P & N Investments, LLC, d/b/a Dickey's Barbecue Pit v. Frontier Mall Associates, LP , 395 P.3d 1101 ( 2017 )

IN THE SUPREME COURT, STATE OF WYOMING
2017 WY 62
APRIL TERM, A.D. 2017
May 31, 2017
P & N INVESTMENTS, LLC, d/b/a
DICKEY’S BARBECUE PIT,
Appellant
(Plaintiff),
S-16-0244
v.
FRONTIER MALL ASSOCIATES, LP,
Appellee
(Defendant).
Appeal from the District Court of Laramie County
The Honorable Steven K. Sharpe, Judge
Representing Appellant:
Tara B. Nethercott, Woodhouse Roden Nethercott, LLC, Cheyenne, Wyoming.
Representing Appellee:
Rick A. Thompson and Lucas E. Buckley, Hathaway & Kunz, LLP, Cheyenne,
Wyoming. Argument by Mr. Buckley.
Before BURKE, C.J., and HILL, DAVIS, FOX, and KAUTZ, JJ.
FOX, J., delivers the opinion of the Court; Hill, J., files a dissenting opinion, in which
DAVIS, J., joins.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building,
Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be
made before final publication in the permanent volume.
FOX, Justice.
[¶1] Appellant P & N Investments, LLC (P & N) obtained a franchise for a Dickey’s
Barbeque Pit restaurant to be operated in Frontier Mall in Cheyenne, Wyoming. P & N
entered into a lease with Frontier Mall Associates, LP (the Mall), which required the Mall
to pay P & N a finish allowance when certain provisions had been satisfied. P & N then
entered into a contract with a general contractor, which P & N eventually paid in full for
the work done. The general contractor, however, did not pay all the subcontractors.
P & N and the Mall now dispute whether the lease provision requiring that liens be
released and work be paid for was satisfied. The district court ruled that the lease
language is unambiguous, and, because it is undisputed that subcontractors have not been
paid and have not provided evidence regarding satisfaction or waiver of any liens,
granted summary judgment in favor of the Mall. We affirm.
ISSUE
[¶2] We rephrase the issue: Do the unambiguous terms of the lease require evidence
that subcontractors and the general contractor have been paid in full before the Mall is
obligated to pay the finish allowance?
FACTS
[¶3] P & N entered into a ten-year Shopping Center Lease (Lease) with the Mall for
approximately 2500 square feet in Frontier Mall in which to operate a Dickey’s Barbeque
Pit franchise. The Lease allowed P & N to renovate the space to suit its use as a
restaurant. P & N retained East Rochester, New York contractor, CCI Builders and
Developers, Inc. (CCI), to act as the general contractor on the project. CCI, in turn, hired
a number of local subcontractors to provide materials and perform work on the project.
[¶4] The Lease provided that upon satisfaction of ten express conditions, the Mall
would pay P & N a tenant finish allowance of $150,180. The condition that lies at the
heart of this dispute requires P & N to provide the Mall satisfactory evidence from P &
N’s general contractor and subcontractors that any liens have been satisfied or waived
and an affidavit that “all work has been paid for” before the finish allowance becomes
due.
[¶5] Work was completed on the project in September 2014 and the restaurant opened
on schedule. For the purposes of this appeal, it is undisputed that the total cost of
construction was $308,929.55 and that P & N paid CCI $308,929.55. P & N submitted
an affidavit to the Mall stating:
1
6. The total cost of construction was three hundred
eight thousand nine hundred twenty nine and 55/100 dollars
($308,929.55). The cost was paid in full by me [Nathaniel
Schott, owner of P & N] to CCI.
7. The construction was completed in September
2014.
7. [sic] No liens have been filed on the property or
may be filed as a result of construction on the leased
premises.
It is also undisputed that CCI did not pay numerous subcontractors a total of
approximately $90,000 for work they performed on or materials they provided to the
project.1
[¶6] Under Wyoming law, contractors have one hundred fifty days from the date of the
completion of their work to assert a lien.2 Thus, CCI and the subcontractors had until
February 27, 2015, at the latest, to assert a lien against the property. It is undisputed that
no liens have been filed against the property.
