RCSH Operations, LLC v. Third Crystal Park Associates Ltd. Partnership

115 F. App'x 621
CourtCourt of Appeals for the Fourth Circuit
DecidedNovember 16, 2004
Docket02-2324
StatusUnpublished
Cited by8 cases

This text of 115 F. App'x 621 (RCSH Operations, LLC v. Third Crystal Park Associates Ltd. Partnership) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RCSH Operations, LLC v. Third Crystal Park Associates Ltd. Partnership, 115 F. App'x 621 (4th Cir. 2004).

Opinion

PER CURIAM:

RCSH Operations, L.L.C. (“RCSH”) appeals from an award of summary judgment dismissing its breach of contract and negligence claims against the defendants, Third Crystal Park Associates Limited Partnership (“TCP”), Charles E. Smith Management, Inc., CESC Park Three Land, LLC, and CESC Park Three Manager, LLC, and from a judgment, following a bench trial, in favor of TCP on its counterclaim against RCSH for breach of contract. For the reasons set forth below, we affirm both the entry of summary judgment in TCP’s favor on RCSH’s claims and the entry of judgment in favor of TCP on its counterclaim.

I.

In 1993, TCP and Prime L.L.C. (“Prime”) entered into a commercial lease agreement (the “Lease”) by which Prime leased space on the eleventh floor of a building owned by TCP. From then until August 1998, Prime operated a franchised Ruth’s Chris Steak House restaurant in *624 the leased premises. 1 In August 1998, the franchise restaurant was purchased from Prime by Ruth’s Chris Steak House # 28, Inc. (“RC # 28”), a corporate subsidiary of Ruth U. Fertel, Inc., then the parent corporation of the Ruth’s Chris Steak House organization. Also, in August 1998, RC # 28 assumed the Lease from Prime and thereafter operated the Ruth’s Chris restaurant under the Lease until March 2001 when RC #28 was merged into RCSH, which assumed the Lease. Pursuant to the merger agreement, RC # 28 ceased to exist.

This action arises out of plumbing problems at the restaurant in 1999 while RC # 28 was the tenant. The principal drain line for the restaurant is a five inch drain (the “5" line”) that runs vertically and horizontally in a zig-zag pattern as it wends its way down and across the building from the eleventh floor to the sewer connection that is located in the basement. The 5" line and other drains in the restaurant that lead to the 5" line, became clogged, resulting in flooding on the eleventh floor and four lower floors in the building. The restaurant was damaged and so too were an adjacent tenancy on the eleventh floor, as well as other tenancies on the first, second, third and fifth floors. Extensive cleaning and repair of the restaurant was required and, while that was underway, the restaurant was closed. According to the complaint, RC # 28 incurred approximately $355,000 in direct repair costs, and it suffered approximately $1.15 million in lost profits while the restaurant was closed from January 3, 2000 to April 3, 2000.

TCP also incurred expenses in its emergency response to the flooding in the restaurant, in the adjacent tenancy on the eleventh floor, and in the tenancies on the four lower floors. TCP also incurred expenses to repair flood damage to the restaurant and other tenant spaces. According to TCP, it paid $110,372.14 to various contractors and its property manager in order to respond to the emergency and to remedy the damage caused by the flooding.

Although RC # 28 was the tenant at the time of the flooding in the summer of 1999, it ceased to exist after its merger into RCSH in 2001 and thus RCSH instituted this action, as RC #28’s successor in interest. The complaint asserted claims for breach of contract (Count I), negligence (Count II), and conspiracy to injure another’s trade reputation and business (Count III). TCP filed a counterclaim against RCSH, seeking to recover the expense that it had incurred in responding to the emergency and in repairing damage to the other tenancies and the drain lines.

Count III was dismissed early in the proceedings, and it is not at issue in this appeal. Following the close of discovery, the district court granted summary judgment in favor of all defendants against RCSH on its breach of contract and negligence claims. Thereafter, a pretrial conference was held and the case was set for jury trial. Approximately a week later, TCP moved to strike RCSH’s request for a jury trial on the ground that the parties had waived their right to jury trial under Section 47 of the Lease. The district court granted that motion, and TCP’s counterclaim was tried to the court sitting without a jury, after which a judgment was entered in TCP’s favor in the amount of $110,372.14. 2

*625 II.

We review de novo the district court’s grant of summary judgment, Inova Alexandria Hosp. V. Shalala, 244 F.3d 342, 349 (4th Cir.2001). That includes a de novo assessment of the legal issue whether the Lease was ambiguous. Moore Bros. Co. V. Brown & Root, Inc., 207 F.3d 717, 722 (4th Cir.2000).

Section 7 of the Lease, “REPAIRS AND MAINTENANCE,” provides, in pertinent part, that the “[tjenant shall at its own expense make all repairs to the interior of the Demised Premises.... ” (JA 67). Section 49, entitled “TENANT REPAIRS AND MAINTENANCE” amends Section 7, by inserting immediately after the foregoing quoted text, the provision that: “[tjenant shall also maintain and repair all drain Unes, grease traps, conduits, ducts and other facilities in the Building which are dedicated to serving the equipment in the Demised Premises.” 3 (JA 85).

In 1999, the 5" line and other drain lines that connected to it became clogged. Those lines were dedicated solely to service the restaurant. The 5" line received kitchen waste and sewage from the bathrooms in the restaurant and then carried the combined waste through the building to the county’s sewer line with which the 5" line connected at the garage level of the TCP building.

The record also reflects that, in 1995, when Prime was operating a franchised Ruth’s Chris Steak House restaurant in the leased premises, the restaurant experienced two flooding problems in the 5" line and that, consequently, an outside plumbing company was called upon to unclog the drain lines. The plumbing company used electrical “snaking” equipment and completely cleared the line. Also, in 1995, the plumbing company installed special “clean-outs” so that future maintenance of the line would be easier, and advised that the 5" line should be “snaked” regularly.

Roger Pastore, an experienced restaurant manager, became general manager of the restaurant in January 1997, and he was aware of the need to maintain the drain lines that served the restaurant. In fact, in 1997, TCP’s property management company reminded Pastore that maintenance of the 5" line was the restaurant’s responsibility under the Lease, (JA 517; 266), and Pastore passed this along to corporate headquarters. The plumber, who had “snaked” the line in 1995, returned to clean the line in the summer of 1997. He observed that the condition of the 5" line was worse than it had been in 1995 and concluded that the line did not appear to have been cleaned since 1995. Nonetheless, and notwithstanding that the line was completely clogged, the plumber, using the same procedure followed in 1995, was able to clear out the entire line once again. From the record, it appears that no “snaking” or other cleaning was performed between the summer of 1997 and the summer of 1999 when the flooding that gave rise to this action occurred.

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115 F. App'x 621, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rcsh-operations-llc-v-third-crystal-park-associates-ltd-partnership-ca4-2004.