Privitera v. Dillard Department Stores, Inc. , 8 F. App'x 920 ( 2001 )

F I L E D
United States Court of Appeals
Tenth Circuit
MAY 3 2001
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT PATRICK FISHER
Clerk
CARL J. PRIVITERA and JOSEPHINE
A. PRIVITERA,
Plaintiffs-Appellees,
No. 99-3046
v. (D.C. No. 97-CV-2389-GTV)
(District of Kansas)
DILLARD DEPARTMENT STORES,
INC.,
Defendant-Appellant.
ORDER AND JUDGMENT*
Before HENRY, PORFILIO, Circuit Judges, and WEINSHIENK, District Judge.**
INTRODUCTION
This diversity breach of contract case involves issues of whether defendant-
appellant Dillard Department Stores, Inc., (Dillard) was required to repair the roof on a
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
**
The Honorable Zita L. Weinshienk of the United States District Court for the
District of Colorado, sitting by designation.
warehouse it was leasing from plaintiffs-appellees, and if so what was the maximum
award which the evidence supported. Dillard appeals the district court’s denial of its
initial and renewed Fed. R. Civ. P. 50(b) Motions for Judgment as a Matter of Law, and
presents the new argument that the maximum amount of award justified by the evidence
was $40,000. In doing so, it argues that the evidence presented at trial was undisputed
that the original roof was beyond its useful life, obsolete, and in need of replacement, and
that the lease was unambiguous in that it did not require the tenant to replace an obsolete
roof. Further, Dillard argues that the only evidence supporting any award was expert
testimony that repairs, which would be extremely temporary in their effect, could have
been made for $40,000. Defendant-appellant concludes that the district court should have
entered judgment as a matter of law or at a minimum reduced the verdict. We assert
jurisdiction pursuant to 28 U.S.C. § 1291, and, for the reasons stated below, affirm the
district court’s verdict award and denial of defendant-appellant’s motions.
BACKGROUND
Plaintiffs Carl and Josephine Privitera are the owners of an approximately 100,000
square foot warehouse in the Fairfax Industrial District of Kansas City, Kansas. On May
13, 1976, the Priviteras entered into a lease with Macy’s for the use of the warehouse
from June 1, 1976, until May 31, 1986. Dillard became the successor in interest to the
lease through its acquisition of Macy’s in March of 1986. Prior to Dillard’s acquisition of
Macy’s, the lease was renewed for an additional term of 10 years. After acquiring the
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lease, Dillard chose not to use or occupy the warehouse for the remaining ten years of the
lease. In the spring of 1990, Dillard contracted for the repairs of various components of
the warehouse including the roof. Dillard conducted no further repairs during its control
of the lease for the warehouse.
Both sides agree that the roof and interior of the building were in severe disrepair
when the warehouse was returned to the plaintiffs. The parties disagree over whether
Dillard was required to make any repairs. The provision of the lease at issue is section
4C, which provides in pertinent part:
Tenant further agrees to accept the premises in the condition
existing at the commencement of the term, to take good care
of the premises and, at its expense, to make all reasonable
repairs in and about the premises necessary to preserve and
maintain them in good order and condition. . . . At the
termination of this lease, Tenant shall deliver the premises to
Landlord in good condition and repair, allowance being made
for fire damage, unavoidable casualty, ordinary wear and tear
and obsolescence. . . .
Dillard takes the position that the roof was obsolete and that, under the terms of the lease,
it was not required to make any repairs. The Priviteras in contrast, argue that the roof was
restorable and that Dillard failed to make obligated repairs leading to further damages.
Accordingly, the Priviteras filed suit in the District Court of Wyandotte County, Kansas
for breach of section 4C of the lease. The suit was removed to federal court by Dillard on
diversity grounds.
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The roof was inspected on behalf of Dillard by two experts, Richard Baxter and
Robert Lococo.1 Both of their findings were presented to the jury, Mr. Baxter’s through
the admission of his report, and Mr. Lococo’s through his testimony. The Baxter report
found that the roof, although having “provided service long beyond [the roof’s] . . .
expected service life,” could either be repaired or replaced. He estimated that the cost to
repair the roof was $40,000, while replacement would cost $180,000. Mr. Lococo, in his
direct testimony, stated that the type of roof on the warehouse had a twenty year average
life span and that the warehouse roof was 50 years old. He opined that the roof was in
atrocious condition and should have been replaced at least ten years earlier. He also
discounted the effectiveness of the type of repairs advocated by Mr. Baxter, referring to
them as ineffective. On cross-examination and in his report he gave two options for the
roof, recovering or complete replacement of the roof. His estimate for the recovering of
the roof was $200,000, while replacement would cost $300,000.
