Best Buy Stores, L.P. v. Shops at Pinnacle Park, LLC

CourtCourt of Appeals of Texas
DecidedDecember 21, 2018
Docket05-17-01054-CV
StatusPublished

This text of Best Buy Stores, L.P. v. Shops at Pinnacle Park, LLC (Best Buy Stores, L.P. v. Shops at Pinnacle Park, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Best Buy Stores, L.P. v. Shops at Pinnacle Park, LLC, (Tex. Ct. App. 2018).

Opinion

AFFIRM in Part, REVERSE in Part, and REMAND; Opinion Filed December 21, 2018.

In The Court of Appeals Fifth District of Texas at Dallas No. 05-17-01054-CV

BEST BUY STORES, L.P., Appellant V. SHOPS AT PINNACLE PARK, LLC, Appellee

On Appeal from the 134th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-16-04728

MEMORANDUM OPINION Before Justices Lang, Fillmore, and Schenck Opinion by Justice Fillmore

This is an appeal of portions of the trial court’s rulings on cross–motions for summary

judgment regarding the terms of a commercial real estate lease (Lease). Best Buy Stores, L.P.

(Best Buy or Tenant) appeals the trial court’s grant of summary judgment in favor of Shops at

Pinnacle Park, LLC (Pinnacle Park or Landlord) and the denial of Best Buy’s motion for summary

judgment regarding payment of property taxes and security service costs under the Lease. In three

issues, Best Buy contends the trial court erred in granting summary judgment in favor of Pinnacle

Park and against Best Buy because (1) Texas Property Code section 93.012 does not permit the

trial court to award Pinnacle Park security service costs under the Lease, (2) the Lease did not

permit Pinnacle Park to recover security service costs from Best Buy, and (3) the Lease did not

require Best Buy to pay property taxes for 2015. We affirm the trial court’s judgment in part, reverse the trial court’s judgment in part, and remand the case to the trial court for further

proceedings consistent with this opinion.

Background

In April 2005, Best Buy entered into a ten–year written Lease with POB Pinnacle GP, LLC

(POB Pinnacle) to lease space (Premises) in Pinnacle Park Shopping Center (Shopping Center).

By its terms, the Lease expired on January 31, 2016. POB Pinnacle subsequently assigned the

Lease to Pinnacle Park. After the Lease expired, Best Buy filed suit against Pinnacle Park for

declaratory relief and breach of contract. Specifically, Best Buy requested declaratory judgment

that under Articles 25 and 27 of the Lease, it was not required to pay property taxes for the entirety

of 2015 or January of 2016, and it was not required to pay any costs incurred by Pinnacle Park to

provide security services for the Shopping Center during the Lease term. Best Buy alleged

Pinnacle Park breached the Lease by charging Best Buy for security service costs and 2015

property taxes, and claimed actual damages in excess of $320,000 for overpayment of security

services costs and property taxes.1 Pinnacle Park counterclaimed against Best Buy for declaratory

and monetary relief. Specifically, Pinnacle Park requested declaratory judgment that it was

entitled to retain the entire payment made by Best Buy for its proportionate share of 2015 property

taxes, Best Buy was required to pay its proportionate share of property taxes for January 2016, and

Best Buy was required to pay its proportionate share of security service costs incurred by Pinnacle

Park during the Lease term.2

Best Buy and Pinnacle Park stipulated there were no disputed material facts and filed cross-

motions for traditional summary judgment. Best Buy’s summary judgment evidence included, in

relevant part, the affidavit of its Vice President of Real Estate, who testified, among other things,

1 Best Buy paid its proportionate share of the 2015 property taxes and security service costs under protest. 2 In the event the trial court ruled the Lease did not require Best Buy to pay security service costs, Pinnacle Park alternatively sought recovery in quantum meruit for the security services provided by Pinnacle Park.

–2– about amounts Best Buy paid in property taxes for 2015 and for security services; the Dallas

County Tax Office 2015 Tax Statement to Pinnacle Park; and the Lease. Pinnacle Park’s summary

judgment evidence included, in relevant part, the affidavit of the Chief Operating Officer of Vista

Property Co., LLC (Vista), the authorized agent and property manager for Pinnacle Park, who

testified, among other things, about amounts Best Buy paid in property taxes for 2015 and for

security services; Vista’s lease ledger showing charges and payments with respect to the Lease

from October 31, 2009, through April 14, 2016; the Dallas County Tax Office 2015 Tax Statement

to Pinnacle Park; and the Lease. Both parties’ summary judgment motion arguments were based

on their respective interpretations of the terms of Articles 25 and 27 of the Lease.

Article 27 of the Lease governed whether Best Buy was required to pay its proportionate

share of the security services provided by Pinnacle Park for the Shopping Center. Article 27

provided:

In each calendar year, Tenant shall pay Landlord, as additional rent, its proportionate share of Landlord’s Operating Costs (as hereinafter defined).

....

As used herein, the term “Landlord’s Operating Costs” shall mean actual out- of-pocket expenses reasonably incurred by Landlord to maintain the Common Areas in the manner required of Landlord hereunder . . . [and] shall include, and be limited to, all costs and expenses incurred by Landlord in maintaining, repairing, lighting, cleaning, and removing snow, ice and debris per the specifications as set forth in Exhibit F attached hereto. In addition, Tenant shall pay to Landlord an administrative fee that shall not exceed five percent (5%) of the approved common area maintenance expenses[.]

Notwithstanding the foregoing, the following shall, in all events, be excluded from Landlord’s Operating Costs: depreciation, principal, interest and other charges on debt; the cost of capital improvements[;] management and overhead expenses, costs and fees, including, but not limited to, on-site wages, salaries and benefits[.]

–3– Exhibit F to the Lease addressed snow removal, landscaping, parking lot lighting requirements,

and requirements regarding sweeping debris and rubbish from the parking areas, landscaping and

planters, and parking islands. Exhibit F did not address the provision of security services.

Best Buy moved for summary judgment on its claim for security service costs on the

grounds the explicit language in Article 27 and Texas Property Code section 93.012 preclude

Pinnacle Park from charging Best Buy for security service costs.3 Best Buy contends section

93.012 of the property code allows Pinnacle Park to impose only those charges that are identified

in or can be calculated based on language in the Lease. According to Best Buy, because the Lease

“provide[d] the exclusive list of the Landlord’s Operating Costs which Best Buy must share in

paying” and security services were not on that list, Pinnacle Park could not assess any portion of

the costs of providing security for the Shopping Center to Best Buy. On that basis, Best Buy

argued there was no genuine issue of material fact as to any element of Best Buy’s claim for breach

of contract on security service costs and it was entitled to summary judgment as a matter of law.

Pinnacle Park’s cross–motion for summary judgment asserted the plain language of Article

27 did not expressly exclude security services from the definition of “Landlord’s Operating Costs,”

Pinnacle was required to “provide maintenance services and keep the shopping center in good

order,” security services constituted maintenance, Best Buy and other tenants requested that

Pinnacle Park provide security services, and Best Buy paid for security services for two years

without complaint.

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Best Buy Stores, L.P. v. Shops at Pinnacle Park, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/best-buy-stores-lp-v-shops-at-pinnacle-park-llc-texapp-2018.