Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-09-06120/USCOURTS-ca10-09-06120-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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*

 Case No. 09-6120 was submitted on the briefs by the court’s Order, dated

May 4, 2010.

** This order and judgment is not binding precedent except under the

doctrines of law of the case, res judicata and collateral estoppel. It may be cited,

however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th

Cir. R. 32.1.

FILED

United States Court of Appeals

Tenth Circuit

August 24, 2010

Elisabeth A. Shumaker

Clerk of Court

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ROCKWELL ACQUISITIONS, INC.,

an Oklahoma corporation,

Plaintiff-Appellant,

Nos. 09-6065 and 09-6120*

v. (W.D. of Okla.)

ROSS DRESS FOR LESS, INC., a

Virginia corporation,

Defendant-Appellee.

(D.C. No. CV-08-146-F)

ORDER AND JUDGMENT**

Before TYMKOVICH, SEYMOUR, and BALDOCK, Circuit Judges.

Rockwell Acquisitions, Inc., an Oklahoma City shopping center owner,

appeals the district court’s summary judgment in favor of one of its tenants, Ross

Dress for Less, Inc. The dispute concerns a provision of the lease between

Rockwell and Ross that requires certain anchor tenants to occupy the shopping

center and the definition of an anchor tenant. Ross alleges Rockwell violated the

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 The lease executed in 2005 states the tenant’s rent commences 120 days

after the Intended Delivery date of January 9, 2006 (Section 1.4.1 of the Lease).

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required co-tenancy lease provision when it replaced an anchor tenant, Big Lots,

with smaller retailers. As a result, Ross invoked a provision of the lease that

allowed it to pay reduced rent because of the violation. Rockwell in turn claimed

Ross violated the lease in doing so, and the dispute disrupted Rockwell’s planned

sale of the shopping center.

Rockwell sued Ross in Oklahoma state court, alleging breach of contract

and tortious interference with Rockwell’s contract to sell the shopping center to

another developer. Ross removed the suit to the Western District of Oklahoma,

and the district court granted summary judgment in favor of Ross. Rockwell now

appeals the breach of contract and tortious interference rulings, as well as the

assessment of attorneys’ fees. 

Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM.

I. Background

A. The Lease’s Provisions

In January 2005, Ross signed a 10-year lease for retail space with

Rockwell.1

 The lease specifies two rents: (1) a “minimum rent” of $22,593.75 per

month, and (2) a “substitute rent,” defined as two percent of Ross’s gross sales

(assuming that is less than the “minimum rent”). 

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 Section 1.7.1 of the lease uses the singular term for an Anchor Tenant (R.

Vol. 1, p.28) but Rockwell’s Brief in Support of its Response to the Motion for

Summary Judgment erroneously quoted Section 1.7.1 using the plural (R. Vol. 1,

p.334) and mistakenly retained this line of thought in its arguments before the

district court, which granted summary judgment favoring Ross. Rockwell’s

appellate briefing correctly quotes the singular term of an Anchor Tenant (Aplt.

Opening Brief, pp.4, 13) but pluralizes the term when combining two tenants as

Anchor Tenants, avoiding defining each as an Anchor Tenant (id. at p.5).

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The lease also lists “Required Co-Tenants.” The focus of the parties’

dispute is the lease provision defining required co-tenancy, 1.7.1, that states:

At least all of the following three (3) Co-Tenants [or other comparable

replacement Anchor Tenant (as defined below) replacing one (1) or

more of the named Co-Tenants (“Required Co-Tenants”) occupying no

less than ninety percent (90%) of the Required Leasable Floor Area of

the Required Co-Tenant being replaced] occupying no less than

Ninety-percent (90%) of the Required Leasable Floor Area indicated as

follows:

Co-Tenant’s Name Required Leasable Floor Area

(minimum sq. ft.)

(a) Target 113,000

(b) Big Lots 27,000

(c) PetsMart 20,000

An “Anchor Tenant” is a national retailer with at least one hundred

(100) stores or a regional retailer with at least seventy-five (75) stores.2

(emphasis added; brackets in original). If the required co-tenants are not open

and operating during any portion of Ross’s lease, Ross may be entitled to pay the

lower substitute rent.

The lease provides two primary reporting mechanisms by the landlord

concerning occupancy. First, it requires Rockwell to provide to Ross a tenant

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 Rockwell signed a lease with Famous Footwear in March 2006, then with

K&G Men’s Company in April 2006, and began collecting on its lease with Ross

in June 2006, having received Big Lots’s intention to end its lease back in the fall

of 2005. Though this congregate of spring 2006 timing might beg the question of

which of these three tenants might be considered a replacement, this issue was not

briefed nor argued here.

