DocketNumber: C.A. No. 83-683
Judges: <underline>GIBNEY, J.</underline>
Filed Date: 3/14/1991
Status: Non-Precedential
Modified Date: 4/18/2021
On February 4, 1982, plaintiffs (Robert Forcier and Norman Reisch d/b/a Abbott Associates) and defendant (Woloohojian Realty Corporation) executed an "Agreement of Lease with Option to Purchase." The agreement concerned the Snow Street Garage, an automobile parking facility located in the City of Providence. According to paragraph 2 of the agreement, the lease was to run from January 15, 1982 through February 16, 1983. Paragraph 20 of the agreement provided, however, that defendant could exercise its option to purchase by giving written notice to plaintiffs sometime between January 16, 1983 and February 15, 1983. In a letter dated January 20, 1983, defendant exercised its option pursuant to paragraph 20.
Paragraph 20 also provided that in the event of defendant exercising its option, a closing would take place no earlier than February 16, 1983 but no later than March 16, 1983. Plaintiffs requested a closing date of February 16, 1983; their rationale in doing so was to prevent any interference with defendant's possession of the premises. Defendant refused plaintiff's request and subsequently demanded a closing date of March 16, 1983.
On February 17, 1983, plaintiffs initiated this action for a declaratory judgment, and requested the appointment of a keeper to determine the daily damages. This Court denied the request for a keeper but ordered defendant to account for all receipts from the end of the term of the lease to the date of the closing, and to deposit those receipts in an escrow fund. When a verified copy of the fund was filed, it showed a balance of $14,913.32.
In answer to plaintiffs' claim of possession of the premises between February 17, 1983 and March 16, 1983, defendant offers two arguments. First, defendant contends that its exercise of the option to purchase immediately extinguished its landlord-tenant relationship with plaintiffs and subsequently created a vendor-purchaser relationship. Second, defendant contends that the "Agreement of Lease with Option to Purchase" contained an implied extension of defendant's right to possession of the premises in the event the option was exercised.
When an option to purchase land is duly exercised, the relation of landlord and tenant ceases and that of vendor and purchaser arises. 51C C.J.S. § 82(1)(b). Execution converts the option into a binding executory contract for the sale of land. 91C.J.S. § 13 Under Rhode Island law, the purchaser in an executory contract for the sale of land becomes the equitable owner of such land though the vendor still holds legal title.Dulgarian v. City of Providence,
This Court recognizes that majority opinion that absent some express agreement otherwise in the lease, a lessor is not entitled to rent after a lessee has validly exercised his option to purchase, at which time the lessee becomes the vendee in an executory contract for the sale of land. Young v. Cities ServiceOil Company,
At the same time, this Court must consider the actual positions of the parties for whom equity can fashion some relief. With respect to the defendant, its surrender of the property for a contractually acceptable period of one day up to one month before the closing would require the defendant to remove all of its signs and lay off its employees and in turn, permit the plaintiff to erect new signs and hire new employees. At the expiration of this interval, again potentially one day, the defendant, now also an equitable owner of the property, would be required to re-enter and claim possession after payment of the purchase price. Absent some agreement by the parties, the law does not require one to do a vain act. Allardice v. McCain.
This Court finds the contract to be silent regarding the rights of the parties during the period between the exercise of the lessee's option to purchase and the closing and further finds that such a potential waiting period was permitted by the terms of the contract and was thus foreseen by the parties at the time of contracting. Therefore, this Court declares that the defendant has been neither granted nor denied possession of the property from February 17, 1983 to March 16, 1983. Accordingly, the Court finds it equitable that the defendant pay the plaintiff the reasonable rental value of the premises for its enjoyment of same during this interval prior to conveyance of title. The Court further declares that $2,105.90, the amount of one month's rent as stipulated in the lease, to be a reasonable amount for the defendant to pay. At the same time, the defendant is entitled to the profits it has gained and which have been held in escrow ($14,913.32).
The plaintiffs' request for damages is not warranted by the extant facts and is hereby denied. The lessee at bar must be distinguished from the lessee in Ucci, 387 A.2d at 1056. InUcci, the lessee breached a lease agreement and was then asked to vacate the premises, but instead remained on the property as a trespasser — all before she exercised an option to purchase. TheUcci court awarded damages to the lessor after finding that the lessee's occupation was trespassory. Id. at 1059. In contrast, lessee, Woloohojian Realty Corporation, has validly exercised its option to purchase, thus becoming a vendee, and has not breached its lease agreement which is ambiguously silent regarding its right of possession after exercise of the option to purchase.
Lastly, plaintiffs' request for attorney's fees is granted. The Court adheres to the longstanding rule that attorney's fees may not be awarded absent statutory or contractual authorization.Farrell v. Garden City Builders, Inc.,
Counsel shall prepare the appropriate judgment for entry by this Court.
COTTONWOOD HILL INC. v. Ansay , 709 P.2d 62 ( 1985 )
Young v. Cities Service Oil Co. , 33 Md. App. 315 ( 1976 )
Shupe v. Ham , 98 Nev. 61 ( 1982 )
Jakober v. E. M. Loew's Capitol Theatre, Inc. , 107 R.I. 104 ( 1970 )
Washington Trust Company v. Fatone , 106 R.I. 168 ( 1969 )
Dulgarian v. City of Providence , 507 A.2d 448 ( 1986 )
Hensley v. Eckerhart , 103 S. Ct. 1933 ( 1983 )
Farrell v. Garden City Builders, Inc. , 477 A.2d 81 ( 1984 )