Preview
017-325326-21 FILED
TARRANT COUNTY
5/18/2022 5:08 PM
CAUSE NO. 017-325326-21 THOMAS A. WILDER
DISTRICT CLERK
CNMK TEXAS PROPERTIES, LLC, § IN THE DISTRICT COURT OF
§
Plaintiff and Counter-Defendant, §
§
v. §
§ TARRANT COUNTY, TEXAS
GK PREFERRED INCOME II §
(RIDGMAR) SPE, LLC, AND 1551 §
KINGSBURY PARTNERS SPE, LLC, §
§
Defendants and § 17th JUDICIAL DISTRICT
Counter-Plaintiffs. §
PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION
Plaintiff CNMK Texas Properties, LLC (“Plaintiff” or “Cinemark”) files this Motion for
Leave to File Second Amended Petition (“Motion”) and respectfully states as follows:
I. INTRODUCTION
The Court is well aware of the ongoing dispute between the parties regarding the
application of the First Amendment on the Lease made the subject of this litigation. The parties
have been litigating competing interpretations of a contract provision throughout this lawsuit.
Plaintiff has attempted to amend its petition to plead ambiguity of the contract. Defendant moved
to strike Plaintiff’s Second Amended Petition because Plaintiff did not first obtain leave of court
to amend its pleading.
Plaintiff now seeks leave to file its Second Amended Petition, which is attached hereto and
incorporated by reference as Exhibit A, to add additional information to the factual background
to illustrate the ambiguity in the disputed provision. The Court should grant the Motion because
the amendment is neither surprising nor prejudicial to Defendant.
PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 1
II. GROUNDS FOR MOTION
A court should grant leave to amend a pleading after the filing deadline unless (a) the
opposing party presents evidence of surprise or prejudice; or (b) the opposing party establishes
that the amendment asserts a new cause of action or defense and is prejudicial on its face. See Tex.
R. Civ. P. 63; see also Greenhalgh v. Serv. Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex. 1990). The
trial court has broad discretion in allowing pleading amendments, and the burden to show surprise
and prejudice is on the party opposing the amendment. See Greenhalgh, 787 S.W.2d at 939.
Here, leave to amend should be given. Other than the inclusion of two paragraphs in the
factual background, the Second Amended Petition is substantively identical to the First Amended
Petition. Plaintiff does not seek to add additional causes of action. Plaintiff’s purpose in filing the
Second Amended Petition was merely to plead ambiguity in the contract. The parties have been
debating the meaning of the phrase “notwithstanding anything in the Lease to the contrary” for the
entirety of this litigation. Further, as Plaintiff concedes in its Letter Brief, a court may conclude
that a contract is ambiguous even when the parties do not plead ambiguity. See Sage St. Assocs. v.
Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993). Given the extensive debate over the
contract provision and the fact that courts can determine ambiguity absent a pleading, Plaintiff’s
pleading ambiguity should not surprise or prejudice Defendant. The pleading of ambiguity is a
mere formality.
Additionally, the disputed contract provision is ambiguous because it is capable of more
than one reasonable interpretation. See Zurich Am. Ins. Co. v. Hunt Petroleum (AEC), Inc., 157
S.W.3d 462, 465 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Plaintiff and Defendant have
offered two reasonable interpretations of the disputed contract provision that cannot be
harmonized. See id. at 467. Therefore, a fact issue exists and summary judgment is improper. See
id.
PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 2
Further, Defendant argues in its Letter Brief, “there can be no parol evidence about the
meaning of the phrase at issue in this case.” See Plaintiff’s Letter Brief, on file with the Court.
However, Defendant’s reliance on D.R. Horton-Texas, Ltd. v. Savannah Properties Assoc., L.P. is
misplaced. See 416 S.W.3d 217, 221 (Tex. App.—Fort Worth 2013, no pet.). D.R. Horton-Texas
states, “[p]arol evidence may not be introduced to create an ambiguity or to alter the intent of the
parties as expressed in the instrument.” See id. (emphasis added). This case is distinguishable from
D.R. Horton-Texas because Plaintiff does not intend to introduce parol evidence to create
ambiguity or to alter the parties’ intent. As stated above, the disputed provision is ambiguous
because it is capable of more than one reasonable interpretation. See Zurich, 157 S.W.3d at 465.
When a contract is ambiguous, a court may consider parol evidence to determine the true meaning
of the instrument. See Traweek v. Long, No. 02-20-00311-CV, 2021 WL 733085, at *5 (Tex.
App.—Fort Worth Feb. 25, 2021, pet. denied), reh’g denied (Mar. 25, 2021) (citing Nat’l Union
Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995)); see also
Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 768 (Tex. App.—El Paso 2004, no
pet.); see also RPC, Inc. v. CTMI, LLC, 606 S.W.3d 469, 493 (Tex. App.—Fort Worth 2020, pet.
denied). Any additional discovery or parol evidence will not be used to create ambiguity because
ambiguity already inherently exists. Additionally, any additional discovery and parol evidence
sought by Plaintiff will not be used to attempt to alter the parties’ intent, but to explain the parties’
intent through testimony and emails of the parties to decipher the ambiguity. Contrary to
Defendant’s contention in its Letter Brief, Plaintiff has not designated and has no intention of
designating an expert for the purpose of testifying about the parties’ intent.
Finally, in Defendant’s Letter Brief, Defendant cites cases to illustrate that the disputed
provision is unambiguous. However, those cases are inapplicable to the subject matter of this
PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 3
litigation because those cases only apply when “there is an irreconcilable conflict between [the
contract section at issue] and other provisions of the contract.” IHR Sec., LLC v. Innovative Bus.
Software, Inc., 441 S.W.3d 474, 479 (Tex. App.—El Paso 2014, no pet.) (emphasis added). Here,
there is no irreconcilable conflict between the “notwithstanding” provision and the other
provisions of the First Amendment and the Lease. Id. Instead, the provisions can be read together
in a way that does not render all of the other applicable provisions meaningless.
The Court should grant the Motion and allow Plaintiff to file its Second Amended Petition
because Defendant will not be surprised or prejudiced by the ambiguity pleading.
III. RELIEF REQUESTED
For the foregoing reasons, Cinemark respectfully requests that the Court grant the Motion,
permit Cinemark leave to file Plaintiff’s Second Amended Petition, and grant Cinemark such other
relief to which it may be entitled at law or in equity.
Dated: May 18, 2022 Respectfully submitted,
/s/ Patrick Canon
K. Todd Phillips
Texas State Bar No. 24002767
todd.phillips@wickphillips.com
Nick Nelson
State Bar No. 24074804
nick.nelson@wickphillips.com
Patrick Canon
State Bar No. 24040637
patrick.canon@wickphillips.com
WICK PHILLIPS GOULD & MARTIN, LLP
100 Throckmorton Street, Suite 1500
Fort Worth, Texas 76102
Telephone: 817.332.7788
Facsimile: 817.332.7789
ATTORNEYS FOR PLAINTIFF CNMK TEXAS
PROPERTIES, LLC
PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 4
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing instrument was served on all counsel
pursuant to the Texas Rules of Civil Procedure on May 18, 2022.
