Northtown Mall Territories LLC, Appellant,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A24-0359

Northtown Mall Territories LLC,
Appellant,

vs.

398 Northtown Drive BLA LLC, dba Cloud Kitchens,
Respondent.

Filed September 9, 2024
Affirmed
Reyes, Judge

Anoka County District Court
File No. 02-CV-23-5615

Tamara O’Neill Moreland, Larkin, Hoffman, Daly & Lindgren Ltd., Minneapolis,
Minnesota (for appellant)

Christopher E. Bowler, Jacob J. Brekke, Gislason & Hunter LLP, New Ulm, Minnesota
(for respondent)

Considered and decided by Reyes, Presiding Judge; Wheelock, Judge; and Florey,
Judge.
∗
NONPRECEDENTIAL OPINION
REYES, Judge
After a court trial in this eviction action, appellant-landlord argues that the district
court abused its discretion by (1) determining that the lease was ambiguous and that

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
2
respondent-tenant did not materially breach the lease terms and (2) admitting hearsay
evidence. We affirm.
FACTS
This case concerns the eviction of a tenant at a property commonly known as the
Northtown Mall (the mall), located in Blaine. In June 2020, the mall’s then-owner, WPG
Northtown Venture, LLC (WPG), entered into a ten-year lease with tenant-respondent 398
Northtown Drive BLA LLC, d/b/a Cloud Kitchens (Cloud Kitchens) to occupy and operate
the mall’s food court. In August 2023, WPG sold the mall to appellant Northtown Mall
Territories LLC (Northtown) and assigned the lease to Northtown.
Just a few days after purchasing the mall, Northtown sent two consecutive notices
of default to Cloud Kitchens, alleging that Cloud Kitchens had violated multiple provisions
of the lease. Specifically, Northtown asserted that Cloud Kitchens had violated the lease’s
“permitted use” provision by failing to operate “substantially all” of the leased premises
during the required days and hours, and further violated the lease by failing to maintain the
premises in a clean and orderly manner. The second notice, sent August 30, 2023,
instructed Cloud Kitchens to cure the violations within 30 days to avoid an eviction action.
After Cloud Kitchens denied Northtown’s allegations and the cure period expired,
Northtown filed a verified eviction complaint against Cloud Kitchens, alleging that it had
materially breached the lease and failed to cure the breach within the cure period.
The district court held a three-day court trial before a referee in January 2024. The
district court heard testimony from Felix Reznick, an owner and managing member of
Northtown; Melissa Winther, the mall’s general manager; and Riley Andrews, a senior
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regional operations employee of Cloud Kitchens. The district court also received numerous
exhibits, including pictures and videos of the food court, comparison videos of the
Maplewood Mall and Rosedale Mall food courts, screenshots from Cloud Kitchens’
website and its online advertisement for food-court licensees, email correspondence
regarding the food court’s management, and data tables outlining sales percentages from
Cloud Kitchens’ food-court licensees.
The district court determined that Northtown “failed to prove both that [Cloud
Kitchens] materially breached the terms of the lease and that [Cloud Kitchens] failed to
perform according to the terms of the lease.” The district court ordered that Cloud Kitchens
remain in possession of the premises and awarded it costs and disbursements.
This appeal follows.
DECISION
I. The district court did not err by determining that Northtown failed to show
that Cloud Kitchens materially breached the lease.

Northtown first argues that the district court erred by determining that Cloud
Kitchens did not materially breach the lease because (1) it erroneously and implicitly
determined that the lease was ambiguous by considering parol evidence to interpret the
lease and (2) Cloud Kitchens failed to operate the food court or maintain the premises in
accordance with the unambiguous terms of the lease and failed to cure its violations within
the cure period.1 We disagree.

1 Because it is not at issue, we need not address Northtown’s additional argument that the
lease’s nonwaiver provision must be enforced. Cloud Kitchens agrees that Northtown has
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A. Standard of Review.

