Echo Consulting Services, Inc. v. North Conway Bank

Brief Fact Summary.

Defendant became Plaintiff’s landlord after purchasing a building and assuming Plaintiff’s lease. Plaintiff sued Defendant after Defendant began renovating the building and causing many disruptions. Plaintiff alleged that all of these circumstances constituted a constructive eviction, partial actual eviction, and breach of implied covenant of quiet enjoyment. The trial court ruled in Defendant’s favor. Plaintiff appealed, alleging that the trial court erred in not finding a constructive or actual eviction and in applying the wrong legal test regarding quiet enjoyment.

Synopsis of Rule of Law.

Constructive eviction occurs when a landlord, by omission or affirmative action, deprives a tenant of the use or enjoyment of the leased property, even though there has not been an actual, physical eviction or exclusion.

Facts.

North Conway Bank (Defendant) purchased a building in which Echo Consulting Services (Plaintiff) was a tenant, assuming the lease the lease and becoming Plaintiff’s landlord. The lease granted “a common right to access thereto [and] common use of the parking lot.” Plaintiff began to complain of noise, dirt, and occasional power outages caused by the building’s renovation. Additionally, the rear parking lot was not accessible. Defendant changed the locks to one of the building’s two entrances therefore, Plaintiff’s employees could only access the building through the rear entrance, which was obstructed.

Issue.

1) Must there be intent to evict on the part of a landlord for a tenant to establish a constructive eviction? 2) Does the covenant of quiet enjoyment only protect a tenant against repossession by the landlord or one claiming superior title?

Held.

1) No The trial court’s ruling is affirmed.. To establish constructive eviction, the plaintiff here does not need to prove intent to evict on the part of the landlord. 2) Yes. The trial court’s ruling is reversed and remanded fro reconsideration of the facts in light of this holding. The covenant of quiet enjoyment protects the tenant not only against denial of actual possession, but extends to substantial interferences with the tenant’s use or enjoyment of the premises.

Discussion.

1) Defendant promised that the building would be accessible, however, it did not promise to make any particular entrance available. Furthermore, the alleged disturbances were intermittent and temporary, and therefore, not an actionable interference of Plaintiff’s rights. 2) Some interferences may not rise to the level of a constructive eviction, however, they may reduce the value of the lease and require compensation. Furthermore, in commercial leases, tenants should not be forced to wait for actual dispossession after they have already expended considerable capital in establishing themselves on the premises.