Case Title: Landmark HHH, LLC v. Park

Citation: 

Docket Number: 072365

State: virginia

Court: Virginia Supreme Court

Date: 2009-01-16T00:00:00Z

Document:
Present:  All the Justices 
 
LANDMARK HHH, LLC  
 
 
 
 
 
 
 
 
 
   OPINION BY 
v.  Record No. 072365   
 JUSTICE LAWRENCE L. KOONTZ, JR. 
         
 
 
 
 
 
 
January 16, 2009  
GI HWA PARK 
 
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY 
R. Terrence Ney, Judge 
 
In this appeal, we consider whether the circuit court 
correctly determined that under a lease for commercial real 
estate the landlord was liable for contract damages for the 
loss sustained by the tenant when the roof of the leased 
premises leaked during a rainstorm, inundating the leased 
premises and causing substantial damage to the tenant’s 
inventory.  We further consider whether the court erred in 
failing to hold that the provisions of the lease requiring the 
tenant to maintain hazard insurance and hold the landlord 
harmless for any insured losses barred the tenant from seeking 
to obtain damages for all the losses sustained. 
BACKGROUND 
This case was tried by the circuit court, sitting without 
a jury.  Upon appellate review, the court’s judgment is 
entitled to the same weight as a jury verdict and will not be 
set aside unless it appears from the evidence that the 
judgment is plainly wrong or without evidence to support it.  
Code § 8.01-680; Hickson v. Commonwealth, 258 Va. 383, 387, 
520 S.E.2d 643, 645 (1999).  Accordingly, we recite the facts 
in this case in the light most favorable to the tenant, the 
party in whose favor the circuit court rendered its judgment.  
Government Micro Res., Inc. v. Jackson, 271 Va. 29, 35, 624 
S.E.2d 63, 66 (2006). 
In May 1998, Gi Hwa Park entered into a commercial lease 
with Landmark HHH, LLC (Landmark) for a retail space located 
in the Plaza at Landmark, a shopping center in Fairfax County.  
Park intended to operate a clothing store called The Four 
Seasons in the leased space, specializing in high-end imported 
men’s suits and related accessories.  As relevant to this 
appeal, the lease contained the following provisions: 
16(b) Tenant, at its sole cost and expense, shall be 
responsible for providing a policy of fire and 
extended coverage insurance, insuring Tenant’s 
inventory, . . . and all other contents in the 
Premises . . . . 
 
25(a) Landlord shall endeavor to keep the foundation, 
roof, and the outer walls . . . of the Premises in 
good repair and make such repairs to the foundation, 
roof and outer walls as are necessary following 
Landlord’s knowledge of the necessity of said repairs 
. . . . 
 
37(c) Landlord and Tenant hereby release the other 
from any and all liability or responsibility to the 
other or anyone claiming through or under them, by way 
of subrogation or otherwise, from any loss or damage 
to property caused by fire or any other perils insured 
under policies of insurance covering such property 
(but only to the extent of the insurance proceeds 
payable under such policies), even if such loss or 
damage is attributable to the fault or negligence of 
 
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the other party, or anyone for whom such party may be 
responsible. 
 
Within three weeks of Park’s opening of The Four Seasons 
and continuing through September 2005, leaks in the roof 
allowed water to flow into the store, damaging the ceiling and 
causing wet spots throughout the store.  The leaks would occur 
several times during the year, especially when precipitation 
was heavy.  Tony Park, Park’s son and manager of The Four 
Seasons, contacted Landmark’s property manager multiple times 
concerning the leaks.  Landmark took various remedial steps to 
attempt to repair the damage to the interior of the store and 
to repair the roof. 
Between September 2005 and February 2006, in response to 
complaints from Park and other tenants, Landmark undertook to 
replace the entire roof of the shopping center.  Landmark 
hired Waterproofing Consulting Company, Inc. (WCC) to design 
and monitor the installation of a new roof.  On WCC’s 
recommendation, Landmark contracted with Potteiger-Raintree, 
Inc. to perform the actual installation.  Despite the addition 
of the new roof, water continued to leak into The Four 
Seasons, and Tony Park again reported this fact to Landmark, 
which referred the matter to WCC.  WCC and Potteiger-Raintree 
took corrective measures to connect a drain and repair 
 
