Miller v. Burnett

No. 116,373

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

LINDA K. MILLER,
Appellant,

v.

WILLIAM BURNETT,
Appellee.

SYLLABUS BY THE COURT

1.
As a general rule, an appellate court cannot determine whether substantial
evidence supports a trial court's factual findings unless a transcript of the evidence
presented to the trial court is included in the appellate record.

2.
Although Kansas recognizes a landlord's duty to mitigate damages, that duty does
not arise unless the tenant has abandoned the property. A landlord's duty to mitigate
damages does not authorize interference with the tenant's rights to exclusive possession
and quiet enjoyment of the leased premises.

Appeal from Wabaunsee District Court; GARY L. NAFZIGER, judge. Opinion filed June 9, 2017.
Reversed and remanded with directions.

Linda K. Miller, appellant pro se.

William Burnett, appellee pro se.

Tucker A. Stewart, associate counsel, for amicus curiae Kansas Livestock Association.
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Before STANDRIDGE, P.J., LEBEN, J., and PATRICIA MACKE DICK, District Judge,
assigned.

LEBEN, J.: In early 2016, Linda K. Miller sued her landlord, William Burnett,
claiming she was entitled to damages because he had allowed his neighbor's horses to
graze on the 35 acres of pastureland that she rented from him and also had denied her
access to the land for several months. Burnett filed a counterclaim against Miller,
claiming she hadn't paid rent. Miller lost at both small-claims court and at a bench trial in
district court; the court ordered her to pay Burnett the rent she owed. On appeal, she
essentially argues that, based on the evidence, the district court reached the wrong result.

Unfortunately, at least from her vantage point, she did not include a trial transcript
in the record on appeal. Without this, we cannot know what evidence the district court
relied on to make its decision, so we cannot evaluate the factual validity of that decision.

But we can evaluate the district court's legal conclusion that because Miller hadn't
paid rent, Burnett was required to mitigate his damages by allowing his neighbor's horses
to graze on the rented property. That's not correct. First, while landlords do have a duty to
mitigate damages under Kansas law (a minority position nationally), that duty arises only
when a tenant abandons the property—it simply doesn't apply in this situation, where all
we know for sure is that the tenant failed to pay rent but might have still occupied the
premises. Second, the district court's conclusion is at odds with another principle of
landlord-tenant law, the implied covenant of quiet enjoyment, which exists in every
Kansas lease and prevents a landlord from interfering with the tenant's exclusive use and
possession of the rented property. The law simply does not authorize a landlord to breach
this covenant of quiet enjoyment and interfere with the tenant's sole possession based on
a nonpayment of rent when the tenant is still in possession—a landlord has other legal
remedies available when a tenant fails to pay rent.

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FACTUAL AND PROCEDURAL BACKGROUND

Beginning around 2010, Miller rented 35 acres of pastureland in Wabaunsee
County from Burnett; she and her husband used the land to grow and harvest brome
grass. The parties seem to agree that they had an oral lease agreement, that the rent was
$1,000 a year, and that the lease terminated on March 1, 2016. (By statute, oral farm
leases in Kansas run from March 1 to March 1. K.S.A. 58-2506[a].) Otherwise, the key
facts in this case are disputed.

In February 2016, Miller filed a case in small-claims court alleging that Burnett
had violated the terms of the oral lease when he allowed four horses (belonging to a
neighbor) to graze on the rented pastureland in late summer 2014 and late summer 2015
and when he denied her access to the pastureland for 3 months, December 2015 through
February 2016. For damages, Miller asked for half the cost of fertilizing the pastureland
in 2014 and 2015 (totaling $1,956), half the rent for 2014 and 2015 (totaling $1,000), the
cost of feeding the cattle instead of grazing them, and an unspecified amount of money
for being denied access to the property.

Burnett filed a counterclaim against Miller, alleging that she hadn't paid the $1,000
rent for the 2015-2016 lease term. He made additional claims for the cost of storing a
piece of Miller's farm equipment and for an unpaid water bill.

The small-claims court didn't make any specific factual findings (at least in
writing), but it denied Miller's claims and granted Burnett's claim for rent, ordering Miller
to pay Burnett $1,000. Miller appealed that decision to the district court.

