Coleman v. Regions Bank
| Decision Date | 03 November 2005 |
| Docket Number | No. 05-307.,05-307. |
| Parties | Timothy Tucker COLEMAN; Leslie Eagle Coleman; Candice Coleman Heyward; Ren Tucker; Lauren Tucker; Jack R. Tucker Jr.; Victor Halter; Vernon Tucker Jr.; Mary Ann Garner Frizone; Cherron Garner Munson; Gayle Garner Roski; Tucker Garner; Patricia Tucker Bell, and Marvin D. Thaxton, Trustee Under the Last Will and Testament of Cora A. Moore, Deceased, Appellants; v. REGIONS BANK; Kark-TV, Inc.; Combined Communications Corp.; Gannett Company, Inc., Appellees. |
| Court | Arkansas Supreme Court |
Richard H. Mays Environmental Legal Services, by: Richard H. Mays, Little Rock, for appellants.
Chisenhall, Nestrud & Julian, P.A., by: Charles R. Nestrud, Little Rock, for appellee.
This case presents issues of construction of commercial leases and comes to this court after review by the Arkansas Court of Appeals. In this case, there are two sets of Appellants. The first set, known as "Tucker," are the heirs of Mildred Tucker Porter and Irma Tucker Engle, and are the distributees of the Tucker Company.1 The second Appellant, known as "Moore," is Marvin D. Thaxton, who is the trustee under the last will and testament of Cora A. Moore, deceased. Appellees are Regions Bank, successor to the original lessee; KARK-TV, Inc.; Combined Communications Corp.; and Gannett Company, Inc. (collectively known as "the Bank"). The Pulaski County Circuit Court granted the Bank's motion for partial summary judgment and also ruled that the properties in this case are subject to an implied easement. Tucker and Moore appealed to the Arkansas Court of Appeals, which affirmed on the grounds that three points of appeal were procedurally barred, and that the trial court did not err in finding that the "good condition" clause of the leases did not require the Bank to return separate buildings. See Coleman v. Regions Bank, CA04-401, (Ark.App. March 2, 2005). Tucker and Moore filed a petition for review of that decision, pursuant to Ark. Sup.Ct. R. 2-4(c)(iii), alleging that the issue of whether the "good condition" clause in a ground lease of property applies to the configuration of the building when returned to the lessor is an issue of first impression in this state. We granted the petition. When we grant review following a decision by the court of appeals, we review the case as though it had been originally filed with this court. See Cox v. Miller, 363 Ark. 54, 210 S.W.3d 842 (2005); Robinson v. Ford-Robinson, 362 Ark. 232, 208 S.W.3d 140 (2005). We find no error and affirm.
The pertinent facts and procedural history of this case were thoroughly laid out by the court of appeals:
In August 1952, [the Bank] executed two leases — one with the Tucker predecessors and the other with Moore — for the lease of the two parcels. Each lease permitted the Bank to construct its banking facilities on the parcels. Further, each lease allowed the Bank to make such alterations in and to the building as the Bank deemed necessary, provided that such alterations were not injurious to the leased premises. Finally, each lease required the Bank, upon termination, to deliver the building, except for bank fixtures, equipment, and bank vaults, in good condition, reasonable wear and tear excepted. Each lease, as extended, expired on July 31, 2002.
In 1953-54, in accordance with the leases, the Bank constructed its then-new banking headquarters consisting of a two-story structure on the Moore property that housed the Bank's lobby and offices and a two-story structure on the Tucker property that housed a drive-through banking facility on part of the ground floor and additional office space on the second floor. The Bank's architects prepared the design for the building, and Tucker and Moore approved the plans. . . . As a result of the 1953-54 construction, the structures were integrated, having common electrical, HVAC, and plumbing systems and sharing common elevators, restrooms, and stairwells.
In 1966-67, the Bank desired to expand its banking headquarters and acquired additional leasehold interests to the west of the Tucker and Moore properties. . . . In 1967, the Bank expanded its banking facilities to cover all of the Tucker and Moore parcels (the East Building). The drive-in banking facility was relocated to the ground floor under the western . . . side. There is no evidence regarding whether the Bank sought approval of its plans.
