Seaway Shopping Center Corp. v. Grand Union Stores, Inc., of Vermont, 3-73
| Decision Date | 05 February 1974 |
| Docket Number | No. 3-73,3-73 |
| Citation | 315 A.2d 483,132 Vt. 111 |
| Parties | SEAWAY SHOPPING CENTER CORPORATION v. The GRAND UNION STORES, INC., OF VERMONT, and the Grand Union Company. |
| Court | Vermont Supreme Court |
James D. Foley, of Yandell, Page & Archer, Burlington, for plaintiff.
Wilson, Curtis, Bryan, Quinn & Jenkins, Burlington, for defendants.
Before SHANGRAW, C. J., and BARNEY, SMITH, KEYSER and DALEY, JJ.
This is an appeal from a judgment entered in a civil action tried by the Chittenden County Court on December 6, 1972. Jury trial was waived and following a hearing by the court plaintiff was awarded damages in the amount of $14,839.05 and its costs. A judgment for this amount followed, and the defendants have appealed therefrom.
Plaintiff, a Vermont corporation, owns and operates the Seaway Shopping Center in Sought Burlington, Vermont. Its principal stockholder and officer is Thomas Farrell, who developed the shopping center.
The Grand Union Stores, Inc., of Vermont, is also a Vermont corporation, and a wholly owned subsidiary of The Grand Union Company. The Grand Union company is a Delaware corporation with its principal office in East Paterson, New Jersey. The Grand Union Company is a guarantor of the performance of its subsidiary company under the lease here in question.
For the purposes of this opinion, Seaway Shopping Center is hereinafter referred to as 'Seaway', The Grand Union Stores, Inc., of Vermont, as 'Tenant', and The Grand Union Company as 'Parent Company.'
The original lease, here in question, was between Thomas Farrell and the above Tenant. The Parent Company was guarantor of the Tenant. The lease was subsequently assigned by Farrell to Seaway. Its terms are not in dispute.
Without reciting verbatim all of the pertinent provisions of the lease, the court determined under finding No. 5 that it provided, in substance, as follows:
(a) That the Landlord would maintain the surface of the parking area, rights of way, curb-cuts, approaches and sidewalks in good condition.
(b) That if the Landlord failed to carry out any of its obligations, the Tenant might, after reasonable notice or without notice if in the Tenant's judgment an emergency should exist, perform the obligation at the expense of the Landlord.
(c) That if Tenant did so, it would be entitled to reimbursement from the Landlord, and could apply the claim against subsequent rent installments.
(d) That the Landlord should also mark and reline the parking areas as often as necessary.
(e) That notices or demands under the lease should be given by each party to the other by mail, to the addresses therein set forth.
The trial court continued with the following findings.
6. It is undisputed, and we find, that the Tenant in July 1971, caused a substantial part of the parking area adjacent to its store premises to be repaired and repaved, and subsequently remarked. The cost of the paving was. $14,050.00, and of the remarking $903.15, both costs being reasonable.
7. It is also conceded, and found, that Tenant made withholdings from its rent as follows:
January 1, 1972 $2,500.00
February 1, 1972 2,500.00
March 1, 1972 2,500.00
April 1, l972 2,500.00
May 1, 1972 2,500.00
June 1, 1972 2,453.15
8. It is virtually, if not actually, conceded, and we find, that the remarking in question was required and necessary, whether or not the repaving was, and we find that the deduction of $903.15 by Tenant was justified and is an allowable reduction of plaintiff's claim.
9. Since the rental obligation itself is not in question, the central issue here involved is the condition of the parking lot before the repaving was done, i. e. whether it was in 'good condition' as required by the lease. We find that it was, and that the repaving by the Tenant was not justified. Additionally, no notice of the repaving was given to the Landlord, the notice which was given referring only to 'repair.' (Def.Ex. T)
10. Over the course of six years prior to the repaving, Tenant had from time to time notified Seaway of the recurrent need for repairs to the lot, and Seaway had made them, presumably to the satisfaction of Tenant, since the non-performance clause had not previously been invoked.
11. When repairs were needed, Seaway had an arrangement with one Armand Pare and one Rene Barsalou to make them, using their equipment and hot mix (or cold patch in winter) purchased from local suppliers.
12. The cost of these repairs to Seaway were as follows: 1966, $760.65; 1967, $20.15; 1968, $670.09; 1969, $232.01; 1970, $469.91; and 1971, $1,835.91. The total is $3,968.72, almost half of which was just before the repaving in question.
13. Mr. Farrell testified that the repaving was done by Tenant, not because of necessity, but because it desired to give the premises a 'new look' and to upgrade the store to meet growing competition. We so find, for the following reasons:
(a) By letter of May 5, 1970, the parent company advised Seaway (Def.Ex.L) that the parking area was badly in need of repair, 'creating a very shabby appearance in comparison to the other Shopping Centers in the area.'
(b) It then, in August, 1970, proceeded to get an estimate of the cost of repaving from L. M. Pike & Son, Inc., (Pl.Ex. 2, p. 4) even though it did not proceed with the work.
(c) On June 25, 1971, in a telephone conversation with Farrell, Mr. Hayes, Vice-president for the real estate of the parent company (which handled all these matters completely without reference to its subsidiary), asked Seaway to pay half of the cost of repaving, to upgrade the store to meet competition. Mr. Farrell refused, advising Hayes that substantial repairs had already been made and more were in process.
(d) At that time, a second quotation for repaving had already been obtained by defendants, and another was in the process.
(e) We are unable to find, and defendants' evidence could not make clear, who made the decision to repave. Notice was mailed July 1, 1971, although it did not specify that repaving was to be done, referring only to repairs. This notice came from Mr. Charles Bailey, assistant maintenance supervisor for the parent company. The following day he accepted the low quote for the work, and it proceeded.
(f) When Mr. Bailey gave this notice and accepted the quote, he did not know repairs had been made, was unaware of the then condition of the lot and had had no communication from local officials of the Tenant about the repairs.
(g) Mr. Bailey testified he did not know who in the chain of command made the decision to repave. He thought it might have been the 'legal department.' A representative of the legal department was present through the trial, but did not testify. The vagueness of this whole line of testimony as to individual decision-making within the corporate structure tends to reinforce the conclusion that the reasons for repaving were other than as stated in the formal notice.
14. The defendants, although entitled to deduct the sum of $903.15 from the rent, were not entitled to deduct the further sum of.$14,050.00. Plaintiff is entitled to recover from defendants that sum, with interest to date in the amount of $789.05, for a total of $14,839.05, plus its taxable costs.
In its conclusions the court, in part, stated:
No substantial legal questions are here presented. As agreed, by the parties, the main issue involved is one of fact, whether the parking lot in question was in good condition under the terms of the lease when the repaving was done, or in such bad condition, unremedied by the landlord after tenant's request, that repaving was necessary. Strengthened by the information that tenant's responsible officials did not know of, or take into consideration, the substantial repairs which landlord had made, we have concluded that the repaving was not necessary, but was done for purposes of 'upgrading' to meet competition, a worthy motive but not the landlord's responsibility under the lease.
The issues raised by the defendants on appeal are primarily challenges to the findings of fact made by the trial court which they claim are clearly erroneous. The standard by which such a challenge is tested is stated in V.R.C.P. 52(a) thus:
Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses and the weight of the evidence.
The above Vermont rule is similar to Rule 52(a) of the Federal Rules of Civil Procedure. Defendants argue that this Court should not follow the long history of Vermont case law, but should adopt a new standard now used by the Federal Courts. It...
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