Brittany Sobery Family Ltd. v. Coinmach Corp.

• Decision Date: 15 January 2013
• Docket Number: No. ED 97800.,ED 97800.
• Parties: The BRITTANY SOBERY FAMILY LIMITED PARTNERSHIP, d/b/a Bridgeport Crossing Apartments, Plaintiff/Respondent, v. COINMACH CORPORATION, Defendant/Appellant.
• Court: Missouri Court of Appeals

392 S.W.3d 46

The BRITTANY SOBERY FAMILY LIMITED PARTNERSHIP, d/b/a Bridgeport Crossing Apartments, Plaintiff/Respondent,

v.COINMACH CORPORATION, Defendant/Appellant.

No. ED 97800.

Missouri Court of Appeals,

Eastern District,

Division Two.

Jan. 15, 2013.

Robert Schultz III, Ronald Jay Eisenberg, co-counsel, Chesterfield, MO, for Appellant.

Brian Lee Harvell, Justin Mark Weinrich, co-counsel, St. Louis, MO, for Respondent.

LISA S. VAN AMBURG, Judge.

INTRODUCTION

Coinmach Corporation (“Coinmach”) appeals from the judgment entered, after a court-tried case, in favor of The Brittany Sobery Family Limited Partnership, d/b/a Bridgeport Crossing Apartments (“Bridgeport”). Coinmach claims the trial court erred by finding: (1) Coinmach's right of first refusal terminated during its holdover tenancy; (2) Coinmach had no contractual right to renew the leasehold for another ten years; (3) Coinmach's holdover tenancy was a month-to-month tenancy as opposed to a year-to-year tenancy; and (4) Bridgeport was entitled to damages in the amount of $17,588.47. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

On January 15, 1991, the parties' predecessors in interest entered into a Standard Laundry Equipment Lease (“Original Lease”) to equip and manage a coin-operated laundry facility in an apartment complex located at 4015 Brittany Circle, Bridgeton, Missouri (“Leased Premises”). The Original Lease defined the term as ten years with a termination date of January 15, 2001.

Paragraph eight of the Original Lease contained a right of first refusal option giving Coinmach the right to match any bona fide offer from third parties. The record is unclear as to when but at some point the parties eliminated an automatic right of renewal clause from the terms of the Original Lease.

Several months prior to expiration of the Original Lease term, the parties executed an extension of the Original Lease by addendum (“Lease Addendum”), extending the lease term an additional twelve months, from its “now current expiration date,” to January 15, 2002. The Lease Addendum specifically stated, “[a]ll other terms and conditions of said Lease shall remain in full force and effect except as amended herein.”

Following expiration of the Lease Addendum on January 15, 2002, Coinmach remained in possession of the Leased Premises without the benefit of a written lease. Coinmach continued to pay rent on a monthly basis just as in the Original Lease through March 2009. The parties stipulated Coinmach was a holdover tenant “at least through March, 2009.”

On March 30, 2009, Bridgeport executed a new lease with a third party for the provision of laundry services on the Leased Premises. The next day Bridgeport notified Coinmach it was canceling the holdover tenancy and demanded removal of Coinmach's laundry machines by April 30, 2009. Coinmach responded that the cancellation of the leasehold was not valid, citing its right of first refusal contained in the Original Lease and presented Bridgeport with an offer matching the terms of the third-party lease. Coinmach also asserted the term of its holdover tenancy continued on a year-to-year basis, and therefore the then current term of its holdover tenancy commenced January 15, 2009, and continued until January 15, 2010.

Bridgeport refused Coinmach's matching offer and repeatedly demanded Coinmach vacate. Coinmach refused and remained in the Leased Premises operating its laundry services up through entry of judgment.

Bridgeport filed a petition seeking Ejectment, Unlawful Detainer, Trespass, Declaratory Judgment and Injunctive Relief against Coinmach. Following a bench trial the court entered judgment in favor of Bridgeport. The trial court found: Coinmach's right of first refusal terminated after January 15, 2003; Coinmach's holdover tenancy terminated on March 30, 2009, effective April 30, 2009; Coinmach unlawfully detained the Leased Premises after April 30, 2009, and Bridgeport was entitled to damages in the amount of $17,588.47. Coinmach appeals.

STANDARD OF REVIEW

On appeal from a court-tried case we accept evidence and inferences in a light most favorable to the prevailing party, disregarding all contrary evidence, and will affirm the decision of the trial court unless no substantial evidence supports it, it is against the weight of the evidence or it erroneously declares or applies the law. Sachs Elec. Co. v. HS Const. Co., 86 S.W.3d 445, 453 (Mo.App. E.D.2002); Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).

