Kite v. Gus Kaplan Inc.

747 So. 2d 503, 1999 WL 1053274
CourtSupreme Court of Louisiana
DecidedNovember 17, 1999
Docket98-C-0715, 98-C-0751
StatusPublished
Cited by4 cases

This text of 747 So. 2d 503 (Kite v. Gus Kaplan Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kite v. Gus Kaplan Inc., 747 So. 2d 503, 1999 WL 1053274 (La. 1999).

Opinion

747 So.2d 503 (1999)

Timothy W. KITE d/b/a Timothy Kite Enterprises
v.
GUS KAPLAN INC. and Gustave Kaplan.
Gus Kaplan, Inc.
v.
Timothy Kite Enterprises.

Nos. 98-C-0715, 98-C-0751.

Supreme Court of Louisiana.

November 17, 1999.
Rehearing Denied January 7, 2000.

*505 J. Morgan Passman, Walker, Passman & Michiels, Alexandria, Edward A. Kaplan, Alexandria, for Applicant.

Cary Brian Bryson, Robert Murray Mahony, Lafayette, Harry Lawrence Shoemaker, III, Baton Rouge, for Respondent.

LEMMON, Justice.[*]

This is an action by the lessee of space in a department store, leased for the operation of a fine jewelry department, against the store's corporate owner and its chief officer for damages for breach of the lease and for wrongful eviction. The principal question is whether the store owner's contractual authority to change the "space" of the fine jewelry department permitted the owner to remove the jewelry from that complex's many locked display cases and drawers, overnight and without prior notice, and to offer the lessee in its place a small complex of non-lockable showcases designed for clothing display and sales. We conclude that, despite the highly factual nature of this case and the unsympathetic nature of the lessee's claim, the lessor's unilateral relocation of the jewelry department from a superbly furnished and finished complex to an unfinished complex that was not comparable to that in the original location constituted a failure to maintain the lessee in peaceable possession and rendered the lessor liable for damages. On significant secondary issues, we further conclude that the damages awarded by the court of appeal were excessive and that the lessor's insurance policy covered its liability for these damages.

Facts

Gustave Kaplan, with fifty years of experience in the department store business as of time of trial, formed Gus Kaplan, Inc. (GKI) in 1967. As president of GKI in 1988, Kaplan was negotiating the lease of an Alexandria building that D.H. Holmes Co. had used as a department store. During the course of the negotiations, Timothy Kite, a 1986 high school graduate with certificates earned by early 1988 from the American Gemological Institute in diamonds and diamond grading, gemology and fine jewelry making and repair, approached Kaplan about operating a fine jewelry department in GKI's intended new location.

Kaplan and Kite had discussions from time to time over the next three years, during which Kite worked in his fields as an employee for others. Kite wanted to run a fine jewelry department for GKI as an employee, and Kaplan wanted a department run by Kite, but did not want to pay the salary that Kite wanted. On the other hand, Kite did not have the money to establish and stock his own fine jewelry department in the store, as Kaplan preferred. To solve Kite's money problem, Kaplan personally loaned Kite $25,000, interest free, and helped Kite obtain a $185,000 Small Business Administration loan with personal letters of recommendation to Kaplan's bank and a waiver of GKI's lessor's privilege.[1]

On August 3, 1992, GKI and Kite entered into a renewable five-year term "lease and contract for space in a retail store." Kite contracted to operate a fine jewelry department in GKI's department store, with a monthly rental price of fourteen percent of the department's gross sales. GKI drafted the contract on its computer, using the standard form that it modified for each leased department.

The contract identified the leased "space" only "as illustrated" on an attached floor plan. That plan, which designated a prominent central portion of the store that was completely covered by one showcase complex and directly faced the *506 main entrance, was annotated "jewelry department * 400 sq.ft."

The showcase complex had been designed, built and used by D.H. Holmes as its jewelry department, and had such special amenities as high-intensity lighting; locking jewelry showcases with burglary-resistant, non-removable, shatterproof glass tops; many small locking drawers; gates controlling access for salespersons; and a motion detector in the ceiling (in addition to the store's basic alarm system) to further protect against burglary. A photograph of one side of one of the two aisles for salespersons down the length of the complex (separated by an interior island work-station, itself split by a passageway) shows thirty-six separately lockable drawers below its display compartments and ten separately lockable access doors to those compartments. Other pictures show that the shallow glass display compartments, with felt display mats and pads that Kite had custom-made, occupied only the top one-third of the showcase furniture, with the other two-thirds having a solid outside facing for their full length, behind which were the tiers of locking drawers accessible only from the salesperson areas. Lighted clear-plastic frames, holding poster-size photographic transparencies of jewelry (provided by Kite), advertised the nature of the department.

The lease declared as its purpose the lessee's "conducting a retail sales department of jewelry," adding that "lessee shall by these presents have the exclusive right and privilege to merchandise and sell all items usually sold by a fine jewelry department."[2] Pertinent to the key issue in this litigation, the contract also contained the following clause regarding change of location:

All of the mentioned store space, and reserve stock space is located in the store of lessor, and may be changed from time to time by lessor at its option and expense.[3]

After the lease was signed, the parties had recurring differences over the direction the jewelry department should take. Kite complained, in his petition and in his reconventional demand to Kaplan's consolidated suit for the balance of the $25,000 loan, that Kaplan:

persistently pressured [him] to stock increasing quantities of cheap, low-end jewelry merchandise (much of which was to be purchased from Sommers & Sommers Jewelry, Inc., the firm of Gustave Kaplan's son-in-law, Walter Sommers), to display such merchandise more prominently, and to participate in store advertisements and promotions featuring such merchandise.

Kite asserted that that kind of jewelry did not belong in, and adversely affected, a fine jewelry department, but he conceded that he did stock the Sommers jewelry from time to time in order to maintain amicable relations with Kaplan.

On the store's opening day, October 29, 1992, Kite placed the Sommers jewelry in one of his twelve display cases, but he returned the balance to Sommers after the holiday season. For the Valentine season in February 1993 and the year-end holiday season in October 1993, Kite again stocked Sommers jewelry, allegedly in deference to Kaplan. Then in January 1994, according to Kite, Kaplan wanted to use Kite's department to conduct a close-out of Sommers' costume jewelry and gift line, and Kite's reluctant agreement brought greater and greater quantities (a thousand pieces as of February 26), leaving less and less room for his fine jewelry (which he *507 removed to his safe until the Sommers promotion would end).

Kaplan, on the other hand, maintained that less expensive jewelry was what should have been promoted and sold by Kite in a department store.

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Bluebook (online)
747 So. 2d 503, 1999 WL 1053274, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kite-v-gus-kaplan-inc-la-1999.