MEL FRANK TOOL & SUPPLY CO. V. DI-CHEM CO.
580 N.W.2d 802 (Iowa 1998)
NATURE OF THE CASE: This was a dispute over the termination of a lease.
FACTS: Di-Chem (D) was a chemical distributor. D leased space from Mel Frank (P). There were no face to face negotiations but P was in fact aware that D was going to store chemicals on the site. Some of the chemicals that D distributes are in fact hazardous materials. The lease was to start June 1, 1994 and end May 31, 1997. The lease limited D’s usage to storage and distribution. The lease required D to make no unlawful use of the premises and to comply with all City Ordinances. There was also a destruction of premises provision that allowed termination under certain circumstances. On July 21, 1995, the city’s fire chief and several city authorities inspected the premises. That inspection resulted in a finding that the building did not comply with Code requirements and that the hazardous materials must be removed within seven days to eliminate the hazard. On August 2nd, D informed P of the city’s actions and then informed P of its intent to relocate to avoid civil and criminal penalties. On October 23rd, D then informed P that it was going to vacate the premises by the end of October. D stated to P that the structure was useless as a chemical warehouse. P then sued for breach of contract. The court found for P in that P had no reason to know or believe that chemicals classified as hazardous would be stored in the warehouse. D appealed.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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