'pay up' signs on [the] store's windows."               Sengul asserts that he 
had   a   right   to   take   these   actions   as   detainer6  and   maintains   that   his   actions   did   not 

        4       Norville v. Carr-Gottstein Foods Co., 84 P.3d 996, 1000 n.1 (Alaska 2004) 

(holding that questions of fact are created when the meaning of contract language is 
dependent on conflicting extrinsic evidence); Ben M., 204 P.3d at 1018 (stating that trial 
court's factual findings are reviewed for clear error). 

        5       Miscovich v. Tryck, 875 P.2d 1293, 1302 (Alaska 1994) (citing Fun Prods. 

Distribs., Inc. v. Martens, 559 P.2d 1054, 1058 (Alaska 1977); Alaska R. Civ. P. 52(a)). 

        6       Detainer is a term of art defined as "[t]he action of detaining, withholding 

or keeping in one's possession." BRYAN A. GARNER, A DICTIONARY OF MODERN LEGAL 

                                                  -8-                                             6624

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constitute the type of substantial interference that would amount to constructive eviction. 

We cannot agree.  Under the terms of the lease Sengul had no right to lock CMS out as 

an   act   of   detainer,   and   physically   excluding   CMS   from   the   building   amounted   to 

constructive, if not an actual, eviction. 

                 1.      Sengul had no right to lock CMS out under the lease's terms. 

                 Alaska   Statute   09.45.690,   which   applies   to   commercial   leases,        states: 

"Unless otherwise provided in the lease, a landlord has a right to re-enter leased premises 

when a tenant fails to pay rent, and may bring an action to recover the possession of the 
premises."8     Sengul appears to rely on this provision, arguing without citation to any 

legal authority that he "had a clear right to detainer since this was a commercial lease." 

                 The superior court recognized the availability of a self-help remedy under 

this statute; however, focusing on the phrase "[u]nless otherwise provided in a lease," 

the superior court turned to the lease between Sengul and CMS.                     In relevant part, the 

lease states that in the event of CMS's unpaid rent Sengul was permitted to, "in addition 

to any rights and remedies that may be given to [him] by statute . . . [a]fter legal process 

on notice, reenter the Leased Property and take possession thereof."  (Emphasis added.) 

The superior court reasoned that "[i]f the intent of the lease were to allow reentry/seizure 

of the premises without legal process or notice, there would be little reason" for the "after 


USAGE 270 (2d ed. 2001). 

        7        Presumably AS 09.45.690 applies only to commercial leases; in 1974 the 

Alaska legislature passed AS 34.03.250(b), which explicitly abolished distraint for rent. 

        8        AS 09.45.690; see also Klosterman v. Hickel Inv. Co., 821 P.2d 118, 122 

(Alaska 1991) (explaining that a landlord could engage in a self-help remedy in response 
to the tenant's nonpayment of rent because the lease at issue "expressly permit[ted] the 
lessor to re-enter the property upon the lessee's failure to pay rent"). 

                                                    -9-                                              6624

----------------------- Page 10-----------------------

legal process on notice" clause.  Thus, the superior court concluded that Sengul "lacked 

authority to simply padlock the doors of [CMS's] store without some 'legal process,' 

particularly as the parties were still attempting to reach resolution of their dispute."  We 

agree with the superior court that, reading the statutory provision and the lease terms 

together, Sengul did not have a right to lock CMS out for nonpayment of rent without 

prior legal process. 

              2.     Sengul's actions constituted constructive eviction. 

              Constructive eviction is a defense to a landlord's action for payment of 
rent.9 We have explained that a tenant can invoke a constructive eviction defense when 

there has been a substantial interference with the tenant's use of the leased premises.10 

To claim constructive eviction a tenant must:   (1) notify the landlord of the interference; 

(2) give the landlord a chance to remedy the problem; and (3) vacate the property within 
a reasonable time.11  Here, it is undisputed that Sengul was notified of the interference 

because he was the one who caused it.       Sengul did not remedy the problem; instead 

Manus had to call a contractor to remove the lock from CMS's store door. Manus moved 

       9      Hrubes v. Smith, Mem. Op. & J. No. 626, 1992 WL 12549972, at *2-3 

(Alaska, June 30, 1992) (citing RESTATEMENT  (SECOND) OF PROPERTY   5.4 & cmt. b 

       10     King v. Petroleum Servs. Corp., 536 P.2d 116, 120 (Alaska 1975); see also 

(5th ed. 2011) ("Constructive eviction is defined as any disturbance by landlord . . . that 
(1) renders the leased premises unfit for the purpose leased, or (2) deprives the tenant of 
the beneficial enjoyment of the premises.") (internal citation omitted). 

