Northwest Plaza, L.L.C. v. Michael-Glen

• Decision Date: 25 March 2003
• Docket Number: No. ED 81026.,ED 81026.
• Parties: NORTHWEST PLAZA, L.L.C., Plaintiff/Respondent, v. MICHAEL-GLEN, INC., Defendant, Byron Stevens Enterprises, Inc., Defendant/Appellant.
• Court: Missouri Court of Appeals

102 S.W.3d 552

NORTHWEST PLAZA, L.L.C., Plaintiff/Respondent, v. MICHAEL-GLEN, INC., Defendant Byron Stevens Enterprises, Inc., Defendant/Appellant.

No. ED 81026.

Missouri Court of Appeals, Eastern District, Division One.

March 25, 2003.

Gillespie, Hetlage & Coughline, L.L.C., Lawrence G. Gillespie, Clayton, MO, for appellant.

Copeland Thompson Farris, Stephen C. Hiotis, Clyde C. Farris, Clayton, MO, for respondent.

MARY K. HOFF, Judge.

Byron Stevens Enterprises, Inc. (BSE) appeals the judgment the trial court entered in favor of Northwest Plaza, L.L.C. (Northwest Plaza) after granting Northwest Plaza's motion for summary judgment in this action arising out of a lease and guaranty. We affirm the judgment but remand to the trial court with directions to determine a reasonable award of attorney's fees for this appeal.

In its only point, BSE urges the trial court erred and misapplied the law in entering summary judgment in favor of Northwest Plaza because there was a genuine dispute of fact based on the evidence that, at the time of BSE's December 1996 assignment of the lease, Northwest Plaza received a personal guaranty and the assignee had a greater net worth than BSE, which absolved BSE of liability under the lease according to the lease's assignment provision.

We review the grant of summary judgment de novo. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). We view the record in the light most favorable to the party against whom judgment was entered, and take facts set forth in affidavits and otherwise in support of the motion as true unless they are contradicted by the non-moving party's response. Id. Whether or not summary judgment was proper is a question of law, and we need not defer to the trial court's decision granting summary judgment. Id. We do, however, consider the same information the trial court considered in rendering its decision. Earth City Crescent Associates, L.P. v. LAGF Associates-Mo, L.L.C., 60 S.W.3d 44, 46 (Mo.App. E.D. 2001).

For entry of summary judgment in its favor, the movant has the burden of proving that it is entitled to judgment as a matter of law and that no genuine issues of material fact exist. ITT Commercial Fin. Corp., 854 S.W.2d at 381. When the movant is the plaintiff, such as in this case, the movant must establish that there is no genuine dispute as to those material facts upon which it has the burden of persuasion at trial. Id. Additionally, a plaintiff seeking summary judgment in the face of a defendant's affirmative defense must establish that the affirmative defense fails as a matter of law. Id. The plaintiff seeking summary judgment may defeat an affirmative defense by establishing that any one of the facts necessary to support the defense is absent. Id.

The undisputed record discloses the following: In April 1993, BSE and the predecessor in interest to Northwest Plaza entered into a lease (Lease) allowing BSE to operate a restaurant at a shopping mall until the end of December 2003. In relevant part, the Lease provided:

Notwithstanding anything contained herein to the contrary, [BSE] shall have the right to freely assign this Lease or sublet the Premises, without charge and without [Northwest Plaza]'s consent being required, to duly authorized franchisees of Quizno's Franchise Corporation ("Franchisor"), provided, however, that [BSE] shall remain fully liable for the terms, covenants and conditions of this Lease unless the entity to which [BSE] assigns is of equal or greater net worth than [BSE] at the time of the assignment, and further provided that a personal guaranty is given to [Northwest Plaza] in a form substantially similar to the form signed by Steve Shaffer in connection with this Lease for the greater of (a) the time remaining on the Guaranty given by Steve Shaffer (at which time Steve Shaffer's Guaranty will be released[] ) or (b) two (2) years from the date of the assignment. Nothwith-standing the foregoing, if the entity to which [BSE] assigns has a net worth of in excess of $500,000 and agrees to maintain such a net worth, no personal guaranty will be required by [Northwest Plaza].

Steven B. Shaffer and Susan Shaffer executed a guaranty applying "to all obligations which accrue through the third (3rd) Lease year."