The district court also denied Miller's claims and ordered her to pay Burnett
$1,000 in rent for the 2015-2016 lease term. The district court's written order likewise
didn't make many specific factual findings, stating only: "Plaintiff breached implied
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contract by failing to pay rent. Defendant was obligated upon plaintiff's breach to
mitigate his damages by grazing horses."

Miller has appealed to our court.

ANALYSIS

Miller argues on appeal that she is entitled to damages because Burnett violated
the oral lease when he allowed a neighbor's horses to graze on the pastureland that she
rented from him and when he denied her access to the land for 3 months.

When a trial court has made findings of fact and conclusions of law, our standard
of review is whether those findings of fact are supported by substantial evidence and
whether the findings are sufficient to support its legal conclusions. We then
independently review the court's legal conclusions, without any required deference to the
district court. Owen Lumber Co. v. Chartrand, 283 Kan. 911, 915-16, 157 P.3d 1109
(2007).

In most cases, after reciting this standard, we would go on to evaluate whether
substantial evidence supports the trial court's factual findings. In this case, though, we
have an initial difficulty—because the transcript of the trial below is not included in the
record on appeal, there's no way for us to decide whether substantial evidence supports
the trial court's factual findings. Simply, since we don't know what evidence there was at
trial, we can't know whether it was substantial. The burden is on the party making a claim
on appeal—here, Miller—to show facts in the record that support the claim; without such
a record, the claim of error necessarily fails. Friedman v. Kansas State Bd. of Healing
Arts, 296 Kan. 636, 644-45, 294 P.3d 287 (2013). So we cannot evaluate Miller's factual
claims or reverse the district court's judgment based on its factual findings. What we can
do, though, is evaluate the district court's conclusions of law, asking whether the factual
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findings are sufficient to support the legal conclusions. See Tucker v. Hugoton Energy
Corp., 253 Kan. 373, 377, 855 P.2d 929 (1993).

The district court found that Miller had failed to pay rent for the 2015-2016 lease
term (a fact Miller actually concedes, although she disputes when rent was due under the
lease). Not paying rent is a breach of a lease agreement. Norris v. McKee, 102 Kan. 63,
65, 169 Pac. 201 (1917); Restatement (Second) of Property, Landlord and Tenant
§ 12.1(1) (1977). The district court concluded that because Miller had breached the oral
lease by failing to pay rent, Burnett was required to graze the horses on the rented land to
mitigate the damages caused by this breach. We disagree.

Usually, if someone breaches a contract—doesn't do something he or she is
required to do by the agreement—the other, nonbreaching party to the agreement can file
a lawsuit and be awarded the full amount of damages caused by the breach. But in some
circumstances, courts impose a special rule on the nonbreaching party called the "duty to
mitigate damages," which requires the person damaged by a breach of contract to take
some action to try to reduce the amount of those damages. Black's Law Dictionary 618
(10th ed. 2014). This duty is an additional responsibility—instead of just getting damages
from the person who caused them, the nonbreaching party first has to try to reduce those
damages.

In a landlord-tenant context, only a minority of states recognize a duty to mitigate
damages. In re Estate of Sauder, 283 Kan. 694, 712, 156 P.3d 1204 (2007) (noting that
applying this duty in a landlord-tenant context is the minority rule). The majority rule is
that if a tenant abandons the lease, the landlord doesn't have to try to find a new tenant;
the landlord can just sue the abandoning tenant for the full amount of rent owed under the
lease. Restatement (Second) of Property, Landlord and Tenant § 12.1(3) (1977). But
Kansas follows the minority rule: If a tenant abandons a lease, the landlord has a duty to
try to find a new tenant rather than just suing the original tenant for any remaining rent.
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In re Sauder, 283 Kan. at 712. But the duty to mitigate damages doesn't arise until a
tenant abandons the lease. Wichita Properties v. Lanterman, 6 Kan. App. 2d 656, 659,
633 P.2d 1154 (1981) ("[T]he duty to mitigate does not begin until tenant abandons the
property and notifies the landlord of that abandonment."). And there's no suggestion
before us that Miller abandoned the lease.