       11     Hrubes, 1992 WL 12549972, at *3; see also 3 FRIEDMAN  & RANDOLPH, 

supra note 10,  29:3.1 (explaining that "[i]t is not a constructive eviction unless tenant 
surrenders possession of the premises, and does so within a reasonable time after the 
condition arises"). 

                                            -10-                                       6624

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CMS's inventory and returned the key to Sengul by September 6, two days after the 

                 Sengul maintains that his actions were "simply not enough" to substantially 

interfere    with   CMS's      possession     of  the  property.    The     superior    court   disagreed, 

concluding:   "Padlocking [CMS's] door and advising that he would do it again the next 

day, along with posting multiple "pay up" signs on a store's windows[,] constitutes 

substantial interference with [CMS's] use of the leased premises."                  The superior court 

thus determined that the constructive eviction was effective as of September 6, 2006. 

                 To support his claims on appeal, Sengul cites King v. Petroleum Services 

Corp., where we held that a landlord's actions in reentering a leased premises did not 
substantially interfere with the tenant's use of the premises.13           But as CMS points out, the 

situation in King was markedly different.  In King, the tenant had already abandoned the 

premises and the landlord's reentry "was primarily to safeguard [the tenant's] property 
and   was   not   the   cause   of   [the   tenant's]   abandonment   of   the   premises."14   We   thus 

reasoned   in  King  that   there   was   "no   evidence   .   .   .   of   actual   interference   with   [the 
tenant's] use of the leased premises."15           But in this case CMS had not abandoned the 

        12       Sengul appears to imply that Manus vacated the storefront on September 6 

because the tourist season was over, not because of the lockout.                  But both Sengul and 
Manus testified that the tourist season lasts until late September, and Manus added that 
the   last   weeks   of   the   season   are   important   because   vendors   try   to   sell   all   of   their 
inventory to avoid paying to ship it back.  There is no evidence that Manus would have 
closed his store on September 6 but for Sengul's actions. 

        13       536 P.2d at 120. 

        14      Id. 

        15      Id.; cf. Hrubes, 1992 WL 12549972, at *3 (determining that ineffective 

repairs resulting in a "known structural susceptibility to earthquakes" was a substantial 

                                                   -11-                                              6624

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storefront before being locked out, and Sengul's actions certainly were not intended to 

safeguard CMS's property.  Clearly, Sengul did actually interfere with CMS's use of the 

property   by   locking   the   store's   door   and   preventing   Manus,   his   staff,   and   potential 
customers from entering the store during business hours.16            Sengul testified that this was 

his exact intent in executing the lockout - to "prevent [Manus] [from] coming in." 

                We agree with the superior court that Sengul's actions constituted at least 

a constructive eviction.      Indeed, a physical exclusion from leased premises, such as a 

lockout, is an oft-cited example of an actual eviction.   "An actual eviction of the tenant 

is a physical exclusion of the tenant from access to the leased premises,for example, by 
locking the tenant out of the premises."17        Courts in other jurisdictions have agreed that 

a landlord's physically excluding a tenant from the premises is an actual eviction.18 


interference with a lessor's intended use of subleasing the building and upholding a 
superior court's finding of constructive eviction). 

        16      The record   also suggests that Sengul may have physically stood in the 

doorway to prevent Manus's handyman from removing the padlock. 


