United States District Court, E.D. Louisiana
ORDER AND REASONS
J. BARBIER UNITED STATES DISTRICT JUDGE
the Court is a Motion for Summary Judgment
(Rec. Doc. 9) filed by Plaintiff, East
Jefferson Medical Plaza, LLC (“Landlord”).
Defendant, Jefferson Parish Hospital District No. 2, Parish
of Jefferson d/b/a East Jefferson General Hospital
(“the Hospital”) opposes the motion (Rec. Doc.
18). Landlord filed a reply (Rec. Doc. 19). Having considered
the motion and legal memoranda, the record, and the
applicable law, the Court finds that the Motion for
Summary Judgment should be GRANTED.
AND PROCEDURAL HISTORY
litigation arises from the expiration of a Master Lease that
was entered for a fixed term by the original landlord and the
Hospital on September 22, 1995. Landlord acquired the subject
property at 4228 Houma Boulevard on February 27, 2008 and
took an assignment of the Master Lease. From 2003 to 2015,
Landlord and the Hospital executed a series of amendments to
the definition of “Premises” under the Master
Lease. On September 30, 2016, Landlord and the Hospital
executed the Eighth Amendment to the Master Lease, wherein
the Hospital reduced the total amount of square footage to
58, 643 square feet and limited the office suites in the
Premises to Suites 120, 130, 200, 310, 320, 330, 510, and
April 30, 2017, the Master Lease expired. The record reflects
that on May 2, 2017, a representative of the Hospital
contacted Landlord to confirm that as of April 30, 2017, the
Hospital had vacated and would no longer be paying rent for
Suites 120, 310, 320, and 510. On May 4, 2017, Landlord
advised that the suites referenced in the May 2 email are all
part of the Master Lease and, barring completion of new
leases as outlined in the letter of intent, the Master
Lease-including the spaces that the Hospital indicated it had
vacated-would continue on a month-to-month basis. After this
email exchange, the Hospital continued occupying Suites 130,
200, 330, and 600 and Landlord continued invoicing the
Hospital for the full amount of the rent owed for the
Premises as defined in the Eighth Amendment to the Master
Lease. The Hospital either paid or caused to be paid in full
the rent due for Suites 130, 200, and 330. The parties
dispute whether the Hospital paid or caused to be paid the
full rent for Suites 120 and 310. However, the record reflects
that the Hospital refused to pay rent for Suites 320 and 510
and stopped paying the full rent for Suite 600.
February 23, 2018, Landlord and the Hospital executed a
Termination of Master Lease with Reservation of Rights
Agreement. Pursuant to the Termination Agreement, the parties
agreed that the Master Lease would terminate, rent would
cease to accrue, and possession of the Premises would be
surrendered to the Landlord upon the execution of new leases
for Suites 130, 140, 200, 410, and 530. Nevertheless, the
parties stipulated that each party was reserving its rights,
claims, and defenses against the other, including but not
limited to claims for payment of past due rent and all other
sums owed under the Master Lease. Thereafter, Landlord and
the Hospital executed new leases for Suites 200 and 530 with
an effective date of April 2, 2018. However, the parties
amended the Termination Agreement to remove the requirement
for execution of new leases for Suites 130, 140, and 410,
stipulating that delivery of possession of these remaining
suites was completed and rent ceased to accrue as of April 2,
8, 2018, Landlord filed the instant action against the
Hospital seeking recovery of the full rental amount owed for
the Premises under the Master Lease. (See Rec. Doc.
1). Specifically, Landlord alleges that it is entitled to
recover $434, 422.37 in past due rent. (Rec. Doc. 1).
Landlord filed the instant motion for summary judgment on
August 21, 2018. (Rec. Doc. 9). The Hospital sought leave to
file its opposition out of time on November 30, 2018. (Rec.
Doc. 12). With Landlord's consent, the Hospital's
opposition was filed into the record on December 12, 2018.
(Rec. Doc. 18). Landlord filed a reply the same day. (Rec.
argues that it is entitled to judgment as a matter of law
because the Master Lease was reconducted on a month-to-month
basis when the Hospital continued to occupy portions of the
Premises after the term expired. (Rec. Doc. 9-1 at 7).
Specifically, Landlord asserts that it is undisputed that the
Hospital continued to occupy Suites 130, 200, 330, and 600 of
the Premises, either directly or through a subtenant, from
April 30, 2017-the date the Master Lease expired-until April
2, 2018-the date the Master Lease was terminated. (Rec. Doc.
9-1 at 7). Given that “[t]here is no mechanism in the
Master Lease or under Louisiana law for allowing the Hospital
to partially surrender the Premises and unliterally reduce
its rental obligation due under the Master Lease, ”
Landlord argues that the Master Lease in its entirety was
reconducted on a month-to-month basis. (Rec. Doc. 9-1 at 7).
Landlord emphasizes that “[c]ourts interpreting article
2724 have held that ‘[a] reconducted lease is actually
a continuation of the lease under the same terms and
conditions except that the fixed term or period of duration
in the old lease is voided and the reconducted lease is
considered to be by the month.'” (Rec. Doc. 9-1 at
8). Based on the foregoing, Landlord concludes that the
Hospital is not permitted to unilaterally redefine the
Premises of a reconducted lease, and Landlord is entitled to
recover the entire amount of rent for the Premises due under
the Master Lease. (Rec. Doc. 9-1 at 12). Namely, Landlord
asserts that the Hospital owes $43, 109.08 in past due rent
for Suite 320, $129, 716.95 in past due rent for Suite 510,
and $260, 505.14 in past due rent for Suite 600. (Rec. Doc.
