PAGE 1 – OPINION AND ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

ROSS DRESS FOR LESS, INC.,

Plaintiff,

v.

MAKARIOS-OREGON, LLC, and 

WALKER PLACE, LLC,

Defendants.

Case No. 3:14-cv-1971-SI

OPINION AND ORDER

Thomas V. Dulcich and Rebecca A. Boyette, SCHWABE WILLIAMSON & WYATT, PC, 1211 S.W.

Fifth Avenue, Suite 1900, Portland, OR 97204; Gregory D. Call and Tracy E. Reichmuth, 

CROWELL & MORING, LLP, 275 Battery Street, 23rd Floor, San Francisco, CA 94111. Of 

Attorneys for Plaintiff.

Jeffrey M. Edelson and Molly K. Honoré, MARKOWITZ HERBOLD, PC, 1211 S.W. Fifth Avenue, 

Suite 3000, Portland, OR 97204. Of Attorneys for Defendant Makarios-Oregon, LLC.

Darian A. Stanford and Keith A. Pitt, SLINDE NELSON STANFORD, 111 S.W. Fifth Avenue, Suite 

1940, Portland, OR 97204. Of Attorneys for Defendant Walker Place, LLC. 

Michael H. Simon, District Judge.

This case involves a dispute over a lessee’s obligations at the expiration of two leases—

negotiated with two separate landlords for two conjoined buildings—that have spanned more 

than 50 years. Plaintiff Ross Dress For Less, Inc. (“Ross” or “Plaintiff”) is the successor in 

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interest to the original lessee. Defendants Walker Place, LLC (“Walker Place”) and 

Makarios-Oregon, LLC (“Makarios”) (collectively, “Defendants”) are the successors in interest 

to the original lessors. Walker Place is the owner, lessor, and landlord of the Failing Building, 

located in downtown Portland, Oregon. Makarios is the owner, lessor, and landlord of the 

adjacent Richmond Building. Ross leases the Failing Building from Walker Place under the 1956 

“Failing Lease,” and Ross leases the Richmond Building from Makarios under the 1956 

“Richmond Lease.”1 All parties agree that the Failing and Richmond Leases will expire on 

September 30, 2016, and will not be renewed. A great deal of litigation has already taken place 

in this case, and the Court has issued several decisions concerning the condition in which Ross is 

obligated to return the leased premises, the Failing and Richmond Buildings.

On September 6, 2016, Ross moved for partial summary judgment. The principal 

question raised in Ross’s motion is whether Ross may either enter or continue to remain on the 

premises of the Failing and Richmond Buildings after September 30, 2016, over Defendants’ 

objections, so that Ross may complete its “building separation” obligations needed to surrender 

the premises in the condition required under the leases. For the reasons explained below, the 

Court holds that after the leases expire on September 30, 2016, neither Ross nor its agents may 

enter or continue to remain on the premises of the Failing or Richmond Buildings over the 

objections of Walker Place or Makarios, respectively. Accordingly, Plaintiff’s Motion for Partial 

Summary Judgment Regarding Completion of End-of-Lease Work Pursuant to the Failing and 

Richmond Leases (ECF 219) is denied.

 

1

The Failing and the Richmond Leases have been amended several times in ways not 

relevant to the pending motion.

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BACKGROUND

In December 2014, Ross commenced this lawsuit against Defendants, seeking a judicial 

declaration that Ross’s proposed end-of-lease plans satisfy Ross’s obligations under the relevant 

leases. Walker Place and Makarios both asserted counterclaims for a judicial declaration 

clarifying the extent of Ross’s end-of-lease obligations and for breach of contract. On 

February 1, 2016, all parties filed cross motions for partial summary judgment. After reviewing 

the parties’ submissions and hearing oral argument, the Court issued its decision (ECF 99) on 

March 25, 2016. Ross Dress for Less, Inc. v. Makarios-Oregon, LLC, et al., --- F. Supp. 3d ---, 

2016 WL 1181677 (D. Or. March 25, 2016). Among other things, the Court held that “the leases 

do not require the elimination of shared lateral forces or the creation of a new ‘joint’ or gap 

between the buildings.” Id. at *11. Shortly thereafter, the parties agreed to bifurcate their 

respective claims for declaratory relief (“Phase I”) from Defendants’ breach of contract claims

for damages (“Phase II”). ECF 104.