As an initial matter, we are compelled to clarify the standard of review. Eviction
actions are governed by Minnesota Statutes chapter 504B (2022 & Supp. 2023). SVAP III
Riverdale Commons LLC v. Coon Rapids Gyms, LLC, 967 N.W.2d 81, 85 (Minn. App.
2021). An eviction is “a summary court proceeding to remove a tenant or occupant from
or otherwise recover possession of real property.” Minn. Stat. § 504B.001, subd. 4. In
eviction actions, which are civil in nature, “generally the only issue for determination is
whether the facts alleged in the complaint are true.” Cimarron Village v. Washington, 659
N.W.2d 811, 817 (Minn. App. 2003). A landlord must establish grounds for eviction by a
preponderance of the evidence. Nationwide Hous. Corp. v. Skoglund, 906 N.W.2d 900,
908 (Minn. App. 2018), rev. denied (Minn. Mar. 28, 2018).
Appellate courts review a district court’s factual findings in an eviction action for
clear error. Cimarron, 659 N.W.2d at 817. Appellate courts will not disturb the district
court’s findings “unless they are manifestly contrary to the evidence and without
reasonable evidentiary support,” Cap. Warehouse Co. v. McGill-Warner-Farnham Co.,
149 N.W.2d 31, 35 (Minn. 1967), and will defer to a district court’s credibility
determinations and not reweigh evidence, Fairmont Hous. & Redevelopment Auth. v.
Winter, 969 N.W.2d 839, 850 (Minn. App. 2021). As to mixed questions of fact and law,
we “correct erroneous applications of law but defer to the district court’s ultimate
conclusions, which we review for [an] abuse of discretion.” NY Props., LLC v. Schuette,

not waived the right to enforce the lease’s terms, but maintains that Cloud Kitchens has not
violated the lease’s terms to trigger enforcement.
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977 N.W.2d 862, 865 (Minn. App. 2022), rev. granted (Minn. Apr. 27, 2022) and appeal
dismissed (Minn. Aug. 24, 2022) . Although Northtown contends that we must “review
evidence as it appears in the record,” it omits that we also must “ view the evidence in a
light favorable to the [district court’s] findings.” Id.
A tenant’s violation of a lease may justify eviction if the violation is of a material
lease term. Minn. Stat. § 504B.285, subd. 5. “[T]he general rule applicable to contracts is
that rescission of a contract is justified only by a material breach or substantial failure in
performance,” which is “consistent with the principle that forfeitures are disfavored.”
Cloverdale Foods of Minn., Inc. v. Pioneer Snacks, 580 N.W.2d 46, 49 (Minn. App. 1998).
Therefore, a district court must “ not only [determine] the truth of the allegations in the
complaint, but also whether the allegations, if found to be true, demonstrate[] a material
breach of the lease agreement.” Id. A material breach is one that “goes to the root or
essence of the contract” and “is significant enough to permit the aggrieved party to elect to
treat the breach as total (rather than partial), thus excusing that party from further
performance and affording it the right to sue for damages.” BOB Acres, LLC v.
Schumacher Farms, LLC, 797 N.W.2d 723, 728 (Minn. App. 2011) (quotations omitted),
rev. granted (Minn. June 14, 2011) and appeal dismissed (Minn. Aug. 12, 2011).
B. The district court did not implicitly determine that the lease was
ambiguous by considering parol evidence.

Northtown appears to argue that, because the district court admitted parol evidence
to interpret the lease, it implicitly found that the lease was ambiguous. We disagree.
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When a lease’s language is ambiguous, district courts may consider parol, or
extrinsic, evidence to explain the parties’ intent. Staffing Specifix, Inc. v. TempWorks
Mgmt. Servs., Inc., 913 N.W.2d 687, 692 (Minn. 2018). “A contract is ambiguous if its
language is reasonably susceptible of more than one interpretation.” Current Tech.
Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539, 543 (Minn. 1995). However, a
contract is not ambiguous solely because the parties interpret it differently. Staffing
Specifix, 913 N.W.2d at 692.
The district court’s order does not indicate whether it found the lease ambiguous. 2
But the record refutes Northtown’s argument because the district court did not receive the
alleged parol evidence , consisting of the affidavit of the prior CEO of WPG, Louis
Conforti, as an exhibit. Further, we do not presume error on appeal, Waters v. Fiebelkorn,
13 N.W.2d 461, 464 (Minn. 1944), and Northtown has pointed to nothing in the record to
show that the district court relied upon the affidavit when issuing its decision. Northtown’s
argument is therefore unavailing.
C. The district court did not abuse its discretion by determining that
Northtown failed to show that Cloud Kitchens materially breached the
lease.

