Ventures v. Safeway, Inc.

• Decision Date: 06 August 2013
• Docket Number: No. WD 75837.,WD 75837.
• Citation: 410 S.W.3d 245
• Parties: BACK VENTURES, L.L.C. SERIES D, Appellant, v. SAFEWAY, INC., Respondent.
• Court: Missouri Court of Appeals

410 S.W.3d 245

BACK VENTURES, L.L.C. SERIES D, Appellant,

v.SAFEWAY, INC., Respondent.

No. WD 75837.

Missouri Court of Appeals, Western District.

Aug. 6, 2013.

Anthony L. Gosserand, Kansas City, MO, for appellant.

Patrick K. McMonigle, Patrick J. Kaine, Kansas City, MO, for respondent.

Before Division Three: LISA WHITE HARDWICK, Presiding Judge, and MARK D. PFEIFFER and CYNTHIA L. MARTIN, Judges.

MARK D. PFEIFFER, Judge.

Back Ventures, L.L.C. Series D (“Back Ventures”) appeals from the judgment entered by the Circuit Court of Clay County, Missouri (“trial court”), in which the trial court granted summary judgment to Safeway, Inc. (“Safeway”), in Back Ventures' suit for breach of a lease agreement. Because we must review the record in the light most favorable to the party against whom summary judgment was entered and accord the non-movant the benefit of all reasonable inferences from the record, we conclude that summary judgment was error. Thus, we reverse and remand for further proceedings consistent with this opinion.

Factual and Procedural History ¹

On January 16, 1953, Louis and Sylvia Weinstein (the “Weinsteins”) entered into a lease (the “Lease”) with Safeway Stores Incorporated (“Safeway Stores”) for the rental of certain improved real property, commonly known and numbered as 1815 Burlington Avenue, North Kansas City, Clay County, Missouri (the “leased premises”), for thirty years commencing April 1, 1953, and expiring March 31, 1983. Back Ventures is the successor in interest to the Weinsteins, and Safeway is the successor in interest to Safeway Stores. Safeway Stores operated a grocery store in the leased premises until November 1962. Thereafter, Safeway Stores and its successors in interest to the Lease subleased the leased premises to various tenants. In 1982 and 1988, Safeway Stores exercised options to extend the term of the Lease, with the term finally expiring on March 31, 2013.

On November 30, 1987, Safeway Stores transferred all of its interest as lessee under the Lease to Property Development Associates (“PDA”). Pursuant to an Asset Purchase Agreement dated January 15, 1988, SunWest Development Co., Inc., purchased the assets of PDA. On April 18, 1988, PDA assigned all of its interest in the Lease to SunWest N.O.P., Inc. (“SunWest”). On April 28, 1988, PDA notified Back Ventures' predecessor in interest that it had transferred and assigned its interest in the Lease to SunWest. The Lease gave the lessee the “right to assign or transfer the lease,” but provided that “[s]hould lessee assign this lease it shall nevertheless remain liable to lessor for full payment of the rent and lessee's other obligations under this lease.” When PDA notified Back Ventures of the assignment to SunWest, it advised, consistent with the Lease, that it “hereby acknowledges and confirms its continued liability for the payment of rent and performance of the tenant's obligations following the above referenced assignment as required by the assignment and subletting provision of said [L]ease.”

In 1997, a dispute arose regarding the allegedly deteriorating condition of the leased premises. Initial efforts to resolve the dispute were not successful. Back Ventures' attorney, Sherwin Epstein, sent a letter dated November 12, 1997 (the “1997 Letter”), to, among others, Safeway Stores, PDA, ² and SunWest, stating that “[n]otice is hereby given that [Back Ventures] has elected to declare the term of the above-referenced lease ended because of the tenant's failure to perform its covenants and agreements under the lease.” The 1997 Letter also made a demand for possession of the premises. SunWest did not relinquish possession of the premises. Back Ventures did not take any action to remove SunWest from the premises. Rather, SunWest thereafter made repairs and improvements to the leased premises, and continued to pay rent, which Back Ventures accepted. The record is silent as to the communications between Back Ventures and SunWest following and in response to the 1997 Letter.

In 2008, another dispute arose regarding the allegedly deteriorating condition of the leased premises. On this occasion, Back Ventures filed suit against both SunWest and Safeway for breach of the Lease (the “2008 Lawsuit”). The 2008 Lawsuit sought possession of the leased premises and monetary damages for default from both SunWest and Safeway. Safeway tendered the defense of the 2008 Lawsuit to SunWest pursuant to an indemnification agreement relating to the Lease. Back Ventures subsequently dismissed the 2008 Lawsuit. SunWest remained in possession of the leased premises and continued to pay rent in the amount required by the Lease. The record does not indicate that Safeway responded to the 2008 Lawsuit with the claim that its obligations under the Lease had been previously terminated by the 1997 Letter or because Back Ventures had failed to provide it written notice about SunWest's failures to perform the Lease.

