# BALOGH ASSOCIATES VII LLC v. DICK'S SPORTING GOODS, INC.

> District Court, M.D. North Carolina · September 30, 2022

URL: https://www.frixlaw.com/law-library/cases/10254188

## Case

- **Court:** District Court, M.D. North Carolina
- **Decided:** September 30, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10254188

## How later opinions describe it (automated extraction)

- noting that the acts of the principal, not the agent, are dispositive in determining whether an agent has authority
- finding the purpose of a commercial lease was not frustrated after the city of Raleigh denied the defendant’s request to build a 40,000 square foot building on the property
- recognizing that a dispute is not genuine for summary judgment purposes when one party rests solely on allegations in the pleadings and does not produce any evidence to refute alternative arguments
- noting district courts have “discretion . . . to deny summary judgment motions even when the standard appears to have been met”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

BALOGH ASSOCIATES VII LLC, )
)
Plaintiff, )
)
v. ) 1:20CV872
)
DICK’S SPORTING GOODS, INC., )
)
Defendant. )

MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Before this court is a Motion for Summary Judgment filed by
Plaintiff Balogh Associates VII LLC (“Balogh” or “Plaintiff”),
(Doc. 23). Also before this court is Defendant Dick’s Sporting
Goods, Inc.’s motion for supplemental briefing, (Doc. 40), and
cross-motion for summary judgment, (Doc. 40–1).
This court will deny Plaintiff’s motion for summary
judgment on its breach of contract claim and Defendant’s motion
for supplemental briefing. Defendant’s cross-motion for summary
judgment will be granted in part and denied in part. This court
will grant the motion insofar as Defendant was permitted to pay
Substitute Rent for May 2020 and deny the motion as to all other
claims.
I. FACTUAL BACKGROUND
This court reviews the facts and draws all reasonable
inferences in the light most favorable to nonmoving party when
considering a motion for summary judgment. See Scott v. Harris,
550 U.S. 372, 378 (2007). The following facts are uncontested.
In 2005, Defendant, as tenant, signed a lease with JG
Winston-Salem, LLC, as landlord (“Lease”). (Compl. (Doc. 3) ¶ 6;
Lease (Doc. 23–1) at 4.)1 On January 28, 2019, JG Winston-Salem
assigned its rights in the Lease to Hanes Mall Parcels, LLC.

(Compl. (Doc. 3) ¶ 8; Ex. B (Doc. 23–2) at 1.) On September 27,
2019, Hanes Mall Parcels assigned its rights in the Lease to
Plaintiff. (Compl. (Doc. 3) ¶ 9; Ex. C (Doc. 23-3) at 1.)
Under the Lease, Defendant was required to pay “Minimum
Rent” each month. (Lease (Doc. 23–1) § 4.1.) Minimum Rent was
determined based on the year of the Lease and was payable “in
advance, without notice or demand and without offset or
abatement except as expressly set forth herein, upon the first
day of each calendar month included within the term of [the]
Lease.” (Lease (Doc. 23–1) § 4.1(a)–(b).) In March, April, and
May 2020, Minimum Rent was $90,750 a month. (See Compl. (Doc. 3)

1 All citations in this Memorandum Opinion and Order to
documents filed with the court refer to the page numbers located
at the bottom right-hand corner of the documents as they appear
on CM/ECF.
¶ 11; compare Lease (Doc. 23–1) § 4.1(a)(ii), with Lease (Doc.
23–1) § 6.1).)
The Lease also provided that, in certain circumstances,
Substitute Rent could be paid in lieu of Minimum Rent and
defined Substitute Rent as “two percent (2%) of Gross Sales, but
never more than the Minimum Rent for that month that would have
otherwise been payable . . . .” (Lease (Doc. 23–1) § 1.5(c)(i).)
On March 19, 2020, Defendant sent Plaintiff a letter.
(Ex. D (“March 19 Letter”) (Doc. 23–4) at 1.) The letter stated

that “[t]he COVID-19 (Coronavirus) Pandemic constitutes a force
majeure event. As such, any store closures resulting from or in
response to the COVID-19 (Coronavirus) Pandemic are permitted
under the terms of the Lease.” (Id.) Defendant sent Plaintiff
another letter on March 27, 2020. (Ex. E (“March 27 Letter”)
(Doc. 23–5) at 1–2). This letter stated that Defendant had
“temporarily closed all of [its] stores . . . effective March
19, 2020” because of the COVID-19 pandemic. (Id. at 1.) It also
stated that
[b]ased on the language of our lease, and our
rights at law and in equity, we have determined that
DSG has the right to abate all rent beginning as of
the date of this closure, including, without
limitation, minimum rent, percentage rent, substitute
rent, co-tenancy rent, charges for taxes, common area
costs and insurance (collectively, “Rent”). Legal
rights aside, we recognize the significant and mutual
financial pain caused by this unprecedented situation.
In that light, DSG is prepared to offer the following:
 At locations where we closed in response to
Governmental Mandates or Landlord Mandates, all
Rent will abate from the date of this closure
until the later of June 30, 2020, or the date
that DSG re-opens for business; and

 At locations where our closure was not in
response to Governmental Mandates or Landlord
Mandates, all Rent that would otherwise have been
due under the lease for the period from the date
of this closure through June 30, 2020, shall be
deferred and paid back, interest free, in equal
monthly installments over a twelve-month period
commencing January 1, 2021.

(Id. at 1–2.)
On April 3, 2020, Pauline Balogh, a co-owner of Plaintiff,
(Ex. 1, Zoom Dep. of Pauline Balogh (“Def.’s Excerpts Balogh
Dep.”) (Doc. 25–1) at 8), emailed Brandon Barnett, a Director of
Real Estate at Dick’s, memorializing a phone call from earlier
that morning, (Ex. 10 (“Email Chain”) (Doc. 23–8) at 3–4).
Balogh wrote that she was “willing to defer [Defendant’s] base
rent from $90750.00 each month to $80000.00 per month for March,
April and June. The difference would be paid back starting Jan.
2021 . . . . If this proposal is not accepted, please e-mail me
your counter proposal as soon as possible.” (Id. at 4.) Barnett
replied a few days later with a “revised proposal,” (id. at 3),
which Balogh declined, (id. at 2).
On April 9, 2020, Balogh and Barnett had a second call to
discuss reducing April rent. (See Def.’s Excerpts Balogh Dep.
(Doc. 25–1) at 29.) Barnett confirmed the call’s substance in an
email, stating that “[p]er our conversation we will pay the
April rent at a 25% reduction and pay back starting 1/1/2021.
Please confirm and I will submit to my team.” (Email Chain (Doc.
23-8) at 2.) Balogh replied “confirming that Dicks can reduce
the April rent by 25 percent and defer the difference in full
with [sic] Jan 1st 2021.”2 (Id. at 1–2.) Barnett responded that
“[w]e will process on our end.” (Id. at 1.)
Defendant paid Minimum Rent of $90,750 in March. (See

Def.’s Answer to Compl. (“Answer”) (Doc. 7) at 19.) Defendant
did not pay any rent in April. (See Compl. (Doc. 3) ¶ 15; Answer
(Doc. 7) at 14.) Defendant paid $13,712.85 in May rent. (Compl.
(Doc. 3) ¶ 15; Answer (Doc. 7) at 14.)
II. PROCEDURAL BACKGROUND
Plaintiff filed its Complaint in North Carolina state court
alleging one claim for breach of contract. (See Compl.

2 It is unclear whether Barnett or Balogh first emailed to
memorialize the April 9, 2020, call. Balogh’s email has a
9:49 a.m. timestamp; Barnett’s has a 10:04 a.m. timestamp (Email
Chain (Doc. 23-8) at 1–2.) This suggests Balogh’s email was sent
first. However, as noted by Plaintiff, “the threading, the text
of the three emails and the time stamps on Barnett’s emails
suggest that [Balogh’s] email was actually sent at 10:49 am, in
response to. [sic] Barnett’s 10:04 email with Barnett replying a
minute later.” (Pl.’s Reply Mem. of Law in Supp. of Mot. for
Summ. J. (“Pl.’s Reply”) (Doc. 27) at 3 n.1)(emphasis in
original).) This court finds this issue does not constitute a
material fact since the ordering of Balogh and Barrett’s emails
does not impact the substance of the parties’ alleged agreement.
(Doc. 3).) Defendant removed to federal court. (See Doc. 1.)
Defendant also answered Plaintiff’s Complaint and alleged six
counterclaims against Plaintiff. (Answer (Doc. 7) at 19–23.)
After discovery concluded, Plaintiff filed a motion for
summary judgment, (Doc. 23), and a brief in support, (Pl.’s Mem.
of Law in Supp. of Mot. for Summ. J. (“Pl.’s Br.”) (Doc. 24)).
Defendant responded, (Def.’s Resp. to Mot. for Summ. J. (“Def.’s
Resp.”) (Doc. 25)), and Plaintiff replied, (Pl.’s Reply
(Doc. 27). More than five months after the end of briefing,

Defendant filed a motion to (1) accept its response to
Plaintiff’s motion for summary judgment as a cross-motion for
summary judgment and (2) for leave to file a supplemental
submission, (Doc. 40), as well as a brief in support, (Def.’s
Mem. of Law in Supp. of Mot. (“Def.’s Mem.”) (Doc. 41)).
Plaintiff filed a response in opposition. (Pl.’s Resp. to Def.’s
Mot. to File Mot. for Summ. J. (“Pl.’s Resp. to Def.’s Mot.”)
(Doc. 42.) This court granted Defendant’s motion to accept its
response as a cross-motion for summary judgment and reserved
judgment on the remainder of the motion. (Order (Doc. 45) at 4–
5.)

