Court Opinion

ID: 1039035
Source: CourtListenerOpinion
Date Created: 2013-08-28 22:26:46.924879+00
Date Added: 2024-06-11T12:47:38.273428
License: Public Domain

Supreme Court

                                                               No. 2012-151-Appeal.
                                                               (PB 08-5051)

Inland American Retail Management LLC     :

                  v.                      :

     Cinemaworld of Florida, Inc.         :

            NOTICE: This opinion is subject to formal revision before publication in
            the Rhode Island Reporter. Readers are requested to notify the Opinion
            Analyst, Supreme Court of Rhode Island, 250 Benefit Street, Providence,
            Rhode Island 02903, at Tel. 222-3258 of any typographical or other
            formal errors in order that corrections may be made before the opinion is
            published.
                                                                 Supreme Court

                                                                 No. 2012-151-Appeal.
                                                                 (PB 08-5051)

Inland American Retail Management LLC          :

                     v.                        :

       Cinemaworld of Florida, Inc.            :

              Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

                                          OPINION

       Justice Flaherty, for the Court.            The resolution of this appeal hinges on the

interpretation of a clause concerning the allocation of real estate taxes that appears in a written

lease between Inland American Retail Management LLC (Inland) and Cinemaworld of Florida,

Inc. (Cinemaworld). Relevant to this appeal, a trial justice of the Superior Court—ruling on

cross-motions for summary judgment—declared as a matter of law that the formula allocating

Cinemaworld’s reasonable share of real estate taxes should be based on the square footage of its

leased premises. Relying on that conclusion, the trial justice granted partial summary judgment

in Cinemaworld’s favor with respect to its motion seeking an accounting, and he denied Inland’s

request for costs. Inland appeals from that decision, arguing that the trial justice erred when he

adopted a formula that was not supported by the language of the lease. Inland also argues that

the trial justice erred in declining to award interest, late charges, expenses, and attorneys’ fees,

all of which, Inland argues, are mandated by the lease. This case came before this Court on May

7, 2013, pursuant to an order directing the parties to show cause why the issues raised in this

                                               -1-
appeal should not summarily be decided.            After considering the parties’ written and oral

submissions, and after reviewing the record, we conclude that cause has not been shown and that

this case may be decided without further briefing or argument. For the reasons set forth in this

opinion, we vacate the judgment of the Superior Court.

                                                    I

                                          Facts and Travel

                                                   A

                                              The Lease

        Inland and Cinemaworld were successors-in-interest to a twenty-year ground lease,

entered into on December 16, 2003, for the rental of what is now a movie theater in the Lincoln

Mall Shopping Center (Lincoln Mall or Shopping Center). 1 Under the terms of the lease,

Cinemaworld incurred certain liabilities and expenses. These included “Minimum Rent,” which

was specifically defined in the lease, and “Additional Rent,” which was described in the lease as

“[a]ll other sums as shall become due and payable by Tenant to Landlord under this Lease.”

Article 1, section 1.01(i); Article 3, sections 3.01(a), (b).

        Under the umbrella of “Additional Rent”—and the matter which gives rise to the

underlying dispute—was the requirement that Cinemaworld pay an amount equal to the real

estate taxes “levied, assessed, or otherwise imposed” against the movie theater. The provisions

1
  On December 16, 2003, Inland’s predecessor-in-interest, LB Lincoln Mall Holdings LLC (LB
Lincoln Mall), entered into a lease with Cinemaworld’s predecessor-in-interest, Cinema World,
Inc., to rent approximately 60,000 gross square feet, which included the land, buildings, and
improvements thereon, as defined in the lease, located at the Lincoln Mall Shopping Center. On
December 10, 2004, Cinema World, Inc. assigned all of its right, title, and interest as a tenant
under the lease to Cinemaworld. In May 2006, MB Lincoln Mall, LLC (MB Lincoln Mall)
purchased the Lincoln Mall from LB Lincoln Mall, and Inland became its managing agent.
        Prior to the closing between MB Lincoln Mall and LB Lincoln Mall, LB Lincoln Mall
and Cinemaworld executed a release agreement and estoppel certificate, which are not at issue in
this case.
                                                  -2-
of the lease concerning the apportionment of real estate taxes included Article 9, entitled

“Taxes,” and Article 25, entitled “Tenant’s Property.”

