This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The Plaintiff, a retail tenant in a Las Cruces shopping mall, sought to recover $167,971.02 in excess rent payments made under a lease amendment. The lease amendment, negotiated in 1982, included provisions for minimum and percentage rent, with a "Base Net Retail Sales Figure" of $2,224,400. A clause in the lease reduced the minimum rent if the anchor tenant, J.C. Penney, vacated the mall, but it did not explicitly address adjustments to the percentage rent breakpoint. J.C. Penney left the mall in 1983, and the Plaintiff began paying reduced minimum rent and recalculated percentage rent based on a natural breakpoint. Years later, the Plaintiff claimed overpayment, asserting the original breakpoint should have applied (paras 1, 5-9).
Procedural History
- District Court of Dona Ana County: The trial court found the lease amendment unambiguous and granted summary judgment in favor of the Plaintiff, awarding the claimed overpayment. It also granted summary judgment to Loretto Mall Partners on a cross-claim against Dartford Company for breach of warranty (paras 2, 4).
Parties' Submissions
- Appellant (Dartford Company): Argued that the lease amendment was ambiguous and that a factual issue existed regarding mutual mistake, warranting reformation of the contract. Additionally, it contended that the Plaintiff's claim was barred by laches (paras 2-3).
- Cross-Appellant (Intershop HFA Management USA): Supported Dartford's arguments (N/A).
- Plaintiff (C.R. Anthony Company): Asserted that the lease amendment was clear and unambiguous, and the original breakpoint of $2,224,400 applied, entitling it to recover the overpaid rent (paras 2, 9).
- Defendant (Loretto Mall Partners): Defended the trial court's summary judgment on its cross-claim, arguing that reliance on Dartford's warranty was not a material issue (paras 4, 24-25).
Legal Issues
- Was the lease amendment ambiguous regarding the percentage rent breakpoint?
- Should the lease amendment be reformed due to mutual mistake?
- Was the Plaintiff's claim for overpayment barred by laches?
- Did Loretto Mall Partners rely on Dartford's warranty in the purchase and sale agreement?
Disposition
- The Supreme Court of New Mexico reversed the summary judgment in favor of the Plaintiff and remanded the case for further proceedings on the issue of mutual mistake (para 3).
- The Court affirmed the summary judgment in favor of Loretto Mall Partners on its cross-claim against Dartford Company (para 26).
Reasons
Per Ransom J. (Baca and Montgomery JJ. concurring):
Contract Interpretation: The Court held that the lease amendment was unambiguous regarding the percentage rent breakpoint. The language clearly set the breakpoint at $2,224,400, and no provision in the lease amendment allowed for recalculation based on reduced minimum rent. Extrinsic evidence could not be used to contradict the clear terms of the contract (paras 3, 12, 21).
Mutual Mistake: The Court found sufficient evidence to suggest a factual issue regarding whether the parties intended to adjust the breakpoint if the minimum rent was reduced. Evidence of negotiations, industry practices, and the parties' conduct supported the possibility of a mutual mistake. The issue required a full evidentiary hearing (paras 3, 22-23).
Laches: The Court declined to address the laches defense, leaving it to be considered on remand (para 26).
Breach of Warranty: The Court affirmed the trial court's ruling that reliance was not a necessary element for a breach of an express warranty in a written agreement. The warranty provided by Dartford to Loretto was enforceable without proof of reliance (paras 24-25).