 16B.02[2][a] (Michael Allan Wolf, ed., 2010) (emphasis added); see also DAVID  S. 
HILL, LANDLORD AND TENANT LAW IN A NUTSHELL 26 (3d ed. 1995) ("To constitute an 
actual eviction there must be a wrongful physical expulsion or exclusion of the tenant 
from the leased premises by the landlord.  For example, where a landlord physically bars 
a tenant from entering the premises, or . . . padlocks the entrances to the premises, there 
has been an actual eviction [and] the tenant's liability for all rent is suspended."). 

        18      See, e.g., Turks Head Realty Trust v. Shearson Lehman Hutton, Inc., 736 

F. Supp. 422, 428 (D. R.I. 1990) (holding that plaintiff wrongfully evicted defendant 
when it changed the locks on defendant's commercial building and citing Rhode Island 
law that "any intentional act or conduct by the landlord . . . which deprives a lessee of 
his or her rightful possession constitutes an eviction"); Village Commons, LLC v. Marion 
Cnty. Prosecutor's Office, 882 N.E.2d 210, 216 (Ind. App. 2008) (determining that 

                                                  -12-                                            6624

----------------------- Page 13-----------------------

                While neither party argued that CMS was actually evicted, the fact that a 

lockout   generally   is   an   example   of   an   actual   eviction   supports   CMS's   constructive 

eviction claim because constructive eviction arguably broadens the circumstances in 

which a tenant may invoke an eviction defense:  "Interferences by the landlord that fall 

short   of   a   physical   exclusion,   but   that   nevertheless   substantially   interfere   with   the 

tenant's enjoyment of the premises, causing the tenant to vacate, are actionable by the 
tenant as 'constructive' evictions."19  As one treatise explains, the related doctrines of the 

covenant of quiet enjoyment and   constructive eviction   "evolved   historically   from   a 

protection against physical expulsion into a protection against interference by or through 
the landlord with the beneficial enjoyment of leased premises."20               Just as a lockout is a 


landlord's instructing a tenant to vacate a space prone to water damage constituted an 
actual eviction, which the court defined as "when the tenant is deprived of the occupancy 
of some part of the demised premises") (citation omitted); Echo Consulting Servs., Inc. 
v. North Conway Bank, 669 A.2d 227, 229 (N.H. 1995) ("The landlord's actual physical 
dispossession of the tenant from the leased premises constitutes an actual eviction, either 
total or partial."); Barash v. Penn. Terminal Real Estate Corp., 256 N.E.2d 707, 710 
(N.Y. 1970) ("[W]here the landlord changes the lock, or padlocks the door, there is an 
actual eviction."). 

        19      2 POWELL  & ROHAN, supra note 17,  16B.03[1] (emphasis added); see 

also RESTATEMENT  (SECOND) OF  PROP.: LANDLORD  & TENANT   6.1 reporter's note 2 
(1977) ("The common   law   has   recognized two types of eviction: actual eviction, in 
which the landlord deprives the tenant of physical possession of the leased property, and 
constructive eviction, in which the landlord so deprives the tenant of the use of the 
property that his action is tantamount to depriving the tenant of physical possession.") 
(emphasis added). 

        20      3 FRIEDMAN & RANDOLPH,supra note 10,  29:1; see also 49 AM . JUR . 2D 

Landlord and Tenant   515 (2011) ("[T]he ancient rule of the common law that entry 
and expulsion, or some real disturbance of the possession, was required to establish 
eviction of a tenant by the landlord has been so far modified in favor of the tenant that 

                                                  -13-                                             6624

----------------------- Page 14-----------------------

traditional actual eviction claim, classic constructive eviction cases are often based on 
circumstances such as failure to repair a premises,21  and the doctrine is "broad enough 

to include many different situations where the whole or a substantial part of the premises 
is rendered unfit for the purpose for which is was leased."22            It would make no sense for 

us to recognize that Sengul's lockout of CMS was an actual   eviction but decline to 

uphold the superior court's constructive eviction determination. Thus, Sengul's lockout, 

which was a physical exclusion of CMS, was a substantial interference with CMS's use 

of the storefront and at the very least constituted constructive eviction. 

