Jerseyville Mall, L.L.C. v. Shop 'N Save Warehouse Foods, Inc.

633 S.W.3d 523

JERSEYVILLE MALL, L.L.C., Appellant,

v.SHOP ‘N SAVE WAREHOUSE FOODS, INC., Respondent.

No. ED 109357

Missouri Court of Appeals, Eastern District, DIVISION TWO.

Filed: September 21, 2021

Thomas W. Hayde, Jr., John J. Coatar, Seong J. Hong, 1 N. Brentwood Blvd. Ste. 1000, St. Louis, MO 63105, For Appellant.

Brian E. McGovern, Chad M. deRoode, Alexander J. Lindley, 825 Maryville Center Dr., Town and Country, MO 63017, For Defendant.

OPINION

Thom C. Clark, Judge

This appeal involves the interpretation of a complex, decades-old lease agreement for a retail store location in Jerseyville, Illinois. The property owner, Appellant Jerseyville Mall, L.L.C. (Jerseyville), alleges that the tenant, Respondent Shop ‘N Save Warehouse Foods, Inc. (Shop ‘N Save), breached the lease by ceasing operations and notifying Jerseyville that the lease was terminated. Shop ‘N Save contends that termination was proper under the terms of the lease. The issue was presented to the trial court on cross motions for summary judgment, and the trial court decided in favor of Shop ‘N Save. Jerseyville appeals, and we affirm.

Facts and Procedural Background

The parties’ lease agreement was originally entered in 1978 by Jerseyville and Shop ‘N Save's predecessor and has been extended and modified on numerous occasions. Two of the instruments extending and modifying the lease contain the key language pertinent to this appeal. In the first of these instruments, entered in 1999 (the 1999 Agreement¹ ), Shop ‘N Save agreed to exercise two five-year extension options, continuing the lease to 2010. The 1999 Agreement also contained two paragraphs relating to termination of the lease. Section 3 of the 1999 Agreement provides:

Shop ‘N Save hereby exercises its right to renew the Lease for the first and second five-year renewal terms PROVIDED HOWEVER, that Shop ‘N Save shall have the right to terminate the Lease, at any time during such first or second renewal terms, upon thirty days written notice. It is agreed and understood that, by so exercising its [sic] right to renew the Lease for such terms, Shop ‘N Save does not, in any way, warrant or represent that it will remain in operation during any such term.

And § 4 provides:

In the event Shop ‘N Save closes or shuts down the operation of the grocery store, the lease shall be deemed immediately terminated or in any event terminated no later than 30 days after Shop ‘N Save ceases operation of the grocery store and Shop ‘N Save shall vacate the premises within 30 days of such termination of store operation.

A subsequent instrument containing language we are asked to interpret was entered in 2014 (the 2014 Amendment). In that document, Shop ‘N Save agreed to "irrevocably exercise" a further five-year renewal option, extending the lease from November 1, 2015 through October 31, 2020. In the same agreement, Jerseyville consented to allow Shop ‘N Save to make certain structural changes to the property. The 2014 Amendment expressly set forth that it extended the existing "Lease," which it defined to include "the Base Lease and the 1999 Agreement" as well as other extensions and modifications entered over the years. It further provided that "[e]xcept as amended hereby, the Lease shall remain unchanged ..."

On November 14, 2018, Shop ‘N Save ceased operations at the Jerseyville location. On November 30, it sent a notice to Jerseyville informing it that operations had ceased and stating that it would vacate the premises by December 31, 2018, at which time, Shop ‘N Save wrote, the lease would be "deemed terminated." On December 14 Jerseyville responded, taking the position that Shop ‘N Save's actions were a breach and repudiation of the lease.

Jerseyville filed suit against Shop ‘N Save alleging anticipatory and actual breach of the lease. The parties filed cross-motions for summary judgment. On October 30, 2020 the circuit court granted Shop ‘N Save's motion for summary judgment and denied Jerseyville's motion. This appeal followed.

Standard of Review

The propriety of summary judgment is an issue of law, and this Court's review of a grant of summary judgment is essentially de novo. ITT Com. Fin. Corp. v. Mid-Am. Marine Supply Corp. , 854 S.W.2d 371, 376 (Mo. banc 1993). The court "review[s] the record in the light most favorable to the party against whom judgment was entered." Id. Summary judgment is proper only if the moving party establishes there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Id. at 382 ; see also Rule 74.04.² A genuine issue exists when the record contains competent materials that evidence two plausible, but contradictory, accounts of the essential facts. ITT Com. Fin. Corp. , 854 S.W.2d at 382. A genuine issue is a dispute that is real, not merely argumentative, imaginary, or frivolous. Id. The Court accords the non-movant the benefit of all reasonable inferences from the record. Id. at 376.

