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Show Me Sunshine Properties, LLC v. Blueline Rental, LLC

United States District Court, W.D. Missouri, Southern Division

September 11, 2019

SHOW ME SUNSHINE PROPERTIES, LLC, Plaintiff,
v.
BLUELINE RENTAL, LLC, Defendant.

          FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER ON MOTIONS TO SUBSTITUTE PARTIES AND SUPPLEMENT THE RECORD

          ROSEANN A. KETCHMARK, JUDGE

         This diversity-jurisdiction case comes before the Court on the action of Plaintiff Show Me Sunshine Properties, LLC (“Show Me Sunshine”) for breach of a commercial lease and unlawful detainer. (Doc. 25.) Prior to trial, the Court granted partial summary judgment and dismissed Count I of the Amended Complaint, which alleged that Defendant BlueLine Rental, LLC (“BlueLine”) breached the lease's “no-assignments” clause. (Doc. 80.) The Court then held a bench trial on the remaining counts (II and III), which seek damages and an eviction for altering the property without consent and failing to keep the premises in good repair. After trial, the parties submitted proposed findings of fact and conclusions of law (Doc. 97; Doc. 103), and Defendant filed corrected motions to supplement the record and to substitute parties (Doc. 101; Doc. 102), which Plaintiff opposes (Doc. 104; Doc. 105).[1]

         For the reasons below, BlueLine's motion to substitute parties is DENIED; BlueLine's motion to supplement the hearing record is GRANTED; on Count II, the Court finds for BlueLine in part and Plaintiff in part and assesses Plaintiff's damages at $0; and on Count III, the Court finds for BlueLine.

         Subject-Matter Jurisdiction

         The Court has diversity jurisdiction under 28 U.S.C. § 1332. When this action was filed, Show Me Sunshine was a limited liability company with two members, Geoffrey and Brenda Shaver. The Shavers were domiciled in either Florida or Missouri. (Doc. 94, Trial Tr. at 21, 124-26.) BlueLine was a limited liability company with one member, Vander Intermediate Holding III Corporation. Vander Intermediate Holding III Corporation was a Delaware corporation with its principal place of business in Texas. (Doc. 85 at 1-2; Doc. 85-1; Doc. 85-2.) Accordingly, the parties are diverse. See OnePoint Sols., LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007) (LLCs have the citizenship of their members); Chavez-Lavagnino v. Motivation Educ. Training, Inc., 714 F.3d 1055, 1056 (8th Cir. 2013) (diversity is assessed at the time the action is commenced); Walker by Walker v. Norwest Corp., 108 F.3d 158, 161 (8th Cir. 1997) (complete diversity rule). The disputed portion of the lease (five years of monthly rent at $7500) also surpasses the $75, 000 amount-in-controversy threshold. Therefore, the Court has diversity jurisdiction.

         Corrected Motion to Substitute Parties

         BlueLine requests to substitute United Rentals (North America), Inc. (“United Rentals”) in its place as the defendant because BlueLine merged into United Rentals after trial and then terminated. (Doc. 102.) Plaintiff opposes the motion. (Doc. 104.) Rule 25 of the Federal Rules of Civil Procedure provides that “[i]f an interest is transferred, the action may be continued by or against the original party unless the court, on motion, orders the transferee to be substituted in the action or joined with the original party.” A merger constitutes a transfer of interests under this rule. Luxliner P.L. Exp., Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 71 (3d Cir. 1993). The Court has discretion over a motion to substitute parties. Froning's, Inc. v. Johnston Feed Serv., Inc., 568 F.2d 108, 110 n.4 (8th Cir. 1978).

         The Court sees little, if any, benefit to replacing BlueLine with United Rentals. The primary purpose of substitution is to “facilitate the conduct of the litigation.” 7C Fed. Prac. & Proc. Civ. § 1958 (3d ed. 2019). This is not a case in which substitution would avoid difficulties in obtaining discovery from a non-party. Discovery has closed; a trial has been held; and the case will be resolved after the Court enters judgment. Furthermore, dismissing BlueLine could raise unforeseen issues because, depending on state law, it might be subject to an enforcement action despite its termination, while United Rentals will have the benefit of the Court's judgment either way. Id. Seeing no practical benefit to substitution, the Court will deny the corrected motion to substitute.[2]

         Corrected Motion to Supplement the Hearing Record

         BlueLine seeks to supplement the hearing record with evidence that (1) BlueLine merged into United Rentals; (2) United Rentals entered into a post-hearing contract for repairs of the subject property with a company owned by Geoffrey Shaver (Resort Installation Systems); and (3) evidence that Plaintiff filed another lawsuit against United Rentals for nonpayment of a single month's rent and then voluntarily dismissed the case. (Doc. 101; Doc. 101-1; Doc. 101-2.) The first and third categories of documents are official public records that may be judicially noticed. See Couzens v. Donohue, 854 F.3d 508, 513 n.6 (8th Cir. 2017) (secretary of state records); Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007) (state court records). Regarding the second category, Plaintiff opposes admitting the contract documents on relevance grounds and due to a lack of “contextual foundation as to what caused certain documents to be created, actions to be taken and what led to the existence/occurrence of those documents/actions.” (Doc. 105 at 1.)

         Despite Plaintiff's use of the phrase “contextual foundation, ” it does not argue that the contract is hearsay or that it lacks authenticity. See Mueller v. Abdnor, 972 F.2d 931, 937 (8th Cir. 1992) (a contract is not hearsay when it is used to show its existence); Williams v. Evangelical Ret. Homes of Greater St. Louis, 594 F.2d 701, 704 (8th Cir. 1979) (authenticity may be waived). The Court believes the post-hearing contract is relevant to determining the extent of Plaintiff's damages. Furthermore, the subject of the two-day bench trial was the severity of the alterations and damages to the property, if any. At the end of the trial, the Court forecasted its ruling and found real damage to the property in four areas. Additional context about what led the parties to reach an agreement to fix the damages discussed at trial is unnecessary for the Court to determine the pending claims. Accordingly, the corrected motion to substitute the hearing record will be granted.

         Findings of Fact

         On May 16, 2012, Geoffrey and Brenda Shaver leased the property at 48 Industrial Park Drive, Hollister, MO 65672 (the “Property”) to Volvo Construction Equipment Rents, Inc. for the purpose of operating a construction equipment rental business. At some point after the lease was executed, Show Me Sunshine replaced the Shavers as the lessor, and Volvo Construction Equipment Rents, Inc. converted from a corporation to an LLC and changed its name to BlueLine Rental, LLC.

         The lease provides for a five-year term. It also grants the lessee two options to renew for additional five-year terms, “[p]rovided that Lessee is not in default.” Any violation of the terms of the lease is considered an event of default. Paragraph 6 of the lease requires the lessee to obtain the lessor's written consent to improve or alter the building; paragraph 9.1 requires the lessee to “[k]eep the Premises reasonably clean and free from all rubbish, ashes, dirt and other matter;” and paragraph 9.2 requires the lessee to “maintain the Premises in good repair, and in at least as good condition as ...


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