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Specialty Retailers, Inc. v. RB River IV LLC

Court of Appeals of Louisiana, Third Circuit

January 5, 2018

SPECIALTY RETAILERS, INC.
v.
RB RIVER IV LLC, ET AL.

         APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2016-3347 HONORABLE KRISTIAN D. EARLES, DISTRICT JUDGE

          Jennie P. Pellegrin Phillip M. Smith Neuner Pate Counsel for Plaintiff/Appellant: Specialty Retailers, Inc.

          Edward C. Abell, Jr., Craig A. Ryan, Emily Breaux, Counsel for Defendants/Appellees: RB River IV LLC, RB River V LLC, RB River VI LLC

          Michael P. Bienvenu, Kinchen, Walker, Bienvenu, Bargas, Reed & Helm, L.L.C., Counsel for Defendant/Appellee: Stirling Properties, LLC

          Court composed of Marc T. Amy, Shannon J. Gremillion, and Phyllis M. Keaty, Judges.

          PHYLLIS M. KEATY JUDGE.

         Plaintiff, a commercial tenant, filed suit against its landlord and the property manager to recover rent it allegedly overpaid. The tenant and the landlord filed cross-motions for summary judgment concerning interpretation of the "Additional Rent" provision in the lease between them. The trial court denied the tenant's motion for partial summary judgment and granted summary judgment in favor of the landlord, dismissing the tenant's claims against it. The tenant appeals, and for the following reasons, we affirm.

         FACTS AND PROCEDURAL HISTORY

         The facts are not in dispute. Plaintiff, Specialty Retailers, Inc. (SRI or the tenant), entered into a ten-year Lease Contract (the lease) with Weingarten Realty Investors (WRI) in February 2003, regarding a portion of a retail shopping center in Lafayette, Louisiana. Thereafter, SRI began operating a Stage department store in the leased premises. In May 2005, WRI transferred its interest in the shopping center to RB River IV LLC, RB River V LLC, and RB River VI LLC (collectively RBR or landlord). The lease called for SRI to pay three types of rent: Minimum Rent, [1] Percentage Rent, [2] and Additional Rent. In simple terms, the Additional Rent portion of the lease required SRI to make monthly payments to cover its proportionate share of the costs and expenses paid by the landlord. The lease provided for a year-end reconciliation of the monthly amounts paid by SRI against the actual amount that the landlord incurred in costs and expenses during that calendar year.

         SRI hired third-party auditor Green Back Cost Recovery (Green Back) in 2014 to review the lease. Green Back concluded that SRI had been paying more than it owed in Additional Rent based upon its interpretation of a cap provision found in the lease. Thereafter, SRI sent several demand letters in accordance with the Louisiana Open Account Law[3] to Stirling Properties, L.L.C. (Stirling), property manager of the shopping center, seeking a refund of the amounts it had allegedly overpaid. When its demands went unanswered, SRI filed suit against RBR and Stirling (hereafter collectively referred to as Defendants), alleging that they were guilty of breach of contract and/or that they were liable to it on open account and seeking damages of $213, 529.39.

         After Defendants answered the suit, SRI filed a motion for partial summary judgment seeking to have the trial court declare as a matter of law that Section 22.01(E) of the lease capped the "actual CATI[4] payments" owed by it to RBR. In response, RBR filed a motion for summary judgment asserting that the lease obligated SRI to "pay its proportionate share of all Common Area Operating Costs, Taxes and Insurance Premiums incurred on an annual basis and that Section 22.01(E) simply limit[ed] the monthly payment obligations against those annual costs." Stirling filed a memorandum in support of RBR's motion and against that filed by SRI. Following a hearing, the trial court denied SRI's motion for partial summary judgment and granted summary judgment in favor of RBR, dismissing SRI's claims against it. SRI timely appealed the ensuing judgment and is now before this court assigning these errors:

1. In deciding that the annual cap on Tenant's Share of CATI only applied to estimated monthly payments, the district court erroneously interpreted the clear and unambiguous language of Section 22.01(E) of the Lease Contract, which expressly provides that Tenant's Share of actual CATI may not increase by more than four percent (4%) each year.
2. The district court's erroneous interpretation of the Lease Contract renders Section 22.01(E) meaningless because, without an annual cap on Tenant's share of actual CATI, the additional rent would be unpredictable and the reconciliation process found in Section 22.02 would be unnecessary.
3. To the extent the district court found the Lease Contract to be ambiguous, the district court erroneously failed to consider that the undisputed facts establish the intent of the original parties to the Lease Contract to provide for an annual cap on actual CATI (as evidenced by similar contracts between SRI and WRI).

         DISCUSSION

         Standard ...


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