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Whole Foods Market Group, Inc. v. Wical Limited Partnership

United States District Court, District of Columbia

January 22, 2018

WHOLE FOODS MARKET GROUP, INC., Plaintiff,
v.
WICAL LIMITED PARTNERSHIP, Defendant.

          MEMORANDUM OPINION

          Royce C. Lamberth United States District Judge.

         I. INTRODUCTION

         This breach of contract case was brought by plaintiff Whole Foods Market Group, Inc. ("Whole Foods") against its commercial landlord, defendant Wical Limited Partnership ("Wical"). Whole Foods's Amended Complaint, ECF No. 21, seeks relief on four separate counts. Before the Court is Wical's motion to dismiss all four counts. ECF No. 26. Upon consideration of Wical's motion, the opposition thereto, the reply brief, the applicable law, and the entire record herein, the Court will DENY in part and GRANT in part Wical's Motion to Dismiss.

         II. BACKGROUND

         For purposes of this Motion to Dismiss the Court will provide (1) the relevant terms of the lease between plaintiff Whole Foods and defendant Wical and (2) a statement of Whole Foods's well pleaded facts. This is appropriate because this is a motion to dismiss and the Court must view all well pleaded facts in the complaint (and any incorporated documents) as true and in the light most favorable to Whole Foods.

         A. Relevant Provisions from Whole Foods Lease with Wical[1]

         Paragraph 4(F)-Conduct of Business:

"Tenant shall continuously conduct its business at the Demised Premises in accordance with the same standards of operation and in the same quality as it presently operates its other similar stores, subject to the other terms and provisions of this Lease. Tenant shall not cause injury or waste to the Demised Premises, reasonable wear and tear excepted. Tenant shall keep the Demised Premises and all areas appurtenant thereto (including without limitation the parking garage, loading dock and service areas) clean and free from pests, insects, rubbish, trash and garbage, and, at its own expense, arrange for removal of same."

         Paragraph 4(G)-Renovation

"The Demised Premises may occasionally require rehabilitation, modernization or improvement. Tenant may, from time to time, close the Demised Premises to the public for such periods as may be reasonably required in order to diligently modernize or improve same, but in no event shall such closures exceed sixty (60) days in the aggregate during any three (3) year period elapsing during the Lease Term."

         Paragraph 5(A)-Non-Structural Repairs and Maintenance

"[T]he tenant shall ... make all necessary structural and non-structural repairs ... and perform all maintenance ... in a good and workable manner in accordance with all applicable governmental requirements."

         Paragraph 7(A)-Alterations

"Tenant shall not make any exterior or structural alterations, installations, changes, replacements, additions, or improvements ... without Landlord's prior written consent. All other alterations, installations, changes, replacements, additions or improvements in or to the Demised Premises or any part thereof, which are not structural or exterior, may be made by Tenant, provided that Tenant has complied with its obligation (if any) to deliver to Landlord the plans or working drawings for same as below provided in this Article 7(A). The consent of Landlord under this paragraph shall not be unreasonably withheld, "If either party hereto shall be delayed or prevented from the performance of any act required hereunder (other than the payment of monies) by reason of acts of God, strikes, lockouts, labor troubles, plan approval delay, inability to procure materials, restrictive governmental laws or regulations, adverse weather, unusual delay in transportation, delay by the other party hereto or other cause without fault and beyond the control of the party obligated to perform (financial inability excepted), then upon notice to the other party, the performance of such act shall be excused for the period of the delay and the period of performance of such act shall be extended for a period equal to the period of such delay; provided, however, the party so delayed or prevented from performing shall exercise good faith efforts to remedy any such cause of delay or cause preventing performance, and nothing in this paragraph shall excuse Tenant from the prompt payment of any rental or other charges required of Tenant except as may be expressly provided elsewhere in this Lease."

         B. Whole Foods's Well Pleaded Facts

         The lease agreement between Whole Foods and Wical runs through January 31, 2021. The agreement provides Whole Foods tenancy of the property at 2321 Wisconsin Avenue, NW, Washington D.C. 20007, at which it operates its Georgetown store. Under the contract, Whole Foods has the option to renew the lease for three additional terms of five years. Whole Foods has consistently paid the rent and from 1996 until 2017 it never closed the store.

         In 2017, the District of Columbia issued two separate ordinance violations to Whole Foods related to rodent problems at its store. Both times, Whole Foods was required to close the store. After the second violation notice-issued on March 13, 2017-Whole Foods sought a "complete and lasting resolution" to the problem. Amended Complaint, ECF No. 21 at ¶37. Whole Foods consulted numerous contractors in order to understand the extent of the rodent problem and the proper corrective action needed to solve it. Whole Foods determined that curing the problem required that "the Georgetown Store must be closed, emptied of much of its inventory and fixtures, and gutted, including the removal of drywall and ceiling tiles, and a thorough cleaning of the premises." Id. at ¶38. Only after demolition was Whole Foods able to understand the extent of the problem and the necessary remedial measures. The Georgetown store has been closed for business since demolition began in March 2017.

         In late March, representatives from Whole Foods and Wical met to discuss the situation. Whole Foods followed up with a letter on April 5, 2017, informing Wical that the rodent issue had been resolved following demolition and that the interior of the store required a substantial rebuild. Whole Foods further provided Wical notice, pursuant to Paragraph 30(A) of the lease, that the store would remain closed "well beyond the 60 days anticipated in [the] lease." ECF No. 21-2. Whole Foods continued, "We do not yet have a final timetable for the drawing, permitting, reconstruction and reopening of the store, but will keep you updated as our progress advances. As you know, permitting alone will take about 4 months." Id.

         Since Whole Foods had to rebuild the interior of the store as a result of the rodent problem, it determined that it made sense to remodel the store in order to bring it up to the same standards of similar stores in the area. Whole Foods planned the following improvements: "modernizing the store's layout; replacing existing food display cases; replacing the salad bar; replacing the millwork, cabinetry, register stands, walls, and ceilings which were demolished in curing the ordinance violation; overhauling the elevator and conveyor system; and adding new food presentations which requires the movement of certain major systems such as plumbing and HVAC." Amended Complaint, ECF No. 21 at ¶50. In order to receive the permit to commence this project, the District of Columbia requires Whole Foods to obtain the property owner's approval. Whole Foods reached out to Wical for such approval on May 23, 2017. On May 26, 2017, Wical refused its consent. Construction plans were ...


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