The Court held a bench trial from May 2 to May 13, 2016, to address the issues raised in 

Phase I. On June 10, 2016, the Court issued its Findings of Fact and Conclusions of Law 

(ECF 213), interpreting the respective leases and describing the required conditions in which 

Ross is obligated to surrender the respective premises at the expiration of the two leases. Ross 

Dress for Less, Inc. v. Makarios-Oregon, LLC, et al., 2016 WL 3360678 (D. Or. June 10, 2016). 

Among other things, the Court held that Ross’s “proposal for a gypsum wall was a cost-cutting 

measure that does not comply with the requirement for masonry curtain walls as provided for in 

the two leases.” Id. at *19.

The Court also held that, among other things: (1) the “leases do not require Ross to slice 

the floors and columns and remove the 19 to 28 inches of concrete between the buildings”;

(2) “[w]ith sufficiently durable exterior walls separating the buildings, the buildings may 

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continue to have conjoined features and yet comply with the intent of the original parties”;

(3) “the 1956 leases require removing the connection between the escalator beams that span the 

property line [and] [t]o the extent that severing the escalator beams requires supporting the 

severed beams in order to ensure the structural integrity of the buildings, the leases require the 

tenant to complete that work”; (4) Ross must maintain and return the third through fifth 

mezzanine floors of the Richmond Building in “good order, condition, and repair” reasonable 

wear and tear excepted; (5) Ross “is obligated to return the [Failing Building’s] sidewalk vaults 

in good order, condition, and repair, reasonable wear and tear excepted”; and (6) Ross “is 

obligated to surrender only the internal portion of the vent stack within the second floor of the 

Failing Building in good order, condition, and repair, reasonable wear and tear excepted.” Id. 

at *20-27. The Court also interpreted the meaning of “good order, condition, and repair, except 

for reasonable wear and tear,” as that phrase is used in the two leases. Id. at *30-31. The Court’s 

Findings of Fact and Conclusions of Law at Phase I were intended by the Court to provide Ross 

with sufficient guidance to be able timely to meet its obligations to surrender the Failing and 

Richmond Buildings in the condition required under the two leases by September 30, 2016, when 

the two leases expire.

STANDARDS

A party is entitled to summary judgment if the “movant shows that there is no genuine 

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine 

dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view 

the evidence in the light most favorable to the non-movant and draw all reasonable inferences in 

the non-movant’s favor. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1257 

(9th Cir. 2001). Although “[c]redibility determinations, the weighing of the evidence, and the 

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drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling 

on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of 

the plaintiff’s position [is] insufficient . . . .” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 

255 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for 

the nonmoving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith 

Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).

DISCUSSION

On September 6, 2016, 24 days before the expiration of the two leases, Ross filed the 

pending motion for partial summary judgment.2ECF 219. In support of its motion, Ross states

that, among other things:

Ross wants to do the work required under the Leases. Since this 

Court issued its Findings of Fact and Conclusions of Law 

(Dkt 213) (the “Order”) regarding Phase I of this litigation, Ross 

has continued to work towards complying with the Leases as 

outlined in the Order, including preparing updated plans and 

submitting those plans for review by the City of Portland. 

However, after having argued that Ross is solely obligated to do 

everything required under “triple net” Leases, including 

maintenance, renovations, and extensive separation work, 

Landlords now seek to block that work. In particular, Landlords 

have expressly stated that (1) they will not consent to the work set 

forth in the plans – despite the fact that the parties have already 

litigated those issues; and (2) they will not permit Ross to have 

access to the Richmond and Failing Buildings to complete the 

work after September 30, despite the fact that the Landlords’

interference both prior to and after the filing of this action has 

made it impossible to complete the work prior to September 30.

ECF 219 (emphasis added). Defendants deny that they have interfered with Ross’s efforts to 

complete its required work, but Defendants agree that they will not permit Ross or its agents to 

have access to the Failing and Richmond Buildings after September 30, 2016. Thus, the principal 

 

2 During a status conference with the Court on August 25, 2016, Ross stated that it 

anticipated filing this motion.

