MRI Northwest Rental Investments, I, Inc. v. Schnucks-Twenty-Five, Inc., SCHNUCKS-TWENTY-FIV
| Decision Date | 10 January 1989 |
| Docket Number | No. 54239,INC,SCHNUCKS-TWENTY-FIV,54239 |
| Citation | 763 S.W.2d 375 |
| Parties | MRI NORTHWEST RENTAL INVESTMENTS, I, INC., Plaintiff-Appellant/Cross- Respondent, v., and Allied Supermarkets, Inc., Defendants- Respondents/Cross-Appellants. |
| Court | Missouri Court of Appeals |
Martin P. Zucker, Robert O. Hetlage, St. Louis, for plaintiff-appellant/cross-respondent.
William J. Travis, St. Louis, for defendants-respondents/cross-appellants.
MRI Northwest Rental Investments, I, Inc. ("MRI"), the sole general partner of Northwest Plaza Associates, Ltd., the owner of Northwest Plaza, a shopping center in St. Louis County, entered into a commercial lease with Allied Supermarkets, Inc. ("Allied") which Allied later assigned to Schnucks-Twenty-Five, Inc. ("Schnucks"). MRI sued both Allied and Schnucks in a two count petition seeking declaratory relief and damages for breach of contract. MRI appeals from the judgment of the trial court entered in favor of respondents Allied and Schnucks. Allied and Schnucks have cross-appealed on the issue of attorneys' fees. In the interest of judicial economy, the two appeals have been consolidated. We reverse and remand in part and affirm in part the judgment of the trial court.
The lawsuit filed by MRI against respondents involved the interpretation of a special termination provision of a commercial lease for premises located at Northwest Plaza Shopping Center in St. Louis County where Schnucks maintained a grocery supermarket. The lease was originally entered into between Allied and MRI's predecessor in interest in 1965. Allied assigned its lease to Schnucks in 1970. The lease was amended in 1978.
The lease as amended in 1978 provided in part:
Section 6.02. Operation of Business.
Except as provided in Section 27.03 hereof, Tenant shall continuously operate all of the leased premises during the entire term of this lease with due diligence and efficiency so as to produce all of the gross sales which may be produced by such manner of operation, unless prevented from doing so by causes beyond Tenant's control....
Section 27.03 of the lease, captioned "Use of Premises" and also amended in 1978, is the sole provision of the lease allowing early termination before February 28, 1990. In pertinent part, Section 27.03 states as follows:
Tenant shall continuously conduct and operate a grocery supermarket upon the leased premises, together with such other of the aforesaid types of business as tenant shall, at its option, desire to operate, except for temporary interruptions due to fire or other casualty, strikes or any other causes beyond Tenant's control.
... Tenant shall have the right to cease operation of its business on the Demised Premises and terminate this lease upon Tenant giving Owner one (1) year prior written notice of its intent to cease operation of its business and terminate this lease.
In 1983 MRI became owner of Northwest Plaza Shopping Center and landlord under the lease. In 1984 Schnucks exercised its option to renew the lease for five years effective March 1, 1985, and continuing to February 28, 1990, subject to its right to terminate. On March 12, 1985, Schnucks wrote a letter to MRI stating: On March 24, 1985, however, Schnucks ceased it business operations on the premises. It closed its store and vacated the premises. MRI, both before and after Schnucks ceased its operations, informed Schnucks that MRI considered Schnucks' attempted notice to terminate the lease ineffective. MRI claimed the notice given was defective because Schnucks ceased its business operations just eleven days after giving notice, instead of the one year period required under section 27.03 of the lease.
After giving notice, Schnucks continued to pay rent for the one year period until March 15, 1986. MRI accepted the rent payments. In the interval between Schnucks' giving one year's notice and trial on November 30, 1986, MRI had not procured a tenant to replace Schnucks.
The only issue raised by MRI in its appeal is whether the trial court erred in ruling that Schnucks properly terminated its lease. The sole provision of the lease allowing early termination expressly required Schnucks to give one year prior written notice of its intent to cease business operations and terminate the lease. (Emphasis ours). Thus, to effectuate a valid termination required two elements: 1) one year notice to cease operations and 2) one year notice to terminate the lease. The uncontroverted evidence establishes that, while Schnucks did give one year's notice of its intent to terminate the lease, it failed to give one year's notice of its intent to cease operations before so doing. The trial court erred in finding the language in Section 27.03 to be unclear and ambiguous.
A contract is ambiguous only if its terms are susceptible of more than one meaning so that reasonable men may fairly and honestly differ in their construction of the terms. Union Center Redevelopment Corp. v. Leslie, 733 S.W.2d 6, 9 (Mo.App.1987). An ambiguity does not arise merely because the parties disagree how the contract should be construed. Id. The requirement that Schnucks continue its business operations during the one year notice period is contained within the same single sentence granting Schnucks the right of early termination of its leasehold interest. The requirements are joined by "and", not "or". We are persuaded by MRI's argument that the word "and" connecting Schnucks' one year prior written notice of its intent to...
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MRI Northwest Rentals Investments I, Inc. v. Schnucks-Twenty-Five, Inc., SCHNUCKS-TWENTY-FIV
...give one year notice prior to ceasing their business operations and vacating the premises. MRI Northwest Rental Investments I, Inc. v. Schnucks-Twenty-Five, Inc., 763 S.W.2d 375 (Mo.App., E.D.1989). Since we held that the appellants breached the lease, we remanded the case for a determinati......