/s/ Patrick Canon
Patrick Canon
PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 5
Exhibit A
017-325326-21 FILED
TARRANT COUNTY
5/5/2022 2:24 PM
CAUSE NO. 017-325326-21 THOMAS A. WILDER
DISTRICT CLERK
CNMK TEXAS PROPERTIES, LLC, § IN THE DISTRICT COURT OF
§
Plaintiff and Counter-Defendant, §
§
v. § TARRANT COUNTY, TEXAS
§
GK PREFERRED INCOME II §
(RIDGMAR) SPE, LLC, AND 1551 §
KINGSBURY PARTNERS SPE, LLC, §
§
Defendants and §
Counter-Plaintiffs. § 17th JUDICIAL DISTRICT
PLAINTIFF’S SECOND AMENDED PETITION
Plaintiff CNMK Texas Properties, LLC (“Plaintiff” or “Cinemark”) files its Second
Amended Petition against Defendants GK Preferred Income II (Ridgmar) SPE, LLC (“GK”) and
1551 Kingsbury Partners SPE, LLC (“1551” and collectively with GK “Defendants”) and would
respectfully show the Court as follows:
I.
DISCOVERY CONTROL PLAN AND RULE 47 DISCLOSURE
1. Discovery is intended to be conducted under Level 2 pursuant to Texas Rule of
Civil Procedure 190.3, and Plaintiff affirmatively pleads that this suit is not governed by the
expedited actions process in Texas Rule of Civil Procedure 169 because Plaintiff seeks monetary
relief over $250,000.
2. Pursuant to Texas Rule of Civil Procedure 47, Plaintiff discloses that this matter is
within the jurisdictional limits of the Court and that it seeks monetary relief over $250,000 but not
more than $1,000,000, and non-monetary relief.
PLAINTIFF’S SECOND AMENDED PETITION Page 1
II.
PARTIES
3. Plaintiff CNMK Texas Properties, LLC is a domestic limited liability company
with its principal place of business at 3900 Dallas Parkway, Suite 500, Plano, Texas 75093.
4. Defendant GK Preferred Income II (Ridgmar) SPE, LLC is a Delaware limited
liability company doing business in Texas with its principal place of business at 257 East Main
Street, Suite 100, Barrington, Illinois 60010, and may be served through its registered agent, CT
Corporation System, 1999 Bryan Street, Suite 900, Dallas, Texas 75201.
5. Defendant 1551 Kingsbury Partners SPE, LLC is a Delaware limited liability
company doing business in Texas with its principal place of business at 257 East Main Street, Suite
100, Barrington, Illinois 60010, and may be served through its registered agent, CT Corporation
System, 1999 Bryan Street, Suite 900, Dallas, Texas 75201.
III.
JURISDICTION AND VENUE
6. Pursuant to Section 24.001, et seq. of the Texas Government Code, this Court has
jurisdiction over this action by virtue of the relief sought herein and because the amount in
controversy exceeds this Court’s minimum jurisdictional requirements.
7. The Court has jurisdiction over Defendants because they own property within the
State of Texas. Further, jurisdiction is proper under Texas Civil Practices and Remedies Code
Section 17.042 because Defendants have sufficient minimum contacts with the State of Texas, and
purposefully directed activities at Plaintiff in the State of Texas. Specifically, Plaintiff’s cause of
action arises in whole or in part as a result of Defendants’ contacts with Texas. Defendants have
substantial, continuous, and systematic contacts with Texas and have purposely availed themselves
of the benefits and protection of Texas by establishing minimum contacts with the state.
PLAINTIFF’S SECOND AMENDED PETITION Page 2
Additionally, Defendants have created continuing relationships and obligations with citizens of
Texas and contracted in Texas, which contract forms the basis of this suit. The Court’s exercise of
jurisdiction over Defendants does not offend traditional notions of fair play or substantial justice.
8. Venue is proper in Tarrant County pursuant to Section 15.002(a)(1) of the Texas
Civil Practice & Remedies Code because a substantial part of the events or omissions giving rise
to Plaintiff’s claims occurred in Tarrant County.
IV.
FACTUAL BACKGROUND
A. Cinemark and Defendants’ predecessors-in-interest execute a Lease for theater space
in the Ridgmar Mall.
9. On or about January 23, 2003, Shopco 129 Limited Partnership, a New York
limited partnership (“Original Landlord”), and Rave Motion Pictures Ft. Worth, L.L.C., a
Delaware limited liability company (“Original Tenant”), executed a lease wherein Original
Landlord agreed to lease property located at 2300 Green Oaks Road, Fort Worth, Texas 76116 (the
“Premises”) to Original Tenant to operate a movie theater (the “Lease”). The Premises is located
within the Ridgmar Mall, located at the intersection of Alta Mere Drive and Interstate 30, in Tarrant
County.
10. On or around November of 2012, Cinemark entered into an agreement to purchase
certain Rave Cinema locations, including the theater operated within the Premises, thereby
becoming successor-in-interest to Original Tenant’s rights and obligations under the Lease.
11. On or around October of 2013, Defendants purchased the Ridgmar Mall, thereby
becoming successor-in-interest to Original Landlord’s rights and obligations under the Lease.
B. The Lease includes anchor tenant and co-tenancy thresholds tying Premises Fixed
Rent to the number of anchor tenants and the percentage of Floor Space open within
Ridgmar Mall.
12. Importantly, Section 14.23 of the Lease requires Defendants to maintain certain
PLAINTIFF’S SECOND AMENDED PETITION Page 3
tenancy thresholds within Ridgmar Mall. If those tenancy thresholds are not maintained, Cinemark
is entitled to a reduction of Fixed Rent. 1 Specifically, if, pursuant to 14.23(a) of the Lease, there
are less than three (3) anchor locations open for business within Ridgmar Mall, or less than sixty
percent (60%) of the floor space that fronts the Covered Mall is open for business for more than
eight (8) months after notice is provided to Defendants by Cinemark, then Cinemark’s Fixed Rent
shall be reduced by twenty-five percent (25%) until the end of the Initial Term of the Lease.
Additionally, if, pursuant to 14.23(b) of the Lease, there are less than three (3) anchor locations
open for business within Ridgmar Mall, or less than sixty percent (60%) of the floor space that
fronts the Covered Mall is open for business for more than twelve (12) months after notice is
provided to Defendants by Cinemark, then Cinemark’s Fixed Rent shall be reduced by fifty percent
(50%) until the end of the Initial Term of the Lease. 2
13. In other words, Cinemark is entitled to a reduction of Fixed Rent for the remainder
of the Initial Term of the Lease in the event the Ridgmar Mall is not at least sixty percent (60%)
open for business for a period at least eight (8) months, or does not have at least three anchor
tenants open for business.
C. Ridgmar Mall begins losing tenants, and Cinemark notifies Defendants that the
anchor tenant and co-tenancy thresholds have not been met.
14. On September 2, 2018, anchor tenant Sears ceased operations within Ridgmar Mall.
On September 5, 2018, believing there to be fewer than three anchor tenants within Ridgmar Mall,
Cinemark sent notice to Defendants pursuant to Section 14.23(a), providing its eight (8) and twelve
(12) month notice that required co-tenancy levels concerning anchor tenants was not being met.
15. On September 17, 2018, Defendants responded by merely stating that Cinemark’s
1
Unless otherwise defined herein, all capitalized terms herein shall have the meanings ascribed to them in the Lease.
