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South Hills Village Associates, LP v. Select Restaurants

October 22, 2010

SOUTH HILLS VILLAGE ASSOCIATES, LP, PLAINTIFF,
v.
SELECT RESTAURANTS, INC., DEFENDANT.



The opinion of the court was delivered by: Magistrate Judge Cathy Bissoon*fn1

MEMORANDUM AND ORDER

I. MEMORANDUM

Plaintiff, South Hills Village Associates, LP,*fn2 has alleged that Defendant, Select Restaurants, Inc., breached a lease agreement by failing to pay real estate taxes, rent, and various other expenses. See Compl. ¶¶ 15-18. Defendant filed a concise statement of material facts (Doc. 21) and memorandum in support of summary judgment (Doc. 22), but did not file an actual motion for summary judgment. This Court will nonetheless treat Defendant's "Motion for Summary Judgment Statement of Material Facts" (Doc. 21) as a motion for partial summary judgment. Because Defendant's brief (Doc. 22) addresses only the issue of whether Defendant owes Plaintiff any amounts for real estate taxes, this Court treats Defendant's motion as a motion for partial summary judgment on that issue alone.*fn3 For the reasons stated herein, the Court will grant Defendant's motion.

BACKGROUND

Plaintiff, as landlord, and Defendant, as tenant, are successors in interest to a February 24, 1965 Lease for space in South Hills Village Mall, located in Allegheny County, Pennsylvania. Def.'s Statement of Material Facts ("Def.'s Facts") (Doc. 21) ¶¶ 5-6; Compl. ¶¶ 3-6. Plaintiff and Defendant entered into a Third Amendment to the Lease on October 20, 1993. Exh. B to Compl.; see also Def.'s Facts ¶ 5; Compl. ¶ 7. Pursuant to the Third Amendment, Defendant on February 11, 2004 exercised an option to renew the lease to October 31, 2009.*fn4 Exh. C. to Compl. Under the Lease, including the renewal term under the Third Amendment, Defendant operated a restaurant known as the Roxy Café in South Hills Village Mall until sometime in 2009.

Pursuant to the Third Amendment, during the renewal term:

Tenant shall pay real estate taxes on a pro rata basis based upon Landlord's formula which is then being utilized by Landlord in its non-Department Store retail leases for space in the Shopping Center[.]

Exh. B. to Compl. ¶ 6(d)(iii). Prior to and during the renewal term, Defendant paid Plaintiff real estate taxes from October 1993 to October 2009 in the same manner based on the same formula. Pl.'s Response to Def.'s Facts ¶ 13. Defendant's payments were made in accordance with Plaintiff's calculations, which were provided to Defendant in "Cost Computation Summaries." See Pl.'s Br. at 7 (Doc. 24); Pl.'s Response to Def.'s Facts ¶ 29. During those sixteen years, Defendant "continuously paid what it believed to be its yearly real estate tax obligations under the Lease," Pl.'s Br. at 5, and Plaintiff never contended that there was a mistake in the calculation of real estate taxes due. Def.'s Facts ¶ 15; Pl.'s Response to Def.'s Facts ¶ 15.

Sometime after this period, Plaintiff apparently discovered what it believes was an error in the calculation of real estate taxes owed by Defendant. Pl.'s Response to Def.'s Facts ¶ 16. According to Plaintiff, it calculated Defendant's real estate tax owed based on the correct "formula" but used incorrect "data." See Pl.'s Response to Def.'s Facts ¶¶ 17-19. Specifically, Plaintiff contends that it misstated the total square footage of South Hills Village Mall occupied by non-anchor tenants by approximately 160,000 square feet. Pl.'s Br. at 7; Aff. of Jocelyn Gubler ¶ 9 (Doc. 25-1 at 196). Correction of this misstatement of square footage essentially doubles Defendant's tax obligation. See Pl.'s Response to Def.'s Facts ¶ 17. Plaintiff seeks recovery of the difference between the "corrected" amount of Defendant's alleged tax obligation and the amount of Defendant's tax obligation actually paid.

ANALYSIS

Federal Rule of Civil Procedure 56(c) provides that summary judgment may be granted if, drawing all inferences in favor of the non-moving party, "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c).

Defendant argues that it satisfied its obligation to pay real estate taxes pursuant to the Third Amendment to the Lease by consistently paying real estate taxes in the same manner based on the same formula for sixteen years without objection from Plaintiff. Def.'s Br. 2-5. Plaintiff contends that a genuine issue of material fact exists as to whether Defendant satisfied that obligation because the payments made by Defendant between 2004 and 2009 were based on erroneous calculations. See Pl.'s Br. at 5-7; Pl.'s Response to Def.'s Facts ¶¶ 17, 19.

By Plaintiff's own admissions, there is no genuine issue of material fact that Defendant satisfied its real estate tax obligations under the Third Amendment to the Lease. First, Plaintiff agrees that Defendant made real estate tax payments based upon the correct "formula."*fn5 Second, according to Plaintiff, the "formula" used to calculate Defendant's tax obligation is distinct from the "data" used in that calculation. Plaintiff repeatedly asserts that Defendant paid real estate taxes based upon the correct "formula," but incorrect "data." Pl.'s Response to Def.'s Facts ¶ 17 ("Simon has never asserted that Select was billed based on an incorrect formula under the Lease . . . ."_); id. at ¶ 19 ("Simon has continuously asserted that it has, in fact, used the correct formula, but simply inputted incorrect data."); see also Pl.'s Response to Motion to Compel at 4 (Doc. 17) ("[Plaintiff] has in fact applied to these non-anchor tenants the same formula that has been applied to the Defendant.").

Accepting Plaintiff's characterization of the "formula" and the "data" used to calculate real estate tax obligations as distinct, and accepting Plaintiff's agreement that Defendant paid real estate taxes based on the correct "formula," there is no genuine issue of material fact that Defendant satisfied its obligations under the ordinary meaning of the Third Amendment to the Lease requiring Defendant to "pay real estate taxes on a pro rata basis based upon Landlord's formula which is then being utilized by Landlord in its non-Department Store retail leases for space in the Shopping Center." See Pines Plaza Bowling, Inc. v. Rossview, Inc., 145 A.2d 672, 676 (Pa. 1958) (noting that the words of a contract must be given their ...


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