       Under section 9.01(a), “Taxes” were defined as “all taxes * * * commonly and generally

referred to as ‘real estate taxes’ * * * levied, assessed, or otherwise imposed upon, the Land or

any part thereof, the Building(s) and Improvements * * *.”2 The lease also provided that

Cinemaworld was required to exercise “its best efforts to take the steps necessary to have the

Premises [it leased] assessed as a separate tax parcel”—something that Cinemaworld did not do.

Section 9.01(b). According to Inland, some tenants at the Lincoln Mall had their premises

assessed and levied as a separate tax parcel and, pursuant to the lease, paid real estate taxes

directly to the Town of Lincoln. The remainder of the Lincoln Mall, including the premises

leased to Cinemaworld, was taxed to Inland as a single parcel, and, therefore, pursuant to the

lease, Cinemaworld was required to make monthly payments to Inland of a “reasonably

estimate[d]” real estate tax, which was equal to one-twelfth of Lincoln Mall’s real estate taxes

for their leased premises for the current calendar or fiscal year. Section 9.02(b). The lease

further provided that at the end of each year—after Inland had received all of the tax and

assessment bills that were attributable to the Lincoln Mall—“Landlord shall furnish Tenant a

written statement of the actual amount of the Taxes for such year,” and the tenant would either

pay or be credited for the difference between the amount of actual taxes due for the year and the

“reasonably estimate[d]” amount that was paid. Section 9.02(b).

2
  “Premises” is defined in the lease as “[t]he Land, the Building and the Improvements (as
hereinafter defined).” Article 1, section 1.01(e). “Land” is further defined as the area “shown
cross-hatched on the Preliminary Site Plan attached hereto as Exhibit B and made a part hereof,”
section 1.01(c); “Building” is defined as “[t]he building to be constructed on the Land by Tenant,
as described in [Article 6, s]ection 6.01,” section 1.01(d); and “Improvements” is defined as “any
improvements existing on the Land as of the date hereof, the improvements to be constructed
thereon by Tenant pursuant to the terms of this Lease as part of Tenant’s Work * * * and such
other improvements as Tenant may from time to time construct * * *,” Article 2, section 2.01(a).
                                              -3-
       Also relevant to this appeal is section 25.01, entitled “Taxes on Tenant’s Property,”

which provided, in pertinent part, that “Tenant shall be responsible for * * * any and all taxes * *

* with respect to * * * [t]he Premises.” With regard to the manner of payment, this section

provided that if a tenant’s premises was not assessed as a separate tax parcel, “Tenant shall pay

to Landlord Tenant’s reasonable share [of those taxes] as reasonably determined by Landlord in

consultation with Tenant.” Id.

                                                  B

                                     The Underlying Dispute

       On July 7, 2008, counsel for Inland forwarded a notice of default to Cinemaworld, citing

a failure to pay the full amount of real estate taxes and alleging that, under the terms of the lease,

$117,114.42 was due for taxes. The formula Inland employed to allocate the tax bill to the

individual tenants, including Cinemaworld, was “on a pro rata basis by dividing each tenant’s

gross leasable square footage (60,000 for Cinemaworld) by the total gross leasable square

footage for the Shopping Center.”

       Cinemaworld notified Inland that it disagreed with Inland’s allocation of the real estate

taxes and requested a breakdown of the figures used in the calculation. However, according to

Cinemaworld, Inland simply responded with a list of the square footage of all of the Lincoln

Mall tenants and a copy of the bill that it had previously sent to Cinemaworld.              Despite

Cinemaworld’s objection to Inland’s demand for the payment of unpaid taxes, on July 15, 2008,

Cinemaworld paid $67,000 toward the real estate taxes that Inland claimed were due and owing.

