Nickels and Dimes, Inc. d/b/a Tilt v. Park Plaza Mall, LLC

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ca04-930

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION

DIVISION IV

CA04-930

June 22, 2005

NICKELS AND DIMES, INC., AN APPEAL FROM PULASKI

d/b/a TILT COUNTY CIRCUIT COURT

APPELLANT [CV01-11453]

V. HON. TIMOTHY FOX, JUDGE

PARK PLAZA MALL, LLC REVERSED AND REMANDED ON APPELLEE DIRECT APPEAL; CROSS-APPEAL MOOT

Wendell L. Griffen, Judge

Appellant Nickels and Dimes, Inc., d/b/a Tilt, appeals from an order granting summary judgment to appellee Park Plaza Mall, LLC. Appellant argues that genuine issues of material fact precluded the entry of judgment for rent for the month of June 2002 and for damages after the expiration of the lease between the parties. Appellant further argues that the trial court erred in calculating interest from the filing of the complaint and for awarding all attorney fees requested by appellee. Appellee cross-appeals, arguing that the trial court erred in denying its motion for summary judgment regarding rent owed from May 2001 until appellant vacated its space in the mall. Because there are genuine issues of material fact regarding rent owed, we hold that the grant of summary judgment in favor of appellee was improper. Accordingly, we reverse and remand on direct appeal.

Appellant and appellee entered a lease agreement on or about August 25, 1992. The lease was through December 2002. Appellant agreed to pay a fixed minimum rent of $4519.50 per month in exchange for space in appellee's mall. During the pendency of the lease, appellant operated "Tilt," a game room located at the lower level of appellee's mall. The lease contained a provision entitled "Article 57 - Tenant's Right to Pay Percentage Rent in Lieu of Minimum Annual Rental."1 The relevant portion of Article 57 read:

If at any time during the Lease Term, any other tenant in the Shopping Center operates five (5) or more electronic amusement devices, other than family oriented coin operated amusement devices and/or carnival games or attractions (herein collectively referred to as "Games"), with the exception of a department store and with the exception of a movie theater . . . , then in any such event, Tenant's Minimum Annual Rent shall abate in its entirety upon such date and continue thereafter until the date such business operations are no longer being conducted in the Shopping Center (sometimes referred to as the "Rent Abatement Period"). Further it is hereby agreed that the provisions of this ARTICLE shall also apply in the event more than five (5) Games are being operated within the joint use areas of the Shopping Center, whether same is being performed by Landlord, its agents or by another tenant. During the Rent Abatement Period, Tenant's sole obligation to Landlord for Minimum Annual Rental and Percentage Rent shall be the payment of Percentage Rent only in the amount equal to ten (10%) percent of Tenant's net sales derived from the Leased Premises.

Appellee filed a complaint on November 2, 2001, alleging that appellant owed $27,117 as of the date of the complaint and that "[a]dditional rent will accrue during the pendency of this litigation if not paid by [appellant]." Appellant admitted the terms of the lease but denied all other allegations.

On April 6, 2004, appellee filed a motion for summary judgment. Appellee alleged that appellant owed $125,677.43 in accrued rent. The lease expired December 31, 2002, and appellant vacated the premises on or about March 27, 2003. Appellant sent appellee a letter dated March 29, 2001, stating that more than five games were being operated within the common areas of the mall since April 1, 1999. Accordingly, appellant declared its intent to pay only ten percent of its net sales. In its summary-judgment motion, appellee acknowledged that on October 1, 1998, it entered an agreement with Kiddie Koncepts, Inc., whereby Kiddie Koncepts agreed to operate five rides in the common area of the lower level of the mall.2 At the same time, two photo booths and a gumball machine were also being operated in common areas of the mall.

A dispute arose about whether the photo booths and the gumball machine were "games" as defined by the lease. In a memorandum dated September 14, 1998, addressed to various people, Gary Noe, counsel for appellee, addressed Article 57 of the lease. The relevant portion of the memorandum read:

I am also enclosing a copy of a letter I recently sent to Tilt's attorney which concerns a phone conversation he had with me in which he stated that Tilt is not concerned about gumball machines, photo taking machines, vending machines or other similar devices, but rather is concerned about the "entertainment" type amusement devices such as kiddie rides, video game machines etc.

In addition, appellee included a letter dated September 2, 1998, from Mr. Noe to Sheldon Braun, counsel for appellant, in its motion. In the letter, Mr. Noe wrote: "It is our understanding that neither you nor the Tenant consider `Games' to include gumball machines, photo taking machines or vending machines."