        B.      CMS Did Not Waive Its Right To Rent Abatement. 

                CMS argues on cross-appeal that it had a right to abate the rent, that it did 

not   waive   this   right,   and   that   it   owed   no   unpaid   rental   amounts   at   the   time   of   the 
constructive eviction.23      The superior court found that CMS had been entitled to a rent 

abatement under the terms of the lease.  The superior court then discussed whether CMS 


actual ouster or physical dispossession is no longer necessary to constitute an eviction."). 

        21      Eugene L. Grant, Disturbing Concepts: Quiet Enjoyment and Constructive 

Eviction in the Modern Commercial Lease, 35 REAL  PROP. PROB . & TR . J. 57 (2000) 
("[A] modern constructive eviction occurs when a landlord's acts substantially deprive 
a tenant of beneficial enjoyment of the premises, including access to . . . goods and 
services. . . .  The most common ground for constructive eviction claims probably is a 
landlord's failure to repair defects in the premises."). 

        22      3 FRIEDMAN & RANDOLPH, supra note 10,  29:3.1 (collecting examples of 

conditions   sufficient   to   support   constructive   eviction   actions,   including   "landlord's 
failure to repair the leased premises," "landlord's failure to supply essential services," 
"periodic   flooding,"   "mold   and   mildew        problems,"   and   "interference   with   access, 
easements, and deprivation of light and air") (internal citations omitted). 

        23      Sengul did not file a reply brief and did not address these issues in his 

opening brief. 

                                                  -14-                                             6624

----------------------- Page 15-----------------------

waived this entitlement. Weighing against waiver, the superior court recognized that the 

lease contained a non-waiver clause, that it was unclear that Sengul could have remedied 

the   defects   had   Manus   mentioned   them   earlier,   and   that   Sengul   did   not   bring  up 

abatement when he delivered the property to Manus in an unimproved condition.  But 

the superior court ultimately concluded that CMS waived its entitlement to abatement 

based on "[t]he combination of consciously declining to timely invoke the rent abatement 

lease provision, promises to pay rent (that [Manus] only later claimed he did not owe), 

and prejudice to Sengul in being left unable to timely respond and potentially remedy 

claimed defects."      CMS disagrees, arguing that the finding of waiver was erroneous 

because the lease's non-waiver provision precluded a finding of implied waiver, and 

because the language in the lease made abatement mandatory such that Manus did not 

have to mention the clause to Sengul to invoke abatement. 

                1.	     The non-waiver clause and the mandatory language of the rent 
                        abatement       provision     indicate   that   CMS     did   not   waive    its 
                        entitlement to rent abatement. 

                As the superior court recognized, neither the fact that the lease included a 

non-waiver      provision,    nor   the  mandatory      language    of   the  abatement     provision, 

absolutely precludes the conclusion that CMS waived its right to abatement.                  Neither, 

however, does our case law demand that waiver be found in this case. 
                The superior court relied upon Carr-Gottstein Foods Co. v. Wasilla, LLC24 

to support the finding of a waiver.   In that case, a tenant shopping center moved a liquor 
store closer to a supermarket without obtaining permission from its landlord.25                   The 

landlord was aware of the relocation and made no objection, even bidding on electrical 

        24      182 P.3d 1131 (Alaska 2008). 

        25      Id. at 1133. 

                                                 -15-                                              6624 

----------------------- Page 16-----------------------

work for the relocation.26       Six years later, the landlord informed the supermarket that it 

considered the liquor store relocation to be a breach of the lease.27             Carr-Gottstein is not 

directly applicable here because the non-waiver provision in that case dealt expressly 

with the waiver of future rights or remedies based on a prior, single instance of waiver, 
not waiver of the immediate breach as in this case.28 

                 In Dillingham Commercial Co. v. Spears, we considered a non-waiver 

clause   similar   to   the   one   in   this   lease   and   held   that   the   non-waiver   clause   did   not 

foreclose waiver; one party's "long acquiescence constituted a waiver of her right" even 
though the contract included a general non-waiver provision.29                 Here, the time between 

the signing of the lease and Manus's first mention of the abatement provision was less 

than three months, and the time lapse between the start of the abatement period (May 15) 
and Manus's first mention of abatement was even less30                  - a little over two months. 