       On August 1, 2008, notwithstanding Cinemaworld’s payment, Inland filed a complaint

for breach of the lease for Cinemaworld’s alleged failure to make timely payments as required by

the lease. Cinemaworld filed responsive pleadings and, following an avalanche of amended

                                                -4-
pleadings and other motions, both sides filed cross-motions for summary judgment in November

2009. In support of its motion for summary judgment, Inland maintained that the language of the

lease was unambiguous and that it clearly required that real estate taxes be allocated by the

square footage of Cinemaworld’s leased premises, including the taxes attributable to parking and

common areas. Conversely, Cinemaworld argued that the proper assessment of real estate taxes

should not include the taxes attributable to parking and common areas. On June 1, 2010, Inland

filed a supplemental memorandum in support of its motion for summary judgment, in which

Inland asserted—for the first time—that the allocation of real estate taxes should be based on the

fair market value of the leased premises.

       On January 7, 2011, the trial justice rendered a written decision on the cross-motions for

summary judgment. The trial justice found that “neither party appear[ed] to dispute the basic

formula by which to calculate Cinemaworld’s ‘reasonable share’ of the Taxes,” and, based on

this, he concluded “that Cinemaworld’s reasonable share should be computed by multiplying the

tax bill by a fraction, the numerator of which is the square footage of the theater and denominator

of which is the square footage of the Shopping Center.” 3 He also found that each party should

bear its own attorneys’ fees, costs, and expenses.

       On October 4, 2011, Inland filed a motion for reconsideration, which the trial justice

denied. Inland timely appealed, arguing that the trial justice erred by adopting a formula for

3
  Specifically, the trial justice provided that he calculated Cinemaworld’s share of the real estate
taxes by:
                “(1) taking the entire tax bill for the Shopping Center; (2)
                excluding the taxes attributable to the parking and common areas;
                (3) and multiplying the remaining tax bill by a fraction, the
                numerator of which is the square footage of the Building, and the
                denominator of which is the current leasable square footage of the
                Shopping Center which is not separately assessed to other tenants.”
The trial justice also appointed a special master to provide an accounting as to the amount of real
estate taxes owed by Cinemaworld under the terms of the lease.
                                               -5-
calculating taxes that was not supported by any language found in the lease and by denying its

request for interest, late charges, expenses, and attorneys’ fees.

                                                  II

                                        Standard of Review

       It is well established that this Court reviews a trial justice’s decision to grant summary

judgment de novo, “employing the same standards and rules used by the [trial] justice.” Empire

Fire and Marine Insurance Companies v. Citizens Insurance Co. of America/Hanover Insurance,

43 A.3d 56, 59 (R.I. 2012) (quoting Generation Realty, LLC v. Catanzaro, 21 A.3d 253, 258

(R.I. 2011)). We will affirm a lower court’s grant of summary judgment “[i]f we conclude, after

viewing the evidence in the light most favorable to the nonmoving party, that there is no genuine

issue of material fact to be decided and that the moving party is entitled to judgment as a matter

of law * * *.” Id. (quoting Pereira v. Fitzgerald, 21 A.3d 369, 372 (R.I. 2011)); see also Rule

56(c) of the Superior Court Rules of Civil Procedure.

                                                 III

                                              Analysis

                                                  A

                                       Lease Interpretation

       Initially, we note that we do not agree with the trial justice’s conclusion that “neither

party appears to dispute the basic formula by which to calculate Cinemaworld’s ‘reasonable

share’ of the Taxes.” Although it is true that the parties insisted both below and on appeal that

the lease agreement was unambiguous, both parties nonetheless strongly advocate for different

interpretations of the provisions concerning the calculation of real estate taxes. Inland maintains

that the full amount of real estate taxes that are due under the lease should be calculated by

                                                -6-
multiplying the fair market value of Cinemaworld’s leased premises by the applicable tax rate.