Even so, the district court concluded that Burnett had to mitigate his damages
without considering whether Miller had abandoned the lease—its conclusion was based
solely on Miller's nonpayment of rent. We can find no caselaw suggesting that the duty to
mitigate damages arises or applies in cases that don't involve either abandonment or
termination of the lease. On the contrary, the Kansas Supreme Court has described it this
way: "Kansas follows the minority position, imposing upon a landlord the duty to make
reasonable effort to secure a new tenant if a tenant surrenders possession of leased
property." (Emphasis added.) In re Sauder, 283 Kan. at 712. And though the Restatement
(Second) of Property follows the majority, no-duty rule, it nonetheless phrases the duty to
mitigate as one that could arise only when a tenant abandons the property: "[I]f the tenant
abandons the leased property, the landlord is under no duty to attempt to relet the leased
property for the balance of the term of the lease to mitigate the tenant's liability under the
lease." (Emphasis added.) Restatement (Second) of Property, Landlord and Tenant
§ 12.1(3). In sum, the district court wrongly concluded that Burnett had a duty to mitigate
damages based solely on a nonpayment of rent and without any consideration of whether
Miller had abandoned the lease. See Wichita Properties, 6 Kan. App. 2d at 659 (the duty
to mitigate isn't triggered until the tenant abandons the lease). Nothing in the record
available to us suggests that Miller had abandoned the lease.

An additional problem with the district court's conclusion is that it would allow a
landlord to interfere with the tenant's possession of the rented property. When a landlord
leases property to a tenant, the tenant has exclusive right of possession. Restatement
(Second) of Property, Landlord and Tenant § 1.2 (1977) ("A landlord-tenant relationship
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exists only if the landlord transfers the right to possession of the leased property."). The
tenant's right to exclusive possession is encapsulated in what lawyers call the "implied
covenant of quiet enjoyment," which exists in every Kansas lease, including oral farm
leases. Stewart v. Murphy, 95 Kan. 421, Syl. ¶ 2, 148 Pac. 609 (1915). A "covenant" is
simply a promise, and "implied" just means that this promise is a part of every lease, even
if the lease doesn't expressly say anything about it. Black's Law Dictionary 443, 872
(10th ed. 2014). "Quiet enjoyment" means that a tenant has possession of the property
and is free to come and go from the property without the landlord's interference. See
Stewart, 95 Kan. at 423-25; see also Bocchini v. Gorn Management Co., 69 Md. App. 1,
6-7, 515 A.2d 1179 (1986) (landlord can't interfere with the tenant's right to use and
enjoy the property). If a landlord were required to mitigate damages caused by the
nonpayment of rent when a tenant has not abandoned the property, then the landlord
would be required to violate the implied covenant of quiet enjoyment and the tenant's
right to exclusive possession without the landlord's interference. This significant point
was raised in the amicus brief submitted by the Kansas Livestock Association, and it's a
reasonable one. The duty to mitigate damages has its limits. It isn't a license for landlords
to interfere with a current tenant's use of the rented property.

Saying that a landlord can't interfere with the tenant's exclusive use of the property
merely due to nonpayment of rent doesn't leave the landlord without recourse: The
landlord has other remedies available when a tenant fails to pay rent but doesn't abandon
the leased property. For example, if a tenant fails to pay rent when it's due, the landlord
can give the tenant notice that the lease will be terminated if rent isn't paid within 10
days. K.S.A. 58-2507. And specifically related to farm leases, a landlord can enforce a
lien (a legal interest in someone else's property) on the crops growing on the farmland:
"Any rent due for farming land shall be a lien on the crop growing or made on the
premises." K.S.A. 58-2524; Black's Law Dictionary 1063 (10th ed. 2014). Either of these
options protects the landlord's right to receive rent without interfering with the tenant's
possessory rights.
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So where does all of this leave us? We can't review the factual findings of the
district court in the absence of a transcript, so we must accept those factual findings. But
it's clear to us that the district court's judgment was based in part on a legal error—its
conclusion that Burnett's duty to mitigate damages authorized him to allow others to
graze their horses on the rented pastureland. Because the district court's judgment is
based in part on a legal error, we reverse it. We remand the case for the district court to
reconsider application of the law to the facts as it found them in a manner consistent with
this opinion.

The district court's judgment is reversed, and this case is remanded for further
proceedings consistent with this opinion.