At the close of the Priviteras’ case-in-chief, Dillard moved for judgment as a
matter of law on the issue of whether it was obligated to repair the roof. The District
Court Judge denied the motion. Dillard renewed its Rule 50 motion at the close of all the
evidence, but the district court again denied the motion. Finally, after the jury verdict was
reached, Dillard again renewed its motion, which again was denied. In denying the
Only Mr. Lococo testified at the trial. The expert report of Mr. Baxter was
1
admitted without objection by the Court.
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second renewed motion, the Judge stated “[v]iewing the evidence presented at trial in the
light most favorable to plaintiffs, the court concludes that there is ample evidence upon
which the jury could properly return a verdict for plaintiffs.”
The Jury returned a verdict in favor of the Priviteras. In response to a special
verdict form, the Jury awarded $271,967 in total damages.2 Of that, $150,500 was
attributed to repairs to roof. It is only the denial of the Rule 50 motion regarding the roof
repairs that is being appealed by Dillard.
DISCUSSION
A. Standard of Review
This court reviews de novo the denial of a motion for judgment as a matter of law.
See Kinser v. Gehl Co., 184 F.3d 1259, 1267 (10th Cir.1999). A court should grant a
defendant judgment as a matter of law “[i]f there is no legally sufficient evidentiary basis
. . . with respect to [the plaintiffs] claim . . . under the controlling law.” Baty v.
Willamette Indus., Inc., 172 F.3d 1232, 1241 (10th Cir.1999) (quotation omitted). In
evaluating a Rule 50 motion, this court examines all the evidence admitted at trial,
construing that evidence and the inferences therefrom in the light most favorable to the
non-moving party. See Kinser, 184 F.3d at 1267. “Such a judgment ‘is warranted only if
the evidence points but one way and is susceptible to no reasonable inferences supporting
2
This figure included an award of damages for items unrelated to the roof
including, among others, damages to the guttering spouts, removal of asbestos, and repair
or replacement of the interior lighting.
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the party opposing the motion. . . .’ ” See Baty, 172 F.3d at 1232, 1241 (10th Cir. 1999)
(quotation marks and citations omitted).
B. Repair of the Roof
Dillard essentially makes two arguments as to why the roof was obsolete and that it
was, therefore, not required to make any repairs. First, that once a roof has gone well
beyond its expected life, it automatically should be deemed obsolete. Accordingly, as it is
uncontested that the actual age of this roof is well beyond its anticipated life span, the
exception to the duty to repair for obsolescence, as specified in section 4C of the lease, is
applicable. Second, Dillard argues that the testimony of the experts, which was the only
testimony before the jury on the state of the roof, demonstrate that this roof was in fact
obsolete.
As an initial matter we decline to adopt the position that the expected life span of a
roof is the determining factor of obsolescence. Were this the case, the actual condition of
a roof would play no part, and a tenant would be allowed to ignore simple repairs which
could avoid much more costly future expenditures to the owner. Instead, a court must
examine each item and determine on an individual basis whether repairs are possible or if
the item is actually no longer able to be repaired.
As to the roof in this case, as noted above, it was examined by two experts
employed by Dillard, Richard Baxter and Robert Lococo. In Mr. Baxter’s report, which
was placed in evidence, he concluded that the roof, although beyond its expected life
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could be repaired for $40,000. Mr. Lococo testified that, although in his opinion the roof
was obsolete, the roof could be recovered with a single-ply layer put over the existing
roof for his estimate of $200,000. Dillard argues that this recovery option does not
constitute a repair of the roof, but instead a complete replacement. It has failed, however,
to demonstrate that a jury evaluating Mr. Lococo’s testimony could not have justifiably
considered this procedure, which kept the original roof in place, a repair. Thus, based
upon the evidence elicited through the expert roof consultants employed by the defendant,
the cost to repair the roof properly could have been considered by the jury anywhere in
the range from $40,000 to $200,000. We agree with the district court that this testimony
provided ample evidence by which the jury could have found that the roof was not
obsolete and could have been repaired by Dillard.
Dillard’s argument that any award should be reduced to the $40,000 repairs
estimated by Mr. Baxter, for the reasons outlined above, also has no basis. Accepting Mr.
Lococo’s recovery option as a repair, the $150,500 award is within the experts’ estimates
and, accordingly, should not be disturbed by this Court.
CONCLUSION
We affirm the district court’s denial of defendant-appellant’s Rule 50 motions for
judgment as a matter of law.
ENTERED FOR THE COURT
Zita L. Weinshienk
Senior District Judge
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