Facilities, Inc. v. Rogers-Usry Chevrolet, Inc.


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Docket Number: 2003-CT-00856-SCT
Linked Case(s): 2003-CA-00856-COA ; 2003-CT-00856-SCT ; 2003-CA-00856-COA

Supreme Court: Opinion Link
Opinion Date: 06-30-2005
Opinion Author: Randolph, J.
Holding: THE JUDGMENT OF THE RANKIN COUNTY CHANCERY COURT IS AFFIRMED AND REINSTATED, AND THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED

Additional Case Information: Topic: Contract - Construction of language
Judge(s) Concurring: Waller and Cobb, P.JJ., Easley and Carlson, JJ.
Non Participating Judge(s): Smith, C.J., and Diaz, J.
Dissenting Author : Graves, J.,
Concur in Part, Concur in Result 1: Dickinson, J.
Procedural History: Bench Trial
Nature of the Case: CIVIL - CONTRACT
Writ of Certiorari: Granted
Appealed from Court of Appeals

Trial Court: Date of Trial Judgment: 04-04-2003
Appealed from: Rankin County Chancery Court
Judge: Thomas L. Zebert
Disposition: The chancellor found the lease agreement at issue to be unambiguous and concluded that the parties intended for bonus rent to apply only to new vehicles sold on the property rented by Facilities.
Case Number: 51117

Note: THE JUDGMENT OF THE RANKIN COUNTY CHANCERY COURT IS AFFIRMED AND REINSTATED, AND THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED - 06/30/2005 See original COA opinion at http://courts.ms.gov/Images/OPINIONS/CO20357.PDF

  Party Name: Attorney Name:  
Appellant: Facilities, Inc.




GLENN GATES TAYLOR



 

Appellee: Rogers-Usry Chevrolet, Inc. LEM G. ADAMS, III, CHRISTOPHER PAUL PALMER  

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Topic: Contract - Construction of language

Summary of the Facts: Rogers-Usry Chevrolet leased property from Facilities, Inc. The property was to be used as a retail car dealership. The lease was for a term of fifteen years, and in 1998 Rogers-Usry and Facilities renewed the lease until April 30, 2015. The lease provided that in addition to a base amount of rent, Rogers-Usry would pay Facilities bonus rent for new vehicle sales exceeding one hundred vehicles per month. In 2000, Rogers-Usry obtained a tract of land a few hundred feet from the leased property, and moved its new car sales to the new location. Rogers-Usry filed an action in 2002 seeking a declaratory judgment on its rent obligations to Facilities under the renewed lease. Rogers-Usry argues that when it moved its new vehicle sales to the new property, it was no longer obligated to pay Facilities new vehicle sales bonus rent. The chancellor ruled that, under the contract, Rogers-Usry was not obligated to pay Facilities bonus rent for new vehicle sales that did not occur on the property owned by Facilities. On appeal, the Court of Appeals held that the contract was not ambiguous and therefore, the chancellor erred in concluding that the parties intended for the bonus rent to apply only to new vehicles sold on the property rented by Facilities. Rogers-Usry filed a petition for a writ of certiorari which the Supreme Court granted

Summary of Opinion Analysis: In contract construction cases, the focus is upon the objective fact--the language of the contract. First, the “four corners” test is applied, wherein the reviewing court looks to the language that the parties used in expressing their agreement. The courts are not at liberty to infer intent contrary to that emanating from the text at issue. On the other hand, if the contract is unclear or ambiguous, the court should attempt to harmonize the provisions in accord with the parties’ apparent intent. Only if the contract is unclear or ambiguous can a court go beyond the text to determine the parties’ true intent. Here, the Lease Agreement contains no term requiring Rogers-Usry to maintain any of its new vehicle operations on the Facilities property. Reading the lease agreement as a whole, the language of the lease is clear and unambiguous. The rent was to be paid not only for the “occupancy” of the demised lease property, but also for the “use” of same. It is evident that Rogers-Usry intended to occupy the real property described in the Lease Agreement for the operation of a retail automobile dealership. The term “retail” includes both new and used cars which are sold to a consumer or end user and not a wholesaler or reseller of vehicles. As the chancellor noted, had the parties intended for the property to be exclusively used and occupied only for the sale of “new” vehicles, they could have employed language so stating, rather than entering into an agreement stating that the Facilities property was only to be used and occupied as a “retail” automobile dealership. There is no claim that Rogers-Usry has failed to fulfill its obligation to “use and occupy” the Facilities property as a “retail” automobile dealership and service center. Therefore, Rogers-Usry had not breached the Lease Agreement. Although the Court of Appeals held that the Lease Agreement was not ambiguous, it is clear from the recitation of facts and procedural history and its analysis, that the foundation of its opinion is based on the consideration of evidence outside the “four corners” of the Lease Agreement. Because the Court of Appeals found the Lease Agreement to be unambiguous, it was error for the Court of Appeals to view or consider evidence outside the “four corners” of the contract.


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