Shop 'N Save Warehouse Foods, Inc. v. Soffer
| Decision Date | 06 February 1996 |
| Docket Number | No. 66971,66971 |
| Citation | 918 S.W.2d 851 |
| Court | Missouri Court of Appeals |
| Parties | SHOP 'N SAVE WAREHOUSE FOODS, INC., a corporation, Plaintiff/Respondent, v. Donald G. SOFFER and Magna Trust Company, a corporation, Defendants/Third-Party Plaintiffs/Appellants, v. Donald E. WEIHL, Thompson & Mitchell, a Partnership, by and through William G. Guerri as Class Representative, and Weihl & Millard, Ltd., a dissolved Illinois corporation, Third-Party Defendants/Respondents. |
Gerald P. Greiman, St. Louis, for appellants.
Byron E. Francis, St. Louis, for plaintiff/respondent.
John Gianoulakis, St. Louis, for third-party defendants/respondents.
RHODES RUSSELL, Judge.
Defendants, Donald G. Soffer and Magna Trust Company 1 ("Soffer"), appeal a judgment entered upon a jury verdict in favor of Plaintiff Shop 'N Save Warehouse Foods, Inc. ("Shop 'N Save") on its petition for breach of the covenant of quiet enjoyment as contained in a commercial lease. Soffer further appeals a judgment in favor of Third-Party Defendants Donald E. Weihl, Thompson & Mitchell, and Weihl & Millard, Ltd., on their third-party claim for malpractice. We affirm.
The basic facts of this case are undisputed. Soffer was a commercial real estate investor in the St. Louis area. Shop 'N Save owned and operated a chain of grocery stores also in the metropolitan St. Louis area. 2 Prior to the lease agreement here at issue, Soffer and Shop 'N Save had entered into four other commercial lease agreements, all containing essentially the same language.
In early 1989 Soffer owned property on 650 Carlyle Road in Belleville, Illinois. The property contained a large building, formerly used as a store, a strip shopping center and a parking lot. In March 1989, Soffer initiated discussions with Shop 'N Save concerning Shop 'N Save possibly leasing the 650 Carlyle property as a grocery store.
During that period Soffer also owned the shopping center across the street at 655 Carlyle Road and leased a portion of the center to National, another supermarket chain, for use as a grocery store. The lease between Soffer and National contained a restrictive covenant which prohibited Soffer, as lessor, from leasing any other premises within one mile of the 655 Carlyle Road property for use as a grocery store. This radius restriction had an exception for a mortgagee who became the owner of the 655 Carlyle Road property. Specifically, the mortgagee exception to the radius restriction provided [I]f a Mortgagee shall become the owner of the Shopping Center, [the radius restriction] shall not be applicable to any property, other than the Shopping Center, which such Mortgagee may then or thereafter own.
In the course of their discussions over the property at 650 Carlyle, Soffer informed Shop 'N Save of the radius restriction and discussed how it might pose a problem for leasing the property as a grocery store. The officers of Shop 'N Save were concerned and made known to Soffer that Shop 'N Save would not enter into a lease until they received written assurances satisfactory to their legal department that the radius restriction would not interfere with the plans and that they could develop and use the property as a grocery store.
In June of 1989, Soffer sought advice from several attorneys as to the enforceability of the radius restriction and possible ways to avoid its effect by using the mortgagee exclusion. Soffer consulted one local attorney who concluded that the mortgagee exclusion could be used to avoid the radius restriction and proposed that Soffer pay off the then outstanding loan balance to the two insurance companies who held the mortgage. Soffer would then get a release of the mortgage by the two companies, create a new mortgage and effect certain transfers of title. In fulfilling the proposed scheme of transfers, the attorney felt Soffer could become the mortgagee of the National property and thereby be excluded from the radius restriction. The attorney further advised Soffer that he may want to file a declaratory judgment action to determine the validity of the radius restriction.
At the suggestion of his banker, Soffer sought the advice of a second attorney, Donald Weihl, who was at that time practicing as a principal with the firm of Weihl & Millard, Ltd. Three days after meeting with Soffer, Weihl delivered to Soffer two letters. The one letter, dated June 26, 1989, was an opinion letter wherein Weihl stated:
It is the unequivocal legal opinion of this office that the terms of the Lease above referenced would not be violated and provide a reason for the current tenant thereunder to terminate the Lease if a Mortgagee of the Shopping Center in which the leased property is located acquired additional property within the one mile specified in the Lease and leased or sold the property to a food store or a food department of any entity in the food business.
There are any number of methods that could be used to arrange to have the Mortgagee hold the title to the property within the one mile radius to be used for food sales that would be permitted without causing the lease tenant to have the right to terminate the Lease. Should you desire the assistance of this office in structuring such an arrangement, please feel free to call the undersigned.
The other letter included was a transmittal letter addressed to Soffer wherein Weihl warned Soffer that there were many possible rebuttal arguments to his opinion, the most persuasive being that a scheme to avoid the radius restriction by using the mortgagee exclusion would circumvent the language and intent of the parties to the National lease.
