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Reid v. Mutual of Omaha Insurance Company | 776 P.2d 896 (1989)

If a tenant leaves and stops paying rent before a lease is up, may the landlord recover the unpaid rent? Does it matter whether the landlord tried to relet the space? We explore those questions in Reid versus Mutual of Omaha Insurance.

Mutual of Omaha leased office space from Mervin and Ethna Reid for five years. The parties’ lease was to expire in October of nineteen eighty-five. Mutual used the premises to sell insurance. Intermountain Marketing later rented the space next to Mutual, which it used to train sales personnel. Mutual repeatedly told the Reids that Intermountain was very loud and interfered with Mutual’s ability to conduct business. However, the noise persisted. In February of nineteen eighty-two, Mutual gave notice and vacated the premises.

The Reids sued Mutual for breach. Mutual counterclaimed and argued that it’d been constructively evicted by Intermountain’s excessive noise. While the litigation was pending, the Reids renovated Mutual’s former space and leased it to Intermountain. However, Intermountain vacated and stopped paying rent in November of nineteen eighty-two.

The trial court rejected Mutual’s constructive-eviction claim and found that Mutual had breached the lease. It awarded the Reids unpaid rent until the date of trial, less what they’d actually received in rent from Intermountain. It further awarded the Reids monthly rent through the end of the lease term, less any actual amounts they might receive from a future reletting. It also awarded the Reids the costs they’d incurred in renovating and reletting the space to Intermountain. Mutual appealed to the Utah Supreme Court.

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