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question to be addressed by the Court in resolving Ross’s motion for partial summary judgment 

is whether, notwithstanding the Defendants’ objections, the respective leases allow Ross and its 

agents to continue to perform end-of-lease “building separation” work at the Failing and 

Richmond Buildings after September 30, 2016. To answer this question, the Court begins with 

the relevant provisions of the respective leases and Oregon law governing the interpretation of 

contracts, including leases.

A. Contract Interpretation Under Oregon Law

In this case based on diversity jurisdiction, Oregon’s substantive law governs. See 

Conrad v. Ace Prop. & Cas. Ins. Co., 532 F.3d 1000, 1004 (9th Cir. 2008) (noting in a case 

involving contract interpretation that “[b]ecause federal jurisdiction in this case is based on 

diversity of citizenship, we apply the substantive law of the state”). In addition, because the 

resolution of the parties’ dispute turns upon the interpretation of the parties’ leases, ordinary 

principles of contract interpretation apply. Harold Schnitzer Props. v. Tradewell Grp., Inc., 104 

Or. App. 19, 23 (1990) (“Oregon treats a commercial lease as a contract and, in the absence of a 

provision in the lease to the contrary, ordinary contract principles apply.”).

Under Oregon law, the “central issue” in interpreting a lease is “the intent of the parties 

at the time of the execution of the lease.” Stark St. Props., Inc. v. Teufel, 277 Or. 649, 658 (1977)

(emphasis added); see also Pauma Band of Luiseno Mission Indians of Pauma & Yuima 

Reservation v. California, 813 F.3d 1155, 1165 (9th Cir. 2015) (“‘The fundamental goal of 

contract interpretation is to give effect to the mutual intent of the parties as it existed at the time 

of contracting.’ This fundamental axiom is widely accepted and uncontested.”) (citation omitted) 

(emphasis in original).

The leading case in Oregon on contract interpretation continues to be Yogman v. Parrott, 

325 Or. 358 (1997). In Yogman, the Oregon Supreme Court established a three-step process for 

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interpreting a disputed contractual provision. First, the court must determine whether, as a matter 

of law, the disputed provision is ambiguous. Id. at 361. A contractual provision is ambiguous if it 

can “reasonably be given more than one plausible interpretation.” Williams v. RJ Reynolds 

Tobacco Co., 351 Or. 368, 379 (2011). “The court must, if possible, construe the contract so as 

to give effect to all of its provisions.” Id. Further, when construing a contract provision, the court 

is advised “not to insert what has been omitted, or to omit what has been inserted.” Or. Rev. Stat. 

(“ORS”) § 42.230; see also Yogman, 325 Or. at 361 (citing ORS § 42.230 at step one of the 

Yogman analysis). 

The analysis ends if the meaning of the provision is clear from the text and context of the 

contract. Williams, 351 Or. at 379-80. The court then applies the contractual term to the facts. 

See Yogman, 325 Or. at 361. If the provision is ambiguous, however, the court proceeds to the 

second step. Id. at 363. At the second step, the trier of fact examines extrinsic evidence of the 

contracting parties’ intent and construes the disputed contractual provision consistent with that 

intent, if such a resolution can be determined. Id. Oregon follows the objective theory of 

contracts, and relevant evidence at step two may include actual “manifestations of intent, as 

evidenced by the parties’ communications and acts.” Holdner v. Holdner, 176 Or. App. 111, 120 

(2001) (quotation marks omitted). If, after examining extrinsic evidence, the contract is still 

ambiguous, the court applies appropriate maxims of construction at the third step. Yogman, 326 

Or. at 364. 

Oregon courts have generally held that summary judgment is inappropriate when the trial 

court finds an ambiguity at step one of the Yogman analysis. See, e.g., Dial Temp. Help Serv., 

Inc. v. DLF Int’l Seeds, Inc., 255 Or. App. 609, 611 (2013) (the “general rule” is that the 

meaning of a contract may be disposed of by way of summary judgment only if its terms are 

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unambiguous); PGF Care Ctr., Inc. v. Wolfe, 208 Or. App. 145, 151 (2006) (“Disputes over the 

meaning of a contract provision may not be disposed of by summary judgment if the provision is 

ambiguous.”). Oregon courts have, however, also clarified that “it [is] not the ambiguity of the 

contract that render[s] summary judgment inappropriate, but that the ambiguity represent[s] a 

dispute over a genuine issue of material fact.” Dial, 255 Or. App. at 611. 