In its April 28, 2004 order, the circuit court granted in part and denied in part appellee's motion for summary judgment. It found that the parties understood "games" to exclude photo booths and gumball machines. It stated that Kiddie Koncepts was "any other tenant" under the terms of the lease and that appellee was not entitled to payment of minimum rent for any month during which Kiddie Koncepts operated five or more kiddie rides at the mall. It also found that appellee was not entitled to minimum rent for any period of time during which more than five games operated in joint use areas of the mall. However, the court was unable to determine how many kiddie rides operated by Kiddie Koncepts were in place or how many months more than five games were being operated in joint use areas of the mall. Thus, the court stated:

12. [Appellee]'s Motion for Summary Judgment is denied in part on the issue of liability of the defendant to pay the minimum rent for each month or partial month during the period of time from May, 2001, through [appellant]'s vacation of the leased premises, in which Kiddie Koncepts, Inc. operated five (5) or more kiddie rides at Park Plaza Mall.

13. [Appellee]'s Motion for Summary Judgment is denied in part on the issue of liability of the defendant to pay the minimum rent for each month or partial month during the period of time from May, 2001, through [appellant]'s vacation of the leased premises, in which there were more than five (5) "games" [including kiddie rides operated by Kiddie [K]oncepts, Inc. but excluding gumball machines or photo taking machines] being operated in the joint use areas of Park Plaza Mall.

14. [Appellee]'s Motion for Summary Judgment is granted in part on the issue of liability of the defendant to pay the minimum rent for each month or partial month during the period of time from May, 2001, through [appellant]'s vacation of the leased premises, in which Kiddie Koncepts, Inc. operated fewer than five (5) kiddie rides at Park Plaza Mall and in which there where five (5) or less "games" [including kiddie rides operated by Kiddie [K]oncepts, Inc. but excluding gumball machines or photo taking machines] being operated in the joint use areas of Park Plaza Mall.

In response, appellee filed a "supplemental" motion for summary judgment on April 30, 2004. Attached to the motion was the affidavit of Julie Adami, accountant for appellee. She stated that Kiddie Koncepts vacated the mall in May 2002 and that from June 1, 2002, until the end of March 2003, there were no kiddie rides or other games in the mall. Attached to her affidavit was an exhibit purporting to list "all sums due Park Plaza Mall by Tilt from June 1, 2002 through March 2003." The sums totaled $23,585.94.

In response to appellee's supplemental motion, appellant presented the affidavit of Ron Kostelny, appellant's president. He stated that, beginning in July 2002, appellant did not withhold rent associated with disputes involving whether photo booths were "games" under the terms of the lease. Kostelny also reviewed Adami's affidavit and claimed that appellee was attempting to improperly charge appellant. He stated his belief that appellee removed the excessive number of games in June 2002 and that appellee sought to improperly impose rent for June 2002. He also noted that appellee claimed charges owed from February 1, 2003, to April 28, 2003, yet appellant paid rent for January, February, and March 2003.

Regarding the period of occupancy after the lease expired, Kostelny stated that he spoke with Brenda Ford, a representative of appellee, in December 2002. Ford reminded him that the lease was set to expire, and Kostelny replied that he was aware of that information and was preparing to vacate. Ford proposed a new deal, in which appellant would pay twenty percent of its sales plus $643.03 per month for electricity, $56.10 for trash disposal, and $73.70 for water and sewer. The new term was for one year with each party having a right to terminate anytime during that year. Kostelny orally agreed to these terms, and appellant remained on the premises. However, while the parties agreed to the financial terms of the new lease, they disputed other terms.3 When it was determined that the parties could not come to full agreement, appellee asked appellant to leave the premises. Kostelny stated that all rents had been paid and that appellant should not be obligated to pay any additional amounts to appellee.

On May 4, 2004, the circuit court granted appellee's supplemental motion for summary judgment and found that appellee was entitled to $23,585.94, "together with prejudgment interest at the rate of six percent (6%) per annum from the date of the filing of the Complaint in this action through entry of this judgment all of which shall bear post-judgment interest at the rate of ten percent (10%) per annum." Appellant's subsequent motion for a new trial and reconsideration of the summary-judgment motion was denied on June 8, 2004. Appellant filed its notice of appeal on June 15, 2004, designating an appeal from the May 5 order. Appellee filed its cross-notice on June 24, 2004, designating an appeal from the April 28 order.

Summary judgment should be granted only when it is clear that there are no genuine issues of material fact to be litigated and the moving party is entitled to judgment as a matter of law. O'Marra v. Mackool, ___ Ark. ___, ___ S.W.3d ___ (Feb. 24, 2005); Riverdale Dev. Co. v. Ruffin Bldg. Sys. Inc., 356 Ark. 90, 146 S.W.3d 852 (2004). The burden of sustaining a motion for summary judgment is the responsibility of the moving party. O'Marra v. Mackool, supra; Pugh v. Griggs, 327 Ark. 577, 940 S.W.2d 445 (1997). Once the moving party has established a prima facie entitlement to summary judgment, the nonmoving party must meet proof with proof and demonstrate the existence of a material issue of fact. O'Marra v. Mackool, supra; Pugh v. Griggs, supra. We determine if summary judgment was appropriate based on whether the evidence presented by the moving party in support of its motion leaves a material fact unanswered, viewing the evidence in the light most favorable to the nonmoving party and resolving all doubts and inferences against the moving party. O'Marra v. Mackool, supra; George v. Jefferson Hosp. Ass'n, Inc., 337 Ark. 206, 987 S.W.2d 710 (1999); Adams v. Arthur, 333 Ark. 53, 969 S.W.2d 598 (1998). Our review is not limited to the pleadings, but also focuses on the affidavits and other documents filed by the parties. Hisaw v. State Farm Mut. Auto Ins. Co., 353 Ark. 668, 122 S.W.3d 1 (2003); Brown v. Wyatt, ___ Ark. App. ___, ___ S.W.3d ___ (Feb. 9, 2005).

