JASPER E. JONES, Judge.
This is an action on a lease by the lessor, John C. Bray, against the lessee, Arthur
In November, 1969, Bray leased a location on Hearne Avenue in Shreveport, Louisiana, to Treacher's for the operation of a fast food, fish and chips restaurant. The lease contained the following provisions relative to insurance:
The lease contained the following provisions as to the lessor's rights in case of a default by the tenant:
The evidence shows that Bray and Treacher's generally had a good relationship. However, on at least two occasions prior to the circumstances on which this suit is based Bray learned that the premises were not insured as required by the lease. On each occasion insurance was quickly obtained, but after the second incident Bray informed Treacher's that he did not expect this problem to continue to recur.
In early May, 1978, Bray again learned that the premises were uninsured. Bray attempted to contact Treacher's by telephone about the situation, but was unable to do so. Bray arranged for insurance coverage and informed Treacher's by certified mail on May 10 that the property had been uninsured, that the lease had been violated and that he had obtained insurance whose cost he expected to be paid as additional rent. The last paragraph of the letter stated:
The letter of May 10 did not include the specific cost of the insurance.
On May 26, Bray sent Treacher's a second letter, again by certified mail, notifying it of the cost of the insurance, $985, and demanding payment of the additional rent by June 10. The letter also informed Treacher's that, should it fail to pay the additional rent, Bray would avail himself of his rights under the lease provisions relating to tenant defaults.
Bray received no response from Treacher's before June 16 and on that day filed this suit exercising his option to accelerate the future rentals. Bray also sought the cost of the insurance as additional rent, interest and attorney's fees as provided for by the lease in his action.
On June 27 Bray received a check for $985 from Treacher's. On June 28 Bray received a certified letter dated June 21 informing him that a check for the additional rent was being forwarded under separate cover.
Bray also received on June 28 a certificate of insurance which purported to show coverage retroactive to May 10. Treacher's also later claimed that the property had been covered since August 31, 1977 under its policy with Nationwide Mutual Insurance Company. This assertion is based on an alleged unwritten policy of Nationwide to extend insurance coverage to unknown locations of its national accounts for lengthy periods of time. It is not contended that there is coverage under the written terms of the policy.
After a trial on the merits the district judge found that Treacher's had violated the lease by failing to maintain insurance on the premises. He granted judgment against the defendants for the additional rent, accelerated future rent, interest and attorney's fees.
The defendants appealed and set out five assignments of error. First, that the trial court erred by awarding punitive damages. Second, that the trial court erred in concluding that the property was uninsured. Third, that the trial court erred in holding that Treacher's received proper notice of its failure to provide insurance. Fourth, that the trial court erred in holding that defendant was properly placed in default. Fifth, and finally, that the trial court erred in holding the defendants' breach of contract to be irreparable. We will consider each assignment separately.
ASSIGNMENT NO. 1
The appellants contend that the district judge erred by awarding accelerated
Clauses providing for the acceleration of future rent in case of breach are lawful and binding on the parties. Shepard Realty Co. v. United Shoe Stores Co., 193 La. 211, 190 So. 383 (1939); Succession of Israel, 154 So. 487 (La.App.Orl.1934); Skye Realty Co. v. Diversified Insurance Agency, Inc., 221 So.2d 871 (La.App. 3d Cir. 1969). Such clauses have been enforced by this circuit. Redline v. Snodgrass, 8 La.App. 19 (La.App. 2d Cir. 1928). We conclude that the award of accelerated rents was not an award of punitive damages. This assignment is without merit.
ASSIGNMENT NO. 2
The defendants assign as error the conclusion that there was no insurance.
Contracts have the effect of law on the parties to them. LSA-C.C. art. 1901.
The district court, in its written reasons for judgment, said:
This is a finding that Treacher's failed to maintain insurance within the intent of the parties under the lease. That is a factual conclusion which we may not disturb absent manifest error. Arceneaux v. Domingue, 365 So.2d 1330 (La.1978).
Treacher's contends that the property has been covered since August 31, 1977 under its policy with Nationwide. There is no coverage under the written terms of the insurance contract between Treacher's and Nationwide. The alleged coverage is based on a supposed unwritten policy of liberality by Nationwide in favor of its national accounts. Because of this unwritten policy Nationwide would have supposedly broadly construed its undisclosed locations coverage to cover the Hearne Avenue location.