Thus, there exist “at least two circumstances in which the ‘general rule’ [that summary 

judgment is inappropriate after step one of Yogman] does not apply.” Id. at 612. Yogman itself 

recognizes the first of these circumstances. Summary judgment may be appropriate after step one 

of the Yogman analysis if “[t]he parties agree that no additional evidence of the contracting 

parties’ intent is available beyond what is in the summary judgment record.” Yogman, 325 Or. 

at 364. “[W]hen there is no relevant extrinsic evidence to resolve the ambiguity[,] . . . the court 

can, on summary judgment, determine the contract’s meaning by applying appropriate maxims 

of construction.” Madson v. W. Or. Conf. Ass’n of Seventh-Day Adventists, 209 Or. App. 380, 

389 n.3 (2006) (citing Yogman). Thus, summary judgment is appropriate if “despite the 

ambiguity, no genuine issue of material fact remain[s] to be tried.” Dial, 255 Or. App. at 612. 

The second circumstance arises when “the party that b[ears] the burden of presenting evidence to 

establish the existence of a genuine issue of material fact has failed to do so.” Id.

B. The Relevant Provisions of the Failing and Richmond Leases

1. The 1956 Failing Lease

At paragraph (f) under the heading “Lessee’s covenants,” the 1956 Failing Lease 

provides that the Lessee covenants and agrees:

(f) That it will at the expiration of the term hereof, or at the 

earlier termination of this lease surrender the premises to the 

Lessors or those having their estate therein in the same condition 

as that in which the Lessee is, by the terms of this lease, obligated 

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to put the premises, reasonable use and wear thereof, and damage 

due to fire, alone excepted.

ECF 61-2 (emphasis added). In addition, under the heading “Severance,” the 1956 Failing Lease 

provides in relevant part:

The Lessee agrees that, prior to the expiration of this lease or, in 

the event of termination of this lease for any reason whatsoever, 

promptly after such termination, it will at its sole cost and 

expense do and perform such work as shall be necessary to 

physically separate, and constitute entirely independent and selfsufficient, the demised premises from the adjacent “Richmond 

Building” premises. . . .

Id. (emphasis added). The Court generally refers to this Severance provision as Ross’s “building 

separation” obligation under the Failing Lease.

2. The 1956 Richmond Lease

Article 16 of the 1956 Richmond Lease is captioned “Surrender of Premises.” It contains 

two parts, Section 16.01 and Section 16.02. In Section 16.01, the Richmond Lease provides in 

relevant part:

The Tenant shall, upon the expiration or termination of this 

lease for any reason whatsoever, surrender to the Landlord the 

buildings, structures and building equipment then upon the 

demised premises, together with all alterations and replacements 

thereof then on the demised premises, in good order, condition and 

repair, except for reasonable wear and tear; provided, however, 

that if the Tenant shall have made any alteration or alterations 

adapting the buildings, structures and building equipment upon the 

demised premises for multiple occupancy, then, in such event, 

prior to the expiration or termination of this lease, the Tenant, at 

the Landlord’s request, shall restore said buildings, structures and 

building equipment to the order and condition which existed prior 

to such alteration or alterations. . . .

ECF 61-1 (emphasis added). In Section 16.02, this lease provides:

The Tenant agrees that, prior to the expiration of this lease or, in 

the event of termination of this lease for any reason whatsoever, 

promptly after such termination, the Tenant, at the Tenant’s sole 

cost and expense, shall make such alterations to the building 

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PAGE 10 – OPINION AND ORDER

then erected on the demised premises as shall be necessary to 

constitute such building an entirely independent and selfsufficient structure. Such alterations shall include, without in any 

way limiting the generality of the foregoing, the removal of 

escalators, the construction of footings and a masonry curtain wall 

along the westerly boundary line of the demised premises, the 

removal of any facing encroaching upon adjoining premises, the 

removal of signs, the relocation of plumbing, drain pipes, 

sprinklers, electrical wiring, lighting fixtures and exhaust ducts, the 

installation of a new soil connection to the city sewer, a new steam 

connection and new electrical service conduits and equipment and 

provision for a new toilet and rest room. The provisions of this 

Section 16.02 shall survive the expiration or any termination of 

this lease.

