LOGAN FABRICOM, INC.; AND GARY H. DOWNS v. AOP PARTNERSHIP, LLP D/B/A AIRPORT OFFICE PARK
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RENDERED:
DECEMBER 22, 2006; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-002410-MR
LOGAN FABRICOM, INC.; AND
GARY H. DOWNS
APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE ANN O'MALLEY SHAKE, JUDGE
ACTION NO. 03-CI-009146
v.
AOP PARTNERSHIP, LLP
D/B/A AIRPORT OFFICE PARK
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
JUDGE.
COMBS, CHIEF JUDGE; JOHNSON, JUDGE; HUDDLESTON, 1 SENIOR
JOHNSON, JUDGE:
Logan Fabricom, Inc., and Gary H. Downs
(hereinafter collectively referred to as “Logan”) have appealed
from an opinion and order of the Jefferson Circuit Court entered
on April 1, 2004, which granted summary judgment 2 in favor of AOP
Partnership, LLP d/b/a Airport Office Park (AOP) on AOP’s claim
1
Senior Judge Joseph R. Huddleston sitting as Special Judge by assignment of
the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution
and Kentucky Revised Statutes (KRS) 21.580.
2
Kentucky Rules of Civil Procedure (CR) 56.
for breach of a lease agreement.
Having concluded that the
trial court properly granted summary judgment to AOP, we affirm.
The facts of this case are not in dispute.
On June 5,
1996, AOP entered into a lease agreement with Logan 3 whereby AOP
leased 547 square feet of office space located in building 200
of the Airport Office Park in Louisville, Kentucky, to Logan for
the period from July 1, 1996, to June 30, 1997.
On July 22,
1997, the lease agreement was extended by execution of an
amendment to the agreement for a period of one year, expiring on
June 30, 1998.
The lease agreement was amended for a second
time on June 11, 1998, which extended the lease between the
parties for an additional year, until June 30, 1999.
On February 3, 2000, a third amendment to the lease
agreement was executed between Logan and AOP.
Through this
third amendment, Logan and AOP agreed that after June 30, 1999,
the lease had continued on a month-to-month basis through
January 2000.
This third amendment also provided that Logan
would relocate its offices to a larger space in the same
building and that AOP would make specified improvements to the
new space with the term of the lease being extended through
January 31, 2002.
Significantly, this third amendment contained
a buyout clause which provided as follows:
3
Logan was previously known as LFUS, Inc.
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6. Lessee has option to buy out lease at the
end of twelve months, with a payment of
three (3) months’ rent.
In January 2002 AOP and Logan executed the fourth and final
amendment to the lease agreement.
This fourth amendment extended
the lease of the property to Logan through January 31, 2005.
The
fourth amendment did not contain a buyout provision.
In August 2003 Logan notified AOP in writing that it
intended to buyout the lease agreement pursuant to the buyout
provision in the third amendment to the lease and tendered a
check in an amount equal to three months’ rent to AOP.
On
September 8, 2003, AOP returned the check to Logan and informed
Logan that the buyout provision had expired and demanded that
Logan continue to perform its obligations under the lease
agreement as amended by the fourth amendment.
Logan subsequently
vacated the leased premises and AOP brought this action in
October 2003 to recover the amount of rent due pursuant to the
fourth amendment of the lease agreement.
Logan and AOP filed cross-motions for summary judgment
and the trial court entered an opinion and order on April 1,
2004, concluding that the buyout provision had expired and had
not been incorporated into the fourth amendment of the lease
which was in effect at the time Logan vacated the leased
premises.
On April 29, 2004, Logan filed an appeal with this
Court from the trial court’s opinion and order which was
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dismissed by this Court’s order of August 4, 2004, on the grounds
that the trial court’s order merely disposed of partial claims
regarding attorneys’ fees, rents, and late fees. 4
The trial
court then entered a final order on November 4, 2004, awarding
rents, late fees, and interest to AOP and reserving the issue of
future attorneys’ fees pending appeal.
The trial court stated,
in part, as follows:
The only buy out option granted by AOP was
contained in Amendment Three, the term of
which expired on January 31, 2002.
Amendment Four which was in effect at the
time Fabricom vacated the leased premises
specifically incorporated the Lease and all
of its provisions except as follows: “In
the event of any conflict between the terms
and conditions of the Lease and the terms
and conditions of this Amendment, this
Amendment shall govern and control.”
Neither Amendment Four nor the Lease
contained a buy out option. In fact,
Exhibit A to Amendment Four specified at
options: “none”.
This appeal followed.
The standard of review governing an appeal of a summary
judgment is well-settled.
We must determine whether the trial
court erred in concluding that there was no genuine issue as to
any material fact and that the moving party was entitled to a
judgment as a matter of law. 5
Summary judgment is appropriate
“if the pleadings, depositions, answers to interrogatories,
4
Case No. 2004-CA-000870-MR.
5
Scifres v. Kraft, Ky.App., 916 S.W.2d 779, 781 (1996).
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stipulations, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law.” 6
In Paintsville Hospital Co. v. Rose, 7 the
Supreme Court of Kentucky held that for summary judgment to be
proper the movant must show that the adverse party cannot prevail
under any circumstances.
