United States District Court, D. Maryland
KANSAS CITY LIVE BLOCK 124 RETAIL, LLC, Plaintiff and Counter-Defendant,
KOBE KANSAS, LLC, et al., Defendants and Counter-Plaintiffs.
L. RUSSELL, III UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on
Plaintiff/Counter-Defendant's, Kansas City Live Block 124
Retail, LLC (“KC Live”), Motion for Partial
Summary Judgment on (1) its Second Amended Complaint and (2)
Count I of Defendants/Counter-Plaintiffs', Kobe Kansas,
LLC, Young W. Bae, and Chan H. Bae (the “Baes”),
Counterclaims. (ECF No. 73). The Motion is ripe for
disposition. No hearing is necessary. See Local Rule
105.6 (D.Md. 2016). For the reasons that follow, the Court
will grant in part and deny in part the Motion.
case involves a dispute over a commercial lease between the
Baes and KC Live and alleged misrepresentations KC Live's
representatives made to induce them to lease space in a KC
Live-owned mixed-use development. The Lease,  executed on
September 24, 2009, became effective for a ten-year term on
September 15, 2008. (Second Am. Compl. Ex. 1 [the
“Lease”] §§ 101, 201(b), ECF No. 34-1).
In September 2009, the Baes executed a personal guaranty of
their obligations under the Lease. (Second Am. Compl. ¶
18, ECF No. 34).
signing the Lease, on December 3, 2008, KC Live sent the Baes
a Notice of Possession, which triggered the Fixturing
Period-a 150-day period during which the Baes were to install
equipment and fixtures necessary to operate their restaurant.
(See Lease § 307). Under the Lease, parties
subsequently agreed that the Fixturing Period began on
December 9, 2008. (Id. Explanatory Statement). The
Rent Commencement date was February 6, 2009.(Fowler Aff. 10,
ECF No. 72-1; see also Kansas City Live Block 124 Retail,
LLC v. Kobe Kansas, LLC, et al., WDQ-11-2171, Compl.
¶ 7, ECF No. 1). The Baes opened their restaurant on
October 17, 2009-eight months after the Rent Commencement
Date. (Fowler Aff. ¶ 10). After the Baes opened their
restaurant, they failed to pay Rent. (See Second Am.
Compl. Ex. 2, ECF No. 34-2; see also Kansas City
Live, WDQ-11-2171, Compl. ¶ 8, ECF No. 1).
August 2011, KC Live sued the Baes in this Court, alleging
various breaches of the Lease and Guaranty. (Second Am.
Compl. ¶ 22). In November 2011, without the Baes
answering KC Live's Complaint, the parties executed an
Amendment to the Lease to settle the 2011 Suit. (Id.
¶ 23). In the 2011 Amendment, the parties stipulated
that as of July 31, 2011, the Baes owed KC Live $2, 122,
430.88 under the Lease. (Id. ¶ 24). The
Stipulated Amount Owed included liquidated damages under
Section 402 of the Lease for the late opening of the
Baes' restaurant and late charges on the liquidated
damages under Section 2605 of the Lease. (Id.). The
parties also agreed that if the Baes paid $350, 446.93 of the
Stipulated Amount Owed and complied strictly with the Lease
and the 2011 Amendment through the end of their terms, KC
Live would waive the balance of the Stipulated Amount Owed.
(Id. ¶¶ 27, 28). The Baes paid the $350,
446.93 to settle the 2011 Suit. (Fowler Aff. ¶ 37).
October 2014, KC Live brought the current action against the
Baes for breaches of the Lease, Guaranty, and 2011 Amendment.
(Compl., ECF No. 1). According to KC Live, after the parties
settled the 2011 Suit, the Baes failed to pay Rent on time
between November 1, 2011 and October 31, 2013, and after
November 2013, stopped paying Rent entirely. (Second Am.
Compl. ¶ 36; Fowler Aff. ¶ 36).
January 9, 2015, KC Live filed an Amended Complaint, (ECF No.
11), to which the Baes filed an Answer and Counterclaim for
fraudulent inducement, (ECF No. 17). On February 16, 2016, KC
Live filed a Second Amended Complaint, which added
allegations that the Baes failed to operate their restaurant
during Minimum Store Hours required under the Lease. (Second
Am. Compl. ¶¶ 10, 17, 38). On June 29, 2016, the
Baes filed an Answer and Amended Counterclaim. (ECF No. 58).