[¶7] Because the Mall has not paid the finish allowance, P & N sued the Mall, asserting
claims of breach of contract and unjust enrichment, and seeking declaratory judgment
that the Mall must pay the tenant finish allowance because P & N has met the conditions
for that payment set forth in the Lease. The Mall counterclaimed, seeking a
determination that the Lease terms have not been satisfied and that the requirement to pay
the finish allowance has not been triggered. The parties filed cross-motions for summary
judgment. The district court concluded that the disputed contract language is
unambiguous and requires the submission of evidence of lien release satisfactory to the
Mall from the general contractor and the subcontractors and an affidavit that all
1
CCI is not a party to this action, perhaps because of the arbitration clause in its contract with P & N requiring that
“[a]ny controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association . . . .”
2
Wyo. Stat. Ann. § 29-2-106(a) (LexisNexis 2015) provides:
(a) Except as provided in subsection (c) of this section, any contractor
asserting a lien under this chapter shall file his lien statement within one
hundred fifty (150) days and every other person asserting a lien under this
chapter shall file within one hundred twenty (120) days:
(i) Of the earlier of:
(A) After the last day when work was performed or materials
furnished under contract;
(B) From the date of substantial completion of the project on
which work was performed or materials were furnished under contract;
or
(ii) With respect to a subcontractor, after the last day he
performed work at the direction of the contractor or other person
authorized to provide direction.
2
outstanding amounts owed for the construction, including amounts owed to
subcontractors, have been paid. Because there is no dispute that neither of these
requirements has been met, the district court granted summary judgment in favor of the
Mall. P & N appeals.
STANDARD OF REVIEW
[¶8] We review a grant of summary judgment deciding a question of law de novo.
Anadarko Land Corp. v. Family Tree Corp., 2017 WY 24, ¶ 15, 389 P.3d 1218, 1223
(Wyo. 2017); Williams v. Sundstrom, 2016 WY 122, ¶ 17, 385 P.3d 789, 793 (Wyo.
2016). We use the same materials and follow the same standards as the district court.
Leeks Canyon Ranch, LLC v. Callahan River Ranch, LLC, 2014 WY 62, ¶ 12, 327 P.3d
732, 737 (Wyo. 2014). Summary judgment can be granted when there are no genuine
issues of material fact and the moving party is entitled to judgment as a matter of law.
W.R.C.P. 56(c).
[¶9] When summary judgment is based on interpretation of a contract:
The initial question of whether the contract is
capable of being understood in only one way is a
question of law for the court. If the court determines
that the contract is capable of being understood in only
one way, then the language used in the contract
expresses and controls the intent of the parties. In such
case, the next question, what is that understanding or
meaning, is also a question of law. When we review
the district court’s summary judgment decisions that a
contract is capable of being understood in only one
way and what that understanding is, we accord no
deference to those decisions.
Claman v. Popp, 2012 WY 92, ¶ 23, 279 P.3d 1003, 1012
(Wyo. 2012) (quoting Union Pacific Railroad Co. v. Caballo
Coal Co., 2011 WY 24, ¶ 13, 246 P.3d 867, 871 (Wyo.
2011)).
Leeks Canyon Ranch, LLC, 2014 WY 62, ¶ 12, 327 P.3d at 737.
DISCUSSION
[¶10] Our “ultimate goal when interpreting a contract ‘is to discern the intention of the
parties to the document.’” Comet Energy Servs., LLC v. Powder River Oil & Gas
Ventures, LLC, 2008 WY 69, ¶ 6, 185 P.3d 1259, 1261 (Wyo. 2008) (Comet I) (quoting
Mullinnix, LLC v. HKB Royalty Trust, 2006 WY 14, ¶ 22, 126 P.3d 909, 919 (Wyo.
2006)). In so doing, we first consider the “specific terms of the contract and give them
their plain and ordinary meaning.” Id.
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[¶11] Section 1.5(b) of exhibit B to the Lease provides:
Tenant shall have furnished evidence satisfactory to Landlord
from its general contractor and any subcontractors that any
and all liens that have been, or may be, filed have been
satisfied of record or waived and an affidavit that all work has
been paid for[.]
Both parties contend that these terms are unambiguous, but they disagree as to the
meaning. A disagreement between the parties as to the meaning of the terms of a
contract does not give rise to an ambiguity. Omohundro v. Sullivan, 2009 WY 38, ¶ 9,
202 P.3d 1077, 1081 (Wyo. 2009). We agree with the district court that the language of
this provision is unambiguous. It is not “obscure in its meaning, because of
indefiniteness of expression, or because a double meaning is present.” Amoco Prod. Co.
v. Stauffer Chem. Co. of Wyo., 612 P.2d 463, 465 (Wyo. 1980) (citation omitted); see
also Comet I, 2008 WY 69, ¶ 11, 185 P.3d at 1263.
