Opinion ID: 2278904
Heading Depth: 1
Heading Rank: 6

Heading: Radius Restriction As Applied To Golden Ring Mall Store

Text: As we have observed, Articles 8(A) and 4(G) of the Sam's Club lease permitted Sam's Club to discontinue the operation of its Diamond Point Plaza store, although if it did so, it would remain liable for the basic rent due under the lease throughout the term of the lease. Subject to other provisions of the lease, including Article 4(H), Article 4(G) also permitted Sam's Club to operate stores in other locations which are in competition with its Diamond Point Plaza store. The caveat in Article 4(H) was that Sam's Club shall not, during the term of this lease, own, operate. manage or have any financial interest in, any store or business located within a radius of seven (7) miles from the Shopping Center and similar to that then being conducted upon the demised premises. It is undisputed that Wal-Mart began making plans to relocate the Sam's Club Diamond Point store in 1998, that it ultimately approved Golden Ring Mall as the new site, that it began construction of a store there in or about 2000, that it closed the Diamond Point Plaza store on July 31, 2002, that it opened the Golden Ring Mall store the next day, August 1, 2002, and that the Golden Ring Mall store was well within a seven-mile radius from the Diamond Point Plaza shopping center. The question, presented to the Circuit Court in cross-motions for partial summary judgment, is whether the construction and operation of the Golden Ring Mall store constituted a violation of Article 4(H). [6] Wal-Mart, stressing the language and similar to that then being conducted upon the demised premises, took the position that there was no violation, because that language limited the restriction to a situation where the Diamond Point Plaza store and the second store were in simultaneous operation, which was never the case here. Wells Fargo, focusing more on the prohibition against owning, operating, or managing another store or business during the term of this lease, urged that the restriction applied to any such store or business at any time during the term of the Diamond Point Plaza lease, regardless of whether the Diamond Point Plaza store remained in operation. On January 10, 2005, the court, agreeing with Wal-Mart, granted its motion. The court concluded that the provision was unambiguous and that it required both stores to be operating simultaneously. It continued that, unless the doors of both locations were open for business and customers were being served simultaneously, then and only then would the radius restriction have been violated. The Court of Special Appeals disagreed with that determination, at least as a matter of law. It held that the language of Article 4(H) was ambiguous, that a dispute existed as to the material fact as to whether maintenance of a presence at both locations constituted ownership, etc. in any store similar to that being conducted. Wells Fargo v. Diamond Point, supra, 171 Md.App. at 102, 908 A.2d at 703. The appellate court added that Wells Fargo, in our view, presented sufficient facts to demonstrate ambiguity as to whether a breach only occurred if there were competing businesses at the two locations. Id. We have stated the relevant rules of contract interpretation many times. Just recently, in United Services v. Riley, 393 Md. 55, 79, 899 A.2d 819, 833 (2006), we confirmed that [c]ontract interpretation, including the determination of the ambiguity of a contract, is a question of law and subject to de novo review. A contract is ambiguous if, when read by a reasonably prudent person, it is susceptible of more than one meaning. Id. at 80, 899 A.2d at 833, quoting Calomiris v. Woods, 353 Md. 425, 436, 727 A.2d 358, 363 (1999). A contract is not ambiguous simply because, in litigation, the parties offer different meanings to the language. It is for the court, supposing itself to be that reasonably prudent person, to determine whether the language is susceptible of more than one meaning. Determining whether contractual language is susceptible of more than one meaning requires an examination of `the character of the contract, its purpose, and the facts and circumstances of the parties at the time of execution.' United Services v. Riley, supra, 393 Md. at 80, 899 A.2d at 833, quoting Calomiris, 353 Md. at 436, 727 A.2d at 363. If, to the court, the language is unambiguous, the court must give effect to its plain meaning and [] not contemplate what the parties may have subjectively intended by certain terms at the time of formation. Cochran v. Norkunas, 398 Md. 1, 16, 919 A.2d 700, 709 (2007). In construing contractual language, including for the purpose of determining whether ambiguity exists, effect must be given to each clause so that a court will not find an interpretation which casts out or disregards a meaningful part of the language of the writing unless no other course can be sensibly and reasonably followed. Cochran, 398 Md. at 17, 919 A.2d at 710, quoting Sagner v. Glenangus Farms, 234 Md. 156, 167, 198 A.2d 277, 283 (1964). Applying these precepts, we agree with the conclusion of the Circuit Court that there is no ambiguity in the language of Article 4(H) and that its plain intent and meaning is to prohibit Sam's Club, while operating a store in the leased premises at Diamond Point Plaza, from simultaneously owning, managing, or operating another similar store within seven miles from that shopping center. A reasonably prudent person could reasonably find the language susceptible of the meaning ascribed to it by Wells Fargo only if the ending phrase were not part of it  if it simply prohibited Sam's Club, during the term of the lease, from owning, managing, or having a financial interest in a store or business located within a radius of seven miles from the Diamond Point Plaza shopping center. Then, the prohibition would be broad, clear, and absolute: any store or business would be precluded for the entire duration of the lease, regardless of whether a Sam's Club store at Diamond Point Plaza was operational. That is not what the contract says, however. The prohibition is clearly limited. What is precluded is owning, managing, operating, or having a financial interest in a store or business, during the term of the lease, that is similar to that then being conducted upon the demised premises. (Emphasis added). That necessarily requires that there be a store or business presently being conducted at Diamond Point Plaza and that the second store or business within the seven mile radius be similar to it. For the language to be reasonably susceptible to Wells Fargo's construction, that ending phrase, adding the requirement of similarity between the second store and that then being conducted upon the demised premises, would have to be virtually ignored, which our jurisprudence does not allow. [7] The Court of Special Appeals was wrong in declaring Article 4(H) ambiguous and in effectively vacating the partial summary judgment entered by the Circuit Court.