Ross Dress for Less, Inc. v. Makarios-Oregon, LLC, Case No. 3:14-cv-01971-SI
Decision Date | 25 March 2016 |
Docket Number | Case No. 3:14-cv-01971-SI |
Parties | Ross Dress For Less, Inc., Plaintiff, v. Makarios-Oregon, LLC, and Walker Place, LLC, Defendants. |
Court | U.S. District Court — District of Oregon |
Thomas V. Dulcich and Rebecca A. Boyette, Schwabe Williamson & Wyatt , PC, 1211 S.W. Fifth Avenue, Suite 1900, Portland, OR 97204; Gregory D. Call and Tracy E. Reichmuth, Crowell & Moring , LLP, 275 Battery Street, 23rd Floor, San Francisco, CA 94111. Of Attorneys for Plaintiff.
Jeffrey M. Edelson and Molly K. Honoré, Markowitz Herbold , PC, 1211 S.W. Fifth Avenue, Suite 3000, Portland, OR 97204. Of Attorneys for Defendant Makarios-Oregon, LLC.
Keith A. Pitt, Nicholas J. Slinde, and Phillip J. Nelson, Slinde Nelson Stanford , 111 S.W. Fifth Avenue, Suite 1940, Portland, OR 97204. Of Attorneys for Defendant Walker Place, LLC.
Plaintiff Ross Dress For Less, Inc. (“Ross” or “Plaintiff”) brings this declaratory action against its two downtown Portland landlords, Defendant Makarios-Oregon, LLC (“Makarios”) and Walker Place, LLC (“Walker Place”) (collectively “Defendants”). Ross seeks a judicial declaration that its proposed end-of-lease plans satisfy Ross's obligations under the relevant leases. Makarios and Walker Place both assert counterclaims for a judicial declaration clarifying the scope of Ross's end-of-lease obligations and breach of contract. Walker Place brings an additional counterclaim for statutory waste under Oregon Revised Statutes (“ORS”) § 105.805. All three parties have filed motions for partial summary judgment. For the reasons that follow, each party's motion is GRANTED IN PART AND DENIED IN PART.
A party is entitled to summary judgment if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards, Inc. v. Sixshooters, Inc. , 251 F.3d 1252, 1257 (9th Cir.2001). Although “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient ....” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).
Where parties file cross-motions for summary judgment, the court “evaluate[s] each motion separately, giving the non-moving party in each instance the benefit of all reasonable inferences.” A.C.L.U. of Nev. v. City of Las Vegas , 466 F.3d 784, 790–91 (9th Cir.2006) (quotation marks and citation omitted); see alsoPintos v. Pac. Creditors Ass'n , 605 F.3d 665, 674 (9th Cir.2010) (). In evaluating the motions, “the court must consider each party's evidence, regardless under which motion the evidence is offered.” Las Vegas Sands, LLC v. Nehme , 632 F.3d 526, 532 (9th Cir.2011). “Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case.” In re Oracle Corp. Sec. Litig. , 627 F.3d 376, 387 (9th Cir.2010). Thereafter, the non-moving party bears the burden of designating “specific facts demonstrating the existence of genuine issues for trial.” Id. “This burden is not a light one.” Id. The Supreme Court has directed that in such a situation, the non-moving party must do more than raise a “metaphysical doubt” as to the material facts at issue. Matsushita , 475 U.S. at 586, 106 S.Ct. 1348.
The events in this case date back to the mid-1900s and involve longstanding landlord-tenant relationships in Portland, Oregon's historic downtown. In 1946, J.J. Newberry Co., Incorporated (“Newberry”), a national retail chain of “five-and-dime” department stores, set in motion plans to open its largest store nationwide in downtown Portland. In preparation for the opening of this store, Newberry entered into a lease (the “1946 Failing Lease”) that allowed the department store chain to renovate an existing downtown building (the “Failing Building,” located at 620 S.W. Fifth Avenue) and also construct a new building (the “Richmond Building,” adjacently located at 618 S.W. Fifth Avenue) on the neighboring property.1 After the completion of construction, the Richmond Building's columns and floors aligned exactly with those of the Failing Building, as designed, and the two buildings shared conjoined retail spaces in the basement and on the first and second floors. Newberry opened this Fifth Avenue space for business in 1953.
Behind the scenes of the grand opening and ongoing operation of Newberry's downtown department store was a rather unique landlord-tenant arrangement. The arrangement—from its very beginning in 1946 up to the present day—requires, among other things, that the tenants of the Failing Building and Richmond Building separate the buildings when the tenancies end. Before the completion of the Richmond Building, the 1946 Failing Lease provided that the Richmond Building “shall be so constructed that by the installation of partition walls between it and the Failing Building, it can be used as a self contained [sic] building as regards plumbing, heating, wiring and vertical transportation.” Dkt. 61–3 at 18.
Ten years later, on August 31, 1956, the Failing Landlords and Newberry amended and restated the 1946 Failing Lease with a new lease (the “1956 Failing Lease”). This lease, among its many provisions, stated that at the termination of Newberry's tenancy in the Failing Building, Newberry would “at [Newberry's] sole cost and expense do and perform such work as shall be necessary to physically separate, and constitute entirely independent and self-sufficient, the [Failing Building] from the adjacent ‘Richmond Building’ premises.” Dkt. 61–2 at 5. The lease, “[w]ithout limiting the generality of the foregoing,” stated that this separation work must include:
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