2
A true and correct copy of an excerpt of Lease evidencing Section 14.23 has been attached hereto as Exhibit “A.”
PLAINTIFF’S SECOND AMENDED PETITION Page 4
correspondence was incorrect, and denying that Cinemark could exercise its rights under Section
14.23 for a “number of reasons,” which Defendants declined to identify.
16. Thereafter, on February 21, 2019, Cinemark again notified Defendants that it had
come to Cinemark’s attention that less than sixty (60%) percent of the Floor Space that fronts on
the Covered Mall (excluding the anchor locations at the Shopping Center) was open for business,
and again provided its eight (8) and twelve (12) month notice that required co-tenancy levels under
Section 14.23 of the Lease were not being met. If the co-tenancy threshold was not remedied
following this notice, Cinemark would be entitled to a twenty-five percent (25%) reduction in
Fixed Rent beginning November 1, 2019, and a fifty percent (50%) reduction in Fixed Rent
beginning March 1, 2020.
17. On February 27, 2019, Defendants again responded by merely stating that
Cinemark’s correspondence was incorrect, and denying that Cinemark could exercise its rights
under Section 14.23 for a “number of reasons,” which Defendants once again declined to identify.
18. On March 15, 2019, Cinemark responded by stating that Cinemark representatives
physically visited Ridgmar Mall and, using occupancy listings showing Floor Space by suite
number previously provided by Landlord (and cross-referenced with the mall directory),
determined the total occupancy stood at only 53.04%.
19. On March 25, 2019, Defendants responded by simply stating that Cinemark’s letter
was incorrect, and alleged that seventy-five percent (75%) of the Floor Space that fronts on the
Covered Mall was open for business. Defendants failed to provide any additional information
supporting their assertion that 75% of the Ridgmar Mall was actually open for business as alleged.
20. On May 6, 2019, Cinemark responded, stating that as it had received no verification
from Defendants that the minimum occupancy levels had been met, itreserved its rights under
PLAINTIFF’S SECOND AMENDED PETITION Page 5
Section 14.23 relating to the payment of Fixed Rent in the event Defendants had failed to satisfy
the co-tenancy requirements required by the Lease. 3
D. Defendants attempt to unilaterally re-interpret the Lease to avoid reducing
Cinemark’s Fixed Rent.
21. On May 16, 2019, Defendants responded again stating that they disagreed with
Cinemark’s assertion and, asserting for the first time, an allegation that the minimum co-tenancy
requirements of Section 14.23 had somehow been completely done away with as a result of by the
First Amendment to Lease dated March 6, 2015 (“First Amendment”). Specifically, Section 5 of
the First Amendment states the following: 4
22. No reference is made at all to Section 14.23 in the First Amendment, nor have there
been any subsequent amendments to the Lease that address any revision or deletion of Section
14.23 from the Lease. In fact, Section 1 of the First Amendment also states the following:
23. Section 10 of the First Amendment also states the following regarding all other
terms and conditions of the Lease remaining in full force and effect, and that they are expressly
ratified and confirmed by Cinemark and Defendant:
3
A true and correct copy of Cinemark’s May 6, 2019 correspondence has been attached hereto as Exhibit “B.”
4
A true and correct copy of Defendants May 16, 2019 correspondence has been attached hereto as Exhibit “C,” and
a true and correct copy of the First Amendment has been attached hereto as Exhibit “D.”
PLAINTIFF’S SECOND AMENDED PETITION Page 6
24. No mention is again made of any modification of Section 14.23 of the Lease in the
First Amendment, nor is any mention made of any modifications to the minimum co-tenancy
percentage requirements defined in the Lease.
25. Defendants now attempt to take the position that because the definition of Fixed
Rent is modified in the First Amendment “notwithstanding anything in the Lease to the contrary,”
that all other provisions even tangentially impacting Fixed Rent in the Lease are somehow
modified, and presumably that the only Fixed Rent that can be charged moving forward are the
amounts described in Section 5 of the First Amendment. Such a tortured reading of Section 5 is
misplaced, ignores the plain language of Sections 1 and 10 of the First Amendment, and ignores
that no changes explicitly pertaining to co-tenancy requirements appear anywhere within the First
Amendment. Indeed, the text upon which Defendants attempt to justify their actions simply means
that Fixed Rent is to be amended notwithstanding any other rent amounts stated elsewhere within
the Lease, and attempting to redefine it as something else is nothing more than a transparent
attempt by Defendants to avoid their contractual responsibilities to one of the handful of remaining
tenants in Ridgmar Mall.
26. On February 23, 2021, Cinemark sent a final letter to Defendants again providing
notice to Defendants pursuant to Section 14.23 of the Lease that tenancy levels remained below
60%, and inviting Defendants to provide evidence that tenancy levels are in fact above the required
co-tenancy threshold.
PLAINTIFF’S SECOND AMENDED PETITION Page 7
27. Cinemark has continued paying full Fixed Rent subject to the reservation of rights
in its May 6, 2019 letter to Defendants.
28. Defendants have now completely failed to respond at all to Cinemark’s latest good
faith attempt to address this issue, and have consistently failed to provide any information
supporting their position that co-tenancy levels have actually been met during the eight and twelve
month periods following Cinemark’s initial notice on September 5, 2018. Cinemark has therefore
been left with no choice but to file this petition for declaratory relief to confirm the rights and
responsibilities of Cinemark and Defendants under the Lease and First Amendment.
29. Specifically, Cinemark seeks a declaratory judgment that Section 14.23 of the
Lease was not modified by the First Amendment, that the co-tenancy requirements of the Lease as
described in Section 14.23 of the Lease remain in full effect, that Cinemark has been entitled to a
twenty-five percent (25%) reduction in Fixed Rent since September 3, 2018 and a fifty percent
(50%) reduction in Fixed Rent since March 3, 2019, and requiring the disgorgement by Defendants
of any Fixed Rent that Cinemark has overpaid while minimum co-tenancy levels have not been
met. Cinemark also seeks damages for breach of contract, and specific performance of Section
14.23 of the Lease.
30. Alternatively, and in the event the Court disagrees with Cinemark’s assertion that
the Lease and the First Amendment are unambiguous, 5 Cinemark alleges that the phrase
“notwithstanding anything in the Lease to the contrary” is reasonably susceptible to more than one
interpretation and therefore is ambiguous.
31. The Parties’ differing interpretation of the Lease and First Amendment, as shown
in both Cinemark and Defendant’s summary judgment briefing, highlights this point. More
5
See Pls.’ Mot. for Partial Summ. J., ¶ 33.
PLAINTIFF’S SECOND AMENDED PETITION Page 8
specifically, Cinemark is prepared to present testimony as to its intent in agreeing to the First
Amendment language, as similar language is utilized in numerous theater leases across the country.
32. Ambiguous contract language, which is present here, constitutes a genuine issue of
material factual issue that is inappropriate to resolve on summary judgment. Additionally, a court
may conclude that a contract is ambiguous even when the parties do not plead ambiguity. 6
33. Accordingly, parol evidence, deposition testimony, and other forms of discovery
are needed to ascertain the Parties’ intent regarding the Lease and the First Amendment.
V.
CAUSES OF ACTION
Count One: Declaratory Judgment
34. Each of the foregoing paragraphs are re-alleged and incorporated by reference as if
fully set out herein.
