17 Va. Cir. 325 | Fairfax Cir. Ct. | 1989
Rainwater Concrete Company, Inc. (hereafter "Rainwater") and Cardinal Concrete Company, Inc. (hereafter "Cardinal") seek declaratory relief regarding the ownership and disposition of a certain cement batch plant. This case presents a sufficiently justiciable controversy for disposition under Ya. Code § 8.01-184, as agreed to by both parties. For the reasons stated below, this Court finds that the Rex Lo-Go 10 is the property of Cardinal and hereby authorizes Cardinal to remove the batch plant from the leased premises no later than January 1, 1990.
Rainwater and Cardinal entered into.a lease agreement on January 1, 1980, for a portion of the premises owned by Rainwater. After two properly executed lease extensions, the lease is currently set to expire on December 31, 1989. When the lease was originally negotiated, there was a Rex Lo-Go 5 batch plant owned by McClung-Logan Equipment Co., Inc. (hereafter "McClung-Logan") on the premises.
It is undisputed that the Rex Lo-Go 5 belonged to McClung-Logan when Cardinal was negotiating its original lease with Rainwater in 1979. A conflict in the testimony then arises as to the current ownership of the Rex Lo-Go 5. Rainwater claims that there was an indebtedness on the Rex Lo-Go 5 at that time in the amount of $42,000, and that Rainwater agreed to reduce Cardinal’s rent from $4,000 to $2,000 per month for twenty-one months (a savings to Cardinal of $42,000) provided that Cardinal satisfy the McClung-Logan indebtedness. Rainwater further contends that Cardinal’s $30,000 payment was not made to obtain ownership of the Rex Lo-Go 5, but merely as a condition precedent to Cardinal being allowed to begin operations at the Rainwater site. Cardinal’s testimony is that it bought the Rex Lo-Go 5 from McClung-Logan for $30,000 in 1979, and the evidence so proves. The Court finds nothing in the record to support Rainwater’s theory regarding rent abatement or "satisfaction as condition precedent," and accordingly finds the Rex Lo-Go 5 to have been owned by Cardinal. This holding is not dispositive of the issues here.
In Bolin v. Laderburg, 207 Va. 795 (1967), the Virginia Supreme Court resolved a dispute similar to the case at bar. There, the lessees operated a retail office furniture store. As their lease neared its end, they filed a bill of complaint seeking permission to remove "certain moveable fixtures" which they had placed in the leased premises. The case was referred to a commissioner in chancery, who applied the law of fixtures in the course of recommending that the lessees be permitted to remove only some of the disputed property, according to how permanently each piece of property was affixed to the premises.
On appeal, the Supreme Court agreed that disputes between a landlord and tenant concerning the ownership of property found on leased premises is usually controlled by the law of fixtures. Bolin, 207 Va. at 800. However,
The pertinent provision in the Rainwater-Cardinal lease on this point is paragraph 26, which provides as follows:
26. Surrender of Premises. Upon expiration of this lease, the Lessee shall surrender possession of the demised premises in good condition, reasonable wear and tear excepted and all machinery and apparati fit for use and operable . . . Lessee shall have the right to remove from the demised premises at the expiration of this lease such improvements as it may have made (excepting those made to the existing improvements). (Emphasis added)
This paragraph is not quite as clear as the provision at issue in the Bolin case. However, the Court takes particular note of the footnote to paragraph 26, whereby the parties agreed that:
the tenant will be using a part of the premises for "wash out" of its concrete trucks and tenant shall not be responsible for the removal of the "wash out" materials at the expiration of the lease provided that they are limited to areas agreed to between landlord and tenant.
When read together, that lease provision and its footnote present clear evidence that the parties negotiated in detail as to the property which would be covered by paragraph 26. The Court accordingly holds that, as agreed by the parties, this case is controlled by the rule laid down in Bolin: the law of contract construction will determine the disposition of the Rex Lo-Go 10, and not the law of fixtures.
Courts faced with this threshold question frequently ask which party has the benefit of any presumption. Such an inquiry allows the court to allocate the burden of proof to the other party. As a general rule of contract law, any ambiguity in a written instrument will be presumed to have been caused by the party preparing it, subjecting him to the burden of removing such ambiguity. Winn v. Aleda Construction Co., 227 Va. 307 (1984). See also 17A C.J.S. Contracts § 586. In this case, the parties have stipulated that the lease was prepared by Rainwater’s attorney, Paul Kincheloe.
The Court finds additional guidance on this point in the law of fixtures which, although not directly applicable to the case at bar, nevertheless, provides a useful policy guideline. In order to encourage the maximum use of leased premises, the courts are strongly inclined to allow a trade tenant to remove chattels affixed by that tenant. See 55 Va. L. Rev. 1568, 1576 (1969), (citing 2 H. Tiffany, Real Property §§ 616-617 (3d ed. B. Jones 1939)). In this case it is undisputed that Cardinal paid for the Rex Lo-Go 10 with its own funds and then brought the Rex Lo-Go 10 onto the leased premises. Under these facts, the Court holds that Rainwater bears the burden of proving the elements required to support the declaratory relief sought.
In cases dealing with the construction of the term "improvements" as used in lease provisions permitting or prohibiting the tenant’s removal thereof at the termination of the lease, it has been held that the term should be given its plain, usual, and ordinary meaning. Bolin v. Laderburg, 207 Va. at 801, citing American Health Ins. Corp. v. Newcomb, 197 Va. 836, 843 (1956). As discussed at 30 A.L.R.3d 998, 1003-04:
[T]he term "improvements" may be said to comprehend everything that adds to the value or convenience of a building or a place of business . . . it certainly includes repairs of every description; it necessarily includes much more than the term "fixtures"; and, indeed, it is difficult to conceive any addition, alteration, or repair made by the tenant upon the premises for his own convenience, which may not be properly included in the term "improvements."
While the Annotation at 30 A.L.R.3d 998 does include decisions regarding the treatment of a host of "improvements," none of those cases present sufficiently similar facts to aid in the disposition of the case at bar.
As discussed in more detail below, the Rex Lo-Go 5 may or may not constitute an "improvement" to the leased premises. Even if it does, however, it does not follow that a completely new batch plant is an "improvement" to the old one. Rather, the phrase "improvement ... to an existing improvement" as employed in this lease would properly refer only to additional parts permanently attached to the Rex Lo-Go 5. In other words, if the Rex Lo-Go 5 is held to be an "existing improvement," then Cardinal
The evidence clearly indicates that the Rex Lo-Go 10 is much more than a spare part or addition to the Rex Lo-Go 5. Mr. Rainwater’s own testimony shows that the Rex Lo-Go 10 was installed some 150 feet away from the Rex Lo-Go 5, and that the two batch plants were operated simultaneously for a brief period until the Rex Lo-Go 5 was dismantled and removed. Rainwater is accordingly denied declaratory relief. Instead, the Court holds that the Rex Lo-Go 10 belongs to Cardinal, and Cardinal may remove it from the leased premises no later than January 1, 1990.