This court now addresses Plaintiff’s motion for summary
judgment, (Doc. 23), Defendant’s motion for supplemental
briefing, (Doc. 40), and Defendant’s cross-motion for summary
judgment, (Doc 40–1).
III. STANDARD OF REVIEW
Summary judgment is appropriate when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Celotex
Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). This court’s
summary judgment inquiry is whether the evidence “is so one-
sided that one party must prevail as a matter of law.” Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). The moving
party bears the initial burden of demonstrating “that there is
an absence of evidence to support the nonmoving party’s case.”
Celotex, 477 U.S. at 325. If “the moving party discharges its
burden . . ., the nonmoving party then must come forward with
specific facts showing that there is a genuine issue for trial.”
McLean v. Patten Cmtys., Inc., 332 F.3d 714, 718–19 (4th Cir.
2003).
A factual dispute is genuine and triable when “the evidence
is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson, 477 U.S. at 248; see also First

Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289–90
(1968) (recognizing that a dispute is not genuine for summary
judgment purposes when one party rests solely on allegations in
the pleadings and does not produce any evidence to refute
alternative arguments). This court must look to substantive law
to determine which facts are material because only those “facts
that might affect the outcome of the suit under the governing
law will properly preclude the entry of summary judgment.”
Anderson, 477 U.S. at 248.
In addition, “the mere existence of some alleged factual
dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment.” Id. at 247–48

(emphasis in original). “[T]he non-moving party must do more
than present a ‘scintilla’ of evidence in its favor.” Sylvia
Dev. Corp. v. Calvert Cnty., Md., 48 F.3d 810, 818 (4th Cir.
1995) (quoting Anderson, 477 U.S. at 252). “What Rule 56(e) does
make clear is that a party cannot rest on the allegations
contained in his complaint in opposition to a properly supported
summary judgment motion made against him.” First Nat’l Bank of
Ariz., 391 U.S. at 289. Summary judgment should “be granted
unless a reasonable jury could return a verdict for the
nonmovant on the evidence presented.” McLean, 332 F.3d at 719.
When facing cross-motions for summary judgment, this court

reviews “each motion separately on its own merits to determine
whether either of the parties deserves judgment as a matter of
law.” Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003)
(citations and internal quotation marks omitted). “When
considering each individual motion, the court must take care to
resolve all factual disputes and any competing, rational
inferences in the light most favorable to the party opposing
that motion.” Id. (citation and internal quotation marks
omitted).
IV. ANALYSIS
Plaintiff seeks summary judgment on its breach of contract
claim. (Compl. (Doc. 3) ¶ 20; see also Pl.’s Br. (Doc. 24) at 5–

9.) Defendant raises several affirmative defenses in response:
(1) that Plaintiff’s claim is barred by the nonoccurrence of
conditions precedent; (2) that rent was equitably abated under
Sections 3.6 and 17.16 of the Lease; (3) that Plaintiff breached
its own obligations under the Lease and; (4) that Defendant’s
obligation to pay rent was excused pursuant to the doctrines of
frustration of purpose and impossibility. (Answer (Doc. 7) at 5–
6.) Defendant also asserts six counterclaims that overlap with
its affirmative defenses: (1) declaratory judgment that the Co-
Tenancy Requirement was not met as of late March 2020, that
Defendant was entitled to pay Substitute Rent in lieu of Minimum

Rent while the Co-Tenancy Requirement was not satisfied, and
that the Force Majeure clause does not affect Defendant’s rights
with regard to the Co-Tenancy Requirement; (2) declaratory
judgment that rent was equitably abated while Defendant was
closed from March 19, 2020 through May 8, 2020, pursuant to
Sections 3.6 and 17.16 of the Lease, and that Defendant is
entitled to a partial rebate for rent paid for March; (3)
frustration of purpose; (4) breach of contract; (5) return of
money had and received; and (6) attorneys’ fees. (Id. at 19–23.)
Defendant’s Cross-Motion seeks summary judgment on four
issues: (1) for Declaratory Judgment that (a) the Co-Tenancy
Requirement of the Lease was violated, such that Defendant was

entitled to pay Substitute Rent, (b) the Force Majeure
provisions of Section 17.3 do not impact Defendant’s rights
under the Co-Tenancy Requirement, and (c) Defendant is not in
default under the Lease; (2) for Declaratory Judgment that
Defendant was entitled to abate its rent under Sections 3.6 and
17.16 of the Lease; (3) that Defendant’s purpose in entering the
Lease was frustrated by the COVID-19 Pandemic; and (4) on a
counterclaim for breach of contract. (Def.’s Cross-Mot. for
Summ. J. (Doc. 41–1) at 1.)
This memorandum addresses only the issues raised by the
parties that are necessary for this court to rule on Plaintiff’s

motion for summary judgment and Defendant’s cross-motion for
summary judgment. This memorandum will first consider
Defendant’s request for supplemental briefing. This court will
then consider Plaintiff’s breach of contract claim. Ruling on
Plaintiff’s claim requires considering whether Defendant was
permitted to abate its rent under Section 3.6 or 17.16, whether
the Co-Tenancy Requirement was violated, whether the parties
entered into a rent deferral agreement for April 2020 rent, and
whether the purpose of the Lease was frustrated. Finally, this
court will consider Defendant’s cross-motion for summary
judgment for breach of contract.
A. Defendant’s Request for Supplemental Briefing

Defendant seeks leave to file a supplemental submission in
opposition to grounds Plaintiff allegedly raised for the first
time in its reply. (Doc. 40.) Defendant argues that it lacked
notice that Plaintiff “was moving for summary judgment regarding
breach of an alleged settlement agreement.” (Def.’s Mem. (Doc.
41) at 5.) Plaintiff counters that Defendant “first raised the
[settlement] [a]greement” issue, (Pl.’s Resp. to Def.’s Mot.
(Doc. 42) at 9), so, Plaintiff was entitled to respond to those
arguments in its reply, (see id.).
In this district, Local Rule 7.3(h) governs reply briefs
and states that they are “limited to discussion of matters newly

raised in the response.” Local Rule 7.3(h). “Courts in this
district interpreting Local Rule 7.3(h) have consistently held
that ‘[r]eply briefs . . . may not inject new grounds’ for
argument.” Pouncey v. Guilford Cnty., No. 1:18CV1022, 2020 WL
1274264, at *5 (M.D.N.C. Mar. 17, 2020) (alteration in original)
(cleaned up) (quoting Triad Int’l Maint. Corp. v. Aim Aviation,
Inc., 473 F. Supp. 2d 666, 670 n.1 (M.D.N.C. 2006)). “In sum,
Local Rule 7.3(h) exists to give the replying party a chance to
rebut newly raised arguments, not to give the replying party an
unfair advantage in having a chance to make new arguments that
should have been raised initially.” Id. (citations omitted).
The parties dispute whether Plaintiff’s reply brief

“injected new grounds” for argument. (Compare Def.’s Mem. (Doc.
41) at 5–6, with Pl’s Resp. to Def.’s Mot. (Doc. 42) at 9–10.)
Plaintiff first raised the issue of the rent deferral agreement
in its brief where it states that Balogh
[N]egotiated a rental abatement agreement with Brandon
Barnett . . . . The parties’ agreed that that[sic] 25%
of Dick’s April, 2020 rent would be deferred and
repaid on January 1, 2021. Dick’s, however, reneged
upon this agreement, paid no rent for April, 2020 and
unilaterally paid only $13,712.85, in arrears, for
May, 2020.

