Landmark Hhh, LLC v. Gi Hwa Park
| Decision Date | 16 January 2009 |
| Docket Number | Record No. 072365. |
| Citation | 277 Va. 50,671 S.E.2d 143 |
| Parties | LANDMARK HHH, LLC v. GI HWA PARK. |
| Court | Virginia Supreme Court |
Francis J. Prior, Jr., (Siciliano, Ellis, Dyer & Boccarosse, on brief), Fairfax, for appellant.
J. Chapman Petersen (Surrovell Markle Isaacs & Levy, on brief), Fairfax, for appellee.
Present: All the Justices.
OPINION BY Justice LAWRENCE L. KOONTZ, JR.
In this appeal, we consider whether the circuit court correctly determined that under a lease for commercial real estate the landlord was liable for contract damages for the loss sustained by the tenant when the roof of the leased premises leaked during a rainstorm, inundating the leased premises and causing substantial damage to the tenant's inventory. We further consider whether the court erred in failing to hold that the provisions of the lease requiring the tenant to maintain hazard insurance and hold the landlord harmless for any insured losses barred the tenant from seeking to obtain damages for all the losses sustained.
This case was tried by the circuit court, sitting without a jury. Upon appellate review, the court's judgment is entitled to the same weight as a jury verdict and will not be set aside unless it appears from the evidence that the judgment is plainly wrong or without evidence to support it. Code § 8.01-680; Hickson v. Commonwealth, 258 Va. 383, 387, 520 S.E.2d 643, 645 (1999). Accordingly, we recite the facts in this case in the light most favorable to the tenant, the party in whose favor the circuit court rendered its judgment. Government Micro Res., Inc. v. Jackson, 271 Va. 29, 35, 624 S.E.2d 63, 66 (2006).
In May 1998, Gi Hwa Park entered into a commercial lease with Landmark HHH, LLC (Landmark) for a retail space located in the Plaza at Landmark, a shopping center in Fairfax County. Park intended to operate a clothing store called The Four Seasons in the leased space, specializing in high-end imported men's suits and related accessories. As relevant to this appeal, the lease contained the following provisions:
16(b) Tenant, at its sole cost and expense, shall be responsible for providing a policy of fire and extended coverage insurance, insuring Tenant's inventory, ... and all other contents in the Premises....
25(a) Landlord shall endeavor to keep the foundation, roof, and the outer walls ... of the Premises in good repair and make such repairs to the foundation, roof and outer walls as are necessary following Landlord's knowledge of the necessity of said repairs. ...
37(c) Landlord and Tenant hereby release the other from any and all liability or responsibility to the other or anyone claiming through or under them, by way of subrogation or otherwise, from any loss or damage to property caused by fire or any other perils insured under policies of insurance covering such property (but only to the extent of the insurance proceeds payable under such policies), even if such loss or damage is attributable to the fault or negligence of the other party, or anyone for whom such party may be responsible.
Within three weeks of Park's opening of The Four Seasons and continuing through September 2005, leaks in the roof allowed water to flow into the store, damaging the ceiling and causing wet spots throughout the store. The leaks would occur several times during the year, especially when precipitation was heavy. Tony Park, Park's son and manager of The Four Seasons, contacted Landmark's property manager multiple times concerning the leaks. Landmark took various remedial steps to attempt to repair the damage to the interior of the store and to repair the roof.
Between September 2005 and February 2006, in response to complaints from Park and other tenants, Landmark undertook to replace the entire roof of the shopping center. Landmark hired Waterproofing Consulting Company, Inc. (WCC) to design and monitor the installation of a new roof. On WCC's recommendation, Landmark contracted with Potteiger-Raintree, Inc. to perform the actual installation. Despite the addition of the new roof, water continued to leak into The Four Seasons, and Tony Park again reported this fact to Landmark, which referred the matter to WCC. WCC and Potteiger-Raintree took corrective measures to connect a drain and repair improperly installed flashing, but intermittent leaks continued to occur.
On the morning of June 26, 2006, following a night of record rainfall in Northern Virginia, Tony Park arrived at The Four Seasons and immediately noticed an "unbearable stench," and, after turning on the lights, discovered that the entire store had been flooded. The ceiling tiles had fallen in, and there was substantial water damage to the store's inventory. Inspectors from Fairfax County visited the store the following day, June 27, 2006, and informed Tony Park that because of the store's condition, he would have to close the business temporarily.
Shortly after the flooding, extensive repairs were made to The Four Seasons. Even after the repairs were completed, a bad odor remained in the store and much of the inventory was not recoverable despite efforts to clean it. Although The Four Seasons briefly re-opened in the late summer and early fall of 2006, the store was closed permanently in November 2006.
In a complaint filed October 16, 2006 in the Circuit Court of Fairfax County, Park sought to recover damages from Landmark for breach of its lease obligation to provide a serviceable roof and to provide her with the quiet enjoyment of the leased premises. Park asked for $550,000 in compensatory damages, principally for the lost inventory.
At trial, in addition to evidence consistent with the above-recited facts, Park presented testimony from Kyong Ho Kim, a commercial roof repair expert, who opined that the new roof had been improperly installed. Kim testified that there were gaps in the cap flashing where the flashing connected with one of the roof's expansion joints; this gap allowed water to flow underneath the roofing surface and into the building. Furthermore, Kim testified that the roof contained an insufficient number of drains to accommodate the influx of water coming from a higher, larger adjoining roof of a department store in the shopping center.
At the conclusion of the evidence, the circuit court held that section 25(a) of the parties' lease required Landmark to keep the roof in good repair, regardless of any notice of defects. Thus, despite the fact that Landmark had contended that it did not have sufficient notice that the newly installed roof would fail, the court ruled that the failure of the roof constituted a breach of Landmark's duties under the lease. The court further held that the provision in section 16(b) of the lease requiring Park to maintain insurance on inventory and the limitation of liability provision in section 37(c) did not insulate Landmark from being subject to a claim for breach of the lease. The court noted that the lease had been drafted by Landmark and, thus, it was Landmark's burden to show that the lease was intended to make Park solely responsible for any property loss. In the court's view, no such intention was found in the express language of the lease. The court awarded Park $298,762.56 in...
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