DIVISION I

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

JOHN F. STROUD, JR., CHIEF JUDGE

CA01-1422

September 11, 2002

ADVANCE FOOD SERVICES, INC. AN APPEAL FROM FAULKNER COUNTY

APPELLANT CIRCUIT COURT

V. [CIV 2001-143]

COOPER REALTY INVESTMENTS, HONORABLE DAVID REYNOLDS,

INC. CIRCUIT JUDGE

APPELLEE

AFFIRMED AS MODIFIED

This landlord-tenant dispute presents questions concerning computation of damages and the election of remedies following the breach of a commercial lease by appellant, Advance Food Services, of property owned by appellee, Cooper Realty Investments. We modify the amount of damages awarded and affirm as modified.

Appellant, Advance Food Services, Inc., operates Pizza Inn restaurants in Conway. On January 8, 1998, appellant entered into a five-year lease with Nabholz Properties, Inc. (Nabholz), for approximately 4,150 square feet of commercial space in two spaces in the Westgate Center. The lease provided for an annual rental rate that automatically increased each year throughout the term of the lease. Nabholz later conveyed the property and assigned its rights under the lease to appellee, Cooper Realty Investments, Inc., but continuedto manage the property under a contract with appellee. In December 1999, appellant, through Bob Clairday, one of its owners, notified Nabholz that appellant would be moving from the premises and requested Nabholz's assistance in finding a new tenant. Nabholz marketed the property but was unsuccessful in finding a new tenant. Nabholz offered to separate the space into two units. There was evidence that Jerry Dean, one of the managers for appellant, called one of Nabholz's leasing agents in July 2000 to check on the status of the search for a new tenant. Dean was quoted in a memo of the conversation as saying the rent was "eating his lunch." Appellant continued to pay rent through October 2000. Clairday testified that appellant ceased paying rent because he interpreted the lease as providing appellee with the exclusive remedy of seeking possession of the premises. Appellee did not reenter or take possession of the premises, and appellant left equipment in the store while Nabholz attempted to find a tenant. Appellee then filed suit seeking as damages the unpaid rent between November 2 and the time of trial. At the time of trial in August 2001, Greg Nabholz testified that he expected the property to be rented by the end of 2001; he also testified that the fair rental value of the premises was $2,640 per month for the larger unit and $875 per month for the smaller unit, or a total of $3,515 per month.

In a letter opinion, the trial judge found that appellant maintained continuous possession of the premises; that appellant had breached the agreement by failing to pay rent; that the fair rental value of the premises was $3,315 per month ($200 per month less than the testimony of Nabholz); and that appellant owed appellee $49,470 under the contract. The trial judge rejected appellant's defense based on its interpretation of the lease as providing appellee with the exclusive remedy of seeking possession of the premises and awardedappellee judgment for $55,470, which included $6,000 in attorney's fees.

This appeal followed. Appellant argues three points: (1) the lease provides appellee's exclusive remedy upon breach; (2) the trial court erred in not finding that appellee had elected its remedy; and (3) the trial court erred in its calculations of damages.

The standard of review of a circuit court's findings of fact after a bench trial is whether those findings are clearly erroneous. Ark. R. Civ. P. 52; Burke v. Elmore, 341 Ark. 129, 14 S.W.3d 872 (2000); A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242, 961 S.W.2d 729 (1998). ··²SDU_5²····²SDU_5²·· Disputed facts and determination of the credibility of witnesses are within the province of the judge, sitting as the trier of fact. Ford Motor Credit Co. v. Ellison, 334 Ark. 357, 974 S.W.2d 464 (1998).

Exclusivity of Remedies

Paragraph 10(A) of the lease provides: "In the event any rental payments coming due hereunder be not paid within thirty (30) days after due ... the LESSOR shall have the right to declare this lease terminated and LESSEE shall immediately surrender possession of said leased premises." Appellant, citing Weingarten/Arkansas, Inc. v. ABC Interstate Theatres, Inc., 306 Ark. 64, 811 S.W.2d 295 (1991), argues that, because the lease provided appellee with a remedy upon default by appellant, that remedy was appellee's exclusive remedy. Therefore, because collection of damages was not one of the mentioned remedies, appellant argues that appellee could not recover the unpaid rent, only possession of the premises. However, Weingarten did not address the question presented in this case, i.e., whether theinclusion of a remedy in the lease bars resort to the common-law remedies. Instead, Weingarten held that parties to a lease may agree to alter the common-law remedies available to a landlord upon breach of the lease. Further, the trial judge's letter opinion rejected appellant's reading of Weingarten.

The remedies provided for in a contract may be permissive or exclusive. If the lease contract specifically provides for only one remedy and sets forth this as the only remedy, then the lessor is bound by the exclusive remedy set out in the contract. See Great Dane Trailer Sales, Inc. v. Prysock, 301 Ark. 436, 785 S.W.2d 13 (1990); Burke Constr. Co. v. Board of Improvement, 161 Ark. 433, 256 S.W. 850 (1923); Vandergriff Chevrolet Co. v. Forum Bank, 613 S.W.2d 68 (Tex. Civ. App. 1981). The mere fact that the contract provides a party with a particular remedy does not necessarily mean that such remedy is exclusive. Vandergriff, supra. The question of exclusiveness of remedy turns upon the intention of the parties as revealed by the language of the contract as a whole, the ··²SDU_18²····²SDU_18²··specific provisions relating to the remedy, and all the facts of a particular case, such as the background ··²StarPage²····²StarPage²····²citeas((Cite as: 81 N.M. 255, *261, 466 P.2d 101, **106)²····²citeas((Cite as: 81 N.M. 255, *261, 466 P.2d 101, **106)²····²citeas((Cite as: 81 N.M. 255, *261, 466 P.2d 101, **107)²····²citeas((Cite as: 81 N.M. 255, *261, 466 P.2d 101, **107)²··of the contract when executed, the conduct of the parties, and the nature of the subject matter involved. See Kohlenberger v. Tyson's Foods, 256 Ark. 584, 510 S.W.2d 555 (1974); Hopper v. Reynolds, 81 N.M. 255, 466 P.2d 101 (1970).

