Appendix — Baca v. Walgreen Co.

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No, 78-CV-1100

In THe District Court or SHAWNEE COUNTY, KANSAS

First Division

Mary Dolores Baca and Svsan Robertson Gerard, as individ-

uals, and Mary Dolores Baca and Susan Robertson Gerard as

Trustees of the Louise V. Stover Trust,

Plaintiffs,

vs.

Walgreen Company, an Illinois corporation,

Defendant.

JOURNAL ENTRY OF JUDGMENT

Now on this 12th day of October, 1979, the above entitled

matter comes on for decision after trial to the Court. The

plaintiffs appear by their attorney, Robert D. Hecht. The

defendant appears by its attorney, Robert S. Johnson.

The Court, after hearing the evidence, reviewing the file,

hearing the arguments and statements of counsel and being

otherwise well and duly advised in the premises, states con-

trolling facts and legal principles as follows:

I. The plaintiffs between them own all of the title to

certain property located at 815 Kansas Avenue. ( Pleadings

and testimony of Mr. George Gerard.)

2. That Mr. George F. Gerard was appointed by the

plaintiffs as their attorney-in-fact under a Limited Power of

Attorney under the date of September 19, 1976, and at all times

in reference to this matter acted in regard to the above

described property pursuant to the authority granted to him by

that particular Limited Power of Attorney. (Exhibit No. |.)

3. The defendant is an Illinois corporation duly authorized

to conduct business in the State of Kansas, which operates a

retail drug store in the premises owned by plaintiffs, being Lots

267, 269 and 271 on Kansas Avenue in the City of Topeka,

commonly known as 815 Kansas Avenue under a lease dated

April 1, 1960, which was a sublease between George Gordon

and Bertha Gordon, his wife. (Exhibit 2.) Under a judgment

entered by Judge Terry Bullock of the Sixth Division of this

Court, the defendant has now become attorned to plaintiffs as

their tenant under the terms of said lease. (Judgment of June

13, 1977, Case #132,818, District Court of Shawnee County,

Kansas. )

4. The lease document controlling the relationship be-

tween the plaintiffs and the tenants is a certain Lease Agree-

ment dated April 1, 1960, which has been marked and admit-

ted as Exhibit No. 2 in the above matter. (Testimony of

George Gerard and Michael Hirschtick, and Exhibit No. 2.)

5. The lease was made between George Gordon and

Bertha Gordon, his wife, and the defendant herein, and that

[sic] the plaintiffs became landlords to the defendant as

successors in interest to George and Bertha Gordon pursuant to

the Consent and Agreement attached to the lease and executed

between plaintiffs and defendants on the same date as the lease.

( Testimony of George F. Gerard and Exhibit No. 2.)

6. That a loss control :ngineering report was prepared by

the Kemper Insurance Companies, the insurance companies

through which plaintiffs carried fire and multiple coverage on

the premises in question, on the 8th day of March, 1978, and

that said report insofar as the same pertains to this particular

law suit provided as follows:

. Special hazards: Gas grill and three electric deep-

fryers located under hood with filters. Filters were clean

and are serviced every-other day. Hood clean. Duct not

observed due to cooking operations. Hood and duct

serviced quarterly. Dry chemical automatic extinguishing

system protects hood and duct. No surface

protection.

PS306 Ansul System last inspected 11-77. Presumed six

month inspection frequency. Gas range under hood with

no filters or automatic protection. Since it is not used for

frying this 0 is satisfactory. Linen control

satisfactory. .

“Note: There is no automatic fuel shut-off to the grill and

deep fryers.

“Recommendations: Discussed with Joe Alonzo, Assistant

Manager. He could not comment on compliance.

“Important: 78-3-1 the automatic extinguishing system for

the cooking appliances provides protection for the exhaust

hood and duct, but not for the cooking surfaces. Also, there

is no automatic fuel/power shut-off device designed to

operate in conjunction with the extinguishing system.

“The extinguishing system should be extended to provide

direct coverage for cooking surfaces and automatic

fuel/ power shut-offs.”

7. In April, 1978, George F. Gerard first learned that the

cooking surfaces at the 815 Kansas Avenue store ( hereinafter

“the store”), did not have the dry fire extinguishing system and

automatic fuei cut-off device specified by the loss engineering

report when he received a duplicate copy of such report.

8. On May II. 1978, George F. Gerard sent a letter to

M. M. McGivern, Maintenance and Repair Department of

Walgreen, at Franklin Park, Illinois, ( Exhibit No. 5), attaching

a copy of the loss engineering report and recommendations and

requesting Walgreen to make the corrections recommended by

such report other than those concerning defects outside the

building. Mr. Gerard also sent a letter to Kemper Insurance

Companies on the same day advising of his request for

compliance by Walgreen.

9. On July 13, 1978, Mr. Gerard made a telephone call to

Mr. Gudenkauf, the store manager, inquiring about any prog-

ress toward installation. Mr. Gerard was informed by Guden-

kauf that nothing had been done in the 815 Kansas Avenue

store, although such a system had been installed in the Wal-

green store at the White Lakes Shopping Center during re-

modeling. On the same day, Gerard called the Franklin Park

office of the Walgreen Maintenance Division and talked with

Vincent Leone, who stated that he would check to see if any

progress had been made towards installation of the fire pre-

vention system. Mr. Gerard wanted to get on the record and let

Lumbermen’s Mutual (a member of the Kemper Group which

insured the store) know what was happening. Mr. Gerard had

knowledge at that time of the letter of Fred Hurley from the

Kemper ly urance Companies dated June 12, 1978, (Exhibit

No. 24) stating that insurance coverage would be cancelled if

the cooking surfaces protection problem could not be solved.

On the same day, Gerard called Fred Hurley and told him that

a letter from Walgreen would be sent to the Kemper Group.

Hurley stated that the insurance policy in the stere would be

coming up for review within four (4) weeks time.

10. On July 17, 1978, Gerard received a letter from

Vincent Leone dated July 13, 1978, stating he had reviewed the

installation of a fire extinguishing system approved by the

Kemper Insurance Compznies or as owners provide below.

“Furthermore, owners find Walgreen Co. to be in further

default under its April 1, 1960, contract by now violating

its implicit covenant to operate its business in a safe

80 as to avoid the unnecessary risk of fire in the

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must. within thirty (30) days of its

in during the remainder of Walgreen's tenancy from

1111118

ale

ital

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tinguishing system in the kitchen so that it would provide the

protection desired or it would be replaced to the satisfaction of

the insurance company. He further stated that a letter would be

sent on this date to McGivern or Leone at the Franklin Park

office with a copy to Gerard. Gerard never received a copy of

such letter.

12. On July 25, 1978, the defendants contacted Keller Fire

& Safety Equipment Company of Kansas City to get an

estimate and that said estimate was made and communicated to

Walgreen on July 28, 1978, by Keller Fire & Safety Equipment

Company. (Testimony of Earnest Grafke of Keller Fire &

Safety Equipment Company. )

13. On August 18, 1978, Gerard called the store at

Topeka, Kansas. Dave Wiley, an employee, stated that no

work had been done on the dry fire extinguishing system over

the cooking surfaces.

14. An order was sent from Walgreen Company on

September 26, 1978, to Keller Fire & Equipment Company

indicating that the work should progress. (Testimony of Mr.

Earnest Grafke. }

15. On September 7, 1978, Gerard called the store in

Topeka, Kansas. He was informed that nothing yet had been

done on the dry fire extinguishing system.

16. A melt down of electrical wites occurred on the

property in the interior of the building on approximately

September 30, 1978. (Testimony of Mr. George F. Gerard and

Exhibit Nos. 9, 20, 23; testimony of Mr. Donald Jensen;

testimony of Mr. Darrell Dibbern. )

17. The cause of the problem was an electrical malfunc-

tion in the electrical junction box. ( Exhibit No. 9)

18. It was recommended by the electrical inspector as well

as the Fire Inspector, Darrell Dibbern, that the Walgreen

Company secure the services of a licensed electrical contractor

to do the electrical work necessary to eliminate de hazardous

situation of the unapproved junction box in the west stairway to

the basement and to change and re-engineer the service

entrance of electrical conductors, raceway and systems to come

(which included conductors considered outside of buildings,

service entrance conductors not to be spliced, no other con-

ductors in raceway with service entrance conductors, raceway to

be sealed from underground distribution system and means to

be provided to disconnect all conductors from the service

entrance conductors; and that the disconnecting means shall be

installed either inside or outside the building at a readily

accessible place nearest the point of entrance of the service

entrance conductors). (Exhibit Nos. 20 and 23.)

19. On Monday, October |, 1978, Gerard went to the store

in Topeka. When he arrived, he proceeded to the back of the

store to the location of the electric junction box. The junction

box appeared to be smoldering and Gerard was informed that

an electric short circuit had occurred, causing a fire in the box to

which the Topeka Fire Department had responded on the

previous Saturday. KPL was in the process of installing a new

set of cables. Gerard witnessed two steam leaks, one from the

threshold from the alley on the west end of the ground floor of

the store building.

20. The steam under the threshold in the store area and

near the junction circuit box of the store caused a short circuit

and melt down in the electrical box, the same having been

caused by a foreign substance in the junction box. (Testimony

of Mr. Gerard and Mr. Donald Jensen.)

21. On October 3rd it was discovered that the system in

question was an Ansul and not a Kidde System, as Mr. Grafke

had been informed that the Walgreen system was. ( Testimony

of Mr. Earnest Grafke. )

22. On October 3, 1978, Gerard had a telephone conversa-

tion in Gudenkauf's office with McGivern. McGivern stated

that the Keller Fire Equipment Company could not install the

dry fire extinguishing equipment but that East Kansas would

take a look on that day or the following day. McGivern also

stated that the existing PS/30 Fire Extinguishing System lo-

cated in the vents but not over the cooking surfaces, was

obsolete.

23. On October 5, 1978, Gerard telephoned East Kansas

and talked with an employee by the name of Betty. Gerard

learned that Glenn Elliott was the estimator for the company

and that he had gone to the store on October 4, 1978, on

request of Walgreens. She further stated that Elliott would call

Gerard on Monday or Tuesday of the following week.

24. On October 9, 1978, Gerard learned from the Martin

Foltz office that Kemper Insurance Companies would be send-

ing out a notice of cancellation of insurance effective 12:01 a.m.,

November II. 1978, unless the desired fire prevention system

was installed.