Cinemaworld, however, argues that the trial justice appropriately construed the terms of the lease

in allocating the real estate taxes based on the square footage of the leased premises.

       In reviewing the lease, we apply the laws of contract interpretation. See Elena Carcieri

Trust-1988 v. Enterprise Rent-A-Car Co. of Rhode Island, 871 A.2d 944, 947 (R.I. 2005)

(applying contract-interpretation principles to a lease agreement). As is the case in contract

interpretation, whether a lease is ambiguous or not is a question of law that this Court reviews on

a de novo basis. Furtado v. Goncalves, 63 A.3d 533, 537 (R.I. 2013). In determining whether a

lease is ambiguous, “we give words their plain, ordinary, and usual meaning. * * * The

subjective intent of the parties may not properly be considered by the Court; rather, we consider

the intent expressed by the language of the [lease].” Id. (quoting Derderian v. Essex Insurance

Co., 44 A.3d 122, 128 (R.I. 2012)). Thus, if a lease “is clear and unambiguous by its terms,

‘what is claimed to have been the subjective intent of the parties is of no moment.’” Id. (quoting

Young v. Warwick Rollermagic Skating Center, Inc., 973 A.2d 553, 560 (R.I. 2009)). “In

situations in which the language of a [lease] is plain and unambiguous, its meaning should be

determined without reference to extrinsic facts or aids.” Id. (quoting Garden City Treatment

Center, Inc. v. Coordinated Health Partners, Inc., 852 A.2d 535, 542 (R.I. 2004)).

       After reviewing the record and the lease document itself, we are of the firm opinion that

the provisions of the lease at issue are ambiguous. At the outset, we note that section 9.01 of the

lease provides that the term “real estate taxes” is to mean its “commonly and generally” accepted

sense; however, the lease provides no further assistance as to the meaning of this term or in

determining how to allocate Cinemaworld’s share thereof. Because the term “real estate taxes”

is not defined in the lease, we often refer to sources such as dictionaries to give a term its plain,

                                                -7-
ordinary, and usual meaning. See Garden City Treatment Center, Inc., 852 A.2d at 542-43 (in

determining the plain meaning of a word, this Court will often apply a common meaning as

provided by a recognized dictionary). Nevertheless, a reference to the dictionary provides no

assistance in attempting to clarify the meaning of “real estate taxes.” Indeed, Black’s Law

Dictionary defines the term “tax” as “[a] charge, usu[ually] monetary, imposed by the

government on persons, entities, transactions, or property to yield public revenue,” and the term

“property tax” as “[a] tax levied on the owner of property (esp. real property), usu[ually] based

on the property’s value.” Id. 1594, 1596 (9th ed. 2009). These definitions, however, offer no

guidance as to how the real estate taxes are to be calculated under the terms of the particular

lease at issue here.

          In addition, when viewing the lease in its entirety, the sections of the lease relating to the

allocation of “real estate taxes” appear to be internally inconsistent. See W.P. Associates v.

Forcier, Inc., 637 A.2d 353, 356 (R.I. 1994) (“In determining whether an agreement is clear and

unambiguous, the document must be viewed in its entirety and its language be given its plain,

ordinary and usual meaning.”). Article 9 of the lease imposes an obligation on Cinemaworld to

pay “the actual amount of the [real estate t]axes for such year,” although the lease provides no

explicit formula or guidance as to how to calculate the “actual amount” of real estate taxes.

