IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-30702

K & B LOUISIANA CORPORATION, doing business as Rite Aid,

 Plaintiff - Appellant

v.

CAFFERY-SALOOM RETAIL, L.L.C.; 

SOUTHWEST PROPERTY MANAGEMENT, INCORPORATED; 

AMERICAN NATIONAL INSURANCE COMPANY, 

 Defendants - Appellees

Appeal from the Unites States District Court

for the Western District of Louisiana

USDC No. 6:16-CV-503

Before CLEMENT, OWEN and HO, Circuit Judges.

PER CURIAM:*

On January 23, 1995, K & B Louisiana Corporation executed a 20-year 

lease with Caffery Center, L.L.C. for commercial retail space inside the Caffery 

Center Shopping Center. A major point of the agreement was the continued 

operation of a Winn-Dixie grocery store at the location to act as an anchor 

tenant and attract business. 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

February 13, 2019

Lyle W. Cayce

Clerk

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2

The companies specified that Winn-Dixie’s occupancy was “part of the 

consideration to induce [K & B] to lease and pay rent for its store.”

Accordingly, the lease stipulated:

Article 2 – Conditions Precedent and Continuing

[S]hould Winn-Dixie fail or cease to operate or lease and pay rent 

for its store in the Shopping Center during the Lease Term as 

hereinafter set out, Lessee shall have the right and privilege of: (a) 

cancelling [sic] this Lease and of terminating all of its obligations 

hereunder at any time thereafter upon written notice by Lessee to 

Lessor, and such cancellation and termination shall be effective 

ninety (90) days after the mailing of such written notice; or (b) 

invoking the privileges of Article 20 herein. (Emphasis added).

The lease further instructed that should Winn-Dixie cease its operations 

and/or lease, Caffery Center had six months to find a replacement prior to 

K & B “invoking its rights and privileges as above.” (Emphasis added). 

However, should Caffery Center’s efforts fail, the lease permitted K & B to pay 

half the rental amount until the breach was cured. Specifically, the lease 

stated: 

Article 20 – Default

Without in any way waiving, limiting, or restricting Lessee’s other 

remedies or options contained in this Lease, in the event of a violation of 

or the failure to Lessor or anyone else to observe the terms hereof, the 

monthly basic rental . . . shall be payable at half of the stipulated amounts

therein stated for the period from the date of such default until Lessor 

cures any such violation or failure to observe the said provisions, which 

reduction shall be considered as liquidated damages for the periods 

during which any such violation may have existed. (Emphasis added).

The parties dispute whether these provisions required K & B to affirmatively 

invoke its options under Article 20, or whether the half-rent provision was 

triggered automatically six months after the breach occurred.

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Sometime between June 21, 2000, and February 28, 2005, Winn-Dixie 

vacated its store-front and stopped paying rent. Although a comparable

grocery store never took its place, K & B continued to pay the full rental rate

throughout the lease term.

K & B did not act on its privileges and rights until December 17, 2015, 

when it sent a letter, through counsel, to the property manager, Southwest 

Property Management, Inc, declaring it and the parties to the lease in default. 

The letter stated that K & B was invoking its Article 20 remedies and 

demanded “the return of half of the total rental it paid during this period as 

liquidated damages.” 

On March 9, 2016, K & B filed suit in state court. The petition named

Southwest Property Management, Inc. as a defendant, along with American 

National Insurance Company and Caffery-Saloom Retail, L.L.C. Defendants 

removed the case to federal court by means of diversity jurisdiction. Then, 

after a period of discovery, they filed two separate motions for summary 

judgment. The motions argued that K & B waived its right to overpayment 

and that its attempts to recoup its losses exceeded the ten-year prescriptive 

period. 

K & B opposed the motions and filed one of its own. It contended that 

the half-rent provision in Article 20 took effect automatically and that the 

company thus possessed a claim under Art. 2299 of the Louisiana Civil Code, 

because Defendants had “received a payment or a thing not owed” and were 

bound to restore it. LA. CIV. CODE Art. 2299. K & B further contended that 

each installment had its own ten-year prescriptive period, meaning that the 

company could still recover most of the money it had mistakenly surrendered.

The district court granted summary judgment in favor of Defendants. It 

held that the plain language of Articles 2 and 20 demanded that K & B 

specifically invoke its rights before the company could benefit from the reduced 

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rent. Since K & B failed to do so before the ten-year prescriptive period ran 

out, the company could not claim relief under Art. 2299. The district court 

never reached a decision on the alternative issues raised by the moving parties. 

K & B submitted its notice of appeal. 

A grant of summary judgment falls under de novo review. Am. Family 

Life Assur. Co. of Columbus v. Biles, 714 F.3d 887, 895 (5th Cir. 2013) (per 

curiam). We apply the same standard as the district court and view the 

evidence in the light most favorable to the non-moving party. Id. Because our 

jurisdiction is based on diversity of citizenship, the substantive law of 

Louisiana governs our analysis. Nat’l Liability & Fire Ins. Co. v. R & R Marine, 

Inc., 756 F.3d 825, 834 (5th Cir. 2014).

The controversy before us presents a single dispositive question: 

whether the terms of the lease required K & B to specifically invoke its 

privileges in Article 20 for the one-half provision to take effect? 

We agree with the district court. Article 20 must be read in light of 

Article 2. Article 2 provides two options in the event that Winn-Dixie ceases 

to operate at the Shopping Center—K & B can either terminate its lease, or 

“invok[e]” the privileges of Article 20. In light of this language, we construe 

Article 20, in the context of Article 2, to require an affirmative election by 

K & B to invoke its privileges under Article 20. K & B has made no such 

election. Accordingly, K & B has no statutory claim under either the lease or

Art. 2299.1 We therefore affirm the judgment of the district court.

 

1 The parties did not brief whether K & B was entitled to half rental payments for the 

months after it invoked its Article 20 option. We therefore do not address it here. 

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