25. On October 10, 1978, Gerard received a call from

Glenn Elliott of East Kansas, Distributor for Ansul. Elliott said

that the Walgreen store Restaurant Manager stated that Wal-

green headquarters wanted nothing done to the surfaces being

used for cooking in the back kitchen, but only wanted some-

thing done in the front serving line. Elliott further stated that

the existing system would only smother fire in the duct plenum

area behind the grease trapping filters but would not deter

surface fires such as in the deep-fet fryers or on the cooking

surfaces. On the same date, Gerard called the Topeka Fire

Department and talked with Inspector Darrell Dibbern con-

cerning fire prevention systems required by law ſor restarants

[sic].

26. On October 10, 1978, Elliott of East Kansas issued an

estimate to Walgreens for the cost of installing the requested

fire prevention equipment.

27. On October 10, 1978, Gerard sent Walgreens a letter

entitled “Supplemental declaration of forfeiture of right of

possession under former sublease and notice of additional

defaults”. Such letter stated, among other things, that defend-

ant was in default under the provisions of the April l. 1960,

contract by reason of the failure of defendant to repair the

steam service line and the maintenance of a severely cluttered

eastern one-third of the basement of the premises. Defendant

was given thirty (30) days to take corrective action with respect

to these conditions. Such letter further stated that plaintiff's

reiterated their previous declarations terminating tenant’s right

to possess premises and informed defendant that should owners

be able to replace fire and casualty insurance protection, owners

would accept Walgreen as a continuing month-to-month tenant

upon the condition that beginning the Ist day of November,

1978, Walgreen would pay monthly in advance to owners as

rent the sum of FOUR THOUSAND TWO HUNDRED

DOLLARS ($4,200.00). Such letter further stated that in the

event such terms were unacceptable, defendant should give

written notice within fifteen (15) days so that owners could

take steps to show the premises to prospective tenants, and in

the event owners were unable to replace fire and casualty

insurance protection, the premises should be surrendered by

midnight, November 9, 1978.

28. On October 11, 1978, Gerard sent a letter to the State

Fire Marshal Department making an urgent request for in-

spection and report of the store premises at 815 Kansas

Avenue.

29. On October 12, 1978, the property was inspected and

that Mr. Gordon Sailors, Deputy State Fire Marshal, and Mr.

Darrell Dibbern, with the Topeka Fire Department, found that

the property was in violation of K.S.A. 31-133, and the

Administrative Regulations located at 22-13-4. (Testimony of

Gordon Sailors, Darrell E. Dibbern and Exhibit No. 31.)

30. On the day following their inspection on the 12th day

of October, 1978, Dibbern and Sailors made a report finding

problems with emergency lighting, egress, corrider [sic] enclo-

sure and smoke doors and a few other items such as locks, exit

signs and debris, poor smoking habits, frayed wiring and loose

wiring and plugs. They also found the following:

installed in

required by the Kansas Administrative Regulations ap-

proved by the Kansas Statutes Annotated, 31-133, effec-

tive January |, 1973, amended May |, 1975.

10a

“The regulation states for an approved system, it shall

contain complete duct and plenum coverage including

surface nozzles. The system shall also have a remote pull

and automatic fuel shut-off device. The regulation also

states, ‘before any extinguishing system can be accepted, it

first must meet the approval of the Kansas State Fire

Marshall’ [sic]. This means after the system is installed,

our Office will conduct a final inspection for acception.

“If there are any questions pertaining to this requirement,

please contact our office.” ( Testimony of Darrell Dibbern,

Gordon Sailors, Fire Inspection Report Exhibit No. 32 and

letter of State Fire Marshall [sic] to Mr. George F.

Gerard, Exhibit No. 33.)

31. On October 20, 1978, Mr. Gerard called Michael

Hirschtick, House Counsel for Walgreen. Mr. Hirschtick stated

that he was drafting a letter concerning Walgreen's efforts to

. secure the fire extinguishing equipment. He further indicated

that there were only three manufacturers nationally of dry fire

extinguishing systems and that there was a long waiting period

for delivery of the unit. Mr. Gerard never received this letter.

32. On October 25, 1978, Mr. Gerard called Dallas Glaze

who stated that East Kansas had about a dozen units in stock

and that there would be no delay in securing the units. East

Kansas had received no instructions from ‘Walgreen i in response

to its estimate.

33. On November 13, 1978, defendant mailed a letter to

Kemper Insurance Companies dated September 21, 1978, with

a letter to George F. Gerard advising that it had issued a

purchase order to Keller Fire and Safety Company for in-

stallation of an automatic fuel shut-off on the extinguishing

system and extension of the system to include direct coverage of

cooking surfaces and fryers.

34. On November 17, 1978, Mr. Michael J. Hirschtick

wrote three letters addressed to plaintiffs. The stated purpose

of the first letter ( Exhibit No. 59), was to notify plaintiffs of

Fone

lla

their failure to install a dry fire extinguishing system in the grill

area at the store. In the second letter (Exhibit No. 60),

defendant stated that it was notifying piaintiffs of their failure

to repair and relocate the electrical junction box as required by

the local fire code. In the third letter (Exhibit No. 61),

defendant notified plaintiffs of their failure to repair and

replace the heating system including all steam lines. Defendant

gave further notice in such letters that in the event plaintiffs

failed to take the requested actions within thirty (30) days,

defendant would perform the necessary work at the cost and

expense of plaintiffs.

35. By letter of November 20, 1978, Mr. Gerard respond-

ed to correspondence of defendant dated November 17, 1978.

Mr. Gerard’s letter was entitled “NOTICE OF DEFAULT”

and stated:

“THEREFORE, PLEASE TAKE NOTICE THAT OWN-

ERS FIND WALGREEN COMPANY, CO. TO BE IN

DEFAULT UNDER SAID CONTRACT FOR WAL-

GREEN’S FAILURE TO UNDERTAKE AND TO

COMPLETE THE REPAIR OF THE SERVICE LINE

SUPPLYING STEAM TO THE PREMISES AT 815-817-

819 KANSAS AVENUE IN TOPEKA, KANSAS.”

Mr. Gerard’s letter also contained an elaborate rebuttal stating

in detail the reasons for the position of plaintiffs rejecting the

contention of defendant that the landlord was under any

obligation to make the repairs requested by Walgreen under

the provisions of the April |, 1960, lease agreement.

36. On or about November 30, 1978, the electrical

Junction box was repaired by Peters Electric Company on

request of defendant. The work included change of electrical

service and coordination work with City Electrical Inspector

and KPL. The total charge to defendant was $3,943.00.

37. Sometime during the first two weeks of December,

1978, the dry fire extinguishing system and automatic

fuel / power shut-off were installed on order of the defendant.

38. Article No. 4 of the lease agreement dated April |,

1960, provides that the tenant shall not use the leased premises

for any unlawful purpose and shall comply with the valid

requirements of public authorities regarding the manner of the

conduct of tenant's business in the leased premises. Article No.

5 of such lease provides that the tenant shall make repairs to the

interior of the leased premises. Article No. 9 of such lease

provides that tenant may install any other mechanical equip-

ment, and in doing so, shall comply with all lawful require-

ments. In view of such provisions of the lease agreement of

April 1, 1960, the Court determines that it was the duty and

obligation of the defendant Walgreen to install at its own

expense the dry fire extinguishing system and the automatic

fuel / power shut-off device.

Defendant Walgreen was obligated under the provisions of

Article No. 4 of the lease agreement of April l. 1960, to comply

with the valid requirements of public authorities regarding the

manner of the conduct of the tenant’s business in the leased

premises. Consequently, such defendant was required to

comply with the findings and requirements of the State Fire

Marshal as contained in the report of such agency dated

October 13, 1978. However, there is no requirement of

compliance until such defendant received actual notice of such

findings and requirements of the State Fire Marshal.

40. Article No. 19 of the lease agreement of April l. 1960.

provides that if the tenant breaches any of the other covenants

of the lease and if such breach continues for thirty (30) days

after receipt of the notice from landlord. landlord shall then,

but not until then, have the right to sue for rent or to terminate

the lease or tenant’s right to possession but if tenant shall in

good faith within said thirty (30) days commence to correct

such other breach, and diligently proceed therewith, then

tenant shall not be considered in default. In view of such

provisions, the Court determines that the plaintiff has failed to

sustain the burden of proving that the defendant Walgreen has

materially breached the terms of the lease agreement of April |,

1960, by reason of failure to install such dry fire extinguishing

system and automatic fuel / power shut-off device for the follow-

ing reasons:

(a) Written notices of default or forfeiture sent by plaintiff

to defendant prior to the report of the State Fire Marshal

on October 13, 1978, failed to notify defendant of its

obligation to install the dry fire extinguishing system and

the automatic fuel/power shut-off device as required by

Article No. 4 of the lease for the reason that the valid

requirements of public authorities had not been established

prior to such time.

(b) Defendant Walgreen was under no obligation to

install dry fire extinguishing system and the automatic

fuel/power shut-off device merely upon request of plain-

tiff’s insurance company.

required by Article 19 of the lease of defendant’s breach in

failing to comply with the valid requirements of public

authorities as required by Article No. 4 of such lease after

the official report of the State Fire Marshal on October 13,

1978.

(d) A good faith dispute existed between plaintiffs and

defendant with respect to the obligation of installing the

dry fire extinguishing system and the automatic fuel / power

shut-off device. Defendant sent a written demand to

plaintiffs on November 17, 1978, requesting plaintiffs to

install such equipment. Plaintiffs responded in writing on

November 20, 1978, rejecting such demand of defendants.

In a relatively short period of time thereafter, defendant

installed within the first two weeks of December, 1978,

such equipment at its own expense, In view of all the facts

and circumstances disclosed by the evidence, the conduct

of defendant in installing such equipment was not unrea-

sonable and cannot constitute a material breach of the

terms of the lease in question.

41. Article No. 4 of the lease agreement of April |, 1960.

provides that as to the leased premises, landlord shall make all

14a

changes or installations so required and all repairs to the

exterior and structural portions of the building, entrances to the

leased premises, pipes, ducts, wires and conduits leading to and

from the leased premises. Such article further provides that

landlord shall make all repairs required by fire. Article No. 6

provides that the landlord shall make repairs and replacements

to the heating and air conditioning equipment costing in excess

of $200.00 in each instance. In view of the foregoing provi-

sions, the Court determines:

(a) The steam service line within the interior of the

premises is part of the heating system. Plaintiffs as

landlords had the obligation to make repairs and replace-

ments to such steam service line within the interior of the

premises and to pay all costs in excess of $200.00 for such

repair and/or replacement.