35. Defendants failed to maintain at least three anchor tenants in Ridgmar Mall as of
September 3, 2018, and occupancy percentages of Floor Space that front on the Covered Mall
within Ridgmar Mall appear to have fallen below sixty percent (60%) since at least early 2019.
Cinemark first provided notice to Defendants under Section 14.23 of the Lease of the anchor tenant
default on September 5, 2018 and of the Lease percentage default on February 21, 2019, and more
than eight and twelve months have passed since Cinemark has provided these notices. Instead of
complying with the plain language of Section 14.23 and reducing Cinemark’s rent, Defendants
have denied that Ridgmar Mall has fewer than three anchor tenants and that the occupancy
percentages have fallen below 60%, have failed to provide any information to Cinemark verifying
same despite repeated requests, and have now improperly taken the untenable position that the
minimum co-tenancy requirements have somehow been removed from the Lease via the First
6
See Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993).
PLAINTIFF’S SECOND AMENDED PETITION Page 9
Amendment, despite no mention being made at all of Section 14.23 therein.
36. As set forth above, the remaining provisions of the First Amendment expressly
incorporate and ratify the terms of the Lease, and make no mention whatsoever of any modification
to the minimum co-tenancy requirements under the Lease. The language Defendants claim has
modified these co-tenancy provisions is merely a common contractual provision confirming that
the amount of Fixed Rent was amended notwithstanding any other Fixed Rent amounts defined
elsewhere within the Lease. It does not mean that the parties agreed to remove any and all methods
of modifying rental payments following the occurrence of certain conditions under the Lease.
37. Cinemark is a “person” entitled to a declaratory judgment under Texas Civil
Practice & Remedies Code §§ 37.001, et seq. (the Texas Uniform Declaratory Judgment Act), to
determine the rights, duties, and/or obligations of the parties under the terms of the Lease and
under applicable law.
38. All parties who have or claim any interest in the Lease have been made parties to
this suit, and Cinemark requests that this Court declare the rights, status, and legal relations under
the Lease.
39. In particular, Cinemark seeks a declaratory judgment that Section 14.23 of the
Lease was not modified by the First Amendment, that the co-tenancy requirements of the Lease as
described in Section 14.23 of the Lease remain in full effect, that Cinemark has been entitled to a
twenty-five percent (25%) reduction in Fixed Rent since September 3, 2018 and a fifty percent
(50%) reduction in Fixed Rent since March 3, 2019, and requiring the disgorgement by Defendants
of any Fixed Rent that Cinemark has overpaid while minimum co-tenancy levels have not been
met.
40. It has been necessary for Cinemark to engage counsel to represent it in this suit.
PLAINTIFF’S SECOND AMENDED PETITION Page 10
Cinemark has agreed to pay said attorneys a reasonable fee for their services and Cinemark is
therefore entitled to recover such fees from FSA pursuant to Texas Civil Practice & Remedies
Code §§ 37.001, et seq, and Section 13.04 of the Lease.
Count Two: Breach of Contract
41. Each of the foregoing paragraphs are re-alleged and incorporated by reference as if
fully set out herein.
42. The Lease is a valid and enforceable contract between Cinemark, on the one hand,
and Defendants, on the other.
43. Cinemark performed or substantially performed all of its obligations required under
the Lease.
44. All conditions precedent to Cinemark’s right to specific performance have been
fulfilled, excused, or waived. All conditions precedent to Defendants’ obligations under the Lease
have been fulfilled, excused, or waived.
45. Defendants materially breached the Lease by failing to provide Cinemark the
appropriate twenty-five and fifty percent Fixed Rent reductions under Section 14.23 of the Lease
once anchor tenant and co-tenancy levels were not met within Ridgmar Mall, and Cinemark
provided notice of same on September 5, 2018 and February 21, 2019.
46. As a direct and proximate result of Defendants’ breach of the Lease, Cinemark has
suffered damages in an amount to be determined at trial. Those damages include, but are not
limited to, the amounts Cinemark has overpaid by making full Fixed Rent payments while anchor
tenant and co-tenancy obligations were not met within Ridgmar Mall.
47. As a result of Defendants’ breach of the Lease, Cinemark is entitled to specific
performance such that Defendants should be ordered to perform fully and completely all of their
PLAINTIFF’S SECOND AMENDED PETITION Page 11
obligations set forth in the Lease, including the reduction of Cinemark’s Fixed Rent pursuant to
Section 14.23.
48. It has been necessary for Cinemark to engage counsel to represent it in this suit.
Cinemark has agreed to pay said attorneys a reasonable fee for their services and is therefore
entitled to recover reasonable attorneys’ fees and costs incurred in the prosecution of this matter
from FSA under Chapter 38 of the Texas Civil Practice & Remedies Code, and Section 13.04 of
the Lease.
VI.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that the Court:
A. Enter a declaratory judgment with respect to the Fixed Rent, anchor tenant and co-
tenancy obligations under Section 14.23 of the Lease, as set forth above;
B. Enter judgment against Defendants requiring disgorgement of all amounts that
Defendants improperly charged to Cinemark, and requiring Defendants to specifically perform
under Section 14.23 of the Lease;
C. Award Plaintiff pre- and post-judgment interest at the highest rates allowed by law;
D. Award Plaintiff its reasonable attorneys’ fees and costs of court in an amount to be
proven at trial; and
E. Award Plaintiff such other and further relief to which it may be entitled at law or
in equity.
PLAINTIFF’S SECOND AMENDED PETITION Page 12
Dated: May 5, 2022 Respectfully submitted,
/s/ Patrick Canon
K. Todd Phillips
Texas State Bar No. 24002767
todd.phillips@wickphillips.com
Nick Nelson
State Bar No. 24074804
nick.nelson@wickphillips.com
Patrick Canon
State Bar No. 24040637
patrick.canon@wickphillips.com
WICK PHILLIPS GOULD & MARTIN, LLP
100 Throckmorton Street, Suite 1500
Fort Worth, Texas 76102
Telephone: 817.332.7788
Facsimile: 817.332.7789
ATTORNEYS FOR PLAINTIFF CNMK
TEXAS PROPERTIES, LLC
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing instrument was served on all counsel
pursuant to the Texas Rules of Civil Procedure on May 5, 2022.
/s/ Patrick Canon
Patrick Canon
PLAINTIFF’S SECOND AMENDED PETITION Page 13
Exhibit A
covenant of the party bound by, undertaking or making same, not dependent on any other
provision of this Lease unless otherwise expressly provided. All terms and words used in this
Lease, regardless of the number or gender in which they are used, shall be deemed to include any
other number and any other gender as the context may require.
14.20 COMPLETE AGREEMENT. The provisions of this Lease are intended
by the parties as a final expression of their agreement. No representations, agreements,
arrangements, understandings, oral or written, between the parties relating to the subject matter
of this Lease have been made or given which are not fully expressed herein. Tenant
acknowledges that, except as expressly set forth in this Lease, neither Landlord nor anyone
representing Landlord has represented, nor has Tenant relied on any representations, that any
number or any specific tenant or tenants will operate in the Shopping Center during the Term.
Tenant, in entering into this Lease, is relying solely upon its own inspection of the Shopping
Center, the businesses operating in the Shopping Center, the area demographics affecting the
Shopping Center and all other matters affecting the viability of Tenant's planned business in the
Demised Premises. In addition, Tenant hereby expressly acknowledges and agrees that Landlord
is not representing or warranting anything with respect to the business viability of Tenant's
intended operations in the Demised Premises or the success of the Shopping Center in general.
