Columbia East Associates v. Bi-Lo, Inc.

• Decision Date: 09 May 1989
• Docket Number: No. 1392,INC,BI-L,1392
• Citation: 299 S.C. 515,386 S.E.2d 259
• Court: South Carolina Court of Appeals
• Parties: COLUMBIA EAST ASSOCIATES, a Limited Partnership, Respondent-Appellant, v., Appellant-Respondent. . Heard

Page 259

386 S.E.2d 259

299 S.C. 515

COLUMBIA EAST ASSOCIATES, a Limited Partnership, Respondent-Appellant, v. BI-LO, INC., Appellant-Respondent.

No. 1392.

Court of Appeals of South Carolina.

Heard May 9, 1989.

Decided Sept. 5, 1989.

Harvey G. Sanders, Jr., and Natalma M. McKnew, of Leatherwood, Walker, Todd & Mann, Greenville, for appellant-respondent.

Thomas E. McCutchen and Herbert W. Hamilton of Whaley, McCutchen, Blanton & Rhodes, Columbia, for respondent-appellant.

SHAW, Judge:

Respondent-appellant, Columbia East Associates, sued appellant-respondent, Bi-Lo, Inc., alleging breach of a commercial lease agreement and violation of the South Carolina Unfair Trade Practices Act. Bi-Lo appeals the denial of its summary judgment motion and an order awarding Columbia East $400,000 on its breach of contract claim. Columbia East appeals an order directing a verdict for Bi-Lo on Columbia East's unfair trade practices claim. We affirm.

In 1975, Bi-Lo was one of the most popular supermarket chains in South Carolina and remains so now. Its ability to draw customers into a shopping center made Bi-Lo an attractive tenant. During this time, Bi-Lo signed a letter of intent which provided for the proposed lease of space in the Columbia East Shopping Center. Bi-Lo selected the primary tenant's position in the center of the parking lot and in the center of the traffic flow. Bi-Lo also participated in the layout of the Columbia East Shopping Center.

On June 30, 1975, Bi-Lo executed a lease for the premises. The lease was prepared by Bi-Lo using its standard form lease as provided for in the letter of intent. Bi-Lo considered the lease terms nonnegotiable. Under the agreement, Bi-Lo was to lease 30,000 square feet in the shopping center at an annual rental rate of $48,000 per year. The term of the lease ran from the day Bi-Lo opened its store until December 31, 1995. The lease provided, in part, as follows:

The leased premises shall be used only for the operation of a supermarket (for the sale of groceries, meats and/or other items generally sold by supermarkets). No store or building or any part of the same, now or hereafter constructed in the Center (other than the building demised to Lessee) shall be used for the sale of health foods ..., delicatessen items, groceries, meats and/or other items generally sold by supermarkets, and no delicatessen and/or delicatessen department shall be operated in the Center without Lessee's written consent.

The lease further provided:

Lessee may assign this Lease or sublet any part or all of the leased premises for the purposes set forth in this Lease for which said premises may be used. No sublease or assignment by Lessee shall relieve Lessee of any liability hereunder.

Two other tenants entered into lease agreements for space in the center which made specific provisions regarding the operation of Bi-Lo in the center. One required its lease be conditioned upon the execution of a lease of space to Bi-Lo. The other inserted a provision allowing cancellation of its lease if Bi-Lo ceased to operate. The trial judge held Bi-Lo was the anchor tenant in Columbia East Shopping Center.

In the fall of 1986, Bi-Lo was presented with an opportunity to relocate its Columbia East store to a vacant Kroger supermarket in an adjacent shopping center located 150-200 feet away. Bi-Lo performed a site analysis to determine the viability of relocation. The analyst, Mr. Schafer, stated in his deposition that the biggest advantage of relocation to the vacant Kroger would be "eliminating the competitor and preventing a competitor from taking over the Kroger". The written analysis itself mentions the elimination of competition twice and reflects this was an important factor in the decision of whether to relocate. The analysis recommended relocation. Mr. Schafer stated he did not consider the possibility the Columbia East store would be taken over by a competitor. Conversely, he assumed it would not be occupied by a competitor.

In October, 1986, Mr. Kapp, Columbia East's managing agent, contacted Bi-Lo's real estate manager, Mr. Adamson, after hearing a rumor that Bi-Lo was considering closing the Columbia East store and relocating to the Kroger location. On December 23, 1986, Bi-Lo gave official notice to Columbia East of its intent to close the store. Following receipt of this notice, Mr. Kapp again contacted Mr. Adamson regarding the closing of the store. Mr. Kapp testified, and the trial judge so found, that Mr. Adamson advised him a competing supermarket chain would not be an acceptable subtenant for the premises.

On February 21, 1987, Bi-Lo vacated the Columbia East premises and relocated to the vacant Kroger store in the adjacent shopping center. At the time of the hearing, the Columbia East store had remained vacant since Bi-Lo's relocation with no activity occurring on the premises. Bi-Lo continued to make rent payments on the Columbia East space but presented no proposed subtenant for the vacant store. The record discloses that while Bi-Lo executed an agreement with a real estate company to market various premises which had been vacated by Bi-Lo, Bi-Lo directed the company to omit the Columbia East space from its advertising brochure. Approximately one month prior to the trial of this case, Bi-Lo instructed the company to include the Columbia East space in its brochure. Bi-Lo made no other effort to locate a subtenant for the Columbia East store.

The case went to trial before the judge, sitting without a jury. Following the hearing, the trial judge issued his order holding Bi-Lo had breached its lease agreement with Columbia East by its cessation of operation and the refusal to sublease to a competing supermarket chain damaged Columbia East in the amount of $400,000. The trial judge ordered judgment in that amount and Bi-Lo appeals. Columbia East appeals the directed verdict in favor of Bi-Lo on the unfair trade practices claim.

Once a contract is before the court for interpretation, the main concern of the court is to give effect to the intention of the parties. Williams v. Teran, Inc., 266 S.C. 55, 221 S.E.2d 526 (1976). The courts, in attempting to ascertain this intention, will endeavor to determine the situation of the parties, as well as their purposes, at the time the contract was entered. Klutts Resort Realty v. Down' Round Development, 268 S.C. 80, 232 S.E.2d 20 (1977). The intention of the parties must be inferred from the whole agreement. Martin v. Carolina Water Service, Inc., 280 S.C. 235, 312 S.E.2d 556 (Ct.App.1984). If a writing, on its face, appears to express the whole agreement between the parties, parol evidence cannot be admitted to add another term thereto. However, where a contract is silent as to a particular matter, and ambiguity thereby arises, parol evidence may be admitted to supply the deficiency and establish the true intent. U.S. Leasing Corp. v. Janicare, Inc., 294 S.C. 312, 364 S.E.2d 202 (Ct.App.1988). For, generally, parol evidence is admissible to show the true meaning of an ambiguous written contract. Klutts, supra. Such a contract is one capable of being understood in more ways than just one, or an agreement unclear in meaning because it expresses its purpose in an indefinite manner. Id. When an agreement is ambiguous, the court may consider the circumstances surrounding its execution in determining the intent. Williams, supra. Where the contract is susceptible of more than one interpretation, the ambiguity will be resolved against the party who prepared the contract. Id.

Bi-Lo argues that, under the lease agreement, it can vacate the premises and leave the store empty as long as...