Soffer showed the opinion letter but not the accompanying transmittal letter to Shop 'N Save, admittedly to persuade Shop 'N Save to move forward with the plans to lease the property at 650 Carlyle. Soffer met with Matthew McCarthy, the general counsel of Shop 'N Save, and other members of the legal staff, who gave the legal department's approval to proceed with the lease.
Meanwhile, unbeknownst to Shop 'N Save, Soffer had engaged in discussions with National to modify the lease for 655 Carlyle. The lease was amended on June 30, 1989 to give National the right of first refusal to acquire the shopping center and left all other terms and conditions of the lease, including the radius restriction, in effect.
In July and August of 1989 Shop 'N Save continued negotiations with Soffer over the terms of the lease and Soffer's progress in effecting the transfers necessary to fall within the mortgagee exclusion. Also during this period Shop 'N Save had started doing some renovations on the 650 Carlyle property.
In August 1989 Soffer contacted Weihl to help implement the plan to use the mortgagee exclusion to avoid the radius restriction in the National lease. Since their last correspondence, Weihl had left the firm of Weihl & Millard, Ltd. and joined the Belleville office of Thompson & Mitchell as a partner. On August 11, 1989, Weihl wrote another opinion letter to Soffer outlining specifically what Soffer needed to do to fall within the mortgagee exclusion. Weihl set forward in detail how Soffer should purchase the then existing mortgage on the National property from the two insurance companies and have the notes assigned to the land trust, with Magna Trust Company as trustee, which already had title to 650 Carlyle.
In the weeks that followed, Soffer did exactly as Weihl advised in the letter. Meanwhile, Soffer had contact with Peter Bohling, vice-president of real estate for National, concerning the Shop 'N Save lease. Bohling requested, in a letter dated August 23, 1989 to Soffer, an opportunity to review the documents involved in the lease with Shop 'N Save and warned "[i]f you are not willing to do this National Super Markets will be forced to take whatever action is necessary to make sure that our rights have not been violated." Soffer responded that the paperwork involved would be completed shortly and that he would share it with National, however, none was ever provided. Further, these correspondences were never disclosed to Shop 'N Save.
All the steps outlined by Weihl were completed by early October 1989. At that point Shop 'N Save requested a clarification from Soffer and Weihl as to the steps needed to avoid the radius restriction, reassurance that those steps had been completed and would, in fact, be effective in obviating the radius restriction. By letter dated October 5, 1989 to Shop 'N Save's legal counsel, Weihl outlined the pertinent lease provisions and the actions taken to avoid the radius restriction. Weihl also gave further assurances that all necessary steps had been taken and would effectively serve to counter enforcement of the radius restriction.
After receiving the requested assurances, Shop 'N Save and Soffer continued with their lease negotiations, and the lease was officially executed on October 31, 1989. Article I of the lease contained the use provision, allowing the lessee to use the property to operate a store specializing in the sale of goods customarily sold by grocery stores and "all other uses not prohibited by law or local ordinance." The lease also included in Article XVIII the covenant of quiet enjoyment. 3 There was no provision addressing the radius restriction and its effect on the lease if the radius restriction was found to be enforceable.
On November 27, 1989, National brought suit in St. Clair County, Illinois seeking to enjoin Soffer and Shop 'N Save from developing and using the property at 650 Carlyle as a grocery store. Soffer represented Shop 'N Save's interests and hired Weihl from Thompson & Mitchell to represent them in the litigation. The trial court entered a judgment permanently enjoining Soffer and Shop 'N Save from operating the property at 650 Carlyle as a grocery...
To continue reading
Request your trial
-
Lohmann By and Through Lohmann v. Norfolk & Western Ry. Co.
...that the jury follows its instruction. Barlow v. Thornhill, 537 S.W.2d 412, 422 (Mo. banc 1976); Shop 'N Save Warehouse Foods, Inc. v. Soffer, 918 S.W.2d 851, 861 (Mo.App.1996). "We are to presume that the jury followed the trial court's instruction to exclude the improperly admitted eviden......
-
Herd v. American Sec. Ins. Co.
...the existence or nonexistence of a fact, material to the agreement, and not as to a future contingency." Shop `N Save Warehouse Foods, Inc. v. Soffer, 918 S.W.2d 851, 862 (Mo.App.1996) (citing Thies v. St. Louis County, 402 S.W.2d 376, 381 (Mo. 1966)). In other words, a mutual mistake must ......
-
Guess v. Escobar
...Industrial Excavating & Equipment, Inc., 981 S.W.2d 607, 613 (Mo. App. W.D. 1998)(quoting Shop 'N Save Warehouse Foods, Inc. v. Soffer, 918 S.W.2d 851, 863 (Mo. App. E.D. 1996)). However, logically relevant evidence is not necessarily admissible. Olinger, 896 S.W.2d at 48. In order to be ad......
-
King v. Ryals
...trial court's decision substantial deference, and only interfere when the trial court has abused its discretion. Shop 'N Save Warehouse Foods v. Soffer, 918 S.W.2d 851 863 (Mo.App. E.D.1996). The test for relevancy is whether the proffered evidence tends to prove or disprove a fact in issue......