Id. (emphasis added). The Court generally refers to Section 16.02 as Ross’s “building 

separation” obligation under the Richmond Lease.

C. The Parties’ Arguments

1. Plaintiff’s Position

The first premise of Ross’s argument is that under both the Richmond Lease and the 

Failing Lease, expiration is a form, or type, of termination. Ross identifies several provisions in 

each lease to support this conclusion. Section 9.03 of the Richmond Lease provides the strongest 

support for Ross’s position. That section provides, in relevant part:

All alterations made by the Tenant shall immediately be and 

become part of the realty and the sole and absolute property of the 

Landlord and shall remain upon and be surrendered with the 

demised premises at the expiration or other termination of this 

lease.

ECF 61-1 (emphasis added). Ross argues that the word “other,” which modifies the word 

“termination,” would be unnecessary—and even inappropriate—unless expiration is a type of 

termination under this lease. In addition, Section 6.02 of the Richmond Lease provides, in 

relevant part:

The Tenant covenants and agrees to pay, and to indemnify the 

Landlord against, all legal costs and charges, including counsel 

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fees, lawfully and reasonably incurred in obtaining possession of 

the demised premises after default of the Tenant or upon 

expiration or earlier termination of the demised term, or in 

enforcing any covenant or agreement of the Tenant herein 

contained.

ECF 61-1 (emphasis added). Ross also argues that the word “earlier,” which modifies the word 

“termination,” would be unnecessary unless expiration is a type of termination under the 

Richmond Lease.

Ross makes a similar argument concerning the Failing Lease at paragraph (f) of the 

section captioned “Lessee’s covenant’s.” In relevant part, paragraph (f) provides that “at the 

expiration of the term hereof, or at the earlier termination of this lease,” the lessee shall surrender 

the premises to the Lessors. Again, Ross argues that the word “earlier,” which modifies the word 

“termination,” would be unnecessary unless expiration is a type of termination under the Failing 

Lease.

In support of its argument, Ross relies on the principle of contract interpretation under 

Oregon law that provides when construing a contract provision, the court is “not to insert what 

has been omitted, or to omit what has been inserted.” ORS § 42.230; see also Yogman, 325 Or. 

at 361 (citing ORS § 42.230 at step one of the analysis). Ross argues that the Court should not 

ignore, or omit, the words “other” or “earlier” when construing the Richmond and Failing 

Leases.

For the second premise of its argument, Ross begins with the text of Section 16.02 of the 

Richmond Lease. The relevant text provides:

The Tenant agrees that, prior to the expiration of this lease or, in 

the event of termination of this lease for any reason whatsoever, 

promptly after such termination, the Tenant, at the Tenant’s sole 

cost and expense, shall make such alterations to the building then 

erected on the demised premises as shall be necessary to constitute 

such building an entirely independent and self-sufficient 

structure. . . .

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ECF 61-1 (emphasis added). Building on the first premise, Ross asserts that an event of 

termination under this section could include expiration. Ross then notes that the clause “for any 

reason whatsoever” modifies “event of termination,” which Ross argues further supports its 

conclusion that expiration could be an event of termination.

From these two premises, Ross concludes that Section 16.02 of the Richmond Lease, 

which allows Ross to complete its building separation obligations described in that section 

“promptly after such termination,” must be read as allowing Ross to complete its building 

separation obligations “promptly after” the expiration of the lease. In other words, Ross asserts, 

it may complete its Section 16.02 building separation obligations in the Richmond Building 

“promptly after” the Richmond Lease expires on September 30, 2016.

Ross reaches the same conclusion under the Failing Lease. Under the heading 

“Severance,” the Failing Lease states, in relevant part:

The Lessee agrees that, prior to the expiration of this lease or, in 

the event of termination of this lease for any reason whatsoever, 

promptly after such termination, it will at its sole cost and 

expense do and perform such work as shall be necessary to 

physically separate, and constitute entirely independent and selfsufficient, the demised premises from the adjacent “Richmond 

Building” premises.”

ECF 61-2. Thus, according to Ross, under the Failing Lease, Ross may complete its building 

separation obligations in the Failing Building “promptly after” the Failing Lease expires on 

September 30, 2016.

