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The Middleberg Riddle Group v. 201 St. Charles Place, LLC

Court of Appeals of Louisiana, Fourth Circuit

December 12, 2018

THE MIDDLEBERG RIDDLE GROUP
v.
201 ST. CHARLES PLACE, LLC

          APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2014-01643, DIVISION "I-14" Honorable Piper D. Griffin, Judge

          Yvette D'Aunoy Jean-Paul J. Morrell Marianne Garvey MIDDLEBERG RIDDLE GROUP COUNSEL FOR PLAINTIFF/APPELLANT

          David J. Halpern Sean T. McLaughlin McClain R. Schonekas KEAN MILLER, LLP COUNSEL FOR DEFENDANT/APPELLEE

          Court composed of Judge Edwin A. Lombard, Judge Rosemary Ledet, Judge Tiffany G. Chase

          Tiffany G. Chase, Judge.

         The Middleberg Riddle Group (hereinafter "MRG"), seeks review of the trial court's May 1, 2018 judgment finding no option to renew its lease with 201 Place St. Charles, LLC (hereinafter "PSC"); and awarding PSC past due rent and operating expenses owed from MRG. After consideration of the record before this Court, and the applicable law, we affirm the judgment of the trial court.

         Facts and Procedural History

         MRG initially leased the 31st floor at 201 St. Charles Avenue, from PSC, on December 14, 1987 (hereinafter "the Original Lease"). The Original Lease was for a ten year period beginning May 1988 and contained an option to renew the lease for a five year period. The Original Lease was first amended on March 1, 1993. The first amendment, (hereinafter "Renewal 1"), changed the option to renew to a three year period. The second amendment, (hereinafter "Renewal 2"), to the lease occurred on October 5, 1993 and changed the option to renew back to a five year period. The lease was amended for a third time, (hereinafter "Renewal 3"), on February 20, 2003, but does not include language regarding an option to renew.[1] MRG's lease with PSC was set to expire February 28, 2014.

         As part of its lease agreement, MRG was required to give PSC a twelve month notice from the expiration of the current lease term, if it were exercising its option to renew. On January 23, 2013, MRG requested the market rental rate from PSC as part of its process in determining whether it wanted to exercise its option to renew. PSC maintained that MRG did not have an option to renew the lease agreement. In March 2012, PSC entered into a rental agreement with General Electric (hereinafter "GE"). GE agreed to rent floors 30-32 at 201 St. Charles Avenue. GE was scheduled to take occupancy in three phases and set to move into the 31st floor in May 2014. On February 7, 2013, PSC sent a proposal to MRG allowing for early termination of MRG's lease and moving its office to a smaller space. MRG continued to maintain that they possessed an option to renew the lease of the 31st floor. After months of failed negotiations, MRG relocated its office to 909 Poydras Street on December 20, 2013, two months prior to the expiration of its lease agreement. PSC sent default letters to MRG advising that it was delinquent in its rental payments for January and February 2014. MRG offered to set up a payment plan to pay the outstanding rent but PSC refused the offer.

         MRG filed a petition for declaratory judgment on February 18, 2014, requesting a determination that PSC breached the lease by renting the 31st floor to GE prior to the expiration of MRG's lease. On April 8, 2014, PSC answered the petition for declaratory judgment and filed a reconventional demand. PSC sought the rent, and associated fees due from MRG for January and February 2014. After a two day bench trial, the trial court took the matter under advisement and entered judgment in favor of PSC. The trial court found that MRG did not have an option to renew the lease after February 28, 2014 and, as such, PSC did not breach the lease agreement when it entered the lease agreement with GE. The trial court further found that MRG breached the lease by failing to pay rent for January and February 2014 and was therefore liable to PSC for the outstanding expenses.[2] The trial court awarded PSC a total of $70, 893.60 ($18, 474.75 in base rent plus $16, 972.05 in operating expenses= $70, 893.60). This appeal followed.

         Discussion

         Although MRG presents numerous assignments of error, we find the central issue to be two-fold: (1) whether MRG had an option to renew the lease after February 28, 2014 and (2) whether MRG breached its contract by failing to pay rent and is therefore liable to PSC for the rent and operating expenses associated with January and February 2014.

         Option to Renew

         This Court reviews a trier of fact's factual conclusions regarding a breach of contract claim under a manifest error/clearly wrong standard of review. Brenner v. Zaleski, ...


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