KPW ASSOCIATES v. SS Kresge Co.

535 So. 2d 1173, 1988 WL 127002
CourtLouisiana Court of Appeal
DecidedNovember 30, 1988
Docket20,136-CA, 20,137-CA
StatusPublished
Cited by12 cases

This text of 535 So. 2d 1173 (KPW ASSOCIATES v. SS Kresge Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
KPW ASSOCIATES v. SS Kresge Co., 535 So. 2d 1173, 1988 WL 127002 (La. Ct. App. 1988).

Opinion

535 So.2d 1173 (1988)

KPW ASSOCIATES, Plaintiff-Appellant,
v.
S.S. KRESGE COMPANY, Defendant-Appellee.
K-MART CORPORATION, Plaintiff-Appellee,
v.
KPW ASSOCIATES, a Limited Partnership, Defendant-Appellant.

Nos. 20,136-CA, 20,137-CA.

Court of Appeal of Louisiana, Second Circuit.

November 30, 1988.
Writ Denied February 17, 1989.

*1175 Cook, Yancey, King & Galloway by Bernard S. Johnson & Curtis R. Shelton, Shreveport, for plaintiff-appellant.

Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman by Pamela C. Walker & Ben R. Miller, Jr., Baton Rouge, for defendant-appellee.

Before JASPER E. JONES, FRED W. JONES, Jr. and LINDSAY, JJ.

LINDSAY, Judge.

These consolidated suits arise from a lease dispute between K-Mart Corporation (formally S.S. Kresge Company) and KPW Associates, a Limited Partnership, (hereinafter referred to as "KPW"), which is the landlord for the K-Mart store in Bossier City, Louisiana. KPW appeals the trial court judgment rejecting its demand to evict K-Mart for nonpayment of rent and which found that K-Mart was entitled to apply rent due under the lease to the cost of resurfacing a substantial portion of the landlord's parking lot. The judgment further ordered KPW to take action to repair the rest of the parking lot in order to put it in compliance with the lease provisions, or, in default thereof, provided that K-Mart was entitled to make the necessary repairs to the parking lot and pay for them with the rent due under the lease. For the following reasons, we affirm the judgment of the trial court.

FACTS

On October 15, 1971, W. Floyd Clark and Harold A. Clark entered into a semi-gross lease with S.S. Kresge Company for a K-Mart store to be built near the intersection of Airline Highway and East Texas Street in Bossier City. By the terms of a semi-gross lease, the landlord is generally responsible for the maintenance of the building's roof, the load-bearing walls, the floor slab, and the parking lot. The lessee performs common area maintenance, which includes striping and/or cleaning of the parking lot.

The K-Mart store opened in October, 1972. Within a few years, difficulties with the parking lot arose, which required the landlord to make repairs, such as filling chuck holes and remedying minor base failures. Usually, the lessor, Clark Development Company, made the requested repairs within a few months of receiving the complaint. In the latter half of 1978, Clark and K-Mart reached an agreement by which K-Mart would consent to Clark's sale to a third party of a portion of the area covered by the lease (referred to as an "outlot"), provided that part of the proceeds from the sale were allotted for parking lot repairs. The outlot sold for $110,000.00, of which $50,000.00 was eventually conveyed to K-Mart. (These funds were ultimately used by K-Mart to make temporary repairs to the parking lot.)

KPW became interested in acquiring the property. The limited partnership was looking for "a virtually certain safe return" on its investment, from which it could count on a certain cash flow. KPW contacted K-Mart to inquire about the condition of the store and its business. Roger D. Stern, the chief operating officer of Kenbee Management, Inc., the general partner of KPW, testified that "someone" in K-Mart's regional office assured him that there were no problems with the store other than routine maintenance. KPW then engaged Law Engineering Testing Co. (LETCO), one of the largest inspection services in the country, to conduct a visual inspection of the premises.

KPW also sent Jordan Wright, a law student and the son of Martin Wright, the chief financial officer of Kenbee, to inspect the property without advance warning. He walked about the store with the assistant manager, John Hoyle. Mr. Hoyle, who was the assistant manager at the Bossier City store until his transfer in April, 1979, testified that he showed around a representative of a prospective buyer about two or three months before his transfer. He testified that they toured the building and the parking lot for two to three hours, most of which time they spent in the parking lot. Mr. Hoyle testified that there were observable chuck holes, cracked asphalt, and one particularly large hole in front of the store. The portion of the parking lot behind the *1176 store was in even worse condition. All these areas were observed by the visitor. Mr. Hoyle further recalled that the man took notes.

Mr. Stern testified that Jordan Wright reported that the area looked "pretty good" and it was "a nice store." He informed Mr. Stern that there were no major problems with the roof or parking lot.

On March 15, 1979, Alan Casnoff of KPW was informed that pothole repairs were to be undertaken on the parking lot, and that Clark Development would agree to complete the work after closing, if necessary.

LETCO conducted its examination of the premises and gave KPW a report by telephone. Martin Wright wrote to Mr. Casnoff, a partner associated with KPW's general counsel, on March 20, 1979, to apprise him of the contents of the telephone call. Mr. Martin wrote, in relevant part:

The parking lot, as we knew, has pot holes and chuck holes. It has not been fixed in a good prescribed manner. They are to be taken care of either by Chodorow or the current owners. Lines are also to be painted. [The engineer] estimates on a continuing basis it would cost approximately $2,500 a year to keep the parking lot in good order, and doing the pot holes in a good prescribed manner.

On March 21, 1979, LETCO issued its written report, which provided in relevant part:

The asphaltic concrete has failed in several areas, creating ruts and potholes. The damage is most severe to the north (rear) of the buildings, probably due to more truck traffic in that area.... Some patching of the pavement has been attempted on more than one occasion; some of these patches have failed.... Judging by the appearance of the potholes, the asphaltic concrete layer is thin (two inches or less) and there is no aggregate base course between the surface and the subgrade of brown silty clay.
The parking area will require periodic repair of isolated pavement failures. Simple filling of potholes with asphaltic concrete should not be considered a longterm repair. All patching should include excavation of the affected area and replacement with sufficient compacted base and asphalt surface.

On March 28, 1979, at the request of the prospective buyers of the property, Mr. John P. Johnson, a vice-president of the K-Mart Corporation, executed a document entitled "Tenant Certification."[1] This document provided, in pertinent part:

3. Insofar as Tenant currently has knowledge, the buildings, Site improvements and the facilities required to be furnished by the landlord in accordance with the terms of the Lease have been completed in all respects, and Tenant will not exercise its right to cancel as contained in Article 6 and 12 of the Lease.
4. Insofar as Tenant currently has knowledge, the landlord has fulfilled all of its representations, warranties and duties under the Lease of an inducement nature.
5. Tenant has no knowledge of any claim under the Lease against landlord or any present defense, offset or credit under the Lease against Tenant's obligation to pay the rent and Tenant's other obligations under the Lease.
* * * * * *
9.

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Cite This Page — Counsel Stack

Bluebook (online)
535 So. 2d 1173, 1988 WL 127002, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kpw-associates-v-ss-kresge-co-lactapp-1988.