Section 9.02(b) (emphasis added). Similarly, Article 25 of the lease provides that Cinemaworld

is required to pay a “reasonable share” of “any and all taxes,” including the real estate taxes

assessed against Inland, yet Article 25 fails to define how the “reasonable share” of real estate

taxes should be calculated. 4 Section 25.01 (emphasis added). Thus, in addition to not clearly

4
    The full text of Article 25, section 25.01 provides:
                  “Tenant shall be responsible for, and shall pay, prior to
                  delinquency, any and all taxes, assessments, levies, fees and other
                                                  -8-
delineating how real estate taxes are to be calculated, Articles 9 and 25 of the lease appear to be

in conflict as each give rise to different methods of calculating real estate taxes: Article 9, section

9.02(b) imposes an obligation on Cinemaworld to pay “the actual amount” of real estate taxes,

while Article 25, section 25.01 imposes an obligation on Cinemaworld to pay a “reasonable

share” thereof. See Rotelli v. Catanzaro, 686 A.2d 91, 95 (R.I. 1996) (contract language is

usually ambiguous where the terms are inconsistent on their face). 5 Accordingly, given the

different possible ways of calculating real estate taxes, and after reviewing the lease in its

                governmental charges of every kind or nature (collectively,
                ‘Charges’) levied or assessed by an[y] municipal, county, state,
                federal or other taxing or assessing authority upon, against or with
                respect to:
                         “(i)   The Premises or any leasehold interest therein, or
                any use thereof, including, without limitation, any use and/or
                occupancy tax,
                         “(ii) All fixtures, furnishings, equipment, merchandise
                and personal property of any kind owned by Tenant and placed,
                installed or located in, within, upon or about the Premises, and
                         “(iii) All or any portion of the Rentals payable by Tenant
                to Landlord; irrespective of whether any of such items described in
                clauses (i) through (i) [sic] above are assessed as real or personal
                property, and irrespective of whether any of such items are
                assessed to or against Landlord or Tenant.
                     “If at any time during the Term any of such Charges are not
                levied and assessed separately and directly to Tenant (for example,
                if the same are levied or assessed to Landlord, or upon or against
                the Shopping Center and/or the land underlying the Shopping
                Center), Tenant shall pay to Landlord Tenant’s reasonable share
                thereof as reasonably determined by Landlord in consultation with
                Tenant.” (Emphases added.)
While section 25.01 uses the term “real * * * property,” that term is synonymous with real estate.
See Black’s Law Dictionary 1337 (9th ed. 2009) (defining “real property” as “[a]lso termed * * *
real estate”).
5
  Although the heading of section 25.01, “Taxes on Tenant’s Property,” seems to indicate that
that particular section is limited to personal property and excise taxes assessed and levied against
the tenant, we note that headings serve only as an aid in a court’s interpretation. See Town of
East Greenwich v. O’Neil, 617 A.2d 104, 109 (R.I. 1992) (applying that canon of construction to
a statute). Indeed, the text of section 25.01 is broader than the heading and applies to any taxes
assessed either to or against “real or personal property” and “to or against Landlord or Tenant.”
                                                 -9-
entirety and according the language its plain, ordinary, and usual meaning, section 9.01—

requiring Cinemaworld to pay “all taxes * * * commonly and generally referred to as ‘real estate

taxes’”—is susceptible to more than one reasonable interpretation and, therefore, is ambiguous.

Rotelli, 686 A.2d at 94 (A contract is ambiguous “when it is reasonably and clearly susceptible

to more than one interpretation.”).

       In an effort to blunt the force of the foregoing conclusion, Inland argues that the real

estate taxes should be calculated by multiplying the fair market value of Cinemaworld’s leased

premises by the applicable tax rate. First, Inland maintains that pursuant to G.L. 1956 § 44-5-

12(a)—which provides, in pertinent part, that “[a]ll real property subject to taxation shall be

assessed at its full and fair cash value * * * to be determined by the assessors in each town or

city”—the provisions of the lease that address the allocation of real estate taxes cannot mean

anything other than that Cinemaworld must pay the taxes apportioned to its specific, assessed

value. We disagree.

       Inland’s position rests on the assumption that the term “real estate taxes” as used in the

lease has the same meaning as applied under § 44-5-12. However, this statutory definition does

not automatically render that term to be unambiguous. Although the parties used a phrase that

has a statutory definition in Rhode Island, there is nothing in the lease to suggest that the parties

intended to adopt this discrete, statutory definition of “real estate taxes.” See Garden City

Treatment Center, Inc., 852 A.2d at 543 (“Contracting parties are free to define a term as they

see fit, but they must do so in writing if they intend the term to carry a technical definition.”).