This Lease constitutes the complete and exclusive statement of its terms and supersedes all prior
drafts, other agreements and term sheets. No provision of this Lease may be amended except by
an agreement in writing signed by the parties hereto or the respective successors in interest,
whether or not such amendment is supported by new consideration.
14.21 COUNTERPART
Preview
017-325326-21 FILED TARRANT COUNTY 5/18/2022 5:08 PM CAUSE NO. 017-325326-21 THOMAS A. WILDER DISTRICT CLERK CNMK TEXAS PROPERTIES, LLC, § IN THE DISTRICT COURT OF § Plaintiff and Counter-Defendant, § § v. § § TARRANT COUNTY, TEXAS GK PREFERRED INCOME II § (RIDGMAR) SPE, LLC, AND 1551 § KINGSBURY PARTNERS SPE, LLC, § § Defendants and § 17th JUDICIAL DISTRICT Counter-Plaintiffs. § PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Plaintiff CNMK Texas Properties, LLC (“Plaintiff” or “Cinemark”) files this Motion for Leave to File Second Amended Petition (“Motion”) and respectfully states as follows: I. INTRODUCTION The Court is well aware of the ongoing dispute between the parties regarding the application of the First Amendment on the Lease made the subject of this litigation. The parties have been litigating competing interpretations of a contract provision throughout this lawsuit. Plaintiff has attempted to amend its petition to plead ambiguity of the contract. Defendant moved to strike Plaintiff’s Second Amended Petition because Plaintiff did not first obtain leave of court to amend its pleading. Plaintiff now seeks leave to file its Second Amended Petition, which is attached hereto and incorporated by reference as Exhibit A, to add additional information to the factual background to illustrate the ambiguity in the disputed provision. The Court should grant the Motion because the amendment is neither surprising nor prejudicial to Defendant. PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 1 II. GROUNDS FOR MOTION A court should grant leave to amend a pleading after the filing deadline unless (a) the opposing party presents evidence of surprise or prejudice; or (b) the opposing party establishes that the amendment asserts a new cause of action or defense and is prejudicial on its face. See Tex. R. Civ. P. 63; see also Greenhalgh v. Serv. Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex. 1990). The trial court has broad discretion in allowing pleading amendments, and the burden to show surprise and prejudice is on the party opposing the amendment. See Greenhalgh, 787 S.W.2d at 939. Here, leave to amend should be given. Other than the inclusion of two paragraphs in the factual background, the Second Amended Petition is substantively identical to the First Amended Petition. Plaintiff does not seek to add additional causes of action. Plaintiff’s purpose in filing the Second Amended Petition was merely to plead ambiguity in the contract. The parties have been debating the meaning of the phrase “notwithstanding anything in the Lease to the contrary” for the entirety of this litigation. Further, as Plaintiff concedes in its Letter Brief, a court may conclude that a contract is ambiguous even when the parties do not plead ambiguity. See Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993). Given the extensive debate over the contract provision and the fact that courts can determine ambiguity absent a pleading, Plaintiff’s pleading ambiguity should not surprise or prejudice Defendant. The pleading of ambiguity is a mere formality. Additionally, the disputed contract provision is ambiguous because it is capable of more than one reasonable interpretation. See Zurich Am. Ins. Co. v. Hunt Petroleum (AEC), Inc., 157 S.W.3d 462, 465 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Plaintiff and Defendant have offered two reasonable interpretations of the disputed contract provision that cannot be harmonized. See id. at 467. Therefore, a fact issue exists and summary judgment is improper. See id. PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 2 Further, Defendant argues in its Letter Brief, “there can be no parol evidence about the meaning of the phrase at issue in this case.” See Plaintiff’s Letter Brief, on file with the Court. However, Defendant’s reliance on D.R. Horton-Texas, Ltd. v. Savannah Properties Assoc., L.P. is misplaced. See 416 S.W.3d 217, 221 (Tex. App.—Fort Worth 2013, no pet.). D.R. Horton-Texas states, “[p]arol evidence may not be introduced to create an ambiguity or to alter the intent of the parties as expressed in the instrument.” See id. (emphasis added). This case is distinguishable from D.R. Horton-Texas because Plaintiff does not intend to introduce parol evidence to create ambiguity or to alter the parties’ intent. As stated above, the disputed provision is ambiguous because it is capable of more than one reasonable interpretation. See Zurich, 157 S.W.3d at 465. When a contract is ambiguous, a court may consider parol evidence to determine the true meaning of the instrument. See Traweek v. Long, No. 02-20-00311-CV, 2021 WL 733085, at *5 (Tex. App.—Fort Worth Feb. 25, 2021, pet. denied), reh’g denied (Mar. 25, 2021) (citing Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995)); see also Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 768 (Tex. App.—El Paso 2004, no pet.); see also RPC, Inc. v. CTMI, LLC, 606 S.W.3d 469, 493 (Tex. App.—Fort Worth 2020, pet. denied). Any additional discovery or parol evidence will not be used to create ambiguity because ambiguity already inherently exists. Additionally, any additional discovery and parol evidence sought by Plaintiff will not be used to attempt to alter the parties’ intent, but to explain the parties’ intent through testimony and emails of the parties to decipher the ambiguity. Contrary to Defendant’s contention in its Letter Brief, Plaintiff has not designated and has no intention of designating an expert for the purpose of testifying about the parties’ intent. Finally, in Defendant’s Letter Brief, Defendant cites cases to illustrate that the disputed provision is unambiguous. However, those cases are inapplicable to the subject matter of this PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 3 litigation because those cases only apply when “there is an irreconcilable conflict between [the contract section at issue] and other provisions of the contract.” IHR Sec., LLC v. Innovative Bus. Software, Inc., 441 S.W.3d 474, 479 (Tex. App.—El Paso 2014, no pet.) (emphasis added). Here, there is no irreconcilable conflict between the “notwithstanding” provision and the other provisions of the First Amendment and the Lease. Id. Instead, the provisions can be read together in a way that does not render all of the other applicable provisions meaningless. The Court should grant the Motion and allow Plaintiff to file its Second Amended Petition because Defendant will not be surprised or prejudiced by the ambiguity pleading. III. RELIEF REQUESTED For the foregoing reasons, Cinemark respectfully requests that the Court grant the Motion, permit Cinemark leave to file Plaintiff’s Second Amended Petition, and grant Cinemark such other relief to which it may be entitled at law or in equity. Dated: May 18, 2022 Respectfully submitted, /s/ Patrick Canon K. Todd Phillips Texas State Bar No. 24002767 todd.phillips@wickphillips.com Nick Nelson State Bar No. 24074804 nick.nelson@wickphillips.com Patrick Canon State Bar No. 24040637 patrick.canon@wickphillips.com WICK PHILLIPS GOULD & MARTIN, LLP 100 Throckmorton Street, Suite 1500 Fort Worth, Texas 76102 Telephone: 817.332.7788 Facsimile: 817.332.7789 ATTORNEYS FOR PLAINTIFF CNMK TEXAS PROPERTIES, LLC PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 4 CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing instrument was served on all counsel pursuant to the Texas Rules of Civil Procedure on May 18, 2022. /s/ Patrick Canon Patrick Canon PLAINTIFF’S MOTION FOR LEAVE TO FILE SECOND AMENDED PETITION Page 5 Exhibit A 017-325326-21 FILED TARRANT COUNTY 5/5/2022 2:24 PM CAUSE NO. 017-325326-21 THOMAS A. WILDER DISTRICT CLERK CNMK TEXAS PROPERTIES, LLC, § IN THE DISTRICT COURT OF § Plaintiff and Counter-Defendant, § § v. § TARRANT COUNTY, TEXAS § GK PREFERRED INCOME II § (RIDGMAR) SPE, LLC, AND 1551 § KINGSBURY PARTNERS SPE, LLC, § § Defendants and § Counter-Plaintiffs. § 17th JUDICIAL DISTRICT PLAINTIFF’S SECOND AMENDED PETITION Plaintiff CNMK Texas Properties, LLC (“Plaintiff” or “Cinemark”) files its Second Amended Petition against Defendants GK Preferred Income II (Ridgmar) SPE, LLC (“GK”) and 1551 Kingsbury Partners SPE, LLC (“1551” and collectively with GK “Defendants”) and would respectfully show the Court as follows: I. DISCOVERY CONTROL PLAN AND RULE 47 DISCLOSURE 1. Discovery is intended to be conducted under Level 2 pursuant to Texas Rule of Civil Procedure 190.3, and Plaintiff affirmatively pleads that this suit is not governed by the expedited actions process in Texas Rule of Civil Procedure 169 because Plaintiff seeks monetary relief over $250,000. 