2. Defendants’ Position

Both Walker Place and Makarios respond that Ross’s interpretation of the words 

“expiration” and “termination” renders unnecessary, or meaningless, the phrase “prior to the 

expiration of this lease,” as that phrase is found both in the Severance provision in the Failing 

Lease and in Section 16.02 of the Richmond Lease. Defendants argue that it would be 

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meaningless for either lease to include a requirement that Ross, as Lessee or Tenant, complete

the required building separation work prior to the expiration of the lease if the lease also 

permitted the Lessee or Tenant, at its option or election, instead to complete that same building 

separation work “promptly after” any termination, including expiration. 

If Ross’s interpretation of the two leases were correct, according to Defendants, the 

relevant leases would simply require the Lessee or Tenant to complete the required building 

separation work not later than promptly after the termination of the lease. As was the case in 

Ross’s argument, Walker Place and Makarios rely upon that aspect of Oregon’s law of contract 

interpretation that provides that the court is not “to omit what has been inserted.” ORS § 42.230.

Defendants argue that if Ross’s interpretation of the leases were accepted, the effect would be to 

omit (or render meaningless) the clause “prior to the expiration of this lease” that is contained in 

each lease. Because a court should not interpret a contract in such a way that omits or renders 

meaningless a term or phrase in the contract, Defendants argue, Ross’s proposed interpretation of 

the leases should be rejected.

Walker Place and Makarios instead urge the Court to interpret the Severance provision in 

the Failing Lease and Section 16.02 in the Richmond Lease as reading, in essence, that the 

Lessee or Tenant must complete the required building separation work either before the 

expiration of the lease or, if the lease terminates before expiration, then promptly after such 

termination. In other words, both Ross and Defendants interpret the word “expiration” in its 

normal and ordinary fashion and agree that the two leases expire on September 30, 2016. 

Defendants, however, contrary to Ross, interpret the word “termination” as used in the two 

leases as referring to a termination that occurs before expiration. Thus, Defendants’ 

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interpretation excludes any definition of “termination” that results in expiration being a type of 

termination.

As discussed previously, Ross argues that Defendants’ construction is inappropriate 

because it inserts “what has been omitted,” in violation of ORS § 42.230. Ross also argues that 

Defendants’ construction would render meaningless the “Survival Clause” that appears in both 

leases. The final sentence in Section 16.02 in the Richmond Lease states, “The provisions of this 

Section 16.02 shall survive the expiration or any termination of this lease.” The final sentence in 

the Severance provision of the Failing Lease similarly states, “The provisions of this section 

shall survive the expiration of [sic] [or] termination of this lease.”

Both leases envision the possibility of termination before expiration. In such an event, 

both leases require the Lessee or Tenant to complete its building separation obligations promptly 

after such termination. To that extent, when the Survival Clause uses the word “termination,” it 

is not meaningless or unnecessary under Defendants’ construction. It is needed precisely in case 

the lease terminates before expiration and the Lessee or Tenant did not complete its building 

separation obligations promptly thereafter.

Ross, however, argues that under Defendants’ construction, the word “expiration” is 

meaningless or unnecessary in the Survival Clause. Ross argues that if lease expiration is the 

final date for the Tenant or Lessee to complete its building separation obligations, there would be 

no need for a “Survival Clause.” According to Ross, if the Tenant or Lessee has completed its 

building separation obligations by the time of lease expiration, there is nothing that needs to 

“survive.” If, however, the Tenant or Lessee has not completed its building separation 

obligations by the time of lease expiration, Ross argues, there is already a breach of contract 

under Defendants’ construction, and there is again nothing that needs to “survive” because a 

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party may always sue for damages caused by a breach of contract even without a “Survival 

Clause.” Defendants respond by arguing, among other things, the Survival Clause in the 

Severance and Section 16.02 may have been the consequence of a cautious draftsperson wanting 

to preserve the possibility of the Landlords being able to request specific performance.