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roster and occupancy report annually, in January or February. Second, Section

6.1.3 of the lease states “Landlord shall promptly notify” Ross if the lease’s

occupancy conditions are not met.

B. Big Lots Vacates, New Stores Move In

In the fall of 2005, Big Lots—a required co-tenant in Ross’s

lease—informed Rockwell of its intent to terminate its lease due to financial

difficulties. On January 31, 2007, Big Lots closed its store in the shopping

center. Three weeks before Big Lots vacated the shopping center, Rockwell sent

Ross the annual tenant roster, which showed Big Lots as a current tenant.

In early 2006—between the time Big Lots notified Rockwell of its intent to

terminate the lease and the time Big Lots actually closed its store—Rockwell

leased other space in the shopping center to Famous Footwear and K&G Men’s

Company.3

 Both Famous Footwear and K&G qualify as national or regional

retailers under Ross’s lease. Combined, Famous Footwear and K&G leased a

space equivalent to 90 percent of the Big Lots store; separately, neither store

occupied 90 percent of Big Lots’s space. Famous Footwear and K&G began

operating in late 2006, before Big Lots closed its store. 

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 Prior to this appeal, Harold’s filed for bankruptcy and vacated the

shopping center.

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After Big Lots closed its store, in June 2007, Rockwell leased part of Big

Lots’s former store to Harold’s. Harold’s occupied less than 90 percent of Big

Lots’s space, and Harold’s did not qualify as a national or regional retailer.4

C. Litigation

Ross continued to pay minimum rent until December 2007. At that time,

Rockwell asked Ross for an estoppel certificate waiving claims against Rockwell

in preparation for the shopping center’s sale. Shortly thereafter, Ross requested a

tenant roster, and within weeks asserted it had overpaid rent because it should

have been paying only the substitute rent from the time Big Lots closed its store

in January 2007. Ross declined to execute the estoppel certificate, and after it

began withholding rent to make up for the claimed overpayment, Rockwell sued.

In its suit, Rockwell alleged Ross breached its lease by refusing to pay the

minimum rent, and Ross’s withholding of rent tortiously interfered with

Rockwell’s sale of the shopping center. Ross moved for summary judgment,

arguing the required co-tenancy provision of the lease unambiguously entitled it

to pay the lower substitute rent because Rockwell had failed to replace Big Lots

with an appropriate required co-tenant. The district court concluded the lease’s

co-tenancy provision required Rockwell to replace Big Lots with one comparable

anchor tenant. Because Rockwell replaced Big Lots with two small tenants

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instead of one large tenant, the co-tenancy requirement was not met, and Ross

was entitled to pay the substitute rent.

The district court consequently granted summary judgment for Ross on

both claims and awarded Ross attorneys’ fees.

II. Discussion

A. Standard of Review

We review the district court’s grant of summary judgment de novo. City of

Herriman v. Bell, 590 F.3d 1176, 1180 (10th Cir. 2010). “Summary judgment is

appropriate if there is no genuine issue of material fact and . . . the moving party

is entitled to judgment as a matter of law. We examine the factual record and

draw all reasonable inferences in the light most favorable to the nonmoving

party.” Id. at 1181 (internal citation and punctuation omitted). 

B. The Required Co-Tenancy Provision

The crux of the appeal is whether the lease’s required co-tenancy provision

mandated that Rockwell replace Big Lots with a “comparable replacement Anchor

Tenant” or allowed Rockwell to replace Big Lots with multiple, smaller tenants. 

This very narrow question turns on a careful parsing of the provision’s text. “A

lease is a contract and in construing a lease, the usual rules for the interpretation

of contractual writings apply. Generally, the terms of the parties’ contract, if

unambiguous, clear, and consistent, are accepted in their plain and ordinary

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sense . . . .” Osprey L.L.C. v. Kelly-Moore Paint Co., 984 P.2d 194, 198 (Okla.

1999). 

To satisfy the co-tenancy provision, Rockwell must fulfill two

requirements: (1) all three of the “named” co-tenants—Target, Big Lots, and

PetsMart—must be open and operating in the shopping center, and (2) the named

co-tenants must occupy at least 90 percent of the specified floor area. If

Rockwell does not fulfill these two requirements, it can still satisfy the cotenancy provision by exercising the “comparable replacement Anchor Tenant”

option. The anchor tenant option has three requirements: the tenant must (1) be

“a national retailer with at least one hundred (100) stores or a regional retailer

with at least seventy-five (75) stores,” (2) “replac[e] one (1) or more of the named

Co-Tenants,” and (3) “occupy[] no less than ninety percent (90%) of the Required

Leasable Floor Area of the Required Co-Tenant being replaced.” Thus, for

example, if a national retailer such as Kohl’s replaced Target, it would have to

occupy at least 90 percent of the 113,000 square feet designated to Target.