2. Pursuant to Texas Rule of Civil Procedure 47, Plaintiff discloses that this matter is within the jurisdictional limits of the Court and that it seeks monetary relief over $250,000 but not more than $1,000,000, and non-monetary relief. PLAINTIFF’S SECOND AMENDED PETITION Page 1 II. PARTIES 3. Plaintiff CNMK Texas Properties, LLC is a domestic limited liability company with its principal place of business at 3900 Dallas Parkway, Suite 500, Plano, Texas 75093. 4. Defendant GK Preferred Income II (Ridgmar) SPE, LLC is a Delaware limited liability company doing business in Texas with its principal place of business at 257 East Main Street, Suite 100, Barrington, Illinois 60010, and may be served through its registered agent, CT Corporation System, 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 5. Defendant 1551 Kingsbury Partners SPE, LLC is a Delaware limited liability company doing business in Texas with its principal place of business at 257 East Main Street, Suite 100, Barrington, Illinois 60010, and may be served through its registered agent, CT Corporation System, 1999 Bryan Street, Suite 900, Dallas, Texas 75201. III. JURISDICTION AND VENUE 6. Pursuant to Section 24.001, et seq. of the Texas Government Code, this Court has jurisdiction over this action by virtue of the relief sought herein and because the amount in controversy exceeds this Court’s minimum jurisdictional requirements. 7. The Court has jurisdiction over Defendants because they own property within the State of Texas. Further, jurisdiction is proper under Texas Civil Practices and Remedies Code Section 17.042 because Defendants have sufficient minimum contacts with the State of Texas, and purposefully directed activities at Plaintiff in the State of Texas. Specifically, Plaintiff’s cause of action arises in whole or in part as a result of Defendants’ contacts with Texas. Defendants have substantial, continuous, and systematic contacts with Texas and have purposely availed themselves of the benefits and protection of Texas by establishing minimum contacts with the state. PLAINTIFF’S SECOND AMENDED PETITION Page 2 Additionally, Defendants have created continuing relationships and obligations with citizens of Texas and contracted in Texas, which contract forms the basis of this suit. The Court’s exercise of jurisdiction over Defendants does not offend traditional notions of fair play or substantial justice. 8. Venue is proper in Tarrant County pursuant to Section 15.002(a)(1) of the Texas Civil Practice & Remedies Code because a substantial part of the events or omissions giving rise to Plaintiff’s claims occurred in Tarrant County. IV. FACTUAL BACKGROUND A. Cinemark and Defendants’ predecessors-in-interest execute a Lease for theater space in the Ridgmar Mall. 9. On or about January 23, 2003, Shopco 129 Limited Partnership, a New York limited partnership (“Original Landlord”), and Rave Motion Pictures Ft. Worth, L.L.C., a Delaware limited liability company (“Original Tenant”), executed a lease wherein Original Landlord agreed to lease property located at 2300 Green Oaks Road, Fort Worth, Texas 76116 (the “Premises”) to Original Tenant to operate a movie theater (the “Lease”). The Premises is located within the Ridgmar Mall, located at the intersection of Alta Mere Drive and Interstate 30, in Tarrant County. 10. On or around November of 2012, Cinemark entered into an agreement to purchase certain Rave Cinema locations, including the theater operated within the Premises, thereby becoming successor-in-interest to Original Tenant’s rights and obligations under the Lease. 11. On or around October of 2013, Defendants purchased the Ridgmar Mall, thereby becoming successor-in-interest to Original Landlord’s rights and obligations under the Lease. B. The Lease includes anchor tenant and co-tenancy thresholds tying Premises Fixed Rent to the number of anchor tenants and the percentage of Floor Space open within Ridgmar Mall. 12. Importantly, Section 14.23 of the Lease requires Defendants to maintain certain PLAINTIFF’S SECOND AMENDED PETITION Page 3 tenancy thresholds within Ridgmar Mall. If those tenancy thresholds are not maintained, Cinemark is entitled to a reduction of Fixed Rent. 1 Specifically, if, pursuant to 14.23(a) of the Lease, there are less than three (3) anchor locations open for business within Ridgmar Mall, or less than sixty percent (60%) of the floor space that fronts the Covered Mall is open for business for more than eight (8) months after notice is provided to Defendants by Cinemark, then Cinemark’s Fixed Rent shall be reduced by twenty-five percent (25%) until the end of the Initial Term of the Lease. Additionally, if, pursuant to 14.23(b) of the Lease, there are less than three (3) anchor locations open for business within Ridgmar Mall, or less than sixty percent (60%) of the floor space that fronts the Covered Mall is open for business for more than twelve (12) months after notice is provided to Defendants by Cinemark, then Cinemark’s Fixed Rent shall be reduced by fifty percent (50%) until the end of the Initial Term of the Lease. 2 13. In other words, Cinemark is entitled to a reduction of Fixed Rent for the remainder of the Initial Term of the Lease in the event the Ridgmar Mall is not at least sixty percent (60%) open for business for a period at least eight (8) months, or does not have at least three anchor tenants open for business. C. Ridgmar Mall begins losing tenants, and Cinemark notifies Defendants that the anchor tenant and co-tenancy thresholds have not been met. 14. On September 2, 2018, anchor tenant Sears ceased operations within Ridgmar Mall. On September 5, 2018, believing there to be fewer than three anchor tenants within Ridgmar Mall, Cinemark sent notice to Defendants pursuant to Section 14.23(a), providing its eight (8) and twelve (12) month notice that required co-tenancy levels concerning anchor tenants was not being met. 15. On September 17, 2018, Defendants responded by merely stating that Cinemark’s 1 Unless otherwise defined herein, all capitalized terms herein shall have the meanings ascribed to them in the Lease. 2 A true and correct copy of an excerpt of Lease evidencing Section 14.23 has been attached hereto as Exhibit “A.” PLAINTIFF’S SECOND AMENDED PETITION Page 4 correspondence was incorrect, and denying that Cinemark could exercise its rights under Section 14.23 for a “number of reasons,” which Defendants declined to identify. 16. Thereafter, on February 21, 2019, Cinemark again notified Defendants that it had come to Cinemark’s attention that less than sixty (60%) percent of the Floor Space that fronts on the Covered Mall (excluding the anchor locations at the Shopping Center) was open for business, and again provided its eight (8) and twelve (12) month notice that required co-tenancy levels under Section 14.23 of the Lease were not being met. If the co-tenancy threshold was not remedied following this notice, Cinemark would be entitled to a twenty-five percent (25%) reduction in Fixed Rent beginning November 1, 2019, and a fifty percent (50%) reduction in Fixed Rent beginning March 1, 2020. 