The Court has also stated that “the
proper function of summary judgment is to terminate litigation
when, as a matter of law, it appears that it would be impossible
for the respondent to produce evidence at the trial warranting a
judgment in his favor.” 8
There is no requirement that the
appellate court defer to the trial court since factual findings
are not at issue. 9
“The record must be viewed in a light most
favorable to the party opposing the motion for summary judgment
and all doubts are to be resolved in his favor” [citation
omitted]. 10
Furthermore, “a party opposing a properly supported
summary judgment motion cannot defeat it without presenting at
6
Kentucky Rules of Civil Procedure (CR) 56.03.
7
Ky., 683 S.W.2d 255, 256 (1985).
8
Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476, 480
(1991).
9
Goldsmith v. Allied Building Components, Inc., Ky., 833 S.W.2d 378, 381
(1992).
10
Steelvest, 807 S.W.2d at 480.
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least some affirmative evidence showing that there is a genuine
issue of material fact for trial.” 11
The interpretation of a contract is a question of law
for the courts. 12
In construing a contract, a court’s primary
objective is to ascertain and to effectuate the intention of the
parties to the contract from the contract itself. 13
The contract
must be construed as a whole giving effect to all parts and
words. 14
A court must interpret the terms of the contract by
assigning language its ordinary meaning. 15
Absent an ambiguity,
“the parties’ intentions must be discerned from the four corners
of the instrument without resort to extrinsic evidence”
[citations omitted]. 16
If a reasonable person would find the
contract susceptible of different or inconsistent
interpretations, the contract is ambiguous. 17
“The fact that one
party may have intended different results, however, is
11
Steelvest, 807 S.W.2d at 482.
56.03, p. 321 (5th ed. 1995).
See also Philipps, Kentucky Practice, CR
12
First Commonwealth Bank of Prestonsburg v. West, 55 S.W.3d 829, 835
(Ky.App. 2000).
13
Withers v. Commonwealth, Department of Transportation, Bureau of Highways,
656 S.W.2d 747, 749 (Ky.App. 1983); City of Louisa v. Newland, 705 S.W.2d
916, 919 (Ky. 1986).
14
City of Louisa, 705 S.W.2d at 919.
15
Cantrell Supply, Inc. v. Liberty Mutual Insurance Co., 94 S.W.3d 381, 385
(Ky.App. 2002).
16
Id.
17
Id.
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insufficient to construe a contract at variance with its plain
and unambiguous terms” [citation omitted]. 18
In this case, Logan asserts that the trial court erred
by concluding that the buyout provision contained in the third
amendment to the lease agreement had expired prior to the time
Logan attempted to exercise it.
We disagree.
By its terms, the
buyout provision in the third amendment allowed Logan to buyout
the remainder of the lease “at the end of twelve months, with a
payment of three (3) months’ rent” [emphasis added].
The third
amendment was executed by Logan on February 15, 2000, and
extended the term of the lease agreement from that date through
January 31, 2002.
Under the plain meaning of the buyout
provision, Logan could have paid AOP three months’ rent at the
end of 12 months after executing the third amendment to the lease
and terminated the lease agreement at that time.
However, Logan
chose not to exercise the buyout option “at the end of twelve
months,” and thus, the buyout provision expired by its own terms.
To construe the provision as Logan seeks would give no meaning to
the inclusion of the 12-month period for exercising the buyout as
contained in the provision in the third amendment.
We reject
Logan’s interpretation of this provision as being contrary to the
ordinary meaning of the words and as failing to give effect to
all provisions of the contract.
18
Cantrell Supply, 94 S.W.3d at 385.
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Logan also contends that the trial court erred by
failing to construe the language of the buyout provision more
strongly against AOP, the party which drafted the document. 19
However, this rule has no application to the case before us
because we conclude the language of the buyout provision to be
plain and unambiguous.
Logan also relies heavily upon language included in the
four amendments which refer back to the terms and conditions of
the lease.
The following provision was included, to some degree,
in all four amendments:
Except as modified herein, all terms and
conditions of the Lease are hereby ratified
and acknowledged to be unchanged and shall
remain in full force and effect. In the
event of any conflict between the terms and
conditions of the Lease and the terms and
conditions of this Amendment, this Amendment
shall govern and control. 20
Logan argues that every amendment to the lease “contained the
language that all prior terms and conditions of the Lease were
ratified by each successive Amendment and remained in full force
and effect unless changed or modified therein.
This
ratification in the Fourth Amendment had the same effect, and
there was nothing in that Amendment that in any way modified,
changed or terminated the buy out provision.”
We reject this
argument under the plain language of the fourth amendment.
The
19
Boyd v. Phillips Petroleum Co., 418 S.W.2d 736, 738 (Ky. 1967).
20
The first amendment contained only the first sentence of this provision.
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language relied upon by Logan clearly referred to “all terms and
conditions of the Lease” and made no reference to the previous
amendments.
Thus, this language from the fourth amendment did
not ratify any terms and conditions of the third amendment, but
only the terms and conditions of the lease.
Based upon the foregoing, the judgment of the
Jefferson Circuit Court is affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANTS:
BRIEF FOR APPELLEE:
Larry C. Ethridge
Louisville, Kentucky
John S. Talbott
Lexington, Kentucky
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