At all relevant times before and after the 1997 Letter and the 2008 Lawsuit, SunWest remained in continuous possession of the leased premises. Likewise, pursuant to the terms of the Lease, SunWestmade rent payments to Back Ventures through December 2009, made property tax payments through 2008, and maintained insurance for the leased premises through 2009.

In December 2009, SunWest contacted Back Ventures and informed Back Ventures that SunWest would no longer meet its obligations under the Lease, thereby surrendering the leased premises. In turn, Back Ventures contacted Safeway in February 2010 regarding its position on the alleged default status of the Lease and, particularly, the current deteriorated condition of the surrendered leased premises. Safeway responded by obtaining an inspection of the leased premises, obtaining property repair bids from Metropolitan Construction Services (July 2010) and Mid–America Contractors, Inc. (December 2010), and obtaining insurance coverage for the leased premises (consistent with the requirements of the Lease). Safeway engaged in discussions regarding Back Ventures' claims that Safeway was obligated for breach of the Lease but, ultimately, those discussions did not lead to resolution, and Back Ventures filed the underlying lawsuit against SunWest and Safeway in 2011 (the “2011 Lawsuit”). Due to imminent condemnation and demolition by the City of North Kansas City, Missouri, Back Ventures demolished the leased premises at its expense and sought reimbursement from Safeway for those expenses, and other damages, in the 2011 Lawsuit.³

Safeway did not tender the defense of the 2011 Lawsuit to SunWest and, instead, filed a separate answer to the 2011 Lawsuit. Thereafter, Safeway filed a motion for summary judgment, asserting that Back Ventures terminated the Lease in 1997 as a result of the 1997 Letter, and that Safeway had no further legal obligation under the Lease as a result. Safeway further alleged that after November 13, 1997, Back Ventures did not provide Safeway notice of any kind relating to the Lease until February 2010. Safeway further asserted that between November 1997 and February 2010, Back Ventures provided no notice to Safeway of any default under the Lease; did not request or advise Safeway of any separate agreements or arrangements it made with SunWest concerning maintenance of the leased premises; and did not notify Safeway that the leased premises had been vacant since 2000 ⁴ or that SunWest continued to make payments under the Lease while leaving the leased premises vacant. Safeway also raised the affirmative defenses of waiver, estoppel, and laches, and contended that Missouri's five-year statute of limitations, § 516.120, applied to Back Ventures' claims under the Lease.⁵ Back Ventures opposed Safeway's motion for summary judgment. The trial court granted summary judgment to Safeway by a September 24, 2012 docket entry.

SunWest, although properly served, failed to file an answer to the 2011 Lawsuit. On October 31, 2012, the trial court entered a “Judgment of Default against SunWest and a Final Judgment.” In its judgment, the trial court noted that it had previously granted Safeway, Inc.'s Motion by a September 24, 2012 docket entry and that it was now entering final judgment in Safeway's favor on all counts raised against it in the 2011 Lawsuit.

Back Ventures timely appeals.

Standard of Review

The propriety of summary judgment is purely an issue of law, and appellate review is essentially de novo. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). We review the record in the light most favorable to the party against whom judgment was entered and accord the non-movant the benefit of all reasonable inferences from the record. Id. We do not defer to the trial court's order granting summary judgment. Id.

“The purpose of summary judgment under Missouri's fact-pleading regime is to identify cases (1) in which there is no genuine dispute as to the facts and (2) the facts as admitted show a legal right to judgment for the movant.” Id. at 380. Facts in support of a party's summary judgment motion, set forth by affidavit or otherwise, are taken as true, unless the non-moving party's response contradicts them. Id. at 376. “The key to summary judgment is the undisputed right to judgment as a matter of law; not simply the absence of a fact question.” Id. at 380.

“Where a ‘defending party’ will not bear the burden of persuasion at trial, that party need not controvert each element of the non-movant's claim in order to establish a right to summary judgment.” Id. at 381. Rather, “a ‘defending party’ may establish a right to judgment by showing facts that negate any one of the claimant's elements.” Id.

Conversely, when “the defending party has moved for summary judgment based on ... affirmative defense[s], the moving party must show ‘that there is no genuine dispute as to the existence of each of the facts necessary to support the movant's...