By a letter, dated July 27, 1994, the parties to the Lease agreed, in part: that the restaurant would be relocated within the shopping mall by September 1, 1994; that BSE would make improvements at the new location, subject to a specified cost reimbursement by Northwest Plaza; that the rent would abate "during the period of construction and relocation, provided such abatement shall not extend beyond September 1, 1994"; and to amend the Lease in specified respects, including an increase in the amount of rent, upon the opening of restaurant at the new location. This letter agreement expressly stated that "[a]ll other terms and conditions of the Lease remain the same and in full force and effect." Steven B. Shaffer and Susan Shaffer signed this letter agreement and guaranteed the financial obligations incurred for the improvement work required under the letter agreement.

In December 1996, the parties to the Lease entered into another letter agreement providing for the assignment of BSE's "obligations under the Lease" to Michael-Glen, Inc.¹ In relevant part, this letter agreement stated that

[Northwest Plaza] hereby consents to the assignment of the Lease, effective December 31, 1996, from [BSE] to Michael-Glen[, Inc.] ... subject to the following terms and conditions ...:

1. [Michael-Glen, Inc.] assumes all of [BSE]'s obligations under the Lease;

2. [BSE] shall continue to remain fully liable for all of its obligations under the Lease and Steven B. Shaffer and Susan Shaffer shall also continue to remain fully liable for all of their obligations under the Lease pursuant to letter agreement dated July 27, 1994;

3. The undersigned ... Brian Looperer[] hereby agree[s] to guarantee all of [BSE]'s obligations under the Lease in accordance with the Guaranty attached hereto.

4. All parties hereto agree that the Lease shall be amended as follows:

a. The Lease Term shall be extended from January 1, 2004 through December 31, 2006 (Extension Term);

* * *

c. By no later than March 31, 1999, [BSE] shall, at its sole expense, complete a remodeling of the entire Leased Premises, including the storefront and signs ... There shall be no abatement of any Minimum Rent or additional rent during the remodeling ...

5. All other terms and conditions of the Lease shall remain the same and in full force and effect.

An unsigned guaranty of Brian Looper, who was president of Michael-Glen, Inc., was provided at the same time. It is not disputed that Michael-Glen, Inc., took possession of the leased premises.

On May 1, 2001, Northwest Plaza filed this lawsuit against Michael-Glen, Inc. and BSE upon their failure to pay approximately $22,000 in rent and other charges that came due in 2001 under the terms of the Lease. Based on these breaches of the Lease, Northwest Plaza sought restitution of the premises, rental charges due through the date of judgment, interest on the amount due, late rent charges, and reasonable attorney's fees and costs. BSE denied liability and set forth the following affirmative defenses:² Northwest Plaza failed to state a cause of action upon which relief may be granted; the cause of action is "barred by latches"; and, in compliance with the assignment provision of the Lease, the Lease was assigned to an entity having a greater net worth than BSE and included a more than two year guaranty in substantially the same form as the original Shaffer guaranty.

Northwest Plaza subsequently moved for summary judgment seeking entry of judgment in its favor for the amounts due under the Lease as of June 2001 and through the date of judgment. Specifically, Northwest Plaza argued that: Michael-Glen, Inc. was in possession of the leased premises; the Lease contained provisions requiring the payment of rent and other charges; BSE and Michael-Glen, Inc. had not made payments required by the Lease since March 16, 2001; Northwest Plaza sent BSE and Michael-Glen, Inc. notices of the overdue amounts; Northwest Plaza had incurred attorney's fees and costs; the allegations of the petition do set forth a cause of action for the amounts due; as a matter of law, "latches" does not bar the cause of action; and at the time of the December 1996 assignment, BSE agreed to remain liable for its obligations under the Lease and there was no executed guaranty from Brian Looper. In support of its motion, Northwest Plaza provided the affidavits of the General Manager of the shopping mall where the leased premises were located and of an attorney in the law firm representing Northwest Plaza. In opposing the motion, BSE submitted an affidavit by Steven Shaffer.

The trial court, without setting forth its reasoning, granted the motion for summary judgment upon finding no genuine issue of material fact and that Northwest Plaza was entitled to judgment as a matter of law. The trial court awarded Northwest Plaza the total amount of $32,290.41, consisting of $28,596.00 for rent due through June 2001, $1,034.40 for prejudgment interest through June 2001, $1,391.01 in late charges, and $1,269.00 in attorney's fees and costs through June 14, 2001. This appeal followed.

BSE's sole point challenges the trial court's judgment based on BSE's position it fully complied with the 1993 Lease's assignment provision when it assigned the lease to Michael-Glen, Inc., in December 1996. We are not persuaded by this contention. The record reveals that only an unexecuted guaranty was provided at the time of the December 1996 assignment.

Moreover, the record does not contain an evidentiary basis to establish a genuine dispute of material fact regarding Michael-Glen Inc.'s actual net worth at the time of the December 1996 assignm...