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improperly installed flashing, but intermittent leaks 
continued to occur. 
On the morning of June 26, 2006, following a night of 
record rainfall in Northern Virginia, Tony Park arrived at The 
Four Seasons and immediately noticed an “unbearable stench,” 
and, after turning on the lights, discovered that the entire 
store had been flooded.  The ceiling tiles had fallen in, and 
there was substantial water damage to the store’s inventory.  
Inspectors from Fairfax County visited the store the following 
day, June 27, 2006, and informed Tony Park that because of the 
store’s condition, he would have to close the business 
temporarily. 
Shortly after the flooding, extensive repairs were made 
to The Four Seasons.  Even after the repairs were completed, a 
bad odor remained in the store and much of the inventory was 
not recoverable despite efforts to clean it.  Although The 
Four Seasons briefly re-opened in the late summer and early 
fall of 2006, the store was closed permanently in November 
2006. 
In a complaint filed October 16, 2006 in the Circuit 
Court of Fairfax County, Park sought to recover damages from 
Landmark for breach of its lease obligation to provide a 
serviceable roof and to provide her with the quiet enjoyment 
 
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of the leased premises.  Park asked for $550,000 in 
compensatory damages, principally for the lost inventory. 
At trial, in addition to evidence consistent with the 
above-recited facts, Park presented testimony from Kyong Ho 
Kim, a commercial roof repair expert, who opined that the new 
roof had been improperly installed.  Kim testified that there 
were gaps in the cap flashing where the flashing connected 
with one of the roof’s expansion joints; this gap allowed 
water to flow underneath the roofing surface and into the 
building.  Furthermore, Kim testified that the roof contained 
an insufficient number of drains to accommodate the influx of 
water coming from a higher, larger adjoining roof of a 
department store in the shopping center. 
 
At the conclusion of the evidence, the circuit court held 
that section 25(a) of the parties’ lease required Landmark to 
keep the roof in good repair, regardless of any notice of 
defects.  Thus, despite the fact that Landmark had contended 
that it did not have sufficient notice that the newly 
installed roof would fail, the court ruled that the failure of 
the roof constituted a breach of Landmark’s duties under the 
lease.  The court further held that the provision in section 
16(b) of the lease requiring Park to maintain insurance on 
inventory and the limitation of liability provision in section 
37(c) did not insulate Landmark from being subject to a claim 
 
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for breach of the lease.  The court noted that the lease had 
been drafted by Landmark and, thus, it was Landmark’s burden 
to show that the lease was intended to make Park solely 
responsible for any property loss.  In the court’s view, no 
such intention was found in the express language of the lease.  
The court awarded Park $298,762.56 in damages consisting of 
$282,618.00 for two-thirds of the value of the lost inventory, 
$11,014.50 for certain incidental expenses incurred in 
attempting to mitigate damages, and $5,130.06 as a return on 
the security deposit on the leasehold. 
DISCUSSION 
 
A lease is a contract and “‘when the terms of a contract 
are clear and unambiguous, a court must give them their plain 
meaning.’” Levisa Coal Co. v. Consolidation Coal Co., 276 Va. 
44, 57, 662 S.E.2d 44, 51 (2008) (quoting Pocahontas Mining 
L.L.C. v. Jewell Ridge Coal Corp., 263 Va. 169, 173, 556 
S.E.2d 769, 771 (2002)).  “On appeal, we review a trial 
court’s interpretation of a lease under a de novo standard.”  
Id.  We do not accord any deference to the circuit court’s 
interpretation of the lease “because we are afforded the same 
opportunity as the circuit court to interpret the terms of the 
parties’ contract.”  Pocahontas Mining L.L.C. v. CNX Gas Co., 
LLC, 276 Va. 346, 352, 666 S.E.2d 527, 531 (2008). 
 
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Landmark first contends that the circuit court erred when 
it found Landmark breached the lease by failing to provide a 
leak-free roof.  According to Landmark, the lease required 
Park or another tenant to give Landmark notice of a defect in 
the new roof and that Landmark be given an opportunity to 
remedy the defect before it would be in breach of the lease.  
Landmark contends that any notice it had of defects with the 
new roof was not sufficient to impose liability upon it 
because it took reasonable steps to have the contractor and 
subcontractor remedy the defects, and it had no notice that 
the roof would fail entirely.  We disagree. 
 
Landmark’s contention places too narrow a construction on 
section 25(a) of the lease.  That provision requires Landmark 
to keep the roof “in good repair” at all times during the 
period of the lease.  The further requirement that Landmark 
“make such repairs . . . as are necessary following 
[Landmark’s] knowledge of the necessity of said repairs” is 
not a limitation on the principal duty to provide a 
serviceable, leak-free roof.  The duty to keep the roof in 
good repair would be effectively negated if necessary repairs 
to the roof were only required when Landmark was notified by a 
tenant of defects in the roof. 
 
