Genesco, Inc. v. Monumental Life Ins. Co.

Decision Date17 June 1983
Docket Number82-496-15.,Civ. A. No. 81-2195-15
Citation577 F. Supp. 72
PartiesGENESCO INC., Plaintiff, v. MONUMENTAL LIFE INSURANCE COMPANY and Jaffe-Spindler Company, Defendants, JAFFE-SPINDLER COMPANY, Plaintiff, v. GENESCO, INC., Defendant.
CourtU.S. District Court — District of South Carolina
COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

William C. Stork, Columbia, S.C., for Genesco.

James C. McLeod, Florence, S.C., and Robert S. Moraff, Totowa, N.J., for Jaffe-Spindler.

Robert W. Dibble, Jr., Robert E. Stepp, Columbia, S.C., for Monumental Life.

ORDER

HAMILTON, District Judge.

This matter was tried by the court sitting without a jury during the period June 1 — June 3, 1983. Having carefully considered the evidence, the credibility of the witnesses and the briefs and arguments of counsel, the court hereby enters its Findings of Fact and Conclusions of Law pursuant to Rule 52(a) of the Fed.R.Civ.P.

I. Parties

1. Genesco, Inc., ("Genesco") is a corporation organized under the laws of the State of Tennessee with its principal office and place of business at Genesco Park in Nashville, Tennessee.

2. Monumental Life Insurance Company ("Monumental") is a Maryland corporation with its principal office and place of business in Baltimore, Maryland.

3. Jaffe-Spindler Company ("Jaffe-Spindler") is a limited partnership organized under the laws of the State of New York with its principal office and place of business at 111 First Street, Jersey City, New Jersey. Jaffe-Spindler appeared herein through its General Partner, Benjamin D. Jaffe, who resides at 1401 North Venetian Way, Miami Beach, Florida (Order entered March 31, 1982).

II. Prior Proceedings

4. The original action, Civil Action No. 81-2195-15, was initiated by Genesco in the Court of Common Pleas of Marlboro County on September 10, 1981. The complaint named as defendants (i) I.R.E. Realty Advisors, Inc., the General Partner of and d/b/a Investors Tax Sheltered Real Estate, Ltd., Series II ("I.R.E."), which Genesco assumed to be the landlord under the lease pursuant to which Genesco occupied certain premises in a shopping center in Bennettsville, South Carolina, and (ii) Monumental, mortgagee of said shopping center and collateral assignee of landlord's interest in said leases with Genesco and the Great Atlantic and Pacific Tea Company. The complaint alleged that, notwithstanding notice, and its obligation to do so, I.R.E. had failed and refused to stop severe roof leaks, rendering the leased premises incapable of being occupied and enjoyed. The State Court ordered the defendants to show cause on October 5, 1981, why the equitable relief sought in the complaint should not be granted.

5. On or about October 5, 1981, prior to the hearing on the Order to Show Cause, the defendants removed the action to this Court. On the same date, the defendants filed an answer to Genesco's complaint denying that the lessor had failed and refused to comply with its obligations under the lease. Defendants also counterclaimed, alleging that Genesco misrepresented its reasons for vacating the premises and was simply attempting to break a lease obligation. Genesco denied the allegations contained in defendants' counterclaim.

6. By motion filed on October 12, 1981, Genesco renewed its petition in this Court for an Order requiring defendants to show cause why they should not be enjoined during the pendency of this action from pursuing any default due to Genesco's tender of rentals due under said lease into the registry of this Court. Because of settlement negotiations among all parties, this motion was not heard until March 31, 1982. During the pendency of this motion, Genesco continued to pay into this Court the monies due and owing under the Lease.

7. On March 12, 1982, Jaffe-Spindler filed Civil Action No. 82-496-15 in this Court against Genesco. The complaint alleged that Jaffe-Spindler was the true owner of said shopping center and landlord under the lease. The complaint demanded, among other things, payment by Genesco to Jaffe-Spindler of accrued rent allegedly withheld by Genesco since September 1981. Various motions had been filed by the parties, all of which came before the Court for hearing on March 31, 1982.

8. By Order entered on March 31, 1982, with the consent of the attorneys for all parties, the Court:

(i) entered summary judgment under Rule 56 of the Federal Rules of Civil Procedure in favor of I.R.E., dismissing it as a party defendant and counter-claimant in Civil Action No. 81-2195-15;

(ii) allowed Benjamin D. Jaffe, as General Partner of Jaffe-Spindler, to be made a party defendant in Civil Action No. 81-2195-15 and consolidated Civil Action No. 81-2195-15 and Civil Action No. 82-496-15 with permission for Jaffe-Spindler to appear and prosecute its complaint by and through its General Partner Benjamin D. Jaffe, subject to its compliance with certain legal requirements.1

(iii) ordered (a) that funds previously deposited by Genesco with the Clerk of this Court be paid immediately to Jaffe-Spindler; and (b) that payment of said funds would not be a waiver by Genesco of its claims of constructive eviction from the leased premises and reserved to Genesco the right to claim refund of all payments made to Jaffe-Spindler from October 1, 1981 if a constructive eviction was found; and

(iv) ordered (a) that Genesco, from the date of the Order, send to Jaffe-Spindler all monetary payments under the terms of the lease as and when they become due and (b) further provided that Jaffe-Spindler waived its rights to claim a default (except for counsel fees, interest and costs) due to the non-payment by Genesco of sums due under the subject lease prior to March 31, 1982.

