Court Opinion

ID: 9489685
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:21:25.084195+00
Date Added: 2024-06-11T17:53:39.576110
License: Public Domain

FERNANDEZ, Circuit Judge,
dissenting:
I respectfully dissent. I would not attempt to guess what the parties might have done had the possibility of a new good or service (for example a new drink or the Arizona Lottery) been brought to their attention in 1975 when they entered into their lease. I see no reason to do so.
Circle K drew the lease, which specifically and clearly provides that Collins is entitled to rent based upon two percent of gross sales, if that exceeds the minimum. “Gross sales” in turn means “gross receipts of every kind and nature originating from sales and services on the demised premises ... in every department operating on the demised premises, whether operated by the Lessee, or by a Sublessee, or concessionaire....”
I see nothing which makes that language hard to fathom, and if I did think it was ambiguous, I would be inclined to construe the ambiguity against the draftsman of the document, Circle K. See Cardon v. Cotton Lane Holdings, Inc., 173 Ariz. 203, 841 P.2d 198, 202 (1992); Polk v. Koerner, 111 Ariz. 493, 533 P.2d 660, 662 (1975). Certainly, when a customer buys a lottery ticket Circle K has supplied a sale or a service. Certainly, that has taken place on the demised premises. Certainly, the money which passes into Circle K’s hands at that time is a “gross receipt of [some] kind and nature.” Equally certainly, Circle K should calculate Collins’ percentage on that amount.
Circle K’s convoluted attempts to avoid the pellucid result of its own pellucid language should not be countenanced. It concedes that the commissions it received for selling the lottery tickets on the premises should be considered. Presumably it finally sees that those are receipts originating from a sale or service on the premises. But so, too, are the rest of the lottery ticket proceeds. Indeed, there is no proper way to distinguish between the two.
Circle K’s explanation that the rest of the proceeds should be excluded because they belong to the Lottery is much more difficult to fathom than the words of the lease itself. Receipts by a concessionaire would belong to the concessionaire, not to Circle K. Yet we know that Circle K would be required to add an amount equal to those receipts into its own receipts when it made the percentage rent calculation. Neither am I impressed by claims that if Circle K must pay the percentage rent, public policy will be outraged or someone might be entitled to seize Arizona’s money. The most important public policy ought to be that companies like Circle K abide by their lease agreements, not that gambling tickets be sold. Furthermore, the mere fact that the percentage rent is measured by the receipts does not mean that the receipts belong to Circle K itself. They could be the receipts of a sublessee or a concessionaire or someone else. The lease does not apply to Circle K’s receipts; it applies to receipts “originating from sales and services on the demised premises.” It does not matter whose receipts they are. What counts is the place they accrue, not the person to whom they accrue.
Circle K can pay Collins his percentage rent or it can, as it promised or threatened in its letter of August 7, 1981, decide not “to continue in this program at [his] store.” What it cannot do is openly violate the express terms of the lease; that is to say, it *490cannot do so unless we say it can. We should not.
Thus, I respectfully dissent.