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Accenture LLP v. CSDV-MN Limited Partnership

November 19, 2007

ACCENTURE LLP, PLAINTIFF,
v.
CSDV-MN LIMITED PARTNERSHIP, DEFENDANT.



The opinion of the court was delivered by: Judge Marvin E. Aspen

MEMORANDUM ORDER AND OPINION

Presently before us in this lease dispute action are cross-motions for summary judgment filed by Plaintiff Accenture LLP ("Accenture"), an Illinois limited liability partnership with its principal place of business in Chicago, Illinois (Pl. Facts ¶ 3; Def. Facts ¶ 1), and Defendant CSDV-MN Limited Partnership ("Landlord"), a Delaware limited partnership and the current owner of the commercial office building located at 333 South Seventh Street, Minneapolis, Minnesota. (Pl. Facts ¶ 6; Def. Facts ¶ 2). Accenture argues that due to Landlord's inconsistent application of the term "Building" within the lease, it is either entitled to a declaration that it has overpaid real estate taxes since 2001 and damages for breach of contract or, in the alternative, a declaration that it has overpaid operating expenses since 2001 and damages for breach of contract. In its cross-motion, Landlord seeks summary judgment on its counterclaim for a declaration that it has properly calculated both real estate taxes and operating expenses under the Lease. For the reasons set forth below, we grant in part Landlord's Motion and deny Accenture's Motion.

SUMMARY OF FACTS

On May 31, 1993, Accenture entered into a lease for several floors of office space in this building ("Lease") with the successor landlord of the property, Metropolitan Life Insurance Company. (Pl. Facts ¶¶ 6, 8; Def. Facts ¶ 6). The Lease runs through 2012 and includes at least ten amendments. (Pl. Facts ¶ 10; Def. Facts ¶¶ 16-25). Under the Lease, Accenture is responsible, among other things, for paying real estate taxes on "the Land or the Building and any skyway bridges attached to the Building," as well as its "Tenant's Share" of operating expenses. (Lease ¶ 4(A)(ii)-(iii)). The "Tenant's Share" is calculated by dividing the "total square footage of rentable area . . . in the Leased Premises" by "the total square footage of rentable area in the Building." (Schedule ¶ 4).

In 2001, Accenture conducted an audit and discovered that it was being assessed for a share of the real estate taxes attributable to the parking garage. (Pl. Facts ¶ 25). However, the audit also showed that Landlord was not including the parking garage in its calculation of Accenture's share of operating expenses, despite the fact that both of these definitions include the word "Building." (Pl. Facts ¶ 26).

On March 8, 2006, Accenture filed a four-count complaint against CSDV, alleging that CSDV had since 2001 overcharged Accenture for Accenture's share of building operating expenses or, in the alternative, had since 2001 improperly charged Accenture for a portion of real estate taxes attributable to the parking garage space in the office building. (Compl. ¶¶ 6, 9-15). Accenture seeks declarations in the alternative that each practice is a breach of Accenture's lease. (Compl. ¶¶ 8, 26, 28). Accenture also brings claims in the alternative for breaches of the lease agreement. (Compl. ¶¶ 16-24, 28, 33).

On May 17, 2006, Landlord filed a Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim, arguing that Landlord, by virtue of its relationship with CalSTRS, enjoyed sovereign immunity from suit. (Dkt. No. 14). We denied that motion, finding that Landlord did not function as an arm of the State of California. (Dkt. No. 34, at 4-5).

On December 4, 2006, Landlord filed another Motion to Dismiss, arguing that because the citizenship of a partnership is the citizenship of the partners and CalSTRS is an "arm of the State of California," CSDV is not a "citizen" of any state, and is not subject to diversity jurisdiction. (Dkt. No. 38). We denied that motion, finding that CalSTRS is not an arm or alter ego of the State of California and, therefore, is a "citizen" of California for diversity jurisdiction purposes. (Dkt. No. 51).

On August 16, 2007, the parties filed cross-motions for summary judgment.

STANDARD OF REVIEW

Summary judgment is proper when "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56. A genuine issue for trial exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 250, 2510 (1986). This standard places the initial burden on the moving party to identify "those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986) (internal quotations omitted).

Once the moving party meets this burden of production, the nonmoving party "may not rest upon the mere allegations or denials of the adverse party's pleading" but rather "must set forth specific facts showing that there is a genuine issue [of material fact] for trial." Fed. R. Civ. P. 56(e). In deciding whether summary judgment is appropriate, we must accept the nonmoving party's evidence as true and draw all inferences in that party's favor. See Anderson,477 U.S. at 255.

ANALYSIS*fn1

Accenture argues that Landlord has inconsistently applied the term "Building" in the Lease since 2001. More specifically, Accenture argues that Landlord cannot claim that the Lease term "Building" includes the parking garage for real estate tax purposes, but then excludes the parking garage for operating expenses, the effect of which is to maximize Landlord's gains. Accenture argues that the plain meaning of "Building" does not include the parking garage and that, therefore, it is entitled to summary judgment on its claims for a declaration that it has overpaid real estate taxes since 2001 and damages for breach of contract or, in the alternative if "Building" does include parking garage, ...


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