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2401 Walnut, L.P. v. American Express Travel Related Services Co.

February 16, 2009


The opinion of the court was delivered by: Pollak, J.


Before the court are defendant's motion to dismiss count two of plaintiff's amended complaint, Docket No. 71, and the parties' cross-motions for partial summary judgment as to count one of the amended complaint, Docket Nos. 78 and 79. These motions raise common questions of law and will be addressed concurrently.*fn1 For the reasons that follow, defendant's motion to dismiss count two of the amended complaint will be granted, and both of the cross-motions for partial summary judgment will be denied.

I. Facts

The relevant facts of this case, many of which were set forth in the court's memorandum and order granting defendant's first motion for partial summary judgment, Docket No. 65, are as follows: Plaintiff, 2401 Walnut L.P., owns an office building at 2401 Walnut Street, Philadelphia (hereinafter the "Building"). Defendant American Express Travel Related Services Company, Inc. ("American Express") was at one time plaintiff's tenant in the Building under the terms of a commercial lease that commenced on October 1, 2003 and is now terminated. The parties entered into this lease pursuant to an agreement wherein American Express agreed to purchase the stock of the building's then-owner, Rosenbluth International, Inc. ("Rosenbluth").

The Building once served as Rosenbluth's company headquarters. On July 11, 2003, American Express entered into a Stock Purchase Agreement ("SPA") with Rosenbluth for the purchase of all shares of Rosenbluth stock. The SPA provided that certain of Rosenbluth's assets would be excluded from the purchase, and that Rosenbluth would transfer these assets to a third party prior to the closing. SPA § 5.8. Among these excluded assets was the Building, though American Express would acquire the "tangible property located in the building":

Prior to the Closing, [Rosenbluth] shall take all reasonably appropriate and necessary action to dispose of or transfer the following assets of the Company [Rosenbluth] effective as of the Closing Date and to transfer or to discharge the related liabilities . . . the real property (land and building) for the Company's headquarters located in Philadelphia, PA, including the adjacent parking lot (the "Headquarters"), but not the computers, equipment and other tangible property located in the building, which Headquarters shall be transferred to an assignee or transferee who agrees to enter into a lease agreement, dated as of the Closing Date, in the form of Exhibit 7.1 (xiii) attached hereto (the "Headquarters Lease Agreement") and obtain any consents related thereto . . . ."

SPA § 5.8. The closing was completed on September 30, 2003.

As required by the SPA, Rosenbluth transferred the Building to a third party, plaintiff 2401 Walnut L.P. The transfer, as described in the deed, included the Building "and improvements thereon erected." See Deed. Plaintiff entered into the "Headquarters Lease Agreement" with American Express referenced in § 5.8 of the SPA. Under the lease's terms, American Express was required, upon termination of the lease, to "leave the Building . . . in good order and condition, ordinary wear and tear, damage by fire or other casualty alone excepted," Lease § 6(a). American Express was also responsible, under the lease, "for making all repairs . . . foreseen and unforeseen, required to keep and maintain the structural and non-structural portions of the Building and Property . . . in good order and condition." Id. § 6(b). The lease further provided that American Express, at its own expense, would remove all items of its property from the Building upon termination of the lease:

Tenant shall at the expiration or earlier termination of this lease or of Tenant's right of possession, also remove from the Building all furniture, trade fixtures, office equipment and all other items of Tenant's property so that the Landlord may again have and repossess the Building. . . . Tenant shall repair, at or before the expiration or termination of this Lease or of Tenant's right of possession, all damage done to the Building or any other part of the Building by installation or removal of furniture and property by Tenant . . . .

Lease § 6(a). The lease went into effect October 1, 2003 and terminated October 30, 2006.

In March 2007, plaintiff filed suit for breach-of-the-lease in the Philadelphia Court of Common Pleas. Defendant then removed the case to this court. In its one-count first amended complaint, plaintiff alleged that defendant failed to satisfy its obligation to leave the building in satisfactory condition and failed to comply with its obligation to remove the following items from the Building:

(1)[K]itchen fixtures and signage (including, without limitation, equipment, plumbing, and grease traps), (2) "Continuum" trade space and all specialized rooms (including ceilings, walls, flooring and signage), (3) customized trade spaces (including, without limitation, data room, theater, and network operations center), (4) customized components (including, without limitation, halon fire system), (5) satellite dishes, projection equipment, screens and other related equipment, (6) metal rods left in building where signage for Rosenbluth International was removed by Tenant, (7) customized fixtures in basement including a gym and lockers, (8) signage throughout building including wall name plates, (9) piping from water purification systems on each floor, and (10) superfluous cabling and wiring that runs throughout the building.

Am. Compl. ¶ 11. In the parties' first cross-motions for partial summary judgment, defendant acknowledged that it did not remove the items listed in the amended complaint. Defendant argued, however, that the disputed items were "fixtures" that were constitutive of the Building that plaintiff purchased pursuant to the SPA, and that therefore defendant had no obligation to remove the items, which belonged to plaintiff, upon termination of the lease. In January 2008, the court accepted this argument and awarded partial summary judgment to defendant. Docket No. 65.

In April 2008, plaintiff, with the permission of Magistrate Judge Angell, filed a two-count second amended complaint. In the second amended complaint, plaintiff again alleges that defendant failed to satisfy its obligation to leave the building in satisfactory condition. However, the second amended complaint omits the claim in the first amended complaint upon which this court granted summary judgment - that defendant failed to remove certain ...

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