I. INTRODUCTION
Third-Party Defendant Southern Food Group, L.P. (“SFG”) moves for partial summary judgment as to Counts IV and V of Plaintiff Jeffrey Lindner’s (“Lindner”) Complaint and, by extension, Count I of Defendant and Third-Party Plaintiff Meadow Gold Dairies, Inc.’s (“Meadow Gold”) Third-Party Complaint and Count III of SFG’s Counterclaim. At issue is whether Meadow Gold is liable for failing to remove certain permanent improvements and restore the land to its pre-Lease condition when it terminated its Lease with Lindner. The court finds that there are genuine issues of material fact as to both Count IV (regarding the removal of certain structural improvements) and Count V (restoration of the premises). The court thus DENIES SFG’s Motion for Partial Summary Judgment. The court also DENIES Lindner’s Ex Parte Motion for Leave to File Supplemental Declarations. 1
II. BACKGROUND
Two prior rounds of motions for partial summary judgment have been decided by the court in this case.
See Lindner v. Meadow Gold Dairies, Inc.,
A. Factual Background
Lindner is the fee simple owner of land located on the island of Kauai. Lindner acquired the land from Amfac Property Development Corporation (“Amfac”). In 1988, Amfac had leased a portion of the land to Meadow Gold (“Lease”) for the operation of a dairy farm (“Moloa’ a Dairy Farm”). When Lindner acquired the land in 1996, Amfac also assigned him its interests and obligations under the Lease.
In 1997, Meadow Gold exercised its renewal options under the Lease, thereby extending the Lease until September 30, 2013. Shortly thereafter, Meadow Gold assigned its interests under the Lease to SFG. 2
The Moloa’ a Dairy Farm had the highest density of cows on a dry lot dairy on Kauai.
See
Pi’s. Mem. in Opp’n, Ching Decl. ¶ 8. Meadow Gold utilized a portion of the land as a “cattle graveyard,” burying over twelvе hundred carcasses onsite.
In the use of the premises for dairy opеrations and related pasture use, Lessee, except insofar as it may be prevented from doing so by an Act of God, the public enemy, fire, strikes or other unavoidable casualty or cause, shall practice good husbandry as defined in this Lease. Lessee shall use the premises in such a manner as to maintain the fertility of the soil and shall continue so to do during the term of this Lease with all reasonable skill, care, prudence and diligence.
SFG’s Mot. for Partial Summ. J. Ex. A, Art. IV § 13 (hereinafter “Lease”). The Lease defines “good husbandry” as:
The phrase “practice of good husbandry” shall mean good husbandry as practiced generally by the sugar and cattle industry in the State of Hawaii and shall, without being restricted thereto, include the prevention or elimination of waste; the employment of routine soil conservation practices to prevent or arrest loss of soil by erosion; the fertilization of areas subject to cultivation with organic and inorganic fertilizers; the control of “noxious weeds” as defined herein; the taking of all steps reasonably necessary to assure against any damage to the water or other natural resources of the premises by the activities of Lessee; and compliance with the highest applicable standards made or adopted pursuant to law in prevention of air and water pollution.
Lease Art. VI § 6(a).
By return letter dated July 6, 1999, Meadow Gold asserted that the “dead animals, a dog and a cock” buried near the Papa‘a Stream were actually on Lindner’s property, not the portion of land leased by Meadow Gold. Further, Meadow Gold claimed that it “ha[d] invested several thousand dollars in an improved system for disposing оf animal carcasses. This include[d] digging a large ten-foot-deep trench, well away from Papa‘a Stream, in which carcasses are buried. Lime is applied to the carcasses that are buried in the trench to speed the natural process of decomposition.” SFG’s Mot. for Partial Summ. J. Ex. J.