That same day, the Baes filed a Supplemental Counterclaim,
adding a declaratory judgment count. (ECF No. 60). In their
Supplemental Counterclaim, the Baes allege that KC Live
wrongfully retook the Premises on May 11, 2016. (Suppl.
Countercl. ¶ 154, ECF No. 60).
to the Baes' Amended Counterclaim, prior to executing the
Lease, representatives associated with KC Live made
representations that the District, as a whole, was going to
be filled with businesses. (Am. Countercl. ¶¶ 19,
21, 29-30, ECF No. 58). In early September 2005, Michael
Morris, the Director of Leasing and Development for KC
Live's parent company, told the Baes that many
nationally-operated businesses were starting to fill
available lots in the District. (Id. ¶ 21).
Specifically, Mr. Morris stated that P.F. Chang's and The
Cheesecake Factory had “already leased” space in
the District. (Id. ¶ 22). At some unspecified
time before execution of the Lease, Mr. Morris told the Baes
that condominiums would be built above the Baes'
restaurant. (Id. ¶ 25). Mr. Morris further
represented that “given its location, the other major
tenants already committed to the District, and the housing
that would be built above the [P]remises, the Baes could
easily achieve $3, 000, 000.00 per year” with their
restaurant. (Id. ¶ 26). In January 2007, KC
Live's parent company issued a press release in which
Blake Cordish, Vice President of KC Live's parent
company, stated that they had “commitments” for
85% of the space in the District. (Id. ¶ 30;
see also Am. Countercl. Ex. 3, ECF No. 17-3).
Court has already resolved multiple motions in this case.
(See ECF No. 26) (denying KC Live's Motion to
Dismiss Counterclaim); (ECF No. 57) (granting KC Live's
Motion for Leave to File Second Amended Complaint, granting
the Baes' Motion for Leave to File Amended Counterclaim,
and denying without prejudice KC Live's Motion for
Summary Judgment); (ECF No. 82) (denying the Baes' Motion
for Partial Summary Judgment). On February 3, 2017, KC Live
filed the pending Motion for Partial Summary Judgment. (ECF
No. 73). The Baes filed their Opposition on March 10, 2017.
(ECF No. 76). KC Live filed its Reply on April 24, 2017. (ECF
Standard of Review
reviewing a motion for summary judgment, the Court views the
facts in a light most favorable to the nonmovant, drawing all
justifiable inferences in that party's favor. Ricci
v. DeStefano, 557 U.S. 557, 586 (2009); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing
Adickes v. S.H. Kress & Co., 398 U.S. 144,
158-59 (1970)). Summary judgment is proper when the movant
demonstrates, through “particular parts of materials in
the record, including depositions, documents, electronically
stored information, affidavits or declarations, stipulations
. . . admissions, interrogatory answers, or other materials,
” that “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A).
“material fact” is one that might affect the
outcome of a party's case. Anderson, 477 U.S. at
248; see also JKC Holding Co. v. Wash. Sports Ventures,
Inc., 264 F.3d 459, 465 (4th Cir. 2001) (citing
Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir.
2001)). Whether a fact is considered to be
“material” is determined by the substantive law,
and “[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.”
Anderson, 477 U.S. at 248; accord
Hooven-Lewis, 249 F.3d at 265. A “genuine”
dispute concerning a “material” fact arises when
the evidence is sufficient to allow a reasonable jury to
return a verdict in the nonmoving party's favor.
Anderson, 477 U.S. at 248. If the nonmovant has
failed to make a sufficient showing on an essential element
of her case where she has the burden of proof, “there
can be ‘no genuine [dispute] as to any material fact,
' since a complete failure of proof concerning an
essential element of the nonmoving party's case
necessarily renders all other facts immaterial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
argues that the Baes cannot satisfy the elements of their
fraudulent inducement claim with sufficient evidence. KC Live
also contends that no dispute exists over whether the Baes
breached the Lease, Guaranty, and 2011 Amendment; only
portions of the damages amount are disputed. KC Live
therefore asserts that it is entitled to summary judgment on
the Baes' fraudulent inducement claim and partial summary
judgment on its breach of contract claim. The Court addresses
KC Live's arguments in turn.
Missouri law,  a claim for fraudulent ...