Indeed, “[w]e decline to read nonexistent terms or limitations into a contract.” Pearson v.

Pearson, 11 A.3d 103, 109 (R.I. 2011).

                                               - 10 -
       Because the term “real estate taxes” as used in the lease is neither defined within the

document, nor specifically governed by the statute, we are satisfied that the term is ambiguous

and reasonably susceptible to more than one interpretation.            Thus, although contract

interpretation is a question of law, when the contract terms are ambiguous, interpretation of the

terms becomes a question of fact. Accordingly, at this stage of the proceedings—interpreting

ambiguous contractual language—statutes and common-law principles should be considered as

only part of the surrounding circumstances from which to discern the intent of the parties. See

Citizens for Preservation of Waterman Lake v. Davis, 420 A.2d 53, 58 (R.I. 1980) (While it is

well settled that existing law is an implied term of every contract, “existing law is an extrinsic

aid to discerning the contracting parties’ intent” in construing an ambiguous contract.); see also

11 Samuel Williston, A Treatise on the Law of Contracts § 30:21 at 286 (4th ed. Lord 2012)

(“[T]he rule that existing law is incorporated into every contract * * * does not go so far as to

mean that statutory definitions in a particular code govern the interpretation of every ambiguous

phrase in a private agreement.”). A resort to such outside sources is not permitted to aid or

explain the intended meaning of the parties, unless and until the contract language is found to be

ambiguous. See Furtado, 63 A.3d at 537; Merrimack Mutual Fire Insurance Co. v. Dufault, 958

A.2d 620, 624-25 (R.I. 2008) (“[B]efore the trial justice may look to extrinsic evidence an

ambiguity must be found in the terms of the contract.”). However, in this case, because we

conclude that the language of the lease is ambiguous, we agree with Inland that § 44-5-12 is

certainly one of several pieces of extrinsic evidence that should be considered to resolve the

ambiguity. Nonetheless, it is not appropriate to consider this evidence on a motion for summary

judgment because the intent of the parties is a question of fact. Lennon v. MacGregor, 423 A.2d

820, 822 (R.I. 1980).

                                              - 11 -
       Additionally, Inland argues that the allocation of real estate taxes in this case should be

determined by references to the valuation of Cinemaworld in “Property Record Card

Summar[ies]” that were provided by the municipality. However, in our view, Inland’s reliance

on the “Property Record Card Summar[ies]” is misplaced. Those summaries were used by the

tax assessor in determining the amount of real estate taxes to be levied against the Lincoln Mall.

Consequently, they merely provide an explanation as to how the assessment of real estate taxes

for the Lincoln Mall was derived. Indeed, Cinamaworld did not exist as a separate taxable parcel

during the years in question, and, therefore, contrary to Inland’s assertion, the Town of Lincoln

did not “independently assess[] the value of Cinemaworld’s Premises.” Further, the lease itself

does not provide that the parties intended the summaries to be a reliable proxy for the fair market

value that should be affixed to Cinemaworld.

       Accordingly, we are of the opinion that the summaries afford Inland no support for its

contention that the lease unambiguously directs that real estate taxes should be allocated by the

fair market value of Cinemaworld’s premises. However, concluding as we do that the lease is

ambiguous in this regard, the summaries may well assist as an interpretive aid to determine the

parties’ intent, but, again, such a determination cannot properly be resolved at the summary

judgment stage. See D.T.P., Inc. v. Red Bridge Properties, Inc., 576 A.2d 1377, 1382 (R.I. 1990)

(“If the terms of a contract are ambiguous, the court will look to the construction placed upon

such terms by the parties themselves as an aid in determining their intended meaning. * * * The

circumstances surrounding the execution of the contract are also relevant to the determination of

that intent.” quoting Woonsocket Teachers’ Guild, Local 951 v. School Committee of

Woonsocket, 117 R.I. 373, 376, 367 A.2d 203, 205 (1976)); see Restatement (Second) Contracts

                                               - 12 -
§ 203(b) (1981) (course of performance, course of dealing, and usage in custom or industry may

be used in determining the intent of contracting parties).