(b) The electrical junction box was damaged by fire on

September 30, 1978, and plaintiffs are required to make all

repairs by reason of such fire and to comply with the valid

requirements of public authorities regarding leased prem-

ises as required by such article. Defendant is therefore

entitled to judgment against plaintiffs in the sum of

$3,943.00 pursuant to the terms of Article 19 of the lease

agreement of April l. 1960, which provides that if landlord

shall from time to time fail to perform any act or acts

required by the lease and if such failure continues for thirty

(30) days after receipt of the notice from tenant, tenant

shall then have the right to perform such act or acts and

the full amount of the costs and expense so incurred shall

immediately be owing by landlord to tenant.

42. All other violations on the part of defendant of the

requirements of public authorities disclosed by the evidence

and as indicated by the report of such public authorities, do not

constitute a material breach of the provisions of the lease

agreement of April l. 1960.

43. The Court sustains all objections of plaintiffs which

were reserved to evidence offered by defendant and not admii-

15a

ted at the time of trial. and such evidence has been excluded

and not considered by the Court in reaching the findings and

conclusions stated herein.

44. Plaintiffs have failed to sustain the burden of proving

that defendant has breached any covenants implied by law with

respect to the lease agreement of April |, 1960.

45. Defendant has failed to sustain the burden of proving

constructive eviction by reason of conduct of the plaintiffs.

Accordingly, defendant is noi entitled to recover on such claim.

Judgment should be rendered, therefore, in favor of plaintiffs

on the claim of defendant for constructive eviction.

IT IS THEREFORE CONSIDERED, ORDERED AND

ADJUDGED BY THE COURT that the defendant, Walgreen

Company, has not materially breached the lease agreement

dated April |, 1960.

IT IS FURTHER ORDERED AND ADJUDGED BY

THE COURT that the defendant, Walgreen Company, recover

on its claim against the plaintiffs, the sum of $3,943.00 for costs

of repairing and changing the electrical junction box by Peters

Electric Company.

IT IS FURTHER ORDERED that judgment be rendered

in favor of plaintiffs on the counterclaim of defendant, Wal-

green Company, for constructive eviction.

IT IS FURTHER ORDERED that the costs of the action

be taxed to the plaintiffs.

IT IS FURTHER ORDERED that judgment on all claims

be entered forthwith upon the filing of this journal entry of

judgment.

16a

No. 51624

CouRT OF APPEALS OF KANSAS.

Mary Dolores Baca and Susan Robertson Gerard, as individ-

uals and Mary Dolores Baca and Susan Robértson Gerard, as

Trustees of the Louise V. Stover Trust,

Appellants and Cross-Appellees,

vs.

Walgreen Co., an Illinois Corporation,

Appellee and Cross-Appellant.

June 26, 1981.

Before ABBOTT, P. J. and SWINEHART and MEYER,

JJ.

MEYER, Judge:

This case involves the question of whether there was a

breach, or breaches, of a lease agreement.

Appellants, Mary Dolores Baca and Susan Robertson

Gerard, as individuals and as trustees of the Louise V. Stover

Trust, who were owners of the property in question (land-

lords), brought this action alleging that appellee Walgreen Co.

(tenant) had breached its lease with the landlords by failing to

comply with a demand that the tenant install a dry fire

extinguishing system and automatic fuel cut-off device for the

cooking appliances. The landlords sought cancellation of the

lease and possession. The tenant counterclaimed for damages

for constructive eviction and harassment, and also for failure to

make certain repairs. The tenant also requested declaratory

judgment enjoining landlords from further harassment, and

ordering the landlords to make certain repairs.

17a

The pertinent parts of the lease agreement are as follows:

“4. Tenant shall not use the leased premises for any

‘unlawful purpose. Tenant shall comply with the valid

requirements of public authorities regarding the manner of

the conduct of Tenant's business in the leased premises,

but as to the leased premises, Landlord shall make all

eased premises and plate las replacemens eXeD0

18a

other

right

ey Se

within

breach,

not

time to ti

Landlord i

iy days .

then

such act

aon |

by Landlord to Tenant, and Tenant shall

11125

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1 nH tb

deduct such amount from the rent. No delay on the part of

either party in enforcing any of the provisions of this lease

shall be considered as a waiver thereof.

“28. Supplementing Article 19—

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1 HALEE ia

Hee 1 1

ele

19a

title) on April |, 1960. Under an earlier judgment June 13,

1977, the tenant became attorned to the landlords herein under

the terms of the lease. (Affirmed on appeal, unpublished

opinion No. 50,586, filed March 14, 1980, Baca v. Gordon, 5

Kan.App.2d xi, 609 P.2d 1184.)

The need for fire extinguishing equipment in the tenant's

store first became known to the landlords in April, 1978, as a

result of a loss control engineering report prepared by the

insurer of the premises. On May II. 1978, the landlords sent a

letter to tenant’s central office requesting tenant to make the

corrections recommended by the report.

On July 13, 1978, the landlords inquired about progress at

the Walgreen store and were informed that nothing had been

done in the 815 Kansas Avenue store, although such a system

had been installed in the Walgreen store at the White Lakes

Shopping Center. The landlords had received notice that the

imsurance coverage would be cancelled if the cooking surfaces

protection problem could not be solved.

On July 17, 1978, the landlords received a letter from the

central office of the tenant stating that after reviewing the lease

tenant had found no grounds to undertake installation of the

fire protection system at its own expense. On the same date. the

landlords sent a letter to the tenant entitled. Demand and

notice of further default under those remaining provisions of

April 1, 1960, contract which are still operative.” The notice

demanded that the tenant shut down the operation of the

cooking surfaces until a fire extinguishing system could be

installed, meeting approval of the insurer of the premises. The

notice also stated the tenant was in default by violating its

“implicit covenant to operate its business in a safe manner so as

to avoid the unnecessary risk of fire in the premises and the

imposition on its landlords of excessively high costs for fire and

other casualty insurance.” The notice also stated that tenant

must, within thirty days of receipt of the notice. undertake the

20a

installation of the fire extinguishing system, refrain from cook-

ing. or warrant that the landlord would be provided fire

insurance on their building at a certain rate. If tenant failed to

do so, then at the end of the thirty-day period, tenant would

have to remove itself from the premises.

The landlords were informed on July 21, 1978, by house

. counsel for tenant, that tenant would modify the fire ex-

tinguishing system.

On July 25, 1978, the tenant contacted Keller Fire & Safety

Equipment Company of Kansas City to get an estimate on such

a system and said estimate was made and communicated to

tenant on July 28, 1978. Tenant sent an order on September

26, 1978, to Keller Fire & Equipment Company indicating that

the work should progress. The landlords spoke with an

employee at tenant's store on August 18, 1978, and September

7, 1978, regarding progress on installetion of the system and

A meltdown of electrical wires occurred on the property in

the interior of the building on approximately September 30.

1978. The cause of the problem was an electrical malfunction

in the electrical junction box. A leak in the steam pipe under

the threshold in the store area and near the junction circuit box

of the store caused a short circuit and meltdown in the electrical

box, the same having been caused by a foreign substance ( rust )

in the junction box.

It was discovered on October 3. 1978, that the system

ordered from Keller Fire & Equipment Company would not

work in the store, since the existing system ( which was located

in the vents but not over the cooking surfaces ) was not the same

system as the one proposed to be installed.

On October 3, 1978, the landlords had a telephone conver-

sation with tenant's central office. The landlords were told that

the Keller Fire & Equipment Company could not install the dry

2la

fire extinguishing equipment, but that E-Kan Inc. Fire Equip-

ment Sales and Service would inspect the premises either that

day or the next.

An estimator for E-Kan Inc. went to the store at the

request of the tenant on October 4, 1978. The landlords

learned of this on October 5, 1978. after telephoning E-Kan Inc.

and speaking with an employee there.

On October 9, 1978, the landlords learned that Kemper

Insurance Companies would be sending out a notice of cancel-

lation of insurance effective November II. 1978, unless the

desired fire prevention system was installed.

Landlords heard from E-Kan Inc. on October 10, 1978.

E-Kan Inc. stated it was told by tenant's manager that its

headquarters wanted nothing done to the surfaces being used

for cooking in the back kitchen, but only wanted something

done in the front serving line. The landlords then called the

Topeka Fire Department concerning fire prevention systems

required by law for restaurants.

On October 10, 1978, landlords sent tenant a letter entitled

“Supplemental declaration of forfeiture of right of possession

under former sublease and notice of additiona! defaults.” Such

letter listed additional defaults of failure to repair the steam

service line and the maintenance of a severely cluttered eastern

one-third of the basement of the premises. Tenant was given

thirty (30) days to take corrective action with respect to these

conditions. The letter further stated that the landlords reiter-

ated their previous declarations terminating tenant’s right to

possess the premises and informed tenant that should the

owners be able to replace the insurance protection, they would

accept tenant as a continuing month-to-month tenant upon the

condition that beginning November |, 1978, tenant would pay

the sum $4,200.00 monthly in advance as rent. The letter

further stated that in event such terms were unacceptable.

tenant should give written notice within fifteen (15) days so

22a

that landlord could take steps to rerent the premises, and that

premises should be surrendered by midnight, November 9,

1978.

E-Kan Inc., on October 10, 1978, issued an estimate to the

tenant for the cost of installing the automatic fire protection

equipment over the cooking appliances and automatic shut-off

switch ($1,707.75)

Landlords sent a letter to the State Fire Marshal on

October 11, 1978, making a request for inspection and report of

the store premises.

On October 12, 1978, the property was inspected by the

Deputy State Fire Marshal and the Topeka Fire Department.

The property was found to be in violation of K.S.A. 1978 Supp.

31-133, and K.A.R. 22-13-4, regarding automatic extinguishing

systems to be installed over cooking equipment. The following

day the inspectors made a report finding problems with emer-

gency lighting, egress, corridor enclosure and smoke doors. and

a few other items such as locks, exit signs and debris, poor

smoking habits, frayed wiring and loose wiring and plugs, as

well as the violation for failure to have an extinguishing system

over the cooking equipment and remote pull and automatic fuel

shut-off device.

Landlords filed suit on October 19, 1978, against the

tenant for breach of lease.

On October 20, 1978, house counsel for tenant told land-

lords that there were only three manufacturers nationally of dry

fire extinguishing systems and there was a long waiting period

for delivery of the unit.

Landlords called E-Kan Inc. on October 25, 978. and

were told that it had a dozen units in stock and that there would

be no delay in securing the units. E-Kan Inc. had received no

order from tenant in response to its estimate.

