United States District Court, D. Colorado
FT. COLLINS 8, L.L.C., a Washington limited liability company, Plaintiff,
v.
WALTON FOOTHILLS HOLDINGS VI, L.L.C., a Delaware limited liability company, Defendant.
ORDER
LEWIS
T. BABCOCK, JUDGE.
This
matter is before me on the Motion to Dismiss filed by
Defendant Walton Foothills Holdings VI, L.L.C. ECF No. 4. I
have jurisdiction pursuant to 28 U.S.C. § 1332. After
considering the parties' arguments and exhibits, I grant
Defendant's Motion for the reasons set forth below.
I.
Facts
In
November 2014, Defendant, as landlord, and Plaintiff, as
tenant, entered into a lease for Plaintiff to operate a bar
and restaurant in a shopping center in Fort Collins,
Colorado. Compl. Declaratory J., ECF No. 6 at ¶¶
2-6. The Retail Lease Agreement (the “Lease”)
signed by the parties included an “Exclusive Use”
provision which prohibited Defendant from entering into
another lease with a different tenant who intended to open a
similar establishment as Plaintiff's:
The Exclusive Use provision generally prohibits [Defendant]
from entering into a “lease, purchase agreement or
occupancy agreement for any space in the Shopping Center with
any tenant or occupant or purchaser intending to use its
premises for . . . (iii) a sports themed restaurant/bar
larger than 5, 000 square feet.” This latter clause
(iii) is defined in the CB & Potts Lease as the
“Sports Bar Exclusive.”
Id. at ¶¶ 5, 7; ECF No. 4-1 at 26-27. The
next subsection of the Lease contains a “Rouge
Tenant” provision, which limits remedies pending
certain actions if the Exclusive Use provision is arguably
breached:
Subject to the last sentence of this subparagraph (b), Tenant
shall have no remedy for a violation of subparagraph (a)
above if: (i) another tenant or occupant of the Shopping
Center violates a provision of its lease or license
agreement, or other document burdening said tenant or
occupant's premises or property, which either does not
permit or specifically prohibits such violating tenant or
occupant from engaging in the Exclusive Use; and (ii) after
receiving written notice of such tenant or occupant's
violation from Tenant, (A) Landlord provides written notice
of the lease, license agreement or document violation to such
other tenant or occupant; and (B) Landlord commences and
diligently pursues all actions reasonably available to
Landlord for the enforcement of the provisions of the lease,
license, or other document. In such event (“Rogue
Tenant Violation”), Landlord shall have a period of up
to one year from receipt of the foregoing notice from Tenant
within which to cure such violation of Tenant's Exclusive
Use, and, in the event that at the end of such one-year
period the Rogue Tenant Violation shall not be cured, Tenant
shall have the right to pursue the remedies afforded to
Tenant under this Agreement.
ECF No. 4-1 at 27.
In
August 2018, Defendant and Green Screens, L.L.C., operating
under the trade name “XGolf, ” entered into a
lease (the “XGolf Lease”) to open an
establishment over 7, 000 square feet in the same shopping
center “for the purposes of operating [] indoor golf
simulators, to include the sale of golf-related apparel, a
‘fast casual' restaurant, and a bar.” ECF No.
6 at ¶¶ 8-9. The XGolf Lease reads that XGolf
“may not, among other restrictions, use its premises
for ‘a sports themed restaurant/bar larger than 5, 000
square feet.'” Id. at 10. In its
Complaint, Plaintiff includes screenshots of various XGolf
franchise webpages, including the Facebook page for the XGolf
in Fort Collins. Id. at ¶¶ 14, 27, 29. On
its Facebook page, the Fort Collins XGolf advertised using
the hashtag moniker “#sportsbar, ” noted that it
would have a “full bar with 12 taps for beer and 8 TVs,
” and featured cocktails and a bar in its photos.
Id. at ¶¶ 29-31.
In
December 2018, representatives of Plaintiff's parent
company expressed concern to Defendant that XGolf's
business would violate the Exclusive Use provision in the
Lease. Id. at ¶ 11. Defendant responded that
XGolf was “not a sports themed restaurant and
bar.” Id. at ¶ 12. During discussion
between the parties, Plaintiff requested “a copy of any
floor plan for the prospective XGolf facility, the number of
seats, the number of [TVs], the location and type of video
service to be used, the proposed menus for food and beverage,
and whether XGolf intended to propose to offer a full bar
serving liquor, beer and wine.” Id. at ¶
16. While the parties continued discussion, the information
was not disclosed; construction of XGolf had a projected
completion date of May 2019. Id. at ¶ 25.
Plaintiff
filed suit in District Court of Larimer County, Colorado
seeking declaratory judgment that: (1) the Fort Collins XGolf
location contemplated in the XGolf lease is a “sports
themed restaurant/bar larger than 5, 000 square feet”;
and (2) that Defendant subsequently violated the Exclusive
Use provision in the Lease. Id. at 7. Defendant
filed this Motion to Dismiss, arguing that Plaintiff's
claims were not ripe and that Plaintiff failed to state a
claim upon which relief could be granted. ECF No. 4.
Defendant then removed the case to this Court. Notice of
Removal, ECF No. 1.
II.
Law
As this
is case proceeds under diversity jurisdiction, ECF No. 1 at
¶ 7, Colorado substantive law and federal procedural law
applies. Haberman v. The Hartford Ins. Grp., 443
F.3d 1257, 1264 (10th Cir. 2006).
A.
...