DISCUSSION

In its first point, Coinmach argues the trial court erred by finding Coinmach's right of first refusal terminated twelve months into its holdover tenancy. In its second point, Coinmach argues the court erred by finding Coinmach had no contractual right to renew the leasehold under the terms of the right of first refusal clause. Coinmach presents interrelated arguments in its first two points. Therefore, we will address these two points as one.

Generally, when a tenant holds over with the landlord's consent, a new tenancy arises and the law presumes that the holding-over is subject to the terms and conditions of the original lease, unless the contrary be shown. Grand Inv. Corp. v. Connaughton, Boyd & Kenter, P.C., 119 S.W.3d 101, 111 (Mo.App. W.D.2003).

Paragraph eight of the Original Lease reads as follows:

“ Lessor hereby grants Lessee the right of first refusal to meet the terms of any bonafide offer from any party proposing to provide laundry equipment for tenant use at Lessor's property, either by sale or lease, to be installed by such other party or by Lessor at any time within twelve (12) months following the expiration of the term, or any renewal term, of this lease, whether such proposal is made before, at, or after the expiration of this lease's term, or any renewal term. Prior to agreeing to any such proposal to lease space to any competitor, or to purchase and install equipment, Lessor will give Lessee a copy of the new proposal in writing, and Lessee will have thirty (30) business days to match the new proposal, or submit a better offer. If Lessee matches the new proposal, or submits a better one, Lessor agrees to sign an agreement with Lessee reflecting the terms of the new proposal. If Lessor does not honor Lessee's right of first refusal, Lessee may declare this lease as having been renewed under its same terms ( [sic] or a period equal to the original lease term; such additional renewal term to commence on the day immediately following the last day of the last effective lease term, and lessee may reinstall its equipment, or Lessee may seek any other remedy allowed by law, including compensationcalculated as stated in paragraph 5(b) above.” (emphasis added).

Relying on paragraph eight, Coinmach argues the trial court misapplied the law or misconstrued the intent of the parties by failing to recognize that Coinmach's right of first refusal remained throughout the holdover tenancy. Coinmach asserts the court misapplied the law because there is no evidence upon which it could find the right of first refusal terminated. We disagree.

The trial court relied on the language in the lease as evidence that the parties did not intend for the right of first refusal to extend indefinitely into a holdover tenancy. Where the language of a contract is free from ambiguity, its construction is for the court, as a matter of law. Wilson Mfg. Co. v. Fusco, 258 S.W.3d 841, 844 (Mo.App. E.D.2008). Unambiguous language in a lease is evidence of the parties' intent. Washington University v. Royal Crown Bottling Co. of St. Louis, 801 S.W.2d 458, 464 (Mo.App. E.D.1990). Therefore the trial court's decision was based on evidence and the court correctly applied the law.

Coinmach next contends the trial court misconstrued the language of the lease because paragraph eight contains the phrase, “any renewal term,” which evidences an intent to include holdover tenancies. We disagree.

We review the language of a lease de novo in order to construe the parties' intent. Stahlhuth v. SSM Healthcare of St. Louis, 289 S.W.3d 662, 670 (Mo.App. E.D.2009). When interpreting lease agreements, we follow the rules of construction governing contract. Kamada v. RX Group Ltd., 639 S.W.2d 146, 148 (Mo.App. E.D.1982). We first examine the plain language of the agreement to determine whether it clearly addresses the issue at hand. TAP Pharmaceutical Prods. Inc. v. State Bd. of Pharmacy, 238 S.W.3d 140, 143 (Mo. banc 2007). If the language is clear and addresses the disputed matter, the inquiry ends. TAP, 238 S.W.3d at 143. Language is considered unclear, or ambiguous, if it is reasonably susceptible to more than one construction giving the words their plain and ordinary meaning as understood by a reasonable, average person. Klonoski v. Cardiovascular Consultants of Cape Girardeau, Inc., 171 S.W.3d 70, 73 (Mo.App. E.D.2005). If the language is ambiguous, courts will look to the language in the context of the entire contract and parol evidence to determine the intent of the parties, including the practical construction the parties themselves have placed on the contract by their acts and deeds, and external circumstances. TAP, 238 S.W.3d at 143;West v. Sharp Bonding Agency, Inc., 327 S.W.3d 7, 15 (...