Appellant argues that genuine issues of material fact precluded the entry of judgment to recover rent for June 2002. Specifically, appellant contends that Kostelny's affidavit created a factual dispute regarding the date the games were removed from the mall. Adami's affidavit stated, "From June 1, 2002 until the end of March 2003 there were no kiddie rides or other games, not including photo machines and gumball machines, in Park Plaza Mall." Appellee also produced an e-mail stating that the games had been removed as of May 11, 2002. In response, Kostelny's affidavit denied that rent was owed for June 2002 and stated, "We believe Park Plaza Mall removed the excessive number of games that triggered rent abatement as determined by the Court's Order and that Park Plaza Mall removed the excessive number of games in June of 2002." Appellant also submitted a document entitled "Monthly Mall Walk Worksheet," which had on it the handwritten statement "Kiddie rides removed 3 weeks ago approx 6/01."

Because Article 57 provided for the abatement of rent "until the date such business operations are no longer being conducted in the shopping center," the exact date that the games were removed is relevant to whether appellant owed June 2002 rent. Evidence presented by appellee stated that they were removed before June, while evidence presented by appellant alleged that the games were not removed until sometime in June. Appellee argues that Kostelny did not dispute whether extra games were in the mall from June 1, 2002, until appellant vacated; however, Kostelny's affidavit does not go so far. The two affidavits contradict each other regarding the date the games were removed. Thus, to the extent that the trial court granted summary judgment and awarded June 2002 rent, that decision was in error.

Appellant also argues that the trial court erred in granting summary judgment and allowing appellee to recover damages resulting from its occupancy after the lease expired. Specifically, appellant argues that appellee did not show a prima facie entitlement to summary judgment, that the issue of holdover tenancy is a new issue not pled or addressed by appellee, and that Kostelny's affidavit provides genuine issues of material fact regarding the holdover tenancy. Appellee responds by arguing that there was no new lease and that any argument made by appellant was rejected by the trial court.

As previously stated, once a moving party has established a prima facie entitlement to summary judgment, the nonmoving party must meet proof with proof and demonstrate the existence of a material issue of fact. O'Marra v. Mackool, supra; Pugh v. Griggs, supra. However, when the proof to support the motion for summary judgment is insufficient, there is no duty on the part of the opposing party to meet proof with proof. Cash v. Lim, 322 Ark.359, 908 S.W.2d 655 (1995); Collyard v. American Home Assurance Co., 271 Ark. 228, 607 S.W.2d 666 (1980). Appellant argues that Adami's affidavit is insufficient to meet that burden. Adami alleged that appellant owed $23,585.94. In response, Kostelny's affidavit stated that appellant did not withhold any payments after July 2002 and that appellant paid rent for January, February, and March 2003. He also alleged that Adami's affidavit charged appellant with owing more than the agreed upon rent. Even if appellant is incorrect in its assertion that appellee failed to show a prima facie entitlement to summary judgment, the allegations in Kostelny's affidavit create a genuine issue of material fact regarding whether appellee received payment during the holdover period. Appellant presented sufficient evidence regarding rent due to defend against appellee's motion for summary judgment. Accordingly, we reverse the grant of summary judgment and remand this case for trial on the merits. Our decision renders appellee's cross-appeal moot.

Normally, the reversal of the grant of summary judgment also requires the reversal of an attorney-fee award. See Burford Distrib., Inc. v. Starr, 341 Ark. 914, 20 S.W.3d 363 (2000). In its order entered May 5, 2004, the circuit court stated that appellee would have fourteen days within which to file a petition for the award of attorney fees, and appellee filed a timely motion requesting $10,656. However, the record contains no order awarding attorney fees, although both parties designated the entire record in their notices of appeal. Therefore, we need not address appellant's argument on this issue.

Reversed and remanded on direct appeal; cross-appeal moot.

Hart and Robbins, JJ., agree.

1 Article 57 is the only portion of the lease agreement that appears in the record.

2 The original agreement stated that six rides were to be placed in the mall, but at no time were there more than five.

3 Among the disputed terms was: "Further any amounts due and payable to Tenant and/or Licensee to Landlord and/or Licensor accrued and/or attributable to a period prior to December 31, 2002 are considered paid and/or waived by Landlord and/or Licensor."