       Finally, Inland maintains that Cinemaworld’s interpretation of the lease is unreasonable.

Specifically, Inland argues that Cinemaworld would obtain an unfair benefit under a formula that

allocates the real estate taxes by square footage, because the Town of Lincoln attributes different

values to the various buildings at the Lincoln Mall, and Cinemaworld’s leased premises, which is

a newer building, has a higher fair market value than most of the other tenants in the Lincoln

Mall. Although we agree with Inland that interpreting the ambiguous language of the lease

should be guided by well-established principles of contract interpretation, including the principle

that contracts are to be construed according to the fair and reasonable meaning of their words,

see Durapin, Inc. v. American Products, Inc., 559 A.2d 1051, 1056 (R.I. 1989), summary

judgment is inappropriate where references to extrinsic evidence and the surrounding

circumstances must be relied on to discern the intent of the contracting parties.

       For its part, Cinemaworld maintains that real estate taxes should be calculated based on

the square footage of the leased premises, less the taxes attributable to parking and common area.

As Inland correctly highlights, Cinemaworld’s suggested formula is almost identical to the

formula provided under Article 8 of the lease to determine the “Tenant’s Proportionate Share” of

“Common Area Maintenance Costs.”           Section 8.04.     In particular, the lease provides that

“Tenant’s Proportionate Share”

               “shall mean a fraction, the numerator of which is the leasable floor
               area of the Building and the denominator of which is the leasable
               floor area of all buildings on the Shopping Center as of the first
               day of the applicable calendar year to which Common Area
               Maintenance Costs relate.” Section 8.04.

                                               - 13 -
However, section 8.03(c) specifically provides that the calculation of “Common Area

Maintenance Costs shall not include: * * * Taxes.” Adopting Cinemaworld’s formula would

ostensibly render section 8.03 internally inconsistent with the provisions of the lease that relate

to the allocation of real estate taxes and would effectively negate the separate assessment of the

Common Area Maintenance Costs from the separate assessment of real estate taxes.                See

Andrukiewicz v. Andrukiewicz, 860 A.2d 235, 239 (R.I. 2004) (An interpretation that reduces

certain words of a contract to mere surplusage should be rejected.). While we do not agree with

Cinemaworld’s contention that the lease is unambiguous with respect to the allocation of real

estate taxes, we recognize that it is conceivable that both parties intended the allocation of “real

estate taxes” to be based on the leasable square footage—a formula similar to that which Inland

had originally championed. See D.T.P., Inc., 576 A.2d at 1382 (the construction placed upon the

terms of a contract by the parties serves as an aid in determining their intended meaning); see

also In re Dissolution of Anderson, Zangari & Bossian, 888 A.2d 973, 977 n.3 (R.I. 2006)

(“[T]he parties’ subsequent course of performance may be instructive in contract interpretation.”

quoting Reed & Reed, Inc. v. Weeks Marine, Inc., 431 F.3d 384, 388 (1st Cir. 2005)). However,

we leave it to the trier of fact to determine what significance, if any, this may have on the

computation method intended by the parties.

       Ultimately, after reviewing the interpretations of the lease presented by both parties, and

the somewhat amorphous language of the lease itself, we conclude that there is a genuine issue

of material fact. Because we are unable to determine at this stage which of the reasonable but

conflicting interpretations of the lease the parties intended, those issues of material fact must be

resolved by a trier of fact. See Rotelli, 686 A.2d at 95 (“When a contract is ambiguous, and the

pleadings, discovery materials, and affidavits indicate a dispute in respect to the parties’ intent,

                                               - 14 -
there exists a genuine issue of material fact that must be resolved by the trier of fact.”).

