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Shifting Burdens of Proof Undo Appellant in Commercial Lease Dispute
Lawyers know in the abstract that the plaintiff has the burden of proof as to her claims and the defendant has the burden of proof on any affirmative defenses it asserts. But as the Missouri’s Court of Appeals for the Southern District shows us in Morris Branson Theatre, LLC v. Cindy Lee, LLC, No. SD34572 (Mo. Ct. App. S.D. June 15, 2017), reality isn't so simple.
Cindy Lee leased space from Morris Branson to operate a cafe in 2011. The next year the business suffered substantial damage in a tornado. Morris Branson made some repairs as contemplated under the lease and the business reopened in April 2012. Still, there were ongoing issues that Lee alleged hadn't been adequately addressed. And in August 2012, Lee notified Morris Branson that it was terminating the lease under the casualty provision of the agreement, which allows the tenant to terminate if the landlord did not complete repairs within six months.
When Lee quit possession of the property and failed to pay any further rent under the lease, Morris Branson filed suit for breach of contract seeking the remaining rent due. Lee asserted an affirmative defense claiming that it had properly terminated the lease and thus did not owe any further rent. As you might have guessed by now, the case turned on whether Morris Branson fulfilled its obligation to make repairs within six months (indeed, the opinion from the first appeal in the case - which was from a judgment in Lee's favor - directed the trial court to decide this very issue). The trial court found that Lee had breached the lease and entered judgment in the landlord's favor.
On appeal Lee argued that the court erred because its finding that the landlord had made the necessary and timely repairs wasn't supported by substantial evidence or was against the weight of the evidence. According to Lee, Morris Branson hadn’t proved, as it was supposedly required to, that it had properly repaired the building.
But that argument, the Court held, had the burden of proof backward. Morris Branson’s breach of contract claim was premised on the fact that Lee failed to make rent payments after the termination, a fact Lee admitted. Because Lee also admitted the other elements of the contract claim, Morris Lee had proved all that was required of it. It was Lee’s affirmative defense – i.e., a defense entitling the defendant to judgment based on facts beyond those necessary for a plaintiff to win – that injected the casualty termination provision into the suit. As such, the Court concluded that it was Lee’s burden to prove that Morris Branson failed its obligations under that clause and thus justified Lee's termination of the lease.
The court took a interesting footnote to remind us of “two components” of the burden of proof. First, the plaintiff must meet the burden of production, which requires it to provide enough evidence to justify submitting the issue to the fact-finder (and thus avoid a summary judgment or directed verdict). And second, it must actually convince the fact-finder that it should prevail.
Practice Tip The weeks leading up to trial can be hectic. To avoid getting crossed-up on who must prove what at trial, go back to the pleadings and determine what claim or defense the fact in question is necessary to establish. After all, that is exactly what the court did in McKinney.