[¶12] Our settled rules of contract interpretation require that once we determine a
contract is unambiguous, we determine the intention of the parties from the words of the
contract and the context in which it was written. Hunter v. Reece, 2011 WY 97, ¶ 17,
253 P.3d 497, 502 (Wyo. 2011); Comet Energy Servs., LLC v. Powder River Oil & Gas
Ventures, LLC, 2010 WY 82, ¶ 13, 239 P.3d 382, 386 (Wyo. 2010) (Comet II); Amoco
Prod. Co., 612 P.2d at 465. We consider the contract as a whole and interpretation is a
matter of law. Id.
[¶13] Section 1.5, read in its entirety, indicates that the parties’ overarching intent was to
ensure that all those who worked on the P & N job were paid in full, and evidence of that
was to be obtained from several sources, including directly from the contractor and
subcontractors, and by affidavit from P & N. “Our rules of interpretation require that we
interpret a contract as a whole, reading each provision in light of all the others to find
their plain meaning.” Pope v. Rosenberg, 2015 WY 142, ¶ 20, 361 P.3d 824, 830 (Wyo.
2015) (citation omitted). The disputed language sets forth two requirements that must be
met before the Mall is obligated to pay the finish allowance.
[¶14] The first portion of section 1.5(b) requires that P & N furnish “evidence
satisfactory to [the Mall] from its general contractor and any subcontractors that any and
all liens that have been, or may be, filed have been satisfied of record or waived” before
it is entitled to payment of the finish allowance. P & N argues that since the statutory
time limit for filing a lien has passed, liens can no longer be filed and thus the terms of
this provision have, in essence, been met.
[¶15] We begin by looking at the plain language of the provision. It requires that (1)
P & N provide to the Mall evidence from the general and subcontractors that any liens
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filed by the general and subcontractors have been satisfied and that all other liens that
may be filed have been either satisfied or waived, and (2) the Mall must be satisfied with
the evidence provided. P & N claims the intent of this provision was to make sure there
were no liens on the property, and that the Mall engaged in bad faith when it refused to
accept P & N’s statement that no liens have been filed and any other liens have been
waived, and instead insisted P & N satisfy it with written lien waivers from CCI and the
subcontractors. Every contract imposes on the parties a duty of good faith and fair
dealing in its performance and enforcement. Scherer Constr., LLC v. Hedquist Constr.,
Inc., 2001 WY 23, ¶ 18, 18 P.3d 645, 652 (Wyo. 2001). While “[s]ubterfuges and
evasions” can violate the obligation of good faith, id. (quoting Restatement (Second) of
Contracts § 205, comment d (1981)), courts have held that the insistence on compliance
with the terms of a contract will not rise to the level of bad faith. See Thalle Constr. Co.
v. City of New York, 256 A.D.2d 157 (NY App. Div. 1998). That is particularly true here,
where one of the terms of the contract gives the Mall discretion to determine whether the
evidence of lien release or waiver is satisfactory.
[¶16] While we cannot conclude that the Mall acted in bad faith, we would be hard
pressed to conclude that, as a practical matter, the release or waiver requirement has not
been satisfied by the passage of time. However, the second part of section 1.5(b) requires
that “all work” be paid for before P & N is entitled to the finish allowance. The Mall
argues that this provision is unambiguous and that “all work” includes work performed
by not just the general contractor, but the subcontractors as well. Because it is
undisputed that numerous subcontractors have not been paid, the Mall claims that this
provision has not been satisfied. P & N also contends that the Lease provision is
unambiguous, but claims it requires only that P & N pay the full cost of construction to
CCI and provide an affidavit to that effect to the Mall.
[¶17] We afford words in a contract the plain meaning that a reasonable person would
give to them. Hunter, 2011 WY 97, ¶ 17, 253, P.3d at 502. “All” means everything. In
Caballo Coal Company v. Fidelity Exploration & Production Company, 2004 WY 6, ¶ 4,
84 P.3d 311, 313 (Wyo. 2004), we considered the meaning of deed language granting
coal “[t]ogether with all of Grantor’s undivided interest in and to all other minerals,
metallic or nonmetallic contained in or associated with” coal deposits conveyed coalbed
methane gas to the grantee. (Emphasis added.) We concluded that the “clear language”
of the deeds “expressly convey[ed] ownership of all metallic and nonmetallic minerals,”
id. at ¶ 17, 84 P.3d at 318 (emphasis in original), and that a “reasonable interpretation of
the intent of the grantors expressed within the deeds is that [they] simply intended to
convey everything located within the coal seam.” Id. at ¶ 19, 84 P.3d at 318. Likewise,
“all work,” or the whole amount of work, on this project includes the work performed by
the subcontractors. Thus, we find the language of section 1.5(b) requiring “all work” to
be paid for is unambiguous and requires every individual component of work to be paid
before the finish allowance becomes due.
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[¶18] The affidavit P & N submitted to the Mall stated:
The total cost of the construction was three hundred eight
thousand nine hundred twenty nine and 55/100 dollars
($308,929.55). The cost was paid in full by me to CCI.
P & N claims that the affidavit complies with the terms of section 1.5(b), but it does not
say that “all work has been paid for,” as required by the Lease. Had the parties intended
that only the general contractor needed to be paid in order for the finish allowance to
come due, they could have used language to that effect, such as, “the general contractor
has been paid in full.” Instead, they used the term “all work.” We will not “rewrite
contracts under the guise of interpretation . . . .” Comet I, 2008 WY 69, ¶ 11, 185 P.3d at
1263. We interpret this provision according to its clear language, and conclude that the
parties intended to include work by subcontractors on the project as work that must be
paid for before the finish allowance became due. Because all work has not been paid for
on this project, the Mall was entitled to summary judgment.
[¶19] P & N asks us to examine the terms of its agreement with CCI to determine the
intent of the disputed language in its contract with the Mall. “While unambiguous
contract language is generally interpreted without resort to extrinsic evidence, it need not
be interpreted in a vacuum.” 11 Samuel Williston, Treatise on the Law of Contracts
§ 30:6, at 108 (Richard A. Lord ed., 4th ed. 2012); see also Pokorny v. Salas, 2003 WY
159, ¶ 23, 81 P.3d 171, 177-78 (Wyo. 2003). “We consider the language in the context in
which it was written, looking to the surrounding circumstances, the subject matter, and
the purpose of the agreement to ascertain the intent of the parties at the time the
agreement was made.” Comet II, 2010 WY 82, ¶ 13, 239 P.3d at 386.3 However, we
have rejected the use of extrinsic evidence to determine whether a contract is ambiguous:
The ambiguity which justifies examining extrinsic evidence
must exist . . . in the language of the document itself. It
cannot be found in the subsequent events or conduct of the
parties, matters which are extrinsic evidence. The suggestion
3
The identity of the party drafting the contract is one of those surrounding circumstances that we may
consider. See Williston, supra, § 30:5, at 84 (“Extrinsic evidence properly considered in deciding
whether the contract is ambiguous may include . . . whether one of the parties prepared the instrument, so
that the language should be construed most strongly against it.”); see Nuhome Invs., LLC v. Weller, 2003
WY 171, ¶ 17, 81 P.3d 940, 947 (Wyo. 2003) (considering identity of drafter to determine whether
unequal bargaining power existed); Collins v. Finnell, 2001 WY 74, ¶ 19, 29 P.3d 93, 100 (Wyo. 2001)
(ambiguity is construed against the drafter); Emulsified Asphalt, Inc. of Wyo. v. Transp. Comm’n of Wyo.,
970 P.2d 858, 864 (Wyo. 1998) (same). It is unclear from the record which party drafted the Lease,
however, the Lease itself contains many deletions and additions, indicating that a significant number of
changes had been made from its original version.
6
that one should examine extrinsic evidence to determine
whether extrinsic evidence may be examined is circuitous.
Wolter v. Equitable Res. Energy Co., Western Region, 979 P.2d 948, 952 (Wyo. 1999)
(citation omitted and emphasis in original); see also Thornock v PacifiCorp., 2016 WY
93, ¶ 20, 379 P.3d 175, 181 (Wyo. 2016).
[¶20] P & N emphasizes the terms of its agreement with CCI prohibiting P & N from
communicating with subcontractors. It argues that this prohibition is further evidence of
P & N’s intent that only CCI must be paid before the finish allowance is due because
P & N had no contracts with or invoices from the subcontractors. “A party’s subjective
intent is not relevant in contract interpretation cases because we use an objective
approach to interpret contracts.” Omohundro, 2009 WY 38, ¶¶ 24-25, 202 P.3d at 1085
(declining to consider affidavit regarding parties’ subjective intent regarding covenants).
