Appeal from the United States District Court for the District of Columbia (No. 99cv03073)
Before: Ginsburg, Chief Judge, and Henderson and
Roberts, Circuit Judges.
The opinion of the court was delivered by: Karen Lecraft Henderson, Circuit Judge
Pat O'Donnell (O'Donnell) appeals the district court's summary judgment in favor of appellees Mick's at Pennsylvania Ave., Inc. (Mick's) and Morton's Restaurant Group, Inc. (Morton's). Mick's was the lessee of a restaurant property under a 15-year lease of which Morton's was a limited guarantor. Mick's subleased the property to BOD, Inc. (BOD) under a sublease signed by Pat O'Donnell and his then-wife Barbara O'Donnell on behalf of BOD. In addition, the O'Donnells both signed a guaranty agreement assuring BOD's performance under the sublease. The district court concluded that the O'Donnells are liable under the guaranty for rents and sales taxes BOD owes Mick's under the sublease. Having reviewed the district court's judgment de novo, we affirm because, as the district court concluded, "there is no genuine issue as to any material fact" and the appellees are "entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Mick's at Pennsylvania Ave., Inc. v. BOD, Inc., 99cv3073 (D.D.C. 2003) (Summary J. Dec.).
On December 12, 1997 the O'Donnells, on behalf of sublessee BOD, and Thomas J. Baldwin, Executive Vice President and Chief Financial Officer of sublessor Mick's, signed the sublease for restaurant premises located at 2401 Pennsylvania Ave. N.W., Washington, DC. Under the sublease, which ran from December 15, 1997 to November 1, 2000, BOD was to pay monthly "basic rent" of $14,085.05 and "additional rent" consisting of operating costs, taxes, utility costs, insurance "and all other items of Additional Rent payable by the Sublessor under the Lease." Sublease at 2, § 3B. The sublease also provided for an initial three-month "Rent Concession Period," for which BOD would be exempt from its basic rent payment obligations provided it complied with all other sublease terms. On the same day, both O'Donnells also signed the guaranty, agreeing to guarantee BOD's performance under the sublease and to indemnify Mick's for any losses arising from the sublease and BOD's business operation.
BOD opened a restaurant at the subleased location and operated it from about December 15, 1997 until March 1999, when BOD abandoned the premises and ceased paying rent.
On November 17, 1999 Mick's and Morton's filed this action against BOD and each of the O'Donnells, alleging breach of the sublease by BOD and breach of the guaranty by the O'Donnells.*fn1 The complaint sought to recover unpaid rent under the sublease (both basic and additional) and sales taxes for the months of February and March 1999, which Mick's had paid subject to reimbursement by BOD.
In a memorandum opinion and order filed December 11, 2003 (Summary J. Dec.) the district court granted summary judgment in favor of Mick's and Morton's, ordering the O'Donnells and BOD to pay $131,710.70,*fn2 including four months' basic rent ($56,340.20 for January to March 1998, the Rent Concession Period, and for March 1999, the final month of occupancy), additional rent in the form of operating costs ($53,160.72 for August 1998 to March 1999) and of trash removal and parking costs ($1,422.11 for March 1999) and sales tax reimbursements ($10,787.67 for February to March 1999). Pat O'Donnell timely appealed the district court's judgment.*fn3
We address each of Pat O'Donnell's arguments separately.
First, O'Donnell disputes the award of $10,787.67 reflecting sales taxes which Mick's paid subject to reimbursement by BOD for the months of February and March 1999. O'Donnell asserts that, because BOD's obligation to repay the funds arose under a side oral agreement separate from the sublease, he is not required to cover the tax advances under the guaranty. We disagree.
The sublease expressly requires that BOD pay as part of its additional rent under the sublease "one hundred (100%) percent [sic] of all items of `Additional Rent', as defined under Lease, which are payable by Sublessor under the Lease, including without limitation, `Operating Costs', `Taxes', as defined in the Lease, utility charges, insurance and all other items of Additional Rent payable ...