Although the dissent emphasizes that those months were at the height of the summer 

        26      Id. 

        27      Id. at 1134. 

        28      Id. at 1140 (concluding that "[t]he clause, if anything, implies that failure 

to insist on the performance of a right on one occasion will be a waiver of the right to 
declare a breachfor that occasion ") (emphasis added). 

        29       641 P.2d 1, 7-8 (Alaska 1982) (concluding that a landlady waived her right 

to claim a default despite the presence of a non-waiver provision where the landlady 
accepted late rental payments from the tenant for nine years without complaint and only 
mentioned the tenant's breach when the tenant tried to exercise the lease's purchase 

        30       Though   there   is   some   evidence   that   Manus   may   have   indirectly   raised 

abatement in emails sent in April and May, the superior court found that Sengul credibly 
testified   that   he  did   not  receive    either  email,   neither    email   specifically    mentions 
abatement, and CMS does not mention either email in its appellate brief. 

                                                   -16-                                              6624

----------------------- Page 17-----------------------

tourist season, the key inquiry in Dillingham  was whether one party's acquiescence 
"lulled [the other party] into inaction."31     After nine years of late payment of rent without 

objection from the landlady, we concluded in Dillingham that the tenant was lulled into 
a belief that such lateness was acceptable.32        Here, however, it is unlikely that Manus's 

failure to mention the abatement provision "lulled" Sengul into delaying getting the 

certificate of occupancy because Sengul had his own independent motivation to obtain 

the certificate (opening his own store), and because he did in fact obtain the certificate 

and open his own store as soon as the building was in compliance on June 8.  Therefore, 

while the superior court was correct that a non-waiver clause does not always bar a 

finding of implied waiver, because there was no unreasonable acquiescence on CMS's 

part in this case, the non-waiver provision supports CMS's argument that it did not waive 

its entitlement to abatement. 

                The superior court also found it important that Manus "did not invoke or 

mention the rent abatement provision of the lease to Sengul until raising it in late July, 

when   Sengul   began   pressing   for   payment   of   rent."    The   superior   court   added   that 

"although the rent abatement provision was a specifically-negotiated part of the lease, 

Manus gave no notice of his intent to rely on the provision until he received the first 

demand   for   rent."   We   conclude   that   notice   was   not   required   based   upon   the   plain 

language of the lease. 

                In relevant part, the abatement provision's language states that "Lessor 

shall abate the rent" and "a rent abatement of 4 days will apply"; the lease defines the 

words "shall" and "will" as mandatory.   CMS maintains that this language indicates that 

        31      Dillingham Commercial Co., 641 P.2d at 8 n.10 (quoting Summa Corp. v. 

Richardson, 564 P.2d 181, 185 (Nev. 1977)). 

        32      Id. at 7-8. 

                                                  -17-                                              6624 

----------------------- Page 18-----------------------

abatement was "self-executing" and therefore CMS did not have to provide Sengul with 

notice that CMS intended to rely on it.   CMS thus contends that Manus did not mention 

abatement until Sengul demanded rent in late July because Manus assumed that both 

parties understood that the rent was being automatically abated.  The mandatory nature 

of the rent abatement provision is evident from the plain language of the lease.                  And 

though we have held that a party can implicitly waive its contractual rights regardless of 
the self-executing language of a contract provision,33 we conclude that in this instance 

CMS's conduct was insufficient to amount to an implied waiver. 

                2.      CMS's words and conduct did not result in an implied waiver. 

                We established in the seminal case of Milne v. Anderson that waiver of a 

contractual right may be either express or implicit, and that an implied waiver "arises 

where   the   course   of   conduct   pursued   evidences   an   intention   to   waive   a   right,   or   is 

inconsistent with any other intention than a waiver, or where neglect to insist upon the 
right results in prejudice to another party."34       We explained that implied waiver may be 

demonstrated   by   either:     (1)   "direct,   unequivocal   conduct   indicating   a   purpose   to 

abandon or waive the legal right," or (2) "acts amounting to an estoppel by the party 

        33      See Altman v. Alaska Truss & Mfg. Co., 677 P.2d 1215, 1223 (Alaska 


        34      576 P.2d 109, 112 (Alaska 1978); see also Carr-Gottstein Foods Co., 182 

P.3d 1131, 1136 (Alaska 2008) ("When a party to a contract is aware of conduct on the 
part of the other party that constitutes a breach and fails to protest the   breach while 
continuing to perform the contract, that party may be held to have waived its right to rely 
on the breach in subsequent litigation."). 