On November 17, 1978. house counsel for tenant sent three

letters to the landlords. The first letter notified landlords of

23a

their failure to install a dry fire extinguishing system in the grill

area at the store. The second letter notified landlords of their

failure to repair and relocate the electrical junction box as

required by the local fire code. The third letter notified land-

lords of their failure to repair and replace the heating system

including all steam lines. Tenant gave further notice that in the

event landlords failed to take the requested action within thirty

days, tenant would perform the necessary work at the cost and

expense of landlords.

On November 20, 1978, landlords sent tenant a letter

entitled, “NOTICE OF DEFAULT,” and stated:

“THEREFORE, PLEASE TAKE NOTICE THAT

OWNERS FIND WALGREEN CO. TO BE IN

DEFAULT UNDER SAID CONTRACT FOR WAL-

GREEN’S FAILURE TO UNDERTAKE AND TO

COMPLETE THE REPAIR OF THE SERVICE LINE

SUPPLYING STEAM TO THE PREMISES AT 815-817-

819 KANSAS AVENUE IN TOPEKA, KANSAS.”

Another letter of the same date stated the reasons why

landlords were not under obligation to make the repairs

requested by tenant in the letters of November 17, and

indicated the repairs would not be made by the landlords.

The electrical junction box was repaired by Peters Electric

Company on or about November 30, 1978, at tenant's request

and the total charge of $3,943.00 was paid by the tenant. Also

on that date, tenant issued a purchase order to E-Kan Inc. for

the fire extinguishing system.

Sometime during the first two weeks of December, 1978,

the dry fire extinguishing system and automatic fuel/power

shut-off were installed.

The trial court concluded that the tenant was obligated

under the lease to install, at its own expense, the dry fire

extinguishing system and the automatic fuel/power shut-off

device. It further concluded that tenant was obligated under

24a

the lease to comply with the valid requirements of public

authorities regarding the manner in which the tenant conducted

its business in the leased premises. Consequently, tenant was

required to comply with the findings and requirements of the

State Fire Marshal as contained in the report of such agency

dated October 13, 1978. However, the court held there was no

requirernent of compliance until tenant received actual notice of

such findings and requirements of the State Fire Marshal.

The court further found the landlord had “failed to sustain

the burden of proving that the defendant Walgreen has mate-

rially breached the terms of the lease agreement of April |,

1960, by reason of failure to install such dry fire extinguishing

system and automatic fuel/power shut-off device for the follow-

ing reasons:

“(a) Written notices of default or forfeiture sent by

plaintiff to defendant prior to the report of the State Fire

Marshal on October 13, 1978, failed to notify defendant of

its obligation to install the dry fire extinguishing system

and the automatic fuel/power shut-off device as required

by Article No. 4 of the lease for the reason that the valid

requirements of public authorities had not been established

prior to such time.

“(b) Defendant Walgreen was under no obligation to

install dry fire extinguishing system and the automatic

fuel/power shut-off device merely upon request of plain-

tiſſ's insurance company.

(e) Plaintiffs failed to give written notice to defend-

ant as required by Article 19 of the lease of defendant's

breach in failing to comply with the valid requirements of

public authorities as required by Article No. 4 of such lease

after the official report of the State Fire Marshal on

October 13, 1978.

“(d) A good faith dispute existed between plaintiffs

and defendant with respect to the obligation of installing

the dry fire extinguishing system and the automatic

fuel/power shut-off device. Defendant sent a written

demand to plaintiffs on November 17, 1978, requesting

25a

plaintiffs to install such equipment. Plaintiffs responded in

writing on November 20. 1978, rejecting such demand of

defendants. In a relatively short period of time thereafter,

defendant installed within the first two weeks of Decem-

ber, 1978, such equipment at its own expense. In view of

all the facts and circumstances disclosed by the evidence,

the conduct of defendant in installing such equipment was

not unreasonable and cannot constitute a material breach

of the terms of the lease in question.”

As to the electrical junction box. it was determined that

such was damaged by fire on September 30, 1978, and land-

lords were required to make all repairs by reason of such fire

and to comply with the valid requirements of public authorities

regarding the leased premises as required by Article 4 of the

lease. Therefore, tenant was entitled to judgment against the

landlords in the sum of $3,943.00 pursuant to Article 19 of the

lease.

All other violations were held not to constitute a material

breach of the provisions of the lease agreement.

The court also held that the landlords had failed to sustain

the burden of proving tenant had breached any covenants

implied by law with respect to the lease.

Further, the court held that the tenant had failed to sustain

the burden of proving constructive eviction by reason of the

conduct of the landlords.

The costs of the action were taxed to the landlords.

The landlords appeal from the judgment that the failure to

install the fire extinguishing system was not a material breach.

and from the award of $3,943.00 as costs of repair to the

electrical junction box.

The tenant cross-appeals from the judgment that it was its

obligation to install the fire extinguishing system and from the

judgment denying its claim for constructive eviction and puni-

tive damages. The tenant also raises several issues regarding

26a

damages for repairs not done by the landlords, which issues

were not decided by the trial judge.

Tenant first contends on cross-appeal that the court erred

in finding tenant was required by the lease to pay for and install

the fire extinguishing system.

We address this issue first, even though raised by cross-

appellant, because its resolution affects other issues. The tenant

raises this issue asserting it should have been awarded the costs

of installing the fire extinguishing system.

Whether the lessee or lessor is bound to make improve-

ments or alterations required by governmental authorities must

be determined on the particular facts and circumstances of each

case. Mid-Continent Life Ins. Co. v. Henry’s Inc., 214 Kan. 350,

356, 520 P.2d 1319 (1974).

Mid-Continent is one of the few Kansas cases on the

subject. In Mid-Continent, the court was faced with a situation

in which the lessee had covenanted to make all repairs for

maintenance, and a dispute arose over who was required to

repair a wall, such repair being necessitated because the wall

did not meet city building code standards. There was no

provision dealing with what party was to make improvements

required by public authorities for public laws.

The Mid-Continent court cited the law as summarized in

Gladdis v. Consolidated Freightways, 239 Or. 553, 398 P.2d 749

(1965):

Wie have examined all of the available authority on

the subject and conclude, .. that the criterion applied by

the courts is briefly but fully stated in | American Law of

Property, . . .” ( 1952, § 3.80 beginning at p. 353.) Because

the statement is concise we copy it in full:

. .. If the lessee does not expressly covenant to

repair, it would seem clear that he generally should be

under no duty to make alterations and repairs required by

governmental authority in order to conform the premises

27a

to health and safety laws. Any changes likely to be

ordered for this purpose would be beyond the scope of the

tenant’s common law duty to repair. and the expenses of

compliance are properly regarded either as capital ex-

penditures or as necessary carrying charges to be paid out

of the rent.

Where the lessee covenants to repair, the question

of who should bear the cost of compliance depends upon

the nature of the alteration or improvement and the reason

for requiring it. If the order involves-mere repairs which

the lessee would normally be required to make under his

covenant, he should bear the cost. Likewise, the burden is

on the lessee where the alteration is required only because of

the particular use which he is making of the premises,

although it may be questioned whether even in this case.

the courts would place the burden of extensive and lasting

improvements on the lessee, except perhaps where the

lease is for a long term. At any rate, if the order requires

the making of such improvements, so-called ‘structural’

changes, and they are not required because of the particu-

lar use made of the premises by the lessee. the lessor must

bear the burden of compliance. (pp. 557, 558.)” 214

Kan. at 356, 520 P.2d 1319. (Emphasis added. )

The court in Mid-Continent held:

“Under the facts and circumstances in this case it is

held that the trial court did not err in requiring alterations

and improvements to an exterior wall in a leased building

to be made by the lessor where (I) the improvements were

substantial and structural in nature; (2) the improvements

will survive the term of the lease between lessor and lessee

and thus will inure to the primary benefit of the lessor: (3)

the improvements were not required by or because of any

particular use made of the premises by the lessee; (4) the

cost of such improvements were substantial as opposed to

nominal; and (3) the event which necessitated the im-

provement was unusual, extraordinary and unexpected

and not within the contemplation of the parties at the time

the lease was executed.” ( Emphasis added. ) 214 Kan. 350,

Syl. 73, 520 P.2d 1319.

28a

There are many cases collected at 22 A.L.R.3d 521 dealing

with who, as between landlord and tenant, must tear the

expense of alterations or repairs ordered by public authorities.

One particular factor discussed therein and applicable to the

present case is where the improvement is necessitated by the

particular use of the premises.

In First Nat. Stores v. Yellowstone S. Ctr., 21 N. V. 2d 630,

290 N.Y.S.2d 721, 237 N.E.2d 868 ( 1968), the tenant was held

responsible for installation of a sprinkler system required by

governmental authority. The necessity for the sprinkler system

arose primarily because of the manner in which the tenant used

its premises. The facts in First National are quite similar to the

facts of the instant case, although the language of the lease in

First National is clearer as to the responsibility of the parties

than the lease in the instant case. The court held in First

National that the tenant was required to install the sprinkler

system because it was required by a governmental authority as

a result of the tenant’s specific use of the premises.

Other cases have recognized the general rule that unless

the lease states otherwise, where a lasting improvement is

necessitated by a change in the law and not by the tenant’s use

of the premises, the tenant is not liable. In Fontius Shoe Co. v.

Indus. Western, Inc., 42 Colo.App. 236, 596 P.2d 1209 ( 1979),

the sprinkler system was required by the law in several

businesses in a shopping center regardless of the nature of the

business.

In Mayfair Merchandise Co. v. Wayne, 415 F.2d 23 (2nd

Cir. 1969), the landlord was held responsible for installation of

a sprinkler system necessitated by a change in the law. The

Mayfair court listed the factors in construing a lease with regard

to who should make such repairs:

“*The intention of the parties will be gathered by

considering the lease as a whole: having in mind the length

of the term; the rental reserved for the entire term as

29a

compared with the cost of the work to be done; whether the

work was caused by the use of the premises by the tenant, by

a change in governmental policy, or by a defect in the

premises; the relative benefits of the work to the respective

parties to the lease; and what the parties must have had in

contemplation when they executed the lease.’ ” ( Emphasis

added.) 415 F.2d at 25, citing from Rasch, Landlord and

Tenant and Summary Proceedings § 588 ( 1950).

In the case at bar, it is clear that the installation of the

sprinkler system was necessitated by the use of cooking equip-

ment in the store. The language of the lease makes tenant

responsible for compliance with orders of public authorities

regarding conduct of the business in the leased premises and the

landlords responsible for changes required by public authorities

in the leased premises.