The Court need not resolve this particular point, in part because Ross’s argument appears 

to “prove too much.” Under Ross’s construction that “expiration” is a form of “termination,” the 

use of the word “expiration” in the “Survival Clause” becomes unnecessary. If Ross’s 

construction were correct, it would be sufficient for the Survival Clause in the Richmond Lease 

simply to read: “The provisions of this Section 16.02 shall survive any termination of this lease,” 

and similarly for the Failing Lease. Thus, Ross’s construction renders meaningless or 

unnecessary the words “the expiration or” as found in the Survival Clause, yet this would violate 

Oregon’s rules of construction. Indeed, if Ross’s construction of “expiration” as a type of 

“termination” were accepted, that would render every instance in the two leases that uses both 

words together unnecessary because “expiration” could have been deleted and “termination” 

used by itself in all places.

D. Analysis

It appears that the maxim of contract construction stated in ORS § 42.230 will be violated 

whichever interpretive path the Court chooses. That statute advises the Court “not to insert what 

has been omitted, or to omit what has been inserted.” If Defendants’ construction of “expiration” 

and “termination” were accepted, it would appear that the Court would be omitting, ignoring, or 

rendering meaningless several instances of the words “earlier” or “other” as found in the leases. 

On the other hand, if Plaintiffs’ construction of “expiration” and termination” were accepted and 

expiration were considered to be a type of termination, it would appear that the Court would be 

omitting, ignoring, or rendering meaningless numerous instances of the word “expiration” as 

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well as other phrases in the leases. If expiration were a type of termination, it would be 

unnecessary to use “expiration” in the leases because simply using “termination” in all places 

would suffice. Thus, the Court finds that the terms “expiration” and “termination” are ambiguous 

as they are used in the Failing and Richmond Leases. The Court further finds that adherence to 

the interpretive maxim set forth in ORS § 42.230 will not resolve the dispute over how to 

interpret the text “promptly after termination” as contained in the Severance provision of the 

Failing Lease and in Section 16.02 of the Richmond Lease. See generally Antonin Scalia and 

Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 59 (2012) (stating Canon 3 as 

“No canon of interpretation is absolute. Each may be overcome by the strength of differing 

principles that point in other directions.”).3

No party has cited any extrinsic evidence relevant to the pending dispute or even 

indicated the likelihood that any such extrinsic evidence exists. Thus, there is no genuine issue of 

fact that requires resolution at step two of Yogman. See Madson, 209 Or. App. at 389 n.3 

(“[W]hen there is no relevant extrinsic evidence to resolve the ambiguity[,] . . . the court can, on 

summary judgment, determine the contract’s meaning by applying appropriate maxims of 

construction”) (citing Yogman). Thus, the Court turns to step three of Yogman.

 

3

Even if the Court were to interpret the leases as Ross urges, the relevant text in both 

leases only allows Ross to complete the necessary building separation work “promptly after such 

termination.” ECF 61-1 and 61-2. The adverb “promptly” means “in a prompt manner; at once; 

immediately; quickly.” Webster’s Third New International Dictionary 1816 (2002). During oral 

argument, Ross explained that its building separation work in the Richmond and Failing 

Buildings might not be completed until December 2016 or even sometime in 2017. Whether such 

a timeframe would satisfy the requirement that such work be completed “promptly” after 

September 30, 2016, raises an additional issue of contract interpretation. In light of the Court’s 

ruling on the pending motion, however, the Court need not resolve that issue.

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PAGE 17 – OPINION AND ORDER

The maxim of construction that appears to be the most applicable, and the one that 

appears to be the most capable of breaking the logjam, is found at ORS § 42.260. That statute 

provides, in relevant part:

When different constructions of a provision are otherwise equally 

proper, that construction is to be taken which is most favorable to 

the party in whose favor the provision was made.

ORS § 42.260. See Copeland Sand & Gravel, Inc. v. Estate of Dillard, 267 Or. App. 791, 799 

(2014) (applying ORS § 42.260 to resolve an ambiguity by accepting the construction of a 

provision that is most favorable to the party in whose favor the provision was made); see also 

Heine v. Bank of Oswego, 144 F. Supp. 3d 1198, 1214-15 (D. Or. 2015) (same).

