Crestwood Plaza, Inc. v. Kroger Co.

520 S.W.2d 93, 1974 Mo. App. LEXIS 1443
CourtMissouri Court of Appeals
DecidedDecember 10, 1974
Docket35866, 35867
StatusPublished
Cited by23 cases

This text of 520 S.W.2d 93 (Crestwood Plaza, Inc. v. Kroger Co.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crestwood Plaza, Inc. v. Kroger Co., 520 S.W.2d 93, 1974 Mo. App. LEXIS 1443 (Mo. Ct. App. 1974).

Opinion

CLEMENS, Judge.

Suit for declaratory judgment and injunction by plaintiff-landlord Crestwood Plaza, Inc., to void both its shopping center lease to Kroger Company and Kroger’s sublease to Tipton Electric Company. The issue was whether Kroger had the right to sublet the leased premises to Tipton. The trial court said not and Kroger and Tipton appealed. We reverse.

*95 Crestwood contends in Counts I and IV that since its lease to Kroger provided for base rental plus a percentage of Kroger’s retail sales, the lease impliedly prohibited subletting and restricted Kroger’s use of the premises to that of a retail food supermarket. In Count II, Crestwood contends the lease was terminated when Kroger vacated the leased premises. Finally, in Count III Crestwood contends Kroger’s lease was terminated by an oral agreement.

The facts: Plaintiff corporation is controlled by the Zorensky brothers, Milton and Louis, a lawyer, who decided in 1954 to develop the Crestwood Plaza Shopping Center. They prepared a plat for prospective tenants showing the proposed layout and contacted Kroger’s St. Louis real estate manager. After several months of discussions Kroger proposed a written lease and rider. The Zorenskys studied the proposal two months and returned it as the final lease to Kroger, whose branch manager signed it. After further negotiations the parties entered into a Modification Agreement detailing a new building layout and establishing the term of the Kroger lease from November 1, 1956 to October 31, 1968, with a provision for three five-year extensions at Kroger’s option. Later, the Zorenskys assigned the Kroger lease to the plaintiff corporation of which they are the stockholders.

During discussions before executing the lease, rider and lease modifications, the parties reached various understandings and incorporated them into the written agreements. Among these were an agreement for a larger store than originally planned, a change in the store’s location, the Zoren-skys’ agreement to prohibit other retail food stores within 1,825 feet of the Kroger store, the Zorenskys’ promise to obtain leases with other retailers and their promise not to construct a theater or bowling alley without Kroger’s consent. Negotiations pertaining to utility services, alterations and sewer district taxes were reduced to writing.

The only express restriction upon Kroger was that the premises “shall not be used for any unlawful purpose.” Kroger’s option to renew three times on the same terms was to be automatic unless Kroger notified Crestwood of its intention to terminate six months before any extended lease period. The lease permitted Kroger to remove its fixtures at any time. It further provided the lease should bind and inure to the benefit of the parties, their successors and assigns.

Kroger agreed to pay a basic monthly rental of $2,320 and additional annual rental of 1% of its yearly sales in excess of $2,670,000. The parties agreed in the event Kroger “voluntarily vacates the premises prior to the expiration of the lease term or any renewal thereof, the rental for the remaining period of the lease shall be at a rate equal to the average rental including percentage paid over the previous 36 months for the remainder of the term of the lease.” Kroger never owed any percentage rent because of its low business volume.

Another base provision with which Crest-wood complied required Crestwood to build a standard one-story building with Kroger’s store front, according to specifications prepared by Crestwood and approved by Kroger.

From March, 1957 until November, 1972 Kroger operated a retail food market on the premises. Kroger vacated the store when it opened a larger store across the street in the Crestview Shopping Center. Meanwhile the Crestwood Shopping Center had been enlarged. By 1966 its character and “tenant mix” had changed with the addition of two major department stores; as a result, Kroger’s store was no longer at the east end of the shopping center. Kroger felt the new stores created detrimental traffic and parking problems. When the parties could not agree who would bear the expense of remodeling Kroger’s store, Kroger informed the Zoren-skys it would relocate. In September, 1972 Kroger wrote Louis Zorensky it had begun sublease negotiations with Tipton.

*96 Crestwood wanted to purchase Kroger’s lease. When the parties reached no accord, Kroger sublet its store to Tipton. Although Kroger continued paying the base monthly rental, Crestwood brought this action to terminate Kroger’s lease.

Crestwood’s petition was in four counts. In Count I Crestwood asked the court to declare Kroger had no right to sublet without Crestwood’s consent, this due to an alleged intent when the lease was executed. Crestwood also sought a declaration that Tipton required Crestwood’s consent to occupy the premises. In Count II Crestwood alleged the parties orally agreed to end the lease December 31, 1972 and sublessee Tipton had no right to possession after January 1, 1973. In Count III Crestwood sought a declaration that Kroger’s vacating the premises in 1972 extinguished its right to renew the lease for five-year periods. In Count IV Crestwood prayed for a declaration that the lease’s terms permitted use of the premises for a retail food store and for no other purposes.

Crestwood and Kroger had tried to agree on terminating the lease since neither wanted to continue using the store as a food market. Crestwood offered to pay Kroger to cancel the lease rather than sublet the premises because Crestwood wanted to remodel and rent to higher-paying tenants. Kroger wanted to keep its lease so it could sublet to Tipton at a higher rental. Both were seeking financial advantage, and this right-to-sublet issue stemmed from their inability to agree. We need not weigh the asserted equities; the issue is one of law.

Kroger’s Right to Stiblet. In Counts I, III and IV Crestwood asked the trial court to “construe” the Kroger lease, and the court did so by considering extraneous facts. Courts do that when necessary to resolve ambiguities in a written instrument, but the best indication of contracting parties’ intent is their own words. Here, the parties were learned in the ways of commerce and the law and chose their words after unhurried and deliberate negotiations. We can and do interpret their words by their ordinary meanings. We need not seek extraneous facts to construe the Kroger lease. As was said in Leggett v. Missouri State Life Ins. Co., 342 S.W.2d 833 [11-12] (Mo. banc 1961): “If the terms of a contract are clear and unambiguous the contract will be enforced or given effect in accordance with its terms, and without resort to construction to determine the intention of the parties. . When the language of a contract is plain, there can be no construction because there is nothing to construe.”

Subletting. We cannot agree with Crest-wood’s first contention, that its lease to Kroger impliedly prohibited subletting. The lease is silent about subletting.

We note the lease runs to Kroger, “its successors and assigns” and further declares its provisions shall “inure to the benefit of the parties thereto and their successors and assigns.” These words are explicit and of material significance. Cummins v.

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520 S.W.2d 93, 1974 Mo. App. LEXIS 1443, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crestwood-plaza-inc-v-kroger-co-moctapp-1974.