Camalier & Buckley-Madison, Inc. v. Madison Hotel, Inc.

• Decision Date: 22 May 1975
• Docket Number: No. 73-1523,BUCKLEY-MADISO,INC,73-1523
• Citation: 513 F.2d 407,168 U.S. App. D.C. 149
• Parties: CAMALIER &v. The MADISON HOTEL, INC., et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 407

513 F.2d 407

168 U.S.App.D.C. 149

CAMALIER & BUCKLEY-MADISON, INC. v. The MADISON HOTEL, INC., et al., Appellants.

No. 73-1523.

United States Court of Appeals, District of Columbia Circuit.

Argued April 16, 1974.

Decided May 22, 1975.

David G. Bress, Washington, D. C., with whom Philip L. Cohan was on the brief, for appellants.

Warren K. Kaplan, Washington, D. C., with whom Dorothy Sellers, Washington, D. C., was on the brief, for appellee.

Before ROBINSON and ROBB, Circuit Judges, and SOLOMON, ^* United States Senior District Judge for the District of Oregon.

Opinion for the Court filed by Circuit Judge SPOTTSWOOD W. ROBINSON, III.

SPOTTSWOOD W. ROBINSON, III, Circuit Judge:

The Madison Hotel, Inc. (Madison) and Marshall B. Coyne, its president, appeal from a judgment awarding damages to Camalier & Buckley-Madison, Inc. (Camalier) on account of Madison's termination of a lease into which it had entered with Camalier. The judgment rests upon a verdict directed by the trial judge on the issue of liability, and the amount of damages set by the jury following submission of that issue to it. Presented for review are questions of construction and operation of key provisions of the lease, and of the propriety of some of the instructions given the jury on damages. We find that the direction of the verdict was erroneous, and that the error fatally infected the verdict on damages also. Accordingly, we vacate the judgment and remand the case for a full retrial.

I. THE FACTUAL BACKGROUND

By an instrument dated July 7, 1967, Madison leased to Camalier a portion of the main lobby of Madison's hotel building, together with furnishings and equipment, for use by Camalier as a gift shop and newsstand. The lease specified a term of five years from March 1, 1967, renewable at Camalier's option for an additional five-year period, and incorporated two other features which were to assume great importance in this litigation. Paragraph 21 authorized Madison to relocate the demised premises in similar-sized space on the main lobby floor of either the hotel building or Madison's adjacent office building on a sixty-day notice of intention by Madison and at its expense. ¹ Paragraph 16 provided that in the event of nonperformance by Camalier of any obligation of the lease for a period of five days after written notice thereof by Madison, the latter could terminate the lease and reenter the premises on a five-day notice of its intention to do so. ²

On February 3, 1971, Coyne telephonically informed Camalier's president that the shop would have to be moved from the hotel lobby and relocated in the lobby of the office building. Coyne then received an acknowledgment of Camalier's obligation to comply if Madison provided equivalent space. By May, 1971, the new location was ready for occupancy but Camalier refused to accept it, asserting that the area was smaller than the original site and that the fixtures were inadequate for storage and display of its wares. Negotiations between the parties, over a period of several months ensuing, failed to achieve a mutually satisfactory adjustment of those objections. ³

By letter dated June 1, 1971, Coyne confirmed the February 3 telephone conversation and referred to Paragraph 21 of the lease. ⁴ That letter was followed by another, dated June 23, in which Coyne, again citing Paragraph 21, indicated a desire to terminate the lease but suggested renegotiation of a new lease clarifying their differences. ⁵ After a conference between Coyne and Camalier failed to achieve that goal, ⁶ Coyne, by letter dated August 4, ⁷ advised that "(s)ince Article Twenty-One of your lease gives me the absolute right to require you to relocate your business and since the sixty day notice period will expire August 23, 1971, ⁸ we shall expect you to complete your moving into the relocated space by the last mentioned date, failing which, we shall consider you in default and will take such further action as we deem appropriate to the circumstances." ⁹ Then followed another letter, dated September 3, in which Coyne stated that "on Tuesday, September 7th, I will close the space you occupy currently and I request that you remove all merchandise forthwith." ¹⁰ That missive brought the final episode near.

