FILED
NOT FOR PUBLICATION JUN 05 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
PLAZA 75 SHOPPING CENTER, LLC, a No. 11-15298
Delaware limited liability company,
D.C. No. 2:10-cv-00592-DGC
Plaintiff - Appellant,
v. MEMORANDUM *
BIG LOTS STORES INCORPORATED,
an Ohio corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Arizona
David G. Campbell, District Judge, Presiding
Argued and Submitted May 18, 2012
San Francisco, California
Before: CLIFTON and N.R. SMITH, Circuit Judges, and SELNA, District Judge.**
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable James V. Selna, District Judge for the U.S. District
Court for the Central District of California, sitting by designation.
Plaza 75 Shopping Center, LLC (“Plaza 75”) appeals the district court’s
entry of summary judgment. We have jurisdiction under 28 U.S.C. § 1291, and we
affirm.
Section 3.C (the “kickout” provision) of the lease agreement states:
Kickout: Any other provision of this Lease to the contrary
notwithstanding, if Tenant’s annual Gross Sales (as hereinafter
defined) for the Demised Premises during the fifth (5th) year of the
Term (i.e., the 49th through 60th months of the Term) does not exceed
Three Million Five Hundred Thousand and no/100 Dollars
($3,500,000.00), then Tenant may terminate this Lease, by giving to
Landlord no less than one hundred twenty (120) and no more than two
hundred seventy (270) days’ written notice of termination within one
hundred twenty (120) days following the end of the 60th month of the
Term. In the event Tenant fails to timely deliver such notice, Tenant
shall have no further right to terminate this Lease pursuant to this
Section 3.C.
By subsequent letter agreement, the parties agreed that the kickout notification
must be given between June 1, 2008 and October 28, 2008.
Neither party disputes that Big Lots Stores Incorporated’s (“Big Lots”) fifth
year gross sales were below $3,500,000. Neither party disputes that Big Lots
provided written notice to terminate the lease before October 28, 2008. The parties
only dispute whether the language “no less than one hundred twenty (120) and no
more than two hundred seventy (270) days’ written notice of termination” required
Big Lots to provide Plaza 75 a specific date when the lease would terminate within
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that same time period. Notably, Plaza 75 and Big Lots argue that the language of
the kickout provision is clear and unambiguous; thus, we interpret that language as
a question of law. See Phillips v. Flowing Wells Unified Sch. Dist. No. 8 of Pima
Cnty., 669 P.2d 969, 971 (Ariz. Ct. App. 1983).
“[A] lease contract is effective and enforceable according to its terms . . . .”
Ariz. Rev. Stat. Ann. § 47-2A301. “[A] court must give effect to the contract as it
is written, and the terms or provisions of the contract, where clear and
unambiguous, are conclusive.” Goodman v. Newzona Inv. Co., 421 P.2d 318, 320
(Ariz. 1966). “A contract is not ambiguous just because the parties to it or, . . . a
party to it and the other party’s successor, disagree about its meaning.” In re
Estate of Lamparella, 109 P.3d 959, 963 (Ariz. Ct. App. 2005). “The intent of the
parties, as ascertained by the language used, must control the interpretation of a
contract.” Goodman, 421 P.2d at 320. “The object of all rules of interpretation is
to arrive at the intention of the parties as it is expressed in the contract. There are
many rules of interpretation which can be utilized in reaching the intent of the
parties . . . , includ[ing] . . . reading the contract as a whole . . . .” Phelps Dodge
Corp. v. Brown, 540 P.2d 651, 653 (Ariz. 1975) (citation omitted); Chu v.
Ronstadt, 498 P.2d 560, 563 (Ariz. Ct. App. 1972) (“It is therefore incumbent upon
[the court] to interpret the meaning of these words in light of the intention of the
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parties as shown by the whole writing, and not to isolate the words and give them a
meaning foreign to such intention.”). Therefore, the requirements of the lease are
ascertained from the lease itself, and other requirements or deficiencies cannot be
created from another source.
Interpreting the language of the kickout provision, it requires a notice of
termination be provided before October 28, 2008. It also requires that the lease
continues for at least 120 days (and not more than 270 days) after giving such
notice. The language of the kickout provision does not require that the lessee
include a specific date of termination.
Reviewing the lease agreement as a whole buttresses our interpretation of
this language. Similar to the kickout provision, section 4.C of the lease requires
notice of termination within a certain time period (although in a different context)
but also expressly requires that the notice of termination set forth a specific date.
Unlike section 4.C, the kickout provision does not require that a specific date of
termination must be set forth in the notice. Therefore (from a reading of the lease
agreement as a whole), the kickout provision did not require that the kickout notice
of termination include a specific date of termination or it would have so stated.
Plaza 75 argues that Big Lots’ inclusion (in its termination notice) of a
termination date less than 120 days after it gave notice invalidates the notice.
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However, because we construe the lease provision and not the notice of
termination, adding a date of termination did not invalidate the notice. The plain
language of the kickout provision does not require a specific date of termination.
Further, Big Lots strictly complied with the kickout provision.1 Big Lots gave
notice of its intent to terminate under the kickout provision before October 28,
2008, and continued its obligations for 120 days from the date the notice was
received. Even if Big Lots had wanted to quit the premises prior to the passing of
120 days (as indicated in the notice), it would have been required to pay the rent
for at least 120 days.
Lastly, there was no “cure,” because the notice was never defective.
AFFIRMED.
1
The parties dispute whether an early termination provision is analogous to
an option and therefore must be strictly construed under Arizona law. See Andrews
v. Blake, 69 P.3d 7, 14, 17 (Ariz. 2003). Because Big Lots strictly complied under
a strict construction of the kickout provision, we need not decide whether Arizona
would strictly construe this early termination provision as an option.
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