Guides, Ltd. v. Yarmouth Group
| Decision Date | 02 July 2002 |
| Docket Number | No. 99-1455.,No. 99-1392.,No. 99-1389.,No. 99-1464.,No. 99-1388.,No. 99-1459.,99-1388.,99-1389.,99-1392.,99-1455.,99-1459.,99-1464. |
| Citation | 295 F.3d 1065 |
| Parties | The GUIDES, LTD., a Colorado limited liability company, doing business as The Africa House; and Tseghe Foote, individually, Plaintiffs/Appellants/Cross-Appellees, v. The YARMOUTH GROUP PROPERTY MANAGEMENT, INC.<SMALL><SUP>*</SUP></SMALL>; Tabor Center Associates, L.P., Defendants/Appellees/Cross-Appellants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Darold W. Killmer (David H. Miller and Mari Newman with him on the brief), Miller, Lane, Killmer & Greisen, LLP, Denver, CO, for the Plaintiffs/Appellants/Cross-Appellees.
Robert Lawrence Ashe, Jr., Paul, Hastings, Janofsky & Walker, LLP, Atlanta, GA, (Kelly J. Koelker and Maureen E. O'Neill, Paul, Hastings, Janofsky & Walker, LLP, Atlanta, GA; Dov M. Grunschlag, Steinhart & Falconer, LLP, San Francisco, California; and James L. Aab, Aab & Botts, LLC, Denver, CO, with him on the brief for Tabor Center Associates, L.P.; David H. Stacy, Elzi Pringle & Gurr, Denver, CO, for The Yarmouth Group Property Management, Inc., joins in the brief for Tabor Center Associates, L.P.), for the Defendants/Appellees/Cross-Appellants.
Before BRISCOE and McWILLIAMS, Circuit Judges; and JENKINS, Senior District Judge.**
Plaintiffs Tseghe Foote and The Guides, Ltd., d/b/a The Africa House (hereinafter Africa House) brought a civil rights action against defendants The Yarmouth Group Property Management, Inc., and Tabor Center Associates, L.P., alleging the defendants had violated 42 U.S.C. § 1981, and had intentionally interfered with Africa House's prospective business advantages in conjunction with the defendants' eviction and failure to lease retail space for Africa House. A jury found in favor of Foote and Africa House on all counts, and awarded each plaintiff compensatory and punitive damages. Following post-trial motions, the district court dismissed Foote as an individual plaintiff for lack of standing and vacated the jury's award to her. The district court also granted Africa House's request for attorney fees, although it reduced the requested rates, and further granted prejudgment interest to Africa House.
The defendants appeal the district court's denial of their motion for judgment as a matter of law and motion for new trial or remittitur, as well as the district court's award of prejudgment interest. The plaintiffs cross-appeal the dismissal of Foote as an individual plaintiff and the reduction in attorney fees. Our jurisdiction is pursuant to 28 U.S.C. § 1291. We affirm in part, reverse in part, and remand.
The Guides, Ltd., is a subchapter S corporation organized under Colorado law and doing business as The Africa House, a retail store specializing in African art and artifacts. Tseghe Foote, an immigrant from Ethiopia, is its sole shareholder and president. In 1993, Foote entered into two separate short-term lease agreements with the prior owners of the Tabor Center, a downtown mall in Denver, Colorado, for Africa House to occupy space 322 at the Center. The first short-term agreement ran from February through August of 1993, and the second ran month-to-month beginning in September 1993. Under the terms of the leases, the rent consisted of a base amount of approximately $23 per square foot, and 15% of sales above a predetermined level. The lease did not require Africa House to make any payments for mall operating costs or to incur any improvement or build-out expenses. In exchange for these favorable terms, the lease provided that the owners could terminate the tenancy or relocate the business with fifteen days' notice if they required space 322 for any reason. The possibility of relocation was dependant upon available space and the owners' judgment concerning merchandising mix and balance.
In October 1994, defendant Tabor Center Associates acquired the Tabor Center and became the plaintiffs' landlord. In February 1995, defendant Yarmouth assumed management responsibilities for the Center. In an effort to improve the profitability of the Center, Yarmouth implemented new leasing procedures that included negotiating long-term leases with future tenants. Yarmouth also approached existing tenants to negotiate new long-term and short-term tenancies. However, Yarmouth did not approach Foote, and in fact had no contact with her until September 1996 when Foote approached Yarmouth to discuss the possibility of renewing or entering into a new lease.
