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The Great Atlantic & Pacific Tea Company, Inc v. Gamestop

August 1, 2012

THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.,
PLAINTIFF,
v.
GAMESTOP, INC., DEFENDANT.



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

OPINION

Before the Court is Gamestop, Inc.'s ("Gamestop" or "Defendant") Motion for Summary Judgment ("Motion") and the Great Atlantic & Pacific Tea Company, Inc.'s ("A&P" or "Plaintiff"), Cross-Motion for Summary Judgment ("Cross-Motion") pursuant to Federal Rule of Civil Procedure 56. 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. This Court, having considered the parties' submissions, decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, this Court GRANTSDefendant's Motion and DENIES Plaintiff's Cross-Motion.

FACTUAL AND PROCEDURAL HISTORY

On February 19, 2003, A&P and Gamestop entered into a lease agreement ("Lease") for Space #11 ("leased premises").*fn1 (Compl. ¶¶ 1, 2, 5-6.) The Lease was for a five-year term beginning April 1, 2003, and ending March 31, 2008. (White Decl. Ex. A ¶ 2 at GS-AP 00004-05.) The Lease required Defendant to pay a fixed annual rent of $35,200.00 in equal monthly installments of $2,933.33. (Id. ¶ 3 at GS-AP 00006.) Additionally, the Lease provided that at the end of the initial five-year term, Gamestop had the option to renew the lease for another five years for an increased annual rent of $40,480.00 paid in equal monthly installments of $3,373.33. (Id. ¶ 4 at GS-AP 00007.) The option language provided: "If [Defendant] elects to exercise its option to extend the term of the Lease, it shall do so by notifying [A&P] not more than eighteen

(18) months and not less than eight (8) months before the beginning of the Renewal Period." (Id.)

On April 4, 2007, Gamestop wrote to A&P seeking to exercise the renewal option ("April 4, 2007 letter"). (White Decl. Ex. B at GS-AP 00039.) Specifically, the April 4, 2007 letter stated: "This is notification that Tenant is exercising the Option to Renew at the above referenced location. Tenant would like to propose a reduced term from five (5) years to three (3) years. Term shall commence on 04/01/2008 and expire 03/31/2011." (Id.) (emphasis added). This letter was sent to Plaintiff overnight via Federal Express and by facsimile. (Id. at GS-AP 00040; White Decl. Ex. C at GS-AP 00041.) The cover letter accompanying the facsimile requested that Plaintiff advise "if ownership is agreeable to the three (3) year term." (White Decl. Ex. C at GS-AP 00041) (emphasis added). On that same day, Maureen Hockenbeck ("Hockenbeck"), an employee of A&P, acknowledged receipt of the April 4, 2007 letter and advised that she would submit Gamestop's request to Plaintiff's Real Estate Committee on April 11, 2007. (White Decl. Ex. D at GS-AP 00042.)

On April 11, 2007, Allan Ryff ("Ryff"), Director of Real Estate Administration for A&P sent an e-mail to Kathleen P. Grimm ("Grimm"), Defendant's employee, stating:

I am in receipt of the renewal notice for the subject location that you sent to Maureen Hockenbeck of this office. While giving notice and exercising the five (5) year renewal option for the period 4/1/08 thru 3/31/13, you also requested that we consider reducing the five (5) year option to three (3) years at the same annual rent of $40,479.00. This would result in a loss of $80,960 in rental income for the two (2) year period that we are asked to forfeit.

We are unwilling to do this and will accept April 4, 2007 your [sic] renewal notice to Maureen Hockenbeck whereby you exercised the five (5) year option. (White Decl. Ex. E at GS-AP 00044.) Shortly thereafter, Grimm responded that she would have to speak to her Senior Vice President ("VP") because "[h]e does not want to do the five (5) year. So since [Plaintiff] will not accept the three (3) year he may opt to NOT exercise the option at all." (Id.) About an hour later, Grimm notified Ryff that her Senior VP "will not do more than three years" due to vacancies in the shopping center. (White Decl. Ex. F at A&P Disclosure Doc. #63.) The next day, Ryff responded that three years was "not an option in as much [sic] as [Defendant] exercised the five (5) year option and, after the fact, requested that we consider reducing it to three (3) years." (Id.) On April 16, 2007, Grimm informed Ryff that she would advise the Senior VP of Ryff's position and that he "may consider closing or going to a [month-to-month] status." (Id.) Grimm also advised that she would let Ryff know of the Senior VP's decision. (Id.)

Ryff also sent a letter dated April 12, 2007, wherein he acknowledged Gamestop's April 4, 2007 letter as an exercise of its option to renew the Lease. (White Decl. Ex. G at GS-AP 00045.) However, that letter did not address Defendant's request for a shorter lease period. (Id.) Although the initial lease period expired on March 31, 2008, (White Decl. Ex. A ¶ 2 at GS-AP 00004-05), Gamestop continued to occupy the leased premises through August 31, 2009. (Def.'s Statement Material Facts Not in Dispute ¶ 14; Pl.'s Resp. at 5.) Between April 1, 2008, and August 31, 2009, Defendant continued to pay the initial fixed monthly rent of $2,933.33. (Morse Decl. Ex. A at 4.)

On July 9, 2009, Jeanne Fisk, Real Estate/Legal Department Manager for Gamestop, contacted Ryff to request a one-year lease for $25,000. (White Decl. Ex. H at GS-AP 00046.) Thereafter, on July 16, 2009, Marc Summey, Defendant's Senior VP of Real Estate informed A&P that Gamestop intended to close its store at the leased premises and vacate by August 31, 2009. (White Decl. Ex. I at GS-AP 00054.) Subsequently, on August 31, 2009, Gamestop vacated the leased premises. (Def.'s Statement Material Facts Not in Dispute ¶ 14; Pl.'s Resp. at 5.)

On August 22, 2011, A&P commenced this action asserting that Defendant unilaterally broke the Lease and that Defendant owed $264,286.30. (Compl. ¶ 8.) Plaintiff also alleges that Defendant's use of the premises resulted in unjust enrichment and that Defendant is responsible for reasonable attorney fees and litigation costs in accordance with the Lease. (Compl. ¶¶ 11, 13.) On April 12, 2012, Defendant filed its Motion. On May 3, 2012, Plaintiff filed the instant Cross-Motion.

LEGAL 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). "[T]he 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 ...


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