On the night of September 6-7, an employee of Madison broke off a key in the lock securing the shop in the hotel building. Madison's night manager informed a Camalier employee of the lock; the employee retained a locksmith, regained entry, and business was conducted on September 7 and 8. On the night of September 8-9, Madison had the lock on the shop door changed, and on the next morning Madison's night manager told Camalier's employee that Coyne had informed him that Camalier had broken the lease and was not to reopen for business. When the employee nonetheless attempted to do so, he was unable to open the door, and it was then that Camalier turned to courts.

The complaint which Camalier filed in the District Court alleged wrongful eviction, trespass and breach of contract, and sought damages from Madison and Coyne. At trial before a jury, the judge directed a verdict for Camalier on the question of liability, and the jury assessed compensatory and punitive damages in its favor. ¹¹ Madison's motion for a new trial, or in the alternative for remittitur, was denied and this appeal followed.

II. THE OPTION TO RELOCATE

Camalier's motion for direction of the verdict summoned attention to three notice provisions of the lease. The first was the sixty-day notice of intention specified in Paragraph 23 as a precondition to exercise of Madison's right to relocate Camalier's shop. ¹² The second was the five-day notice of default, and the third the five-day notice of intention, which Paragraph 16 made prerequisite to termination of the lease and reentry by Madison upon the leased premises. ¹³ The trial judge ruled that as a matter of law Madison did not comply with the third provision, and that the omission to do so entitled Camalier to a judgment establishing Madison's liability on all three causes of action stated in the complaint. With that, the judge deemed it unnecessary to determine whether Madison observed the other two notice requirements.

In this court, the parties have debated the effects, upon the issues presented for review, of each of the three notice provisions. Since we disagree with the trial judge's ruling, it is essential that we consider them all. ¹⁴ In the interest of orderly analysis, we start with the one associated with Madison's attempts to relocate the premises leased to Camalier. ¹⁵ We then consider those related to Madison's bid to terminate the lease. ¹⁶

Paragraph 21 conferred upon Madison "the right to relocate the demised premises to another location on the main lobby floor of the hotel building, or office building immediately adjacent thereto," upon satisfaction of three conditions. ¹⁷ One was "that the substituted area . . . be similar in size to the premises (originally) demised . . . ." ¹⁸ Another was that Madison give Camalier "sixty (60) days notice of its intention thereof." ¹⁹ Still another was that "(a)ny and all costs incurred by such relocation . . . be borne by (Madison) and rental payments . . . abate during any period in which (Camalier) shall be unable to operate its business." ²⁰ The last condition does not tender any question for decision on this appeal, but the other two very much do.

Camalier refused to move its business into the office building on grounds that the facility there offered was smaller in floor, storage and display areas. ²¹ Like Camalier, we think the lease fairly contemplated substantial comparability in these respects, ²² and we agree with Madison that the conflicting evidence introduced on these subjects raised substantial issues of fact for resolution by the jury if Paragraph 21 was otherwise properly invoked. ²³ Our immediate concern, however, is whether the notice requirement of Paragraph 21 was met, for if not the relocation provision by its own terms never became operative.

The evidence demonstrated more than ample communication to Camalier of Madison's desire that the shop be moved from the one building to the other. As early as February 3, Coyne telephoned Camalier's president to tell him just that; ²⁴ the message was repeated in Coyne's letters of June 1 ²⁵ and 23, ²⁶ both of which made specific reference to Paragraph 21. Each of these communications was more than sixty days in advance of the date September 7 on which Madison first sought to oust Camalier for noncompliance with Paragraph 21. What Madison had in mind as distinguished from legal validity of the thought, in view of the substituted space and fixtures offered Camalier was indisputably to invoke that provision.

It is contended, however, that these messages were ineffective because none unequivocably established a time for the relocation Madison wished. More particularly, the argument is that neither of the communications transmitted more than sixty days prior to September 7 designated a date from which the sixty-day period for relocation was to run, or a date on which the period was to expire, and that for that reason each was fatally defective. We cannot agree. Paragraph 21 required notice by Madison merely "of its intention" to relocate Camalier; ²⁷ it did not call for notice specifying a day certain on or before which relocation was to take place. ²⁸ The evident purpose of this notice provision was to inform the lessee of the lessor's plan in time to permit the lessee an opportunity to prepare to move. Any communication clearly informing Camalier of the action demanded would suffice, then, after a minimum period of sixty days for preparation and compliance was afforded. ²⁹ We have said that Madison's communications between February 3 and June 23 imparted the necessary information. ³⁰ We now add that at least by August 23 ³¹ Madison was entitled to insist upon relocation of...