668 F.3d 1119
9th Cir.2012Background
- Polar Star owned 300 housing units on Eielson AFB and leased them back to the Air Force for 20 years under Ground and Project Leases.
- Ground Lease language and Project Lease terms included a 23-year span and a renewal mechanism; there were drafting inconsistencies and a misdated ending date.
- Lomond built and Lomond’s successor Polar Star assumed rights via novation; an ongoing dispute over purchase price and renewal rent arose before expiration.
- The Project Lease expired in 2006; the Government gave a one-year renewal notice on May 18, 2006 while rent for renewal term remained unsettled.
- The Government filed eminent domain to condemn a five-month leasehold; district court later held renewal effective and dismissed the condemnation action for lack of taking.
- Polar Star argued for rent determination in district court; government maintained renewal was effective without requiring prior agreement on rent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is renewal effective when rent is not agreed? | Polar Star: renewal invalid without agreed rent amount. | Polar Star: govt can renew via option with method to determine rent; notice suffices. | Renewal enforceable; rent agreement not required prior to renewal. |
| Whether the Ground Lease term error requires reformation fishing to 23 years | Polar Star: error shown in term; challenge to expiration date. | Governor seeks to reform ending date; court corrected to 23-year term. | Ground Lease reformation affirmed; ending date corrected to reflect 23-year term. |
| Does eminent domain action strip rights already renewed? | Polar Star: govt could condemn five-month leasehold and beyond. | Govt already acquired renewal rights; no taking beyond five months. | No taking; renewal granted govt what it sought to condemn; action dismissed. |
| District court's jurisdiction to determine renewal rent post-renewal | Polar Star: court should determine renewal rent; cites Park Place to clarify jurisdiction. | Park Place limits claims against Govt to Court of Federal Claims for monetary damages. | Court lacked jurisdiction to determine rent in condemnation action; dismissal affirmed. |
Key Cases Cited
- Park Place Associates, Ltd. v. United States, 563 F.3d 907 (9th Cir. 2009) (limits government-related contract claims; Tucker Act considerations)
- Altman v. Alaska Truss & Mfg. Co., Inc., 677 P.2d 1215 (Alaska 1983) (renewal rent determinable by arbitration/appraisal; enforceable option)
- Arbitron, Inc. v. Tralyn Broad., Inc., 400 F.3d 130 (2d Cir. 2005) (apply New York law for renewal rent disputes)
- Baer v. Chase, 392 F.3d 609 (3d Cir. 2004) (renewal rent disputes under similar lease doctrines)
- Wapato Heritage, L.L.C. v. United States, 637 F.3d 1033 (9th Cir. 2011) (option enforcement; strict adherence to terms)
- United States v. 60.22 Acres of Land, More or Less, Situate in Klickitat County, Wash., 638 F.2d 1176 (9th Cir. 1980) (government rights not waived by eminent domain filings)
- North Star Alaska v. United States, 14 F.3d 36 (9th Cir. 1994) (reformation of contracts; equity allowed for mistakes)
- United States v. 93.970 Acres of Land, More or Less, 360 U.S. 328 (1959) (eminent domain as quiet title; nature of government interest)
- United States v. Alpine Land & Reservoir Co., 887 F.2d 207 (9th Cir. 1989) (avoid advisory opinions; issues must be pressed)