In 1999, Meadow Gold’s release of cattle manure and wastewater into the Papa'a Stream lead downstream neighbor Peter Guber (“Guber”), principal of Mandalay Inc. and current chairman and owner of film production company Mandalay Entertainment, to file a complaint with the State of Hawaii Department of Health. The Department of Health fined Meadow Gold. See Pi’s. Mem. in Opp’n Ex. 7. The Department of Health also requested that Meadow Gold apply for a National Pollution Discharge Elimination System permit and to submit a “comprehensive animal waste management plan.” See Pi’s Mem. in Opp’n Ex. 5. Guber also threatened to sue Lindner and Meadow Gold, alleging that the practices of the Moloa'a Dairy Farm violated various environmental laws and regulations and seeking the maximum civil penalty of $25,000 per day per violation. Following these incidents, Meadow Gold constructed several berms and swales across the property, apparently without Lindner’s consent, to contain the cattle waste.
Lindner asserts that he verbally communicated his desire that these structures be removed to Heihre sometime in 2000. Lindner attests that he and Heihre also discussed arranging for Lindner to undertake the demolition at Meadow Gold’s cost. Pi’s. Mem. in Opp’n, Lindner Decl. ¶¶ 42-45; Id. Ex. 1. In a January 2, 2001 letter, Lindner asked Meadow Gold to remove certain underground irrigation systems, excavate and clear the cattle graveyard, regrade the berms and swells, and the like. The included list was not meant to be exhaustive and additional issues were anticipated pending Lindner’s inspection of the premises. Pi’s. Mem. in Opp’n Ex. 3. Lindner thus argues that Meadow Gold’s fаilure to remove the structures or pay for their demolition was a breach of Article IV § 16 which requires “that in Lessor’s discretion Lessor may require that all buildings, building pads, foundations, fences or other improvements constructed by Lessee during the term shall be removed.” 3
Lindner also asserts that Meadow Gold’s failure to remove the cattle carcasses from the cattle graveyard constitutes waste in contravention of Article IV § 8: “Lessee shall not make or suffer any strip or waste or any unlawful, improper or offensive use of the premises or of any pаrt thereof or improvements thereon.”
For its part, SFG argues that Lindner’s claims are barred because he failed to give proper notice of default under Article V § 1. That provision allows Lindner to reenter the premises, expel Meadow Gold from the land, and terminate the Lease in circumstances in which Meadow Gold has breached the Lease but failed to cure its defaults after receiving written notice from Lindner.
B. Procedural Background
Lindner filed suit on July 19, 2006, seeking in Count IV removal of permanent
On February 7, 2007, SFG filed a Motion for Partial Summary Judgment as to Counts I and II of Lindner’s Complaint, which Meadow Gold joined. This court granted in part and denied in part SFG’s Motion for Partial Summary Judgment as to Counts I and II, finding that some, but not all of Lindner’s claims for additional rent were time-barred under Hawaii law. The court ordered the parties into arbitration as to the remaining claims for additional rent due.
See generally Lindner v. Meadow Gold Dairies, Inc.,
Lindner and SFG both moved for partial summary judgment as to Lindner’s claim for liquidated damages (Count III). The court granted Lindner’s Motion for Partial Summary Judgment and denied SFG’s Motion for Partial Summary Judgment finding that Lindner was entitled to a liquidated damages payment because SFG prematurely terminated the Lease and SFG’s breach was not excused by frustration or rendered null by Lindner’s failure to provide notice of default.
See Lindner v. Meadow Gold Dairies, Inc.,
Presently before the court is SFG’s Motion for Partial Summary Judgment as to Counts IV and V of Lindner’s Complaint; Count I of the Third-Party Complaint; and Count III of the Counterclaim on April 20, 2007. Lindner filed his Memorandum in Opposition on May 31, 2007. SFG filed its Reply on June 7, 2007. On June 12, 2007, Lindner filed an Ex Parte Motion for Leave to File Supplemental Declarations of S.K. Djou and Tim O’Byrne, two of Lindner’s expert witnesses upon whose reports Lindner relied in his Memorandum in Opposition. SFG filed its Opposition on June 13, 2007. Lindner filed his Reply on June 15, 2007. Meadow Gold filed a joinder to SFG’s Motion for Partial Summary Judgment with respect to Lindner’s Count IV and V claims оn June 18, 2007. The court heard oral arguments on that same day.