Moreover, we do not agree with Landmark’s contention that 
by undertaking to replace the roof it could, in effect, shield 
 
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itself from the responsibility of providing a serviceable roof 
unless and until a tenant gave notice that the new roof was 
defective.  To the contrary, maintenance of the roof was in 
the exclusive control of Landmark, and when it undertook to 
replace the roof as part of its responsibility to Park and the 
other tenants in the shopping center, Landmark bore the sole 
responsibility to assure that the new roof would be “in good 
repair” as required by the lease terms.1 
Finally, Landmark asserts that when read together 
sections 16(b) and 37(c) evince an intention of the parties to 
absolve each other of liability for any loss or damage to 
                     
1 We do not address Landmark’s assertion that Park might 
have sought to recover from WCC or Potteiger-Raintree.  Even 
assuming that Park might have maintained an action against the 
contractors as a third-party beneficiary of the contracts with 
Landmark, she was not required to do so, nor would any 
potential liability of the contractors absolve Landmark of its 
duties under the lease.  We also will not consider Landmark’s 
assignment of error contending that the circuit court erred 
“by imputing the arguable negligence of the landlord’s 
independent contractors to the landlord.”  In support of this 
argument, Landmark relies exclusively on cases arising in tort 
against landlords for personal injuries to tenants or invitees 
as the result of the negligence of third-party contractors.  
Park’s complaint was for breach of the lease, thus negligence 
was not an issue in the case.  Moreover, the record does not 
support the contention that the court’s judgment was premised 
on a finding of negligence in the installation of the roof.  
Rather, the court found that the failure of the roof, whether 
by reason of its negligent installation or some other cause, 
was a breach of Landmark’s lease obligation to maintain the 
roof. 
 
 
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property, and that the circuit court ignored these provisions 
by allowing Park to maintain this suit.  Again, we disagree. 
 
Section 16(b) of the lease required Park to maintain 
insurance on her inventory, which she did.  The language of 
this section, however, does not limit either party’s ability 
to bring suit against the other for violations of the lease.  
Similarly, section 37(c) required Park to absolve Landmark 
from any losses she sustained “to the extent of the insurance 
proceeds payable” on such losses.  The plain language of this 
section only prohibits Park from obtaining a double recovery 
on a loss sustained and requires Park to release Landmark from 
any claim of subrogation by her insurer.2 
We agree with the circuit court that had Landmark, as the 
drafter of the lease, desired to be exempt from all liability 
for losses sustained by Park as the result of the common 
hazards to which the property would be subject, it was 
required to express the exemption in the plain language of the 
lease.  See e.g. Nextel WIP Lease Corp. v. Saunders, 276 Va. 
509, 516, 666 S.E.2d 317, 321 (2008) (quoting Parrish v. 
                     
2 During oral argument of this appeal, Park’s counsel 
averred that the judgment included a credit for proceeds from 
the insurance on the inventory.  Application of this credit is 
not reflected in the final order.  However, Landmark has not 
challenged the amount of the judgment by an assignment of 
error and, therefore, we are not concerned in this appeal with 
whether such a credit was owed and applied. 
 
 
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10
Robertson, 195 Va. 794, 800, 80 S.E.2d 407, 410 (1954)) 
(recognizing the principle that a landlord has “the power of 
providing expressly in his favor” when drafting a lease).  
Indeed, a further provision of the lease expressly limited 
Landmark’s liability, stating that “[i]n no event shall 
Landlord be liable to Tenant for loss of business or 
consequential damages.”  Landmark is, in effect, asking the 
Court to find implicit in the lease a term that it could have 
expressly included, but failed to do so.  However, when 
interpreting a contract, we construe it as written and will 
not add terms the parties themselves did not include.  TM 
Delmarva Power, L.L.C. v. NCP of Virginia, L.L.C., 263 Va. 
116, 119, 557 S.E.2d 199, 200 (2002). 
Accordingly, we hold that the circuit court did not err 
in holding that Landmark’s failure to provide a serviceable, 
leak-free roof constituted a breach of its lease with Park and 
that the lease did not absolve Landmark from liability for the 
damage sustained by Park with respect to her inventory. 
CONCLUSION 
 
For the foregoing reasons, the judgment of the circuit 
court will be affirmed. 
Affirmed.