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Mitigating punitive damages
After one year of leading, the president of the Craig’s Crocodiles, Inc. Mr. Cravath has informed the Pauly Property Management that about the termination of leasing the current office space and warehouse. In response, the Management has sued Craig’s Crocodile to compensate the punitive damages and the lost rent.
In this situation, the Pauly Property Management had leased its properties to the Craig’s Company for a three year period. Nevertheless, Mr. Cravath infringed the lease agreement and left the facilities unpaid for the two years that remained. Looking at these facts, a court can try to resort to the Compensatory damages and the plaintiff may recover the lost rent.
However, there is another very important fact that should be taken into the deepest consideration to put the above-presented act into force. In particular, it is possible to find out whether Pauly made efforts for releasing the facilities, which will be an additional fact in the case (Financial Accounting Standards Board).
In other matters, the Management Company is not in win-win situation in terms of punitive damage compensations because there are no any facts and evidence fitting the Duty to Mitigate Damages (Financial Accounting Standards Board n. p.). According to this rules, the landlord should make efforts to release the property. So, if there are even the slightest attempts to do that, the company should not prevail in the suing process.
Another reason for ignoring punitive measure to the Pauly Property Management is checking the lawsuit for the evidence. The analysis will help to define whether there are obligations and duties that were violated and the ones that were followed. Checking the revenues and the FASB, it is possible to avoid legal liability and fines for the punitive damages.
Discussing the Evidence for Damages
With regard to the case studied, it can be stated the Craig’s Crocodiles, Inc had the right to terminate the lease agreement in case of a due notice of termination. Certainly, the landlord can have claims against tenant because of the unpaid rent in case the lease does not expire and in case the landlord does not re-rent the premises. One way or another, the Management Company cannot hold Craig’s Crocodiles responsible to rent if they give a proper notification.
Due to the fact that Craig’s Crocodile left a rental unit earlier, the extent of responsibility directly relates on the reasons for leaving. In our case, the president had a sufficient ground for leaving the rental unit because he needed to expand their office space and facilities for increasing the revenues (Financial Accounting Standards Board n. p.).
In this respect, Mr. Cravath had the right to leave the rental unit only after he properly notified the leaser. Under these circumstances, Pauly did not have substantial background for filing a lawsuit and for compensating a punitive measure because there were no problems with the facilities used.
Considering the above-mentioned facts, the only evidence on which the lawsuit was based was early termination of the lease contrast due the presence of much more favorable conditions for getting revenues. In this respect, irrelevant quality of facilities was a serious reason for breaking the contract.
So, if the landlord does not repair or somehow contribute to solving your problems, the tenant can properly notify the landlord and wait about 30 days until the notification is confirm. If is not confirmed, a legal entity will not be liable for the unpaid rent. Consequently, the Pauly management did not have evidence for filing a lawsuit; moreover, there are no evidence for the Pauly’s accomplishment of its duties and obligations.
Financial Accounting Standards Board. FASB Formally Adds Project to Reconsider Lease Accounting Board Responders to Investor’s Request for Clearer Reporting of Leasing. 2006. Web. https://www.fasb.org/jsp/FASB/Page/nr071906.shtml