Pentagon South, LLC v. ITT Educational Services, Inc.

Filing 23

Minute Entry for proceedings held before Judge Susan Richard Nelson: denying 21 Motion to Dismiss/General; Motion Hearing held on 12/19/2014 re 21 Amended MOTION to Dismiss/General filed by ITT Educational Services, Inc. See Order for detailed ruling. Additionally, the parties are directed to schedule a settlement conference within the next 90 days with Magistrate Judge Tony N. Leung. (Court Reporter Heather Schuetz) (SMD)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

CIVIL MOTION HEARING
Pentagon South,
Plaintiff,
v.
ITT Educational Service, Inc.,
Defendant.

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COURT MINUTES
BEFORE: Susan Richard Nelson
U.S. District Judge
Case No:
Date:
Court Reporter:
Courthouse:
Courtroom:
Time Commenced:
Time Concluded:
Time in Court:

14cv03419 (SRN/TNL)
December 19, 2014
Heather Schuetz
St. Paul
7B
9:32 a.m.
9:46 a.m.
14 Minutes

Hearing on: Defendant's Motion to Dismiss [# 21]

APPEARANCES:
Plaintiff:
Defendant:

William Penwell
Michelle E. Weinberg

PROCEEDINGS:
The motion was submitted, argued, and denied.
**IT IS ORDERED:
In this declaratory judgment action, Plaintiff seeks a declaration concerning the rights and obligations of the
parties under a December 26, 1996 office lease (the “Lease”), as amended. Specifically, Plaintiff seeks a
declaration that Defendant has breached the Lease by failing to remove specialized HVAC systems and related
equipment and by failing to return the roof and building to their original condition, at Defendant’s cost.
(Compl. ¶ 4 [Doc. No. 1-1].) Defendant moves to dismiss pursuant to Fed. R. Civ. P. 12, arguing that language
in the Supplemental HVAC Provision of the Lease (Ex. H to the Lease) provides that the removal of the HVAC
systems is optional, based on the use of the permissive word “may.” Plaintiff, however, counters that other
language in the HVAC Provision, using the word “shall,” requires the lessee to return the roof and building to
its original condition, at the lessee’s cost, suggesting that removal of the HVAC systems is mandatory. Plaintiff
therefore contends that the ambiguous nature of the contract supports the need for parol evidence, precluding
dismissal under Rule 12(b)(6).
When evaluating a motion to dismiss under Rule 12, the Court assumes the facts in the Complaint to be true and
construes all reasonable inferences from those facts in the light most favorable to the non-moving party.
Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In addition, the Court’s review is limited to the
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Form Modified: 11/29/11

pleadings, Missouri ex rel. Nixon v. Coeur D’Alene Tribe, 164 F.3d 1102, 1107 (8th Cir. 1999), and materials
that are necessarily embraced by the pleadings, Piper Jaffray Cos. v. Nat’l Union Fire Ins. Co., 967 F. Supp.
1148, 1152 (D. Minn. 1997). Applying this standard, the Court finds that the contractual language is
ambiguous and parol evidence is necessary in order to interpret the Lease.
Accordingly, because the Court cannot resolve this motion under Rule 12, Defendant’s Motion to Dismiss
[Doc. No. 21] is DENIED. Additionally, the parties are directed to schedule a settlement conference within
the next 90 days with Magistrate Judge Tony N. Leung.

s/S.DelMonte
Courtroom Deputy

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Form Modified: 11/29/11