Solo Serve Corp. v. Westowne Associates

• Decision Date: 18 April 1991
• Docket Number: No. 90-3051,90-3051
• Citation: 929 F.2d 160
• Parties: SOLO SERVE CORPORATION, Plaintiff-Appellant, v. WESTOWNE ASSOCIATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 160

929 F.2d 160

SOLO SERVE CORPORATION, Plaintiff-Appellant, v. WESTOWNE ASSOCIATES, Defendant-Appellee.

No. 90-3051.

United States Court of Appeals, Fifth Circuit.

April 18, 1991.

K. Eric Gisleson, Steeg & O'Connor, New Orleans, La., for Solo Serve Corp.

Thomas M. Benjamin, Patrick Johnson, Jr., Lemle, Kelleher & Kohlmeyer, New Orleans, La., for Westowne.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before WISDOM, KING and BARKSDALE, Circuit Judges.

WISDOM, Circuit Judge:

This case raises two issues: (1) was the summary judgment evidence sufficient to create a genuine issue of fact; (2) if the evidence presented was insufficient, did the district court abuse its discretion in refusing to give the plaintiff more time for discovery. We find neither sufficient evidence nor an abuse of discretion and therefore AFFIRM the decision of the district court.

I

In March of 1983, Solo Serve Corporation agreed to lease space in a shopping center from the owner of the center, John G. Amato. The lease ran for fifteen years, and gave Solo Serve the option to extend the lease for two additional five year periods. As is typical of such leases, both Solo Serve and Amato made a number of promises intended to create an attractive and comfortable shopping atmosphere for the potential customers of the center.

In 1986, Amato sold the center to Westowne Associates, a limited partnership. In June of 1988, Solo Serve discovered that Westowne planned to lease the space in the center that had previously been occupied by Westside Theaters to Jefferson Downs, Inc. d/b/a The Finish Line ("The Finish Line"). The Finish Line planned to operate an off-track betting business in the leased space. Solo Serve notified Westowne that Solo Serve would consider such action by Westowne a breach of the terms of the lease between Solo Serve and Westowne.

Despite this notice, Westowne leased the space to The Finish Line. The Finish Line opened as an off-track betting business in October of 1988. In December of 1988, Solo Serve filed this action ¹ seeking a declaration that Westowne had breached the terms of the lease between Solo Serve and Westowne. It requested a permanent injunction against the operation of an off-track betting business in the shopping center or, in the alternative, the cost of relocating its store to a shopping center without such a business.

In its complaint, Solo Serve alleged that Westowne had breached four terms of the lease agreement by leasing space in the center to an off-track betting business. First, Solo Serve alleged that Westowne had breached the covenant of quiet enjoyment provided by paragraph 37 of the lease. Second, it alleged a breach of paragraph 39 of the lease which provides:

Neither LANDLORD nor TENANT shall engage in or permit waste or any other activity at or around the Demised Premises which violates any applicable law, ordinance or regulation related to the Demised Premises, constitutes a nuisance, produces loud noises or unpleasant odors, is likely to bring discredit upon the Shopping Center, or discourage customers from patronizing other occupants of the Shopping Center by other than activities customarily engaged in by reputable businesses.

Third, it alleged breaches of two provisions in paragraph 40 of the lease which provides:

A. LANDLORD agrees that it will not re-lease the premises in the Shopping Center ... currently occupied by Westside Theaters ... to any tenant whose business activity customarily requires more than 5 1/2 parking spaces per 1000 square feet of building area.

....

C. LANDLORD will not lease, rent, occupy, or permit to be occupied or used without TENANT's prior written consent any part of the Shopping Center for the operation of a pornographic bookstore or any portion of the Shopping Center within one hundred (100') feet of the Demised Premises for the operation of nightclubs or bars.

On September 29, 1989, Westowne filed a motion requesting summary judgment. Westowne also filed several affidavits that established:

(1) A new parking lot had been built adjacent to The Finish Line. Most of the customers of The Finish Line used this new parking area, and, as a result, customers of The Finish Line customarily used less than 73 spaces in the original parking lot, which was adjacent to Solo Serve.

