Automated Summary
Key Facts
This case concerns a dispute over utility expense allocation in a commercial lease between Malone 118 Main Street Montpelier Properties, LLC (Plaintiff/Landlord) and Hugo's Restaurant Group, LLC and Thomas Greene (Defendants/Tenants). The lease, executed in November 2021, covers 7,780 sq. ft. of a 16,705 sq. ft. commercial property at 118 Main Street in Montpelier, Vermont, with a five-year term from March 1, 2022 to February 2027. The central issue is whether Section 12(b) of the lease requires tenants to pay electricity, district heat, propane, and water/sewer charges directly to providers or through CAM (Common Area Maintenance) costs. The court applied the serial qualifier rule, finding the adverbial phrase 'to be billed through CAM based on Tenant's proportionate share' modifies the entire list of utilities, not just water and sewer charges. The court granted partial summary judgment for the defendants, finding the plain language of the lease controls on this issue.
Transaction Type
Commercial lease dispute over utility expense allocation between landlord and tenant
Issues
- The plaintiff argues the circumstances surrounding contract formation create a latent ambiguity that requires looking beyond plain language. Plaintiff contends the initial draft lacked the adverbial phrase and correspondence shows parties did not intend utilities to flow through CAM costs. The court analyzes whether these circumstances demonstrate mutual mistake or merely unilateral mistake, ultimately finding no latent ambiguity requiring interpretation beyond the unambiguous plain language of the lease.
- The central issue concerns how to interpret Section 12(b) of the commercial lease, which states tenants 'will pay for its own electricity, district heat, propane supplied heat, and water and sewer charges to be billed through CAM based on Tenant's proportionate share.' The court must determine whether the adverbial phrase 'to be billed through CAM based on Tenant's proportionate share' modifies the entire series of utilities listed or only the last item (water and sewer charges). The court applies the serial qualifier rule, finding the modifier applies to the whole sentence, meaning all utilities are to be paid through CAM costs rather than directly to providers.
Holdings
The court granted the defendant's motion for partial summary judgment regarding the interpretation of Section 12(b) of the commercial lease. The court determined that the adverbial phrase 'to be billed through CAM based on Tenant's proportionate share' modifies the entire sentence, requiring all utility expenses (electricity, district heat, propane, and water/sewer) to be paid through the CAM costs process rather than directly to the utility providers. This interpretation is consistent with the plain language of the lease and the parties' intent at the time of contract formation.
Remedies
The Court granted the Defendant's Motion for Partial Summary Judgment, finding that the plain language of the lease agreement controls on the issue of utility expense allocation. The court determined that Section 12(b) of the lease requires Defendants to pay for electricity, district heat, propane, and water and sewer charges through the CAM costs process in Section 5, rather than directly to utility providers. The court also set the matter for a status conference to assess the parties' readiness for trial, including completion of discovery and mediation requirements.
Contract Value
66000.00
Legal Principles
The court applied contract interpretation principles, emphasizing that when contract language is clear on its face, the court will assume the parties' intent is embedded within the terms. The court applied the serial qualifier rule, which states that when there is a straightforward parallel construction in a series, a modifier following the last item normally applies to the entire series. This principle was used to interpret Section 12(b) of the lease, determining that the adverbial phrase 'to be billed through CAM based on Tenant's proportionate share' modifies all four utility items listed, not just the last one.
Precedent Name
- Facebook, Inc. v. Duguid
- Gross v. Turner
- Boyd v. State
- United States v. Lockhart
- Sutton v. Purzycki
- Isbrandtsen v. N. Branch Corp.
- Barnhart v. Thomas
- Town of Lyndon v. Burnett's Contracting Co., Inc.
Key Disputed Contract Clauses
Section 12(b) of the commercial lease states that tenants 'will pay for its own electricity, district heat, propane supplied heat, and water and sewer charges to be billed through CAM based on Tenant's proportionate share.' The central dispute concerns the grammatical interpretation of the adverbial phrase 'to be billed through CAM based on Tenant's proportionate share.' Defendants argue this phrase modifies the entire sentence, requiring all utilities to be paid through CAM costs. Plaintiffs contend it only modifies the last item (water and sewer charges), requiring electricity, district heat, and propane to be paid directly to providers. The court applied the serial qualifier rule, finding the modifier applies to the whole series.
Cited Statute
- Vermont Rule of Civil Procedure 56
- Vermont Rules of Evidence for Electronic Filing
Judge Name
Daniel Richardson
Passage Text
- For these reasons, the Court finds that the plain and reasonable reading of Section 12(b) requires the application of the adverbial phrase to the sentence to a whole, and that interpretation is imbedded in the plain language of the sentence.
- As Justice Scalia and Professor Garner have instructed: 'When, in a contract or statute, there is a straightforward, parallel construction that involves all nouns or verbs in a series,' a modifier following the last item in a list 'normally applies to the entire series.' Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 147 (2012)
- Exhibit A, at § 12(b). The dispute centers on the adverbial phrase 'to be billed through CAM based on Tenant's proportionate share' found at the end of the sentence.