## Facts

- Chester G. Luxon and Lillian Luxon leased Dallas C. Morris a portion of a building on Main Street in Richmond, Kentucky, for a ten-year term beginning January 14, 1964.
- After Chester Luxon died, ownership of the property passed to Lillian Luxon and two other owners, William E. Luxon and Ann L. Durham (the plaintiffs/landlords).
- The lease included a rent-abatement provision stating that if the premises were “destroyed or damaged by fire or other casualty” so as to be unfit for use, rent would be “suspended or abated” until the premises were “rebuilt or repaired” and then would recommence upon completion.
- The lease also stated that the lessor would carry insurance and, “in case of damage to the building by fire,” would make “necessary repairs at the earliest possible time” so the lessee would not be inconvenienced longer than necessary.
- On February 8, 1968, the entire building (including Morris’s leased space) was completely destroyed by fire while Morris was still a tenant.
- Two days after the fire, the owners sent Morris written notice stating the lease was canceled because of the destructive fire.
- Morris disputed the cancellation and asserted that the lease provisions required the owners to rebuild.
- The owners filed suit in the Madison Circuit Court seeking relief that included a declaration that they were not required to rebuild; Morris counterclaimed for a declaration that the owners had a duty to rebuild within a reasonable time.
- After the fire, the owners also discussed or proposed constructing a new building on certain conditions, but Morris did not accept those conditions.

## Issues

1. Did the lease provisions suspending rent until the premises were “rebuilt or repaired” and requiring the lessor to make “necessary repairs” after fire obligate the owners to rebuild after the building was totally destroyed by fire?
2. Did the owners’ post-fire proposal to construct a new building amount to an election to rebuild that bound them under the lease?

## Decision

- The Court of Appeals of Kentucky affirmed the circuit court’s judgment.
- The court held the lease did not impose a duty on the owners to rebuild after total destruction by fire.
- The court held the owners’ conditional proposal to build a new structure did not bind them to rebuild under the existing lease, particularly where the proposal was not accepted.
- The circuit court’s declaration remained in effect: the owners had the option to rebuild, and if they rebuilt within a reasonable time in substantially the former form, the lease would resume when the premises were ready for occupancy.

## Legal Principles

- A landlord is not required to rebuild premises destroyed by fire unless the lease clearly and expressly imposes that obligation.
- A rent-abatement clause suspending rent “until” the premises are rebuilt or repaired generally addresses the rent consequence if rebuilding or repairing occurs; it does not, by itself, promise that reconstruction will occur after total destruction.
- A covenant to make “necessary repairs” in the event of fire damage is typically read as a repair covenant for remediable damage, not as an agreement to reconstruct an entirely destroyed building.
- A claimed “election to rebuild” requires a clear, binding commitment; a conditional proposal on different terms is an offer and does not bind the landlord without acceptance.

## Conclusion

Morris v. Durham holds that lease language abating rent until rebuilding or repair and requiring “necessary repairs” after fire did not obligate the owners to reconstruct a building that was wholly destroyed; and the owners’ unaccepted, conditional proposal to build anew did not bind them to rebuild under the prior lease, so the trial court’s declaration that rebuilding was optional was affirmed.


Morris v. Durham, 443 S.W.2d 642 (1969)