From this initial meeting until late October 1996, Foote had several meetings with representatives of Yarmouth concerning the possibility of leasing space at the Tabor Center. However, Yarmouth would not clarify its intentions or engage in serious negotiations. Foote and Yarmouth discussed a possible space for relocation of the business, but Yarmouth would not assure Foote that the space would be available, even though it was undisputed there were many empty spaces available at the Tabor Center. During these attempted negotiations, a representative from Yarmouth made misrepresentations to Foote concerning the lease at space 322 and commented that her store: (1) did not "mix well" with other tenants; (2) was not glamourous enough; (3) "had to go"; (4) did not "fit the image of Tabor Center"; (5) should change its name; (6) devalued the Tabor Center; and (7) was unsophisticated. Yarmouth also drew up blueprints which did not include Foote's store.
On September 13, 1996, General Nutrition Centers (GNC), a national vitamin and health chain, entered into a ten-year lease with Yarmouth for space 322 at an annual rent double that charged for Africa House. Foote was not informed of this lease while she negotiated with Yarmouth. On September 24, 1996, Foote arrived at her store to find a man making detailed measurements. When she called management to find out the purpose of the measurements, she was informed that it was an attempt to lower the insurance rates for the Center. It was only later that Foote learned that space 322 had been leased to GNC, and the measurements were made in connection with that lease.
On September 26, Yarmouth informed Foote that Africa House would not be offered a long-term lease because its gross sales did not meet or exceed $800,000. Yarmouth was also reluctant to offer Africa House a different space or a short-term lease. On October 14, 1996, the defendants served Foote with notice terminating her lease for space 322. The termination notice did not contain any offer of relocation or a short-term lease, even though other tenants who had been terminated by Yarmouth were offered such options. Foote hired an attorney to negotiate with Yarmouth. Yarmouth eventually offered Africa House a four-month lease for space 202 in the Center, but Foote rejected the lease due to its short duration.
On October 29, 1996, Foote filed the complaint in this action against Yarmouth and Tabor Center Associates, along with an application for a temporary restraining order. Before a hearing on the order, the parties stipulated to relocate the business to space 202 until the legal issues were resolved. In the complaint, Foote brought claims on her own behalf and on behalf of Africa House, alleging that the defendants had (1) unlawfully interfered with the right to make and enforce a contract, in violation of 42 U.S.C. § 1981; and (2) unlawfully interfered with the right to lease real property, in violation of 42 U.S.C. § 1982. Africa House also brought a claim alleging that the defendants had intentionally interfered with its prospective business advantages.
A jury found in favor of both Foote and Africa House on all claims. The jury awarded $200,000 in compensatory damages and $1,500,000 in punitive damages to Foote; and awarded $150,000 in compensatory damages and $1,000,000 in punitive damages to Africa House. The defendants filed a motion for new trial or remittitur, which the district court denied. The defendants also filed a motion for judgment as a matter of law. The district court granted this motion in part, finding that Foote's claims merged with those of Africa House and, therefore, she was without standing. The court dismissed Foote and set aside the verdict and damages in her favor. The plaintiffs filed an application for attorney fees pursuant to 42 U.S.C. § 1988(b). The district court granted this motion, but reduced the hourly rates requested. The district court further granted the plaintiffs' motion for prejudgment interest.
We first address plaintiffs' contention that the district court erred in dismissing Foote's § 1981 and § 1982 claims for lack of standing. The district court reasoned that dismissal was necessary because the injury was suffered by Africa House rather than Foote, in that the defendants had refused to contract with or lease property to Africa House rather than to Foote individually, and that Foote's claim for injuries was the result of that refusal. The plaintiffs argue on appeal that Foote has standing because as sole shareholder of Africa House she suffered injury separate and distinct from that of Africa House, and further that she has standing in her own right because she signed a guaranty contract in her 1993 lease which gave rise to a special duty separate and distinct from that owed to Africa House.
We review issues of standing de novo. Faustin v. City & County of Denver, Colorado, 268 F.3d 942, 947 (10th Cir. 2001). In order to determine whether Foote has standing to claim injury under § 1981 and § 1982, we first consider the language used in those statutes. Section 42 U.S.C. § 1981 guarantees the right of all persons to "make and enforce" contracts. Section 42 U.S.C. § 1982 guarantees the right to "inherit, purchase, lease, sell, hold, and convey real and personal property." It has been held that "[p]rudential limitations on standing ordinarily require that an action under ...
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