AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• Central Market Ltd., Inc. (Central Market), the landlord, initiated a lawsuit to recover rent and maintenance fees it claimed were owed under a commercial lease agreement with tenant Multi-Concept Hospitality, LLC (MCH). Central Market also sued Sham Naik and Peter Gianopoulos, the owners of MCH, for breach of their personal guaranty of MCH’s obligations under the lease. The district court found that Central Market owed MCH more for work performed under the lease than MCH owed in rent and maintenance fees, resulting in a judgment for MCH and the guarantors, including attorney fees and costs.

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Plaintiff-Appellant (Central Market): Argued that MCH breached the lease by failing to pay rent and maintenance fees and that the guarantors breached their personal guaranty of MCH’s obligations.
• Defendants-Appellees (MCH and Guarantors): Contended that Central Market owed MCH money under the lease terms, which should be credited against any damages claimed by Central Market. They also challenged the enforceability of the guaranty’s waiver of defenses and offsets and disputed the calculation of rent and maintenance fees.

Legal Issues

• Whether the district court erred in offsetting amounts Central Market owed to MCH against the amount MCH owed in rent.
• Whether the guaranty’s waiver of defenses and offsets was unenforceable as a matter of law and public policy.
• Whether MCH was required to provide written notice of default to Central Market before recovering damages.
• Whether the district court misconstrued the lease terms regarding rent reduction and maintenance fee calculations.
• Whether the district court abused its discretion in concluding MCH and Guarantors were the prevailing parties and in awarding attorney fees.

Disposition

• The district court's judgment was affirmed in all respects except for the conclusion that the amount of rent due could be modified solely by Central Market’s acceptance of a lower amount for several months. The case was remanded to adjust the amount of overpayment to MCH by the additional rent due.

Reasons

• The appellate court rejected Central Market’s challenges to the district court’s findings of fact as unsupported by substantial evidence, noting Central Market’s failure to cite evidence supporting the district court’s findings (paras 8-10). The court found that the pretrial order adequately put Central Market on notice of MCH’s claim for credits or setoff based on tenant improvements, dismissing Central Market’s claim of prejudice due to MCH’s failure to specifically plead setoff (paras 11-20). The court agreed with the district court that the guaranty agreement’s waiver provision was unenforceable as contrary to New Mexico law and public policy (paras 21-25). It also found that MCH was not required by the lease terms to provide written notice of default before recovering damages (paras 26-28). However, the court disagreed with the district court’s finding regarding rent reduction based on the course of performance, stating that the acceptance of a lower amount did not constitute a modification of the contract (paras 29-35). The court upheld the district court’s calculation of damages related to Common Area Maintenance (CAM) charges, placing the burden on Central Market to prove the amounts charged conformed with the lease terms (paras 36-39). Finally, the court found no abuse of discretion in the district court’s award of attorney fees and costs to MCH and Guarantors, affirming their status as the prevailing parties (paras 40-46).