9-1 at 12).
Hospital argues in opposition that summary judgment should
not be granted in Landlord's favor because several issues
of fact exist, the motion is premature, and the motion fails
on the merits. (Rec. Doc. 18 at 1-2). The Hospital first
argues that Landlord is not entitled to summary judgment
because Landlord and the Hospital modified the Master Lease.
(Rec. Doc. 18 at 4). Specifically, the Hospital notes that
the May 2, 2017 email from Bub Millet to Michael Pousson put
Landlord on notice that the Hospital would no longer be
occupying and/or paying rent for Suites 120, 310, 320, and
510. (Rec. Doc. 18 at 5-6). The Hospital asserts that Michael
Pousson's response on May 4, 2017 “makes it clear
that [Landlord] was agreeable to the modification by stating
that … ‘we also need to have any keys for the
spaces indicated returned and any remaining items removed
… but we're not anticipating any issues.”
(Rec. Doc. 18 at 6-7). Moreover, the Hospital emphasizes that
after this email exchange, Landlord accepted the
Hospital's rental payments for the portions of the
Premises that it was occupying. (Rec. Doc. 18 at 7). The
Hospital essentially argues that Landlord's acceptance of
the reduced rental payments and failure to evict the Hospital
constitutes an acceptance of the proposed modification to the
Premises under the Master Lease. (Rec. Doc. 18 at 7). Thus,
the Hospital concludes that Landlord's motion should be
denied on the merits. (Rec. Doc. 18 at 8).
the Hospital argues that the motion should be denied because
questions of fact exist and the motion is premature. (Rec.
Doc. 18 at 8). The Hospital contends that “[i]t is a
question of fact as to whether there were oral agreements
that modified the written contract.” (Rec. Doc. 18 at
8). The Hospital also asserts that there is an issue of
material fact as to the amount owed (if any) and whether
Landlord mitigated its damages by finding new tenants after
the Hospital vacated Suites 120, 310, 320, and 510. (Rec.
Doc. 18 at 8). In support of its argument that the instant
motion is premature, the Hospital avers that at the time the
motion was filed, neither party had conducted discovery.
(Rec. Doc. 18 at 8).
reply, Landlord contends that its motion for summary judgment
should be granted because the Hospital failed to produce any
competent summary judgment evidence of a material factual
dispute regarding its reconduction of the Master Lease or the
amounts due under the Master Lease. (Rec. Doc. 19 at 1, 6).
First, Landlord argues that the Hospital cannot, as a matter
of law, establish an oral modification of the Master Lease.
(Rec. Doc. 19 at 1). Landlord notes that Section 32 of the
Master Lease prohibits amendment thereof “except by
written agreement of Lessor and Lessee and the holder of any
Mortgage secured by the Building.” (Rec. Doc. 19 at 1).
Acknowledging that a written contract may, nevertheless, be
modified by an oral agreement, Landlord emphasizes that the
email exchange in early May 2017 did not constitute a
“meeting of the minds” sufficient to amend the
Master Lease by oral agreement. (Rec. Doc. 19 at 2).
Specifically, Landlord asserts that “Mr. Pousson's
response demonstrates that absent the Hospital's
execution of new leases, the Landlord was specifically
rejecting any modification of the Master Lease.” (Rec.
Doc. 19 at 3). Landlord argues that when the Hospital failed
to execute new leases as specified in the email, it had a
choice of either terminating the Master Lease by vacating the
Premises in its entirety or continuing the Master Lease on a
reconducted month-to-month basis. (Rec. Doc. 19 at 3).
However, Landlord argues that the Hospital could not
“unilaterally change the terms of the reconducted
Master Lease by re-defining … the Premises under the
Master Lease to remove Suites 120, 310, 320, and 510, while
continuing to claim a right of occupancy and enjoyment of
Suites 130, 200, 330 and 600 under the Master Lease.”
(Rec. Doc. 19 at 3-4). Thus, Landlord concludes that by
retaining portions of the Premises after April 30, 2017 and
failing to enter new leases, the Hospital reconducted the
Master Lease on a month-to-month basis. (Rec. Doc. 19 at 4).
Arguing that “Landlord was anything but silent, ”
Landlord asserts that the Hospital's proposal to continue
the Master Lease with less than all of the office suites
defined as the Premises was flatly rejected in the May 4,
2017 email, Landlord continued to invoice the Hospital for
the full amount of rent owed under the Master Lease from
April 2017 until April 2018, and Landlord acknowledged
receipt of the Hospital's partial rental payments on
December 6, 2017 and March 13, 2018 while specifically
reserving the right to collect the balance owed under the
Master Lease. (Rec. Doc. 19 at 5).
Landlord argues that the Court's consideration of its
motion is not premature under Rule 56(b) or the Local Rules
of the Eastern District of Louisiana. (Rec. Doc. 19 at 7).
Landlord notes that the instant lawsuit was filed on June 8,
2018, and a scheduling conference was held on August 29,
2018. (Rec. Doc. 19 at 7). Thereafter, the Hospital failed to
take any action in the case until it filed a motion seeking
leave to file its opposition out of time on November 30,
2018. (Rec. Doc. 19 at 7). Accordingly, Landlord argues that
the Hospital ...