The opinion of the court was delivered by: Gene E.K. Pratter, District Judge
In this case, the Court is called upon to interpret a lease for real property entered into in 1980 by the parties' predecessors-in-interest. This task is made significantly easier by an undisputed, 28 year-long course of performance that clarifies the meaning of now disputed provisions. Repeated actions performed under a contact are powerful evidence of its meaning.
In 1980, Pathmark Stores, Inc.'s predecessor-in-interest and Gator Monument Partners, LLP's predecessor-in-interest entered into lease agreement for Pathmark to occupy space in a particular shopping center. In May 2008, Gator notified Pathmark that it was terminating the lease because of various alleged defaults, and Pathmark subsequently filed this lawsuit. Pathmark's Complaint seeks (i) injunctive relief to prevent Gator from taking possession of the property and terminating the lease, and (ii) a declaratory judgment that Pathmark is not in violation of the lease, the lease is not terminated, Pathmark has no obligation to vacate the premises, and Pathmark does not owe Gator any additional rent from various subleases. The Complaint also alleges that Gator breached the lease. Gator counterclaims that Pathmark is in default under the lease for (i) failing to request the landlord's consent for subleases; (ii) failing to maintain the property in good repair and condition; (iii) failing to pay sublease revenue to the landlord; and (iv) failing to pay the correct amount of rent.
Both parties now move for summary judgment. Pathmark seeks summary judgment on all counts in its Complaint and Gator's Counterclaims. Gator seeks partial summary judgment on its counterclaim that it is entitled to sublease revenue collected by Pathmark. For the reasons discussed below, the Court will grant in part and deny in part Pathmark's Motion for Summary Judgment, and the Court will deny Gator's Motion for Partial Summary Judgment.
I. FACTUAL AND PROCEDURAL HISTORY*fn1
On November 1, 1980, Supermarkets General Corporation (currently known as Pathmark)*fn2 entered into a lease (the "Lease") with Gator's predecessor-in-interest, Superline Associates Limited Partnership for a shopping center consisting of approximately seven acres of land, with improvements, located at Conshohocken Avenue and Monument Road in Philadelphia, Pennsylvania (the "Property"). (Pl.'s Ex. A, Lease Agreement between Superline Associates Limited Partnership and Supermarkets General Corporation.) Superline Associates Limited Partnership subsequently assigned its interest in the Lease to Newkirk Superline, L.P. ("Superline"). On April 3, 2008, Newkirk Superline assigned its interest in the Lease to Gator Monument Partners, LLP ("Gator"), the present landlord. (Pl.'s Ex. B, Assignment and Assumption of Lease Agreement.)
The shopping center is comprised of 6.615 acres of land and at least 75,983 square feet of improvements. The supermarket space, now comprised of approximately 56,243 square feet, was enlarged by approximately 5,140 square feet in 1990. (Def.'s Supplemental Appendix at 255-57.) The retail space has been subleased from time to time since the inception of the Lease. Pathmark currently subleases seven units. (Pl.'s Ex. E, Subtenant Rent Roll.)
The Lease is comprised of a Primary Term and an Extended Term. The Primary Term commenced on November 26, 1980 and ended on November 30, 2005. (Pl.'s Ex. A ¶ 3, Schedule B.) The Extended Term then began, with an option for up to six consecutive Extended Terms, each of an additional five years, with the Lease permanently terminating on November 30, 2035. (Pl.'s Ex. A ¶ 3, Schedule B.) Pathmark currently occupies the premises under an Extended Term of the Lease that began on December 1, 2005.
A. Relevant Lease Provisions and the Performance Under These Provisions
Schedule B of the Lease sets forth the Basic Rent owed during the Primary and Extended Terms. For example, from 1995 to present, the Basic Rent is calculated as follows:
5. Each instalment [sic] of the Basic Rent payable for the Premises during the term of this Lease commencing on December 1, 1995 and ending on and including November 30, 2005 is $60,375.66 ($22,562.20 for the Land and $37,813.46 for the Improvements) . . . . The fixed rent per square foot during this period is $0.0783 for the Land and $0.5294 for the Improvements.
6. Each instalment [sic] of the Basic Rent payable for the Premises during each Extended Term is $33,671.77 ($12,583.04 for the Land and $21,088.73 for the Improvement) . . . . The fixed rent per square foot during this period is $0.0437 for the land and $.2952 for the Improvements. (Pl.'s Ex. A, Schedule B (emphasis added))
During the Primary and Extended Terms, Pathmark paid Superline the lump sums in rent specified in Schedule B, without any calculation based on the fixed rent per square foot. (See, Pl.'s Ex. D, Declaration of Joanne Grossman ¶ 7).*fn3
ii. Sharing of Sublease Revenue and Consent for Subleases
During the Primary Term, the tenant was not required to obtain consent from the landlord to sublet the property and the tenant had no obligation to share any sublease revenue with the landlord. During the Extended Term, however, the landlord's consent to a sublease is required, although if the landlord fails to either give or refuse consent within 30 days notice of a potential sublease, the landlord "shall be deemed to have consented to such sublease." (Pl.'s Ex. A ¶ 16.) With respect to revenue received from subtenants, the following provision is triggered during the Extended Term:
Notwithstanding Lessor's consent to any sublease for any portion of an Extended Term, Lessee shall continue to pay all Basic Rent and other sums then payable under this Lease and shall, upon Lessee's receipt of the rents and other payments pursuant to all the subleases, pay to Lessor an amount equal to the aggregate of all rents and other payments received from the sublessees in excess of the Basic Rent, additional rent and other amounts paid by Lessee under this Lease applicable to the period to which such payments apply. (Pl.'s Ex. A ¶ 16(b)).
Pathmark currently has subleases with seven tenants. (Pl.'s Ex. E.) During the Extended Term, Pathmark has not received any rent from subtenants in excess of the lump sums of Basic Rent it has paid to the landlord for the entire premises. (Pl.'s Ex. E.)*fn4
iii. Condition of the Property
The Lease requires Pathmark to maintain the Property in good repair and condition. Paragraph 9 of the ...