··²HN;F2²····²HN;F2²·· This rule of interpretation is consistent with the fundamental concept of a contract as an agreement, in which the parties may ordinarily agree upon a remedy or remedies for the breach thereof. Schminke Milling Co. v. Diamond Bros., 99 F.2d 467 (8th Cir. 1938); United States ex rel. Armco Drainage & Metal Prods., Inc. v. Vander Heyden, 158 F. Supp. 930 (S.D. Ill. 1958); Zancanaro v. Cross, 85 Ariz. 394, 339 P.2d 746 (1959). It is also consistentwith the principle that it is not the province of the court to alter or amend the contract but rather to interpret and enforce the contract as made by the parties. Foundation Telecom., Inc. v. Moe Studio, Inc., 341 Ark. 231, 16 S.W.3d 531 (2000); Morrilton Sec. Bank v. Kelemen, 70 Ark. App. 246, 16 S.W.3d 567 (2000).

··²HN;F4²····²HN;F4²·· The language of the contract, and particularly the language of paragraph 10(A), neither expressly limits the remedy to the option provided in said paragraph nor suggests that it is to be considered as the exclusive remedy. In asserting that the lease provides the sole remedy, appellant relies upon the testimony of Bob Clairday for support of its interpretation of the lease. However, Clairday was an officer of appellant, and any portion of his testimony was subject to being believed or disbelieved by the trier of fact. Hodges v. Jet Asphalt, 305 Ark. 466, 808 S.W.2d 775 (1991); Fuller v. Johnson, 301 Ark. 14, 781 S.W.2d 463 (1989). Also, appellant continued to pay rent for some ten or eleven months after moving from the premises, suggesting that it did not believe appellee's sole remedy was to seek possession. Further, there was evidence in the form of a memo of a telephone conversation between Jerry Dean, a manager for appellant, and Stan Roberts, a former leasing agent for Nabholz. The memo quotes Dean as wanting an update on the search because the continuing rent was "eating his lunch." This testimony could provide another motive behind appellant's decision to stop paying rent and would support the trial judge's conclusion that the lease did not bar appellee from its common-law remedies.

Election of Remedies

Appellant also argues that appellee made an election of remedies and that the remedy chosen is contrary to the damages calculated by the trial court. This case does not involvean election of remedies; what we are concerned with is whether there has been an election between substantive rights. "A choice between remedies for an injury must be distinguished from a choice between substantive rights and privileges." Miller v. Empire Rice Mills, 228 Ark. 1161, 1168, 312 S.W.2d 925, 929-30 (1958) (George Rose Smith, J., dissenting). Here, appellee is only seeking one remedy - damages for the unpaid rent.

In a case involving a true election between remedies, Belding v. Whittimgton, 154 Ark. 561, 243 S.W. 808 (1922), the vendee in a contract for the sale of land had a choice between a suit for specific performance and an action for damages. It was held that the institution of an action for damages constituted a binding election that precluded the vendee from later bringing suit for specific performance.

The traditional, common-law view gives a landlord three options when a lessee abandons the premises: 1) he may refuse to accept abandonment, let the premises lie idle, and sue the tenants as the rent matures; 2) accept ··²SDU_11²····²SDU_11²····²BestSection²····²BestSection²··the keys as a surrender of possession, thereby terminating the lease and reenter on his own account; or 3) reenter and relet for the tenant's account and hold the tenant liable for any difference in the agreed rent and that of the new tenant. See Weingarten, supra; Grayson v. Mixon, 176 Ark. 1123, 5 S.W.2d 312 (1928). These options are more appropriately considered measures of damages for the landlord rather than separate remedies. See Browne v. Dugan, 189 Ark. 551, 74 S.W.2d 640 (1934). We find no error.

Calculation of Damages

Appellant also argues that the trial judge erred in calculating the damages awarded appellee. Appellant argues that the award should be $2,740, which represents the amount of the original rental less the reasonable rental value of the premises, instead of the $49,470 awarded by the trial court. This was one of the options set out in Weingarten, supra, and Grayson, supra. However, the trial judge found that appellee did not reenter and take possession of the premises. This finding would serve to limit appellee to the amount of the unpaid rent up to the time of trial because the other measures of damages in Grayson are based on the landlord reentering and taking possession of the premises. Grayson held that either multiple suits for each month's rent or one suit at the end of the lease term were contemplated by the first common-law option.

The undisputed proof shows the unpaid rent from November 2000 until trial in August 2001 to have been $35,500. This court has affirmed a circuit court in a civil bench trial by modification of damages where the trial court used an improper measure of damages. McDaniel v. Linder, 66 Ark. App. 362, 990 S.W.2d 593 (1999).

We reduce the award of damages from $49,470 to $35,550, and, as modified, affirm the award. This would also allow appellee to bring a second suit at the end of the term for the remaining rent. Grayson, supra.

Affirmed as modified.

Bird and Crabtree, JJ., agree.