9. Genesco answered the Jaffe-Spindler complaint on April 21, 1982 alleging a constructive eviction arising from Jaffe-Spindler's failure to maintain the roof in good repair and seeking damages as a result of Jaffe-Spindler's failure to repair the leaking roof, a claim which was abandoned by Genesco at trial on June 2, 1983.

10. Monumental filed an amended answer to the complaint of Genesco and, cross-claimed against Jaffe-Spindler for waste seeking recovery for the dimunition in value of the real property covered by its mortgage and the Genesco lease covered by its collateral assignment of leases.

FINDINGS OF FACT

11. On January 5, 1970, (Ex. 1 of Genesco and Monumental) Bennett Properties Corp., lessor, and S.H. Kress and Company, lessee, entered into a lease for a term of 25 years commencing on August 12, 1970, covering the following property, which is the subject of this litigation:

All that certain lot, piece or parcel of land, situate and being near the City of Bennettsville, County of Marlboro, State of South Carolina, and being more particularly described as follows:
BEGINNING at a point on the Southern Right of Way of Route 15/401 By-Pass at Bennettsville, S.C. and being 116.3 ft. East of the Point of Curve, thence with Right-of-Way N. 58 — 46 E. 62.3 ft. to an iron; thence N. 74-15 E. 96.3 ft. to an iron on Carrollton Ave. Right of Way; thence with Carrollton Ave. R/W N. 89 — 45 E. 477.2 to iron; thence S. 31 — 14 E. 423.2 ft. to an iron on Rear Property Line Point of Curve, thence with Right of Way n. 58 — 46 E. 62.3 ft. to an iron; thence N. 74 — 15 E. 96.3 ft. to an iron on Carrollton Ave. Right of Way; thence with Carrollton Ave. R/W N. 89 — 45 E. 477.2 to iron; thence S. 31 — 14 E. 423.2 ft. to an iron on Rear Property Line; S. 58 — 46 W. 594 ft. to iron; thence N. 31 — 14 W. 544 ft. to an iron on rear line of Reserved Lot; thence N. 58 — 46 E. 30 ft. to iron; thence N. 31 — 14 W. 150 ft. to beginning. All containing 3.49 Acres.

12. On June 8, 1970, (Genesco Ex. 2 and Monumental Ex. 3) that lease was modified by an agreement between Milton Schwartz (successor to Bennett Properties Corp.) and Genesco (successor by merger to S.H. Kress and Company). This lease as modified will be referred to as the Genesco lease. A short form of the Genesco lease (Monumental Ex. 4) was executed on June 8, 1971, and recorded in the Office of the Clerk of Court of Marlboro County in Deed Book 123 at page 36.

13. (Monumental Exs. 1, 3). The Genesco lease provides for the payment of annual rental in the amount of Sixty-Eight Thousand Seven Hundred Fifty ($68,750.00) Dollars in equal monthly installments payable on the first day of each month in advance. The Genesco lease, with respect to the construction of improvements upon the leased premises provides, inter alia;

7. (a) Lessor shall erect upon the Leased Premises a retail store building having approximately 35,000 square feet of floor space all in accordance with final plans and specifications approved by Lessor and Lessee as hereinafter provided ...
(b) All buildings and improvements erected by the Lessor on the Leased Premises shall be designed and erected to meet all physical requirements of the site and to meet all conditions relative to soil and water ...

14. (Monumental Ex. 5). Am-Cal Construction Corp. was the contractor selected to construct the improvements on the property covered by the Genesco lease.

15. (Monumental Ex. 5). By letter to Am-Cal Construction Corp. dated November 11, 1970, E.F. Kerby, building contractor for Genesco, accepted the "building as having been fully completed in accordance with the requirements of the lease."

16. (Monumental Ex. 6). On November 20, 1970, Milton Schwartz, lessor, and the Great Atlantic & Pacific Tea Company, Inc., lessee entered into a lease covering the following property:

All that certain lot, piece or parcel of land, situate and being near the City of Bennettsville, County of Marlboro, State of South Carolina, and being more particularly described as follows:
BEGINNING at an iron stake on Carrollton Avenue R/W at the North Easterly corner, of Kress Store Lot thence with Carrollton Ave. N. 89° 45 E. 140 ft. to an iron; thence S. 31° 14' E. 569.2 to iron on rear line;
...

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