## Facts

- Norman W. and Ardis A. Gehrke (landlords) owned a theater building in Norfolk, Nebraska, leased to General Theatre Corporation (tenant) for operation of a movie theater.
- The tenancy began with a written 5-year lease dated February 24, 1965, was extended in 1970, and was assigned to the Gehrkes after they purchased the building in 1972.
- In April 1975, the parties executed another 5-year lease extension.
- The lease allocated repair duties: the lessor was required to keep the roof and exterior in good repair, while the lessee was obligated to make all alterations, improvements, and necessary repairs to the building’s interior.
- A dispute developed over a large, sagging section of plaster ceiling above the auditorium that the tenant believed could endanger patrons.
- The parties disagreed about who was responsible for repairing the ceiling, with the tenant asserting the condition was tied to roof leaks and thus within the landlords’ repair covenant.
- Evidence at trial supported a finding that the ceiling problem stemmed from a latent construction defect—plaster attached to metal that had been improperly installed when the building was originally constructed—unknown to both parties when they entered the lease.
- The tenant vacated the premises around September 1977 and stopped paying rent beginning November 1, 1977.
- The landlords sued in the District Court for Madison County, Nebraska, seeking unpaid rent of $850 per month for November 1, 1977 through August 1, 1979.
- The case was tried to the court after the parties waived a jury; the trial court entered judgment for the landlords, and the tenant appealed.

## Issues

1. Under the lease’s repair provisions, was the tenant responsible for repairing the sagging auditorium ceiling as an interior repair, or did the landlords’ roof-and-exterior duty require them to fix it?
2. Did the ceiling condition and the landlords’ conduct amount to a constructive eviction that excused the tenant’s obligation to pay rent after it vacated?

## Decision

- The Nebraska Supreme Court affirmed the judgment for the landlords.
- The court agreed that the lease placed responsibility for necessary interior repairs on the tenant, which included repair of the auditorium ceiling.
- The court upheld the trial court’s finding that the landlords did not breach their covenant to maintain the roof and exterior in good repair.
- Because the condition prompting the tenant to vacate was not shown to result from a breach of the landlords’ lease duties, the tenant failed to establish constructive eviction and remained liable for the unpaid rent awarded.

## Legal Principles

- In an action at law tried to the court, the trial court’s factual findings will not be set aside on appeal unless clearly wrong; the appellate court views the evidence and reasonable inferences in the light most favorable to the prevailing party.
- Lease repair obligations are determined by the contract’s allocation of duties; where the lease assigns “necessary repairs to the building’s interior” to the tenant, interior structural repairs may fall on the tenant even if expensive or discovered later.
- Constructive eviction requires a substantial interference with the tenant’s use and enjoyment that is attributable to the landlord’s breach of duty; the tenant must prove the landlord’s breach caused the condition that justified vacating.
- A tenant who abandons premises based on a condition that the lease makes the tenant’s responsibility cannot avoid rent on a constructive-eviction theory.

## Conclusion

The Nebraska Supreme Court affirmed an award of unpaid rent against General Theatre Corporation because the lease required the tenant to make necessary interior repairs, the trial court permissibly found the sagging ceiling resulted from a latent construction defect rather than a roof-repair breach by the landlords, and the tenant therefore failed to prove constructive eviction that would excuse rent after vacating.


Gehrke v. General Theatre Corp., 298 N.W.2d 773 (1980)