Bishop Buffets, Inc. v. Westroads, Inc., 41685

• Decision Date: 24 January 1979
• Docket Number: No. 41685,41685
• Citation: 274 N.W.2d 530,202 Neb. 171
• Parties: BISHOP BUFFETS, INC., Appellant and Cross-Appellee, v. WESTROADS, INC., Appellee and Cross-Appellant.
• Court: Nebraska Supreme Court

Page 530

274 N.W.2d 530

202 Neb. 171

BISHOP BUFFETS, INC., Appellant and Cross-Appellee, v. WESTROADS, INC., Appellee and Cross-Appellant.

No. 41685.

Supreme Court of Nebraska.

Jan. 24, 1979.

Syllabus by the Court

1. In the construction of the terms of an agreement, effect must be given, if possible, to all portions of the contract in order to determine and effectuate the intention of the parties.

2. Real estate taxes will not be deemed to be a cost of "operating and maintaining common areas" within the meaning of a shopping center lease clause where a separate clause specifically addresses the payment of taxes.

3. The practical construction put upon a lease contract cannot control the express, unambiguous provisions of the instrument itself.

4. The burden of proof is ordinarily on the party who would suffer if no evidence at all were introduced.

5. The Supreme Court may take note of plain errors not assigned.

6. Contracts are to be construed according to the usual meaning of the words used.

7. The addition of interior walls does not constitute "expansion or enlargement" of a shopping center unless it is otherwise clear that the parties intended such a construction under the terms of their lease.

8. A common use of the word "other" is as meaning one of two or more of a class. Thus, the general phrase "or other property of the tenant" places a limitation on a list of more specific items which precede it.

9. Where the language of an instrument is susceptible of two or more meanings, an interpretation evincing an underlying rational purpose will be favored.

10. Ambiguities in a contract should be construed most strongly against its author.

11. If the language used in a contract drafted by one of the parties is susceptible of more than one meaning, it should be given the construction which the other party would be fairly justified in giving it.

Leo Eisenstatt and J. Patrick Green, of Eisenstatt, Higgins, Kinnamon, Okun & Stern, P. C., Omaha, for appellant.

John K. Boyer and Denzel R. Busick, of Fraser, Stryker, Veach, Vaughn, Meusey, Olson & Boyer, P. C., Omaha, for appellee.

Heard before SPENCER, C. J., Pro Tem., and BOSLAUGH, McCOWN, CLINTON, BRODKEY and WHITE, JJ., and KUNS, Retired District Judge.

C. THOMAS WHITE, Justice.

Plaintiff below and appellant in this court, Bishop Buffets, Inc., filed suit against Westroads, Inc., in the form of a declaratory judgment action to construe four separate clauses of the lease between appellee Westroads, Inc. as lessor and Bishop Buffets, Inc., as lessee of a building and grounds for the operation of a cafeteria at the Westroads Shopping Center in Omaha, Douglas County, Nebraska. During trial, the parties reached a settlement on the construction of one of the paragraphs of the lease. As to the other three provisions in the lease, the trial court found generally in favor of the appellant on paragraph Eighth of the lease and in favor of the appellee in its construction of paragraph Twenty-ninth (A) and Twenty-ninth (B) of the lease. Plaintiff appeals and defendant cross-appeals. It should first be noted that where no factual issues are involved, no special deference is owed to the trial court and we are free to determine as a matter of law the meaning of a contractual provision. See Don J. McMurray Co. v. Wiesman, 199 Neb. 494, 260 N.W.2d 196. We shall deal with the provisions of the lease individually.

The first provision in controversy is the following part of paragraph Eighth. "Landlord shall operate and maintain common areas and common facilities of the shopping center. Tenant shall pay upon demand in addition to the rent a proportionate share of costs of Operating and maintaining common areas and common facilities. Common areas and common facilities include without limitation all parking areas, access roads, sidewalks, malls, restrooms, landscaped space and any other space used in common or available for use by the Tenant, the Tenant's customers, employees, agents, servants or other invitees of the Tenant." (Emphasis supplied.)

The question is whether the real estate taxes which are attributable to the shopping center's common areas are, within the meaning of paragraph Eighth, costs of "operating and maintaining" the common areas. Westroads contends that they are; Bishop contends that they are not.

