Rachel Debner
Look to the recent Iowa Supreme Court case Dolly Investments LLC v. MMG
Sioux City LLC (No. 21–0014) at 21-0014 (iowacourts.gov). The case involves
a lease agreement in which the parties are the landlord and tenant.
1. What is the name of the landlord and what is the name of the name of
the tenant?
The landlord is Dolly Investments LLC. The tenant is MMG Sioux City LLC.
2. What type of business was being operated at the leased premises?
A restaurant was being leased on the premises. The name of the restaurant
is Golden Carrol.
3. Each party insists that an action by the other party first materially
breached the lease agreement. This is important because that material
breach could be used by the alleging party to suspend their own duty
of performance. Briefly describe each party’s alleged action.
Dolly Investments LLC claimed that MMG Sioux City LLC did not pay the full
rent for June 2019. They claimed this was a material breach of the contract.
MMG Sioux City said that Dolly Investments LLC materially changed the locks
without providing written notice and a fifteen-day period of pay. They
claimed this was a breach of the lease.
4. The Court found each party’s alleged action constituted a breach.
Which party was in material breach?
The court found that MMG Sioux City’s LLC was in material breach. The
reason is that MMG failed to pay the full rent and did not cure the
nonpayment within the required period.
5. The Court refers to how the Restatement (Second) of Contacts defines
a material breach by setting out five factors. What are those factors?
There are five factors to a material breach. These five factors are deprivation
of expected benefit, compensation for deprivation, forfeiture for the
breaching party, likelihood or cure, and whether the breaching party acted in
good faith.
Look to the recent Iowa Supreme Court case Dolly Investments LLC v. MMG
Sioux City LLC (No. 21–0014) at 21-0014 (iowacourts.gov). The case involves
a lease agreement in which the parties are the landlord and tenant.
1. What is the name of the landlord and what is the name of the name of
the tenant?
The landlord is Dolly Investments LLC. The tenant is MMG Sioux City LLC.
2. What type of business was being operated at the leased premises?
A restaurant was being leased on the premises. The name of the restaurant
is Golden Carrol.
3. Each party insists that an action by the other party first materially
breached the lease agreement. This is important because that material
breach could be used by the alleging party to suspend their own duty
of performance. Briefly describe each party’s alleged action.
Dolly Investments LLC claimed that MMG Sioux City LLC did not pay the full
rent for June 2019. They claimed this was a material breach of the contract.
MMG Sioux City said that Dolly Investments LLC materially changed the locks
without providing written notice and a fifteen-day period of pay. They
claimed this was a breach of the lease.
4. The Court found each party’s alleged action constituted a breach.
Which party was in material breach?
The court found that MMG Sioux City’s LLC was in material breach. The
reason is that MMG failed to pay the full rent and did not cure the
nonpayment within the required period.
5. The Court refers to how the Restatement (Second) of Contacts defines
a material breach by setting out five factors. What are those factors?
There are five factors to a material breach. These five factors are deprivation
of expected benefit, compensation for deprivation, forfeiture for the
breaching party, likelihood or cure, and whether the breaching party acted in
good faith.