Despite the second requirement of the anchor tenant option—that an

“Anchor Tenant . . . replac[e] one (1) or more of the named Co-Tenants”—

Rockwell contends it was allowed to substitute two anchor tenants for one named

co-tenant without at least one of the substitutes satisfying the 90 percent

provision. Rockwell argues a separate provision in the lease, 26.7, modifies the

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plain language of the required co-tenancy provision. Under the heading

“Gender,” 26.7 reads, in full:

Words of gender used in this Lease shall be deemed to include other

genders, and singular and plural words shall be deemed to include the

other, as the context may require.

Rockwell reasons because singular and plural words may include each other,

“Anchor Tenants” (plural) may substitute for “Anchor Tenant” (singular) in the

required co-tenancy provision, and therefore the lease authorized its actions when

it replaced Big Lots with Famous Footwear and K&G.

Rockwell’s argument based on the lease’s gender provision is unavailing. 

More specifically, the gender provision does not require singular and plural nouns

to substitute for each other in the lease’s entirety, but instead “as the context may

require.” (Emphasis added.) The required co-tenancy provision plainly allows a

singular—one— anchor tenant to replace one or more required co-tenants. The

provision’s use of the singular when describing “Anchor Tenant” and a redundant

use of plural when describing co-tenants (“one (1) or more of the named CoTenants”) shows the provision’s language is careful when describing numbers. 

We “will not create an ambiguity by using a forced or strained construction, by

taking a provision out of context, or by narrowly focusing on [a] provision.” 

Osprey, 984 P.2d at 199. A context-specific admonition—buried in another part

of the lease—to read the lease’s gendered and numerated nouns liberally cannot

overcome the unambiguous meaning of the required co-tenancy provision.

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Rockwell’s other textual arguments can be dispensed with briefly. First,

the co-tenancy provision requires “[a]t least all of the following (3) three CoTenants,” be open and operating, and it lists Target, Big Lots, and PetSmart. 

Rockwell reasons that because the co-tenancy provision contemplates there could

be more than three required co-tenants, numerous small anchor stores can replace

a single named co-tenant. This argument is meritless. The number of required

co-tenants is a question separate and apart from how many anchor tenants may

replace each co-tenant—the latter is a textual question addressed to the anchor

tenant option, discussed above.

Second, Rockwell argues an “anchor tenant” is not defined by leaseable

floor space. Therefore, it may replace a named co-tenant with tenants of any size

so long as they meet the anchor tenant definition, i.e., they have the requisite

number of stores regionally or nationwide. Rockwell is correct in one sense: the

co-tenancy provision does not define “anchor tenant” by square footage, instead

relying on whether the tenant has a sufficiently large number of sister-stores in its

chain. If the co-tenancy provision allowed any anchor tenant to replace a named

co-tenant, Rockwell would have a winning argument. But the clause only allows

replacement by an anchor tenant “occupying no less than ninety percent” of the

named co-tenant’s leasable space. Put differently, anchor tenancy is a necessary

but not sufficient condition to a store replacing a named co-tenant: the store must

also occupy the requisite leasable floor space of the departing tenant. Otherwise,

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multiple qualifying Anchor Tenants could share limited space within a single

store.

In sum, the lease’s co-tenancy provision required Rockwell to replace Big

Lots with one anchor tenant occupying at least 90 percent of Big Lots’s space. 

Rockwell did not do so, and therefore it breached the lease agreement.

C. Estoppel 

Rockwell argues even if it did violate the lease, Ross is estopped from

enforcing the required co-tenancy provision because Ross knew of the violation

yet remained silent for months. Oklahoma courts have developed a five-part test

for equitable estoppel claims:

The essential elements of an “equitable estoppel” are: First, there must

be a false representation or concealment of facts. Second, it must have

been made with knowledge, actual or constructive, of the real facts.

Third, the party to whom it was made must have been without

knowledge, or the means of knowledge, of the real facts. Fourth, it

must have been made with the intention that it should be acted upon.

Fifth, the party to whom it was made must have relied on or acted upon

it to his prejudice. The representation or concealment, mentioned, may

arise from silence of a party under imperative duty to speak; and the

intention that the representation or concealment be acted upon may be

inferred from circumstances.

Dixon v. Roberts, 853 P.2d 235, 239 (Okla. App. 1993) (quoting Flesner v.

Cooper, 162 P. 1112, 1112 (Okla. 1917)).

The district court correctly held Ross was not estopped from enforcing the

required co-tenancy provision. Rockwell’s “estoppel by silence” argument fails,

first, because Ross did not have a duty to alert Rockwell to the lease violation. 