The language of the lease is not clear and, tenant argues,

should be construed to mean that the landlords should make all

alterations in the leased premises when ordered by public

authorities and the sentence dealing with conduct of the

business refers to the manner of conducting business, such as

not selling alcoholic beverages illegally or maintaining

sufficient cleanliness standards, etc.

However, we believe the better view is that since the

cooking equipment was installed by the tenant, and since such

installation caused the sprinkler system to be required, the

tenant should install and pay for same. To hold otherwise

would be almost as illogical as making the landlords pay for the

cooking equipment itself.

Furthermore, the lease here was prepared by tenant. Since

it is a written lease, we have the same opportunity as did the

trial court to determine the question of ambiguity. Snodgrass v.

Bloomcamp, 225 Kan. 65, 587 P.2d 316 (1978). We conclude

it is ambiguous.

30a

As the Supreme Court said in Desbien v. Penokee Farmers

Union Cooperative Association, 220 Kan. 358, 363, 552 P.2d

917 (1976):

“Another rule of construction is that an ambiguous con-

tract will be construed strictly against the party who drew

or prepared it and liberally toward the other party.”

We conclude the trial court was correct in holding the

tenant responsible for the expense. of installing the sprinkler

system.

Tenant further contends that the court erred in failing to

find the doctrines of res judicata and judicial estoppel appli-

cable and in failing to dismiss the landlords’ claim.

Tenant asserts the landlords’ claim should have been

asserted in an earlier case between the parties and is barred by

res judicata.

“The salutary rule of res judicata forbids a suitor to

twice litigate a claim for relief against the same party. The

rule is binding, not only as to every question actually

presented, considered and decided but also to every ques-

tion which might have been presented and decided. [Cita-

tions omitted.] In Kansas the rule of res judicata is not

binding and does not apply to a different claim for relief

even though it may be between the same parties. [Cita-

tions omitted.]” Hutchinson Nat'l Bank & Trust Co. v.

English, 209 Kan. 127, 130, 495 P.2d 1011 (1972).

The test for determining whether the claims for relief are

the same is whether the primary right and duty and delict or

wrong is the same in each action. 46 Am. Jur.2d, Judgments

§ 406, p. 575.

“[ T]he doctrine of res judicata prevents the splitting of a

single cause of action or claim into two or more suits. The

doctrine of res judicata requires that all the grounds or

theories upon which a cause of action or claim is founded

be asserted in one action or they will be barred in any

subsequent action.” Parsons Mobile Products, Inc. v. Rem-

mert, 216 Kan. 138, 140, 531 P.2d 435 (1975).

3la

Tenant alleges that the claim for breach of the lease for

failure to install the fire extinguishing system should have been

alleged as part of the earlier suit ( No. 50,586). That case was

filed by the landlords against their former lessee, the Gordons.

seeking to enjoin payment by Walgreens to the Gordons and

requesting that Walgreens be attorned to the landlords under

said lease. Walgreens was a sublessee of the Gordons. Wal-

greens intervened and filed a motion for declaratory judgment

requesting landlords be enjoined from evicting it.

The dispute between Walgreens (tenant herein) and the

landlords was decided October 19, 1977, as shown by the

court’s journal entry. The cause of action in the instant case for

breach of the lease for failure to install the fire extinguishing

system arose, at the earliest, thirty days after the notice of

forfeiture in July, 1978. The tenant relies on the fact that final

judgment was not entered in No. 50,586 until October, 1978:

however, that judgment related to damages suffered by the

landlord from the Gordons’ breach. The court, in the earlier

case, retained jurisdiction to try that issue only and Walgreens

was no longer listed in the heading of that journal entry of

judgment as all claims between Walgreens and landlords had

been resolved by the October 1977 journal entry, and Wal-

greens was no longer a party in the later proceedings.

Furthermore, the two lawsuits involved separate claims for

relief in that separate wrongs were involved. The dispute

between Walgreens and landlords in the earlier case involved

payment of rent, whereas here the dispute is over who is to

make repairs.

Res judicata does not apply to different claims for relief.

Separate claims for relief need not be joined in one action.

Joinder is permissive only. Parsons Mobile Products, Inc. v.

Remmert, 216 Kan. 138, 531 P.2d 435; K.S.A. 60-218.

32a

We next reach the landlords’ issues.

Landlords claim that the court erred in ruling there was no

material breach of the lease in tenant’s failure to install the fire

extinguishing system because the tenant had no duty to comply

with state fire laws and regulations until notified by the State

Fire Marshal.

The trial court ruled that the valid requirements of public

authorities had not been established prior to the report of the

State Fire Marshal on October 13, 1978. The landlords argue

that this was error in that tenant had a duty to comply with

state laws and regulations before notified to do so by the State

Fire Marshal. We agree.

The regulation violated was K.A.R. 22-13-4, which pro-

vides:

“In addition to the provisions of 22-13-3, all facilities

maintaining commercial cooking equipment shall have

approved automatic extinguishers mounted in the ventila-

tion canopies or directly above such equipment. All

equipment must bear the underwriters’ laboratories label

e extinguishing agent such as

CO or dry chemical. — 2

de accepted it first must meet the approval of the Kansas

state fire marshal: Provided, however, The authority having

jurisdiction may exempt a facility from the requirements of

this section, if, in his opinion, the waiving of this require-

ment would not present a definite life safety hazard.”

K.A.R. 22-13-32 allows facilities in service prior to the

effective date of the regulations in Article 13, and not in

conformity therewith, to continue in service so long as such

facilities are not determined by the State Fire Marshal to

constitute a distinct hazard to life or property. See also K.S.A.

1978 Supp. 31-133(c).

While this regulation allows the State Fire Marshal to

exempt certain facilities from operation of the regulations and

33a

allow them to continue to operate, this does not mean that up

until such time as inspection occurs, there is no violation. The

penalty section of the statute makes clear that there are separate

violations contemplated by the act. K.S.A. 1978 (now 1980)

Supp. 31-150a(a) provides:

“Any person who violates any provision of this act or

the act of which this act is amendatory, or who.violates any

rule or regulation adopted pursuant thereto, or who vio-

lates any lawful order issued by the state fire marshal or by

any of the persons designated in K.S.A. 1972 Supp. 31-

137, shall be guilty of a class B misdemeanor, and each

day that the offense continues after receipt of written notice

thereof issued by the state fire marshal, or by any other

person designated in KS. A. 1972 Supp. 31-137, shall

constitute a separate violation. Notice of any such viola-

tion shall be sent by restricted mail, as defined in K.S.A.

1972 Supp. 60-103, but refusal of the addressee to receive

such notice shall constitute receipt thereof.”

We note there is an infraction upon violation of the

regulation, violation of a lawful order issued by the State Fire

Marshal, and also a separate violation for each day that the

offense continues after written notice of violation has been sent.

It is clear that tenant was in violation of the regulation even

prior to the issuance of the fire marshal’s report.

Since the tenant was at that time in violation of the law,

tenant was not complying with the provisions of the lease

requiring tenant to comply with the valid requirements of

public authorities regarding the manner of the conduct of

tenant’s business in the leased premises (Article 4), nor was

ee ee nee

with all lawful requirements ( Article 9).

The fact that tenant did not know it was required by law to

install said equipment is no excuse. “It is a legal maxim that

everyone is presumed to know the law. Flott v. Wenger Mixer

Manufacturing Co., 189 Kan. 80, 88. 367 P.2d 44 ( 1961).

34a

The trial court’s assumption that the valid requirements of

public authorities had not been established prior to the report

of the State Fire Marshal was, therefore, erroneous.

Landlords next contend that the court erred in ruling there

was no material breach of the lease in tenant's failure to install

the fire extinguishing system because notice of default was

ineffective in that it preceded the fire marshal's report.

As noted above, tenant was in violation of the law prior to

said report and consequently the cc venants of the lease con-

nected therewith, and therefore, the landlords were authorized

to give notice of breach and forfeiture pursuant to Article 19 of

the lease.

The notice of forfeiture of July 17, 1978, however, stated

an incorrect reason for forfeiture. It notified tenant of a breach

of the “implicit covenant to operate its business in a safe

manner so as to avoid the unnecessary risk of fire in the

premises and the imposition on its landlords of excessively high

costs for fire and other casualty insurance.” Under the lease.

forfeiture is warranted for breach of specific covenants of the

lease only and not for breach of implied covenants. If. in fact.

tenant breached an implied duty to refrain from unnecessarily

exposing the premises to an additional fire hazard, the remedy

for said breach would be an action in damages, not forfeiture of

the lease.

We have found no cases in which the landlord gave notice

of forfeiture on the wrong grounds. It is clear that notice of

forfeiture is necessary in order to terminate the lease for use of

the property for violation of the law.

The Restatement (Second) of Property § 12.5 (1977).

comment e, provides that a lease is not automatically termi-

nated by use of the leased property for an illegal purpose.

adding that in order for a lease to be terminated by a landlord.

he must give the tenant a notice in which is stated the date of

35a

termination and the reason why the remedy of termination is in

order.

“In the absence of sufficient specificity to convey

notice to the lessee of the precise nature of his delinquency,

forfeiture should not be permitted.” Sherwood Med. In-

dustries v. Bldg. Leasing, 527 S.W.2d 407, 411 (Mo. App.

1975).

We are of the opinion that the notice of July 17, 1978, if

standing alone, would be insufficient notice of forfeiture be-

cause it specified the wrong breach. Following the notice of July

17, 1978, an additional notice of breach was sent October 10.

1978. This notice of breach merely incorporated the earlier

notice so it was not a delineation of the correct reason for the

breach, i. e., failure to comply with lawful requirements of

public authorities. 5

However, suit was filed October 19, 1978, and served

October 20, 1978. The petition adequately alleged a breach by

failure of the tenant to install the fire extinguishing equipment

which, by its conduct, failed to comply with the valid require-

ments of public authorities regarding the manner of the conduct

of the tenant’s business. The landlords prayed that the lease be

declared forfeited.

It was held in Groendycke v. Ellis, 205 Kan. 545, 549, 470

P.2d 832 (1970), that the filing and maintenance of an action

was notice of default and forfeiture to a tenant in a suit for

forfeiture for nonpayment of rent.

“This positive manifestation of intent gave appellees ample

opportunity to correct the default and sufficiently satisfied

the notice proviso in the lease (see 51C C. JS. Landlord &

Tenant, § 114[3]).” 205 Kan. at 549, 470 P.2d 832.

In the instant case the lease provides that if breach

continues for thirty days after the notice of breach, landlords

have the right to terminate the lease and reenter said premises.

But if tenant in good faith within said thirty days commences to

36a

correct such breach and diligently proceeds therewith, then

tenant is not considered in default under Article 19 of the lease.