                                                 -18-                                            6624

----------------------- Page 19-----------------------

whose conduct is to   be construed   as a waiver."35           But we have cautioned   that   "the 

standard for an implied waiver is high and factual findings are required."36 

                When analyzing the first way that Manus could have implicitly waived 

CMS's entitlement, the superior court found that Manus made "promises to pay rent (that 

he   only   later   claimed   he   did   not   owe)." Sengul   testified   that   he   had   at   least   two 

conversations with Manus in June and July where Manus stated:   "I know I'm late.  I'm 

going to pay you in full, and I'm going to make it up to you"; "I know I'm late, but I'll 

pay it"; and "I know I owe you, and I'm late, but I'll make it up."  But these statements, 

even as Sengul relates them, are ambiguous regarding what Manus meant by "pay you 

in full," "I'll pay it," and "I owe you."   Aside from rental payments, Manus owed Sengul 

a security deposit that he had not paid.       Thus, Manus's statements that he owed Sengul 

and would pay "it" cannot be construed as "direct, unequivocal conduct" indicating that 

Manus intended to waive his right to abatement. 

                But    aside  from    direct,  unequivocal     conduct,   Manus     could   also   have 

implicitly waived CMS's entitlement to abatement through estoppel.                   In this context, 

estoppel exists when there is "assertion of a position by word or conduct, reasonable 
reliance thereon by another party, and resulting prejudice."37            This is an objective test; 

"neglect to insist upon a right only results in an estoppel" when a party's words or 

conduct "would convey a message to a reasonable person that the neglectful party would 

        35      Milne, 576 P.2d at 112. 

        36      Anchorage Chrysler Ctr., Inc. v. DaimlerChrysler Corp., 129 P.3d 905, 917 

(Alaska 2006). 

        37      Wausau Ins. Cos. v. Van Biene, 847 P.2d 584, 588 (Alaska 1993). 

                                                 -19-                                            6624

----------------------- Page 20-----------------------

not in the future pursue the legal right in question."38           Here, we do not need to reach the 

first two prongs of the estoppel inquiry - asserting a position and reasonable reliance - 

because we conclude that the superior court's determination that Sengul was prejudiced 

by Manus's failure to explicitly invoke his right to abatement earlier than late July was 


                 Sengul claimed that "[i]f Manus had indicated that there was a problem then 

Sengul would have had an opportunity to do something to ensure the penalties would not 

apply[,] such as . . . having the contractor focus solely on finishing [CMS]'s store."  The 

superior   court,   apparently   looking   to   this   statement,   found   that   Manus's   failure   to 

mention abatement prejudiced Sengul because he was "left unable to timely respond and 

potentially remedy claimed defects."            But this finding is inconsistent with at least two 

other findings made by the superior court: that the earliest Manus could have opened his 

store was June 8, when the temporary certificate of occupancy was issued, and that the 

delay in obtaining the certificate "was tied to problems with the sprinkler system - 
beyond      Manus'     control   or  obligation     as  a  tenant."39   The     testimony     of  Sengul's 

contractor confirms that the delay in obtaining the certificate of occupancy was due to 

the building's sprinkler system and fire alarms, neither of which were within CMS's 

control   or   exclusive   to   CMS's   part   of   the   building.  Therefore,   even   if   Sengul   had 

directed the contractor to "focus solely on finishing [CMS]'s store," the certificate could 

not    have   been    obtained    sooner    because     the  barriers   to  compliance      were    present 

throughout the building.          Moreover, Sengul had his own independent motivation to 

bring the building into compliance as quickly as possible - he could not open his own 

        38       Id. at 589. 

        39       Indeed,   the   superior   court   recognized   that   "it   is   not   clear   whether   the 

Certificate of Occupancy could have been obtained earlier regardless of effort." 