The Bank also constructed a three-story structure on the [western side] (the West Annex) and connected it to the East Building through a two-story structure (the Overpass) that traversed the alleyway between the East Building and the West Annex. As a result of the 1967 construction, the separation of the structural frame along the property line was maintained . . . and the banking facility continued to have integrated building services, having common electrical, HVAC, and plumbing systems and sharing common elevators, restrooms, and stairwells. This project is referred to as the 1967 expansion/modifications. . . .
Appellee KARK's involvement began in 1975, when the Bank moved into its current headquarters . . . and entered into a transaction with KARK whereby the Bank conveyed ownership of the banking facilities to KARK (subject to the interests of the landowners) and subleased the Tucker, Moore and [West Annex] ground leases to KARK, who remained on the premises until the sublease expired on June 30, 2002. The Tucker and Moore ground leases expired on July 31, 2002, and on that date Tucker and Moore became owners of the East building. Prior to the expiration of the leases, Moore and Tucker made demands on the Bank to remove the Overpass and to restore the buildings to good condition, including removing any environmental contamination.
The Bank filed a petition for declaratory judgment against Tucker, Moore, and KARK, seeking a declaration that it had complied with the terms of the leases and that the Bank, Tucker, and Moore be determined to have mutual use of the equipment, utilities, and services located in all of the buildings. . . . Moore and Tucker answered and counterclaimed, asserting the right to separate, independent buildings and denying the Bank's easement claims.2 The counterclaim alleged, inter alia, that the Bank and its subtenant, KARK, breached the "good condition" and the "injurious to the leased premises" clauses of the leases, were negligent, and committed waste by constructing a building that effectively merged the Moore and Tucker properties and then failing to restore separate buildings at the expiration of the leases. The Bank's third amended petition sought judgment over against KARK on the independence claims. The trial court bifurcated the claims concerning the separation of the buildings from the claims that the Bank failed to return the buildings in "good condition" or pay for certain necessary repairs. Both sets of claims involve the "good condition" clauses.
Tucker and Moore moved for partial summary judgment on their claims for separate, independent buildings. The Bank responded by filing a motion for summary judgment, alleging that any breach of contract or "waste" claims that Moore and Tucker may assert for separate, independent buildings are barred by the statute of limitations. KARK filed a motion for summary judgment, asserting that it did not agree to assume any of the Bank's obligations on the independence claims and is not otherwise liable to the Bank on those claims. [Footnote omitted.]
In its first order, the circuit court denied Tucker and Moore's motion for partial summary judgment on liability of the Bank to return separate buildings or to place existing buildings in good condition. Additionally, the court granted the Bank's motion for partial summary judgment on the ground that the statute of limitations barred Tucker and Moore's action. The court also dismissed with prejudice Tucker and Moore's counterclaim against the Bank and dismissed with prejudice the Bank's claims against KARK dealing with the independence claims. Lastly, the court found that the Bank's initial petition for imposition of an implied easement was still pending and encouraged the parties to resolve the issues amongst themselves, while still allowing for the parties to return to court should they be unable to do so. The parties were unable to reach a conclusion on the easement issue themselves, and, in a supplemental order, the court found that an implied easement exists that allows all three owners to continue use of the common building features. This order also contained a certification of appealability of the independence claims, pursuant to Ark. R. Civ. P. 54(b).
For reversal, Tucker and Moore argue that the trial court erred in finding that (1) the ground leases did not require separate buildings; (2) the "alterations" clause of the ground leases was not violated by the 1967 expansion and modification; (3) the "good condition" clause was not breached at the termination of the lease due to the configuration of the buildings; and (4) an implied easement exists allowing all landowners to continue to use the common building features in the same manner as before.
Tucker and Moore argue that the trial court erred in finding that the ground leases between them and the Bank did not require the Bank to provide separate buildings to Tucker and Moore at the termination of the leases. In making this determination, the trial court relied on two, distinct reasonings. First, that the ground leases do not provide a basis of liability because the court did not agree that the lease terms should be interpreted to require construction of separate buildings at the end of the lease. Second, the trial court found that their claim was barred by the statute of limitations.
On appeal, Tucker and Moore initially only address one of the two grounds given by the circuit court in reaching its decision. It is not until their reply brief that they ad...
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