The trial court did not reach the issue of whether tenant

commenced to correct the breach and diligently proceeded

therewith within thirty days from the notice. Thus, we must

decide whether efforts made by the tenant, after notice, were

diligent.

While as we have said, the July 17, 1978, and other notices

were insufficient in that they failed to state the proper reason for

forfeiture, we deem it proper to set out that unquestionably the

tenant knew for many months before the inception of this

lawsuit the reason why the landlords were complaining. While

such fact, standing alone, would not constitute proper >tice so

as to permit forfeiture, such evidence is entitled to some weight

when considering whether the tenant acted with due diligence

after the notice was given. As shown by the findings of the trial

court, as early as May, 1978, tenant knew that landlords were

complaining about tenant’s failure to install a proper fire

extinguishing system which was necessitated by tenant’s cafe

business. On July 17, 1978, tenant was notified that its lease

was subject to forfeiture, and although the formal part of said

notice contained the wrong reason for forfeiture, yet the same

notice made known to tenant that landlords were still com-

plaining of the lack of fire extinguishing system. The second

written notice of forfeiture further reminded tenant of the

landlords’ complaint. The commencement of suit on October

20, 1978, disclosed good and sufficient reason for forfeiture.

Notwithstanding such long-time actual knowledge, the tenant

did not send a purchase order for installation of the required

fire extinguishing equipment until November 30, 1978, more

than thirty days after it received notice of breach, and over a

month and a half after they had received E-Kan Inc. 's estimate

of October 10, 1978.

374

We conclude the tenant did not exercise due diligence in

acting promptly after October 20 to effect the installation of the

fire exti aguishing system.

Landlords also contend the court erred in ruling it ere was

no material breach of the lease in tenant's failure to install the

fire extinguishing system because a good faith dispute over who

had the obligation to install the system rendered the alleged

breach reasonable and nonmaterial.

We have found no cases and none have been cited by the

parties in which a good faith dispute over who is to make a

certain repair will allow equitable relief from a forfeiture

provision. On the contrary, it was held in First Nat. Stores v.

Yellowstone S. Ctr., 21 N. V. 2d 630, 290 N. V. S. 2d 721, 237

N. E. 2d 868, that there was no acceptable basis for disallowing

a forfeiture even though there was a declaratory judgment

action filed by the tenant within the time period required by the

lease for compliance. There is no clearer case of a good faith

dispute than First Nat. Stores, yet the court held that since the

motion for restraining order was not filed until after the

termination of the lease. the forfeiture of the . should have

been upheld.

We conclude the trial court’s reason in the instant case for

finding a nonmaterial breach of the lease was erroneous. The

trial court should have ordered the lease forfeited as there was a

material breach of the lease after proper notice of forfeiture.

Landlords claim that the court erred in ruling that it was

the landlords’ obligation to repair the electrical junction box.

Landlords argue that the cause of the damage to the

electrical junction box was the poor condition of the steam

service line, and that the tenant was negligent in failing to

repair the steam service line and, therefore, caused the damage

to the electrical junction box. While the trial court found the

damage to the electrical junction box was caused by a leak in

38a

the steam service line, there was no evidence that the leak was

_caused by tenant’s negligence.

The lease specifically obligates the landlords to make

repairs caused by fire and to comply with the orders of public

authorities with regard to the leased premises (not related to

the conduct of tenant’s business). The Violation Notice of the

Building Inspection Department of the City of Topeka indicates

the repair of the electrical junction box was repair of fire

damage. Furthermore, the inspector found that repairs were

necessary to comply with the National Elecirical Code. This

was clearly the responsibility of the landlords under the above-

mentioned provisions.

Even though the repair to the electrical junction box was

the responsibility of the landlords, tenant failed to comply with

the self-help provision which allows tenant to make the repairs

itself and then charge them to the landlords. That provision

states that if the landlords fail to perform any act required by

the lease, and if the failure continues thirty days after receipt of

notice from the tenant, tenant shall then have the right, at its

option, to perform the acts and the full amount of the cost shall

immediately be owing by landlords to tenant, and tenant can

deduct such amount from the rent.

The tenant sent the purchase order for repair to the

electrical junction box on November 30, 1978, but had only

sent notice to the landlords November 17, 1978. Since this was

less than thirty days prior to the date the tenant made the

repairs, it did not comply with the requirements of the lease. It

is noted, however, that the landlords sent tenant a letter

November 20, 1978, which stated that the landlords did not

intend to comply with the request of the tenant. This anticipa-

tory breach would allow tenant to make the repairs and charge

landlords for the repairs. See Equity Investors, Inc. v. Ammest

Group, Inc., | Kan.App.2d 276, 563 P.2d 531 (1977).

E 2

39a

The last set of issues are those raised by tenant in its cross-

appeal.

Tenant contends that the court erred in failing to enjoin the

landlords from further harassment during the remainder of the

lease.

Landlords were merely pursuing their legal rights in suing

and sending letters requesting certain acts be performed by the

tenant. We see no reason for enjoining a landlord from

pursuing legal rights in order to settle legal disputes. There was

no error as to this issue.

Tenant also contends that the court should have awarded it

$4,990.00 damages for repairs to the exterior of the building

which were the landlords’ responsibility.

Tenant claims that it had. shown $4,990.00 worth of

damages for various repairs which were the responsibility of the

landlords, but were not made. Tenant relies on a letter of

landlords’ attorney, introduced into evidence, which stated

certain work was the responsibility of the tenant’s former lessor.

the Gordons. Since the landlords now stand in the shoes of the

Gordons, the tenant argues landlords are responsible for the

repairs. In cross-examination of th landlords, it was estab-

lished that several of the repairs listed in the letter had still not

been completed, namely wall flashing and pitch pockets:

$1,390; alley paving: $800.00; and sidewalk: $1,800. There was

testimony that there were also some problems with the roof

leaking which had been repaired, but not to the satisfaction of

the tenant. Tenant, in its brief, also raises an item in the letter

delineated Simer pumps, electrical outlets, anti-pilferage chains,

and outlet hoses: $1,000. The landlords testified that the Simer

pumps had been replaced. The landlords admitted that these

repairs were their responsibility and that the estimates had been

made in conjunction with their lawsuit against the former

lessors, the Gordons. There were also several letters which

indicated requests for these repairs, but no notice was sent that

40a

tenant would make repairs and charge these to landlords if

landlords did not comply with the request.

On appeal, the landlords claim that there is no showing

that the damages for these items were prayed for nor shown to

be necessary or reasonable.

Regardless of whether the above items were sufficient to

prove the costs of repairs as necessary and reasonable, the law

indicates that the damages herein requested were the wrong

measure of damages.

In Miller v. Sullivan, 77 Kan. 252, 94 Pac. 266 (1908), the

measure of damages in breach of a covenant to repair premises

by a landlord was.discussed. The court cited the general rule:

Oln a breach of the covenant by the landlord to make

repairs the measure of damages is the difference between

the rental value of the premises as they were and what it

would have been if they had been put and kept in repair.”

77 Kan. at 253, 94 Pac. 266.

The Miller court went on to discuss other options of the

tenant and stated:

“[U]pon the breach of a covenant of the landlord to

recover all damages flowing from the breach. (McCoy v.

Oldham, 1 Ind. App. 372, 27 N. E. 647, 50 Am. St. Rep.

that case the covenant was to clear a part of the

land, and the court approved the rule allowing the dimin-

ution in rental value as the measure of damages, saying

that this is ordinarily the measure of recovery.” 77 Kan. at

254, 94 Pac. 266.

The Miller court held that the tenant could recover for

damages to goods in his storeroom where the landlord tailed to

make repairs to a roof and where the tenant gave seasonable

[sic] notice to the landlord and the landlord made continual,

aithough ineffectual, efforts to repair. The tenant was thus able

—

Ala

to recover the damages naturally and proximately resulting

from the breach.

We find no case where a tenant was able to recover the

cost of making repairs as the damages, whe, the tenant had

not made the repairs.

Assuming that such costs are not the measure of damages.

there is a complete failure of proof as to the damages which

tenant sustained by the landlords’ failure to make repairs.

There was no evidence introduced that any goods were dam-

aged due to the failure to make the repairs, or of any other

consequential damages flowing from the breach, nor was there

any testimony as to the diminution in rental value from the

failure to make repairs. We find no error as to this issue.

Tenant also claims the court should have awarded tenant

$1,200 damages for replacement of the underground steam

supply pipe.

There was evidence introduced that the tenant incurred

$1,200 expense in replacing the underground steam supply

pipe. Tenant made the repair after notice to the landlords of

violation and after receiving landlords’ answer that the would

not make the repair. The trial court found that the steam

service line was the responsibility of the landlords, but failed to

award damages for said repair. We conclude the court should

have awarded said damages on the same basis as the award of

the damages for repair of the electrical junction box.

The provisions of the lease applicable to determine who

was responsible for the repair are as follows:

“2. ... Landlord shall furnish to the leased premises

at all times sufficient sewer, gas, water and electrical

service lines of sufficient capacity as required by Tenant

5. Tenant shall make repairs to the interior of the

leased premises except as provided below. Landlord

42a

shall maintain and make all repairs to the exterior and

structural portions of the building, sidewalks, parking and

other common areas, entrances to the leased premises.

pipes, ducts, wires and conduits leading to and from the

leased premises. Landlord shall make all repairs required

by the fault of Landlord or by fire, casualty or the

elements, or by dry rot or termites. ... Landlord shall

make repairs and replacements to heating and air condi-

— equipment costing in excess of $200 in each in-

” (Emphasis added.)

The trial court specifically found the steam service line was

in the interior of the building, but was part of the heating

“system” and therefore, the landlords’ responsibility under

Article 5. We agree.

Tenant further contends the court erred in ruling tenant

had failed to sustain the burden of proving a constructive

eviction and harassment, and in failing to award punitive

damages therefor.

Tenant claimed constructive eviction, breach of a covenant

of quiet enjoyment, and harassment from the repeated efforts of

the landlords to gain compliance with fire regulations and

numerous notices of default, and the filing of the two lawsuits

noted in this case as well as another filed in district court which

was dismissed.

The trial court ruled that tenant had failed to sustain the

burden of proving a constructive eviction.

“The effect of a negative finding by a trial court is that

the party upon whom the burden of proof is cast did not

sustain the requisite burden. Absent arbitrary disregard of

undisputed evidence or some extrinsic consideration such

as bias, passion or prejudice the finding of the trial judge

cannot be disturbed. An appellate court cannot nullify a

trial judge’s disbelief of evidence nor can it determine the

persuasiveness of evidence which the trial judge may have

believed.” Highland Lumber Co., Inc. v. Knudson, 219

Kan. 366, Syl. 715, 548 P.2d 719 (1976): Jennings ».