(Pl.’s Br. (Doc. 24) at 3.) Defendant’s response included a
section responding to this allegation titled: “The Parties Did
Not Reach Any Settlement Agreement, Let Alone One that
[Defendant] Breached.” (Def.’s Resp. (Doc. 25) at 18–19.)
Plaintiff’s reply went on to highlight evidence establishing the
parties reached an enforceable contract, that Barnett accepted
the agreement, and that Barnett had authority to do accept. See
infra Section IV.B.4.
Thus, Plaintiff did not “inject new grounds,” Pouncey, 2020
WL 1274264, at *5, by arguing in its reply that the parties
executed a rent deferral agreement. (See Pl.’s Reply (Doc. 27)
at 1–5.) Instead, Plaintiff’s reply responded to Defendant’s
argument that no settlement agreement was reached, (See Def.’s
Resp. (Doc. 25) at 18–19), by presenting further facts and
evidence about the existence of the agreement, (See Pl.’s Reply

(Doc. 27) at 1–6). Since Plaintiff’s reply did not inject new
grounds for argument, see Pouncy, 2020 WL 1274264, at *5,
Defendant is not entitled to file a response pursuant to Local
Rule 1.7(h).
Defendant points to two cases in support of its argument
for supplemental briefing. (Def.’s Mem. (Doc. 41) at 6.)
However, those cases arise in the context of a district court
granting summary judgment sua sponte. See Moore v. Equitrans,
L.P., 27 F.4th 211, 224 (4th Cir. 2022) (“[D]istrict courts are
widely acknowledged to possess the power to enter summary
judgments sua sponte, so long as the losing party was on notice

that she had to come forward with all of her evidence.”)
(emphasis in original); see also U.S. Dev. Corp. v. Peoples Fed.
Sav. & Loan Ass’n, 873 F.2d 731, 735 (4th Cir. 1989) (“The
district court entered summary judgment against appellant[] . .
. sua sponte. . . . [T]hat power is contingent on giving the
losing party notice that it must come forward and defend its
claim.”) (emphasis in original). Here, this court is not
deciding on summary judgment sua sponte. Instead, this court is
acting with the benefit of motions and briefing supplied by the
parties. Furthermore, Defendant was on notice about Plaintiff’s
position regarding the agreement because Plaintiff included that
argument in their brief. (See Pl.’s Br. (Doc. 24) at 3.)

Therefore, this court will deny Defendant’s motion for
leave to file a supplemental submission. (Doc. 41).
B. Plaintiff’s Breach of Contract Claim3
Under North Carolina law, “[a] lease is a contract which
contains both property rights and contractual rights.” Strader
v. Sunstates Corp., 129 N.C. App. 562, 570, 500 S.E.2d 752, 756
(1998). “Interpreting a contract requires the court to examine
the language of the contract itself for indications of the
parties’ intent at the moment of execution.” State v. Philip
Morris USA Inc., 359 N.C. 763, 773, 618 S.E.2d 219, 225 (2005).

3 Plaintiff argues this court “should apply North Carolina
law to the interpretation of the Lease provisions.” (Pl.’s Br.
(Doc. 24) at 4–5.) Defendant does not respond to this argument
but relies on North Carolina law in its response memorandum.
(See Def.’s Resp. (Doc. 25).) Therefore, this court will apply
North Carolina law in determining whether summary judgment
should be granted.
“It must be presumed the parties intended what the language used
clearly expresses, and the contract must be construed to mean
what on its face it purports to mean.” Hartford Accident &
Indem. Co. v. Hood, 226 N.C. 706, 710, 40 S.E.2d 198, 201 (1946)
(internal citation omitted). “When the language of a contract is
plain and unambiguous then construction of the agreement is a
matter of law for the court.” Whirlpool Corp. v. Dailey Constr.,
Inc., 110 N.C. App. 468, 471, 429 S.E.2d 748, 751 (1993).
If, however, the language of a contract “is ambiguous and

the intention of the parties is unclear, interpretation of the
contract is for the [finder of fact],” and summary judgment is
not appropriate. Glover v. First Union Nat’l. Bank of N.C., 109
N.C. App. 451, 456, 428 S.E.2d 206, 209 (1993). A contract is
ambiguous “when either the meaning of words or the effect of
provisions is uncertain or capable of several reasonable
interpretations.” Register v. White, 358 N.C. 691, 695, 599
S.E.2d 549, 553 (2004). In determining whether a contract is
ambiguous, “words are to be given their usual and ordinary
meaning and all the terms of the agreement are to be reconciled
if possible.” Piedmont Bank and Tr. Co. v. Stevenson, 79 N.C.

App. 236, 241, 339 S.E.2d 49, 52 (1986). Here, both parties
assert the language of the Lease is unambiguous.4 (Compare Pl.’s
Br. (Doc. 24) at 3, with Def.’s Resp. (Doc. 25) at 1.)
The elements of a North Carolina breach of contract claim
are “(1) existence of a valid contract and (2) breach of the
terms of that contract.” Poor v. Hill, 138 N.C. App. 19, 26, 530
S.E.2d 838, 843 (2000). The parties do not dispute a valid
contract existed; rather, both argue the other has breached the
Lease. (See Pl.’s Br. (Doc. 24) at 6; see also Def.’s Resp.
(Doc. 25) at 9–19.)

1. Abatement under Section 3.6
Section 3.6 is titled “Landlord’s Construction
Representations.” (Lease (Doc. 23-1) § 3.6.) It contains several
warranties made by Plaintiff. (Id.) Defendant argues subsection
(b) provides authority for equitable abatement. (See Def.’s
Resp. (Doc. 25) at 13–15.) That subsection states
[I]f, at any time, any governmental or quasi-
governmental entity or insurance rating bureaus having
jurisdiction shall determine that Landlord’s portion
of the Shopping Center, including Landlord’s Work,
shall not have been performed or constructed or
Landlord’s operation of the Shopping Center is not in
compliance with any applicable law, code, ordinance or
regulation or insurance rating standard and shall
request compliance with the same or if Landlord’s
failure to comply shall in any way adversely affect

4 As explained hereafter, this court finds the relevant
provisions are ambiguous. That conclusion is confined to some
degree by the parties’ respective positions. While they both
contend the provisions are unambiguous, they reasonably argue
that the provisions have different meanings and effect.
the use of the Demised Premises, the Tenant Service
Area, the Service Drive or the Protected Parking Areas
by Tenant or adversely affect any other rights of
Tenant under this Lease or impose any obligation upon
Tenant not contained in this Lease, then Landlord
shall, upon receipt of notice of such complaint, or
determination of non-compliance, promptly, at its sole
cost and expense, cause such repairs, alterations or
other work to be done or action to be taken so as to
bring about the compliance requested and/or otherwise
eliminate the adverse effect upon the Tenant. If by
reason of such failure of compliance or by reason of
such repairs, alterations or other work done by
Landlord, Tenant shall be deprived of the use or
enjoyment of the whole or any part of the Demised
Premises, the Tenant Service Area, the Protected
Parking Areas or the interior Common Areas, all Rent
or Substitute Rent shall abate on a per diem basis in
proportion to such deprivation. Further, if at any
time the applicable zoning and other applicable laws
shall not permit the retail sale of any and all types
of wearing apparel, sporting goods or hunting
equipment in the Demised Premises, then, in addition
to the aforesaid Rent abatement, Tenant, without
waiving any other rights that Tenant may have on
account thereof, may terminate this Lease, by giving
Landlord notice thereof, provided, however, that
Landlord shall have thirty (30) days within which to
cure such non-compliance with zoning and/or other
applicable laws prior to Tenant’s exercising such
right to terminate. Notwithstanding the foregoing, the
rights of Tenant under the preceding sentence shall be
inapplicable if it shall hereafter become unlawful to
sell firearms and/or ammunition from the Demised
Premises.

