Sears, Roebuck and Co. v. Brooks Mall Properties, LLC, No. A09-618 (Minn. App. 1/26/2010), A09-618.
| Decision Date | 26 January 2010 |
| Docket Number | No. A09-618.,A09-618. |
| Parties | Sears, Roebuck and Co., Appellant, v. Brooks Mall Properties, LLC, et al., Respondents. |
| Court | Minnesota Court of Appeals |
Appeal from the District Court, Hennepin County, File No. 27-CV-07-19931.
Thomas P. Kane, Lewis J. Rotman, Hinshaw & Culbertson, LLP, Minneapolis, Minnesota (for appellant).
Connie A. Lahn, David E. Runck, Seth J. Leventhal, Fafinski Mark & Johnson, P.A., Eden Prairie, Minnesota (for respondent).
Considered and decided by Stoneburner, Presiding Judge; Lansing, Judge; and Johnson, Judge.
UNPUBLISHED OPINION
This litigation arises from a dispute between Sears, Roebuck and Co. and Brooks Mall Properties, LLC and its predecessor-in-interest, Talisman Brookdale, LLC, over rights under a series of agreements and a declaration of covenants and restrictions executed with the City of Brooklyn Center in connection with an application for a Planned Unit Development. The district court granted summary judgment against Sears on its claims based on the agreements and the declaration, granted summary judgment against Brooks Mall on its tort claims, and granted summary judgment for Brooks Mall on its request for declaratory relief based on its contractual rights. On appeal, Sears and Brooks Mall challenge different sections of the district court's order, and Brooks Mall also asserts that Sears'ss claims are moot. We affirm in part, reverse in part and vacate in part, and dismiss in part.
Sears, Roebuck and Co. owns approximately thirteen acres within the Brookdale Shopping Mall. Brooks Mall Properties, LLC owns most of the remaining eighty-one acres comprising the mall complex. Beginning in 1960, Sears entered into several operating agreements with Brooks Mall's predecessors-in-interest. These agreements grant reciprocal rights to the common areas on their respective properties and, among other provisions, establish obligations and payment methods for maintaining the common area.
In 1963, Sears and Talisman Brookdale, LLC, Brooks Mall's predecessor, amended their operating agreement to require a minimum of 6.5 parking stalls for each 1,000 square feet of rentable building area. In 1999 Talisman submitted a proposal for a Planned Unit Development (PUD) to Brooklyn Center's city council. The municipal zoning in effect for the mall at that time required a 5.5 parking-stall ratio. The development plan required the city to rezone all of the Brookdale Mall property, including Sears's property, to allow several changes, including a reduction in the minimum parking-stall ratio to 4.5 spaces for each 1,000 square feet of rentable space.
In connection with this proposal, Sears and Talisman negotiated an amendment to the 1960 and 1963 agreements. The amendment, referred to as the 1999 Operating Agreement, reinstated and confirmed the earlier agreements but amended the provisions relating to the common areas of both properties. The amended provisions confirmed that both parties agreed to the redevelopment site plan and reduced the required parking-stall ratio from 6.5 in their earlier agreement to 4.5 based on the PUD rezoning. The 1999 Operating Agreement expired on December 31, 2009.
The city approved the PUD but required Talisman to execute and record a declaration of covenants and restrictions, referred to as the 1999 Declaration, to provide express assurance that Talisman had sufficient property rights to ensure that all property owners subject to the PUD used their land in a way that did not deviate from the site plan approved by the city. Part, but not all, of the planned development occurred. In 2007 Brooks Mall submitted an amended PUD site plan to the Brooklyn Center city council. The city council approved the amended site plan over Sears's objections.
Sears sued Brooks Mall to stop the amended-site-plan development. Sears's complaint sought declaratory and injunctive relief and asserted four separate claims: (1) breach of Sears's right to consent to material changes to the mall common areas based on the 1999 Operating Agreement; (2) breach of the parking-stall ratio stated in the 1999 Operating Agreement and the 1999 Declaration; (3) breach of Sears's right to use the common areas under the 1999 Operating Agreement through the new development's elimination of parts of the common area; (4) breach of Sears's right to approve amendments to the 1999 Declaration by changing the site plan without Sears's consent. Brooks Mall asserted four counterclaims: (1) slander of title, (2) tortious interference with contract and prospective business relations, (3) tortious interference with business expectancy, and (4) declaratory relief under its contracts with Sears or, alternatively, breach of contract for unreasonably withholding consent to the revised development.