(2) The Finish Line had a license to sell food and alcohol and did so. The gross income from food and beverage ² concessions was only 2.5 percent of the gross income from betting. ³

Solo Serve filed an opposition on October 10, 1989. No affidavits or depositions were filed with the opposition. Instead, Solo Serve argued three things: (1) the evidence presented by Westowne created a genuine issue of fact as to whether The Finish Line was a bar; (2) The Finish Line had not complied with the discovery orders of the court, limiting Solo Serve's ability to respond to the income figures given in the affidavit; and (3) the relevant statistic was not the percentage of gross income, but the percentage of net income, derived from the sale of alcohol.

On October 12, 1989, Westowne filed a supplemental memorandum in support of its motion. Westowne attached another affidavit stating that the net income from the sale of food and beverages constituted only 14 percent of the net income of The Finish Line from October of 1988 through July of 1989. The district court heard oral argument on the motion on October 18, 1989, and denied the motion for summary judgment.

On November 6, 1989, Westowne filed a motion asking the district court to reconsider Westowne's motion for summary judgment. An attached affidavit stated that the net income from the food and beverage concession between January 1, 1989 and September 7, 1989 constituted less than 7 percent of the total net income of the betting business. On November 7th, Solo Serve again filed an opposition containing arguments, but no evidentiary facts. First, it argued that the evidence introduced by Westowne established that the sales of alcohol at The Finish Line were substantial, and therefore violated the lease even if The Finish Line earned most of its income from betting. Second, it argued that, while The Finish Line had provided its net income in the form of a bottom line number, it had failed to produce the supporting data as required by the discovery order of the court.

On November 15th, Westowne filed further affidavits that provided some detail of the income and the expenses of The Finish Line. ⁴

The district court took the matter under submission and granted the motion on January 11, 1990. The district court relied on Piggly Wiggly v. Wolpert Associates ⁵ in finding that the betting parlor was not a bar because only 6.5 percent of its net income came from the food and beverage concession. The district court also read the parking space limitation as an intention by the parties to limit the number of spaces that the new tenant would customarily use in the original parking lot, rather than a prohibition on stores that required excessive parking space per se. Given the size of the area leased by The Finish Line, ⁶ the court interpreted the lease to limit to seventy-three the number of parking spaces that could be used customarily by the patrons of The Finish Line in the original parking lot. The only relevant evidence presented established that, because of the construction of the additional parking area immediately adjacent to The Finish Line, fewer than seventy-three of the original parking spaces were customarily used by the patrons of The Finish Line. Thus, despite the fact that customers of The Finish Line may have ordinarily required more than 5 1/2 spaces per 1000 square feet of building space, the district court held that the provision was not violated.

The district court did not explicitly consider the "bring discredit upon" or the "reputable business" language of paragraph 39 of the lease, or the covenant of quiet enjoyment provided by paragraph 37. Apparently, the district court reasoned that, because Louisiana law permits a restrictive covenant to reach and prohibit only those uses clearly delineated in the covenant, the terms in paragraph 39 were too vague to be enforceable against an otherwise lawful business.

Solo Serve raises three arguments on appeal. First, Solo Serve argues that the affidavits presented by Westowne create a genuine issue of fact as to whether The Finish Line was a "nightclub[ ] or bar[ ]" because a reasonable jury could draw the inference, from The Finish Line affidavits, that The Finish Line is a bar. Second, Solo Serve argues that the district court abused its discretion in failing to give Solo Serve more time for discovery. Third, Solo Serve argues that the district court erred in granting summary judgment on the issue of whether Westowne had breached the parking lot, the "bring discredit upon", and the quiet enjoyment covenants.

II

We review the district court's grant of summary judgment as an issue of law: the question is whether sufficient evidence was presented to enable a reasonable jury to find for Solo Serve. ⁷ Because Westowne made the motion, we must view the evidence in the light most favorable to Solo Serve and draw all reasonable inferences in favor of Solo Serve. ⁸ Because Solo Serve is the plaintiff, Solo Serve has the burden of ensuring that the evidence presented is sufficient to establish a genuine issue of material fact. ⁹ While Solo Serve may use the affidavits filed by Westowne to satisfy this burden, only evidence--not argument, not facts in the complaint--will satisfy Solo Serve's burden.

For each provision, we follow the same analysis that was used by the district court. We determine the meaning of the provision, and then look to see if there is sufficient evidence for a reasonable jury to determine that the provision was breached. ¹⁰

Both the parties and the district court assume that the relevant provisions are ...