(Lease (Doc. 23-1) § 3.6(b)(emphasis added).)
Defendant argues that its obligation to pay rent was
equitably abated under Section 3.6(b) of the Lease. (Def.’s
Resp. (Doc. 25) at 13–15.) Defendant argues that the “and other
applicable laws” language applies to the North Carolina
governor’s executive orders regarding COVID-19 and that those
orders prohibited the sale of items in Defendant’s store. (Id.)
Plaintiff argues that Defendant’s rent was not abated under
Section 3.6 because the parties intended to limit the scope of
that section “to situations where construction defects, and laws
and ordinances pertaining to land use and construction . . .
deprived [Defendant] of the ability to use of the premises.”
(Pl.’s Br. (Doc. 24) at 12.)5
North Carolina’s rules of contract interpretation require

an agreement to be construed as a whole and to determine the
intent of the parties “from the entire instrument and not from
detached portions. Individual clauses are to be considered in
context. All parts of the contract will be given effect if
possible.” Int’l Paper Co. v. Corporex Constructors, Inc., 96
N.C. App. 312, 316, 385 S.E.2d 553, 555–56 (1989) (internal
citation omitted). A contract is ambiguous if “the meaning of
words or the effect of provisions is uncertain or capable of
several reasonable interpretations.” Register, 358 N.C. at 695,
599 S.E.2d at 553. When a court is asked to interpret an

5 Plaintiff occasionally cites Section 3.7 as the section of
the Lease at issue. (See Pl.’s Br. (Doc. 24) at 12.) This court
will assume that Plaintiff intended to cite Section 3.6 since
that is the section relied upon by Defendant. (See Def.’s Resp.
(Doc. 25) at 13.)
ambiguous contract, summary judgment is not appropriate. Glover,
109 N.C. App. at 456, 428 S.E.2d at 209.
Under Defendant’s interpretation of Section 3.6, “other
applicable laws” includes the governor’s executive orders
because they prohibited the sale of retail items offered by
Defendant in the Demised Premises. (See Def.’s Resp. (Doc. 25)
at 14.) This court finds it is reasonable to interpret “other
applicable laws” as stated in Section 3.6 of the Lease to
include executive orders issued by the governor that affect “the

retail sale of any and all types of wearing apparel, sporting
goods or hunting equipment.” (Lease (Doc. 23-1) § 3.6(b).) It is
reasonable to interpret “applicable” to mean applicable to the
Demised Premises. Executive orders, such as those issued by the
governor in response to COVID-19, that affect whether Defendant
can operate its retail business are “applicable” to Defendant.
Likewise, it is reasonable to interpret “other applicable
laws” to mean “situations where construction defects, and laws
and ordinances pertaining to land use and construction . . .
deprive[] Dick’s of the ability to use of [sic] the premises” as
argued by Plaintiff. (Pl.’s Br. (Doc. 24) at 12.) Article III of

the Lease is titled “Construction,” so it is reasonable to
interpret “applicable” to limit the types of laws to those
related to construction.
Plaintiff argues Defendant’s interpretation renders the
Force Majeure provision in Section 17.3 of the Lease
meaningless. (See id.) This court disagrees. Section 17.3 of the
Lease defines a Force Majeure Event to
mean any act or event that wholly or partially
prevents the affected Party from performing any of its
obligations (other than the payment of money) if such
act or event is beyond the reasonable control of and
does not arise out of the negligent act or omission
of, the affected Party . . . .

(Lease (Doc. 23-1) § 17.3 (emphasis added).)
Section 17.3 concerns force majeure events that affect a
party’s ability to perform their contractual obligations “other
than the payment of money.” (Id.) As Defendant notes, this
provision could be read to prevent a party from relying “on the
Force Majeure provisions themselves to excuse payments under the
Lease. For example, if there was a flood at [Defendant’s]
corporate headquarters or bank that prevented [Defendant] from
making payments, it could not rely on Section 17.3, which does
not excuse the ‘payment of money.’” (Def.’s Resp. (Doc. 25) at
11.) Therefore, Defendant’s interpretation does not render
Section 17.3 meaningless.
Where the words or effect of a contract are uncertain or
capable of multiple reasonable interpretations, summary judgment
is inappropriate. Glover, 109 N.C. App. at 456, 428 S.E.2d at
209. Here, because both Plaintiff’s and Defendant’s
interpretations are reasonable, the contract is “capable of
multiple reasonable interpretations.” Id. Therefore, this court
finds Section 3.6 is ambiguous on the question of whether
Defendant’s obligation to pay rent is equitably abated when a
law unrelated to construction or land use deprives the tenant of
use of the Demised Premises. Since the language of Section 3.6
is ambiguous, this court will deny both parties’ motions for
summary judgment insofar as they concern Defendant’s ability to
abate rent under Section 3.6.

2. Abatement under Section 17.16
Defendant further argues that its obligation to pay rent
was equitably abated under Section 17.16 of the Lease.6 (Def.’s
Resp. (Doc. 25) at 15–18.) Subsection 17.16 is titled
“Representations and Warranties,” and the relevant portion
states
If at any time there is a breach or default of
any of Landlord’s representations, warranties or
agreements under this Section 17.16 which results in
deprivation or impairment in any material respect in
the use and enjoyment of the Demised Premises, or if
for any other reason Tenant shall be deprived of or
impaired in the use and enjoyment of the Demised

6 Defendant occasionally cites Section 17.6 as the section
of the Lease Defendant contends provides authority for equitable
abatement. (See Def.’s Answer (Doc. 7) at 8, 11, 20; see also
Def.’s Resp. (Doc. 25) at 8). This court will assume Defendant
intended to cite Section 17.16 since that is the section of the
Lease Defendant quotes in its argument. (See, e.g., Def.’s
Answer (Doc. 7) at 7, 11, 17; see also Def.’s Resp. (Doc. 25) at
8.)
Premises and Common Areas as herein provided, the Rent
to be paid by Tenant shall be equitably abated during
any such period. If such period continues for more
than thirty (30) days after notice from Tenant and
such additional period as is reasonably necessary to
cure same so long as Landlord is pursuing with due
diligence, but not longer than one hundred eighty
(180) days, Tenant may, at its option, cancel this
Lease by notice to Landlord while reserving all rights
which Tenant may have for Landlord’s breach of this
Lease.

(Lease (Doc. 23–1) § 17.16(a) (emphasis added).)
Plaintiff asks this court to read the language “any reason”
as limited to reasons related to the representations and
warranties provided in Section 17.16. (See Pl.’s Br. (Doc. 24)
at 12–14.) Under this interpretation, because Section 17.16
arguably made no representations or warranties regarding
closures from an unanticipated public health emergency,7 (see

7 It is arguable, but not obvious, that Section 17.16 makes
no representations about public health emergencies. Section
17.16(a)(ii) says
Tenant's use of the Common Areas of the Shopping
Center for access to the Demised Premises, accessory
automobile parking, signage (subject to Section 8.4)
and service facilities contemplated by this Lease
shall not be prevented or materially impaired by any
current. . . health [or] safety, . . . governmental
law or regulation . . . .”
(Lease (Doc. 23-1) § 17.16(a)(ii).) This court reads this
section of the contract to only provide representations
concerning “current” laws, meaning laws that applied when the
contract was entered into in 2005, (Pl.’s Br. (Doc. 24) at 2;
Def.’s Resp. (Doc. 25) at 4). Thus, it would not apply to laws
arising from the COVID-19 pandemic. Therefore, it does not
appear to impact the analysis that Section 17.16 made no
representations concerning a public health emergency declared in
2020.
Lease (Doc. 23–1) § 17.16), closing due to COVID-19 was not a
reason that would permit Defendant to equitably abate its rent.
Under Defendant’s interpretation of Section 17.16, if the
Tenant is deprived of the use and enjoyment of the Demised
Premises for “any reason,” its rent obligations are equitably
abated. (Def.’s Answer (Doc. 7) at 11 (emphasis in original).)
Defendant argues that when the Demised Premises was closed due
to COVID-19 Defendant “was both deprived of and impaired in the
use and enjoyment of the Demised Premises because it was wholly

unable to use the Demised Premises as a retail sporting goods
store.” (Def.’s Resp. (Doc. 25) at 16.) Defendant claims that
since its use of the Demised Premises was impaired by the COVID-
19 closure, this qualifies as a “reason” under Section 17.16
that allows it to equitably abate its rent payments. (See id.)
Defendant responds to Plaintiff’s argument that the phrase
“any reason” should be limited by the context of representations
and warranties by noting that parties make representations and
warranties in contracts “to allocate risks between the parties.”
(Id. at 17 n.4.) Defendant argues its interpretation is
consistent with the parties’ intent in the Lease “to provide

[Defendant] a space to operate its retail store.” (Id.) To
further this purpose, the “Landlord represents and warrants
that” if the Tenant’s “use and enjoyment of the Demised Premises
is impaired, for any reason, its Rent obligations shall be
equitably abated.” (Id.)
Defendant also notes that Plaintiff’s reading would
effectively require this court to substitute the word “reason”
for the phrase “violation of the [re]presentations and
warranties.” (Id. at 16 (emphasis and internal quotation marks
omitted).) Therefore, its interpretation is at odds with the
Lease’s plain language. (See id. at 16–17.)
This court finds it reasonable to interpret “any reason” to

mean just that—any reason that impairs Tenant’s use and
enjoyment of the premises. Moreover, it is reasonable to find
that the closure impaired Defendant’s use of the Demised
Premises because it prevented Defendant from making in-person
retail sales. (See id. at 16.)
Furthermore, Plaintiff’s interpretation, which effectively
interprets “any reason” to mean any reason related to the
aforementioned representations and warranties, (Pl.’s Br. (Doc.
24) at 12–13), is also reasonable. Section 17.16 is titled
“Representations and Warranties,” (Lease (Doc. 23–1) § 17.16),
so it is reasonable to interpret “any reason” as constrained to

reasons arising out of the representations and warranties the
parties set out elsewhere in Section 17.16.
Plaintiff argues that Defendant’s interpretation would
render several sections of the Lease superfluous including the
Force Majeure provision, the Representations and Warranties
section, the Co-Tenancy provision, the section on partial
abatement if the premises are damaged or destroyed, and the
provision allowing for partial abatement if the premises are
partially condemned. (See Pl.’s Reply (Doc. 27) at 10.) This
court finds that while these arguments may strengthen
Plaintiff’s interpretation, they do not demonstrate that

Defendant’s interpretation is unreasonable.
When a contract’s language “is fairly and reasonably
susceptible to either” party’s interpretation, it is ambiguous.
Glover, 109 N.C. App. at 456, 428 S.E.2d at 209. Interpretation
of an ambiguous contract is an issue for the jury. Id. Here,
because the parties have each advanced contrary, reasonable
interpretations of the abatement language in Section 17.16,
summary judgment on this issue is inappropriate.
3. Co-Tenancy Requirement
Defendant argues that the Co-Tenancy Requirement is a
condition precedent to its obligation under the Lease to pay

Minimum Rent. (See Def.’s Resp. (Doc. 25) at 9–10.) “A condition
precedent is an event which must occur before a contractual
right arises, such as the right to immediate performance. Breach
or non-occurrence of a condition prevents the promisee from
acquiring a right, or deprives him of one, but subjects him to
no liability.” Handy Sanitary Dist. v. Badin Shores Resort
Owners Ass’n, 225 N.C. App. 296, 301–02, 737 S.E.2d 795, 800
(2013) (quoting In re Foreclosure of Goforth Props., Inc., 334
N.C. 369, 375, 432 S.E.2d 855, 859 (1993)).
Plaintiff does not directly address whether the Co-Tenancy
Requirement is a condition precedent to Defendant’s obligation
to pay Minimum Rent. (See Pl.’s Reply (Doc. 27) at 7–9.)

Nevertheless, this court finds the language of the Co-Tenancy
Requirement to be a condition precedent to Defendant’s
obligation to pay Minimum Rent. Specifically, Section 1.7(b)
states that if “the Co-Tenancy Requirement is not satisfied
. . . Tenant shall then pay to Landlord monthly, in lieu of
Minimum Rent, . . . Substitute Rent . . . .” (Lease (Doc. 23-1)
§ 1.7(b).) This language indicates that the Co-Tenancy
Requirement must be met for Defendant to become obligated to pay
Minimum Rent—if the requirement is not satisfied, Defendant does
not have to pay Minimum Rent.
Having determined that the Co-Tenancy Requirement is a

condition precedent to Defendant’s obligation to pay Minimum
Rent, this court will turn to the question of whether the Co-
Tenancy Requirement was satisfied. Defendant argues that the Co-
Tenancy Requirement was not met, so it was entitled to pay
Substitute Rent from April 2020 through June 2020. (See Def.’s
Resp. (Doc. 25) at 9–13.) Plaintiff argues that the Co-Tenancy
Requirement was not violated because that provision does not
apply to force majeure events. (See Pl.’s Br. (Doc. 24) at 14–
16.)
Section 1.7 of the Lease contains a Co-Tenancy Requirement,
which says
(a) As used in this Section 1.7, the term “Co-
Tenancy Requirement” shall mean (i) that at least
three (3) Department Stores shall be open and
operating (i.e., conducting business operations in at
least eighty-five percent (85%) of the [Leasable Floor
Area or “LFA”] available for such stores); and (ii)
that at least sixty-five percent (65%) of the LFA of
the Shopping Center, excluding the Demised Premises,
the Department Stores and any outparcels, shall be
open for the operation of a retail business by one or
more Required Tenant(s). A Department Store shall not
be deemed to have ceased operations until such
Department Store is not open for a period in excess of
one hundred eighty (180) consecutive days. A
Department Store shall not be deemed to have ceased
operations if such Department Store is not open for
reasons of casualty, a Force Majeure Event, repairs,
remodeling or renovation. A “Required Tenant” shall
mean a single national, regional or local Occupant of
the type typically found in first (1st) class regional
shopping centers.

(Lease (Doc. 23-1) § 1.7(a) (emphasis omitted).) Defendant does
not argue that the first requirement was not met; rather,
Defendant argues that “prong (ii) was not satisfied.” (Def.’s
Resp. (Doc. 25) at 10.)
The second prong of the Co-Tenancy Requirement requires
that “at least sixty-five percent (65%) of the LFA of the
Shopping Center, excluding the Demised Premises, the Department
Stores and any outparcels, shall be open for the operation of a
retail business by one or more Required Tenant(s).” (Lease
(Doc. 23-1) § 1.7(a).) Leasable Floor Area, or LFA, is defined
as
the number of gross square feet of leasable floor area
(whether occupied or unoccupied) of the Shopping
Center Buildings intended for the exclusive use by any
tenant, subtenant, assignee, licensee, concessionaire
or other occupant of the Shopping Center (“Occupant”)
thereof including mezzanines or other levels if used
for retail sales or if leased for offices not related
to the retail use thereon. The LFA of any premises
shall be measured from the exterior face of exterior
walls and the exterior face of service corridor walls,
the line along the front of such premises where it
abuts the sidewalk: or other Common Areas, and the
center line of any wall that such premises shares with
an adjoining premises. Notwithstanding the
foregoing, the Demised Premises shall be deemed to
contain 66,000 square feet of LFA.

(Id. § 1.2(d)(emphasis omitted).)
Pauline Balogh, one of Plaintiff’s owners, acknowledged
that none the Shopping Center was open from the end of March to
the beginning of May (when the Shopping Center was allowed to
reopen). (Def.’s Excerpts Balogh Dep. (Doc. 25-1) at 8, 24.)
Although the form of the question asked to Balogh was vague,
(see id. at 24), Plaintiff does not dispute that Hanes Mall was
completely closed from the end of March to the beginning of May
2020 due to the North Carolina governor’s executive order, (see
Ex. 3 Executive Order No. 121 (“March Order”) (Doc. 25-3); Ex. 4
Executive Order No. 138 (“May Order”) (Doc. 25-4); see also Zoom
Dep. of Pauline Balogh (“Pl.’s Excerpts Balogh Dep.”) (Doc. 23-
6) at 22 (discussing the March shutdown notice from the
governor)).
Thus, Plaintiff’s own evidence indicates there is no
dispute that at least sixty-five percent of the LFA of the
Shopping Center, excluding the Demised Premises, the Department

Stores, and any outparcels, was not open for the operation of
retail business while the governor’s executive order was in
effect. Therefore, there is no genuine dispute of material fact
that the second prong of the Co-Tenancy Requirement was not met
from March 30, 2020, when the order went into effect, (see March
Order (Doc. 25–3)), until May 8, 2020, when the shutdown ended,
(see May Order (Doc. 25–4)).
Plaintiff’s argument that a force majeure event precludes a
finding that the Co-Tenancy Requirement was not met has merit as
to prong one. Assuming, without deciding, that the COVID-19
pandemic qualifies as a force majeure event, the plain language

of the Lease indicates that Department Stores have not ceased
operations when they are closed due to a force majeure event.
(Lease (Doc. 23-1) § 1.7(a).) But Section 1.7(a) does not
contain similar language with respect to closure of the Shopping
Center LFA, which is the subject of the second prong. (See id.)
Because the modifying language applies to Department Stores and
not the Shopping Center, closures of the Shopping Center’s LFA
from force majeure-type events (where sixty-five percent or more
of the LFA is not open) violate the Co-Tenancy Requirement.
Therefore, this court finds a force majeure event does not
modify the language of the second prong of the Co-Tenancy
Requirement.8

Plaintiff argues this interpretation would render Section
17.3 of the Lease, the Force Majeure provision, superfluous
because the Force Majeure provision “exclude[s] payment of money
from the obligations that could be suspended by a force majeure
event. (See Pl.’s Br. (Doc. 24) at 16.) However, when a force
majeure event triggers a violation of the Co-Tenancy Requirement
and results in Defendant paying Substitute Rent, Section 17.3 is
not meaningless, (see Lease § 1.7(b)), because the payment of
rent generally is not excused. (See id.) Instead, only the

8 Plaintiff argues that “a Co-Tenancy violation occurs if
(i) the mall has fewer than three Department Stores or if less
than 65% of the leasable floor area (‘LFA’) of the mall not
occupied by Dick’s or a Department Store is not filled by
Required Tenants.” (Pl.’s Reply (Doc. 27) at 8 (emphasis in
original).) This interpretation of the Co-Tenancy Requirement is
squarely at odds with the plain language of the Co-Tenancy
Requirement, which requires both prong one and prong two to be
satisfied. (See Lease (Doc. 23-1) § 1.7.)
payment of Minimum Rent is excused, and the Tenant is obligated
to pay Substitute Rent in lieu of Minimum Rent. (See id.)
If the co-tenancy requirement is violated, the Lease
provides that the Tenant pays, “in lieu of Minimum Rent, . . .
Substitute Rent.” (Lease (Doc. 23-1) § 1.7(b).) Substitute Rent
is defined as “two percent (2%) of Gross Sales, but never more
than the Minimum Rent for that month that would have otherwise
been payable for such calendar month.” (Id. § 1.5(c)(i).) Gross
Sales means

the total amount of all sales of merchandise and
services made, sold or rendered in, upon or from the
Demised Premises during such lease year or partial
lease year in each case whether the same shall be made
by Tenant or by any subtenant, licensee or
concessionaire of Tenant, whether for cash or on a
charge or credit basis, whether delivered from the
Demised Premises or elsewhere. . . .

