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Heathman Hotel Portland LLC v. Mccormick & Schmick Restaurant Corp.

Court of Appeals of Oregon

March 1, 2017

HEATHMAN HOTEL PORTLAND, LLC, an Oregon limited liability company, Plaintiff-Respondent,
v.
McCORMICK & SCHMICK RESTAURANT CORP., a Delaware corporation, Defendant-Appellant.

          Argued and submitted September 21, 2015

         Multnomah County Circuit Court 140404587; Eric J. Neiman, Judge pro tempore.

          Kevin H. Kono argued the cause for appellant. With him on the briefs were Nicholas A. Kampers and Davis Wright Tremaine LLP.

          Robyn Ridler Aoyagi argued the cause for respondent. With her on the brief were Edwin C. Perry and Tonkon Torp LLP.

          Before Armstrong, Presiding Judge, and Hadlock, Chief Judge, and Egan, Judge.

         Case Summary:

         Defendant appeals a judgment for plaintiff declaring that defendant had no right to exercise its second option to renew the parties' restaurant lease and a supplemental judgment that awarded attorney fees and costs to plaintiff. Defendant assigns error to the trial court's grant of summary judgment to plaintiff based on the court's conclusion that the terms of the lease between the parties were unambiguous. It also assigns error to the court's award of attorney fees and the amount of the award. Held: Viewing the disputed terms of the lease in the context of the agreement as a whole and in light of the circumstances under which it was created, the terms of the lease were not ambiguous, and the trial court did not err in granting plaintiff declaratory relief on summary judgment. The trial court also did not abuse its discretion in awarding reasonable attorney fees.

         Affrmed.

          EGAN, J.

         Defendant, McCormick & Schmick Restaurant Corporation, appeals a judgment for plaintiff, Heathman Hotel Portland, LLC, declaring that defendant had no right to exercise its second option to renew the parties' restaurant lease and a supplemental judgment that awarded attorney fees and costs to plaintiff. Defendant assigns error to the trial court's grant of summary judgment to plaintiff based on the court's conclusion that the terms of the lease between the parties were unambiguous. It also assigns error to the court's award of attorney fees and, alternatively, the amount of the award. We affirm.

         We review a trial court's grant of summary judgment to determine whether, viewing the facts in the light most favorable to the nonmoving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. ORCP 47 C. We review for abuse of discretion whether the amount of a trial court's award of attorney fees was reasonable. Village at North Pointe Condo. Assn. v. Bloedel Constr.. 278 Or.App. 354, 369, 374 P.3d 978, adh'd to as modified on recons. 281 Or.App. 322, 383 P.3d 409 (2016).

         Plaintiff and defendant are parties to a restaurant lease dated September 20, 2000. Under the lease, defendant rented and operated the restaurant in the Heathman Hotel. The initial lease term was 10 years, to end on September 30, 2010. Under Section 2.2 of the lease, defendant had the option to extend the lease for two additional 10-year periods. The following were the terms and conditions of the options in Section 2.2;

"2.2 Renewal Options. Provided that at the time of the exercise of the Options herein granted * * * there exists no Default under this Lease by Tenant *** and Tenant shall have achieved the Minimum Total Gross Sales set forth below, Tenant shall have and is hereby granted the option (the 'Option') to extend the Term for two (2) additional periods often (10) years (each an 'Option Term' and collectively, the 'Option Terms') on all of the terms and provisions contained in this Lease, except this Section 2.2. Tenant may exercise the Option by giving Landlord written notice thereof not later than one (1) year and not earlier than two (2) years prior to the expiration of Term or the then-current Option Term, as the case may be. In the event any Option is duly exercised, all references to and other provisions of this Lease concerning the Term shall be deemed to refer to the Term as extended by the Option Term. For purposes of the Renewal Options, Tenant must have average Total Gross Sales for the two Lease Years immediately preceding the delivery of its notice of exercise of the first Option of at least $6, 000, 000 and for the two Lease Years immediately preceding the delivery of its notice of exercise of the second Option of at least $7, 500, 000 (the 'Minimum Total Gross Sales')."

         (Underscoring in original.) Each "Lease Year" ran from October 1 to September 30 of the following year.

         In 2009, plaintiff and defendant amended the lease (the Amendment), effective September 30, 2009. The relevant recitals of the Amendment[1] are as follows:

"D. Tenant has exercised its option to extend the Lease Term and Landlord and Tenant have agreed the Lease Term will be extended for a period of five years (and not for ten years, as provided in the Lease).[2]
"F. Landlord and Tenant agree certain works of improvement will be completed in the Restaurant Premises.
"G. Landlord and Tenant now wish to amend the Lease to evidence the extension of the Term, to modify the length of the remaining Option Term, to add provisions for works of improvement in the Premises and to clarify and ...

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