Opinion
CIVIL ACTION No. 00-CV-3297
July 23, 2001
MEMORANDUM
Presently before the court are three motions and their responses. For the following reasons, Defendant's Motion for Partial Summary Judgment will be denied, Plaintiff's Cross-Motion for Partial Summary Judgment will be denied and Plaintiff's Motion for Leave to Amend the Complaint will be granted.
FACTUAL AND PROCEDURAL BACKGROUND
In or around December 6, 1973, Plaintiff Downing Properties Associates entered into a lease agreement ("Lease) with Defendant The Great Atlantic Pacific Tea Company Inc., whereby Defendant agreed to rent the first floor of a store building ("Property") to be erected and constructed by Plaintiff. ( See Def.'s Ex. A, Lease at 1.) Defendant occupied the Property as a general merchandise business for twenty-five (25) years and made some "alterations" to its interior during that period. ( See Def.'s Ex. A, Lease at 1; Correnti's Aff. at ¶¶ 3-4, attached as Def.'s Ex. C.) Defendant vacated the Property when the Lease expired on March 31, 2000. ( See Compl., Ex. B; Correnti's Aff. at ¶ 4.) Plaintiff alleges that Defendant breached the Lease by failing to restore the Property to its original condition at the termination of the Lease. On July 29, 2000, Plaintiff filed a two-count complaint against Defendant alleging breach of contract and unjust enrichment. Jurisdiction is premised on diversity of citizenship pursuant to 28 U.S.C. § 1332(a)(1) . Defendant filed a Motion for Partial Summary Judgment as to Liability Issues. Plaintiff filed a Response, as well as a Cross-Motion for Partial Summary Judgment and Motion for Leave to Amend the Complaint.
Plaintiff is alleged to be a Pennsylvania corporation with its principal place of business in Pennsylvania, and Defendant is alleged to be a New Jersey corporation with its principal place of business in New Jersey. (See Compl. at ¶¶ 1, 2.)
DISCUSSION
Summary Judgment Summary judgment shall be awarded "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A dispute regarding a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc . , 477 U.S. 242, 248 (1986). Once the moving party has carried the initial burden of showing that no genuine issue of material fact exists, the non-moving party cannot rely on conclusory allegations in its pleadings or in memoranda and briefs to establish a genuine issue of material fact. Pastore v. Bell Telephone Co. of Pa . , 24 F.3d 508, 511 (3d Cir. 1994). The nonmoving party, instead, must establish the existence of every element essential to his case, based on the affidavits or by the depositions and admissions on file. Id . (citing Harter v. GAF Corp . , 967 F.2d 846, 852 (3d Cir. 1992)); see also Fed.R.Civ.P. 56(e). The evidence presented must be viewed in the light most favorable to the non-moving party. Lang v. New York Life Ins. Co . , 721 F.2d 118, 119 (3d Cir. 1983). The interpretation of a contract is a question of law for a court to decide. See Paylor v. Hartford Ins. Co . , 640 A.2d 1234, 1235 (Pa. 1994); Charles D. Stein Revocable Trust v. General Felt Industries, Inc . , 749 A.2d 978, 980 (Pa.Super. 2000.) Under Pennsylvania law, "[a] lease is a contract and is to be interpreted according to contract principles." Hutchinson v. Holmes , 519 A.2d 385, 389 (Pa. 1986) (citing Pugh v. Holmes , 405 A.2d 897, 903 (Pa. 1979)). "Determining the intention of the parties is a paramount consideration in the interpretation of any contract." Hutchinson , 519 A.2d at 389 (citing Robert F. Felte Inc. v. White , 302 A.2d 347, 351 (Pa. 1973); Unit Vending Corp. v. Lacas , 190 A.2d 298, 300 (Pa. 1963)). "The intent of the parties is to be ascertained from the document itself when the terms are clear and unambiguous." Hutchinson , 519 A.2d at 390 (citing Steuart v. McChesney , 444 A.2d 659, 661 (Pa. 1982); In re Estate of Breyer , 379 A.2d 1305, 1309 (Pa. 1977)).
In the present matter, Defendant avers that it is entitled to partial summary judgment, because Paragraph 20 of the Lease, entitled "Alterations," expressly states that the Lessee may "make any alterations or changes to the interior of the building . . . and . . . shall not be required to restore the premises to their original state." (Def.'s Ex. A, Lease at 12.) Therefore, as to any alterations or changes made to the Property, Defendant maintains that it is not required to restore the Property to its original condition.
Plaintiff concedes that Defendant was entitled to make alterations to the Property, but argues that Defendant is obligated to restore the Property to its original condition to the extent that Defendant damaged the Property in removing the alterations. Plaintiff alleges that Defendant breached the Lease by installing, and subsequently removing, "fixtures, appurtenances and property" without restoring the Property to a condition that permits Plaintiff to re-lease it to another tenant. Therefore, Plaintiff argues that its Cross Motion for Summary Judgment should be granted and Defendant's Motion for Partial Summary Judgment should be denied.
Alterations
Paragraph 20, entitled "Alterations," states:
Except for alterations or modifications affecting either the structure of [sic: or] the demised premises, LESSEE may, during the term of this lease or any extension thereof, at its own expense, make any alterations or changes to the interior of the building on the demised premises if they are necessary, in its sole opinion, for the operation of its business, and it is understood that LESSEE shall not be required to restore the premises to their original state.
Plaintiff argues that the word "or" should be substituted for the word "of." (Pl.'s Resp. at 6, n. 1.) Thus, Plaintiff contends the first portion of Paragraph 20 should read: "Except for alterations or modifications affecting either the structure or the demised premises. . . ." Defendant responds: "Plaintiff purposes to make much of an apparent typographic error in paragraph 20. . . . However, the alterations at issue were those made solely to the interior of the premises as opposed to the basic structure (or the underlying tract itself); thus this clause is of no import. (See Def.'s Mem. Supp. Summ. J. at 2.)
(Def.'s Ex. A, Lease at 12.) Paragraph 20 merely relieves the Lessee from liability for failure to restore the premises to the original condition. However, Paragraph 20 does not speak to damage resulting from the removal of alterations and therefore, does not relieve the Lessee from potential liability for excessive damage to the premises resulting from the removal of alterations.
Fixtures
Paragraph 29 of the Lease, entitled "Fixtures," provides:
Any fixtures or other property of Lessee which may be either placed in or upon or affixed or attached to the premises hereby demised by Lessee are to remain its property, and Lessee shall remove the same at any time prior to or upon vacating the said premises and return the demised premises to its original condition, reasonable wear and tear excepted.
(Def.'s Ex. A, Lease at 18.) Paragraph 29 imposes a duty on the Lessee at the termination of the Lease to remove fixtures that were installed during tenancy and to restore the Property to its original condition, reasonable wear and tear excepted. Defendant is not liable for merely removing installed fixtures. However, Defendant may be liable for damage, outside the purview of reasonable wear and tear, caused by the removal of fixtures or other property.
Surrender
Finally, Paragraph 27, entitled "Surrender, states:
At the expiration of said term or extension thereof, LESSEE will quit and surrender the demised premises in as good state and condition as received, reasonable wear and tear, damage by fire or the elements, or from causes beyond its control excepted.
(Def.'s Ex. A, Lease at 18.) Paragraph 27 imposes a general duty on the Lessee to restore the Property to its original condition upon termination of the Lease, allowing for reasonable wear and tear. Plaintiff is not entitled to recover for Defendant's alleged failure to vacate the Property in "a tenantable condition for future tenants." ( See Pl.'s Resp. at 5.) In its response to Defendant's motion, Plaintiff states that "Plaintiff also believes that Defendant was responsible for vacating the space in a reasonably tenantable condition for future tenants, which was the condition of the demised premises when the Lease commenced." ( See Pl.'s Resp. at 5.) The Lease does not state such a standard. Instead, the standard under the Lease for restoring the Property is "in as good state and condition as received," excepting reasonable wear and tear. Therefore, to the extent that Plaintiff is seeking relief based on Defendant's alleged failure to vacate the Property in "a tenantable condition for future tenants," no such relief is available under the Lease.
Given the aforesaid interpretation of the Lease, Defendant's Motion for Partial Summary Judgment will be denied and Plaintiff's Cross-Motion for Partial Summary Judgment will be denied, because it is still necessary for a fact finder to determine whether or not the damages complained of by Plaintiff exceeds the standard of reasonable wear and tear permitted by the Lease.
Amending the Complaint
Under Fed.R.Civ.P. 15(a), if a responsive pleading is already served, a party may only amend his pleading "by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." Motions to amend under Fed.R.Civ.P. 15(a) may be filed to cure a defective pleading, to correct insufficiently stated claims, to amplify a previously alleged claim, to change the nature or theory of the case, to state additional claims, to increase the amount of damages sought, to elect different remedies, or to add, substitute or drop parties to the action. See L. Charles Alan Wright et al., Federal Practice and Procedure: Civil 2d § 1474 (1990). However, a motion for leave to amend may be denied if there is a "potential for undue prejudice" to the non-moving party. See Coventry v. United States Steel Corp., 856 F.2d 514, 519 (3d Cir. 1988) (quoting Cornell Co., Inc. v. Occupational Safety Health Review Comm'n, 573 F.2d 820, 823 (3d Cir. 1978)).
Plaintiff moves for leave to amend the Complaint to include a claim for lost rent. Plaintiff alleges that it has been "unable to rent the Property as a result of Defendant's failure to restore" the Property. Defendant argues that Plaintiff's motion should be denied to the extent that Defendant's Motion for Partial Summary Judgment is granted. In light of the preceeding discussion and the absence of any undue prejudice, undue delay, bad faith or futility which may result from amending the Complaint, Plaintiff's Motion to Amend the Complaint to include a claim for lost rent will be granted.
An appropriate Order follows.
ORDER
AND NOW, this ___ day of July, 2001, upon consideration of the parties' motions and the responses thereto, IT IS HEREBY ORDERED that
• Defendant's Motion for Partial Summary Judgment is DENIED;
• Plaintiff's Cross-Motion for Partial Summary Judgment is DENIED; and
• Plaintiff's Motion for Leave to Amend the Complaint is GRANTED, and Plaintiff shall file an Amended Complaint within five (5) days of receipt of this Order. Defendant shall respond, if appropriate, within ten (10) days of receipt of the Amended Complaint. An additional sixty (60) days from the date of this Order is allowed for discovery. The Deputy Clerk is to schedule a final Pre-Trial Conference at the end of the discovery period.
BY THE COURT: