CM Commercial Realty, Inc. v. Alpha Trust Real Estate, LLC ( 2022 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
)
CM COMMERCIAL REALTY, INC., )
a Maryland Corporation Qualified to do)
business in Delaware, )
Plaintiff, )
)
v. ) C.A. NO. N19C-11-271 DJB
)
ALPHA TRUST REAL ESTATE, LLC, )
Successor in interest to ALPHA TRUST, )
LLC, and FINANCIAL & CONSULTING )
SERVICES, INC., )
Defendant. )
)
MEMORANDUM OPINION
Decided: February 18, 2022
On cross Motions for Summary Judgment
Plaintiff’s motion for summary judgment is GRANTED in part;
Defendant Alpha Trust Real Estate, LLC’s motion for summary judgment is
GRANTED in part, DENIED in part.
Daniel C. Kerrick, Esquire, Hogan & McDaniel, Attorney for Plaintiff
Daniel F. McAllister, Esquire, Tarabicos, Grosso & Hoffman, LLP, Attorney
Defendants
BRENNAN, J.
1
Before the Court are cross-motions for summary judgment filed in this civil
action involving claims related to an alleged breach of contract. Plaintiff CM
Commercial Realty, Inc. (hereinafter “CM”) alleges that Defendants Alpha Trust
Real Estate, LLC (hereinafter “Alpha”) and Financial & Consulting Services, Inc.
(hereinafter “FCS”; collectively “Defendants”)1 breached a Commission
Agreement between the parties in relation to a real estate brokerage deal. In this
deal, CM and Alpha Trust, through its agent Robert Stella, agreed that should CM
find a tenant for Alpha’s property, Alpha would pay a set commission based up on
a percentage of the rent. CM thereafter introduced Defendant Alpha to a tenant,
Dollar Tree Stores, Inc. (hereinafter “Tenant”), and Alpha subsequently entered into
a commercial lease with the tenant for a five (5) year period with two (2) options to
extend. At the end of the lease extension periods, Tenant and Alpha created a
“Lease Amendment”, which extended the lease terms. Plaintiff, upon learning of
the Lease Amendment, requested payment pursuant to the Commission Agreement.
Upon Alpha’s declination to pay, Plaintiff filed this instant action against
Defendants, collectively. In the alternative to its breach of contract claim, Plaintiff
additionally asserts a claim for unjust enrichment against Defendants.
1
Defendant Financial Consulting Services, Inc. was not specifically mentioned
in the briefing as having its own separate role in these exchanges by either party, and
in fact, in the Answer to the Complaint (see Docket Item 8, Lexis Transaction ID
64564183) denied all allegations as to even background averments with respect to
Defendant FCS, the Court will analyze these motions as pertaining to Defendant
Alpha. The most the Court was given was a passing reference in Plaintiff’s motion
that was based upon “information and belief” regarding FCS involvement. There is
simply no information in the record that would support any ruling by the Court at
this time with respect to FSC. The Court, will, however, entertain future motions
with respect to whether or not it is appropriate for FCS to remain as a Defendant in
this matter.
2
On February 5, 2021, both parties moved for summary judgment on the basis
that the Commission Agreement’s unambiguous language entitles the respective
party to judgment as a matter of law.2 After full briefing, the Court heard oral
argument on the cross-motions on September 16, 2021, and took the matter under
advisement.3 On October 4, 2021, however, Defendants filed a motion for rule to
show cause.4 The Court stayed the decision on the cross-motions for summary
judgment on October 6, 2021, pending the resolution of the rule to show cause.5 On
November 18, 2021, Defendants withdrew their motion for rule to show cause.6
This is the Court’s decision on the cross-motions for summary judgment. For the
reasons set forth below, Plaintiff’s motion for summary judgment is GRANTED,7
and Defendant Alpha’s motion for summary judgment is GRANTED in part and
DENIED in part.
I. FACTS
CM is a commercial real estate brokerage firm that, among other things, helps
bring tenants and landlords together to facilitate long-term commercial leases. On
December 14, 2003, Alpha, through Robert Stella, and CM executed a Commission
Agreement, which was contingent upon a commercial lease being finalized between
Alpha and Dollar Tree Stores, Inc/Tenant.8 The Commission Agreement obligated
2
D.I. No. 41-42.
3
D.I. No. 63.
4
D.I. No. 66.
5
D.I. No. 68.
6
D.I. No. 75.
7
Plaintiff did not move for summary judgment on the issue of Count 2 of
their Complaint, but focused their arguments on Count 1. To the extent their
motions can be read to have included an argument for summary judgment on
Count 2, it is DENIED.
8
Joint App. and Table of Contents (“Joint App.”) at JX0001, Apr. 28, 2021
(D.I. 54).
3
Alpha to pay CM commissions upon certain triggering events. Specifically, the
Commission Agreement provided:
[Alpha] shall pay CM a commission equal to five percent (5%) of the
aggregate base rent of the initial lease term. Said commission shall be
paid in full upon the Tenant taking possession of the premises and
making the first monthly installment of minimum rent. [Alpha] shall
pay CM additional commission(s) equal to five percent (5%) of the
aggregate base rent for each option/renewal term for which the Tenant
exercises.9
On March 5, 2004, nearly three months after execution of the Commission
Agreement, Alpha and Tenant executed an agreement (the “Lease” or “original
Lease”) to lease space located at Talleyville Shopping Center, 3603 Silverside Road,
Wilmington, Delaware (the “Premises”).10 The Lease, a thirty-three (33) plus page
document, among other things, provided Tenant with an initial lease term of five
years and two additional five-year terms that were executable at the option of the
Tenant. The Lease identified the three lease terms as the Original Lease Term, the
First Renewal Term, and the Second Renewal Term. The Tenant exercised both the
First and Second Renewal Term under the Lease.11 Pursuant to the Commission
Agreement, Alpha paid CM a commission for all three terms.12
As the Lease’s Second Renewal Term was ending, Alpha and Tenant began
negotiations to draft and execute the First Amendment to Lease Agreement (“Lease
Amendment”).13 Alpha and Tenant executed the Lease Amendment on July 10,
9
Id.
10
Id. at JX0029.
11
Pl.’s Opening Br. Mot. for Summ. J. (“Pl.’s Opening Br.”) ¶¶ 7-8, May 14,
2021 (D.I. 55).
12
Id.
13
4
2019, three weeks before the Lease was set to expire.14 The Lease Amendment
modified the Lease in two ways. First, the Lease Amendment extended the length
of the Lease by adding three additional five-year lease terms—the Extension Term,
the Third Renewal Term, and the Fourth Renewal Term.15 Second, the Lease
Amendment set forth the base rent for each additional term.16 Notably, the Lease
Amendment contains the following language, “Except as expressly modified by this
Amendment, the Lease remains in full force and effect in accordance with its
terms.”17
On July 25, 2019, CM issued an invoice to Alpha seeking to collect a
commission of $47,184.25 under the Lease Amendment.18 Alpha refused to remit
payment claiming that the Extension Term was not a part of the original Lease and
thus, not subject to the Commission Agreement.19 CM sent Alpha a demand letter
on September 13, 2019, seeking full payment of the commission. 20
CM then filed a Complaint for the instant action on November 27, 2019.21
Following discovery, both parties filed cross-motions for summary judgment on
February 5, 2021.22 This Court issued an order dated February 22, 2021, requiring,
among other things, that both parties submit a joint appendix with all exhibits relied
upon by the parties’ respective briefs in support of their motions and held that the
14
15
Id.
16
Id.
17
Id. at JX0053.
18
Id. at JX0059.
19
Id. at JX0060.
20
Id. at JX0061.
21
D.I. No. 1.
22
D.I. No. 41-42.
5
joint appendix “will be considered by the Court as one consolidated record to
adjudicate the issues in dispute[.]”23
II. PARTIES’ CONTENTIONS
CM claims that Defendants breached the Commission Agreement by failing
to pay CM a commission upon Tenant’s execution of the Extension Term under the
Lease Amendment. First, CM argues that the Commission Agreement’s
unambiguous language obligates Defendants to pay the commission. Second, CM
argues that its past contractual relationship with Alpha supports its interpretation of
the Commission Agreement.24 Third, CM argues that the obligations under the
Commission Agreement are triggered because the Lease never lapsed. Finally, and
in the alternative, CM asserts a claim for unjust enrichment.
Alpha claims that CM’s breach of contract claim fails for multiple reasons.
First, Alpha asserts that CM may not recover additional commissions because CM
was not the procuring cause of the Lease Amendment. Second, Alpha avers that the
plain terms of the Commission Agreement require Alpha to only pay CM
commissions on the three original lease terms found in the Lease. Third, Alpha
argues that even if the Commission Agreement is ambiguous, it would not support
CM’s interpretation that commissions should be paid in perpetuity. Finally, Alpha
claims that CM’s unjust enrichment claim fails because the relationship between the
parties is based on a valid contract.
23
D.I. No. 44.
24
Prior to a decision on the matter, it was agreed upon by both parties that the
Court may not look to prior history and extrinsic evidence to rule upon these cross-
motions. Therefore, the Court will not be addressing this contention. This is
consistent with Delaware law, as the parties agree the terms of the contract terms at
issue are not ambiguous. Salamone v. Gorman, 106 A.3d 354 (Del. 2014).
6
III. STANDARD OF REVIEW
When reviewing a motion for summary judgment under Rule 56, the Court
must determine whether any genuine issues of material fact exist.25 The moving
party bears the burden of showing that there are no genuine issues of material fact
to be entitled to judgment as a matter of law.26 The Court will not grant summary
judgment if it appears that there is a material fact in dispute or that further inquiry
into the facts would be appropriate.27 In determining whether a genuine issue of
material fact exists, the Court must view the facts in the light most favorable to the
non-moving party.28
The standard for summary judgment is not altered when the parties have filed
cross-motions for summary judgment.29 Cross-motions for summary judgment are
not “per se” concessions that no genuine issue of material fact exists.30 “But, where
cross-motions for summary judgment are filed and neither party argues the existence
of a genuine issue of material fact, the Court shall deem the motions to be the
equivalent of a stipulation for decision on the merits based on the [submitted
record].”31
25
Radulski v. Liberty Mut. Fire Ins. Co., 2020 WL 8676027, at *3 (Del. Super.
Ct. Oct. 28, 2020).
26
Id.27
Legion Partners Asset Mgmt., LLC v. Underwriters at Lloyds London, 2021
WL 6621168, at *6 (Del. Super. Ct. Sept. 30, 2021).
28
Capano v. Lockwood, 2013 WL 2724634, at *2 (Del. Super. Ct. Feb. 20,
2013).
29
Legion, 2021 WL 6622168, at *6.
30
United Vanguard Fund, Inc. v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del.
1997).
31
Radulski, 2020 WL 8676027, at *4 (internal quotation marks omitted).
7
IV. DISCUSSION: COUNT 1 BREACH OF CONTRACT
While the parties naturally disagree on a number of issues, the parties do agree
that there are no issues of material fact that prevent a grant of summary judgment,
and that no contract ambiguity exists. Simply because the parties disagree about the
contract interpretation does not dictate a finding of ambiguity.32 As such, the Court
turns to the documents themselves for interpretation and to decide the ultimate issue:
whether Plaintiff is owed a commission due to the Tenant and Alpha signing the
Lease Amendment.
The Lease Amendment itself is telling, as it is a two (2) page document which,
throughout, refers back to the original thirty-three (33) plus page Lease. In the first
paragraph, the document states: “This first amendment to Lease Agreement (this
“Amendment”) is executed as of [July 10, 2019]…” In the next section, the parties
Amendment states:
RECITALS
A. [Alpha] and Tenant are parties to that certain Lease Agreement dated
February 5, 2004 (the “Lease”), covering certain Premises located in
the shopping center commonly known as Talleyville Shopping Center,
located in Wilmington, Delaware (Dollar Tree Store No, 2817).
B. The Second Renewal Term expires July 31, 2019. Tenant desires to
extend the Lease, and in connection with such extension, [Alpha] and
Tenant have agreed to modify the Lease as set forth in this Amendment.
…
1. Lease Term, Renewal Term, and Base Rent. The Lease is hereby
amended (i) to provide that the term of the Lease shall be and is hereby
extended for a period of five (5) years, commencing August 1, 2019
and expiring July 31, 2024 (the “Extension Term”), and (ii) by te grant
32
Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192,
1195 (Del. 1992).
8
to Tenant by Landlord of two (2) additional options to renew the term
of the Lease, each for a period of five (5) years, the first commencing,
if so exercised by Tenant, August 1, 2024 and expiring July 31, 2029
(the “Third Renewal Term”), and the second commenting, if so
exercised by Tenant, August 1, 2029 and expiring July 31, 2034 (the
“Fourth Renewal Term”).33
The parties continue their language referencing and incorporating the original
Lease in the very next sentence, which reads: “In recognition of the foregoing,
Section A.10 of the Lease is hereby amended and restated in its entirety to read as
follows…” at which point, they include the table setting forth the terms in the
original Lease and simply add to it, including the new, agreed upon extension terms.
Section 2 of the Lease Amendment states: “Tenant shall remain obligated to pay
Additional Rent as set forth in the Lease.” The Amendment continues to refer to the
original Lease in sections 4, 6 and 7, where the defined terms are said to “have the
same meanings ascribed to them in the Lease”, the conflict section is stated “[t]o the
extent the terms of this Amendment conflict with the terms of the Lease, the terms
of this Amendment shall control” and finally, where it spells out that “Except as
expressly modified by this Amendment, the Lease remains in full force and effect in
accordance with its terms.” Once again, Robert Stella signed the Amendment on
behalf of Alpha.34
An integral part of CM’s argument presupposes that the Lease Amendment is
an amendment and not an entirely new lease. Conversely, Alpha maintains the Lease
Amendment is a new lease. Alpha, however, also argues that it is immaterial
whether the Lease Amendment is categorized as a new lease or an amendment to the
33
JX0052.
34
JX0053.
9
Lease, because it cannot be considered an option/renewal term exercised by the
Tenant.
In fact, the crux of this decision on these cross motions depends on this very
determination. As there is no question that Plaintiff was the procuring cause of the
original Lease, and if the Amendment sufficiently relates back to the original Lease
and is not deemed a new Lease in its entirety, then they seemingly are entitled to the
disputed commission. If the Amendment is deemed to be a new lease entirely, then
they may not be so entitled.
A. THE LEASE AMENDMENT CONSTITUTES AN AMENDMENT TO THE LEASE
The question of whether the Lease Amendment constitutes a new lease
requires the Court to not only interpret the language Lease Amendment, but to do so
in conjunction with the other referenced documents.35 In Delaware, a contract’s
proper interpretation is a question of law and is thus, ripe for decision on cross-
motions for summary judgment.36
The Court finds that the Lease Amendment constitutes an amendment to the
Lease and is not a “new” lease. In making this determination, “Delaware courts do
not give any particular significance to the use of the words ‘renew’ or ‘extend.’”37
Instead, Courts infer the parties’ intent based on the language of the lease. 38 The
Court finds the language and guidance found in Rehoboth Mall Ltd. Partnership v.
NPC Intern., Inc. controlling and most applicable to the situation at bar. In Rehoboth
Mall, the Delaware Supreme Court found that a renewal provision, exercisable at the
35
Rehoboth Mall Ltd. Partnership v. NPC Intern., Inc., 953 A.2d 702, 704
(Del. 2008).
36
See Paul v. Deloitte & Touche, LLP, 974 A.2d 140, 145 (Del. 2009).
37
Rehoboth Mall, 953 A.2d at 704.
38
Id.10
option of the Tenant and provided for in the original lease, did not constitute a “new”
lease because the provision expressly continued all rights and obligations under the
original lease except for adjustments to the rental price.39 To support is holding, the
Court determined that the renewal provision provided for an automatic extension of
the original lease without the need for executing a new lease. 40 In contrast, in
Seaford Associates Ltd. Partnership v. Subway Real Estate Corp., the Delaware
Court of Chancery found that a document titled “Lease Amendment and Extension”
did constitute a new lease, however that was due to the extensive amount of
substantive changes to the original lease that were included in the amendment, which
essentially re-wrote the original lease.41
Here, the Lease Amendment modified Section A.10 of the Lease by adding
three additional 5-year terms and the applicable rent rate for each term. Unlike the
purported amendment in Seaford which altered many of the terms of the underlying
lease, the Lease Amendment stated that the Lease remains in full force and effect
except as expressly modified. Therefore, the Court finds the Amendment is just that
– an amendment to the original Lease. Given the very language included in the
Lease Amendment, the original Lease is to apply with respect to all other terms, the
Court finds that the Lease Amendment is not a new lease.
B. PROCURING CAUSE.
Alpha argues, among other things, that CM is not the procuring cause of the
Lease Amendment because it played no part in its negotiation or execution. As such,
Alpha claims the lease terms included in the Lease Amendment do not entitle CM
39
Id.40
Id.41
Seaford Assocs. Ltd. P’ship v. Subway Real Estate Corp., 2003 WL
21254847, at *7 (Del. Ch. May 21, 2003).
11
to any future commissions. CM maintains that it is procuring cause of the Lease,
and as such, it is entitled to commissions from the Lease Amendment.
The general rule of the procuring cause doctrine is that a broker is entitled to
a commission if the broker “is the procuring cause of a consummated transaction.”42
To constitute procuring cause, a broker’s efforts must bring the prospective tenant
and landlord together and “lead directly to the consummation of the transaction.”43
Courts look to whether a broker’s efforts “was the first link in a direct chain of
causation leading to the consummation of the transaction, without a substantial break
in the negotiations.”44
Here, the Court finds that CM is the procuring cause of the Lease, and as a
result, the Lease Amendment.45 Again, because the Lease Amendment only
modified the Lease, CM remains the procuring cause of the transaction.
Accordingly, CM is the procuring cause of the Lease Amendment, and the Court
will look to the Commission Agreement’s plain language to determine whether CM
is entitled to a commission.
C. BREACH OF CONTRACT FOUND
To bring a successful breach of contract claim, Plaintiff must prove there was:
(1) a contractual obligation; (2) a breach of that obligation; and (3) resulting
42
Nepa v. Marta, 348 A.2d 182, 184 (Del. 1975).
43
B-H, Inc. v. “Indus. Am.,” Inc., 253 A.2d 209, 213-14 (Del. 1969).
44
Id. at 214.
45
See Hursey Porter & Assocs. v. Bounds, 1994 WL 762670, at *12 (Del.
Super. Ct. Dec. 2, 1994) (“… a real estate broker’s right to a commission
should be governed by the provisions of the written listing agreement, not by
the procuring cause doctrine.”); but see Stoltz Realty Co. v. Paul, 1995 WL
654152, at *5-10 (Del. Super. Ct. Sept. 20, 1995) (applying procuring cause
doctrine to three separate leases despite a written brokerage agreement
between landlord and broker).
12
damages.46 When interpreting a contract, the Court will give priority to the parties’
intentions as reflected in the four corners of the agreement.47 “In upholding the
intentions of the parties, a court must construe the agreement as a whole, giving
effect to all provisions therein.”48 Moreover, the Court may not interpret an
agreement to add limitations “not found in the plain language of the contract.”49 The
meaning inferred from a particular provision cannot control the meaning of the entire
agreement if such an inference conflicts with the agreement’s overall scheme or
plan.50
The Court will interpret clear and unambiguous terms according to their
ordinary meaning.51 “Contract terms themselves will be controlling when they
establish the parties’ common meaning so that a reasonable person in the position of
either party would have no expectations inconsistent with the contract language.”52
“A contract is not rendered ambiguous simply because the parties do not agree upon
its proper construction.”53 Rather, ambiguity exists “[w]hen the provisions in
controversy are fairly susceptible of different interpretations or may have two or
46
Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513, 548 (Del. Super.
2005).
47
Paul v. Deloitte & Touche, LLP, 974 A.2d 140, 145 (Del. 2009).
48
E.I. du Pont de Nemours and Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1113
(Del. 1985).
49
Emmons v. Hartford Underwriters Ins. Co., 697 A.2d 742, 746 (Del. 1997).
50
E.I. du Pont, 498 A.2d at 1113.
51
Paul, 974 A.2d at 145 (citing Lorillard Tobacco Co. v. Am. Legacy Found.,
903 A.2d 728, 739 (Del. 2006); Rhone-Poulenc Basic Chem. Co. v. Am.
Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992)).
52
Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del.
1997).
53
Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192,
1195 (Del. 1992).
13
more different meanings.”54 Where a contract is ambiguous, “the interpreting court
may look beyond the language of the contract to ascertain the parties’ intentions.”55
However, where ambiguity is found, summary judgment is inappropriate.56 For the
following reasons, Court finds no ambiguity exists in the terms here, consistent with
the parties contentions.
Here, the parties each rely upon various provisions in the Commission
Agreement, Lease, and Lease Amendment to argue that the Commission Agreement
is unambiguous and supports their respective interpretations. As with any contract
interpretation issue, the contract is to be read as a whole and interpreted as a
reasonable person would, using an objective standard – as such, the language of the
agreement(s) controls and requires a full analysis.
The Commission Agreement states, “Landlord shall pay CM additional
commission(s) equal to five percent (5%) of the aggregate base rent for each
option/renewal term for which the Tenant exercises.”57 Section W.1 of the Lease
addresses brokerage commissions and provides that the Commission Agreement
controls such commissions.58 Section A.10 of the Lease sets forth three lease terms
- the Original Lease Term, the First Renewal Term, and the Second Renewal Term.59
Each term lasts five years, and pursuant to Section C.4 of the Lease, the Tenant has
54
Eagle Indus., 702 A.2d at 1232.
55
Id.56
GMG Capital Invs., LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776,
783-84 (Del. 2012).
57
Joint App. at JX 0001 (emphasis added).
58
See Id. at JX0026.
59
Id. at JX0008.
14
the option to renew.60 Accordingly, all lease terms provided in Section A.10 are
exercisable by the Tenant’s option.
Section W.19 of the Lease provides that the Lease represents the entire
agreement between the parties and that no modification to the Lease will be binding
“unless reduced to writing and signed by them.”61 The Lease Amendment, signed
by both Alpha and the Tenant, modified only Section A.10 of the Lease by including
three additional five-year lease terms—the Extension Term, the Third Renewal
Term, and the Fourth Renewal Term.62 Additionally, the Lease Amendment states,
“Except as expressly modified by this Amendment, the Lease remains in full force
and effect in accordance with its terms.”63
CM claims that the Commission Agreement’s use of “additional” and “each”
refers to all subsequent option/renewal terms, including those added in the Lease
Amendment. Moreover, CM maintains that the additional lease terms under the
Lease Amendment are option/renewal terms exercisable by the Tenant because the
Lease never lapsed and provides for “each succeeding Renewal Term(s).”64
Conversely, Defendants argue that the “additional” and “each” language
found in the Commission Agreement refer only to the first three lease terms included
in the Lease and claim that because the original Lease only identifies three lease
terms, the Commission Agreement is limited only to the initial three terms.
Defendants further assert that the Commission Agreement limits commissions to
option/renewal terms exercised by the Tenant. Defendants maintain that the Lease
60
Id. at JX0011, which states: “Landlord hereby grants to Tenant the option to
renew this Lease for the periods stipulated in Section A.10.”
61
Id. at JX0028.
62
Id. at JX0052.
63
Id. at JX0053.
64
Id. at JX0011.
15
Amendment was not exercised by the Tenant pursuant to any option found in the
Lease. Instead, Defendants aver that the Lease Amendment was negotiated and
agreed to without reference to the renewal terms under the original Lease.
To support their claim, Defendants also looks to Section C.4 of the Lease:
Notice of election by Tenant to exercise each option shall
be given to Landlord in writing at least six (6) months prior
to the expiration of the then current term; provided,
however, that Tenant’s right to exercise any option
hereunder shall not expire unless and until Landlord has
given Tenant written notice of Tenant’s failure to timely
exercise its option.65
D. IT IS REASONABLE TO INTERPRET THE LEASE AMENDMENT TO RELATE
BACK TO THE COMMISSION AGREEMENT.
Both Plaintiff and Defendants contend that they have offered the only
reasonable interpretation of the Commission Agreement, the Lease and Lease
Amendment with respect to payment of additional commissions beyond those
contemplated in the Lease. The Court finds that the Commission Agreement is
unambiguous, and that Plaintiff’s interpretation is the only reasonable interpretation
of the Commission Agreement, the original Lease and the Lease Amendment.
Plaintiff’s interpretation reconciles various provisions between the three
documents. The contention that the Commission Agreement’s use of the terms
“additional” and “each” does not strictly limit commissions to the three
option/renewal terms initially identified in the Lease is entirely reasonable when
looking at the documents altogether. Courts interpret clear and unambiguous
contract terms according to their ordinary meaning.66 When parties do not define
65
Id. (emphasis added).
66
Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate
Fund, 68 A.3d 665, 683 (Del. 2013).
16
terms within the contract, Delaware courts may look to dictionaries to determine
their plain meaning.67
The Commission Agreement obligates Defendants to pay commissions for
“each option/renewal term for which the Tenant exercises.”68 CM and Alpha did not
define the term “each” in the underlying documents. However, “each” has been
defined as “being one of two or more distinct individuals having a similar relation
and often constituting an aggregate.”69 Accordingly, the plain meaning of the
Commission Agreement’s terms does not solely bind the parties to the
option/renewal terms found in the Lease.
Here, Alpha and Tenant amended Section A.10 of the Lease through the Lease
Amendment. The Amendment added three additional lease terms to Section A.10
and expressly stated that all other terms of the Lease “remain in full force and effect
in accordance with its terms.”70 Section C.4 of the Lease grants the Tenant “the
option to renew this Lease for the periods stipulated in Section A.10.”71 As such,
the Tenant has a right to exercise the option for the three new lease terms, and such
terms continue to be subject to the Commission Agreement. Accordingly, Plaintiff’s
interpretation gives effect to all relevant provisions of the underlying documents and
is reasonable.
Defendants maintain that the Commission Agreement’s plain language limits
payable commissions only to the lease terms found in the Lease. In support, they
67
Lorillard Tobacco Co. v. Am. Legacy Foundation, 903 A.2d 728, 738 (Del.
2006).
68
Joint App. at JX0001.
69
Each, MERRIAM-WENSTER.COM, https://www.merriam-
webster.com/dictionary/each (last visited Feb. 18, 2022).
70
Joint App. at JX0053.
71
Id. at JX0011.
17
cite this court’s decision in Silver Lake Office Plaza, LLC v. Lanard & Axilbund,
Inc. 72 In Silver Lake, the court addressed whether a commission agreement’s plain
language obligated the landlord to pay a broker commission on subsequent renewals
of multiple leases after the commission agreement had expired.73 The court held that
the plain language of the commission agreement, specifically its use of the word
“and” and “all” when referring to lease renewals and extensions of the lease,
obligated the landlord to pay the disputed commissions.74
While Silver Lake addressed the reluctance of Delaware courts to enforce
perpetual contracts, it determined that the brokerage agreement at dispute was not
indefinite because its obligations would end when the landlord and tenant decided
not to renew the agreement.75 The court reasoned that a contract’s potential long life
is not “automatically fatal” and chose not to limit the broker’s ability to collect
commission when no such limit was “in the plain language of the contract.” 76 The
same is true here.77
The Commission Agreement’s use of the word “each,” like the word “all,”
does not expressly outline a limitation on which “option/renewal terms” fall under
the scope of the Commission Agreement. Moreover, this Court cannot contradict a
72
Silver Lake Office Plaza, LLC v. Lanard & Axilbund, Inc., 2014 WL 595378(Del. Super. Ct. Jan. 17, 2014).
73
Id. at *7-8.
74
Id. at *7.
75
Id. at *8.
76
Id.
77
Defendant also cites case law from various jurisdictions, arguing that a
broker’s right to collect commissions only applies to lease terms identified in the
original lease, not subsequent extensions of the lease. The Court finds that the case
law from different jurisdictions are legally and factually distinguishable from the
case at hand, and are thus, unpersuasive.
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contract’s plain terms to add a limitation not expressly included by the parties.78
Absent clear contract language to the contrary, the Court will not limit obligations
due under the Commission Agreement solely because the contract has a potentially
long life.
Defendants also argue that even if the Commission Agreement applied to the
lease terms added by the Lease Amendment, those terms were not exercised by the
Tenant through an option under the Lease. Defendants’ argument, however, fails
to consider the provisions of the Lease as a whole. The Lease Amendment modified
Section A.10 and expressly stated that all remaining terms of the Lease apply in full
effect.79 Section C.4 of the Lease grants the Tenant the right to exercise an option
to renew the Lease for all periods stipulated to in Section A.10.80 Under a plain
reading of the Commission Agreement, Lease, and Lease Amendment, this Court
finds that the Tenant exercised an option under the Lease.
Accordingly, the Court finds that the only reasonable interpretation is that the
Lease Amendment simply adds additional terms to the Lease and is an amendment
to the original, and according to the plain meaning of all three documents, the
Commission Agreement applies to the Amendment and Plaintiff is owed
commission. As a result, Defendants’ motion for summary judgment on this issue
is DENIED and Plaintiff’s motion for summary judgment is GRANTED as to
Defendant Alpha.
78
Silver Lake, 2014 WL 595378, at *7 (quoting Rag Am. Coal Co v. AEI Res.,
Inc., 1999 WL 1261376, at *5 (Del. Ch. Dec. 7, 1999).
79
Joint App. at JX0052-53.
80
Id. at JX0011.
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V. DISCUSSION: COUNT 2 UNJUST ENRICHMENT
Unjust enrichment has been defined by Delaware courts as “the unjust
retention of a benefit to the loss of another, or the retention of money or property of
another against the fundamental principles of justice or equity and good
conscience.”81 A claim for unjust enrichment is not available if there is a contract
that governs the relationship between parties that gives rise to the unjust enrichment
claim.82 In other words, if “the contract is the measure of [a party’s] right, there can
be no recovery under an unjust enrichment theory independent of it.” 83 Thus,
“[w]hen the complaint alleges an express, enforceable contract that controls the
parties’ relationship… a claim for unjust enrichment will be dismissed.”84
Both parties agree that the Commission Agreement, Lease, and Lease
Amendment are valid, binding contracts. CM argues that the Commission
Agreement obligates Alpha to pay CM a commission of $47, 184.25. As such, the
Commission Agreement measures CM’s right to recover. Both CM and Alpha assert
that the documents in question control their relationship. Therefore, CM cannot
bring a claim for unjust enrichment in this action. Accordingly, Defendant Alpha’s
motion for summary judgment concerning the unjust enrichment claim is
GRANTED.85
81
Schock v. Nash, 732 A.2d 217, 232 (Del. 1999) (quoting Fleer Corp. v.
Topps Chewing Gum, Inc., 539 A.2d 1060, 1062 (Del. 1988)).
82
Kuroda v. SPJS Holdings, L.L.C., 971 A.2d 872, 891 (Del. Ch. 2009).
83
Wood v. Coastal States Gas Corp., 401 A.2d 932, 942 (Del. 1979).
84
Kuroda, 971 A.2d at 891.
85
Because no arguments have been made with respect to FCS’s involvement in
these briefings, and the only contracts the Court has before it involves Defendant
Alpha and not Defendant FCS, this ruling, once again, only applies to Defendant
Alpha.
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VI. CONCLUSION.
Accordingly, with respect to Plaintiff’s motion for Summary Judgment, it is
GRANTED with respect to Defendant Alpha. With respect to Defendant Alpha’s
motion for Summary Judgment, it is DENIED as to Count 1, and GRANTED as to
Count 2. The Court will allow future motions with respect to Defendant FCS and
its involvement in this matter and potential liability.
IT IS SO ORDERED.
/s/ Danielle J. Brennan_______
The Honorable Danielle J. Brennan
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