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FRAUD AND BREACH OF CONTRACT - LANDLORD/TENANT - DAILY V. U.S. MICRO POWDERS, INC.

In Daily v. U.S. Micro Powders, Inc., [Ms. 2100888, Feb. 24, 2012] __ So. 3d __(Ala. Civ. App. 2012), the Alabama Court of Civil Appeals held that if a lessor provides notice to a lessee that "although he was continuing to accept rents, his acceptance of rents was not intended to affirm the continued existence of the lease, [lessor does] not waive his fraud-based and contract-based claims" related to the lease. In support of its holding, the Court quoted extensively from a case decided by the Nevada Supreme Court, Davidsohn v. Doyle, 825 P.2d 1227, 1229 (Nev. 1992), and observed that the Nevada Supreme Court "found it significant that the lease at issue [in that case] involved commercial property and that the tenant was a sophisticated businesswoman and not a [sic] unsophisticated residential tenant." Finding many similarities between the present case and Davidsohn, the Court concluded that "USMP could not have reasonably believed that Daily's acceptance of the rent after the filing of his declaratory-judgment action was intended to affirm the lease and that Daily no longer intended to pursue his legal claims." As a result, the Court concluded "that the timely filing and maintenance of Daily's declaratory-judgment action was sufficient notice to USMP of his claims and that, therefore, Daily's acceptance of rent during the pendency of that action did not amount to a waiver of his claims."
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