Tenant Made Adequate Repair Efforts During Cure Period

Facts: A national pet product retailer received a notice of default and termination from the owner of the space it rented. The owner alleged that the tenant had failed to perform its maintenance obligations under the lease, most notably, failing to fix a large crack in a wall, which entitled the owner to terminate the lease. But the tenant argued that the lease terms allowed a cure period—that is, a period of time after it received the default notice during which it could perform the repairs. The owner and tenant each asked a trial court for a judgment in its favor without a trial.

Decision: A Nebraska trial court ruled in favor of the tenant.

Reasoning: The owner couldn’t demonstrate that the tenant had defaulted on its obligations and failed to cure its default after notice, which were both necessary for termination. The district court stated that even if, for argument’s sake, the maintenance breach was sufficient to trigger the termination clause, the tenant had, during the cure period after it received the default notice, diligently pursued making repairs. There was evidence that it had created work orders within its own company to fix some items and had hired outside contractors when it was necessary.

• Petco Animal Supplies Stores, Inc. v. The Five Fifty Two Corporation, January 2016