Appellants contend that the trial judge ignored the testimony of their witnesses in concluding that there was no coverage. That is incorrect. The district judge's reasons for judgment show that he was aware of that testimony and considered it, but was unpersuaded by it. The trial judge has considerable discretion on credibility determinations and questions of fact. Kirklin v. Winn-Dixie Louisiana, Inc., 391 So.2d 87 (La.App. 4th Cir. 1980). The trial judge's rejection of the testimony as to Nationwide's alleged unwritten policy of liberality was well within that discretion.
Treacher's also claims coverage by virtue of its effort to have the Hearne Avenue location specifically added to its policy with Nationwide. In accord with this effort Treacher's obtained on June 19 a certificate of insurance purporting to show retroactive coverage to May 10. This coverage was not accepted by Nationwide until July 20.
Assuming that the agent who issued the certificate of insurance on June 19 had the power to bind Nationwide to the coverage before Nationwide accepted the coverage on July 20 (and this fact is established in the record only by the testimony of the issuing agent) the premises would have been uninsured from prior to May 10 until June 19 if plaintiff had not immediately obtained the insurance.
At the time Treacher's obtained the retroactive coverage Treacher's primary problem was not getting insurance on the property, but paying for that which Bray had already secured. The trial judge was correct in concluding that Treacher's had failed to maintain coverage within the intent of the lease.
Assignment number two is without merit.
ASSIGNMENT NO. 3
The appellants assign as error the finding that Treacher's received proper notice of the failure to provide insurance.
The defendants seem to complain that Bray did not give them some general notice of their failure to provide insurance. The notice of failure to provide insurance was fulfilled by plaintiff's letter of May 10.
Bray's first letter cites the provisions of the lease which require the lessee to maintain insurance on the property. The letter states that the property had been uninsured, that the lessor had exercised his option to obtain insurance when the lessee failed to do so, that the cost of the insurance was due as additional rent and that the lessor considered lessee to have violated the lease. This letter gave Treacher's more than adequate notice of its breach of the lease by failing to maintain insurance.
ASSIGNMENT NO. 4
Appellants assert that there was no proper putting in default. The lease provided that the premiums for any insurance purchased by the lessor because the lessee had failed to insure the property were "immediately due and payable as additional rent." Bray's letter of May 26, received by Treacher's on June 6, informed Treacher's of the amount due as additional rent, $985, and demanded its payment by June 10.
A party may be put in default by a demand in writing. LSA-C.C. art. 1911.
Treacher's obligation to reimburse Bray for the insurance premium was due immediately upon Bray's purchase of the
Treacher's did not pay the rent on or before June 21. Treacher's sent Bray a letter on June 21 informing him that a check for the additional rent was being forwarded under separate cover. The envelope containing the check had postage placed on it by means of a postage meter and the meter stamp was not placed on the envelope until June 22. Since the postage was not placed on the envelope until after the delay had run, it could not have been mailed within the fifteen days permitted Treacher's by the terms of the lease to cure the default.
The suit was filed on June 16 demanding the additional rent and accelerating the unpaid rental installment. The lease specifically authorized plaintiff to accelerate the rent upon any default by Treacher's:
This suit was filed ten days after the defendant had received the notice of default contained in plaintiff's letter of May 26 but five days before the elapse of the fifteen days that the lease gave Treacher's to cure the default and for this reason was premature if plaintiff's letter of May 10 is construed as not triggering the commencement of the fifteen day period for curing the default. Defendants remedy to the premature suit was to have filed an exception of prematurity which is a dilatory exception authorized by LSA-C.C.P. art. 926.
Defendants failed to file the exception of prematurity and for that reason any contention by it that the suit was premature because it was filed before the elapse of fifteen days following its receipt of notice of default is waived. Martin v. Watson, 273 So.2d 677 (La.App. 1st Cir. 1973); May v. Southland Corp., 341 So.2d 421 (La.App.3d Cir. 1976); Texas Gas Transmission Corporation v. Pierce, 192 So.2d 561 (La.App.3d Cir. 1966); Pringle Associated Mortgage Corporation v. Eanes, 211 So.2d 399 (La. App.1st Cir. 1968).
Assignment number four is without merit because the defendants failed to cure their default within the fifteen days following receipt of notice of default and waived any contention they may have had that the suit was premature by failing to file an exception of prematurity.
ASSIGNMENT NO. 5
This assignment complains that the trial judge should have found defendants' breach to have been cured by the payment of the insurance premium and the securing of insurance coverage.
When defendants defaulted Bray acquired and then exercised the right to accelerate the future rent. Therefore, to cure its default it was necessary for Treacher's to pay the additional rent and the accelerated future rent. Treacher's sent a check for the additional rent alone. This assignment is without merit.
The judgment appealed from is AFFIRMED. All costs of this appeal are assessed against appellants.