Sun Valley, Ltd. v. Galyan's Trading Company, LLC
2:13-cv-13641
| E.D. Mich. | Mar 17, 2014Background
- Sun Valley owns Fountain Walk Center and leases space to Dick’s Sporting Goods under a 2001 lease; cotenancy requires Sears Great Indoors as Major Anchor plus theater and occupancy thresholds.
- The Major Anchor is defined in the lease as Sears Great Indoors occupying at least 100,000 square feet; Sears Great Indoors existed, then Sears Outlet replaced it in 2012.
- Plaintiff acquired Fountain Walk in 2011 and asserted cotenancy was triggered in 2013 after notifying Defendant it had enough tenants to meet the requirements.
- Defendant argues the cotenancy requires Sears Great Indoors specifically, and Sears Outlet does not satisfy the Major Anchor provision.
- Plaintiff seeks full rent but Defendant pays reduced rent; Plaintiff argues substantial performance or ambiguity could justify full rent.
- Court grants Defendant’s Rule 12(c) motion, finding the lease unambiguous and requiring Sears Great Indoors, which is not presently at Fountain Walk.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Cotenancy satisfied by Sears Outlet? | Sun Valley contends Sears Outlet satisfies Major Anchor. | Galyan’s argues only Sears Great Indoors qualifies. | No; Sears Outlet does not satisfy Major Anchor. |
| Is ‘using its then latest concept’ ambiguous? | Sun Valley says concept language allows substitution. | Galyan’s argues language limits occupancy to Sears Great Indoors. | Unambiguous; term limited to Sears Great Indoors. |
| Is substantial performance a defense? | Sun Valley claims substantial performance could meet cotenancy. | Petit asserts condition precedent; substantial performance does not apply. | Not applicable; explicit condition precedent controls. |
| Is impracticability/forfeiture available? | Sun Valley argues impracticability would excuse performance. | No forfeiture; lease lacks forfeiture clause and performance is not impossible. | Impracticability/forfeiture not established; no excuse. |
| Is the lease ambiguous overall? | Sun Valley asserts ambiguity in cotenancy definition. | Lease is clear and enforceable as written. | Lease is unambiguous and enforceable as written. |
Key Cases Cited
- Gibson v. Group Ins. Co., 369 N.W.2d 484 (Mich.Ct.App. 1985) (substantial performance concepts cautioned; contract terms control)
- Estate of Barney v. PNC Bank, Nat'l Assoc., 714 F.3d 920 (6th Cir. 2013) (plausibility standard for complaints under Twombly/Iqbal)
- In re Sofamor Danek Group, Inc., 123 F.3d 394 (6th Cir. 1997) (standard for pleading and non-acceptance of legal conclusions)
- Real Estate One v. Heller, 724 N.W.2d 738 (Mich.Ct.App. 2006) (definition of condition precedent in contracts)
- Karl Wendt Farm Equip. Co. v. International Harvester Co., 931 F.2d 1112 (6th Cir. 1991) (foreseeability and impracticability distinctions in contract performance)
- Jenkins v. U.S.A. Foods, Inc., 912 F. Supp. 969 (E.D. Mich. 1996) (distinguishes substantial performance vs. forfeiture in specific context)