Mercury Investment Company v. F. W. Woolworth Company

706 P.2d 523 (1985)

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Nature of the Case

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Facts

P built a multi-tenant shopping center and leased space to D. The agreement, drafted by D, provided for an original term of fifteen years and allowed five successive options, each to extend for five years. D agreed to pay P an 'annual minimum rent' of $19,350 for the first fourteen years and $17,425 annually for the remainder of the term. The lease also called for additional rent in the form of a percentage of gross receipts. The percentage rent was to be triggered by annual sales in excess of $387,000 for the first fourteen years and $348,500 thereafter. D never reached those numbers, so no percentage rent was paid. P sued D to terminated the suit based on failure of consideration for a breach of an implied covenant diligently to operate its business in such a manner as to generate percentage rentals and to attract customers to the shopping center for the benefit of the other tenants as well. D got a summary judgment which was overturned on appeal. D appealed.