Car Wash Specialties, LLC v. Turnbull

• Decision Date: 02 June 2015
• Docket Number: No. ED 102075,ED 102075
• Citation: 465 S.W.3d 481
• Parties: Car Wash Specialties, LLC, Plaintiff/Appellant, v. Harold L. Turnbull and Elsie W. Turnbull, Defendants/Respondents.
• Court: Missouri Court of Appeals

465 S.W.3d 481

Car Wash Specialties, LLC, Plaintiff/Appellant

v.Harold L. Turnbull and Elsie W. Turnbull, Defendants/Respondents.

No. ED 102075

Missouri Court of Appeals, Eastern District, DIVISION ONE .

Filed: June 2, 2015

Rehearing Denied July 14, 2015

Lee Reneau Elliott, 151 West College Street, P.O. Box 225 Troy, Missouri 63379, for Appellant

Joel David Brett, 211 North Third Street, St. Charles, Missouri 63301, for Respondent

Lisa S. Van Amburg, Judge

INTRODUCTION

Car Wash Specialties, LLC (“CWS”) appeals the judgment of the trial court granting summary judgment in favor of Harold and Elsie Turnbull (“Landlords' ”) on CWS's petition for declaratory judgment regarding the extension of a lease agreement. CWS contends the trial court erred in interpreting the terms of the lease agreement, because it: (1) determined as a matter of law that the lease required CWS to notify Landlords that it intended to extend the lease term another five years; (2) failed to consider parol evidence and construe allegedly ambiguous language in the lease against Landlords; and (3) interpreted the lease to require CWS to forfeit a $200,000 payment owed to it by Landlords. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The undisputed facts are that CWS, by virtue of an assignment (the “Assignment”) of a prior commercial lease (the “Lease”), entered into an agreement with Landlords to lease a tract of land for a term of five years, for the purpose of conducting business as a carwash. The term of the assigned Lease ran from December 1997 to December 2002.¹ The Lease, however, provided CWS with an option to renew “for four (4) consecutive additional terms of five (5) years each ...” if CWS notified Landlords in writing at least 90 days before the end of each term that it intended to renew the Lease. Upon renewal, the monthly rental rate would increase as follows:

“[1] Initial five year term ... $670.00[,] [2] First renewal term beginning December 2002 ... $737.00[,] [3] Second renewal term beginning December 2007 ... $811.00[,] [4] Third renewal term beginning December 2012 ... $892.00 [,] [5] Fourth renewal term beginning December 2017 ... $985.00 ...”

CWS timely renewed the Lease for the “First Renewal Term,” running from December 2002 to December 2007. CWS also timely renewed the Lease for the “Second Renewal Term,” running from December 2007 to December 2012.

Before the “Second Renewal Term” began, however, a dispute arose between the parties over access to the leased premises, culminating in litigation. In 2009, the parties resolved this prior dispute by entering into a written settlement agreement (the “Settlement”).² The Settlement provided, in relevant part:

1. Within 30 days [Landlords] will pay [CWS] $201,000.00.

2. [CWS] will immediately agree to a change in access to their property....

3. [CWS] will continue to pay rent to [Landlords] until such time [CWS] are [sic] notified that [Landlords] have entered into a contract with a third party to develop the carwash tract with [Landlords]' surrounding ground south of Jason Drive and west of Turnbull Trail. At such time [Landlords] will pay to [CWS] the sum of $200,000.00 and [CWS] will remove their fixtures, both within 60 days.

4. Until such time the carwash is closed to [sic] the terms as outlined above, [CWS] will continue to pay rent and the parties will perform according to the lease and any assignment or amendments thereto.

....

7. Upon closing and payment of the final $200,000, taxes on the property would be prorated as of the date of that payment.

After settling its dispute with Landlords, CWS continued its tenancy for the “Second Renewal Term.” In December 2012, the “Second Renewal Term” ended and CWS failed to notify Landlords that it intended to extend the Lease for the “Third Renewal Term.” Nevertheless, CWS remained in possession of the premises and continued to pay rent at the “Second Renewal Term” rate of $811.00 per month.

In May 2013, Landlords demanded by letter that CWS surrender the premises on or before July 1, 2013. Landlords claimed that because CWS failed to notify them of its intent to renew the Lease for the “Third Renewal Term,” the Lease expired in December 2012, and CWS remained as a holdover tenant. CWS responded by filing the instant action seeking declaratory judgment.

