Thirty and 141, L.P. v. Lowe's Home Centers, Inc.

• Decision Date: 11 May 2009
• Docket Number: No. 08-2335.,08-2335.
• Citation: 565 F.3d 443
• Parties: THIRTY AND 141, L.P.; Gravois Bluffs A, L.L.C.; Gravois Bluffs I, L.L.C., Appellants, v. LOWE'S HOME CENTERS, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

565 F.3d 443

THIRTY AND 141, L.P.; Gravois Bluffs A, L.L.C.; Gravois Bluffs I, L.L.C., Appellants, v. LOWE'S HOME CENTERS, INC., Appellee.

No. 08-2335.

United States Court of Appeals, Eighth Circuit.

Submitted: March 12, 2009.

Filed: May 11, 2009.

Gerard T. Carmody, argued, Teresa Dale Pupillo, Jeffrey D. Sigmund, on the brief, St Louis, MO, for appellant.

Benjamin A. Lipman, argued, Andrew S. Buchanan, on the brief, St Louis, MO, for Appellee.

Before SMITH, GRUENDER and BENTON, Circuit Judges.

GRUENDER, Circuit Judge.

Thirty and 141, L.P., Gravois Bluffs A, L.L.C., and Gravois Bluffs I, L.L.C. (collectively, "Thirty") sought reformation of a deed restriction they recorded pursuant to a lease with Lowe's Home Centers, Inc. ("Lowe's"), alleging mutual mistake. Both parties filed motions for summary judgment, and the district court granted Lowe's' motion. For the reasons discussed below, we vacate and remand.

I. BACKGROUND

On June 10, 1999, Lowe's and Thirty executed a lease agreement for Lowe's to occupy a portion of Thirty's property in an area known as Gravois Bluffs in Saint Louis County, Missouri. Thirty divided its Gravois Bluffs property into three planned shopping areas, which it called the North South and East shopping centers.¹ Lowe's leased a portion of the North shopping center that it intended to use as a home improvement store.

The lease restricted Thirty from leasing certain portions of its remaining Gravois Bluffs property for use as a home improvement store. The lease required Thirty to record deed restrictions on the restricted property, stating that

[Thirty] further agrees to immediately record a deed restriction on each of the other proposed shopping centers abutting Highway 141 setting forth a "no home improvement store" restriction all as more specifically set forth on Exhibit E-2.

(emphasis added). However, the lease did not identify or define "the other proposed shopping centers." Although all three proposed shopping centers abutted Highway 141, Exhibit E-2, which was titled "Legal Description of and Use Restrictions for the Proposed Shopping Centers Abutting Highway 141," only identified and described the South shopping center. Under the heading "Lease Area Shopping Center `South'," Exhibit E-2 included a metes and bounds description of the South shopping center. The lease contained no description of the North or East shopping centers.

On August 24, 2000, Thirty recorded Declaration 90, the "no home improvement store" deed restriction drafted by Lowe's that is the subject of this appeal. Declaration 90 restricted the South shopping center and portions of Thirty's property known as Lot 7 and Lot 8.² At the time the parties executed the lease, Lots 7 and 8 had not been identified or "platted." However, by the time Declaration 90 was prepared and recorded, Lots 7 and 8 had been platted, with Lot 7 abutting the South shopping center and Lot 8 abutting the North shopping center, but neither lot abutting Highway 141.

Thirty asserted that the parties made a mutual mistake by restricting Lots 7 and 8 in Declaration 90 and filed a petition for reformation in the Circuit Court of Saint Louis County, Missouri, which Lowe's removed to federal court pursuant to 28 U.S.C. § 1332. Lowe's contended that it made no mistake in drafting Declaration 90. Both parties filed motions for summary judgment. The district court granted summary judgment to Lowe's, holding that the parties did not intend to exclude Lots 7 and 8 from the restricted property in the lease and, therefore, Declaration 90 contained no mutual mistake.

After the district court granted its motion for summary judgment, Lowe's filed a motion for attorneys' fees pursuant to Declaration 90, which provides:

In the event Lowe's or [Thirty] brings suit to construe or enforce the terms hereof, or raises this Declaration as a defense in a suit brought by the other, the prevailing party is entitled to recover its attorneys' fees and expenses.

The district court granted Lowe's' motion. Thirty appeals, arguing that the district court erred in granting Lowe's' motions for summary judgment and for attorneys' fees and in denying Thirty's motion for summary judgment.

