Court Opinion

ID: 801665
Source: CourtListenerOpinion
Date Created: 2012-06-05 20:11:26+00
Date Added: 2024-06-11T18:00:01.186505
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             JUN 05 2012

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

PLAZA 75 SHOPPING CENTER, LLC, a                 No. 11-15298
Delaware limited liability company,
                                                 D.C. No. 2:10-cv-00592-DGC
              Plaintiff - Appellant,

  v.                                             MEMORANDUM *

BIG LOTS STORES INCORPORATED,
an Ohio corporation,

              Defendant - Appellee.

                   Appeal from the United States District Court
                            for the District of Arizona
                   David G. Campbell, District Judge, Presiding

                        Argued and Submitted May 18, 2012
                             San Francisco, California

Before: CLIFTON and N.R. SMITH, Circuit Judges, and SELNA, District Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable James V. Selna, District Judge for the U.S. District
Court for the Central District of California, sitting by designation.
      Plaza 75 Shopping Center, LLC (“Plaza 75”) appeals the district court’s

entry of summary judgment. We have jurisdiction under 28 U.S.C. § 1291, and we

affirm.

      Section 3.C (the “kickout” provision) of the lease agreement states:

      Kickout: Any other provision of this Lease to the contrary
      notwithstanding, if Tenant’s annual Gross Sales (as hereinafter
      defined) for the Demised Premises during the fifth (5th) year of the
      Term (i.e., the 49th through 60th months of the Term) does not exceed
      Three Million Five Hundred Thousand and no/100 Dollars
      ($3,500,000.00), then Tenant may terminate this Lease, by giving to
      Landlord no less than one hundred twenty (120) and no more than two
      hundred seventy (270) days’ written notice of termination within one
      hundred twenty (120) days following the end of the 60th month of the
      Term. In the event Tenant fails to timely deliver such notice, Tenant
      shall have no further right to terminate this Lease pursuant to this
      Section 3.C.

By subsequent letter agreement, the parties agreed that the kickout notification

must be given between June 1, 2008 and October 28, 2008.

      Neither party disputes that Big Lots Stores Incorporated’s (“Big Lots”) fifth

year gross sales were below $3,500,000. Neither party disputes that Big Lots

provided written notice to terminate the lease before October 28, 2008. The parties

only dispute whether the language “no less than one hundred twenty (120) and no

more than two hundred seventy (270) days’ written notice of termination” required

Big Lots to provide Plaza 75 a specific date when the lease would terminate within

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that same time period. Notably, Plaza 75 and Big Lots argue that the language of

the kickout provision is clear and unambiguous; thus, we interpret that language as

a question of law. See Phillips v. Flowing Wells Unified Sch. Dist. No. 8 of Pima

Cnty., 669 P.2d 969, 971 (Ariz. Ct. App. 1983).

       “[A] lease contract is effective and enforceable according to its terms . . . .”

Ariz. Rev. Stat. Ann. § 47-2A301. “[A] court must give effect to the contract as it

is written, and the terms or provisions of the contract, where clear and

unambiguous, are conclusive.” Goodman v. Newzona Inv. Co., 421 P.2d 318, 320

(Ariz. 1966). “A contract is not ambiguous just because the parties to it or, . . . a

party to it and the other party’s successor, disagree about its meaning.” In re

Estate of Lamparella, 109 P.3d 959, 963 (Ariz. Ct. App. 2005). “The intent of the

parties, as ascertained by the language used, must control the interpretation of a

contract.” Goodman, 421 P.2d at 320. “The object of all rules of interpretation is

to arrive at the intention of the parties as it is expressed in the contract. There are

many rules of interpretation which can be utilized in reaching the intent of the

parties . . . , includ[ing] . . . reading the contract as a whole . . . .” Phelps Dodge

Corp. v. Brown, 540 P.2d 651, 653 (Ariz. 1975) (citation omitted); Chu v.

Ronstadt, 498 P.2d 560, 563 (Ariz. Ct. App. 1972) (“It is therefore incumbent upon

[the court] to interpret the meaning of these words in light of the intention of the

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parties as shown by the whole writing, and not to isolate the words and give them a

meaning foreign to such intention.”). Therefore, the requirements of the lease are

ascertained from the lease itself, and other requirements or deficiencies cannot be

created from another source.

      Interpreting the language of the kickout provision, it requires a notice of

termination be provided before October 28, 2008. It also requires that the lease

continues for at least 120 days (and not more than 270 days) after giving such

notice. The language of the kickout provision does not require that the lessee

include a specific date of termination.

      Reviewing the lease agreement as a whole buttresses our interpretation of

this language. Similar to the kickout provision, section 4.C of the lease requires

notice of termination within a certain time period (although in a different context)

but also expressly requires that the notice of termination set forth a specific date.

Unlike section 4.C, the kickout provision does not require that a specific date of

termination must be set forth in the notice. Therefore (from a reading of the lease

agreement as a whole), the kickout provision did not require that the kickout notice

of termination include a specific date of termination or it would have so stated.

      Plaza 75 argues that Big Lots’ inclusion (in its termination notice) of a

termination date less than 120 days after it gave notice invalidates the notice.

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However, because we construe the lease provision and not the notice of

termination, adding a date of termination did not invalidate the notice. The plain

language of the kickout provision does not require a specific date of termination.

Further, Big Lots strictly complied with the kickout provision.1 Big Lots gave

notice of its intent to terminate under the kickout provision before October 28,

2008, and continued its obligations for 120 days from the date the notice was

received. Even if Big Lots had wanted to quit the premises prior to the passing of

120 days (as indicated in the notice), it would have been required to pay the rent

for at least 120 days.

      Lastly, there was no “cure,” because the notice was never defective.

      AFFIRMED.

      1
         The parties dispute whether an early termination provision is analogous to
an option and therefore must be strictly construed under Arizona law. See Andrews
v. Blake, 69 P.3d 7, 14, 17 (Ariz. 2003). Because Big Lots strictly complied under
a strict construction of the kickout provision, we need not decide whether Arizona
would strictly construe this early termination provision as an option.

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