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Aleut Enterprise, LLC v. Adak Seafood

September 2, 2010

ALEUT ENTERPRISE, LLC, AN ALASKA LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
ADAK SEAFOOD, LLC, A DELAWARE LIMITED LIABILITY COMPANY, DEFENDANT, AND THE INDEPENDENCE BANK, A RHODE ISLAND BANKING INSTITUTION, INTERVENOR,
v.
ALEUTIAN SPRAY FISHERIES, INC., A WASHINGTON CORPORATION; PACIFIC PELAGIC GROUP, LLC, A WASHINGTON LIMITED LIABILITY COMPANY; JOHN YOUNG, AN INDIVIDUAL; AND TRIDENT SEAFOODS CORPORATION, A WASHINGTON CORPORATION, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Ralph R. Beistline United States District Judge

ORDER ESTABLISHING CONDITIONS OF OCCUPANCY UNDER THE ADAK ISLAND FISH PROCESSING PLANT LEASE AGREEMENT

I. INTRODUCTION

Before the Court is Plaintiff Aleut Enterprises, L.L.C. ("Aleut") with a Motion to Establish Conditions of Occupancy at Docket 74. Because Defendant Adak Seafood, L.L.C. ("Adak") remains in possession of the Adak Island Fish Processing Plant ("Plant") during the pendency of the Forcible Entry and Detainer ("FED") litigation, Aleut argues that Adak must abide by the terms of the Plant Lease agreement, including paying rent to Aleut, or vacate the premises.*fn1 Adak makes a Cross-Motion to Establish Conditions of Occupancy at Docket 81. Adak contends that its duty to pay rent to Aleut is excused due to Aleut's constant "obstruction of [AS]'s operation of the Plant."*fn2 Oral argument has been requested at Docket 115. Inasmuch as the Court concludes the parties have submitted memoranda thoroughly discussing the law and evidence in support of their positions, it further concludes oral argument is neither necessary nor warranted with regard to the instant matter and the motion is DENIED.*fn3

Both parties agree that the terms of the Plant Lease agreement should be enforced during the pendency of the litigation.*fn4 The main issue is whether Adak's performance under the Lease should be discharged or suspended during such pendency on account of Aleut's actions.*fn5

Because Adak's claims are not supported by law, are based primarily on disputed factual allegations, fail applicable procedural requirements, or are otherwise barred by res judicata, the Court concludes that Adak and Aleut must fully and promptly abide by the Plant Lease agreement during the pendency of the litigation. Specifically, Adak is directed to:

1. Remit past-due and current rental payments directly to Aleut;*fn6

2. Allow Aleut to inspect the Plant premises as provided for in the Lease;*fn7

3. Operate the Plant at all commercially reasonable times during the pendency of the litigation; and

4. Provide any and all financial information regarding the Plant to Aleut as required by the Lease.

II. APPLICABLE SUBSTANTIVE LAW

Under the Erie doctrine, U.S. district courts exercising their original jurisdiction in diversity cases apply the substantive law of the state where the case is adjudicated and federal procedural law.*fn8

III. DISCUSSION

A. Adak Is Required to Pay Rent to Aleut under the Plant Lease Agreement Because Adak Fails to Establish Any Legal Justification for Withholding Such Rent.

Adak presents four arguments in support of its assertion that its obligation to pay rent directly to Aleut under the Lease is either discharged or suspended by Aleut's alleged interference with the Plant: impracticability, contractual interference, breach of the implied covenant of good faith and fair dealing, and breach of the implied covenant of quiet enjoyment.*fn9 The ...


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