United States District Court, D. Nevada
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
this Court comes Plaintiff Boca Park Marketplace Syndications
Group, LLC (“Boca Park”)'s Motion for Summary
Judgment (ECF Nos. 69, 84) and Defendant Ross Dress for Less,
Inc. (“Ross”)'s Motion for Summary Judgment
(ECF No. 72). For the reasons stated below, the Court denies
these motions. Boca Park additionally filed a Motion to
Strike  Appendix (ECF No. 86), and a Motion to Strike
 Declaration, (ECF No. 87), and both Plaintiff and
Defendant filed motions to seal (ECF Nos. 71, 75, 83), which
the Court grants as discussed below.
April 18, 2016, Boca Park filed a Complaint against Ross in
the Eighth Judicial District Court in Clark County, Nevada.
(ECF No. 1-2). Boca Park asserts the following causes of
action: (1) declaratory judgment, declaring that the
co-tenancy provisions in the commercial lease at issue
constitute the imposition of a penalty and are unenforceable,
and (2) breach of contract. Ross filed a Notice of Removal on
the grounds of diversity jurisdiction on May 27, 2016. (ECF
13, 2016, Ross filed an Answer and Counterclaim to the
Complaint. (ECF No. 6). Ross brings its counterclaim seeking
a declaratory judgment, declaring that the co-tenancy
provisions in the lease and lease amendment, together with
the Substitute Rent provision contained therein, were
negotiated at arm's length between the parties of equal
standing and are enforceable. Boca Park filed an Answer to
the Counterclaim on June 20, 2016. (ECF No. 9).
11, 2017, Boca Park filed a redacted version of its Motion
for Summary Judgment. (ECF No. 69). The same day, Boca Park
filed a Motion to Seal the Motion for Summary Judgment and
certain attached exhibits. (ECF No. 71). Ross filed its
Motion for Summary Judgment on May 12, 2017. (ECF No. 72).
Ross additionally filed a Motion to Seal an attachment to its
Motion for Summary Judgment the same day. (ECF No. 75). On
June 1, 2017, Ross filed a Response to Boca Park's Motion
(ECF No. 80) and an additional Motion to Seal (ECF No. 83).
Boca Park filed its Response to Ross' dispositive motion
on June 2, 2017. (ECF No. 85). Also on June 2, 2017, Boca
Park filed two Motions to Strike attachments to Ross'
Motion for Summary Judgment. (ECF Nos. 86, 87). On June 15,
2017, Boca Park filed a Reply to its dispositive Motion. (ECF
No. 89). The following day, Ross filed its Reply. (ECF No.
90). Ross filed Responses to the Motions to Strike on June
16, 2017. (ECF Nos. 91, 92). Boca Park filed its Replies on
June 23, 2017. (ECF Nos. 94, 95).
Court finds that the following facts are undisputed.
Plaintiff Boca Park owns and operates the Boca Park
Marketplace Shopping Center (“the Shopping
Center”) constructed between 2000 and 2003 and located
at the intersection of West Charleston and South Rampart
Boulevards. Boca Park is owned by an entity called Triple
Five Group (“Triple Five”). The major tenants in
the Shopping Center include Target, Office Max and Ross.
Defendant Ross is the nation's largest retailer of
“off-price” apparel and home fashion. Ross Store
#522 (Store 522) is a 30, 000-sq. ft. store which opened in
the Shopping Center in 2001.
parties entered a 71 page lease for Store 522 on November 1,
2000 (“the Lease”). The Lease provides Ross a
10-year initial term with four additional five-year options,
for a potential 30-year total term. Ross's relevant
monetary obligation to Boca Park is comprised of two
components, what the Lease refers to as “Minimum
Rent” and “Reimbursements.” At the
commencement of the Lease, Ross's “Minimum
Rent” obligation started at $37, 733.75 monthly, or
$452, 805.00 annually, and then increased at five-year
intervals. Between Year 11 and Year 15 of the Lease (February
2012 to January 2017), Minimum Rent was $42, 764 monthly, not
including common area maintenance (“CAM”)
charges, insurance, or taxes. In February 2017, Minimum Rent
rose to $42, 280.50 monthly, not including CAM charges,
insurance, and taxes.
of the Lease, Ross also agreed to pay Boca Park three
categories of “Reimbursements” defined at §
2 of the Lease and further as:
i. § 7.4.1, Ross's “Pro Rata Share of the
Common Area Charges, ” or 10% (§ 1.8), payable
ii. § 8.2.1, Ross's “Pro Rata Share of the Tax
Bill, ” payable annually, and
iii. § 9.1.3, Ross's “pro rata share of the
premium for the casualty insurance described in Section
9.1.1” of the Lease, also payable annually.
to a provision of the lease with the heading
“Guaranteed Co-Tenancy, ” Ross's obligation
to Boca Park to pay Minimum Rent and Reimbursements was
conditioned on the existence of designated
“co-tenants” which were to occupy specific store
locations of required sizes in the shopping center - Target,
Vons, and Office Max. Also pursuant to the Lease, if any of
the aforementioned three co-tenants quit their respective
premises in the Shopping Center, then “Substitute
Rent” applied, which was defined in the Lease as
“the lesser of (a) Minimum Rent, or (b) two percent
(2%) of Tenant's Gross Sales during the preceding month.
Substitute rent, where applicable in this Lease, shall be
paid in lieu of Minimum Rent, Percentage Rent, and
Lease obligated Ross to pay monthly Minimum Rent, not subject
to a right of off-set or deduction, unless a “Reduced
Occupancy Period” or other contracted circumstance
occurred. In a section of the Lease titled “Co-Tenancy
Requirements, ” the Lease provided that a Reduced
Occupancy Period would occur unless all of the following
requirements were met:
(i) all the co-tenants specified in Section 1.7.1 [Target,
Vons, and Office Max] (the “Co-Tenants”) shall be
open in the Shopping Center every day (except for nationally
recognized holidays) for business to the public, during such
Co-Tenant's designated hours; (ii) all the Co-Tenants are
operating in at least the Leasable Floor Area specified in
Section 1.7.1; and (iii) retail occupants of the Inline
Buildings are open and operating under bona fide leases of a
minimum of two (2) years' duration or occupancy
agreements (except for the Co- Tenants, in which case the
existence of a lease or occupancy agreement is not required)
in at least the percentage of the Leasable Floor Area of the
Inline Buildings indicated in Section 1.7.1 ...