RREEF Mid-America Fund III v. Distronics Corp.

652 F. Supp. 1490, 22 Fed. R. Serv. 1655, 1987 U.S. Dist. LEXIS 1045
CourtDistrict Court, E.D. Missouri
DecidedFebruary 11, 1987
DocketNo. 85-2008 C (5)
StatusPublished

This text of 652 F. Supp. 1490 (RREEF Mid-America Fund III v. Distronics Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RREEF Mid-America Fund III v. Distronics Corp., 652 F. Supp. 1490, 22 Fed. R. Serv. 1655, 1987 U.S. Dist. LEXIS 1045 (E.D. Mo. 1987).

Opinion

MEMORANDUM

LIMBAUGH, District Judge.

Plaintiff RREEF Mid-America Fund III contends in Count I of the amended complaint that defendant Distronics Corporation breached various provisions of a lease agreement between the parties dated May 29, 1984. RREEF seeks damages for injuries to its realty, unpaid rent, taxes, common area maintenance charges, and attorneys’ fees. In Count II, plaintiff alleges that defendant’s actions constituted waste of the property under Missouri common and statutory law.

Defendant Distronics concedes that it owes RREEF one month’s rent and its share of certain property taxes. However, defendant claims that RREEF has not adequately documented its claim for common area maintenance charges. In addition, defendant contends that its employees did not damage RREEF’s property to the extent claimed by plaintiff. While conceding that its agents removed some property from the premises, Distronics asserts that these items were its personal property and not part of the real estate. Defendant agrees that it must reimburse plaintiff for the relatively insignificant damage to the premises caused by the removal, but strongly disputes plaintiff’s assertion that it caused any other damage to the property. Finally, Distronics contends that it made a security deposit when it signed the lease, a contention plaintiff denies.

The parties have submitted proposed findings of fact and conclusions of law, and have focused their briefing on four dispositive issues. This Memorandum constitutes the Court’s findings of fact and conclusions of law for purposes of Fed.R.Civ.P. 52(a).

I. Findings of Fact

Plaintiff RREEF is a California Group Trust and its trustees are citizens of Illinois and California. RREEF invests in real estate across the country and owns a commercial building at 149 Weldon Parkway in Maryland Heights, Missouri, a St. Louis suburb. Defendant Distronics, an Ohio corporation with its principal place of business in New Jersey, leased suites 113 and 115 of the Weldon Parkway property from plaintiff in accordance with a lease agreement dated May 29,1984. The term of this lease ran from April 1, 1984 to March 31, 1985. Defendant conducted a computer services business from the premises until its lease with RREEF expired.

A. The Leases

Defendant originally leased the space at 149 Weldon Parkway on February 22, 1983 from O’Fallon Gas Service Leasing Company. On November 22, 1977, Distronics and W & S Investment Co., as agent for the owner, renewed this lease for a five-year term commencing on April 1, 1978 and ending on March 31, 1983. They amended this agreement on August 1, 1980, adding 1,725 square feet of adjoining space and extending the renewal to March 31, 1983. Distronics agreed on February 21, 1983 to renew the 1973 lease for an additional one-year term beginning on April 1, 1983 and ending March 31, 1984.

During this final one-year renewal period, plaintiff RREEF purchased the property and received a general warranty deed dated October 31, 1983. As part of this transaction, RREEF received an estoppel letter from defendant which essentially sets forth the status of Distronic’s arrangement with the previous owner. In particular, the letter states, in part:

[1493]*1493The undersigned [Distronics] hereby warrants and represents:
1. The Leased Premises are leased under the provisions of a lease dated February 22, 1973. The lease agreement is valid and in existence as executed, except as amended by documents dated 2/21/83, 8/1/80, 11/22/77, copies of which are attached hereto, which contain all of the understandings and agreements between Lessor and Lessee (herein collectively referred to as the “Lease”).

[bracketed comment added].

The original 1973 lease between defendant and O’Fallon Gas Service Leasing Company contains a codicil which Distronics contends preserved its rights in certain property it used in its business at 149 Weldon Parkway. This provision reads:

Special Equipment. Lessee is hereby granted permission to install special equipment to the demised premises, all as set out in Exhibit D. Said special equipment shall belong to and remain the personal property of Lessee and Lessee may remove same upon termination and expiration of this lease. Upon removal of said special equipment, Lessee convenants and agrees to restore said demised premises in as good a condition as though said special equipment had never been installed. Said restoration shall be at the expense of Lessee and upon the failure of Lessee to restore said demised premises, Lessor may undertake to do so and Lessee shall be liable to Lessor for the costs of said restoration.

The “Exhibit D” referenced in this quoted provision in the 1973 lease provides:

DISTRONICS CORPORATION WELDON COURT II BUILDING SPECIAL IMPROVEMENTS TO BE PROVIDED BY LESSEE AT LESSEE’S EXPENSE AND TO REMAIN LESSEE’S PERSONAL PROPERTY:
I. Special raised floor in the Computer Room and Tape Storage Room.
II. Special H.V.A.C. unit in the Computer Room and Tape Storage Room.
III. Special electrical receptacles for computer connections in Computer Room.

Defendant Distronics asserts that, by virtue of the explicit provisions of the 1973 lease, it retained ownership of an air-conditioning unit (the “Special H.V.A.C. unit”), the “Special raised floor” in the computer room, and the “Special electrical receptacles.” Plaintiff contends that these items became part of the real estate when installed and, consequently, defendant had no right to remove them from the premises when it vacated. RREEF argues that the lease agreement it executed with Distronics on May 29, 1984 governs the rights of the parties in this action. This 1984 lease contains a standard integration clause which, plaintiff contends, precludes defendant from relying on provisions in the original 1973 lease.

In Count I, RREEF claims that Distronics breached a number of provisions in the 1984 lease. For example, Distronics promised to pay rent and to reimburse plaintiff for certain common area expenses and taxes it incurred in managing the building. Defendant admits it owes rent for March 1985 and prorated property taxes for the first three months of that year. However, Distronics, while conceding it might be liable to plaintiff for common area charges for 1984 and 1985, contends that RREEF has not provided adequate documentation for the amount it seeks to recoup.

RREEF asserts that defendant breached its duty under paragraph 28 of the lease to surrender the premises in the same condition as received, less reasonable wear and tear. The lease also includes language in paragraph 8(F) which sets forth the parties’ understanding concerning responsibility for repairs to the premises. This provision reads:

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Bluebook (online)
652 F. Supp. 1490, 22 Fed. R. Serv. 1655, 1987 U.S. Dist. LEXIS 1045, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rreef-mid-america-fund-iii-v-distronics-corp-moed-1987.