43a

Speaker, Executrix, | Kan. App.2d 610, Syl. J 8, 571 P.2d

358 (1977).

We affirm the decision of the trial court on this issue.

Finally, te ant contends the court erred in refusing to allow

attorney fees and costs.

Landlords were ordered to pay court costs by the trial

court. Tenant alleges the court should have awarded it attorney

fees and costs, but admits that there was no offer of evidence as

to what those fees and costs were. Tenant requests that the case

be remanded, so that the trial court can admit evidence as to

said fees and costs.

“The general rule is that attorney fees are not allowable as

costs in an action in the absence of statutory authority.” In

re Miller, 228 Kan. 606, 610, 620 P.2d 800 ( 1980).

There is no statute which would allow attorney fees in this

type of case, nor has counsel cited any. Further, there is no

provision in the lease allowing for the award of attorney fees by

agreement. The decision of the trial court is affirmed as to this

issue.

Affirmed in part; reversed in part, all as herein set out.

ABBOTT, Judge, dissenting.

I find myself in disagreement with the majority on a

number of issues, both as to the law and as to its application to

the facts. Although I am reluctant to accuse my colleagues of

reweighing the facts, it is my opinion that in some instances

they have done just that and have arrived at different con-

clusions and have substituted their judgment for that of the trial

judge. I do,.however, agree with the majority as to the liability

of the landlord for the steam line. I would otherwise affirm the

trial judge’s decision for the reasons stated in his findings of fact

and conclusions of law.

44a

No. 51.624

IN THE SUPREME COURT FOR THE STATE OF KANSAS

Mary Dolores Baca and Susan Robertson Gerard, as individ-

uals and Mary Dolores Baca and Susan Robertson Gerard as

Trustees of the Louise V. Stover Trust,

Appellants,

vs.

Walgreen Co., an Illinois corporation.

Appellee.

The opinion of the court was delivered by

SCHROEDER, C.J.: This case is before the court on a

Petition for Review of the decision of the Court of Appeals

found at 6 Kan. App. 2d 505, 630 P.2d 1185 (1981).

A detailed factual account of the events pertinent to this

lawsuit appears in 6 Kan. App. 2d at 509-14. We present them

in a highly summarized form.

Walgreen's drug store and restaurant at 815 Kansas Ave-

nue in Topeka operates under a lease dating from April |, 1960.

The present landlords, plaintiffs in this action, first became

aware of a potential problem with the restaurant operation at -

815 Kansas Avenue in April 1978 when their attorney-in-fact

George Gerard received a loss control engineering report

prepared by the plaintiffs’ insurers who recommended that the

dry chemical automatic fire extinguishing system be extended to

cover the cooking surfaces as well as the then currently

protected hood and duct and that an automatic fuel/power

shutoff device be installed to operate in conjunction with the

extinguishing system. Gerard sent a letter to Walgreen on May

11, 1978, requesting compliance.

On June 12, 1978, plaintiffs’ insurance company notified

the Foltz-Roepke Agency in Topeka that insurance coverage

45a

would be cancelled if the cooking surfaces protection problem

could not be solved. Gerard received a copy of that letter in

early July and, contemporaneously, made telephone inquiries of

Steven Gudenkauf, the store manager at 815 Kansas, and

Vincent Leone of the Walgreen Maintenance Division in l-

linois regarding the progress on installation of the equipment.

No work had been done.

On July 17, 1978, Gerard received a letter from Vincent

Leone stating he had reviewed the lease and found no grounds

for the tenant Walgreen to undertake installation of the fire

extinguishing system. On the same day, Gerard sent a notice of

default to Walgreen demanding the tenant shut down the

cooking surfaces until installation of the fire extinguishing

system and declaring default by violation of an implied cov-

enant to operate the business in a safe manner.

Walgreen indicated it would provide the protection desired

and on July 25, 1978, contacted Keller Fire & Safety Equip-

ment Company of Kansas City for an estimate. An order was

placed on September 26, 1978, but the system proved to be one

Keller was not authorized to work on. Another company,

E-Kan, Inc., sent an estimator out at defendant's request on

October 4, 1978.

Meanwhile, in an unrelated incident, a meltdown of elec-

trical wires occurred at the rear of the store when an electrical

junction box malfunctioned. On October |, 1978, Gerard

arrived at the 815 Kansas Avenue store while the junction box

was still smoldering. Kansas Power & Light was in the process

of repairing a steam leak in its delivery line supplying heat to

the premises, and Gerard saw a steam leak from the service line

to the building. The steam leaks were found to have contrib-

uted to the meltdown.

On October 10, 1978, Gerard talked with the estimator for

E-Kan, Inc., called the Topeka Fire Department regarding fire

prevention systems required by law for restaurants, and sent

46a

Walgreen a letter entitled Supplemental declaration of forfei-

ture of right of possession under former sublease and notice of

additional defaults.” In addition to the previous grounds for

default, the letter stated that the tenant Walgreen was in default

for failure to repair the steam service line.

On October 12, 1978, at Gerard’s request. the State Fire

Marshal’s Department inspected the property and found viola-

tions of K.S.A. 1980 Supp. (then 1978 Supp.) 31-133 and

KAR. 22-13-4. The imspector’s report stated: All facilities

maintaining commercial cooking equipment shall have an

approved automatic extinguishing system mounted in ventila-

tion canopies directly above such equipment.”

On October 19, 1978, landlords filed suit against Walgreen

for breach of the lease, with service of process effected October

20.

On November 17, 1978, Michael Hirschtick, legal counsel

for Walgreen, addressed three letters to plaintiffs: One,

notifying plaintiffs of their failure to install a dry fire ex-

tinguishing system in the grill area at the store: two, notifying

plaintiffs of their failure to repair and relocate the electrical

junction box as required by the local fire code: and three.

notifying plaintiffs of their failure to repair and replace the

heating system including all steam lines. The defendant

invoked the 30-day period under the lease after which the

defendant could perform the work at the plaintiffs’ expense.

On November 20, 1978, Gerard denied by letter that the

landlords had any obligation to make the repairs requested.

The defendant, on or about November 30, 1978, ordered

electrical repairs totalling $3,943. During the first two weeks of

December 1978, the dry fire extinguishing system and automa-

tic fuel/ power shutoff were installed on order of the defendant.

The trial court determined, under the provisions of the

lease, that it was the duty of the defendant to install the dry fire

_ —

47a

extinguishing system and automatic fuel/power shutoff device

at its own expense but that the defendant did not have to

comply until actual notice of findings and requirements of the

State Fire Marshal. The court further found Walgreen had not

materially breached the lease by failing to install the fire

prevention devices because: (1) The valid requirements of

public authorities referred to in Article 4 of the lease were not

established until October 13, 1978; (2) the defendant was

under no obligation to install the devices on request of plain-

tiffs’ inzurer, (3) plaintiffs did not give written notice of breach

after October 13, 1978; and (4) a good faith dispute existed as

to responsibility for installation of the fire prevention devices.

On the defendant’s counterclaim, the court found the

steam service line a part of the building’s heating system and

repairs costing over $200 the obligation of the landlord under

the lease. There was, however, no award of damages for repair

of the steam line. The court found the electrical junction box to

be damaged by fire and repairs the obligation of the landlord

under the lease. The defendant was granted judgment in the

sum of $3,943. The court further found the defendant had

failed to sustain the burden of proving constructive eviction on

its counterclaim for damages.

The plaintiffs / landlords appealed to the Court of Appeals

from those portions of the trial court’s decision finding that the

failure to install the fire extinguishing system was not a material

breach and from the award of $3,943 for repair of damage to

the electrical junction box. The defendant/tenant cross-

appealed from those portions of the judgment: (I) Finding the

doctrines of res judicata and judicial estoppel inapplicable: ( 2 )

failing to enjoin the landlords from further harassment: (3)

failing to award $1,200 to the tenant for replacement of

underground steam supply pipe and requiring the tenant to

install the fire extinguishing system at its own expense: (4)

failing to award $4,990 for repairs to the exterior of the

building; (5) failing to award punitive damages for wanton and

48a

malicious harassment and a denial of peaceful and uninter-

rupted possession; and (6) refusing the tenant attorney's fees

and costs.

On appeal, the Court of Appeals found the trial court erred

in finding there had not been a material breach of the lease.

The Court of Appeals reversed the trial court on that issue,

concluding It Ihe trial court should have ordered the lease

forfeited, as there was a material breach of the lease after

proper notice of forfeiture.” 6 Kan. App. 2d at 523. The Court

of Appeals further found the trial court should have awarded

the tenant $1,200 damages for replacement of the underground

steam supply pipe. With regard to the other issues raised on

appeal, the Court of Appeals affirmed the trial court. Both

landlords and tenant petitioned this court for review of the

Court of Appeals decision. We granted review.

On review, the landlords (plaintiffs / appellants) challenge

the awards to the tenant of $3,943 damages for repair and

relocation of the electrical junction box and $1,200 damages

for repair of the steam service line. The tenant

(defendant/appellee/cross-appellant) seeks review of the

Court of Appeals determination that there had been a material

breach of the lease which resulted in forfeiture. Other issues

addressed by the Court of Appeals were not raised on the

Petition for Review and we consider them settled.

We turn first to the question of breach and forfeiture of the

lease. Article 19 of the lease provides for notice of breach and

forfeiture if no diligent effort is made to cure the default within

30 days:

49a

premises, but if Tenant shall pay said rent within said ten

days, or in good faith within said thirty days commence to

correct such other breach, and diligently proceed there-

with, then Tenant shall not be considered in default.”

The breach most vigorously argued by the landlords is

tenant’s failure to install the fire extinguishing system which, if

required, is clearly the tenant’s financial obligation because

required by the manner in which the tenant uses the premises.

6 Kan. App. 2d at 517. The landlurds allege violation of

certain provisions in Articles 4 and *) of the lease. The

provisions in those Articles provide:

“4. ... Tenant shall comply with the valid require-

ments of public authorities regarding the manner of the

conduct of Tenant’s business in the leased premises.

“9. Tenant may install and operate interior and

exterior electric and other signs, soda fountain machinery

and any other mechanical equipment. and in so doing shall

comply with all lawful requirements.”