II. DISCUSSION

We review a district court's decision on cross-motions for summary judgment de novo. J.E. Jones Constr. Co. v. Chubb & Sons, Inc., 486 F.3d 337, 340 (8th Cir. 2007). "Summary judgment is appropriate when, viewing the facts in the light most favorable to the non-movant, there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law." Id. The parties agree that we apply the substantive law of Missouri when considering Thirty's reformation claim. See Oriental Trading Co. v. Firetti, 236 F.3d 938, 944 (8th Cir.2001).

Thirty argues that the district court erred in granting Lowe's' motion for summary judgment because genuine issues of material fact exist regarding the parties' alleged mutual mistake in drafting Declaration 90. To obtain reformation, Thirty "must show (1) a preexisting agreement of the parties to describe the property as requested, (2) a mistake, and (3) the mutuality of the mistake." Brinkerhoff Land & Livestock Co. v. Doyle, 778 S.W.2d 336, 338 (Mo.Ct.App.1989). Thirty "bears a heavy burden and must show the existence of mistake by clear, cogent and convincing evidence." Id.

Although a "clear-and-convincing standard of proof should be taken into account in ruling on summary judgment motions[,] . . . [c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are [ ] functions" of the finder of fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, the appropriate "summary judgment inquiry as to whether a genuine issue" of material fact exists is "whether the evidence presented is such that a [finder of fact] applying [the] evidentiary standard could reasonably find" that Thirty has proven the elements of reformation by clear and convincing evidence. See id.

In order to defeat Lowe's' summary judgment motion, Thirty must first show that a reasonable finder of fact could find by clear and convincing evidence that there was a preexisting agreement between the parties describing the property to be restricted that did not include restrictions on Lots 7 and 8. See Brown v. Mickelson, 220 S.W.3d 442, 449 (Mo.Ct. App.2007) (noting that the party seeking reformation must show "a preexisting agreement between the parties to describe the [land] in accordance with the proposed reformation" (emphasis omitted)). Thirty contends that the lease is the preexisting agreement that demonstrates that the parties did not include Lots 7 and 8 in the "no home improvement store" restriction and, therefore, Declaration 90 should be reformed so that Lots 7 and 8 are not restricted.³ Thirty argues that the parties agreed that Declaration 90 would effect their intention, as stated in the lease, to restrict only certain portions of Thirty's property.⁴ See Morris v. Brown, 941 S.W.2d 835, 840-41 (Mo.Ct.App.1997) (stating that in order to establish a preexisting agreement, "it is sufficient that the parties agreed to accomplish a particular object by the instrument to be executed and that such instrument as executed is insufficient to effect their intention"). Thus, we must examine the lease to determine what property it restricts in order then to decide whether Declaration 90 restricts the same property.

We "must follow the terms of the contract as written if those terms are plain, unequivocal, and clear." Muilenburg, Inc. v. Cherokee Rose Design & Build, L.L. C., 250 S.W.3d 848, 853-54 (Mo.Ct.App.2008). We may examine parol evidence only if we determine that the contract is ambiguous, which we will find "only if the contract's terms are susceptible to more than one meaning such that reasonable persons may honestly and fairly differ in the construction of its terms." Id. at 854.

The lease does not mention Lots 7 and 8, which is not surprising because Lots 7 and 8 were not platted at the time the parties executed the lease. When describing the property to be restricted, the lease simply states that Thirty will restrict "each of the other proposed shopping centers abutting Highway 141 . . . as more specifically set forth on Exhibit E-2." Exhibit E-2 identifies and describes only the South shopping center and does not describe Lots 7 or 8. On the other hand, the lease contemplates restricting multiple shopping centers, as evidenced by its use of the phrase "each of the other proposed shopping centers." Although Exhibit E-2 describes only the South shopping center, its title, "Legal Description of and Use Restrictions for the Proposed Shopping Centers Abutting Highway 141," like the body of the lease, appears to contemplate restricting multiple shopping centers. In addition, Exhibit E-2 states that the no home improvement store restriction will not apply to a "larger general business," such as a Target store, "[w]ith respect to the proposed shopping center abutting the east side of Highway 141." This statement implies that Exhibit E-2 otherwise restricts the East shopping center, which is the only shopping center that abuts the east side of Highway 141. Thus, Exhibit E-2's use of the plural "proposed shopping centers" and its reference to the East shopping center, along with the lease's general references to "each of the other proposed shopping centers abutting Highway 141," are inconsistent with the proposition that the lease restricts only the South shopping center. As Lowe's argues, these discrepancies could mean that even though Exhibit E-2 identifies and describes only the South shopping center, the lease restricts "each of the other proposed shopping centers abutting Highway 141," which includes Lots 7 and 8. The lease does not define "proposed shopping centers." Although Lots 7 and 8 are not part of the current shopping...