Dayton Hudson Corp. v. Macerich Real Estate Co.

Decision Date04 March 1987
Docket NumberNo. 85-1737,85-1737
PartiesDAYTON HUDSON CORPORATION, a Minnesota Corporation, Plaintiff-Appellee, Fred Monsour, Trustee, Plaintiff-in-Intervention-Appellee, v. MACERICH REAL ESTATE COMPANY, a New York General Partnership, Defendant-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit

Stephen P. Friot of Spradling, Alpern, Friot & Gum, Oklahoma City, Okl., for plaintiff-appellee.

Robert C. Smith, Jr. of Monnet, Hayes, Bullis, Thompson & Edwards, Oklahoma City, Okl., for plaintiff-in-intervention-appellee.

Monty L. Bratcher of Bratcher & Teague (Terry F. Stokes, with him on the briefs), Oklahoma City, Okl., for defendant-appellant.

Before SETH, BARRETT and TACHA, Circuit Judges.

BARRETT, Circuit Judge.

Macerich Real Estate Company (Macerich) appeals from an order and judgment entered in favor of Dayton Hudson Corporation (DHC), appellee, and Fred Monsour (Monsour), intervenor appellee. The relevant undisputed facts may be briefly summarized.

On April 11, 1967, Monsour granted a ground lease to Macerich covering an 11.6 acre tract of land owned by Monsour. Macerich acquired the ground lease with the intent of constructing a building on the acreage and thereafter subleasing the building. Section 3 of the ground lease agreement provided, inter alia (a) Tenant covenants and agrees to pay Landlord for the Demised Premises without offset or deduction and without previous demand therefor, basic rent at the rate equal to the sum of:

* * *

* * *

All basic rent per annum shall be payable by Tenant in advance in equal monthly installments....

(b) Tenant shall, during the term of this lease, as additional rent, pay to the Landlord twenty (20%) per cent of all amounts received by Tenant as percentage rental ... from any sublease with respect to the Demised Premises pursuant to the provisions, if any, of any sublease with respect to the Demised Premises relating to the payment of such percentage rental (emphasis added).

The term of the ground lease was for twenty-six years and seven months. The lease year for the ground lease began on February 1 and ended on January 31 annually.

Macerich constructed a building on Monsour's property in 1970 and subleased the building to Arlan's Department Stores, Inc. (Arlan's). Arlan's vacated the building in 1971. Thereafter, in 1972, Target Stores, Inc. (Target) subleased the building from Macerich. The term of the sub-lease was for twenty-seven years and four months. DHC, appellee herein, is Target's corporate successor by merger. Article 10 of the Macerich/Target sublease obligated Target to pay Macerich a fixed minimum annual rental and a percentage rental, subject to certain offsets, of 1.5% of Target annual gross sales in excess of $9,040,000.

From 1972 to 1979, Macerich paid Monsour the base rental set forth in the ground lease and 20% of the percentage rentals paid by DEC to Macerich. On January 31, 1979, approximately seven years into the twenty-seven year term of the sublease, Macerich and DHC executed an amendment to their sublease. As amended, the sublease deleted DHC's obligation to pay percentage rentals. In lieu thereof, DHC agreed to pay a higher minimum monthly rental and utility, maintenance, and repair costs which had been previously paid by Macerich. Subsequent to the sublease amendment, Macerich failed to pay the percentage rentals due Monsour under the ground lease.

In 1984, DHC, in an effort to protect its position under the sublease, paid Monsour $171,016.88 representing the percentage rental sum due Monsour from Macerich under the terms of the ground lease. DHC then initiated this suit in the nature of a declaratory action seeking the right to pay percentage rentals directly to Monsour. Macerich defended on the basis that because the amendment to the sublease terminated DHC's obligation to pay percentage rentals, and because it (Macerich) no longer received percentage rentals, it did not owe Monsour any percentage rentals.

Within its order of April 25, 1985 granting DHC summary judgment, the district court found that the termination of percentage rental payments to Monsour was "untenable because Macerich really is receiving equivalent payments from Dayton Hudson in the form of higher fixed minimum rent and a reduction in its share of maintenance costs, fuel costs, etc. The amount paid to Monsour by plaintiff [DHC] is not in dispute herein and plaintiff had the legal right to pay the disputed sums directly to Monsour so as to avoid a lease cancellation by him." (R., Vol. II at p. 423).

In its judgment of May 30, 1985, the district court ordered Macerich to pay Monsour additional annual percentage rental in accordance with Section 3 of the ground lease. The court also directed that in the event that Macerich failed to pay Monsour as ordered, that DHC could pay Monsour directly and thereafter offset such payments against any amounts which might otherwise be due Macerich.

The district court concluded as a matter of law:

[t]hat the defendant, MaceRich Real Estate Company, is precluded from relying upon its non-receipt of percentage rent from Dayton Hudson Corporation as a condition precedent to its obligation to pay percentage rent to the intervenor, Fred Monsour, Trustee, because it was the conduct of the defendant, MaceRich Real Estate Company, not ratified or consented to by the intervenor, Fred Monsour, Trustee, which prevented fulfillment of said alleged condition precedent.