                                                   -20-                                                 6624 

----------------------- Page 21-----------------------

store without obtaining a certificate of occupancy and he did in fact open his store on the 

same day that the temporary certificate was obtained.             We therefore cannot agree with 

the superior court that Sengul could have "remed[ied] claimed defects" had Manus raised 

the rent abatement issue earlier.        Because Manus's failure to mention the abatement 

provision   until   late   July   did   not   prejudice   Sengul,   we   conclude   that   CMS   did   not 

implicitly waive its entitlement to rent abatement. 

        C.      The Superior Court's Damages Calculation 

                Because we conclude that CMS did not waive its right to abatement, we 

remand to the superior court to recalculate damages owed to CMS.                  Because CMS will 

still owe Sengul some unpaid rent even after abatement is applied pursuant to the terms 
of the lease,40 we briefly consider Sengul's argument that the value of the amount of 

unpaid rent should be calculated using the yearly rental value rather than the monthly 

rental   value.   Specifically,   Sengul   maintains   that   due   to   the   "unique   nature   of   the 

businesses that lease this property," which is to cater to tourists and remain open only 

during the summer months, any unpaid rent should be valued based on the yearly rental 


                We conclude that it is correct to use the monthly rental value in calculating 

unpaid rent.    The lease required payments of "Ten Thousand dollars ($10,000.00) per 

month,   through   5/31/2007."       CMS   still   owed   rent   during   the   non-summer   months, 

regardless of whether its store was open.   Accordingly, CMS should not owe more than 

the lease's rental obligations require.       Had the parties wished to do so, they could have 

        40      Per    the  lease's  terms,   CMS     is  entitled  to  83  days   of  rent   abatement 

(May 15-31st = 17 days, multiplied by the three-day penalty = 51 days.                     June 1-8 = 
8 days, multiplied by the four-day penalty = 32 days). Factoring in these 83 days, Sengul 
is entitled to unpaid rent from August 23 through the date of the constructive eviction, 
September 6. 

                                                  -21-                                            6624

----------------------- Page 22-----------------------

drafted the lease to require that all rental payments be made during the summer, with no 

rental obligation during the off-season, but they did not do so and we decline to do it for 

them.    CMS is only required to compensate Sengul for any unpaid rent as calculated 

based on the monthly rental amount. 

        D.      Other Issues 

                Sengul raises two additional issues on appeal - that CMS's work on the 

storefront did not constitute improvements that entitled CMS to a "refund" after Sengul's 

constructive eviction, and that the superior court failed to address Manus's personal 

liability.   CMS urges that Sengul's briefing on these issues is inadequate.  We agree that 

Sengul   abandoned   these   issues   because   he   failed   to   provide   any   more   than   cursory 
briefing devoid of citation to legal authority, and we do not consider them here.41 


                We AFFIRM the superior court's determination that the lockout constituted 

constructive eviction.   We REVERSE the superior court's conclusion that CMS waived 

its entitlement to rent abatement and REMAND for proceedings consistent with this 


        41      See Jurgens v. City of North Pole, 153 P.3d 321, 326 (Alaska 2007) ("An 

issue is considered abandoned . . . if the appellant inadequately briefs the issue."); A.H. 
v. W.P., 896 P.2d 240, 243 (Alaska 1995) (deeming points on appeal waived where the 
appellant   "provide[d]   no   citation   of   legal   authority"  and   made   only   "cursory   and 
undeveloped" arguments). 

                                                -22-                                           6624

----------------------- Page 23-----------------------

CHRISTEN, Justice, dissenting. 

              I write separately to express my disagreement with the court's conclusion 

that CMS did not waive its right to abatement. 

              As the court notes, in Milne v. Anderson, we held that an implied waiver 

may be demonstrated by either:     (1) "direct, unequivocal conduct indicating a purpose 

to abandon or waive the legal right," or (2) "acts amounting to an estoppel by the party 
whose conduct is to be construed as a waiver."1    The court also recognizes that a superior 

court's determination whether waiver occurred is a question of fact that we review for 
clear error.2 In my view, the trial court's findings of fact support its ruling that Manus 

engaged in "direct, unequivocal conduct indicating a purpose to abandon or waive" the 

right to claim abatement. 