III. STANDARDS OF REVIEW
A. Summary Judgment Standard
A party is entitled to summary judgment where there is no genuine issue of material fact. Fed.R.Civ.P. 56(c). When reviewing a motion for summary judgment, the court construes the evidence— and any dispute regarding the existence of facts — in favor of the party opposing the motion.
Snead v. Metro. Prop. & Cas. Ins. Co.,
B. Choice of Law in Diversity Cases Brought Under 28 U.S.C. § 1332
The court has diversity jurisdiction over Lindner’s claims under 28 U.S.C.
IV. ANALYSIS
A. Motion for Leave to File Supplemental Declarations
Lindner filed a motion requesting leave to file certain declarations that he had neglected to attach when filing his Memorandum in Opposition to SFG’s Motion for Partial Summary Judgment. Specifically, Lindner sought to include additional declarations and background information from S.K. Djou and Tim O’Bryne, two experts upon whose opinion Lindner’s Memorandum in Opposition relies. Lindner fails to set forth the reasons for his original oversight. Seeing no good cause for the delay and in light of the potential prejudice to SFG, the court DENIES Lindner’s Motion for Leave to file Supplemental Declarations. Further, this Order does not rely on the Djou or O’Bryne reports in reaching its conclusion.
B. Notice Requirement
SFG argues that Plaintiffs claims in Counts IV and V fail as a matter of law becausе Lindner neglected to give proper notice of Meadow Gold’s performance defects under Article V § 1 and that Meadow Gold was denied the resulting opportunity to cure. Article V § 1 provides:
This demise is upon the express condition that ... if Lessee shall fail to observe or perform any of the other covenants by Lessee herein contained, and such default shall continue for thirty (30) days after written notice thereof is given to Lessee (unless such default is of such a nature so as to reasonably require a longer period to cure, but in no evеnt longer than ninety (90) days from the giving of the notice by Lessor) ... Lessor may ... at once re-enter the premises or any part thereof in the name of the whole, and, upon or without such entry, at its option terminate this Lease, and may expel and remove from the premises Lessee and any persons claiming by, through or under Lessee and their effects without being deemed guilty of any trespass or becoming liable for any loss or damaged occasioned thereby, all without service of notice or legal process and without prejudice to any othеr remedy or right of action, including summary possession, which Lessor may have for arrears of rent or for the same or any preceding or other breach of contract.
Lease Art. V § 1. SFG argues that under the Hawaii Supreme Court’s interpretation of similar language in
Aickin v. Ocean View Investments Co.,
The court rejects SFG’s argument.
See also Lindner v. Meadow Gold Dairies,
Aickin thus holds that where the relevаnt language of a lease requires notice of default prior to a lessor’s re-entry and repossession of land, a lessor must provide a notice of default specifying the lessee’s performance defects and a meaningful opportunity to cure before the lessor may terminate the lease and evict the lessee. The notice requirement is a condition precedent to a lessor’s entry and repossession of the land. As such, it protects the pos-sessory interests of the lessee from unintentional, inadvertent, or negligent waiver. However, nothing in Aickin holds that lessors are always required to give notice to lessees of any and all breaches before pursuing means of redress other than reentry, expulsion of the lessee, and repossession of the land.
The Lease language at issue here — largely identical to that in
Aickin,
but without its caveat that a commencement of cure of the breach prevents the Lessee from being in default — provides that notice is required before Lindner undertakes certain actions, namely reentry, expulsion, and repossession of the land. “Absent an ambiguity, contract terms should be interpreted according to their plain, ordinary, and accepted sense in common speech.”
Found. Int’l, Inc. v. E.T. Ige Const., Inc.,
Finally, Meadow Gold’s assertion that it did not have an opportunity to investigate and cure the defects in its performance and to thereby minimize damages (including avoiding the expense of litigation) prior to the filing of the present suit is unconvincing. While Lindner may or may nоt have given notice of his desire to have certain structures and organic remains removed before the December 31, 2000 termination of the Lease, it is quite clear that Meadow Gold knew of Lindner’s expectations at the latest by early January 2, 2001, only two days after the termination of the Lease and approximately 5.5 years prior to the filing of the present suit.
