Specialty Foods of Indiana, Inc., d/b/a Jersey Mike's Subs v. City of South Bend and Century Center Board of Managers

997 N.E.2d 23, 2013 WL 5549952, 2013 Ind. App. LEXIS 492
CourtIndiana Court of Appeals
DecidedOctober 9, 2013
Docket71A05-1302-MI-95
StatusPublished
Cited by4 cases

This text of 997 N.E.2d 23 (Specialty Foods of Indiana, Inc., d/b/a Jersey Mike's Subs v. City of South Bend and Century Center Board of Managers) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Specialty Foods of Indiana, Inc., d/b/a Jersey Mike's Subs v. City of South Bend and Century Center Board of Managers, 997 N.E.2d 23, 2013 WL 5549952, 2013 Ind. App. LEXIS 492 (Ind. Ct. App. 2013).

Opinion

OPINION

DARDEN, Senior Judge.

STATEMENT OF THE CASE

Specialty Foods of Indiana, Inc. Ill, d/b/a Jersey Mike’s Subs (“Specialty Foods”), appeals the trial court’s order denying its complaint for declaratory judgment.

We affirm.

ISSUE

Specialty Foods presents three issues for our review, one of which is dispositive: whether the force majeure clause of the agreement between Specialty Foods and the Century Center Board of Managers for the City of South Bend (“Century Center”) applies to excuse the Century Center’s further performance under the agreement.

FACTS AND PROCEDURAL HISTORY

On July 16, 1993, the City of South Bend (“City”) entered into a Management Agreement with the National Football Foundation and College Hall of Fame, Inc. (“NFF”) and the Century Center. On the same day, the City also entered into a License Agreement with the NFF. Both agreements concerned the construction and operation of a building in South Bend to house the College Football Hall of Fame (“Hall of Fame”). The agreements contained an initial term of forty years with automatic five-year renewals thereafter unless proper notice was given. Construction of the massive building to house the Hall of Fame was completed by August 1995.

On April 19, 2000, the Century Center entered into a Use Management and Operations Agreement (“UMO Agreement”) with Specialty Foods for Specialty Foods to be the exclusive provider of food and beverages in the Hall of Fame. The initial term of the agreement was five years with two five-year renewal options, both of which were exercised by Specialty Foods. Pursuant to the agreement, Specialty Foods would occupy only 3,286 square feet of the vast Hall of Fame building.

In August 2001, the City, the Century Center, and the NFF entered into an Interim Agreement for the operation of the Hall of Fame. In that agreement, the parties acknowledged that the financial results of the Hall of Fame had been less favorable than anticipated at the time of execution of the Management and License Agreements. In an effort to reduce the City’s financial burden of operating the Hall of Fame, the NFF agreed to assume the management and operation of the Hall of Fame during the interim term of January 1, 2001 to December 31, 2005. Subsequently in July 2006, the City, the Century Center, and the NFF entered into a Sec *26 ond Interim Agreement, which extended the interim period for an additional five years to December 31, 2010.

The trial court found that in 2009, during the second interim period, the NFF indicated its intent to relocate the Hall of Fame to Atlanta, Georgia. Appellant’s App. p. 7. In addition, the trial court found that in July 2012, the NFF officially announced its imminent departure from South Bend and the closing of the Hall of Fame in South Bend on December 31, 2012. Id. By exercising its final five-year renewal option on May 18, 2010, Specialty Foods expressed its desire to extend its agreement with the Century Center until August 2015. However, in August 2012, the City formally notified Specialty Foods that the Hall of Fame in South Bend would close as of January 1, 2013, due to its relocation to Atlanta, Georgia, and that cessation of the Hall of Fame’s presence in the city necessarily terminated Specialty Foods’ agreement with the Century Center.

On December 28, 2012, Specialty Foods filed a complaint against the City and the Century Center for a declaratory judgment as to its rights to continue operating its business in the Hall of Fame building under the UMO Agreement. Following a hearing, the trial court issued its order denying Specialty Foods’ request for declaratory judgment. This appeal ensued.

DISCUSSION AND DECISION

Specialty Foods contends the trial court erred by applying the force majeure clause of the UMO Agreement to excuse the Century Center’s performance under that agreement when the NFF moved the Hall of Fame from South Bend to Atlanta, Georgia.

The interpretation of a contract is a pure question of law and is reviewed de novo. Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 251 (Ind.2005). The objective of a court when it interprets a contract, including a force majeure provision, is to determine the intent of the parties at the time the contract was made by examining the language used in the contract. See State Farm Fire & Cas. Co. v. Riddell Nat’l Bank, 984 N.E.2d 655, 658 (Ind.Ct.App.2013), trans. denied. Further, in determining the intention of the parties, a contract should be considered in light of the circumstances existing at the time it was made. Allen v. Clarían Health Partners, Inc., 980 N.E.2d 306, 309 (Ind.2012). For example, the court should consider the nature of the agreement, the facts and circumstances leading up to the execution of the contract, the relationship of the parties, the nature and situation of the subject matter, and the apparent purpose of making the contract. Id. Contracts are to be read as a whole, and a court should construe the language in a contract so as not to render any words, phrases, or terms ineffective or meaningless. State Farm, 984 N.E.2d at 658. In addition, a court should attempt to harmonize the provisions of a contract rather than interpret the provisions as conflicting. Id.

In the present case, the trial court ruled that the force majeure clause in the UMO Agreement excused the Century Center from performing its obligation of allowing Specialty Foods to continue to operate its business in the Hall of Fame building after the Hall of Fame terminated the Management and License Agreements and moved from South Bend. A force majeure clause is defined as a “contractual provision allocating the risk if performance becomes impossible or impracticable, esp. as a result of an event or effect that the parties could not have anticipated or controlled.” Black’s Law Dictionary 674 (8th ed. 2004). We note that Indiana has very few cases interpreting force majeure clauses, and *27 those that do exist pertain to issues not before us today. Therefore, we turn to guidance from other jurisdictions.

Historically, the theory of force majeure embodied the concept that parties could be relieved of performance of their contractual obligations when the performance was prevented by causes beyond their control, such as an act of God. Sun Operating Ltd. P’ship v. Holt, 984 S.W.2d 277, 282 (Tex.App.1998). However, much of the theory’s “historic underpinnings have fallen by the wayside” with the result that force majeure is now “little more than a descriptive phrase without much inherent substance.” Id. at 283.

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997 N.E.2d 23, 2013 WL 5549952, 2013 Ind. App. LEXIS 492, Counsel Stack Legal Research, https://law.counselstack.com/opinion/specialty-foods-of-indiana-inc-dba-jersey-mikes-subs-v-city-of-south-indctapp-2013.