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Westside Center Associates v. Safeway Stores 232/5/1996
MARTIN, Acting P. J.
This appeal involves a neighborhood shopping center in the Kern County community of Taft. The anchor position at the center was occupied for many years by a Safeway supermarket in which the various defendants (identified collectively as Safeway) have held an interest at some point. Safeway leased the building from a series of owners, none of which is still a party to this action. Ownership of the remainder of the center, consisting of numerous smaller stores, also passed through several hands before being acquired by the plaintiff, a partnership known as Westside Center Associates (WCA). Thus the shopping center was "fragmented" in that parts of it were owned by different entities; significantly, WCA never owned the Safeway building. It was in this configuration that the present dispute arose.
Citing a loss of profitability, Safeway closed the supermarket in 1987 with about 15 months left on its 20-year lease. Business at the rest of the center suffered as a result. About a year later, Safeway removed all the store fixtures. Soon after that, although it had no plans to reopen the supermarket and the parties had been unable to find a suitable replacement tenant, Safeway executed its option to renew the lease for an additional five years.
The anchor position remained vacant. Faced with foreclosure, WCA sold its interest in the center in 1989 at what it claims was a loss of more than $2 million. It subsequently sued Safeway for damages alleging breach of an implied covenant to remain in operation throughout the lease period, and for tortious interference with prospective economic advantage. WCA contended the Safeway defendants had conspired to close the supermarket and keep the building vacant in order to drive down the value of the center. They then hoped, according to WCA, to buy the property at an artificially low price, bring in a new anchor tenant, and profit from the center's resulting recovery.
The trial court granted judgment in favor of Safeway on all causes of action following lengthy pretrial proceedings in which the court was called upon to decide various questions of law based upon stipulated facts and offers of proof. WCA challenges several of the court's rulings on appeal. We affirm the judgment.
I. FACTUAL BACKGROUND
The shopping center site was purchased in 1964 by Westside Center, a joint venture consisting of Ernest W. Hahn, Inc., a large shopping center developer, and Lester Causey and Don Rook, two commercial real estate brokers in Taft. Westside Center, in turn, agreed to construct and lease two adjacent buildings in the proposed development to Safeway Stores, Inc., for a Safeway supermarket and a Super S drug store. The two stores were to serve as the center's anchor tenants; together they would occupy nearly 50,000 square feet, or about 40 percent of the projected retail space. The rest of the property was to be occupied by local businesses and smaller chain stores.
The anchor tenant at a neighborhood shopping center is commonly regarded within the industry as an important if not crucial element in the center's success. It attracts shoppers who also can be expected to patronize the satellite stores which, if things go as planned, generate much of the owner's profit by filling the remaining space and paying rents based on the added business drawn by the anchor. Given its importance, the anchor tenant is typically able to acquire space in the center on more favorable terms than the other tenants. That was true at the Taft center.
Westside Center signed two 20-year leases with Safeway in 1964, to be effective when Safeway took possession of the completed buildings (in mi
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