Ruud v. Larson
Supreme Court of North Dakota
392 N.W.2d 62 (1986)
Ruud (plaintiff) leased property to Larson (defendant) for a ten-year term, renewed for another ten years, on which Larson operated Mid-State Oil Company. Larson stopped paying property taxes in 1981 and rent for two months in early 1982, ultimately owing $24,500 in back rent plus years of unpaid taxes; before trial, Mid-State went bankrupt, and its assets were sold to Charles Luna, with Larson and Luna separately agreeing that Larson would pay all tax arrearages as part of that sale. After Larson vacated, Ruud repaired and advertised the premises, generating 140 contacts and fifty prospective tenants seeking $1,200 monthly rent (higher than Larson's original rent), and the trial court found Ruud had made diligent efforts to mitigate damages. Larson appealed, arguing Ruud hadn't mitigated in good faith.
Whether, in mitigating damages, a landlord may make payment of all arrearages a condition for approval of a replacement tenant, and whether a landlord is prohibited from seeking to re-let at a higher rent.