(Id. § 6.2.) Gross Sales must occur “upon or from the Demised
Premises” and do not include “[i]nternet or catalog sales.”
(Id.)
Because the Co-Tenancy Requirement was violated, Defendant
was entitled to pay Substitute Rent in lieu of Minimum Rent. The
remaining question is for how long the Co-Tenancy Requirement
was violated, and relatedly, how long Defendant was entitled to
pay Substitute Rent. Section 1.7(b) of the Lease states that in
the event of a Co-Tenancy violation, the Tenant shall pay
“Substitute Rent, during the period which extends from the
beginning of the first full calendar month following the
Co-Tenancy Violation and continuing until the end of the
calendar month in which such Co-Tenancy Requirement is
satisfied.” (Id. §1.7(b).) Since the governor’s executive order
went into effect in March, Defendant was entitled to pay
Substitute Rent beginning in April 2020. That entitlement would
expire at the end of the month in which the Co-Tenancy
Requirement was again satisfied.
Plaintiff does not dispute that Hanes Mall was completely

closed from March 30, 2020 until May 8, 2020. (See March Order
(Doc. 25-3); see also May Order (Doc. 25-4); see also Pl.’s
Excerpts Balogh Dep. (Doc. 23-6) at 22 (discussing the March
shutdown notice from the governor).) Therefore, under the terms
of the Lease, Defendant was entitled to pay Substitute Rent for
April and May 2020.9
Defendant argues the Co-Tenancy Requirement remained unmet
for some period after the conclusion of the shutdown. (See Decl.
of Kristen Boscarino (“Boscarino Decl.”) (Doc. 26) ¶ 6).

9 This does not foreclose the possibility that a subsequent
agreement, for example the alleged rent deferral agreement,
could have supplanted Defendant’s ability to pay rent for some
of these months. Furthermore, the parties have not addressed how
the closure for two days in March and eight days in May might
affect the damages calculation. Because issues remain for trial
regardless, the court does not resolve the March and May issues
here.
Presumably, this is why Defendant seeks a declaratory judgment
that the Co-Tenancy Requirement was not met “between, at least,
March 2020 and June 2020.” (Def.’s Cross-Mot. for Summ. J. (Doc.
41–1) at 1.) To prove this allegation, Defendant asks this court
to rely on Kristen Boscarino’s Affidavit, which claims the Co-
Tenancy Requirement was not met even after the Shopping Center
reopened on May 8, 2020. (Boscarino Decl. (Doc. 26) ¶ 6). This
court declines to do so.
An affidavit which is “conclusory, . . . does not set forth

facts of which the [affiant] has personal knowledge[,] and . . .
does not give specific facts, but only generalities” does
“not measure up to the requirements of Rule 56(e).” Barwick v.
Celotex Corp., 736 F.2d 946, 960 (4th Cir. 1984).
Though Boscarino states she has “personal knowledge of the
facts and matters herein,” (Boscarino Decl. (Doc. 26) ¶ 1), the
allegation “that the Co-Tenancy Requirement . . . remained
unsatisfied after the Shopping Center reopened,” (Id. ¶ 6), is
unsupported by reference to any evidence. Defendant does not
provide its calculations for determining that the requisite
number of tenants were closed, identify which stores remained

closed after the shutdown ended, or provide dates for when they
reopened. Since the relevant language of the affidavit is
“conclusory” and lacks “specific facts,” Barwick, 736 F.2d at
960, this court declines to rely on it to prove the Co-Tenancy
Requirement remained unmet after May 8, 2020.
Similarly, defendant argues that “[Plaintiff] does not . .
. dispute that from March 2020 through June 2020,” the Co-
Tenancy Requirement was not met. (Def. Resp. (Doc. 25) at 7.)
However, more accurately, Balogh stated that Plaintiff did not
perform any calculations to determine whether the Co-Tenancy
requirement was met between March and June 2020. (Def.’s
Excerpts Balogh Dep. (Doc. 25–1) at 76:15–76:23). The fact that

Plaintiff does not have Co-Tenancy calculations to rebut
Defendant’s allegations does not absolve Defendant of the
responsibility to provide evidence demonstrating when the Co-
Tenancy Requirement was violated.10
Therefore, at this stage of the proceedings, there is no
genuine issue of fact as to Plaintiff’s violation of the Co-
Tenancy requirement from March 30, 2020, through May 8, 2020. As

10 Plaintiff’s reply also states “[i]f the Court accepts
Dick’s counterclaims asserting a breach of the Lease’s Co-
Tenancy (Section 1.7), Construction Representations (Section
3.6) or Representations and Warranties (Section 17.16) sections
as to its May and June, 2020 rent, Dick’s is still in breach of
the Rent Deferral Agreement and thus owes full Minimum Rent for
April, 2020.” (Pl.’s Reply (Doc. 27) at 2 (emphasis added).)
This court declines to read this statement as a concession by
Plaintiff that, if this court accepts Dick’s arguments regarding
the Co-Tenancy Requirement, then it must necessarily find that
Defendant was entitled to pay Substitute Rent for June 2020.
a result of that violation, Defendant was presumptively entitled
to pay Substitute Rent for April and May 2020.
However, Plaintiff argues Defendant was not entitled to pay
Substitute Rent in lieu of Minimum Rent for April 2020, (see
Pl.’s Reply (Doc. 27) at 1–5), because the parties had executed
a rent deferral agreement for April 2020 rent, and Defendant
breached that agreement. (See id.) This court must therefore
determine whether the parties entered into a valid contract
regarding April 2020 rent before it can determine the effect of

the Co-Tenancy Requirement violation on April Rent. See infra
Section IV.B.4.
Therefore, this court finds that due to the violation of
the Co-Tenancy Requirement, Defendant was permitted to pay
Substitute Rent for May 2020. This court will grant Defendant’s
motion for summary judgment so far as it requests declaratory
judgment that, for May 2020, Defendant was entitled to pay
Substitute Rent in lieu of Minimum Rent.
4. Rent Deferral Agreement
Defendant argues it did not enter into an agreement
regarding April 2020 rent with Plaintiff. (Def.’s Resp.

(Doc. 25) at 18–19.) Specifically, Defendant argues that Pauline
Balogh’s counterproposal regarding April 2020 rent was never
accepted by Defendant’s employee, Brandon Barnett. (Id. at 18.)
Defendant also appears to argue that Barnett lacked authority to
accept any offer from Plaintiff. (See id.) In the alternative,
Defendant argues the purported agreement was made before the
parties were aware of the failure of the Co-Tenancy conditions
and the agreement did not purport to reach Substitute Rent. (Id.
at 19.)
A valid contract requires an agreement based on a meeting
of the minds and sufficient consideration. See Creech ex rel.
Creech v. Melnik, 147 N.C. App. 471, 477, 556 S.E.2d 587, 591

