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BEST BUY CO., INC. v. HARLEM-IRVING COMPANIES
June 3, 1999
BEST BUY CO., INC. A MINNESOTA CORPORATION, AND BEST BUY STORES, L.P., A DELAWARE LIMITED PARTNERSHIP, PLAINTIFFS,
THE HARLEM-IRVING COMPANIES, INC., AN ILLINOIS CORPORATION, DEFENDANT.
The opinion of the court was delivered by: Levin, United States Magistrate Judge.
MEMORANDUM OPINION AND ORDER
Pending is Defendant The Harlem-Irving Companies, Inc's.
("Harlem-Irving") Motion for Summary Judgment, which requests a
finding of partial non-liability under Federal Rule of Civil
Procedure 56(d). For the reasons set forth below, the Motion is
denied, with the exception of an accord and satisfaction issue
Defendant Harlem-Irving operates an enclosed shopping mall in
the Chicagoland area. Best Buy Company, Inc. ("Best Buy") is one
of the tenants in that shopping mall. Best Buy is a leading
retailer of consumer electronics, home appliances, computer
software, music and video products. In late 1992, the parties
signed a lease, and a rider/addendum. The lease required
Harlem-Irving to deliver possession to Best Buy on or before
December 15, 1992. However, the term of the lease did not begin
until March 1, 1993. The lease term expires on February 29,
Under the lease, Best Buy is required to pay a proportionate
share of common area maintenance ("CAM") charges. CAM charges are
the costs associated with maintaining those portions of the mall
which are not under the exclusive possession of any particular
tenant (i.e. common areas). Examples of common areas include
(internal or external) courtyards, parking lots, driveways,
walkways, lobbies and landscape. Harlem-Irving assesses a monthly
charge for additional rent against Best Buy and other tenants
based on estimated CAM expenses, and each month, Best Buy pays
one-twelfth of its estimated proportionate share of CAM expenses,
subject to reconciliation of overpayments or underpayments after
the end of the calendar year. Of a total of 540,596 square feet
of gross leasable area, Best Buy leases 30,656 square feet. Best
Buy's proportionate share of CAM charges is therefore about 6%.
The lease excludes from Best Buy's share of CAM charges "office
overhead, wages and salaries." Harlem-Irving attempted to charge
Best Buy for all non-office wages and salaries, including
management personnel. Best Buy objected and announced its view of
the "office overhead, wages and salaries" exclusion clause as
excluding from CAM not merely office wages and office salaries,
but rather all wages and all salaries. Harlem-Irving's position
is that the exclusion for "office overhead, wages and salaries"
an exclusion only for "office overhead, [office] wages and
The lease also requires Best Buy to pay Harlem-Irving an
additional administrative fee equal to seven (7%) percent of CAM
charges. The lease, however, provides that Harlem-Irving should
not assess the 7% fee against "real estate taxes and
insurance." Best Buy reads this clause as an exclusion not
merely for real estate insurance, but rather for all insurance.
Harlem-Irving's position is that the exclusion pertains to "real
estate taxes and [real estate] insurance."
Under the lease, repair of the parking lot is a CAM charge
beginning in the sixth year after the rent commencement date.
Repair of the roof is not a CAM charge, but is the sole
responsibility of Harlem-Irving. Part of the surface of the
parking deck also serves as part of the roof of the shopping
mall. Best Buy has challenged charges for repair of the spalling
Best Buy is challenging too, Harlem-Irving's assessment of CAM
charges for training expenses, licenses and permits.
On July 26, 1995, Best Buy issued a protest letter disputing a
variety of CAM charges. In pertinent part, the letter stated that
management salaries should not be included in CAM charges because
the lease "specifically excludes `. . . wages and salaries. . .
.'" The letter also complained about parking ramp expansion joint
replacement, accounting fees, security/maintenance office
supplies and overhead, engineering and architectural fees,
snow-melting machine, deck repair and reconstruction and audit
rights. This letter did not complain about licenses, training
expenses, permits or the inclusion of workers' compensation
insurance premiums. By August 7, 1995, the parties reached a
compromise agreement on the categories which Best Buy had
protested. The agreement was for the amounts due in 1993, and it
was entered into without prejudice to Best Buy's rights under the
lease. The parties continue to be at odds over CAM charges
assessed by Harlem-Irving for all years after the compromise.
I. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate where "the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).
See also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct.
2548, 91 L.Ed.2d 265 (1986). Once the moving party has produced
evidence to show that it is entitled to summary judgment, the
party seeking to avoid such judgment must affirmatively
demonstrate that a genuine issue of material fact remains for
trial. LINC Fin. Corp. v. Onwuteaka, 129 F.3d 917, 920 (7th
In deciding a motion for summary judgment, a court must "review
the record in the light most favorable to the nonmoving party and
to draw all reasonable inferences in that party's favor."
Vanasco v. National-Louis Univ., 137 F.3d 962, 1998 WL 81458,
at *2 (7th Cir. Feb.27, 1998). See also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202
(1986). Nevertheless, the nonmovant may not rest upon mere
allegations but "must set forth specific facts showing that there
is a genuine issue for trial." Fed.R.Civ.P. 56(e). See also
LINC, 129 F.3d at 920. A genuine issue of material fact is not
shown by the mere existence of "some alleged factual dispute
between the parties," Anderson, 477 U.S. at 247, 106 S.Ct.
2505, or by "some metaphysical doubt as to the material facts,"
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, a
genuine issue of material fact exists only if "a fair-minded jury
could return a verdict for the [nonmoving party] on the evidence
presented." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.
II. AMBIGUOUS LANGUAGE IN THE LEASE AND THE DOCTRINE OF
The main disputed clause in the lease excludes from CAM "office
overhead, wages and salaries." That phrase was inserted by Best
Buy's attorney James Istas pursuant to negotiations between
counsel for both sides. Because both sides participated to an
apparently equal degree in the final drafting of the lease, its
language will not be construed strictly against either party.
Meade v. Kubinski, 277 Ill. App.3d 1014, 1020, 214 Ill.Dec. 733,
661 N.E.2d 1178, 1183 (1996).
Harlem-Irving relies on the doctrine of ejusdem generis to
persuade this court to, as a matter of law, read the exclusionary
phrase "office overhead, wages and salaries" as "office overhead,
[office] wages and [office] salaries." Under the same doctrine,
Harlem-Irving argues that the exclusionary phrase "real estate
taxes and insurance" means "real estate taxes and [real estate]
insurance." Best Buy disagrees with such an interpretation.
"The rule of ejusdem generis, while firmly established, is
only an instrumentality for ascertaining the correct meaning of
words when there is an uncertainty." Gooch v. United States,
297 U.S. 124, 128, 56 S.Ct. 395, 397, 80 L.Ed. 522 (1936). "Under
the principle of ejusdem generis, when a general term follows a
specific one, the general term should be understood as a
reference to subjects akin to the one with specific enumeration."
Norfolk & Western Railway Co. v. American Train Dipatchers,
499 U.S. 117, 129, 111 S.Ct. 1156, 1163, 113 L.Ed.2d 95 (1991).
Best Buy has presented two arguments as to why the doctrine of
ejusdem generis does not apply to the lease language in issue.
First of all, Best Buy argues that the complete list of CAM
exclusions in the subject lease is much longer, including the
following items: capital improvements or replacements, ground
rent, interest, debt service, insurance, depreciation,
amortization, real estate taxes or assessments, office overhead,
wages and salaries. Best Buy argues that each item on this list
is separate and distinct, such that there is no textual basis to
assume that wages and salaries are not distinct items, equal in
importance to all of the other enumerated items. (See Pl.Resp.
at 10.) Second, Best Buy argues, somewhat aside from the
particulars of ejusdem generis, that it is a basic rule of
punctuation that commas are used to set off items in a series,
with or without a comma before the conjunction preceding the last
item on the list. (Id. at 10.) Thus, Best Buy maintains, under
ordinary rules of punctuation, the phrase "office overhead,"
"wages" and "salaries" identifies each item as separate ...