Northtown argues that the district court abused its discretion by determining that
Cloud Kitchens did not materially breach multiple lease provisions because it

2 The district court did not issue a memorandum of law with its decision, and we lack the
benefit of insight into the reasoning behind its decision. We strongly encourage district
courts to provide a thorough record of their findings and analysis to permit effective
appellate review.
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misinterpreted the lease and made clearly erroneous findings regarding Cloud Kitchens’
compliance with the lease. We are not persuaded.
Appellant’s argument requires us first to interpret the lease, which is a question of
law that we review de novo. Alpha Real Est. Co. of Rochester v. Delta Dental Plan of
Minn., 664 N.W.2d 303, 311 (Minn. 2003). “[L]eases are contracts to which we apply
general principles of contract construction,” and they should be interpreted with a goal to
“ascertain and enforce the intent of the parties.” RAM Mut. Ins. Co. v. Rohde, 820 N.W.2d
1, 14 (Minn. 2012) (quotation omitted). “Intent” is shown by the parties’ objective
manifestations by their oral or written words and their conduct. Cap. Warehouse, 149
N.W.2d at 35-36. We agree with the parties that the lease’s language is clear and
unambiguous, so we apply “its plain and ordinary meaning.” RAM, 820 N.W.2d at 14-15
(quotation omitted).
1. The district court did not abuse its discretion by determining that
Cloud Kitchens used, occupied, and operated substantially all of
the leased premises continuously and actively for a food court.

Northtown argues that the district court abused its discretion by determining that
Cloud Kitchens did not materially breach the lease by failing to operate “substantially all”
of the premises because six of 12 spaces in the food court were unoccupied through the
cure period.3

3 Northtown further argues that the plain language of the lease allows it to evict Cloud
Kitchens even without it violating a material term. But Northtown waived this argument
by failing to raise it below. See Hoyt Inv. Co. v. Bloomington Com. & Trade Ctr. Assocs.,
418 N.W.2d 173, 175 (Minn. 1988) (“[A]n undecided question is not usually amenable to
appellate review.”). Even if the issue were properly before us, it fails on the merits because
Minnesota law is clear that only a material breach justif ies eviction. See Minn. Stat.
8
The relevant portions of the lease specify that Cloud Kitchens defaults and breaches
the lease by “any failure . . . to perform or observe any other of the non-monetary terms,
provisions, conditions and covenants of this [l]ease for more than thirty (30) days after
written notice of such failure.” The “[l]eased [p]remises” include the entire food court,
and the “[p]ermited [u]se” of the premises is that it
shall be occupied and used by [Cloud Kitchens] and
its . . . licensees solely for the purpose of (i) a shared kitchen
food hall that is open to the public and (ii) a take-out and
delivery component and (iii) provided that [Cloud Kitchens]
operates a food hall that is open to the public, any lawful use
that does not otherwise violate the exclusives and/or prohibited
uses . . . (so long as the food hall is of sufficient in size and
capacity to service the Center’s shoppers, customers and
invitees of the Center).

(Emphasis added.) As for using and occupying the premises, “[t]he Permitted Use is a
material consideration” and “[Cloud Kitchens] will . . . continuously operate (or cause to
be operated) and conduct business in the Premises.”
The lease requires that “substantially all of the [p]remises,” which is the entire food
court, be actively used, occupied, and operated, in good faith, by Cloud Kitchens.
(Emphasis added.) Based on our interpretation of the lease’s unambiguous terms, the
district court did not clearly err by finding that Cloud Kitchens complied with these lease
terms. Testimony at trial established that Cloud Kitchens has consistently operated the
premises as a public food hall with a take-out and delivery component, consistent with the
permitted use. Andrews testified that mall visitors always have access to th e food court