Both the Severance provision in the Failing Lease and Section 16.02 in the Richmond 

Lease require the Lessee or Tenant, upon the expiration or termination of the respective lease, to 

perform certain building separation work as directed in those provisions. Moreover, those 

provisions also direct that this work shall be done at the Lessee’s or Tenant’s “sole cost and 

expense.” There is no benefit, apart from fulfilling its contractual obligation, that could possibly 

accrue to the Lessee or Tenant from performing this work at the Lessee’s or Tenant’s sole 

expense upon the expiration or termination of the lease. Thus, both the Severance provision in 

the Failing Lease and Section 16.02 in the Richmond Lease are provisions made in favor of the 

building owners or landlords, namely Defendants. Because ORS § 42.260 advises the Court, 

when confronted with equally proper but incompatible constructions, to select the version that is 

most favorable to the party in whose favor the disputed provision was made, Defendants’ 

construction prevails.

Ross, however, argues that Ross is the party in whose favor the ambiguous provision was 

made. Ross asserts that both the Severance provision and Section 16.02 give Ross the option to 

complete its building separation work either before lease expiration or promptly after lease 

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PAGE 18 – OPINION AND ORDER

termination. Thus, according to Ross, because the provision gives Ross the choice, the provision 

must have been made in favor of Ross and, thus, Ross’s construction should prevail.

Ross, however, has committed the logical fallacy of circular reasoning, or “begging the 

question,” where the conclusion simply assumes the answer. The “proof” in a circular argument 

is not a conclusion that is logically drawn from the premises of the argument. Instead, the 

conclusion is derived from a premise that assumes the conclusion.

The fallacy of “begging the question” or “circular argument,” more formally known as 

the fallacy of petitio principii (literally, assuming the initial point), results from assuming in the 

premises that which is sought to be proven in the conclusion. As explained in PAUL BOSANAC,

LITIGATION LOGIC: A PRACTICAL GUIDE TO EFFECTIVE ARGUMENT (2009):

Circular argument, circular reasoning, petition principii, vicious 

circle—each is another name for begging the question.

One way to recognize this argument is to focus on the proof for the 

asserted conclusion. Has independent evidence sufficient to 

establish the conclusion been demonstrated? Or, has there merely 

been a reassertion or restatement of the conclusion, using other 

words, presumed to be true, to describe the conclusion? Isolating 

proof from the conclusion is not always a simple task.

Id. at 293; see generally RUGGERO J. ALDISERT, LOGIC FOR LAWYERS: A GUIDE TO CLEAR LEGAL 

THINKING, 201-07 (1989); Roberts v. Legacy Meridian Park Hosp., Inc.., 97 F. Supp. 3d 1245, 

1252 (D. Or. 2015) (explaining the logical fallacy of circular reasoning).

Ross is assuming that its construction of the contractual provision in dispute is correct, 

which would then allow Ross the option of completing its building separation work either before 

September 30, 2016, or promptly thereafter. Based upon this assumption, Ross concludes that the 

disputed provision must have been made in favor of Ross. Therefore, argues Ross, because the 

disputed provision was made in favor of Ross, its construction of the disputed provision, rather 

than Defendants’ construction, should be accepted by the Court. The circular reasoning evident 

Case 3:14-cv-01971-SI Document 235 Filed 09/27/16 Page 18 of 19
PAGE 19 – OPINION AND ORDER

in Ross’s argument is that its premise assumes that Ross’s construction, and not Defendants’ 

alternative construction, should be accepted. If the Court assumes neither Ross’s construction nor 

Defendants’ construction, but simply looks to the nature of the work required under the 

Severance provision and Section 16.02, including who must pay for that work, the only 

reasonable conclusion that may be drawn is that those provisions were made for the benefit of 

the owners or landlords of the buildings, namely Defendants.

In ORS § 42.260, the Oregon legislature provides a fair mechanism for resolving a tie 

between two equally proper but incompatible constructions of a disputed contractual provision. 

The rule provides, in essence, that a tie goes to the runner. In this case, the runners are 

Defendants, Walker Place and Makarios.

CONCLUSION

Plaintiff’s Motion for Partial Summary Judgment Regarding Completion of End-of-Lease 

Work Pursuant to the Failing and Richmond Leases (ECF 219) is DENIED. Walker Place, 

LLC’s Motion in the Alternative for Appointment of Special Master (ECF 217) is DENIED AS 

MOOT.

IT IS SO ORDERED.

DATED this 27th day of September, 2016.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge

Case 3:14-cv-01971-SI Document 235 Filed 09/27/16 Page 19 of 19