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LLC v. Kroger Limited Partnership 1

United States District Court, M.D. North Carolina

March 20, 2018

3357 BATTLEGROUND AVE, LLC, a Nevada limited liability company, Plaintiff,
v.
KROGER LIMITED PARTNERSHIP 1, an Ohio limited partnership, Defendant.

          MEMORANDUM OPINION AND ORDER

          OSTEEN, JR., District Judge

         Presently before the court is a Motion for Judgment on the Pleadings filed by Plaintiff and Counterclaim Defendant 3357 Battleground Ave, LLC (“Battleground”). (Docs. 17, 18.) Defendant and Counterclaim Plaintiff Kroger Limited Partnership 1 (“Kroger”) has responded, (Doc. 19), and Battleground replied, (Doc. 22). Also before the court is Kroger's Individual Rule 26(f) Report. (Doc. 25.) These matters are ripe for resolution, and, for the reasons stated below, this court will deny Battleground's motion for judgment on the pleadings (Doc. 17) and will deny Kroger's individual 26(f) report (Doc. 25) as moot.

         I. BACKGROUND

         The following facts are presented in the light most favorable to Kroger: this action concerns a commercial lease of a grocery store (“Leased Property”) located at 3357 Battleground Avenue, Greensboro, North Carolina 27410. (Complaint (“Compl.”) (Doc. 1) ¶ 1; Defendant's Answer & Counterclaim (“Def.'s Answer & Countercl.”) (Doc. 9) at 7.)[1] Battleground is the successor landlord and lessor, and Kroger is the successor tenant and lessee under the lease dated September 1, 1985, as amended. (Compl. (Doc. 1) ¶ 1; Compl., Ex. 1 (Doc. 1-2); Def.'s Answer & Countercl. (Doc. 9) at 1.)

         Article XXXV (“Section 35”) of the lease specifies how the lessee may exercise its option to purchase the Leased Property for fair market value. (Compl., Ex. 1 (Doc. 1-2) at 48.) Article XXXVI (“Section 36”) provides the process for determining fair market value. (Id. at 48-49.)[2] The lessee is to include in its option notice the name of its appraiser, and the lessor is then to appoint its own appraiser. (Id. at 48.) Each appraiser is to determine the property's fair market value as of the date of purchase. (Id.) If only one appraiser is timely appointed, or if two are appointed but only one makes a timely determination of value, then the one appraiser's determination “shall be final and binding upon the parties.” (Id. at 48-49.) If two appraisers make timely determinations, and those valuations differ by more than 10% of the lesser valuation, then the two appraisers are to appoint a third appraiser or the parties may ask the American Arbitration Association to have a third appointed. (Id. at 49.) If a third is not timely appointed, either party may move for a court to appoint a third appraiser. (Id.) Section 36 also specifies the qualifications of the appraisers:

Each appraiser appointed hereunder shall have five (5) or more years of professional appraisal experience in the geographic area in which the Leased Property is located and shall be a qualified member of the American Institute of Real Estate Appraisers, or any successor of such Institute . . . .

(Id.)

         In a letter dated October 28, 2016, Kroger notified Battleground that it was exercising its option to purchase the Leased Property. (Compl., Ex. 2 (Doc. 1-3); Def.'s Answer & Countercl. (Doc. 9) at 3.) Kroger selected Gerald Sanders as its appraiser. (Id.) Battleground then appointed Damon C. Bidencope as its appraiser. (Compl. (Doc. 1) ¶ 14; Def.'s Answer & Countercl. (Doc. 9) at 3.) Bidencope, assisted by Erich Straughn, and Sanders, assisted by Andrew Tack, prepared appraisal reports of the Leased Property. (See Compl., Ex. 3 (Doc. 1-4) at 3-4, 7-8; Def.'s Answer & Countercl. (Doc. 9) at 3, 13; Def.'s Answer & Countercl., Ex. A (Doc. 9-1) at 2-3, 92.)

         On January 5, 2017, Battleground filed a complaint seeking a declaratory judgment that Sanders and Tack were not qualified under Section 36's requirements and that Tack was not timely appointed by Kroger. (Compl. (Doc. 1) at 5-8.) As a result, Battleground asserts that Kroger's appraisal may not be considered. (Id. at 7-8.)[3] Kroger answered and counterclaimed. (Def.'s Answer & Countercl. (Doc. 9).)[4]

         Battleground moved for judgment on the pleadings on its claim and against Kroger's counterclaims, asking this court to find as a matter of law that its interpretation of the lease is correct. (See Plaintiff's Brief in Support of Motion for Judgment on the Pleadings (“Pl.'s Br.”) (Doc. 18) at 2, 8-14.) Kroger responds that Sanders is qualified under the lease and that because Battleground does not dispute any facts about Sanders's qualifications, this court should sua sponte enter judgment for Kroger. (Defendant's Brief in Opposition to Motion for Judgment on the Pleadings (“Def.'s Br.”) (Doc. 19) at 1-3.) After the Motion for Judgment on the Pleadings was briefed by both parties, they filed a Joint Motion to Appoint Tom Taylor as Third-Party Appraiser, (Doc. 27), which this court granted on September 5, 2017, (Order (Doc. 28)).

         II. LEGAL STANDARD

         A party may move for judgment on the pleadings “[a]fter the pleadings are closed - but early enough not to delay trial.” Fed.R.Civ.P. 12(c). Such motions are “designed to dispose of cases when the material facts are not in dispute and the court can judge the case on its merits by considering the pleadings.” Preston v. Leake, 629 F.Supp.2d 517, 521 (E.D. N.C. 2009). The pleadings, matters of public record, exhibits to the pleadings, “and exhibits to the Rule 12(c) motions that [are] integral to the complaint and authentic” may be considered. Massey v. Ojaniit, 759 F.3d 343, 347-48 (4th Cir. 2014) (citation omitted).

         “[T]he court must accept all of the non-movant's factual averments as true and draw all reasonable inferences in its favor.” SmithKline Beecham Corp. v. Abbott Labs., No. 1:15CV360, 2016 WL 922792, at *3 (M.D. N.C. Mar. 10, 2016) (citations omitted). Judgment on the pleadings is generally only warranted where “the movant clearly establishes that no material fact is disputed and that movant is entitled to judgment as a matter of law.” Preston, 629 F.Supp. at 521 (citation omitted).

         III. ...


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