Defendant tenant abandoned the office building it occupied, and plaintiff landlord sold the building. The Superior Court of Orange County, California, awarded the selling expenses to the landlord, and the tenant appealed.

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Overview

The tenant argued that Cal. Civ. Code § 1951.2 required the landlord to mitigate damages, that the sale of the property was a breach of that duty, and that therefore the sale expenses were not recoverable. The court disagreed, reasoning that reletting the property was not the only means by which the landlord could mitigate. Thus, the sale did not deprive the landlord of its available contract remedies under § 1951.2, including rental loss and consequential damages under § 1951.2(a)(4). Substantial evidence supported a finding that the tenant had reason to foresee circumstances that would require a sale to mitigate damages. The tenant was in the business of leasing, selling, and managing real estate. Because defendant was the sole tenant, the entire building was suddenly abandoned with only one month’s notice. The tenant had reason to know that the landlord would not be able to bear the burden of a vacant building indefinitely, and there was sufficient evidence that the sale was a reasonably foreseeable consequence of the breach. The tenant offered no evidence at all to show that the sale expenses could have been avoided or that they were unreasonable in amount.

Outcome

The court affirmed the judgment of the trial court.