17. On February 27, 2019, Defendants again responded by merely stating that Cinemark’s correspondence was incorrect, and denying that Cinemark could exercise its rights under Section 14.23 for a “number of reasons,” which Defendants once again declined to identify. 18. On March 15, 2019, Cinemark responded by stating that Cinemark representatives physically visited Ridgmar Mall and, using occupancy listings showing Floor Space by suite number previously provided by Landlord (and cross-referenced with the mall directory), determined the total occupancy stood at only 53.04%. 19. On March 25, 2019, Defendants responded by simply stating that Cinemark’s letter was incorrect, and alleged that seventy-five percent (75%) of the Floor Space that fronts on the Covered Mall was open for business. Defendants failed to provide any additional information supporting their assertion that 75% of the Ridgmar Mall was actually open for business as alleged. 20. On May 6, 2019, Cinemark responded, stating that as it had received no verification from Defendants that the minimum occupancy levels had been met, itreserved its rights under PLAINTIFF’S SECOND AMENDED PETITION Page 5 Section 14.23 relating to the payment of Fixed Rent in the event Defendants had failed to satisfy the co-tenancy requirements required by the Lease. 3 D. Defendants attempt to unilaterally re-interpret the Lease to avoid reducing Cinemark’s Fixed Rent. 21. On May 16, 2019, Defendants responded again stating that they disagreed with Cinemark’s assertion and, asserting for the first time, an allegation that the minimum co-tenancy requirements of Section 14.23 had somehow been completely done away with as a result of by the First Amendment to Lease dated March 6, 2015 (“First Amendment”). Specifically, Section 5 of the First Amendment states the following: 4 22. No reference is made at all to Section 14.23 in the First Amendment, nor have there been any subsequent amendments to the Lease that address any revision or deletion of Section 14.23 from the Lease. In fact, Section 1 of the First Amendment also states the following: 23. Section 10 of the First Amendment also states the following regarding all other terms and conditions of the Lease remaining in full force and effect, and that they are expressly ratified and confirmed by Cinemark and Defendant: 3 A true and correct copy of Cinemark’s May 6, 2019 correspondence has been attached hereto as Exhibit “B.” 4 A true and correct copy of Defendants May 16, 2019 correspondence has been attached hereto as Exhibit “C,” and a true and correct copy of the First Amendment has been attached hereto as Exhibit “D.” PLAINTIFF’S SECOND AMENDED PETITION Page 6 24. No mention is again made of any modification of Section 14.23 of the Lease in the First Amendment, nor is any mention made of any modifications to the minimum co-tenancy percentage requirements defined in the Lease. 25. Defendants now attempt to take the position that because the definition of Fixed Rent is modified in the First Amendment “notwithstanding anything in the Lease to the contrary,” that all other provisions even tangentially impacting Fixed Rent in the Lease are somehow modified, and presumably that the only Fixed Rent that can be charged moving forward are the amounts described in Section 5 of the First Amendment. Such a tortured reading of Section 5 is misplaced, ignores the plain language of Sections 1 and 10 of the First Amendment, and ignores that no changes explicitly pertaining to co-tenancy requirements appear anywhere within the First Amendment. Indeed, the text upon which Defendants attempt to justify their actions simply means that Fixed Rent is to be amended notwithstanding any other rent amounts stated elsewhere within the Lease, and attempting to redefine it as something else is nothing more than a transparent attempt by Defendants to avoid their contractual responsibilities to one of the handful of remaining tenants in Ridgmar Mall. 26. On February 23, 2021, Cinemark sent a final letter to Defendants again providing notice to Defendants pursuant to Section 14.23 of the Lease that tenancy levels remained below 60%, and inviting Defendants to provide evidence that tenancy levels are in fact above the required co-tenancy threshold. PLAINTIFF’S SECOND AMENDED PETITION Page 7 27. Cinemark has continued paying full Fixed Rent subject to the reservation of rights in its May 6, 2019 letter to Defendants. 28. Defendants have now completely failed to respond at all to Cinemark’s latest good faith attempt to address this issue, and have consistently failed to provide any information supporting their position that co-tenancy levels have actually been met during the eight and twelve month periods following Cinemark’s initial notice on September 5, 2018. Cinemark has therefore been left with no choice but to file this petition for declaratory relief to confirm the rights and responsibilities of Cinemark and Defendants under the Lease and First Amendment. 29. Specifically, Cinemark seeks a declaratory judgment that Section 14.23 of the Lease was not modified by the First Amendment, that the co-tenancy requirements of the Lease as described in Section 14.23 of the Lease remain in full effect, that Cinemark has been entitled to a twenty-five percent (25%) reduction in Fixed Rent since September 3, 2018 and a fifty percent (50%) reduction in Fixed Rent since March 3, 2019, and requiring the disgorgement by Defendants of any Fixed Rent that Cinemark has overpaid while minimum co-tenancy levels have not been met. Cinemark also seeks damages for breach of contract, and specific performance of Section 14.23 of the Lease. 30. Alternatively, and in the event the Court disagrees with Cinemark’s assertion that the Lease and the First Amendment are unambiguous, 5 Cinemark alleges that the phrase “notwithstanding anything in the Lease to the contrary” is reasonably susceptible to more than one interpretation and therefore is ambiguous. 31. The Parties’ differing interpretation of the Lease and First Amendment, as shown in both Cinemark and Defendant’s summary judgment briefing, highlights this point. More 5 See Pls.’ Mot. for Partial Summ. J., ¶ 33. PLAINTIFF’S SECOND AMENDED PETITION Page 8 specifically, Cinemark is prepared to present testimony as to its intent in agreeing to the First Amendment language, as similar language is utilized in numerous theater leases across the country. 32. Ambiguous contract language, which is present here, constitutes a genuine issue of material factual issue that is inappropriate to resolve on summary judgment. Additionally, a court may conclude that a contract is ambiguous even when the parties do not plead ambiguity. 6 33. Accordingly, parol evidence, deposition testimony, and other forms of discovery are needed to ascertain the Parties’ intent regarding the Lease and the First Amendment. V. CAUSES OF ACTION Count One: Declaratory Judgment 34. Each of the foregoing paragraphs are re-alleged and incorporated by reference as if fully set out herein. 