Metzker v. International Paper Co., Civ. A. No. 92-404-JLL.

• Decision Date: 17 June 1993
• Docket Number: Civ. A. No. 92-404-JLL.
• Citation: 825 F. Supp. 641
• Parties: Albert METZKER, Plaintiff, v. INTERNATIONAL PAPER COMPANY, Defendant.
• Court: U.S. District Court — District of Delaware

825 F. Supp. 641

Albert METZKER, Plaintiff, v. INTERNATIONAL PAPER COMPANY, Defendant.

Civ. A. No. 92-404-JLL.

United States District Court, D. Delaware.

June 17, 1993.

James F. Bailey and Brian Thomas McNelis, Bailey & Wetzel, P.A., Wilmington, DE, for plaintiff.

Olha N.M. Rybakoff, Connolly, Bove, Lodge & Hutz, Wilmington, DE, and Patrick W. Kittredge and Christine Councill Fritton, Kittredge, Donley, Elson, Fullem & Embick, Philadelphia, PA, for defendant.

MEMORANDUM OPINION

LATCHUM, Senior District Judge.

I. INTRODUCTION

Defendant, International Paper Company, ("IPC") has brought this motion, pursuant to Rule 56 of the Federal Rules of Civil Procedure, seeking partial summary judgment in its favor on the six claims of plaintiff, Albert Metzker, which are based on IPC's early termination of its lease.¹ (Docket Item "D.I." 26.) IPC claims that its early termination fell within Article XXVI of the lease which permits early termination by the lessee under certain circumstances. Plaintiff claims that defendant's use of the early termination clause was improper. For the reasons set forth below, this Court finds that defendant's use of the early termination clause was proper, and, accordingly, this Court will grant summary judgment to defendant on all six of plaintiff's claims which are based on defendant's early termination.

Plaintiff is a citizen of Atlanta, Florida. Defendant is a New York corporation with its principal place of business also in New York. The amount in controversy exceeds $50,000.00 exclusive of interest and costs. (D.I. 3.) Accordingly, this Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1332.

II. FACTS

Plaintiff is the owner of a parcel of commercial property located at 200 South Madison Avenue, Wilmington, Delaware, which is the subject of the lease agreement at issue in this case. (D.I. 3.) It is apparently undisputed by the parties that in June of 1980, Hammerhill Paper Company which has now merged into International Paper Company² entered into a written lease agreement with plaintiff for the premises at 200 South Madison Avenue. (D.I. 28 at A-1 ¶ 2.) In July of 1989, the parties to the 1980 lease agreed in writing to amend and extend that lease to May of 1992. In June of 1990, plaintiff sent a letter to defendant suggesting that the parties negotiate a "longer lease" at "a better deal." (D.I. 28 at A-5.)

The parties negotiated and on January 9, 1991, Metzker and IPC signed a lease which stated that its term would be "three (3) years, beginning September 1, 1990, and ending August 31, 1993 together with any extensions thereof permitted hereunder." (D.I. 28 at A26.) It is undisputed that the January 9, 1991 lease was in effect when defendant terminated the lease and it is also undisputed that the January 9, 1991 lease included an early termination provision which read as follows:

Article XXVI

Early Termination by Lessee

Lessee IPC presently utilizes approximately 15 parking spaces, on land owned by a third party, immediately in front of the building on the Leased Premises. Should said third party, its successors or assigns, at any time during the lease require Lessee to discontinue use of this space, totally or in part, then at lessee's option, upon thirty (30) days written notice to Lessor Metzker, this Lease shall terminate, and thereafter be null and void.

(D.I. 28 at A39-40.)

In addition, there is undisputed evidence that in negotiating the lease in question, plaintiff took issue with the early termination provision and proposed a change which would have permitted him to provide alternative parking in the event that the fifteen spaces listed in Article XXVI became unavailable.³ It is also undisputed that plaintiff's change was expressly rejected by defendant. On January 4, 1991, defendant's counsel, John P. Fonzo, sent a letter along with the final version of the lease to plaintiff. That letter stated in relevant part:

I believe that this Lease addresses two of the concerns that you expressed.... Your third concern, early termination by Lessee (Article XXVI) has been retained as originally drafted by International Paper, as the fifteen (15) parking spaces to be provided by you, in the event that the existing spaces are no longer available, cannot be guaranteed as to suitability and proximity to 200 South Madison Street.

