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01/05/90 LENKIN-N LIMITED PARTNERSHIP v. BARRY NACE

January 5, 1990

LENKIN-N LIMITED PARTNERSHIP, ET AL., APPELLANT
v.
BARRY NACE, APPELLEE



Appeal from the Superior Court of the District of Columbia; Hon. Eugene N. Hamilton, Trial Judge.

Before: Belson, Steadman, and Farrell, Associate Judges.

The opinion of the court was delivered by: Farrell

FARRELL, Associate Judge: This case involves a dispute over whether a delay in completing construction of certain "raw" commercial space leased by the law firm of Paulson & Nace (PN) *fn1 from appellant Lenkin-N Limited Partnership (Lenkin) constituted a breach of the lease agreement. Plaintiff-appellee brought suit in Superior Court contending that because of unreasonable delay by Lenkin in preparing the entire premises for occupancy, the firm was forced, for a period of several months, to pay the entire rent on office space that was only partially occupiable. Plaintiff sought damages amounting to that portion of the rent and electricity expenses attributable to the unoccupied portion of the office, which was the first floor. Lenkin defended on the ground that no unreasonable delay had occurred and that, pursuant to the terms of the lease, plaintiff was responsible for the entire amount of the rent even though construction on a portion of the premises was not yet completed when he moved in. The jury found for plaintiff and awarded damages of $6,316.

On appeal, Lenkin argues that plaintiff's failure to present expert testimony that any delay in "building out" this commercial office space was unreasonable rendered his evidence insufficient to create a jury issue, so that Lenkin's motion for a directed verdict should have been granted at the end of plaintiff's case. *fn2 For the reasons that follow, we agree and reverse.

I

On July 5, 1985, PN and Lenkin signed a lease agreement to rent commercial office space located at 1814 N Street in Northwest Washington, D.C. At the time the lease was signed, the space was "raw"; that is, it was completely bare with concrete floors, no ceilings and no walls. It therefore had to be "built out" before it could be used.

Section 2 of the lease stated that the rental term would begin on one of three dates:

the earlier . . . of the following: (a) the date tenant opens for business; or (b) the later of (1) October 1, 1985, [ *fn3] or (2) fifteen (15) days after tenant receives written notice from landlord that so much of the building standard work as is not dependent on prior installation or completion of special items ordered by or for tenants will have been substantially completed. . . . (Emphasis added.)

Under section 24 of the lease, Lenkin was required to supply and install all "building standard work" at its own expense. This included the work necessary to construct a standard office space such as walls, ceilings, doors, electrical and telephone outlets, and heating and air conditioning. Any additional or mob elaborate "special items" were PN's responsibility, for which they could hire Lenkin or subcontract elsewhere. In either case, PN acknowledged that

the installation or completion of Special Items may take longer than would the installation or completion of Building Standard items, and may delay the installation or completion of Building Standard work to be done. Accordingly, Tenant . . . accept delivery . . . even though the Landlord's Work may not have been completed by the Tenant Occupancy date as a result of delays occasioned by special items.

PN chose to hire Lenkin for a substantial portion of the special item work.

On July 16, 1985, PN hired Fran Spector, a professional space planner and interior designer, to design the interior office space. PN expressed a desire for a "traditional" type of office containing a substantial amount of custom woodwork or millwork and other special items that went beyond the building standard work provided by Lenkin. *fn4 Pursuant to PN's instructions and the terms of the lease, Spector prepared construction documents and submitted them to Lenkin for pricing on August 8, 1985. Lenkin, after contacting the necessary subcontractors, completed its first pricing proposal on August 30, 1985, and submitted it to Spector and PN for approval. After reviewing the proposal, PN decided to eliminate some of the special items in order to reduce costs. They returned it to Lenkin for revisions on September 4, 1985. Lenkin submitted a revised proposal on September 11 *fn5 which was once again returned with changes. The third and final proposal was submitted to PN on September 16 and signed on the 23rd. The proposal noted that the millwork would require ten to twelve weeks of lead time and the carpeting six to eight weeks. Construction began on September 24.

On October 17, 1985, Lenkin gave notice that the portion of the building standard work not dependent on installation of special items ordered by PN would be substantially completed in 15 days. A final walk-through was conducted on November 1. The parties agree that the space was not ready for occupancy as of that date. Since the special millwork required to complete the stairs between the first and second floors had not arrived, the stairs were unfinished. Many of the special light fixtures also had not arrived, which delayed installation of the ceilings. Spector testified, however, that as of November 1 Lenkin had substantially completed the standard work that was not dependent on the special items.

PN moved into the second floor on November 25, 1985, and began paying rent as of that date. *fn6 The first floor was still unusable. By late January or early February of ...


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