Safeway Inc. v. Cesc Plaza Ltd. Partnershi

Facts

P is D's tenant in this action. D owns seventy percent of the office and retail space in Crystal City. Crystal City is a large office, retail and apartment building complex located in Arlington, Virginia, with approximately 400,000 square feet of retail space and approximately 10 million square feet of commercial office space. The lease at issue was entered into on May 11, 1967, by P and D's predecessor in interest, Crystal Associates and Plaza Associates. The term of the original lease was ten years, with two 10-year options. The current lease expires on March 31, 2005, with two renewal options of five years each thereafter. As part of the lease, the Lessor further agreed ... that, following completion of construction of any portion of the shopping center, the sizes and arrangements of said buildings and common areas (including parking areas) will not be changed without lessee's written consent, which shall not be unreasonably withheld, and that if said buildings are not completed or if said sizes and arrangements are changed without lessee's written consent, lessee may cancel this lease by notice to lessor. The lease also stated that no remedy herein conferred upon or reserved to lessor or lessee shall exclude any other remedy herein or by law provided, but each shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. D is seeking to implement a forty-million-dollar renovation project designed to transform and revitalize the center and the surrounding area. The proposed renovations, which are subject to a consent provision in P's lease, include the removal of the parking structure, which provides surface level parking for the Plaza Shops and P's store, and the construction of new retail stores in its place to revitalize the street front as part of a larger plan to redevelop the Crystal City area. P seeks a declaratory judgment that its withholding of consent to the proposed alteration of the common area is reasonable, and claims that D's plan to proceed without Safeway's consent constitutes a breach of the lease. P seeks preliminary and permanent injunctions prohibiting D from altering the common areas without Safeway's consent. D counterclaimed and seeks a declaration that P's withholding of consent is unreasonable, and also claims breach of the lease. D moved for partial summary judgment on its contention that P's remedies in this instance were limited solely to cancellation of the lease because the lessee [Safeway] may cancel this lease' in the event that the common areas are changed without its approval. The parties appeared on P's emergency motion for a temporary restraining order. D had plans to close the parking structure and commence construction activity on its revitalization project on Monday, January 6, 2003. A temporary restraining order was granted in part and denied in part, permitting D to close the structure, but prohibiting any irreversible alterations to the parking structure, and requiring D to provide Safeway's trucks with access to the Safeway loading dock. The preliminary injunction was continued the next day until January 30, 2003. By consent between the parties, construction activities were limited pending resolution of the merits of the dispute in the scheduled January 30 trial. The bench trial commenced on January 30, 2003, continued on January 31 and, as a result of unavoidable scheduling conflicts, the presentation of evidence continued on February 19 through 21. Closing arguments were heard on February 25. The decision in this matter was announced from the bench on February 28, 2003, and is more fully set forth and memorialized here. Thus, trial of this matter was conducted and concluded as expeditiously as possible in less than eight weeks after the filing of the January 3 motion for a temporary restraining order.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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