SACRAMENTO – A state appeals court unanimously affirmed the ruling of a lower court in a dispute between two companies about the payment of fees and the details of a 40-year-old real estate sale, according to a ruling handed down last month.
California's Third District Court of Appeal found in favor of Defendant Longs Drug Stores in its ruling handed down Sept. 25. “As we have concluded NVM was not entitled to increased CAM charges, it follows that Longs did not breach the agreement, and NVM has no basis for claiming a right to repurchase the property under the agreement,” the appeals court said in its 10-page decision.
Justice Cole Blease wrote the appeals court's decision in which Justice Harry E. Hull Jr. and Andrea Lynn Hoch concurred.
Longs had been sued by Plaintiff North Valley Mall (NVM) for non-payment of Common Area Maintenance Fees (CAM) and other details of a sales contract made back in 1968, according to the background portion of the appeals court's decision. Longs said they overpaid the fees and filed a cross complaint, asking for summary judgment in the Superior Court of Butte County. Judge Stephen E. Benson of that court ruled in favor of Longs. North Valley Mall appealed.
Ownership of both the drug chain and the shopping center had changed in recent years. In 1968, Longs Drug Stores, Inc. had purchased the property from FH&C Enterprises, Inc., (FHC) which now is owned by North Valley Mall. Longs Drug Stores had merged with CVS Caremark Corporation.
The contract in 1968 stated that Longs would build a drug store on the property and would continue to operate the building as a drug store for a period of 10 years. If that did not happen, FHC could repurchase the property.
“NVM filed this action against Longs for breach of contract to recover additional CAM charges for 2012, for specific performance to enforce its option under the construction agreement, for declaratory relief to enforce the additional CAM charge provision and to enforce its option to repurchase the property," Judge Blease wrote. "As we have concluded, NVM was not entitled to increased CAM charges, it follows that Longs did not breach the Agreement, and NVM has no basis for claiming a right to repurchase the property under the construction agreement.”