N. Providence, LLC v. Great Atlantic & Pacific Tea Co. (In re Great Atlantic & Pacific Tea Co.)

595 F. App'x 72
CourtCourt of Appeals for the Second Circuit
DecidedFebruary 13, 2015
DocketNo. 14-1652-bk
StatusPublished
Cited by2 cases

This text of 595 F. App'x 72 (N. Providence, LLC v. Great Atlantic & Pacific Tea Co. (In re Great Atlantic & Pacific Tea Co.)) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
N. Providence, LLC v. Great Atlantic & Pacific Tea Co. (In re Great Atlantic & Pacific Tea Co.), 595 F. App'x 72 (2d Cir. 2015).

Opinion

SUMMARY ORDER

Appellant N. Providence, LLC (“NP”) appeals from a judgment of the United-States District Court for the Southern District of New York (Seibel, J.) affirming the orders of the Bankruptcy Court for the Southern District of New York (Drain, J.) granting the motion for summary judgment of Appellee The Great Atlantic & Pacific Tea Company,- Inc. (“A & P”) and denying NP’s motion for summary judgment in an adversary proceeding commenced by NP seeking a declaration regarding its and A & P’s obligations under a lease agreement.1 We assume the parties’ familiarity with the underlying facts, the procedural history, and the issues presented for review.

This Court reviews a district court’s grant of summary judgment de novo. Back v. Hastings on Hudson Union Free Sch. Dist., 365 F.3d 107, 122 (2d Cir.2004). [74]*74Summary judgment is appropriate when, viewing the evidence in the light most favorable to the non-moving party, Nabisco, Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir.2000), “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law,” Fed.R.Civ.P. 56(a). “A dispute is not ‘genuine’ unless ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” ’ Nabisco, 220 F.3d at 45 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). In “a contract dispute, a motion for summary judgment may be granted only where the agreement’s language is unambiguous and conveys a definite meaning.” Am. Home Assurance Co. v. Hapag Lloyd Container Linie, GmbH, 446 F.3d 313, 316 (2d Cir. 2006) (internal quotation marks omitted). Under New Jersey law, which the parties agree governs the lease agreement in this case, contracts should be read “as a whole in a fair and common sense manner,” and “[i]f the language of a contract is plain arid capable of legal construction, the language alone must determine the agreement’s force and effect.” Manahawkin Convalescent v. O’Neill, 217 N.J. 99, 85 A.3d 947, 958, 959 (2014) (internal quotation marks omitted).

NP and A & P entered into a 20-year lease agreement, dated as of June 26, 2007, and amended as of October 23, 2009 (the “Lease”), pertaining to a property located at 1260 Springfield Ave., New Providence, New Jersey (the “Premises”) and owned by NP. The Lease requires A & P to pay rent, as well as “Charges,” which, under the terms of the Lease, include payments for A & P’s proportionate share of certain taxes. A & P constructed a new store on the Premises, which obligated NP to pay a $1.9 million construction allowance (the “Construction Allowance”) to A & P on or before the 90th day after A & P opened the store to the public. Section 7.G of the Lease (the “Abatement Clause”) provides that, in the event this Construction Allowance is not paid on time, A & P’s obligation to pay rent and Charges “shall abate ... until [A & P’s] receipt of the Construction Allowance, together with interest on the unpaid balance thereof at the Lease Interest Rate (as hereafter defined) from the due date until [A & P’s] receipt of same.” Jt. App’x 47. While the Construction Allowance became due on December 23, 2010, NP did not pay the Construction Allowance until September 29, 2011. A & P did not pay any rent or Charges that would otherwise have been due under the Lease for the period during which NP failed to pay.

NP commenced an adversary proceeding against A & P on June 28, 2011, seeking a declaration from the bankruptcy court that the Construction Allowance must be reduced by the amount of rent that A & P had refused to pay pursuant to Section 7.G. The bankruptcy court issued various orders regarding the adversary proceeding, eventually granting a motion for summary judgment filed by A & P on the grounds that, pursuant to Section 7.G, A & P was not obligated to pay rent or Charges incurred for the period for which the Construction Allowance was due and unpaid, that this clause was enforceable, and that certain tax payments constituting Charges under the Lease were incurred during this period and thus were not owed to NP. NP appealed the orders of the bankruptcy court, and the district court affirmed the judgment of the bankruptcy court in full.

On appeal, A & P argues that the district court correctly concluded that Section 7.G, properly construed, entirely eliminated A & P’s obligation to pay rent and Charges for the period beginning with the [75]*75day after the Construction Allowance was due and ending with the day NP paid the Construction Allowance. NP argues that this Section must be read together with Section 27.A of the Lease (the “Landlord’s Default Clause”), and that when the two clauses are read together the Lease did not eliminate A & P’s obligation to pay rent and Charges during the abatement period, but instead provides for such amounts to be withheld and then set off against the Construction Allowance, with an adjustment to account for interest. The Landlord’s Default Clause states that in the event of a default by NP, A & P may deduct the amount by which NP is in default plus interest “from fixed annual rent and/or Charges.” Jt. App’x 69. The Landlord’s Default Clause limits the amount of any such “offset, recoupment, withholding or deduction” that can be collected under certain circumstances, but specifies that this limit does not apply to Article 7 of the Lease (which includes, among several sections, Section 7.G’s Abatement Clause). Jt. App’x 70.

We agree with the district court that the Abatement Clause unambiguously eliminated A & P’s obligation to pay rent and Charges for the period during which NP failed to pay the Construction Allowance. NP urges us to interpret an abatement under Section 7.G as constituting an “offset, recoupment, withholding or deduction” under the Landlord’s Default Clause, but this is inconsistent with the ordinary meaning of “abatement,” which refers to “[t]he act of eliminating or nullifying.” Black’s Law Dictionary 3 (9th ed.2009). NP contends that because the Landlord’s Default Clause excepts Article 7 of the Lease from its limit on deductions, the parties must have intended an abatement under Section 7.G to constitute such a deduction. By the plain terms of the Landlord Default Clause, however, the exception to its limit on deductions applies only where Article 7 provides for an offset, recoupment, withholding, or deduction — as Article 7 does, in provisions other than Section 7.G. See Jt. App’x 42 (Section 7.A) (providing for recoupment), 48 (Section 7.H) (same). We agree with the district court that the exception to the deduction limit in the Landlord’s Default Clause should be understood “as meaning no more than what it says, without implying that Section 7.G is in fact an offset provision despite its plain language to the contrary.” In re The Great Atlantic & Pacific Tea Co., 510 B.R. 42, 50 (S.D.N.Y.2014).

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Bluebook (online)
595 F. App'x 72, Counsel Stack Legal Research, https://law.counselstack.com/opinion/n-providence-llc-v-great-atlantic-pacific-tea-co-in-re-great-ca2-2015.