Discussion

Contract Interpretation Under Missouri Law

When interpreting lease agreements, we follow the rules of construction governing contract. Brittany Sobery Fam. Ltd. P'ship v. Coinmach Corp. , 392 S.W.3d 46, 50 (Mo. App. E.D. 2013). Under Missouri law, "the primary rule of contract interpretation is that courts seek to determine the parties’ intent and give effect to it." Chochorowski v. Home Depot U.S.A. , 404 S.W.3d 220, 226 (Mo. banc 2013) (citing Triarch Indus., Inc. v. Crabtree, 158 S.W.3d 772, 776 (Mo. banc 2005) ). This process starts with examining the plain language of the agreement to determine whether it clearly addresses the issue at hand. Brittany Sobery Fam. Ltd. P'ship , 392 S.W.3d at 50 (citing TAP Pharm. Prod. Inc. v. State Bd. of Pharmacy, 238 S.W.3d 140, 143 (Mo. banc 2007) ). Thus, so far as possible, "[t]he intention of the parties is to be gleaned from the four corners of the contract." L.A.C. ex rel. D.C. v. Ward Parkway Shopping Ctr. Co., L.P. , 75 S.W.3d 247, 260 (Mo. banc 2002). Missouri courts construe a contract as a whole so as not to render any terms meaningless. Chochorowski , 404 S.W.3d at 229 (citing State ex rel. Riverside Pipeline Co., L.P. v. Pub. Serv. Comm'n of State, 215 S.W.3d 76, 84 (Mo. banc 2007) ). A construction that gives a reasonable meaning to each term and harmonizes all provisions is preferred over a construction that renders some provisions without function or sense. Id. If the language is clear and addresses the disputed matter, the inquiry ends. Brittany Sobery Fam. Ltd. P'ship , 392 S.W.3d at 50.

Interpretation of the Lease

We begin by observing that the parties chose to present their dispute to the trial court with a limited record and focused on the four corners of the lease documents. Neither party contends that the lease is ambiguous, and neither adduced extrinsic evidence regarding the interpretation of the contract language. Both parties agree that the case should be adjudicated on the basis of the lease document themselves. The lease agreement between the parties, consisting of at least nine separate instruments negotiated by a changing cast of parties and their lawyers over five different decades, is by no means a model of contractual drafting. But, guided by the choice of the parties to present this case on a limited record and cross-motions for summary judgment and restricting our review to the issues presented on appeal, we confine our consideration to the plain language and four corners of the lease documents. See In re Marriage of Fritz , 243 S.W.3d 484, 488 (Mo. App. E.D. 2007) ; Stacy v. Bar Plan Mut. Ins. Co. , 621 S.W.3d 549, 565 n.6 (Mo. App. E.D. 2021).

Turning to that language, the central question is whether Shop ‘N Save's lease obligations ended as a result of its ceasing operations in November 2018. In support of its position that the lease ended, Shop ‘N Save relies on § 4 of the 1999 Agreement. On its face, the language of § 4 is reasonably straightforward. If Shop ‘N Save closes its store, the lease "shall be deemed immediately terminated or in any event terminated no later than 30 days after Shop ‘N Save ceases operation ..." Since there is no dispute that Shop ‘N Save closed its store, it follows that the lease must be "deemed ... terminated."

Jerseyville questions the use of the word "deem[ ]" in this provision. To "deem" means "to treat [something] as if (1) it were really something else, or (2) it had qualities that it does not have." BLACK'S LAW DICTIONARY (11th ed. 2019). In other words, the word "deem" denotes a legal fiction. Modern legal drafting authorities recommend against use of the word for precisely this reason.³ Here however, the use of this word does not change the meaning of the provision in question. Applying the dictionary definition to the language in question, if the lease is "deemed ... terminated" that means that, as between the two parties who agreed to do the "deeming," the lease must be "treated as if it w[as] really" terminated. Since Jerseyville agreed to treat the lease as if it was terminated in this circumstance, its claim for breach of the lease fails as a matter of law.

Jerseyville argues that this use of the phrase "deemed ... terminated" in § 4 of the 1999 Agreement, when read in context, should be read to refer back to the existing termination right in § 3 of that agreement. We conclude that nothing in the contractual language requires this interpretation. Applying dictionary definitions, the phrase "deemed terminated" simply means "treated if it were ended,"⁴ and this straightforward reading seems appropriate here.

Moreover, reading the provisions of § 3 and § 4 in context and in relation to the other provisions of the parties’ agreement, we disagree with Jerseyville's proposed construction. Jerseyville contends that the 1999 Settlement Agreement limits Shop ‘N Save's termination to the initial two five-year lease extensions — 2000 to 2005 and 2005 to 2010 respectively — because § 4 is logically linked to the restrictive conditions...