C. Count IV: Removal of Permanent Improvements
Lindner alleges that Meadow Gold failed to remove a milking barn, hospital barn, various roads, a white water tank, a green metal tank, utilities, and underground irrigation systems as required by the Lease. See Compl. ¶24. The Lease provides:
At thе expiration of the term or sooner termination, Lessee shall peaceably surrender and deliver up to Lessor possession of the premises, together with the possession of and title to all buildings and other permanent improvements of whatever kind or nature thereon, but not including automotive or portable machinery or equipment which in a dairy operation and related pasture use is customarily moved from place to place upon said premises, in substantial good order and condition, reasonable wear and teаr and damage by the elements or other unavoidable casualty not herein required to be insured against excepted; provided, however, that in Lessor’s discretion Lessor may require that all buildings, building pads, foundations, fences or other improvements constructed by Lessee during the term shall be removed and the premises restored, to the greatest extent possible, to the condition they were in at the commencement of this Lease.
Lease Art. IV § 16. SFG argues that Lindner’s claim should be denied as a matter of law because Lindner failed to elect the itеms that he wished removed until after the Lease had been terminated. The court rejects this argument.
There is a genuine issue of material fact as to whether Lindner gave Meadow Gold sufficient notice of his expectations before the termination of the Lease. Lindner argues that he gave Heihre verbal notice of his demands in a telephone conversation sometime in September 2000 and that the two engaged in negotiations as to whether Meadow Gold would remove the structures or would pay Lindner to have them demolished. Pi’s. Mem. in Opp’n, Lindner Decl. ¶¶ 42-45. Although SFG аrgues that written correspondence suggests no such communication took place, the court does not weigh evidence at the summary judgment stage. Lindner also provides permit applications for the demolition of buildings filed in October of 2000, which may indicate that some sort of discussion or planning regarding demolition activity occurred pri- or to the termination of the Lease. Id. Ex. 1. SFG’s Motion for Partial Summary Judgment as to Count IV is DENIED.
D. CountV: Restoration of Premises
Lindner claims that Meadow Gold was required to remove the parts or re
In response, SFG asserts that its burial of the cattle and grading practices on the leased premises comported with Hawaii state law and the “Use of the Premises and Practice of Good Husbandry” Lease covenant, and, as such, constituted “normal wear and tear” of a dairy operation. The good husbandry provision provides:
In the use of the premises for dairy operations and related pasture use, Lessee, except insofar as it may be prevented from doing so by an Act of God, the public enemy, fire, strikes or other unavoidable casualty or cause, shall practice good husbandry as defined in this Lease. Lessee shall use the premises in such a manner as to maintain the fertility of the soil and shall continue so to do during the term of this Lease with all reasonable skill, care, prudence and diligence.
Lease Art. IV § 13. The Lease defines “good husbandry” as:
The phrase “praсtice of good husbandry” shall mean good husbandry as practiced generally by the sugar and cattle industry in the State of Hawaii and shall, without being restricted thereto, include the prevention or elimination of waste; the employment of routine soil conservation practices to prevent or arrest loss of soil by erosion; the fertilization of areas subject to cultivation with organic and inorganic fertilizers; the control of “noxious weeds” as defined herein; the taking of all steps reasonably necessary to assure against any damage to thе water or other natural resources of the premises by the activities of Lessee; and compliance with the highest applicable standards made or adopted pursuant to law in prevention of air and water pollution.
Lease Art. VI § 6(a).
Because the Lease required that the premises be used for “dairy operations and related pasture use,” see Lease Art. IV § 13, SFG argues that lawful burial of cattle and grading is an incidental, anticipated, and common occurrence of dairy and pasture operations. SFG thus argues that Meadow Gold was not requirеd to remove the cattle remains.
While Meadow Gold’s practices may have been consistent with state law, 7 the Lease does not limit practice to those made lawful but requires
good husbandry as practiced generally by the sugar and cattle industry in the State of Hawaii ... the taking of all steps reasonably necessary to assure against any damage to the water or other natural resources of the premises by the activities of Lessee; and compliance with the highest applicable standards made or adopted pursuant to law in prevention of air and water pollution.
