Ross Dress for Less, Inc. v. Makarios-Oregon, LLC

210 F. Supp. 3d 1259, 2016 U.S. Dist. LEXIS 132266, 2016 WL 5402241
District Court, D. Oregon·Decided September 27, 2016·No. Case No. 3:14-cv-1971-SI·Published·Cited by 9 cases

Opinion

OPINION AND ORDER

Michael H. Simon, United States District Judge

This case involves a dispute over a lessee’s obligations at the expiration of two leases—negotiated with two separate landlords for two conjoined buildings—that have spanned more than 50 years. Plaintiff Ross Dress For Less, Inc. (“Ross” or “Plaintiff’) is the successor in interest to the original ■ lessee. Defendants Walker Place, LLC (“Walker Place”) and Makarios-Oregon, LLC (“Makarios”) (collectively, “Defendants”) are the successors in interest to the original lessors. Walker Place is the owner, lessor, and landlord of the Failing Building, located in downtown Portland, Oregon. Makarios is the owner, lessor, and landlord of the adjacent Richmond Building. Ross leases the Failing Building from Walker Place under the 1956 “Failing Lease,” and Ross leases the Richmond Building from Makarios under the 1956 “Richmond Lease.”1 All parties agree that the Failing and Richmond Leases will expire on September 30, 2016, and will not be renewed. A great deal of litigation has already taken place in this case, and the Court has issued several decisions concerning the condition in which Ross is obligated to return the leased premises, the Failing and Richmond Buildings.

On September 6, 2016, Ross moved for partial summary judgment. The principal question raised in Ross’s motion is whether Ross may either enter or continue to remain on the premises of the Failing and Richmond Buildings after September 30, 2016, over Defendants’ objections, so that Ross may complete its “building separation” obligations needed to surrender the premises in the condition required under the leases. For the reasons explained below, the Court holds that after the leases expire on September 30, 2016, neither Ross nor its agents may enter or continue to remain on the premises of the Failing or Richmond Buildings over the objections of Walker Place or Makarios, respectively. Accordingly, Plaintiffs Motion for Partial Summary Judgment Regarding Completion of End-of-Lease Work Pursuant to the Failing and Richmond Leases (ECF 219) is denied.

[1261] BACKGROUND

In December 2014, Ross commenced this lawsuit against Defendants, seeking a judicial declaration that Ross’s proposed end-of-lease plans satisfy Ross’s obligations under the relevant leases. Walker Place and Makarios both asserted counterclaims for a judicial declaration clarifying the extent of Ross’s end-of-lease obligations and for breach of contract. On February 1, 2016, all parties filed cross motions for partial summary judgment. After reviewing the parties’ submissions and hearing oral argument, the Court issued its decision (ECF 99) on March 25, 2016. Ross Dress for Less, Inc. v. Makarios-Oregon, LLC, et al., 180 F.Supp.3d 745, 2016 WL 1181677 (D.Or. March 25, 2016). Among other things, the Court held that “the leases do not require the elimination of shared lateral forces or the creation of a new ‘joint’ or gap between the buildings.” Id. at *11. Shortly thereafter, the parties agreed to bifurcate their respective claims for declaratory relief (“Phase I”) from Defendants’ breach of contract claims for damages (“Phase II”). ECF 104.

The Court held a bench trial from May 2 to May 18, 2016, to address the issues raised in Phase I. On June 10, 2016, the Court issued its Findings of Fact and Conclusions of Law (ECF 213), interpreting the respective leases and describing the required conditions in which Ross is obligated to surrender the respective premises at the expiration of the two leases. Ross Dress for Less, Inc. v. Makarios-Oregon, LLC, et al., 191 F.Supp.3d 1189, 2016 WL 3360678 (D.Or. June 10, 2016). Among other things, the Court held that Ross’s “proposal for a gypsum wall was a cost-cutting meásure that does not comply with the requirement for masonry curtain walls as provided for in the two leases.” Id. at *19.

The Court also held that, among other things: (1) the “leases do not require Ross to slice the floors and columns and remove the 19 to 28 inches of concrete between the buildings”; (2) “[w]ith sufficiently durable exterior walls separating the buildings, the buildings may continue to have conjoined features and yet comply with the intent of the original parties”; (3) “the 1956 leases require removing the connection between the escalator beams that span the property line [and] [t]o the extent that severing the escalator beams requires supporting the severed beams in order to ensure the structural integrity of the buildings, the leases require the tenant to complete that work”; (4) Ross must maintain and return the third through fifth mezzanine floors of the Richmond Building in “good order, condition, and repair” reasonable wear and tear excepted; (5) Ross “is obligated to return the [Failing Building’s] sidewalk vaults in good order, condition, and repair, reasonable wear and tear excepted”; and (6) Ross “is obligated to surrender only the internal portion of the vent stack within the second floor of the Failing Building in good order, condition, and repair, reasonable wear and tear excepted.” Id. at *20-27. The Court also interpreted the meaning of “good order, condition, and repair, except for reasonable wear and tear,” as that phrase is used in the two leases. Id. at *30-31. The Court’s Findings of Fact and Conclusions of Law at Phase I were intended by the Court to provide Ross with sufficient guidance to be able timely to meet its obligations to surrender the Failing and Richmond Buildings in the condition required under the two leases by September 30, 2016, when the two leases expire.

STANDARDS

A party is entitled to summary judgment if the “movant shows that 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). The moving party has the burden of establish[1262] ing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant’s favor. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1257 (9th Cir.2001). Although “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of the plaintiffs position [is] insufficient .... ” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).

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Ross Dress for Less, Inc. v. Makarios-Oregon, LLC, 210 F. Supp. 3d 1259, 2016 U.S. Dist. LEXIS 132266, 2016 WL 5402241 (D. Or. 2016).

210 F. Supp. 3d 1259 (Ross Dress for Less, Inc. v. Makarios-Oregon, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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