In Kansas the State Fire Marshal has statutory authority to

adopt reasonable rules and regulations to safeguard life and

property from the hazards of fire and explosion. K.S.A. 1980

Supp. 31-133 (then 1978 Supp.). Specifically, in subsection

(4), he has authority to require “installation and maintenance

of equipment intended for fire control, detection and ex-

tinguishment in all buildings and other places in which persons

work, live or congregate from time to time for any purposes.

. K.A.R. 22-13-4, adopted pursuant to this statute and

effective January J. 1973, provides, in pertinent part: All

facilities maintaining commercial cooking equipment shall have

approved automatic extinguishers mounted in the ventilation

canopies or directly above such equipment.”

K.A.R. 22-13-32 addresses the question of retroactivity

50a

“The regulations contained in the foregoing sections

shall allow facilities in service prior to the effective date of

such regulations, and not in strict conform therewith, to

continue in service so long as such facilities are not

determined by the authority having jurisdiction to constitute

a distinct hazard to life or property.” (Emphasis added.)

The Walgreen store at 815 Kansas Avenue, in operation since

the early 1960's, clearly comes within this provision.

Accordingly, the circumstances surrounding the October

12, 1978, inspection are important. On October II. 1978.

George Gerard directed a letter to the State Fire Marshal

explaining the safety recommendations of his own insurer and

asking for a report of statutory and regulatory requirements to

safeguard the employees and customers of the Walgreen Co.

ead to protect the building.” In response to this letter, an

inspection, made the following day, noted violation of K.A.R.

22-13-4. No notice seems to have been taken, however, that

Walgreen’s operation preceded the effective date of the regu-

lation. To make the requirement effective as against Walgreen

a determination needed to be made that the facility constituted

“a distinct hazard to life or property.” No such determination

was made although testimony was elicited in the trial of this

matter that the facility constituted a hazard to property.

Contrary to the finding of the Court of Appeals, we find

Walgreen was not in violation of any requirement of a public

authority at the time it refused to install the fire extinguishing

equipment and, consequently, had not breached Articles 4 or 9

of its lease agreement. In light of this determination, consid-

eration of the sufficiency of notice of breach or of due diligence

in correcting the breach becomes unnecessary.

Plaintiffs/landlords further contend in their Petition for

Review that the defendant/tenant’s failure to repair the steam

service line after notice constituted a sufficient basis, independ-

ent of the controversy over installation of the fire extinguishing

a a

Sla

system, for tenant's forfeiture of its right to possession of the

premises. We are in agreement with the trial court and the

Court of Appeals that repair of the steam service line was the

responsibility of the landlord. Plaintiffs argue that the use of

steam heat was a discretionary act related directly to the

manner in which tenant used the premises or. in the alternative,

that the steam pipe is not heating “equipment” for which the

landlord is responsible under Article 6 of the lease.

Provisions of the lease relevant to this issue state:

5. Tenant shall make repairs to the interior of the

leased premises and plate glass replacements, except as

provided below. Landlord shall maintain and make all

repairs to the exterior and structural portions of the

building, sidewalks, parking and other common areas,

entrances to the leased premises, pipes, ducts, wires and

‘conduits leading to and from the leased premises.

“6. Landlord shall make repairs and replacements so

heating and air conditioning equipment costing in excess of

$200.00 in each instance.” ( Emphasis added. )

Even if we were to accept plaintiffs’ construction of the

word “equipment” as referring only to those movable portions

of the heating “system,” Article 6 read in conjunction with

Article 5 clearly contemplates a heating system, the repair of

which is the landlord's responsibility.

While heat is required for the operation of the business in

that it is necessary to the comfort of patrons and employees of

the business, it is not a requirement peculiar to the manner in

which this tenant is using the premises, such that its repair

becomes the tenant’s responsibility. Repair of the steam service

line was the landlord’s responsibility.

We turn now to the damages issues raised by the landlords.

In upholding the trial court's judgment of $3,943 for repair and

relocation of the electrical junction box, the Court of Appeals

stated in 6 Kan. App. 2d at 523:

52a

“The lease specifically obligates the landlords to make

repairs caused by fire and to comply with the orders of

public authorities with regard to the leased premises (not

related to the conduct of tenant's business). The Violation

Notice of the Building Inspection Department of the city of

Topeka indicates the repair of the electrical junction box

was repair of fire damage. Furthermore, the inspector

found that repairs were necessary to comply with the

National Electrical Code. This was clearly the responsi-

bility of the landlords under the above-mentioned provi-

sions.” ( Emphasis in original. )

The Court of Appeals further concluded the trial court

should have awarded the tenant $1,200 damages for repair of

the steam service line “on the same basis as the award of the

damages for repair of the electrical junction box.” 6 Kan. App.

2d at 526.

We have no difficulty in concluding the Court of Appeals

erred in awarding the $1,200 sum for repair of the steam pipe.

Our examination of the trial court record reveals that Exhibit

56, which included the bill for this repair, was excluded from

evidence because no proper foundation was laid. Furthermore.

no testimony was introduced regarding the charge for repair of

the steam line. Although as determined above, the landlords

had the obligation to make repairs and replacements to the

steam service line, there was a complete failure of proof as to

the sum expended by the tenant, if any.

We next consider the propriety of the $3,943 award to

tenant for repair and relocation of the electrical junction box.

Relevant portions of the lease provide:

“2. ... Landlord shall furnish to the leased premises

at all times sufficient sewer, gas, water and electric service

lines of sufficient capacity as required by Tenant, which

shall be connected to an adequate source of supply or

disposal.

53a

“4. ... Tenant shall comp'y with the valid require-

ments of public authorities regarding the manner of the

conduct of Tenant’s business in the leased premises, but as

to the leased premises, Landlord shall make all changes or

installations so required.

„S. .. Landlord shall maintain and make all repairs

to the exterior and structural portions of the building,

sidewalks, parking and other common areas, entrances to

the leased premises, pipes, ducts, wires and conduits

leading to and from the leased premises. Landlord shall

make all repairs required by the fault of Landlord or by

fire, casualty or the elements, or by dry rot or termites.”

(Emphasis added. )

The landlords contend the trial court erroneously con-

cluded the electrical malfunction was a fire within the meaning

of Article 5 of the lease. This is a question of fact determined

by the trial court and the record supports that determination.

There was testimony from an electrical inspector regarding a

fire as well as introduction into evidence of a Fire Report. In

addition, George Gerard testified that, when he arrived on the

scene October |, 1978, “smoky fumes” were coming out of the

junction box. He further testified he learned there had been a

fire or electrical short circuit which caused some smoke. While

the extent of the damage was apparently limited to the wires

themselves, there is nonetheless evidence of a fire. We note in

passing that Article 5 obligates the landlord to repair wires as

well as fire damage.

We are further persuaded this repair was the landlords’

responsibility by the fact, as noted in the Court of Appeals

opinion, that the repairs were necessary to comply with the

National Electrical Code.

We find no error in the decision of the Court of Appeals

upholding the trial court’s award of $3,943 to the defendant for

repair and relocation of the electrical junction box.

eae

54a

After having examined all arguments advanced and au-

thorities cited by the parties on review, we affirm the Court of

Appeals in upholding the damage award of $3,943 for repair

and relocation of the electrical junction box, but reverse the

Court of Appeals in awarding $1,200 damages for repair to the

steam service line and in ordering the lease forfeited. The

ee eae LS Coe ae ye Wee eee

the Petition for Review.

55a

BYSTANDER’S AFFIDAVIT

The Kansas Supreme Court does keep a transcript of

proceedings before the Court. However, that transcript is not

made available to the parties or to reviewing courts. Therefore,

the following Bystander’s Affidavit was prepared by John

Wilkinson who participated in oral argument as counsel for the

AFFIDAVIT

STATE OF KANSAS, COUNTY OF SHAWNEE, ss:

John E. Wilkinson, of legal age, being first duly sworn,

upon his oath, states:

1. That I presented the oral argument in the above-

captioned matter in the Supreme Court of the State of Kansas

on December 4, 1981. The argument started at approximately

11:45 a.m.; there was a break for lunch and argument resumed

at approximately 1:30 p.m.

2. During the course of oral argument, Justice Robert

Miller made certain inquiries of me pertaining to the steam line

and items identified in Exhibit A to the Lease that had to do

with conditions that the Prime-Lessees—the Gordons—had to

satisfy in order to get Walgreen to lease the premises.

3. Thereafter, Justice Herd also asked about the steam

lines. Later, Justice McFarland asked about whether or not my

argument would be any different if the lines to heat the

premises were gas rather than steam lines. Thereafter there

was a question asked by Justice Holmes about whether or not

damages to the landlords would be more appropriate than

forfeiture.

4. Then Justice Fromme became concerned about “forfeit-

ure” by the Walgreen Co. and the amount of rent that

56a

Walgreen would have to pay; he expressed concern about

whether Walgreen would continue to be on the Kansas Avenue

in downtown Topeka if its rent were increased. I indicated that

the landlords were entitled to have their lease enforced as

written; that the landlords were entitled to a declaration of

forfeiture. Thereupon, Justice Fromme declared, “But you

would have the bargaining power!” Then Justice Holmes asked

again about whether or not damages would be sufficient in lieu

of forfeiture. Again, I answered about the Court’s duty to

enforce the contract as written: that, in fact, there had been a

material breach entitling the landlords to a declaration of

forfeiture.

5. During Lessee’s argument, counsel for lessee-appellee,

commented on the prior lawsuits. Justice Fromme again came

on strong about whether Walgreen was planning to leave

downtown. He also asked if there was anything to be done in

these proceedings with the prior lawsuits.

6. Then Justice Prager asked about the hoods over the

grills located in the restaurant part of Walgreen’s leased

premises. He wanted to know how they worked.

7. During this presentation, I became aware of a fixed

attitude not only by Fromme and Holmes but on the part of the

Court about not declaring a forfeiture. I decided to report to

my client immediately after the argument as to what had

happened while it was fresh in my mind. I was not able to

reach my client in California until the next day. I did relate to

him at that time as detailed as I could remember about waai

had occurred during oral arguments—a mind set of not declar-

ing a forfeiture on the part of the Court.

8. Later, when I received the Court’s opinion, written by

Justice Schroeder, I became even more concerned about what

was going on as I felt like the Opinion did not address the

issues. The Opinion as written ignored the clear fact of breach

and the result thereof.

57a

Further affiant saith not.

/s/ JOHN E. WILKINSON

John E. Wilkinson

Subscribed and sworn to before me this Ist day of July, 1982.

/s/ MarGaret L. RICHARDS

Margaret L. Richards—Notary

Public

My Appointment Expires: June 24, 1983

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.