Apple Valley Mall v. Floyd Realty Co., Inc., 97-4157 (1998) (1998)

Citation: Apple Valley Mall v. Floyd Realty Co., Inc., 97-4157 (1998) (1998)
Parent Document: Apple Valley Mall v. Floyd Realty Co., Inc., 97-4157 (1998) (1998)
Jurisdiction: Rhode Island (state)
Effective Date: 1998-03-30
Original Source: https://www.courtlistener.com/opinion/4113657/apple-valley-mall-v-floyd-realt... ↗

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Under this reasoning the Court does not recognize the defendant's manifestation of intent directing the plaintiff to apply the January 30, 1997 rent installment payment to February 1997 rent as valid because the defendant had a duty to perform and enforce the lease agreement by not defaulting. 2 Restatement (Second)Contracts § 258 (1981), cmt. a. ("The obligor cannot, however, effectively direct an application in breach of a contract with the obligee as to how performances should be applied if the contract is specifically enforceable, . . . ."). Such payment application would indicate that the defendant in manifesting an intent to apply the January 30, 1997 rent installment payment to February 1997 rent, also manifested an intent to default the lease by not timely paying the overdue amounts in the notice of nonpayment. The conduct of, and communication between, the parties provides evidence that indicates the defendant had the intent to resolve the payment issues with plaintiff and to not default the lease. Moreover, if this Court had determined that the defendant did not manifest an intent to apply the January 30, 1997 rent installment payment to February 1997 rent installment, the Court will not recognize plaintiff's application of the payment as an effective manifestation of intent. The plaintiff was under a duty to perform and enforce the common purpose of the lease by applying defendant's payments to the overdue amounts listed in the notice of nonpayment. 2 Restatement (First) Contracts § 389 (1931). ("The creditor cannot apply the payment . . . to the exclusion of a claim, failure to discharge which will, as the creditor knows or has reason to know, cause a forfeiture, . . . ."); and 2 Restatement (Second) Contracts § 259 (1981). ("A creditor cannot apply such a payment to a debt if . . . a forfeiture would result from a failure to apply it to another debt and the creditor knows or has reason to know this, . . . . The creditor is also subject to the duty of good faith and fair dealing . . . ."). Therefore, the Court finds that neither party made a proper application of the January 30, 1997 payment of $16,325.00.

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