Accordingly, it is our opinion that the trial justice erred in granting summary judgment in this

case.

                                                B

                      Interest, Penalties, Expenses, and Attorneys’ Fees

        Inland also argues that the lease requires that Cinemaworld pay additional amounts as a

result of its late payment of real estate taxes, pursuant to Article 3, sections 3.02 and 3.03 and

Article 23, section 23.02 of the lease. 6 However, because our review of the record indicates that

6
 Article 3, section 3.02 of the lease provides:
                        “INTEREST. If Tenant shall fail to pay when due any
                Rental within ten (10) days of the date due and payable, Tenant
                shall pay to Landlord, as Additional Rent, interest on the unpaid
                Rental, such interest accruing at the rate of four percent (4%)
                above the prime rate of interest announced from time to time by
                Citibank, N.A. (or any successor thereto, or if there shall be no
                such successor, such other bank or financial institution as Landlord
                may designate in writing to Tenant) (the ‘Default Rule’), from the
                date due until the date paid.”
Section 3.03 of the lease provides:
                        “LATE CHARGE. If Tenant shall fail to pay when due any
                Rental within ten (10) days of the date of receipt of notice from
                Landlord that the same was due and unpaid, then Tenant shall pay
                to Landlord, as Additional Rent, a late charge equal to four (4%)
                percent of the unpaid Rental, as an agreed and liquidated amount
                as compensation for Landlord’s additional administrative expenses
                relating to such late payment. The provisions of * * * [s]ection
                3.03 and [s]ection 3.02 * * * are in addition to any other remedies
                available to Landlord with respect to non-payment of Rental.”
Article 23, section 23.02 of the lease provides:
                        “LANDLORD’S EXPENSES OF CURE. Bills for any expenses
                incurred by Landlord in connection with any performance by it for
                the account of Tenant, and bills for all costs, expenses and
                disbursements of every kind and nature whatsoever, including
                reasonable attorneys’ fees, involved in collecting or endeavoring to
                collect the Rental or any part thereof not paid when due or
                enforcing or endeavoring to enforce any rights against Tenant,
                under or in connection with this Lease, or pursuant to Laws,
                                              - 15 -
there is a genuine issue of material fact as to the parties’ intent and that a resolution by a trier of

fact is necessary, we need not, and will not, review whether the trial justice erred in declining to

award interest, late charges, expenses, and attorneys’ fees to Inland.

                                             Conclusion

         For the forgoing reasons, we vacate the trial justice’s grant of summary judgment and

remand the case for further findings so as to determine the proper formula to calculate real estate

taxes.

                including any such cost, reasonable expense and disbursement
                involved in re-entering the Premises, instituting and prosecuting
                summary proceedings, as well as bills for any property, material,
                labor, or services provided, furnished, or rendered, by Landlord or
                at its instance to Tenant (all of which expenses shall constitute
                items of Additional Rent), may be sent by Landlord to Tenant
                monthly, or immediately, at Landlord’s option, and shall be due
                and payable immediately upon presentation of such bills to
                Tenant.”
                                                - 16 -
                            RHODE ISLAND SUPREME COURT CLERK’S OFFICE

                                 Clerk’s Office Order/Opinion Cover Sheet

TITLE OF CASE:        Inland American Retail Management LLC v. Cinemaworld of
                      Florida, Inc.

CASE NO:              No. 2012-151-Appeal.
                      (PB 08-5051)

COURT:                Supreme Court

DATE OPINION FILED: June 18, 2013

JUSTICES:             Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

WRITTEN BY:           Associate Justice Francis X. Flaherty

SOURCE OF APPEAL:     Providence County Superior Court

JUDGE FROM LOWER COURT:

                      Associate Justice Michael A. Silverstein

ATTORNEYS ON APPEAL:

                      For Plaintiff: Rachelle R. Green, Esq.

                      For Defendant: Justin T. Shay, Esq.