Moreover, we note that P & N entered into the Lease with the Mall on February 11, 2014,
while its contract with CCI is dated May 5, 2014. Thus, even if we were to consider the
terms of the CCI contract, we are not persuaded that those terms impacted P & N’s intent
as it entered into its contract with the Mall.
[¶21] P & N also points to the standard and custom in the construction industry that the
general contractor is responsible for paying the subcontractors in support of its argument
that the intent was only to require P & N to pay CCI, citing Black’s Law Dictionary’s
definition of general contractor:
One who contracts for the construction of an entire building
or project, rather than for a portion of the work. The general
contractor hires subcontractors, coordinates all work, and is
responsible for payment to the subcontractors.
Black’s Law Dictionary 683 (6th ed. 1990). P & N argues that because it paid CCI, the
general contractor, it paid for all work and it was CCI’s responsibility to pay the
subcontractors. P & N claims that because it has clean hands, it should not be punished
by not receiving the finish allowance or by having to pay the subcontractors directly
(when it has already paid CCI) in order to receive the finish allowance.4
[¶22] We cannot rewrite the terms of the Lease. Brashear v. Richardson Constr., Inc.,
10 P.3d 1115, 1118 (Wyo. 2000). “[T]he question whether a bargain is smart or foolish,
or economically efficient or disastrous, is not ordinarily a legitimate subject of judicial
inquiry.” Williston, supra, § 31:5, at 455; see Sowerwine v. Keith, 997 P.2d 1018, 1020-
21 (Wyo. 2000). “[C]ourts are not at liberty to rescue parties from the consequences of
4
In their briefs, the parties dispute whether the Mall could or could not be sued by unpaid subcontractors under a
variety of legal theories. That question is not before the Court and is not relevant to the unambiguous terms of the
Lease.
7
their unwisely made bargains and we cannot rewrite the contract under the guise of
judicial construction.” Hunter, 2011 WY 97, ¶ 23, 253 P.3d at 503 (internal quotation
marks and citations omitted).
[¶23] P & N was in a better position than the Mall to ensure subcontractors were paid.
Accordingly, the Lease put the burden on P & N to ensure that all work was paid for, and
it specifically required P & N to provide an affidavit to that effect. Read together, the
terms of section 1.5(b) indicate that the intent of the parties was for the general and the
subcontractors to be paid, and the affidavit stating that CCI had been paid did not satisfy
that requirement.
CONCLUSION
[¶24] The Lease provision requiring P & N to furnish “evidence satisfactory to [the
Mall] from its general contractor and any subcontractors that any and all liens that have
been, or may be, filed have been satisfied of record or waived” and an “affidavit that all
work has been paid for” before the finish allowance becomes due is unambiguous. Even
if we were to conclude that the passage of time has fulfilled the lien satisfaction and
waiver requirement, all work completed by the subcontractors has not been paid for.
Accordingly, P & N is not entitled to the finish allowance from the Mall. The district
court’s summary judgment in favor of the Mall is affirmed.
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HILL, Justice, dissenting, with whom DAVIS, Justice, joins.
[¶25] I agree that the lease between the Mall and P & N is unambiguous, but because I
interpret the lease differently from the majority opinion, I respectfully dissent.
The disputed lease provision reads:
Section 1.5 Landlord’s Contribution to Construction
of Leased Premises. Of the costs incurred by Tenant in
constructing or improving qualified long-term real property
for use in Tenant’s trade or business at the Leased Premises
(the “Leasehold Improvements”), Landlord agrees to pay to
Tenant the lesser of (a) the actual cost of said construction of
or improvements to said real property made in accordance
with this Exhibit, or (b) the sum of One Hundred Fifty
Thousand One Hundred Eighty and 00/100 Dollars
($150,180.00), less any sums owed to Landlord by Tenant
under this Lease or this Exhibit, and the excess, if any, shall
be paid by Tenant. Landlord’s obligations under the
preceding sentence shall not bind any Mortgagee Party of the
Shopping Center nor any party acquiring title through or
under any such Mortgage Party. The sum to be paid by
Landlord hereunder shall be paid by check to Tenant after all
of the following conditions shall have been satisfied:
***
(b) Tenant shall have furnished evidence
satisfactory to Landlord from its general contractor and
any subcontractors that any and all liens that have
been, or may be, filed have been satisfied of record or
waived and an affidavit that all work has been paid
for[.]
[¶26] I view this term as imposing two separate but related obligations on P & N, as
Tenant. First, P & N is obligated to furnish evidence satisfactory to the Mall from its
general contractor and any subcontractors that any and all liens that have been filed, or
may be filed, have been satisfied of record or waived. Second, P & N is obligated to
furnish an affidavit that all work has been paid for.
[¶27] With respect to the first obligation, I view this as an obligation to perform that is
subject to a condition precedent. A condition precedent is “an act or event, other than a
lapse of time, which must exist or occur before a duty of immediate performance of a
promise arises.” Mad River Boat Trips, Inc. v. Jackson Hole Whitewater, Inc., 803 P.2d
366, 368 (Wyo. 1990) (quoting Robert W. Anderson Housewrecking and Excavating, Inc.
9
v. Board of Trustees, School District No. 25, Fremont County, Wyoming, 681 P.2d 1326,
1331 (Wyo. 1984)). A condition precedent need not be labeled as such in a contract, and
what is instead controlling is whether the contract language creates a contingency on
which performance depends. Id. at 367-68 (finding Forest Service approval to be a
condition precedent to defendant’s obligation to transfer special use permit to plaintiff
even though Forest Service approval was not contained in section of contract labeled
“Conditions Precedent”).
[¶28] In my view, P & N’s obligation to furnish evidence satisfactory to the Mall was
conditioned on the requirement that at least one of two events occurred: 1) a lien was
filed against the Mall’s property; or 2) a lien may be filed against the Mall’s property. It
is undisputed that neither event occurred. No lien was filed against the Mall’s property in
relation to P & N’s project, and because the time for any lien to be filed has expired, no
lien may be filed. The condition precedent to P & N’s obligation to perform did not
come to pass, and P & N was therefore under no obligation to provide evidence of any
type concerning lien satisfaction or lien waivers.
[¶29] P & N’s second obligation is to furnish “an affidavit that all work has been paid
for.” I do not agree that this provision should be read to refer back to both subcontractors
and general contractors. The term requires that P & N furnish an affidavit. Because it is
P & N that is to provide the affidavit, I believe a reasonable reading of the requirement is
one that requires P & N to attest that it has performed its obligation to pay for all work. I
do not agree the language may be extended to add a requirement that P & N attest that the
general contractor has also performed all of its separate payment obligations.
[¶30] This interpretation is borne out by the requirement this provision imposes with
regard to liens against the Mall's property. With respect to liens that have been or may be
filed, the provision requires that P & N furnish evidence that such liens have been either
satisfied or waived. A lien waiver suggests that there are amounts owing to the party that
has agreed to waive its lien, which is inconsistent with the meaning the Mall asks this
Court to give the phrase “all work has been paid for.” If “all work has been paid for”
means, as the Mall contends, that the general contractor and all subcontractors are
satisfied, there would be no occasion to need or require a lien waiver. The Mall’s
willingness to accept a lien waiver rather than satisfaction of that lien simply cannot be
reconciled with its insistence that “all work has been paid for” means P & N must attest
not only that it has paid the amounts it was obligated to pay but also that there are no
outstanding claims against the general contractor.
[¶31] The record of nonpayment to the subcontractors on this project is troubling. It is
undisputed, however, that P & N paid CCI, the general contractor, for all the work done
on the project. P & N did not breach its payment obligations under its contract with CCI,
and P & N had no contracts with the subcontractors. Any breach resulting in
underpayment of subcontractors was a breach of CCI’s separate contracts with the
10
subcontractors, contracts to which P & N was not a party. I am unwilling to read section
1.5(b) of the lease to make P & N a guarantor under the separate contracts between CCI
and the subcontractors. I believe the more reasonable interpretation to give section
1.5(b), and the one that avoids inconsistencies between its terms, is to interpret the
requirement that P & N furnish an affidavit “that all work has been paid for” to mean P &
N must attest that it, the affiant, has paid for all work it was obligated to pay for.
[¶32] My final observation relates to the opening paragraph of section 1.5. In that
paragraph, the Mall promises to P & N a payment of $150,180.00, upon satisfaction of
the enumerated conditions. That opening paragraph also put P & N on notice, however,
that the Mall would decrease that amount by any outstanding sums owed to the Mall by P
& N under the terms of the lease. It seems to me that the Mall could have added similar
language regarding outstanding amounts owing to subcontractors, if its intent was to
ensure not only that P & N met its payment obligations, but that all subcontractors were
paid in full. This certainly would have been a more transparent imposition of that
payment obligation.
11