Winkal Mgmt., LLC v. Fed. Deposit Ins. Corp.

288 F. Supp. 3d 33
CourtCourt of Appeals for the D.C. Circuit
DecidedDecember 13, 2017
DocketCivil Case No. 10–83 (RJL)
StatusPublished
Cited by2 cases

This text of 288 F. Supp. 3d 33 (Winkal Mgmt., LLC v. Fed. Deposit Ins. Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Winkal Mgmt., LLC v. Fed. Deposit Ins. Corp., 288 F. Supp. 3d 33 (D.C. Cir. 2017).

Opinion

RICHARD J. LEON, United States District Judge

Winkal Management, LLC ("plaintiff" or "Winkal") brings this action against the Federal Deposit Insurance Corporation ("defendant" or "FDIC") in its capacity as the Receiver for now-defunct Washington Mutual Bank ("WaMu"). Winkal seeks compensation under 12 U.S.C. § 1821 for damages it allegedly suffered when the FDIC repudiated a lease agreement between Winkal and WaMu and turned the leased property ("Premises") back over to Winkal in a state of disrepair. See First Am. Compl. [Dkt. # 15].

Currently before the Court are the parties' cross-motions for summary judgment. See Dkts. ## 33, 34. Upon consideration of the parties' submissions and the entire record, Winkal's Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART without prejudice, and the FDIC's Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART. In particular, I conclude that Winkal is entitled to summary judgment on its "unpaid rent" claim for the expenses associated with repairing the Premises. The particular amount of damages owed to Winkal, however, remains an open question, and I thus deny Winkal summary judgment on the issue of damages without prejudice. With respect to the FDIC's summary judgment motion, I conclude that the FDIC has shown, under 12 U.S.C. § 1821, that it is entitled to prevail on Winkal's claims for "Landlord's Work" expenses and the costs to complete WaMu's "Tenant's Work."

BACKGROUND

A. The Winkal-WaMu Lease

On December 17, 2007, Winkal entered into a ten-year lease agreement (the "Lease") with WaMu for commercial retail space at a property located in San Gabriel, California. See Decl. of Richard Yarmy ("Yarmy Decl.") [Dkt. # 34-3] Ex. A ("Lease"). The Lease contemplated that WaMu would lease the Premises from Winkal for the purposes of operating a bank branch. Lease art. I, § 3. The Lease set forth the mutual rights and obligations of Winkal and WaMu, as well as provisions governing the rent due to Winkal from WaMu. Three portions of the Lease are particularly relevant here.

First, in Article XXV of the Lease, Winkal agreed to perform certain "Landlord's Work" prior to turning over the property to WaMu. Specifically, Winkal agreed to: 1) install a new roof; 2) install a new HVAC system; and 3) resurface the parking lot. Id. art. XXV. Winkal completed its Landlord's Work at a cost of $130,633 and granted WaMu possession of the Premises in May 2008. Yarmy Decl. ¶¶ 4-6.

Second, Article VI of the Lease establishes Winkal's and WaMu's obligations *37with respect to "Maintenance and Repair of the Premises." Lease art. VI. The provision specifies that "[a]s additional rent and at the sole cost and expense of Tenant, Tenant shall at all times keep all parts of the Premises ... in suitable condition for Tenant's conduct of business and in good order, good condition and good repair." Id. The provision further vests WaMu with the responsibility to "permit no injury to the Premises" and, "at its own cost and expense, replace as necessary all systems, appurtenances, equipment and components on the Premises which may be broken or damaged." Id. Finally, the provision states that at the "expiration or earlier termination of the Term, Tenant shall surrender the Premises ... in as good condition as the same is on the Commencement Date" with "reasonable wear and tear excepted." Id. In short, Article VI of the Lease obligates WaMu, with limited exceptions, to maintain and repair the Premises.

Third, in a section of Article VII entitled "Alterations and Improvements," the Lease contains provisions governing any "Tenant's Work" that WaMu elected to perform. Id. art. VII, § 2. The provisions specify that WaMu, as tenant, "shall bear the expense of all permits, alterations and improvements which are necessary in order to make the Premises suitable for Tenant's occupancy and use before and during the Term." Id. Article VII further specifies that WaMu "shall commence and thereafter complete with due diligence, all of Tenant's Work," cause such work "to be done in a good and workmanlike manner," and "obtain and furnish Landlord at Tenant's expense all certificates and approvals with respect to Tenant's Work." Id.

B. WaMu's Commencement of "Tenant's Work" and Subsequent Receivership

In anticipation of its occupancy, WaMu contracted with an architectural firm to develop plans for WaMu's "Tenant's Work" on the Premises. See Decl. of Donald J. Rethman ("Rethman Decl.") [Dkt. # 34-4] ¶ 3. The planned work included, among other things, the addition of new bathroom facilities, storage areas, administrative offices, and a sprinkler system; upgrades to the floors, doors, and lighting; and complete replacement of all plumbing and electrical and mechanical systems. Id. ¶ 5. Pursuant to the "Tenant's Work" provision of the Lease, Winkal approved WaMu's proposals for the work on the Premises. See Yarmy Decl. ¶ 8.

Following approval of the "Tenant's Work" plans, WaMu contracted with Metro Construction Company to complete the planned construction activities. See Decl. of George Lomeli ("Lomeli Decl.") [Dkt. # 34-5] ¶¶ 3-4. The agreement projected that the work would cost $547,170 in total. Id. ¶ 5. Metro Construction commenced construction on the Premises toward the end of August 2008 and immediately began demolition work to prepare the Premises for the planned additions and renovations. Id. ¶¶ 6-7.

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Bluebook (online)
288 F. Supp. 3d 33, Counsel Stack Legal Research, https://law.counselstack.com/opinion/winkal-mgmt-llc-v-fed-deposit-ins-corp-cadc-2017.