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K&B Louisiana Corp. v. Caffery Saloom Retail LLC
United States District Court, W.D. Louisiana, Lafayette Division
May 18, 2018
K&B LOUISIANA CORPORATION
CAFFERY-SALOOM RETAIL, LLC, ET AL.
B. WHITEHURST UNITED STATES MAGISTRATE JUDGE.
the Court are the following motions: (1) Motion For Summary
Judgment filed by defendant, Caffery-Saloom Retail, LLC
(“Caffery-Saloom”) [Rec. Doc. 57]; Motion for
Summary Judgment filed by defendant American National
Insurance Company (“ANICO”) [Rec. Doc.
Motion for Summary Judgment, or alternatively, for Partial
Summary Judgment filed by plaintiff, K&B Louisiana
Corporation d/b/a Rite Aid [Rec. Doc. 60]; and ANICOS's
Rule 37(c) Motion for Order Compelling Opposing Party to Pay
Attorney's Fees and Expenses [Rec. Doc.
For the following reasons, the motions for summary judgment
filed by Caffery- Saloom and ANICO [Rec. Docs. 54 & 57]
are GRANTED and the claims asserted by K&B against
Caffery-Saloom and ANICO are DENIED AND DISMISSED WITH
PREJUDICE. Because K&B's claims are dismissed,
K&B's motion for summary judgment [Rec. Doc. 60] is
DENIED AS MOOT. ANICO's motion for attorneys' fees
[Rec. Doc. 55] is DENIED for the reasons stated herein.
Background and Procedural History
instant dispute arises out of an alleged co-tenancy violation
contained in a lease agreement between K&B and Caffery
Center, entered into on January 23, 1995. The following facts
• On January 23, 1995, K&B entered into a written
lease with Caffery Center, LLC for drug store space in the
Caffery Center Shopping Center (“Shopping
Center”) located at 4510 Ambassador Caffery Parkway,
• The lease contains the following provisions:
Conditions Precedent and Continuing
B. Lessor [Caffery Center] represents to Lessee [K&B]
that Lessor has entered into a lease with the following named
concern: with Winn-Dixie Louisiana, Inc. (Winn-Dixie) for a
minimum of 50, 000 square feet for a supermarket grocery
store . . . The lease to Winn-Dixie being for a minimum of 20
years . ... The continued operation, lease and payment of
rent for its store in the Shopping Center by Winn-Dixie is
part of the consideration to induce Lessee to lease and pay
rent for its store, as hereinafter described, on the Leased
premises as a part of the Shopping Center. Accordingly,
should Winn-Dixie fail or cease to operate or lease and pay
rent for its store in the Shopping Center during the Lease
Term as hereinafter set out, Lessee shall have the right and
privilege of (a) cancelling [sic] this Lease and terminating
all of its obligations hereunder at any time thereafter upon
written notice by Lessee to Lessor, and such cancellation and
termination shall be effective ninety (90) days after the
mailing of such written notice; or (b) invoking
the privileges of Article 20 herein. In the
event Lessee exercises Lessee's privilege of cancelling
this Lease and terminating all its obligations hereunder,
Lessee shall vacate the premises and return same to Lessor
within one hundred and eighty (180) days of the mailing of
such written notice. The above notwithstanding, in the event
Winn-Dixie should fail or cease to operate or lease and pay
rent for its store in the Shopping Center, Lessor shall have
a period of six (6) months to replace Winn-Dixie with a
comparable supermarket grocery store of comparable size, net
worth, and reputation prior to Lessee invoking its rights and
privileges as above. It is specifically understood that
Lessor shall be obligated to immediately notify Lessee in
writing should Winn-Dixie fail or cease to operate or to
lease and pay rent for such a store in the Shopping Center
during the primary term of this Lease, but any failure of
Lessor to notify Lessee thereof shall in no way deprive
Lessee of its privilege of cancelling this Lease and
termination all of its obligations hereunder, or
invoking the privileges of Article 20
[ . . . ]
B. In the event of default at any time during the Lease Term,
in any of the representations, warranties, covenants or
agreements herein undertaken by Lessor, Lessee may enforce
the performance of this Lease by any mode provided by law
and/or may terminate Lessee's obligations hereunder, at
its option, if such default continues for a period of thirty
(30) days after Lessor has received notice of such default. .
. . Without in any way waiving, limiting, or restricting
Lessee's other remedies or options contained in this
Lease, in the event of a violation of or the failure to
Lessor or anyone else to observe the terms hereof, the
monthly basic rental set forth in Article 6(A) 1 hereof and
the percent of additional rental set forth in Article 6(A) 2
hereof, shall be payable at half of the stipulated amounts
therein stated for the period from the date of such default
until Lessor cures any such violation or failure to observe
the said provisions, which reduction shall be considered as
liquidated damages for the periods during which any such
violation may have existed. . . .
• K&B opened its pharmacy in the Shopping Center for
business in July of 1996. The terms of the Lease state that
the Lease Term began 30 days after K&B opened its store
for business - so approximately August 1, 1996 -- and lasted
for a period of 20 years, until approximately August 1, 2016.
• The Lease provided for a twenty-year lease term with
six consecutive five-year renewal options.
• Dean Babin was the manager of the K&B store from
the time of its opening until May 2006.
• At some time during the lease term between K&B and
Caffery Center, Winn-Dixie also occupied rental space in the
Shopping Center. However, Winn-Dixie closed and ceased
operations during the lease term between K&B and Caffery
• Gregory Reggie, manager of Caffery Center, LLC,
attests that he sent a memo to tenants, including K&B, on
November 22, 2000, confirming that Winn-Dixie had closed.
• On February 21, 2005, Winn-Dixie filed for Chapter 11
bankruptcy protection, and on February 23, 2005, the
bankruptcy court authorized Winn-Dixie to reject 148 store
leases, including Winn-Dixie's lease with Caffery Center,
LLC. Winn Dixie stopped paying rent for its store in the
Shopping Center in February 2005.
• On September 13, 2005, K&B approved the leasing of
the vacant Winn-Dixie to Women's and Childrens'
• In 2009, ANICO, which was Caffery Center's lender,
commenced foreclosure proceedings against Caffery Center, the
original owner and lessor of the Shopping Center.
• In April 2012, ANICO acquired full title to the
Shopping Center and assumed the Lease with K&B Louisiana.
• At some point in 2013, K&B, now doing business in
Louisiana as “Rite Aid, ” conducted a
“Co-Tenancy Violations Review Project” and
determined that the K&B store in Caffery Center violated
the co-tenancy provisions of the lease between K&B and
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