(2001). Further, to be enforceable, a contract must be
sufficiently definite. McClean v. Duke Univ., 376 F. Supp. 3d
585, 606 (M.D.N.C. 2019) (citing Brooks v. Hackney, 329 N.C.
166, 170, 404 S.E.2d 854, 857 (1991)). However, a “contract need
not definitely and specifically contain in detail every fact to
which the parties are agreeing.” Sides v. Tidwell, 216 N.C. 480,
480 5 S.E.2d 316, 318 (1939).
This court finds the alleged agreement between Balogh and
Barnett was sufficiently definite. Barnett stated “[Defendant]
will pay the April rent at a 25% reduction and pay back starting
[January 1, 2021].” (Email Chain (Doc. 23-8) at 2.) There is no

genuine dispute that the parties understood “April rent” to mean
Minimum Rent of $90,750 and that 75% of April rent would be due
immediately, with the remainder due on January 1, 2021. As
Defendant notes, the parties were not aware of any alleged
failure of the Co-Tenancy Requirement when Barnett and Balogh
were communicating. (Def.’s Resp. (Doc. 25) at 19.) Thus, the
parties believed Defendant would owe Minimum Rent for April, not
Substitute Rent and there was no reason for them to discuss
Substitute Rent. Additionally, Balogh’s April 3, 2020 email
refers to “base rent” as $90,750, (Email Chain (Doc. 23-8) at
3–4), and Minimum Rent for the Demised Premises in April was
$90,750, (Compl. (Doc. 3) ¶ 11; compare Lease (Doc. 23–1)

§ 4.1(a)(ii), with Lease (Doc. 23–1) § 6.1), demonstrating that
the parties were discussing Minimum Rent. Barnett’s April 7,
2020 response to Balogh’s email also referenced “base rent” and
made no mention of Substitute Rent. (See Email Chain (Doc. 23-8)
at 3.) Thus, this court finds that there was a sufficiently
definite agreement to reduce April 2020 Minimum Rent by twenty-
five percent with the deferred portion to be paid back
January 1, 2021.
The next question is whether Barnett accepted this
agreement. Acceptance “manifests the offeree’s intent to be
bound by the terms of the offer. Intention is the key element.”

Exec. Leasing Assocs. v. Rowland, 30 N.C. App. 590, 592, 227
S.E.2d 642, 644 (1976). A party may communicate its acceptance
“by any means sufficient to manifest intent” which “may include
a signature, silence, or conduct.” Id. (citing Albemarle Educ.
Found., Inc. v. Basnight, 4 N.C. App. 652, 167 S.E.2d 486
(1969)).
Defendant contends Barnett never accepted Balogh’s
counterproposal. (Def.’s Resp. (Doc. 25) at 18–19.) The record
contradicts this argument. On April 9, 2020, Barnett wrote
Balogh that, “[Defendant] will pay the April rent at a 25%
deduction.” (Email Chain (Doc. 23-8) at 2.) He asked Balogh to
“[p]lease confirm,” and said he would, “submit [the agreement]

to my team.” (Id.) Contrary to Defendant’s argument, this did
not condition Barnett’s acceptance on subsequent approvals from
Defendant. Instead, it manifested Barnett’s intention to bind
Defendant to the rent deferral agreement. Barnett stated
Defendant would pay the agreed upon sum at the agreed upon time.
(See id.) He did not state or imply that acceptance was
conditioned on approval from other members of his team or that
he intended to further negotiate with Balogh. (See id.) Since
this court finds Barnett accepted the agreement, the remaining
question is whether he possessed authority to do so.
Plaintiff contends that Barnett possessed both actual and

apparent authority to bind Defendant to the rent deferral
agreement. (See Pl.’s Reply (Doc. 27) at 4–5). A principal is
liable for a contract made by his agent with a third party if
(1) “the agent acts within the scope of his actual authority;”
(2) the principal ratifies an otherwise unauthorized contract;
or (3) “the agent acts within the scope of his apparent
authority, unless the third person has notice that the agent is
exceeding his actual authority.” Morpul Rsch. Corp. v. Westover
Hardware, Inc., 263 N.C. 718, 721, 140 S.E.2d 416, 418-19
(1965).
“Actual authority is that authority which the agent
reasonably thinks he possesses, conferred either intentionally

or by want of ordinary care by the principal. Actual authority
may be implied from the words and conduct of the parties and the
facts and circumstances attending the transaction in question.”
Harris v. Ray Johnson Constr. Co., 139 N.C. App. 827, 830, 534
S.E.2d 653, 655 (2000). An agent’s authority to bind his
principal must be demonstrated by the principal’s conduct; “[a]n
agent’s authority to bind his principal cannot be shown by the
agent’s acts or declarations.” Stainless Valve Co. v. Safefresh
Techs., LLC, 231 N.C. App. 286, 289–90, 753 S.E.2d 331, 334
(2013) (quoting Simmons v. Morton, 1 N.C. App 308, 310, 161
S.E.2d 222, 233 (1968)).

By contrast, apparent authority “includes authority to do
whatever is usual and necessary to carry into effect the
principal power conferred upon the agent and to transact the
business which he is employed to transact.” Morpul Rsch. Corp.,
263 N.C. at 721, 140 S.E.2d at 419. “When a corporate agent acts
within the scope of his apparent authority, and the third party
has no notice of the limitation on such authority, the
corporation will be bound by the acts of the agent.” Zimmerman
v. Hogg & Allen, Pro. Ass’n, 286 N.C. 24, 30, 209 S.E.2d 795,
799 (1974). Put another way, a principle is liable for contracts
his agent enters into with a third party if the “third [party,]
in the exercise of reasonable care[,] was justified in believing

that the principal had . . . conferred [authority] upon his
agent.” Bookman v. Britthaven, Inc., 233 N.C. App. 454, 458, 756
S.E.2d 890, 894 (2014) (quoting Munn v. Haymount Rehab. &
Nursing Ctr., 208 N.C. App. 632, 639, 704 S.E.2d 290, 295
(2010)).
Plaintiff argues that Barnett was clothed with actual and
apparent authority to bind Defendant to the agreement with
Balogh. (See Pl.’s Reply (Doc. 27) at 4–5.) Plaintiff claims
Barnett possessed actual authority based on his title of real
estate manager, the ”unconditional offer of performance” in his
April 9, 2020 email, and because he initiated negotiations with

Balogh. (Pl.’s Reply (Doc. 27) at 4–5.) While these facts
suggest Barnett possessed actual authority, they do not answer
the relevant legal inquiry—whether Barnett reasonably thought he
had authority to unilaterally enter the agreement on Defendant’s
behalf. Balogh’s response to a question about internal approvals
at Dick’s bolster’s this conclusion.
Q. You don’t know how approvals or authority work at
Dick’s Sporting Goods --
A. That I don’t, no.
(Pl.’s Excerpts Balogh Dep. (Doc. 23-6) at 23.) Plaintiff cites
no evidence regarding Barnett’s job description or statements
from Defendant to Barnett about what authority he had to
negotiate rent abatement contracts with Defendant’s landlords.
While the facts Plaintiff marshals all suggest Barnett believed
he had authority, they are not dispositive on the question of
actual authority at the summary judgment stage.
Plaintiff’s claims regarding Barnett’s apparent authority
rely on the same facts. (See Pl.’s Reply (Doc. 24) at 4–5.)
Again, Plaintiff fails to show these factors satisfy the test
for apparent authority. To prove apparent authority, Plaintiff
must show that it reasonably believed Barnett possessed
authority to bind Defendant to a contract with Plaintiff. See
Brookman, 233 N.C. App. at 458, 756 S.E.2d at 894.
Relevant to this question is Balogh’s impression of
Barnett’s authority to enter the agreement. In her deposition,

Balogh said Barnett, “is in charge of real estate, usually . . .
the [real estate] manager is the one that tells his team this is
what we’re going to do, this [has been] my experience with all
the real estate I’ve ever owned.” (Pl.’s Excerpts Balogh Dep.
(Doc. 23-6) at 23.) This demonstrates that Balogh believed,
based on Barnett’s title and her own past real estate
transactions, that Barnett possessed authority to bind
Defendant. While it shows Balogh believed Barnett possessed
authority, it does not prove her belief was reasonable. This
court was not provided information about whether it is industry
practice for real estate managers to possess authority to enter

into binding rent deferral agreements or how many real estate
managers Balogh made agreements with in the past. Therefore,
this court finds that Plaintiff is not entitled to judgment as a
matter of law at this stage in the proceedings.
Additionally, it appears Defendant has raised a genuine
issue of material fact about whether Barnett possessed authority
to enter the agreement. Defendant’s response makes two
statements about Barnett’s authority, “Barnett stated that he
would have to submit the proposal to his internal team. He did
not express authority to accept on the phone or via e-mail . . .
. Barnett did not state [to Balogh] that he accepted, or even

that he had authority to do so.” (Def.’s Resp. (Doc. 25) at 3,
18.) One interpretation of Defendant’s statements is that
Barnett lacked the authority to unilaterally enter a rent
deferral agreement, and therefore did not affirmatively inform
Balogh that he possessed authority. Under this interpretation,
there is a genuine dispute of material fact about whether
Barnett possessed authority.
However, if Defendant argues that Barnett never
affirmatively informed Balogh that he possessed authority, but
admits that Barnett did have such authority, then there is no
genuine issue of material fact. When an agent acts within the
scope of their actual authority, they bind the principal