(D.I. 28 at A24.) As stated supra, the lease to which the above letter referred and which both parties executed on January 9, 1991, did not contain plaintiff's proposed change.

Defendant contends that the fifteen parking spaces referred to in the lease, were located in a fenced-in lot owned by the City of Wilmington which was situated fifty feet from the front door of the Leased Premises. (D.I. 27 at 6.) It is undisputed that the defendant did use those spaces and that on August 7, 1991, a representative of the City of Wilmington's Department of Commerce notified defendant that defendant would no longer be able to use that parking as the City had determined that it needed the lot for the parking of automobiles seized by the Wilmington Police Department. (D.I. 28 at A90.) In early October, 1991, the City did reclaim its lot and locked the gate to it. Between the time the City notified defendant of its intention to reclaim and the time it actually did reclaim the lot, the City and defendant worked out an arrangement for temporary alternative parking. That arrangement allowed defendant to park in the Delmarva Power Company lot for eight weeks beginning in October, 1991. (D.I. 28 at A42.)

On November 25, 1991, or December 1, 1991,⁴ defendant sent plaintiff a letter which stated in relevant part:

We were recently notified by the party who had permitted us to utilize fifteen (15) parking spaces in front of the Advance Paper facility, the Leased Premises that we will no longer have the use of the same.

Thus, notice is hereby given, pursuant to Article XXVI of the January 9, 1991 Lease between you and International Paper, that International Paper exercises its right to terminate the Lease. As finding a suitable alternative location and relocating will take some time, we will give you thirty (30) days notice in advance of vacating the premises.

(D.I. 28 at A77.) On February 17, 1992, defendant sent plaintiff another letter, referencing the one cited above, which stated in relevant part: "The purpose of this letter is to notify you that Advance Paper (International Paper) will be vacating the premises on March 31, 1992." (D.I. 38 at A79.)

IPC did terminate its lease effective March 31, 1992. The only issue presently before this Court is whether IPC's termination represented a breach of the lease agreement or was in accord with the Article XXVI early termination provision.

III. STANDARD OF REVIEW

Rule 56(c) of the Federal Rules of Civil Procedure provides that a party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Rules 56(a) and 56(d) of the Federal Rules of Civil Procedure provide that summary judgment may be granted on specified issues, while the remainder of a case proceeds to trial. The proper inquiry for determining whether summary judgment is appropriate is whether there is a need for a trial. "In other words, are there any genuine factual issues that properly can be resolved only by a finder of fact because they may be reasonably resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The Supreme Court has held that "there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Id. at 249-50, 106 S.Ct. at 2511. (Citation omitted.)

IV. CHOICE OF LAW

A Federal District Court sitting in diversity must apply the choice-of-law rules of the state in which it sits to determine which state's substantive law governs the controversy before it. Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3 (1975); Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Therefore, this Court must apply the State of Delaware's choice-of-law rules. Delaware courts apply the modern "most significant relationship" test of the Restatement (Second) of Conflicts § 188 (1971)⁵ to resolve conflicts issues arising out of the interpretation and validity of contracts. Travelers Indem. Co. v. Lake, 594 A.2d 38, 41 (Del.1991). That approach "indicates that the laws of the jurisdiction which had the most significant relationship to the transaction and parties would control the substantive legal questions." National Union Fire Ins. Co. v. RLC Corp., 449 A.2d 257, 261 (Del.Super.1982), app. den. RLC Corp. v. National Union Fire Ins. Co., 454 A.2d 765 (Del.1982).

The contacts to be taken into account by a court determining which jurisdiction has the most significant relationship to the transaction in a contract case are: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location and subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. "These contacts are to be evaluated according to their relative importance with respect to the particular issue." Restatement (Second) of Conflicts § 188(2) (1971). See also, Playtex Family Products, Inc. v. St. Paul Surplus Lines Ins. Co., 564 A.2d 681, 688-89 (Del.Super.1989). The comment to subsection (2) of § 188 of the Restatement gives guidance on the relative importance courts should assign to each factor with respect to particular issues, specifically stating that the situs of the subject matter of...