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Viking Bank v. Firgrove Commons 3, LLC

Court of Appeals of Washington, Division 2

September 16, 2014

Viking Bank, Respondent ,
v.
Firgrove Commons 3, LLC, Appellant

Appeal from Pierce County Superior Court. Docket No: 11-2-15629-5. Judge signing: Honorable Stephanie a Arend. Judgment or order under review. Date filed: 05/28/2013.

Barton L. Adams (of Adams & Adams Law PS ), for appellant.

Gary J. Krohn (of Northgate Executive Center II ), for respondent.

Authored by Bradley A. Maxa. Concurring: Jill M Johanson, Rich Melnick.

OPINION

Page 117

[183 Wn.App. 708] Maxa, J.

¶ 1 Firgrove Commons 3 LLC appeals the trial court's declaratory judgment that its tenant Viking Bank does not owe management fees Firgrove incurred with respect to its lease with Viking Bank. Firgrove argues that Viking Bank is responsible for the management fees because the lease

Page 118

provides for " triple net" rent[1] and states that the tenant will pay all costs and expenses incurred in connection with the leased property. Clerk's Papers (CP) at 16. However, we hold that when viewed as a whole, the lease does not require Viking Bank to pay management fees. Accordingly, we affirm.

FACTS

¶ 2 Firgrove owns a parcel in a four-parcel business development in Puyallup known as the Firgrove Commons Shopping Center. A fast food restaurant and an office/retail building occupy two of the other parcels in the shopping [183 Wn.App. 709] center, and the fourth parcel remains undeveloped. The four parcels share common areas, including areas used for ingress and egress.

¶ 3 In 2008, Firgrove entered into a long term commercial ground lease of the parcel with Viking Bank. As contemplated in the lease, Viking Bank constructed a building on the leased premises for use as a retail banking facility. In March 2010, Viking Bank moved into its newly constructed building and began paying rent to Firgrove.

¶ 4 The lease provides that Viking Bank will be responsible for the base annual rent. The lease states that the rent shall be paid as " 'triple net' rent without deduction or offset." CP at 102. It further explains that

[i]t is the intent of the parties, except as is otherwise provided in this Lease, that Base Annual Rent provided to Landlord shall be absolutely net to Landlord, and Tenant shall pay all costs, charges, insurance premiums, taxes, utilities, expenses, and prorated share of maintenance for common area CAM expenses, and assessments of every kind and nature incurred for, against, or in connection with the Ground Leased Premises and Property.

CP at 102.

¶ 5 Under the lease Viking Bank also must pay a portion of the common area maintenance (CAM) expenses. The lease defines " CAM Expenses" as " the reasonable costs and expenses of maintaining or repairing any entrances to or sidewalks within [the development]." CP at 16. But Viking Bank otherwise is responsible for maintaining the noncommon leased premises. Section 7.1 of the lease expressly provides that Viking Bank will maintain its leased premises at its own expense. And CAM expenses do not include the cost or expense of snow removal, landscaping, or other work done on or around the leased premises itself. Further, the lease requires Viking Bank to pay the parcel's ...


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