regardless of whether they inform the third party that they
possess such authority. See Stainless Valve Co., 231 N.C. App.
at 289–90, 753 S.E.2d at 334 (noting that the acts of the
principal, not the agent, are dispositive in determining whether
an agent has authority). Therefore, if Barnett did possess
actual authority, Defendant is bound to the agreement with
Balogh.
However, as this is a motion for summary judgment, this
court is bound to make “rational inferences in the light most
favorable to the party opposing that motion.” Rossignol v.
Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (citations and

internal quotation marks omitted). Taken in the light most
favorable to Defendant, the statements in its response brief
that Barnett never told Balogh he possessed authority are an
assertion that he lacked the authority to bind Defendant.
Therefore, this court will deny Plaintiff’s motion for summary
judgment insofar as it seeks recognition the rent deferral
agreement existed and controls the amount Defendant owed for
April Rent.
Since the issue of whether there was a rent deferral
agreement in place has not been conclusively established, the
proper measure of Defendant’s April rent—be it Minimum Rent,
Substitute Rent, or rent under the rent deferral agreement—is an

issue for trial.
5. Frustration of Purpose
Defendant also argues it did not breach the Lease because
its obligations under the contract were excused under the
doctrine of frustration of purpose. (Answer (Doc. 7) at 5.)
Defendant contends it entered the Lease to use the “Demised
Premises for [its] retail purposes” and that “purpose was
frustrated by the events surrounding the COVID-19 pandemic.”
(Answer (Doc. 7) at 21.) Plaintiff argues frustration of purpose
is inapplicable because the subject of the Lease, the Demised
Premises, was not destroyed and because the Force Majeure

provisions of the Lease “allocated the economic risk to
[Defendant].” (Pl.’s Br. (Doc. 24) at 17.) Defendant did not
argue the issue further in its response, (see Def.’s Resp. (Doc.
27)), but sought summary judgment on the issue in its cross-
motion, (Def.’s Cross-Mot. for Summ. J. (Doc. 41–1) at 1).
Under North Carolina law, the purpose of a contract is
frustrated when “performance remains possible[] but is excused”
by “a fortuitous event [that] supervenes to cause a failure of
the consideration or a practically total destruction of the
expected value of the performance.” Brenner v. Little Red Sch.
House, Ltd., 302 N.C. 207, 211, 274 S.E.2d 206, 209 (1981)
(quoting 17 Am. Jur. 2d Contracts § 401 (1964)). The doctrine’s

“fundamental premise” is to “giv[e] relief in a situation where
the parties could not reasonably have protected themselves by
the terms of the contract against contingencies which later
arose.” Id. (quoting 17 Am. Jur. 2d Contracts § 401 (1964)).
Frustration of purpose is not a defense “[i]f the
frustrating event was reasonably foreseeable” or “if the parties
have contracted in reference to the allocation of the risk
involved in the frustrating event . . . .” Id. Additionally,
“[i]n order for the doctrine of frustration of purpose to
constitute a defense to the obligation to pay rent under a valid
lease, the subject of the contract must be destroyed.” Tucker v.

Charter Med. Corp., 60 N.C. App. 665, 670-71, 299 S.E.2d 800,
804 (1983) (finding the purpose of a commercial lease was not
frustrated after the city of Raleigh denied the defendant’s
request to build a 40,000 square foot building on the property).
This court finds Defendant’s reliance on the defense of
frustration of purpose unpersuasive. A tenant may only invoke
frustration of purpose as a defense when “the subject of the
contract . . . [is] destroyed.” Id. Here, neither party disputes
the validity of the Lease, (compare Def.’s Resp. (Doc. 25) at 9–
18 (arguing Defendant did not breach the valid Lease agreement),
with Pl.’s Br. (Doc. 24) at 6), or that the Demised Premises was

not destroyed, (compare Answer (Doc. 7) at 1–2, 14 (describing
the Demised Premises and noting that it reopened to the public
on May 8, 2020), with Pl.’s Br. (Doc. 24) at 17). Since this
court finds the defense of frustration of purpose is
inapplicable to these facts, it does not reach the question of
whether the Force Majeure provision allocated the risk to
Defendant.11 Thus, Defendant’s cross-motion for summary judgment
will be denied insofar as it seeks a “Declaratory Judgment
regarding Frustration of Purpose.” (Def.’s Cross-Mot. for Summ.
J. (Doc. 41–1) at 2.)

11 This finding is consistent with other courts that have
held that COVID-19 did not create a valid defense of frustration
of purpose. See e.g., Gap Inc. v. Ponte Gadea N.Y. LLC, 524 F.
Supp. 3d 224, 235 (S.D.N.Y. 2021).
C. Defendant’s Breach of Contract Claim
Defendant seeks summary judgment on its counterclaim for
breach of contract. (Def.’s Cross-Mot. for Summ. J. (Doc. 41–1)
at 2). Defendant alleges Plaintiff breached the Lease by: (1)
“failing to provide premises suitable for [Defendant’s] intended
use;” (2) “demand[ing] payments it was not entitled to;” and (3)
“fail[ing] to return overpayments under the lease.” (Id.)
District courts may deny a motion for summary judgment
“where there is reason to believe that the better course would

be to proceed to a full trial.” Anderson, 477 U.S. at 255; see
also Andrew v. Clark, 561 F.3d 261, 271 (4th Cir. 2009) (noting
district courts have “discretion . . . to deny summary judgment
motions even when the standard appears to have been met”);
Forest Hills Early Learning Ctr., Inc. v. Lukhard, 728 F.2d 230,
245 (4th Cir. 1984) (“A court may properly decline, for a
variety of reasons, to grant” summary judgment.)
The substance of Defendant’s counterclaim first appears in
its answer where it recites the three points quoted above
without any providing additional context. (See Answer (Doc. 7)
at 21–22.) Similarly in its response, Defendant makes the same

assertion it is entitled to summary judgment because it “has not
breached the Lease[,] . . . it has paid all amounts due under
the Lease, and in fact has overpaid for amounts not due.” (See
Def.’s Resp. (Doc. 25) at 4.)
As noted supra Section IV.b.3, this court finds that the
Co-Tenancy Requirement was not satisfied and Defendant was
entitled to pay Substitute Rent for May 2020. However, Defendant
does not argue that the failure of the Co-Tenancy Requirement
constituted breach of the Lease. Instead, Defendant notes that
its “obligation to pay full Rent [was] conditioned on whether
certain co-tenancy conditions are met.” (Def.’s Resp. (Doc. 25)

at 5 (emphasis added).) If the Co-Tenancy Requirement was met,
Minimum Rent was owed. If it was not, Substitute Rent was owed.
However, Plaintiff did not breach the Lease in either case.
This court is not persuaded Defendant is entitled to
summary judgment on its claim for breach of contract because it
has failed to make arguments beyond a bare recitation of these
grievances. Without further evidence and argument from the
parties on these issues, this court finds “that the better
course would be to proceed to a full trial.” Anderson, 477 U.S.
at 255. Therefore, this court will deny Defendant’s motion for
breach of contract.

V. CONCLUSION
For the reasons stated herein, Plaintiff’s motion for
summary judgement, (Doc. 23), will be denied, Defendant’s motion
for summary judgment, (Doc. 40–1), will be granted in part and
denied in part, and Defendant’s motion for supplemental
briefing, (Doc. 40), will be denied.
Specifically, this court finds that Sections 3.6 and 17.16
of the Lease are ambiguous on the question of whether Defendant
was permitted to abate rent due to closures from COVID-19. The
court also finds the Co-Tenancy Requirement was unmet from March
30, 2020, through May 8, 2020, which permitted Defendant to pay
Substitute Rent in lieu of Minimum Rent. The court further finds

there is a genuine issue of material fact as to whether the
parties entered into a binding rent deferral agreement for April
rent. Finally, this court finds Defendant’s obligations under
the Lease were not frustrated by the COVID-19 pandemic.
For the reasons set forth herein,
IT IS ORDERED that Plaintiff’s Motion for Summary Judgment
(Doc. 23) is DENIED.
IT IS FURTHER ORDERED that Defendant’s Cross-Motion for
Summary Judgment (Doc. 41–1) is GRANTED IN PART AND DENIED IN
PART, it is GRANTED insofar as Defendant was entitled to pay
Substitute Rent for May 2020 because the Co-Tenancy Requirement

was not met. The remaining elements of the Cross-Motion are
DENIED.
IT IS FURTHER ORDERED that Defendant’s Motion for
Supplemental Briefing, (Doc. 40), is DENIED.
This the 30th day of September, 2022.

WUinm Lb. hon
United States District Ju

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10254188. Public record. Not legal advice.