The trial court resolved the issue in favor of Bishop, noting that the lease provides in paragraph Twenty-ninth that: "All special assessments and all regular consolidated real estate taxes * * * are to be paid by the Owner with the following exceptions: * * *." The import of the exceptions (A) and (B) listed thereunder are also in dispute and will be considered later in this opinion. Sufficient for the purpose of this discussion is that they do not refer to taxes attributable to the common area. The meaning of paragraph Twenty-ninth is obvious, and as obvious as plain language can make it, that it is the obligation of the owner to pay taxes except as specified in that paragraph. In the words of the trial court: "it seems clear, therefore, that no special assessments nor regular consolidated real estate taxes are to be included, or ought to have been included, in the computation of common area expenses to be paid by Bishops." Counsel for the appellee and cross-appellant introduced the testimony of accountants and cited numerous cases concerning the definition of "operating expenses" and counsel for appellant and cross-appellee cited cases arriving at a different definition, each in support of their proposition that taxes are or are not included within the ordinary definition of the term. It is unnecessary for us to pass on that phrase since by the clear, open, and plain meaning of paragraph Eighth when read with paragraph Twenty-ninth, it was the intention of the parties to limit the obligation of the tenant to pay that proportionate share of taxes that is specified in the exceptions of paragraph Twenty-ninth. In the construction of the terms of an agreement, effect must be given, if possible, to all portions of the contract in order to determine and effectuate the intention of the parties. See, section 76-205, R.R.S.1943; Westbrook v. Masonic Manor, 185 Neb. 660, 178 N.W.2d 280.

During trial, Westroads demonstrated that Bishop had, for some time after its tenancy had begun, paid bills for its share of common-area expenses under paragraph Eighth. The bills included an item for real estate taxes on the common area. Westroads argues that the parties thereby placed a practical construction on paragraph Eighth similar to that which they argue for here, and that this practical construction is controlling. Authority is cited for the proposition that where the parties have adopted a particular construction by their performance, that construction will generally be adopted by the courts. However, a review of that authority indicates that the rule is one to aid in the determination of the intent of the parties where that intent is not otherwise clearly expressed in the document. As discussed above, no such ambiguity exists here. The practical construction put upon a lease contract cannot control the express, unambiguous provisions of the instrument itself. See Sky Harbor Air Service v. Airport Authority, 174 Neb. 243, 117 N.W.2d 383. See, also, James Poultry Co. v. City of Nebraska City, 135 Neb. 787, 284 N.W. 273.

The trial court was correct in its construction of paragraph Eighth.

Paragraph Twenty-ninth of the lease, set out above, provides that the landlord shall pay all real estate taxes with two exceptions set out in paragraphs Twenty-ninth (A) and Twenty-ninth (B). It is the meaning and scope of those exceptions which are in dispute and which are considered in the remainder of this opinion.

Paragraph Twenty-ninth (A) provides that: "Increases over and above the regular consolidated real estate tax levied for the third year after opening due and payable the following year resulting from increased mill levy or from an increased assessed value by reason of a general reapportionment or any cause other than the expansion or enlargement of the shopping center shall be charged to the Tenant on a pro-rata basis of floor area demised herewith as against the total rentable area in the building. Said additional taxes, if any, shall be paid to the Owner not later than three (3) days prior to the delinquent date of such taxes."

The trial court held that Bishop should reimburse Westroads according to the proportionate formula for any increase in taxes unless it could show that the increase was due to expansion or enlargement. Bishop alleges that this assignment of the burden of proof constitutes error on the part of the trial court. We cannot agree. The burden of proof is ordinarily on the party who would suffer if no evidence at all were introduced. See, Kucaba v. Kucaba, 146 Neb. 116, 18 N.W.2d 645; Fitzsimons v. Frey, 153 Neb. 124, 43 N.W.2d 531.

In the general course of business, Westroads will receive its general assessment for taxes. Under paragraph Twenty-ninth (A), it will bill its tenant for a proportionate share of any increase in those taxes. Bishop may, of course, dispute that bill, and, if it can show that some portion of the increase is due to expansion or enlargement, avoid payment. The imposition of the burden of proof upon one party or the other is often a matter of common sense. Bishop contends that proof by Westroads that no portion of an increased assessment is attributable to expansion is a condition precedent to any obligation under Twenty-ninth (A). It is true that the Westroads Center was undergoing rapid expansion during the early years of this lease but acceptance of Bishop's condition precedent argument would, in effect, create a presumption that every increase in assessment, year after year, was due to expansion or enlargement. Such a presumption does not comport with reality.

While we thus agree with the trial court's...