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See Sautbine v. Keeler, 423 P.2d 447, 452 (Okla. 1966) (“To constitute estoppel

by silence requires not only opportunity to speak, but also an obligation to

speak.”); Dixon, 853 P.2d at 238 (quoting Lacy v. Wozencraft, 105 P.2d 781, 783

(Okla. 1940)) (estoppel by silence occurs when “a person has been silent on some

occasion when he should have spoken”). The lease places the duty to speak

squarely on Rockwell, requiring Rockwell to “promptly notify” Ross if the

occupancy requirements are not met. Even if we assume Ross knew of the lease

violation prior to its withholding of rent, it did not have a “duty to speak”

required under Oklahoma’s estoppel law, nor was its knowledge a basis for

acquiescence to the breach.

Second, even if Ross somehow had a “duty to speak,” Rockwell’s estoppel

argument still fails because Rockwell was just as aware of the lease terms and

relevant facts as Ross. Not only did Rockwell have actual knowledge and “means

of knowledge” about the lease terms and Big Lots’s vacancy, it had better

knowledge of that information than Ross. Rockwell responds it was not aware of

any lease violation because it did not believe the replacement tenants constituted

a violation. Rockwell, in essence, argues that if it were wrong about interpreting

the lease, it did not have the requisite knowledge of the legal controversy. 

Oklahoma’s estoppel test, however, requires the party arguing for estoppel to lack

“means of knowledge” about “real facts.” Rockwell not only had the ability to

know but actually did know the facts that constitute this legal dispute. 

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Rockwell points to Bowen v. Freeark, 370 P.2d 546 (Okla. 1962), in

support of its estoppel argument. See Aplt. Br. at 27–30. Bowen involved a

purchase option agreement between a lessor and lessees. If the lessor intended to

sell the property, the agreement gave the lessees the right to purchase it from the

lessor at the sale price within 10 days of the lessor’s notice of intent to sell. 

Bowen, 370 P.2d at 548. When the lessor notified the lessees she wanted to sell

the building, the lessees stated they did not want to purchase the building, and

seven days later the lessor sold the building to a third party. Five weeks after the

sale, the lessees attempted to exercise their purchase option. The Supreme Court

of Oklahoma held in favor of the lessor, reasoning that the “plaintiff was in a

position where he was faced with the duty of making known his rights under the

option agreement or remaining silent.” Id. at 550. The lessees remained silent

and consequently were estopped from exercising their option. 

Bowen is distinguishable for two reasons. First, while the party on which

the contractual duty to speak rested, the lessor in Bowen who wanted to sell the

property, actually spoke—Rockwell did not properly inform Ross as the contract

required. After the Bowen lessor informed the lessees of her intent to sell, the

lessees stated they did not want to exercise their option. Likewise, Rockwell

could have informed Ross of the lease breach and Ross could have decided not to

take action—but that did not happen here. Second, Bowen’s purchase option had

a time limit: 10 days after the lessor notified the lessees, the lessees had to

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exercise the purchase option or lose it. The lessees waited approximately 35 days

to attempt to exercise their option. Even assuming—counterfactually— that Ross

was notified by Rockwell about the lease violation, no such contractual time limit

existed for Ross to act.

We affirm the district court’s denial of equitable estoppel. 

D. Additional Discovery under Rule 56(f)

Rockwell also argues the district court made reversible error by failing to

grant it the opportunity to conduct additional discovery under Rule 56 of the

Federal Rules of Civil Procedure. Rule 56(f) requires a party opposing summary

judgment “by affidavit” to move the court for a continuance to allow additional

discovery. FED. R. CIV. P. 56(f); see also Been v. O.K. Indus., 495 F.3d 1217,

1235 (10th Cir. 2007) (“Rule 56(f)’s protection is not absolute, however, as its

protection ‘arises only if the nonmoving party files an affidavit explaining why he

or she cannot present facts to oppose the motion.’”). Rockwell made its Rule

56(f) argument in a footnote in its district court response brief and never filed the

requisite affidavit. Rockwell failed to comply with Rule 56(f), and the district

court correctly denied Rockwell additional discovery.

E. Tortious Interference with the Sale Contract; Attorneys’ Fees

Both Rockwell’s tortious interference claim and its request for attorneys’

fees are derivative of our primary rulings today. The district court was correct to

deny Rockwell’s tortious interference claim because Ross was justified in

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asserting its rights in the lease. The district court’s award of attorneys’ fees is

affirmed because we affirm the district court’s grant of summary judgment for

Ross.

III. Conclusion

For the foregoing reasons, we AFFIRM the district court’s grant of

summary judgment. 

ENTERED FOR THE COURT

Timothy M. Tymkovich

Circuit Judge

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