The Court further concludes as a matter of law that a party to a contract may not by his deliberate act prevent the happening of a condition therein and then take advantage of the condition to defeat liability upon the contract.

The Court further concludes as a matter of law that there was implied in the groundlease agreement between the intervenor, Fred Monsour, Trustee, and the defendant, MaceRich Real Estate Company, the covenant that neither party to the contract would injure the right of the other party to receive the benefits of the agreement.

R., Vol. II at p. 429.

In accordance with this judgment, DHC commenced offsetting rentals otherwise due Macerich against the $171,016.88 it had paid Monsour. Thereafter, Macerich sent DHC default notices threatening to dispossess Target as a tenant.

On July 11, 1985, DHC filed a motion for supplemental relief. DHC requested the court to order Macerich to cease and desist from sending the default notices until such time as DHC had recouped the $171,016.88 it had paid directly to Monsour and which the court had ruled could be offset against future rental otherwise due and owing Macerich. The court entered an order the same day which provided, inter alia:

ORDERED that the plaintiff, Dayton Hudson Corporation, have judgment against the defendant, MaceRich Real Estate Company, in the amount of $171,016.88, with interest at the rate of 6 percent per annum from October 23, 1984 to May 30, 1985, the whole to bear interest at the rate of 7.60 percent per annum from May 30, 1985 until paid.

IT IS FURTHER ORDERED that the defendant, MaceRich Real Estate Company, shall cease and desist from issuance of further default notices to plaintiff, Dayton Hudson Corporation, until such time as plaintiff has recovered the entire amount which has been adjudicated by this Court to be due plaintiff from defendant.

R., Amended Supplemental Vol. II at pp. 18-19.

Less than one month later, on August 2, 1985, Macerich sent Target another default notice. On August 19, 1985, DHC filed an application for citation for contempt against Macerich. On September 6, 1985, the court entered an order imposing sanctions on Macerich for contempt of court. Within its order, the court directed Macerich to post a $200,000 security bond. The court also ordered "that, in the event that any such order shall hereafter be violated, the entire amount of said bond shall be forfeited." R., Amended Supplemental Vol. II at p. 45. As of October 6, 1986, DHC had recouped, by way of rental offset, all of the $171,016.85 it had paid directly to Monsour.

On appeal, Macerich contends: (1) Macerich has no obligation to pay percentage rent to Monsour because Macerich is not receiving percentage rent from DHC; (2) the district court erroneously adopted inappropriate legal theories; (3) the lease must be construed according to its express terms; (4) DHC is estopped from asserting that Monsour's consent to the lease amendment was necessary; (5) DHC is not entitled to enforce the percentage rental provisions of the ground lease and is not entitled to recover percentage rental payments made to Monsour; (6) the court erred in granting summary judgment; and (7) neither the court nor DHC complied with the specific language of 28 U.S.C. Sec. 2202 prior to the court's issuance of supplemental relief. Our discussion of these issues will be limited to those issues we deem dispositive.

I.

At the outset, we observe that in reviewing a grant of summary judgment, we must examine the record to determine whether any genuine issue of material fact pertinent to the ruling remains, and, if not, whether the substantive law was correctly applied. Franks v. Nimmo, 796 F.2d 1230, 1235 (10th Cir.1986). Where different, ultimate inferences may be drawn from the evidence presented by the parties, the case is not appropriate for summary judgment. Brown v. Parker-Hannifin Corporation, 746 F.2d 1407, 1408 (10th Cir.1984). A party moving for summary judgment need not disprove plaintiff's claim but rather, must only establish that the factual allegations have no legal significance. Windon Third Oil and Gas Drilling Partnership v. Federal Deposit Insurance Corporation, 805 F.2d 342, 345 (10th Cir.1986). In the absence of genuine issues of material fact, our review of the grant of summary judgment is limited to whether the substantive law was correctly applied. Franks v. Nimmo supra.

As set forth above, DHC initiated this action after it paid Monsour $171,016.88 representing the...

To continue reading

Request your trial
285 cases
  • Wichita Clinic v. Columbia/Hca Healthcare Corp.
    • United States
    • U.S. District Court — District of Kansas
    • March 31, 1999
    ...plaintiff's claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir. 1987). In resisting a motion for summary judgment, the opposing party may not rely upon mere allegations or deni......
  • Phelps v. Hamilton
    • United States
    • U.S. District Court — District of Kansas
    • July 2, 1993
    ...sufficient for the movant to establish that the alleged factual issues are without legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir.1987). Summary judgment will be granted when the movant is able to show it is entitled to judgment as a matte......
  • Ekotek Site PRP Committee v. Self
    • United States
    • U.S. District Court — District of Utah
    • March 24, 1995
    ...plaintiff's claim; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir.1987). In resisting a motion for summary judgment, the opposing party may not rely upon mere allegations or denia......
  • Hernandez v. Conde
    • United States
    • U.S. District Court — District of Kansas
    • July 24, 2006
    ...claim or defense; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir.1987). The party opposing summary judgment must do more than simply show there is some metaphysical doubt as to th......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT