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Caro Associates Ii, LLC, Stores, Lp v. Best Buy Co.

March 6, 2012

CARO ASSOCIATES II, LLC, STORES, LP, PLAINTIFF,
v.
BEST BUY CO., INC., BEST BUY
DEFENDANTS.



The opinion of the court was delivered by: Wigenton, District Judge.

OPINION

Before the Court are Defendants Best Buy Company, Inc., ("Best Buy, Inc.") and Best Buy Stores, LP's ("Best Buy LP") (collectively "Best Buy" or "Defendants") Motion for Summary Judgment and Plaintiff Caro Associates II, LLC's ("Caro" or "Plaintiff") Motion for Partial Summary Judgment pursuant to Fed. R. Civ. P. 56(c) (collectively "Motions"). This Court has jurisdiction pursuant to 28 U.S.C. § 1332(a). Venue is proper in this District pursuant to 28 U.S.C. § 1391. These Motions are decided without oral argument pursuant to Fed. R. Civ. P. 78. For the reasons stated below, this Court grants in part, and denies in part, Defendants' Motion for Summary Judgment and denies Plaintiff's Motion for Partial Summary Judgment.

FACTUAL AND PROCEDURAL HISTORY

In May 2000, Best Buy, Inc., leased a warehouse located at 75 Carter Drive in Edison, New Jersey, from Plaintiff ("property" or "warehouse"). (Compl. ¶ 4.) Caro and Best Buy, Inc., executed a Lease Agreement ("original lease"). (Defs.' Br. Wolin Certification ("Certif.") Ex. D.) On May 31, 2000, Best Buy, Inc., entered into an "Assignment and Assumption of Lease" agreement with Best Buy LP. Pursuant to the assignment agreement, Best Buy, Inc., transferred all of its rights and interests under the original lease to Best Buy LP, and Best Buy LP assumed the performance of all obligations and liabilities. (Pl.'s Br. Buehler Declaration ("Decl.") Ex. D, at 1-2.)

Article 15.01 of the original lease required Defendants to "take good care of the Demised Premises, the fixtures and appurtenances therein, and shall not do, suffer, or permit any waste . . . [as well as] keep and maintain all interior portions of the Demised Premises." (Pl.'s Br. Buehler Decl. Ex. C, at 21.) Additionally, under Article 22.01, Best Buy was required to restore the property to the "condition existing" at the time tenancy commenced with respect to certain alterations. (Id. at 28.)

Subsequently, on October 13, 2004, Caro and Best Buy executed the Second Amendment to the Lease ("second amended lease") extending the lease to May 31, 2009. (Compl. ¶ 9.) In addition to extending the lease, Paragraph 4(a) of the second amended lease titled "Tenant Improvements" required Best Buy to make certain improvements and renovations to the property. (Pl.'s Br. Buehler Decl. Ex. F, at 2.) However, under Paragraph 4(g) of the second amended lease, Defendants were not required to remove the improvements they made pursuant to the second amended lease at the end of tenancy. (Id. at 4.)

Pursuant to Paragraph 4(a) of the second amended lease, Best Buy performed several improvements to the warehouse. Of significance are two of such improvements. First, Best Buy sought to paint black and yellow lines over the floors of the warehouse ("striping") because that is the system it employs to mark aisles and exit paths as well as indicate where each product type should be stored. (Defs.' Br. Wolin Certif. Ex. B, Patzke Dep. 48:4-19, 53:24-54:10.) Defendants, with the assistance of Plaintiff's architect, Phil Harris ("Harris"), prepared specifications and drawings for the various improvements and alterations they wanted to perform at the warehouse. (Id. at 46:17-19.) Defendants, consistent with Paragraph 4(a) of the second amended lease, provided Caro with the specifications of its intended improvements. (Id. at 48:4-19, 53:24-54:10.) The striping was included on the blueprints provided to Plaintiff for renovation review and approval. (Id. at 48:7-9.) Although the landlord, Jack Sutton ("Sutton"), could not recall if Best Buy provided him with the specifications for the work it performed, he testified that "Caro was aware of all of the work [Defendants] did in conjunction with" the second amended lease. (Defs.' Br. Wolin Certif. Ex. C, Sutton Dep. 66:21-24.) Second, Best Buy removed bathrooms from the property to expand the service area. The bathrooms were also included in the specifications Best Buy provided to Plaintiff for review. (Id. at 46:7-19.)

On August 29, 2007, Best Buy accelerated the termination of the lease to May 31, 2008. (Compl. ¶ 10.) Subsequently, on November 21, 2007, the parties entered into the Third Amendment to Lease and extended the lease to August 31, 2008. (Id. ¶ 11.) On August 31, 2008, Defendants vacated the warehouse without removing the striping or restoring the bathrooms. (Id. ¶¶ 14, 16.) As part of Defendants' notice and termination obligations, Defendants coordinated with Plaintiff regarding any remaining work and repairs Best Buy needed to complete before vacating the property. (Defs.' Br. Wolin Certif. Ex. B, Patzke Dep. 118:1-122:23, 135:24-136:21.) On May 29, 2008, Randall Patzke ("Patzke"), Defendants' senior project manager, conducted a walk-through of the warehouse with Sutton, and Caro's caretaker, Magdy Keriakos. (Id. at 118:1-122:23, 135:24-136:21.) During the walk-through, Sutton identified repairs Best Buy had to complete. (Defs.' Br. Wolin Certif. Ex. N.) Notably, Plaintiff did not ask Defendants to remove the striping. (See Defs.' Br. Wolin Certif. Exs. M, N.)

In addition, according to Patzke, during the walk-through, Sutton informed him that Caro intended to sell the property in an "as is" condition to Credit Suisse; therefore, Caro would accept $45,000 from Best Buy in lieu of Best Buy completing the necessary repairs. (Defs.' Br. Wolin Certif. Ex. B, Patzke Dep. 57:11-21.) As a result, on September 9, 2008, in response to an email from Sutton detailing the repairs*fn1 Best Buy had to complete, Dan Manning ("Manning"), Defendants' employee wrote:

I know during our phone conversation that you had a rough estimate of about $400,000.00 for repairs.

Randy did state to you last week that we are willing to go outside this issue and issue a check for the amount $45,000.00 to resolve all these issues. If ownership accepts this, then I can get a check issued, if not, then we will require the repairs to be done and invoice Best Buy for reimbursement.

If you accept the one[-]time payment of $45,000.00 to resolve these issues, I will complete this and get a check to you as owner. (Defs.' Br. Wolin Certif. Ex. H, at 1-2.) Subsequently, Sutton replied: "To the extent that you wish a formal document, please forward the same for review of our attorneys. Otherwise[,] please forward the check for $45,000.00[.]" (Id. at 1.) Ultimately, Defendants did not tender the $45,000 check because they did not receive a signed release from Caro. (Defs.' Br. Wolin Certif. Ex. B, Patzke Dep. 109:1-7; Defs.' Br. Wolin Certif. Ex. J.)

However, on November 1, 2008, Plaintiff and Credit Suisse were unable to reach an agreement on the sale of the property. (Defs.' Br. Wolin Certif. Ex. C, Sutton Dep. 127:19-22.) As a result, in December 2008, Plaintiff retained Jones Lang LaSalle Brokerage, Inc., ("JLL") to market and lease the warehouse. (Pl.'s Br. Buehler Decl. Ex. H, Sutton Dep. 116:21-22.) Shortly thereafter, JLL advised Plaintiff that the striping deterred potential tenants from renting

the warehouse. (Defs.' Br. Wolin Certif. Ex. W.) JLL, therefore, recommended that Caro remove the striping. (Id.) Plaintiff retained Questmark Flooring Systems ("Questmark") to remove the striping and repair the warehouse floor.

On December 16, 2008, Plaintiff sent Defendants a demand letter with repairs and estimates. (Defs.' Br. Wolin Certif. Ex. K.) Plaintiff sought $861,607.55 in damages. (Id. at 3.) The damages included: $237,000 for repairing the warehouse floor; $487,000 for repair and restoration of the exterior parking lot; $4,884.55 for replacement of exterior sign; $26,835 for replacement of three unit heaters and six drinking fountains; $18,150 for repair and replacement of railings and steel bollards; $32,203 for replacement of the restrooms; $7,150 for replacement of a fence; $15,200 to repair the roof drains; $7,600 to paint the office; $13,585 to replace the carpet; and $12,000 for electrical repairs. (Id. at 2-3.)

In February 2009, Questmark commenced repairs on the warehouse floor using a high finish in accordance with Sutton's request. (Defs.' Br. Wolin Certif. Ex. Q, Wagner Dep. 27:20-21, 21:7-9, 22:22-24.) Questmark projected that the repairs would and could be completed between thirty to forty-five days. (Id. at 32:19-25; Defs.' Br. Wolin Certif. Ex. O, at 9.) However, Questmark did not complete the repairs until July 2009. (Defs.' Br. Wolin Certif. Ex. Q, Wagner Dep. 27:22-24.) Gregory Wagner ("Wagner"), Questmark's Project Manager, proffers the following to explain why the project lasted five months: "What we found out, as we started the project, was that they . . . weren't in the need for us to finish quickly. They were very -- take your time with it. You know . . . there's no rush on it." (Defs.' Wolin Certif. Ex. Q, Wagner Dep. 29:1-5.) Wagner also testified that the high finish improved the warehouse floor because it gave the floor characteristics it did not possess before. (Id. at 20:7-21:21.)

On January 23, 2009, Plaintiff initiated this action in the Superior Court of New Jersey Court of New Jersey, Middlesex County alleging breach of contract and waste. On March 2, 2009, Defendants removed the action to the United States District Court for the District of New Jersey. (Docket Entry No. 1).

In July 2009, Plaintiff rented half of the warehouse to Amster. (Defs.' Br. Wolin Certif. Ex. V, Beyda Dep. 65:12-15.) Even though Questmark removed the striping and repaired the floor of the warehouse with a high-shine polish, Caro had yet to rent the easterly portion of the property as of February 2, 2010. (Id. at 65:16-19.)

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247--48 (1986). A fact is only "material" for purposes of a summary judgment motion if a dispute over that fact "might affect the outcome of the suit under the governing law." Id. at 248. A dispute about a material fact is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. The dispute is not genuine if it merely involves "some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

The moving party must show that if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the non-moving party to carry its burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Once the moving party meets its initial burden, the burden then shifts to the non-movant who must set forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations, speculations, unsupported assertions or denials of its pleadings. Shields v. Zuccarini, 254 F.3d 476, 481 (3d Cir. 2001). "In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence 'is to be believed and all justifiable inferences are to be drawn in his favor.'" Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255).

The nonmoving party "must present more than just 'bare assertions, conclusory allegations or suspicions' to show the existence of a genuine issue." Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) (quoting Celotex Corp., 477 U.S. at 325). Further, the nonmoving party is required to "point to concrete evidence in the record which supports each essential element of its case." Black Car Assistance Corp. v. New Jersey, 351 F. Supp. 2d 284, 286 (D.N.J. 2004). If the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which . . . [it has] the burden of proof," then the moving party is entitled to judgment as a matter of law. Celotex Corp., 477 U.S. at 322-23.

DISCUSSION

1. Settlement ...


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