Raymond James & Assocs., Inc. v. 50 N. Front St. TN, LLC, Case No. 2:18-cv-02104-JTF-tmp

• Court: United States District Courts. 6th Circuit. Western District of Tennessee
• Writing for the Court: JOHN T. FOWLKES, JR. United States District Judge
• Docket Number: Case No. 2:18-cv-02104-JTF-tmp
• Parties: RAYMOND JAMES & ASSOCS., INC., Plaintiff, v. 50 NORTH FRONT ST. TN, LLC, Defendant.
• Decision Date: 30 July 2020

RAYMOND JAMES & ASSOCS., INC., Plaintiff,
v.
50 NORTH FRONT ST. TN, LLC, Defendant.

Case No. 2:18-cv-02104-JTF-tmp

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION

July 30, 2020

ORDER ADOPTING THE MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION AND GRANTING DEFENDANT'S MOTION TO DISMISS

Plaintiff Raymond James & Associates, Inc. ("Plaintiff" or "RJA") filed a First Amended Complaint ("complaint") on May 29, 2018. (ECF No. 41.) Before the Court is Defendant 50 North Front St. TN, LLC's (hereinafter "Landlord") Motion to Dismiss RJA's complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6), which was filed on June 29, 2018. (ECF No. 54.) RJA filed a Response in Opposition to the Motion on July 26, 2018, (ECF No. 70), and Landlord filed its Reply on August 9, 2018 (ECF No. 76). The Court referred the Motion to the Magistrate Judge for report and recommendation, pursuant to 28 U.S.C. § 636. (ECF No. 284.) The Magistrate Judge entered a Report and Recommendation ("R. & R.") on February 20, 2020, recommending that the Court grant Landlord's Motion to Dismiss in its entirety. (ECF No. 301.) RJA timely filed objections to the R. & R. (ECF No. 310), Landlord filed a response to those objections (ECF No. 317), and RJA subsequently filed its reply (ECF No. 321).

For the following reasons, the Court finds that the R. & R. should be ADOPTED and Landlord's Motion to Dismiss GRANTED.

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FINDINGS OF FACT

In his R. & R., the Magistrate Judge provides, and this Court adopts and incorporates, proposed findings of fact in this case. (ECF No. 301, 1-8.)

LEGAL STANDARD

Congress passed 28 U.S.C. § 636(b) "to relieve some of the burden on the federal courts by permitting the assignment of certain district court duties to magistrates." United States v. Curtis, 237 F.3d 598, 602 (6th Cir. 2001). Pursuant to the provision, magistrate judges may hear and determine any pretrial matter pending before the Court, except various dispositive motions. 28 U.S.C. § 636(b)(1)(A). Regarding those excepted dispositive motions, magistrate judges may still hear and submit to the district court proposed findings of fact and recommendations for disposition. 28 U.S.C. § 636(b)(1)(B). Upon hearing a pending matter, "the magistrate judge must enter a recommended disposition, including, if appropriate, proposed findings of fact." Fed. R. Civ. P. 72(b)(1); see also Baker v. Peterson, 67 F. App'x 308, 310 (6th Cir. 2003). Any party who disagrees with a magistrate judge's proposed findings and recommendation may file written objections to the report and recommendation. Fed. R. Civ. P. 72(b)(2).

The standard of review that is applied by the district court depends on the nature of the matter considered by the magistrate judge. See Baker, 67 F. App'x at 310 (citations omitted) ("A district court normally applies a 'clearly erroneous or contrary to law' standard of review for nondispositive preliminary measures. A district court must review dispositive motions under the de novo standard."). Upon review of the evidence, the district court may accept, reject, or modify the proposed findings or recommendations of the magistrate judge. Brown v. Bd. of Educ., 47 F. Supp. 3d 665, 674 (W.D. Tenn. 2014); see also 28 U.S.C. § 636(b)(1). The court "may also receive further evidence or recommit the matter to the [m]agistrate [j]udge with instructions." Moses v.

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Gardner, No. 2:14-cv-2706-SHL-dkv, 2015 U.S. Dist. LEXIS 29701, at *3 (W.D. Tenn. Mar. 11, 2015). A district judge should adopt the findings and rulings of the magistrate judge to which no specific objection is filed. Brown, 47 F. Supp. 3d at 674.

ANALYSIS

This is a breach of contract and tort case. Before turning to the parties' contract (the "Lease") to assess the merits of the complaint, the R. & R. addressed RJA's argument that Landlord's Motion to Dismiss should be denied as untimely. (ECF Nos. 70, 5 & 301, 10-11.) The R. & R. found that although Landlord's Motion was filed late, it should be accepted by the Court because a diligent party could not have reasonably met the filing deadline under the same circumstances. (ECF No. 301, 11) (citing E.E.O.C. v. U-Haul Int'l, Inc., 286 F.R.D. 322, 325 (W.D. Tenn. 2012)). The Court agrees, and in the absence of any objection by RJA, the R. & R.'s finding is adopted, and Landlord's Motion is accepted as timely.

I. Breach of Contract Claim

The Parties agree that Tennessee law governs their dispute. (ECF No. 54-1 n.5) (citing ECF No. 41-1.) See Solo v. United Parcel Serv. Co., 819 F.3d 788, 794 (6th Cir. 2016) ("A federal court sitting in diversity applies the choice of law provisions of the forum state."). They also agree that Sections 10, 11(e), and 11(f) of the Lease are the central provisions at issue in this case and require the Court's interpretation. (ECF Nos. 41-1, 54, & 70.) The parties contest the R. & R.'s application, but not its summary of the general rules of contract construction, and they agree that the rules apply to the Court's interpretation of the Lease in this case. (ECF No. 301, 12-14.)

"The cardinal rule in the construction of contracts is to ascertain the intent of the parties." Am. Senior Dev., L.L.C. v. Parkside of Collierville, L.L.C., 102 Fed. Appx. 890, 893 (6th Cir. 2004). As the R. & R. notes, the best evidence of the parties' intent can be found by looking at the plain

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meaning of the text. (ECF No. 301, 12) (citing Allstate Ins. Co. v. Watson, 195 S.W.3d 609, 611 (Tenn. 2006). Ascertaining a contract's plain meaning requires its provisions to be "read together to give meaning to the document as a whole" and construed in a way that promotes consistency among its parts. (Id.) (quoting Maggart v. Almany Realtors, Inc., 259 S.W.3d 700, 705 (Tenn. 2008)); Adkins v. Bluegrass Estates, Inc., 360 S.W.3d 404, 411 (Tenn. Ct. App. 2011).

The R. &. R. also highlights the established "specific-over-general" rule which states: "[W]here there are, in a contract, both general and special provisions relating to the same thing, the special provisions control. Thus, where there is uncertainty between general and specific provisions, the specific provisions ordinarily qualify the meaning of the general provisions, although this is not universally or necessarily so." Cocke Cty. Bd. of Highway Comm'rs v. Newport Utilities Bd., 690 S.W.2d 231, 237 (Tenn. 1985). The R. & R. correctly relies on these principles of contract interpretation to garner an understanding of the Lease generally, and the interplay between Sections 10, 11(e), and 11(f) in particular.

A. Interpreting the Operative Lease Provisions

The entire complaint can be traced to three broad obligations Landlord has under the Lease, which RJA claims Landlord failed to meet. For ease of reference, the R. & R. separates these commitments into two categories it titles the "general building maintenance provisions" and the "services provisions." First, under the maintenance provisions found in Section 10, which the Lease titles "Maintenance and Repair," Landlord agrees to "maintain and operate the Building" at both the "Current Standard" and the same standard of "Comparable Buildings." (ECF No. 301, 2-3) (quoting (ECF No. 41-1, 34); Lease § 10).¹ The second obligation, which is found in Section 10, is the Landlord's agreement to "make such improvements, repairs or replacements as may be

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necessary to maintain the Building Systems serving the Premises" at the same "Current" and "Comparable" building standards. (Lease § 10). This includes the building's exterior and structural portions, as well as its "Common Areas" such as the lobby, restrooms, and elevators. (Lease §§ 10 & 1(t)). Landlord's third obligation relevant to RJA's complaint, which was dubbed the "services provision" by the R. & R., is to "furnish Tenant . . . the following services . . . in no less than the Current Standard: . . . (iv) elevator service at the times and frequency reasonably required for normal business use of the Premises . . . and security services for the Building . . . ." (Lease § 11(a)). The Lease titles this Section, "Services provided by Landlord." (Id.)

i. Section 10

After describing Landlord's obligation to maintain and repair the building according to certain standards, Section 10 of the Lease indicates that those maintenance and repairs "shall be at Landlord's expense, unless the need for such maintenance or repairs was caused by the negligence or willful misconduct of Tenant . . . in which event Tenant shall reimburse Landlord for the cost of such maintenance or repairs . . . ." (Lease § 10). In other words, unless Tenant, through its own negligence or willful misconduct, creates a need for maintenance or repairs to the building, Landlord must bear the expense necessary to maintain and repair the building in a manner commensurate with the current and comparable building standards.² Despite Plaintiff's attempts to extract specific stand-alone remedies for itself from Section 10, arguments that will be discussed more fully in the paragraphs to follow, nothing in the text supports that assertion. Moreover, the Court's plain reading reveals that Section 10 places limits on Tenant's conduct—giving a remedy

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to Landlord in the event Tenant acts in violation of the agreement, i.e., causes the need for maintenance or repairs through negligence or willful misconduct. As the R. & R. concludes, the provisions in Section 10 speak to Landlord's maintenance and repair obligations generally, but do not provide specific remedies for RJA in the event Landlord fails to maintain or repair the building according to the requisite standards. (ECF No. 301, 14.)

ii. Section 11

In contrast, Section 11 is much more specific. It describes what standard of elevator operation the Parties agree to and gives RJA two remedies, or ways it can recover, in the event the elevators fail to function, and Landlord fails to perform as agreed. These remedies are rent abatement and...