Brooks Mall moved for summary judgment on all claims asserted by Sears, and Sears moved for partial summary judgment on the tort claims asserted by Brooks Mall. The first district court judge assigned to the case denied Brooks Mall's motion for summary judgment, granted Sears's motion for partial summary judgment, and concluded that Sears was a third-party beneficiary of the 1999 Declaration. Because not all claims were resolved, the order was not a final judgment for purposes of appeal. Ten days later, the case was reassigned to a second district court judge. In the intervening time, Brooks Mall and Sears attempted to negotiate stipulated findings of fact, conclusions of law and an order for judgment to facilitate appeal.
Brooks Mall and Sears were unable to agree on a stipulated judgment for purposes of appeal, and, instead, submitted new motions for summary judgment to the second district court judge. Shortly before the motion hearing, Brooks Mall's arrangements with the new developer fell through and Brooks Mall withdrew its amended PUD site plan. At the hearing, Brooks Mall argued that Sears's claims were moot because of the withdrawal of the amended site plan.
The district court concluded that the case was not moot. Because the prior order was not final, the second district court considered all of Sears's and Brooks Mall's claims and concluded as a matter of law that Sears was not a third-party beneficiary of the 1999 Declaration. It then granted summary judgment for Brooks Mall on Sears's first, third, and fourth claims. Sears voluntarily dismissed, without prejudice, the complaint's second count, which alleged a breach of the parking-stall ratio. The district court also granted summary judgment for Brooks Mall on its counterclaim for declaratory relief. The order reaffirmed the earlier district court order that dismissed Brooks Mall's tort claims.
Sears challenges the district court's order granting summary judgment to Brooks Mall on its first, third, and fourth claims and the favorable declaration of Brooks Mall's contractual rights. Brooks Mall filed a notice of review challenging the district court's determination that the case was not moot and also challenging the order granting summary judgment to Sears on its tort claims.
We first address Brooks Mall's claims that the issues in this case are moot because it withdrew its amended PUD site plan. The existence of a justiciable controversy is essential to a court's power to adjudicate. Izaak Walton League of Am. Endowment, Inc. v. State, Dep't of Natural Res., 312 Minn. 587, 589, 252 N.W.2d 852, 854 (1977). A declaratory action is a justiciable controversy if it (a) involves definite and concrete assertions of right that emanate from a legal source, (b) involves a genuine conflict in tangible interests between parties with adverse interests, and (c) is capable of specific resolution by judgment rather than presenting hypothetical facts that would form an advisory opinion. Cincinnati Ins. Co. v. Franck, 621 N.W.2d 270, 273-74 (Minn. App. 2001); see State ex rel. Smith v. Haveland, 223 Minn. 89, 92, 25 N.W.2d 474, 476-47 (1946) (). The question in a case for declaratory judgment is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issue of declaratory judgment. Holiday Acres No. 3 v. Midwest Fed. Sav. & Loan Ass'n of Minneapolis, 271 N.W.2d 445, 448 (Minn. 1978) (quoting Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273, 61 S. Ct. 510, 512 (1941)).
Mootness can be described as "the doctrine of standing set in a time frame: the requisite personal interest that must exist at the commencement of the litigation . . . must continue throughout its existence." Kahn v. Griffin, 701 N.W.2d 815, 821 (Minn. 2005). The mootness doctrine requires a comparison between the relief demanded and the circumstances of the case at the time of decision to determine whether there is a live controversy that can be resolved. In re Minnegasco, 565 N.W.2d 706, 710 (Minn. 1997). The issue of whether a cause of action is moot is a legal issue, which the court reviews de novo. In re McCaskill, 603 N.W.2d 326, 327 (Minn. 1999). When an event makes an order for effective relief impossible or a decision on the merits unnecessary, the appeal should be dismissed as moot. Minnegasco, 565 N.W.2d at 710.
Brooks Mall argues that the case became moot when it withdrew its 2007 amended site plan and that the district court erred by failing to dismiss as moot Counts 1 3, and 4 of Sears's complaint. Because each of these claims is based on different legal documents and different factual allegations, the claims must be analyzed individually to determine whether the claim was moot before the district court and whether it is moot on appeal. The documents at issue were executed by Talisman whose interests were later assumed by Brooks Mall. ...
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