In its petition, CWS requested the trial court declare it was not obligated to notify Landlords of its intent to renew for the “Third Renewal Term,” because the Settlement terms “superseded” the Lease's notification and renewal requirements. In support of its position, CWS pointed to language in the Settlement providing that CWS “will continue to pay rent to [Landlords] until ... notified that [Landlords] have entered into a contract with a third party to develop the carwash tract ... [a]t such time [Landlords] will pay to [CWS] the sum of $200,000.00 ...” CWS argued this language indefinitely extended the term of the Lease, providing it with a right to lease the premises until Landlords entered into a contract to develop the land and paid CWS $200,000.³

Landlords answered and filed a counterclaim seeking declaratory judgment. Landlords also moved for summary judgment, claiming the plain language of the Lease required CWS to notify Landlords of its intent to renew the Lease, and the Settlement did not alter or ify this obligation. In support, Landlords point to paragraph four of the Settlement, which states that CWS “will continue to pay rent and the parties will perform according to the Lease and any assignment or amendments thereto.”

CWS opposed Landlords' motion for summary judgment, arguing the Settlement and the Lease, read together, are ambiguous and the court should consider parol evidence to determine the parties' intent. In support, CWS attached an affidavit from its principal member, Gregory Strawhun, stating the parties intended the Settlement to amend the Lease by creating a lease term that would continue, “until such time as [Landlords] found a developer, paid [CWS] the balance of the damages incurred, and gave [CWS] sixty (60) days' notice in which to remove the car wash equipment and fixtures.”

The trial court held a hearing on Landlords' motion for summary judgment. The court considered the parties' arguments, the language of the Lease and Settlement, and supporting exhibits. The court then granted Landlords' motion for summary judgment. The court concluded the Settlement “specifies the parties will perform according to the lease ...” and this language “negate[s] [CWS]'s argument that the ... settlement removes the necessity for [CWS] ... to follow the terms of such lease.” The court found CWS failed to notify Landlords of its intent to renew the Lease and thereby “allowed said lease to terminate by its own terms.”

CWS filed a motion to amend, correct or clarify the court's order. Following a hearing, the court entered final judgment, granting Landlords' motion for summary judgment. The court reiterated that CWS's failure to renew the Lease for an additional five-year term “resulted in the lease terminating by its own terms ... relieving [Landlords] of any further obligation under the [Lease]....” The court also found that Landlords “did nothing affirmatively or otherwise to violate or breach the terms of the [Lease]” and ordered CWS to remove its fixtures from the premises within 30 days. CWS now appeals.

STANDARD OF REVIEW

“The propriety of summary judgment is purely an issue of law.” ITT Commercial Fin. Corp. v. Mid–America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Therefore, our review is essentially de novo. Id. Because the trial court's judgment is based on the record submitted and the law, we need not defer to the court's order granting summary judgment. Id. We keep in mind that summary judgment is “an extreme and drastic remedy” and great care should be exercised in utilizing the procedure. Intermed Ins. Co. v. Hill, 367 S.W.3d 84, 88 (Mo.App.S.D.2012). We therefore view the record in the light most favorable to the party against whom judgment was entered and afford the non-movant the benefit of all reasonable inferences from the record. ITT Commercial Fin . Corp., 854 S.W.2d at 376. Furthermore, we review the trial court's interpretation of a lease de novo. Campus Lodge of Columbia. Ltd. v. Jacobson, 319 S.W.3d 549, 552 (Mo.App.W.D.2010).

DISCUSSION

In CWS's first two points, it contends the trial court erred in interpreting the terms of the lease agreement, because it: (1) determined as a matter of law that the Lease, together with the Settlement, required CWS to provide notice of its intent to renew the Lease to extend the term another five years; and (2) failed to consider parol evidence to resolve allegedly ambiguous language against Landlords. Both arguments challenge the trial court's grant of summary judgment based on its interpretation of the language of the Lease, together with the Settlement. When construction of a contract is at issue, summary judgment is only appropriate if the contract is unambiguous on its face. See Northwest Plaza, L.L.C. v. Michael–Glen, Inc., 102 S.W.3d 552, 557 (Mo.App. E D.2003) ; Chadwick v. Chadwick, 260 S.W.3d 421, 425 (Mo.App.S.D.2008) (quoting Nat'l Merchandising Corp. v. McAlpin, 440 S.W.2d 489, 494 (Mo.App.Spfld.1969) ). Therefore, this Court must address the threshold question of whether the plain language of the Lease, together with the Settlement, unambiguously required CWS to give notice to Landlords of its intent to renew the Lease for the “Third Renewal Term.” We find no ambiguity, and affirm.

If no ambiguity exists, we interpret a lease like any contract, according to the plain and ordinary meaning of its language. Campus Lodge of Columbia, Ltd., 319 S.W.3d at 552. However if the terms of the agreement are ambiguous, then the court may refer to parol evidence, or evidence beyond the four corners of the document itself, to interpret the contract. See Erwin v. City of Palmyra, 119 S.W.3d 582, 585 (Mo.App.E.D.2003).

Here...