35. Defendants failed to maintain at least three anchor tenants in Ridgmar Mall as of September 3, 2018, and occupancy percentages of Floor Space that front on the Covered Mall within Ridgmar Mall appear to have fallen below sixty percent (60%) since at least early 2019. Cinemark first provided notice to Defendants under Section 14.23 of the Lease of the anchor tenant default on September 5, 2018 and of the Lease percentage default on February 21, 2019, and more than eight and twelve months have passed since Cinemark has provided these notices. Instead of complying with the plain language of Section 14.23 and reducing Cinemark’s rent, Defendants have denied that Ridgmar Mall has fewer than three anchor tenants and that the occupancy percentages have fallen below 60%, have failed to provide any information to Cinemark verifying same despite repeated requests, and have now improperly taken the untenable position that the minimum co-tenancy requirements have somehow been removed from the Lease via the First 6 See Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993). PLAINTIFF’S SECOND AMENDED PETITION Page 9 Amendment, despite no mention being made at all of Section 14.23 therein. 36. As set forth above, the remaining provisions of the First Amendment expressly incorporate and ratify the terms of the Lease, and make no mention whatsoever of any modification to the minimum co-tenancy requirements under the Lease. The language Defendants claim has modified these co-tenancy provisions is merely a common contractual provision confirming that the amount of Fixed Rent was amended notwithstanding any other Fixed Rent amounts defined elsewhere within the Lease. It does not mean that the parties agreed to remove any and all methods of modifying rental payments following the occurrence of certain conditions under the Lease. 37. Cinemark is a “person” entitled to a declaratory judgment under Texas Civil Practice & Remedies Code §§ 37.001, et seq. (the Texas Uniform Declaratory Judgment Act), to determine the rights, duties, and/or obligations of the parties under the terms of the Lease and under applicable law. 38. All parties who have or claim any interest in the Lease have been made parties to this suit, and Cinemark requests that this Court declare the rights, status, and legal relations under the Lease. 39. In particular, Cinemark seeks a declaratory judgment that Section 14.23 of the Lease was not modified by the First Amendment, that the co-tenancy requirements of the Lease as described in Section 14.23 of the Lease remain in full effect, that Cinemark has been entitled to a twenty-five percent (25%) reduction in Fixed Rent since September 3, 2018 and a fifty percent (50%) reduction in Fixed Rent since March 3, 2019, and requiring the disgorgement by Defendants of any Fixed Rent that Cinemark has overpaid while minimum co-tenancy levels have not been met. 40. It has been necessary for Cinemark to engage counsel to represent it in this suit. PLAINTIFF’S SECOND AMENDED PETITION Page 10 Cinemark has agreed to pay said attorneys a reasonable fee for their services and Cinemark is therefore entitled to recover such fees from FSA pursuant to Texas Civil Practice & Remedies Code §§ 37.001, et seq, and Section 13.04 of the Lease. Count Two: Breach of Contract 41. Each of the foregoing paragraphs are re-alleged and incorporated by reference as if fully set out herein. 42. The Lease is a valid and enforceable contract between Cinemark, on the one hand, and Defendants, on the other. 43. Cinemark performed or substantially performed all of its obligations required under the Lease. 44. All conditions precedent to Cinemark’s right to specific performance have been fulfilled, excused, or waived. All conditions precedent to Defendants’ obligations under the Lease have been fulfilled, excused, or waived. 45. Defendants materially breached the Lease by failing to provide Cinemark the appropriate twenty-five and fifty percent Fixed Rent reductions under Section 14.23 of the Lease once anchor tenant and co-tenancy levels were not met within Ridgmar Mall, and Cinemark provided notice of same on September 5, 2018 and February 21, 2019. 46. As a direct and proximate result of Defendants’ breach of the Lease, Cinemark has suffered damages in an amount to be determined at trial. Those damages include, but are not limited to, the amounts Cinemark has overpaid by making full Fixed Rent payments while anchor tenant and co-tenancy obligations were not met within Ridgmar Mall. 47. As a result of Defendants’ breach of the Lease, Cinemark is entitled to specific performance such that Defendants should be ordered to perform fully and completely all of their PLAINTIFF’S SECOND AMENDED PETITION Page 11 obligations set forth in the Lease, including the reduction of Cinemark’s Fixed Rent pursuant to Section 14.23. 48. It has been necessary for Cinemark to engage counsel to represent it in this suit. Cinemark has agreed to pay said attorneys a reasonable fee for their services and is therefore entitled to recover reasonable attorneys’ fees and costs incurred in the prosecution of this matter from FSA under Chapter 38 of the Texas Civil Practice & Remedies Code, and Section 13.04 of the Lease. VI. PRAYER WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests that the Court: A. Enter a declaratory judgment with respect to the Fixed Rent, anchor tenant and co- tenancy obligations under Section 14.23 of the Lease, as set forth above; B. Enter judgment against Defendants requiring disgorgement of all amounts that Defendants improperly charged to Cinemark, and requiring Defendants to specifically perform under Section 14.23 of the Lease; C. Award Plaintiff pre- and post-judgment interest at the highest rates allowed by law; D. Award Plaintiff its reasonable attorneys’ fees and costs of court in an amount to be proven at trial; and E. Award Plaintiff such other and further relief to which it may be entitled at law or in equity. PLAINTIFF’S SECOND AMENDED PETITION Page 12 Dated: May 5, 2022 Respectfully submitted, /s/ Patrick Canon K. Todd Phillips Texas State Bar No. 24002767 todd.phillips@wickphillips.com Nick Nelson State Bar No. 24074804 nick.nelson@wickphillips.com Patrick Canon State Bar No. 24040637 patrick.canon@wickphillips.com WICK PHILLIPS GOULD & MARTIN, LLP 100 Throckmorton Street, Suite 1500 Fort Worth, Texas 76102 Telephone: 817.332.7788 Facsimile: 817.332.7789 ATTORNEYS FOR PLAINTIFF CNMK TEXAS PROPERTIES, LLC CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing instrument was served on all counsel pursuant to the Texas Rules of Civil Procedure on May 5, 2022. /s/ Patrick Canon Patrick Canon PLAINTIFF’S SECOND AMENDED PETITION Page 13 Exhibit A covenant of the party bound by, undertaking or making same, not dependent on any other provision of this Lease unless otherwise expressly provided. All terms and words used in this Lease, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require. 14.20 COMPLETE AGREEMENT. The provisions of this Lease are intended by the parties as a final expression of their agreement. No representations, agreements, arrangements, understandings, oral or written, between the parties relating to the subject matter of this Lease have been made or given which are not fully expressed herein. Tenant acknowledges that, except as expressly set forth in this Lease, neither Landlord nor anyone representing Landlord has represented, nor has Tenant relied on any representations, that any number or any specific tenant or tenants will operate in the Shopping Center during the Term. Tenant, in entering into this Lease, is relying solely upon its own inspection of the Shopping Center, the businesses operating in the Shopping Center, the area demographics affecting the Shopping Center and all other matters affecting the viability of Tenant's planned business in the Demised Premises. In addition, Tenant hereby expressly acknowledges and agrees that Landlord is not representing or warranting anything with respect to the business viability of Tenant's intended operations in the Demised Premises or the success of the Shopping Center in general. This Lease constitutes the complete and exclusive statement of its terms and supersedes all prior drafts, other agreements and term sheets. No provision of this Lease may be amended except by an agreement in writing signed by the parties hereto or the respective successors in interest, whether or not such amendment is supported by new consideration. 14.21 COUNTERPART