V. CONCLUSION
The court DENIES the Plaintiffs Motion for Leave to File Supplemental Declarations. The court also finds that there are genuine issues of material fact as to Plaintiffs claims in Counts IV and V. As such, the Third-Party Defendant’s Motion for Partial Summary Judgment is DENIED.
The claims remaining in Plaintiffs Complaint include: Count I (as to minimum rent originally due on October 1, 2000; issue submitted to arbitration); Count II (as to percentage rent originally due on January 30, 2001; issue submitted to arbitration); Count IV (removal of permanent improvements); and Count V (restoration of the premises).
IT IS SO ORDERED.
Notes
. In a footnote in its Memorandum in Opposition, Lindner writеs that "Plaintiff herein provides prima facie evidence proving his claims for liability for Counts IV and V. Southern Foods failed to provide such facts in its Motion making summary judgment in its favor inappropriate; in fact, such failure makes summary judgment appropriate for Plaintiff.” Pi's. Mem. in Opp’n 1 n. 2. To the extent that Lindner intended this footnote to serve as a countermotion for partial summary judgment, it is also DENIED.
. Lindner contests the validity of this assignment. See Lindner v. Meadow Gold Dairies, Inc.: Order Granting Pi's. Mot. for Partial Summ. J. and Denying Def's. Countermotion for Partial Summ. J. as to Count III (Liquidated Damages) at n. 2.
. In full, Article IV § 16 reads
At the expiration of the term or sooner termination, Lessee shall peaceably surrender and deliver up to Lessor possession of the premises, together with the possession of and title to all buildings and other permanent improvements of whatever kind or nature thereon, but not including automotive or portable machinery or equipment which in a dairy operation and related pasture use is customarily moved from place to place upon said premises, in substantial good order and condition, reasonable wear and tear and damage by the elements or other unavoidable casualty not herein rеquired to be insured against excepted; provided, however, that in Lessor’s discretion Lessor may require that all buildings, building pads, foundations, fences or other improvements constructed by Lessee during the term shall be removed and the premises restored, to the greatest extent possible, to the condition they were in at the commencement of this Lease.
Lease Art. IV § 16.
. Aickin addressed whether the lessees should be permitted — over the lessor’s objection — to exercise an option to renew their lease even though they had previously subleased the commercial property without the prior consent of the lessor, which was required under the lease.
. The Aickin lease provided that "[ljessee shall not be in default” of the lease where the lessee commenced curing the breach within a 30-day period following the lessor’s written notice of default. This "shall not be in default” provision is not contained in the Lind-ner/Meadow Gold Lease.
.Under Article V § 1, Lindner may take these steps without prejudice to his other rights or remedies.
. The Hawaii Department of Health apparently
allow[s] a producer three methods to dispose of dead cattle carcasses.
1.You may bury it on site with sufficient soil (about 2 feet) over the top to prevent dogs or other animals from digging up the carcasses. 2. You may haul the carcasses to the landfill for reburial. The county needs to be notified and there probably is a tipping fee required.
3. You may burn the carcass on site. Clean fuel as lumber or wood is required. No old tires as a fuel source can be used.
SFG's Mot. for Partial Summ. J. Ex. I.
. In a letter to Lindner, counsel for Meadow Gold stated that "Lincoln Ching ['Ching'], the Department of Agriculture’s extension service agent for Kauai, and Gary Uten, of the Department of Heаlth Clean Water Branch, have assured Meadow Gold that this procedure complies with applicable state law and practices of good husbandry." SFG’s Mot. for Partial Summ. J. Ex. J. However, while the letter from Ching discussed lawful methods of disposing of cattle, it did not discuss whether this particular method met good husbandry standards. Indeed, Ching has declared that he is not competent to testify as to the applicable good husbandry standard. Pi’s Mem. in Opp'n, Ching Decl. ¶¶ 2-5, 10-11. SFG has not provided the court with any evidence as to Uten’s statements. Thus, Meadow Gold has only demonstrated that it complied with the laws; it has not demonstrated that it complied with the specific definition of "good husbandry" set forth in Article VI § 6(a).
