178 So. 3d 1094
La. Ct. App.2015Background
- Concessionaire (master concessionaire at MSY) subleased two airport retail spaces to KEI for separate branded restaurants (Popeyes and Subway) under one Sublease requiring each space to be open 12 hours/day and defining rent apportioned by square footage and gross revenues.
- KEI assigned rights and obligations by an Assignment Agreement to K-Squared Popeyes and K-Squared Subway; the Assignment stated assignees were “joint and several” and each assumed obligations for its respective location, but also said a default by either party "shall be a Default under the Sublease."
- K-Squared Popeyes closed the Popeyes location in November 2013; Concessionaire issued default notices and filed for eviction of all Defendants and termination of the Sublease.
- Trial court granted eviction as to the Popeyes location but denied eviction as to the Subway location, finding the Sublease obligations divisible and the agreements ambiguous on whether a default at one location automatically defaulted the other; ambiguous terms were construed against Concessionaire (the drafter).
- Concessionaire appealed; this court affirmed the trial court, reviewing contract interpretation de novo and applying Civil Code principles on divisibility, ambiguity, and contra proferentem.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sublease obligations are divisible or indivisible | Sublease is a single lease for two locations; obligations are indivisible and assignees are solidarily liable, so default at one = default of whole Sublease | Sublease identifies two distinct facilities with separate rent/revenue apportionment; obligations are divisible and assigned separately | Divisible: object (use/occupancy of two spaces) is susceptible of division; Assignment did not make obligations indivisible |
| Whether Assignment/ Sublease unambiguously make a default at one location a default as to both | Assignment language "default by either party shall be a Default under the Sublease" makes the duty indivisible and clear | That language is susceptible to two readings given the divisible structure of Sublease; it creates ambiguity | Ambiguous: provision is susceptible to more than one interpretation; court construed ambiguity against drafter (Concessionaire) |
| Whether law-of-the-case (prior writ denial) bars reconsideration on appeal | Writ denial should bind the court and preclude relitigation | Denial of writ has no precedential value; appellate courts decline supervisory review at their discretion | Law-of-the-case not applied; writ denial does not prevent appellate review of issues on appeal |
| Entitlement to frivolous-appeal damages | Defendants requested sanctions for frivolous appeal | Concessionaire argues appeal is proper | Request denied as appellees did not file an answer or cross-appeal, so sanctions not properly before the court |
Key Cases Cited
- Brown v. Serpas, 146 So.3d 748 (La. App. 4th Cir. 2014) (describing law-of-the-case doctrine and its components)
- Lake Air Capital II, LLC v. Perera, 172 So.3d 84 (La. App. 4th Cir. 2015) (writ-denial decisions are discretionary and generally not binding on later appeals)
- Davis v. Jazz Casino Co., L.L.C., 849 So.2d 497 (La. 2003) (denial of writ has no precedential effect on merits)
- Keyes v. Brown, 158 So.3d 927 (La. App. 4th Cir. 2015) (contract interpretation is a question of law reviewed de novo)
- Musser v. Copping, 325 So.2d 681 (La. App. 4th Cir. 1975) (indivisible obligations cannot be partially executed or rescinded)
- Shell Petroleum Corp. v. Calcasieu Real Estate & Oil Co., 170 So. 785 (La. 1936) (use rules of contract interpretation to determine whether a contract is separable or entire)