              After conducting a bench trial in this case, the superior court found that 

"[b]etween April and July, Sengul and Manus had a cordial relationship, although Manus 

paid neither the rent nor the deposit" and "Manus told Sengul on several occasions that 

he knew he was late with the rent and that he would shortly pay Sengul in full."  The 

superior court found that Manus made statements in June and July like "I know I'm late. 

I'm going to pay you in full, and I'm going to make it up to you," and that Manus "did 

not invoke or mention the rent abatement provision of the lease to Sengul until raising 

it in late July, when Sengul began pressing for payment of rent."  As the trier of fact, the 

superior court found that "it is most likely that Manus did not raise any rent abatement 

claim until pressed to pay the rent and security deposit because he was in default of his 

obligation to pay the security deposit and lacked the funds or desire to pay his bills." 

       1      576 P.2d 109, 112 (Alaska 1978). 

       2      Miscovich v. Tryck, 875 P.2d 1293, 1302 (Alaska 1994) (citing Fun Prods. 

Distrib., Inc. v. Martens, 559 P.2d 1054, 1058 (Alaska 1977)). 

                                            -23-                                         6624 

----------------------- Page 24-----------------------

                 In reversing the superior court's decision, our court finds support in its 

comparison of the facts of this case to the facts of Dillingham Commercial Co., Inc. v. 

Spears,   where   we   held   that   one   party's   "long   acquiescence"   to   a   specific   condition 
constituted   a   waiver   of   her   rights   under   a   lease.3   The   court   compares   the   "long 

acquiescence"   in Dillingham   Commercial   to   the   period   at   issue   in   this   case   -   the 

interval between the signing of the lease and Manus's first mention of the abatement 

provision, in late July - and describes the latter as a period of "less than three months." 

A   period of "less than three months" may not be significant in the context of some 

commercial   leases,   but   viewed   in   the   context   of   the   short   summer   tourist   season   in 

Juneau, Manus's delay effectively wiped out Sengul's ability to collect rent for an entire 

year.   As the superior court recognized: 

                 The     reason     for   Manus['s]      silence    regarding      the   rent 
                 abatement   clause       likely   has   its   root   in  the   nature   of   the 
                 summer   tourist   season   in   Juneau   and   Manus['s]   personal 
                 financial situation.      Small stores in the prime tourist/cruise 
                 ship   location,   such   as   this   small   space, can   garner   annual 
                 rents of $126,000 per year, as with this lease, even though the 
                 stores are only open for approximately four months per year 
                 during the summer season and closed the remainder of the 
                 year.  Thus, the "real" rent for such space when rented on an 
                 annual basis (or in this case five years) is effectively about 
                 $30,000 - $40,000 per month for actual months of operation. 
                 When      viewed     in  this  light,  early   invocation     of   the  rent 
                 abatement provision of approximately $31,759 was relative 
                 "small change" in view of the long-term lease. 

                 Manus   made   no   mention   of   the   abatement   clause   until   late   July,   and 

continued      to  operate    his  business    in  Juneau's     "prime    tourist/cruise     ship  location" 

        3        641 P.2d 1, 8 (Alaska 1982). 

                                                    -24-                                                  6624 

----------------------- Page 25-----------------------

storefront space until early September 2006 without paying rent.     Predictably, after he 

vacated the premises, the space remained vacant until May 2007. 

              Given the context of this lease, I view Dillingham Commercial 's reference 

to one party's "long acquiescence" as reinforcing the superior court's finding that Manus 

waived the right to claim rent abatement.    The combination of Manus's statements that 

he had failed to pay rent,   his acknowledgment that he owed rent, his repeated promises 

to pay the rent, and his failure to mention rent abatement until two-thirds of the tourist 

season had passed, support the superior court's finding that Manus waived the right to 

claim abatement.   Because the record supports the superior court's findings of fact and 

conclusions of law, I respectfully dissent from the court's decision that Manus did not 

waive the right to abatement. 

                                           -25-                                      6624
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