§ 504B.285, subd. 5; Cloverdale, 580 N.W.2d at 49 (noting “general rule” that breach must
be material to justify contract rescission).
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but that the food court licensees operate based on self-scheduled hours. She also testified
that oftentimes a licensee’s sign will be up well before it has gone “live,” and several
current licensees at the food court went “live” after Northtown filed its eviction complaint.
Although Northtown maintains that the plain meaning of “substantially” under lease
section 8.8 is contrary to the district court’s interpretation, its argument interprets the
“premises” as referring only to the restaurant spaces, not the entire food court. Further,
Cloud Kitchens’ argument that allowing eviction under these circumstances would make
another section of the lease superfluous is persuasive. Section 8.2(b) of the lease provides:
Notwithstanding the foregoing, if the Premises remains 100%
vacant for a cumulative period of at least one (1) year (and
such vacancy is not due to a Permitted Closure, as herein
defined) without Landlord’s consent, then Landlord shall have
the option (the “Take-Back Option”), exercisable by Landlord
upon not less than thirty (30) days’ prior written notice to
Tenant (a “Take-Back Notice”), of terminating this Lease,
unless at least ten [(10)] days before the effective date of such
termination by Landlord, Tenant re- opens for business in the
Premises, in which event such Take-Back Notice shall be
deemed null and void. . . .

(Emphasis added.)

“A court ascertains the parties’ intent by putting itself in the parties’ positions at the
time they formed the contract and determining what they reasonably meant to accomplish
in view of the contract as a whole, its plain language, and the surrounding circumstances.”
Ecolab, Inc. v. Gartland, 537 N.W.2d 291, 295 (Minn. App. 1995). The parties would not
have included section 8.2(b) if Cloud Kitchens’ conduct here justified eviction. The record
supports the district court’s determination that Cloud Kitchens did not materially breach
the lease by failing to operate “substantially all” of the premises.
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2. The district court did not abuse its discretion by determining that
Cloud Kitchens continuously operated the premises open to the
public.

Northtown next argues that the district court abused its discretion because Cloud
Kitchens did not operate the premises open to the public on all days and hours that the
mall’s major tenants were open for business.
The lease provides that “[t]enant’s Premises shall be and remain open on all days
and other hours established by Landlord for the Major Tenants of the Center.” Northtown’s
hours of operation for its major tenants are Monday through Saturday, 11:00 a.m. to
8:00 p.m., and Sunday, 11:00 a.m. to 6:00 p.m. Northtown states that Cloud Kitchens
breached the lease terms because certain spaces were not open during the mall hours.
Contrary to Northtown’s argument, the broad, unambiguous language of the lease
requires the “[p]remises” to remain open during mall hours for major tenants. It does not
require that individual licensees remain open during all mall hours. The record reflects
that the premises remained open during mall hours, and the district court therefore
appropriately determined that Cloud Kitchens did not materially breach the lease.
3. The district court did not abuse its discretion by determining that
Cloud Kitchens operated the food court fully staffed and stocked.

Northtown next argues that the district court abused its discretion because Cloud
Kitchens did not operate the food court fully staffed and stocked as a first-class food hall
because it “does not require the restaurants to have staff working in the front service areas
of the [s]paces in the [f]ood [c]ourt” and there is not “food out” for customers. Northtown
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further points to Cloud Kitchens’ use of electronic kiosks as proof that Cloud Kitchens has
not maintained an adequate number of staff.
The lease provides that Cloud Kitchens will “ continuously operate (or cause to be
operated) and conduct business in the Premises, fully staffed and stocked.” Although
Northtown interprets “fully staffed and stocked” to require that Cloud Kitchens’ licensees
have food on display and human employees in addition to or instead of electronic kiosks,
those requirements are not provided in this term.
Northtown also relies on section 8.8, which provides:
Tenant shall, throughout the Lease Term, in good faith,
actively use, occupy and operate (or cause to be used, occupied
and operated) substantially all of the Premises with fixtures and
decor, an inventory of goods and merchandise and a staff of
sales personnel adequate, sufficient and appropriate to operate
the Premises as a first class, high quality and tasteful food hall
consistent with food halls or food courts in other comparable
regional shop ping centers in the metropolitan area. The
foregoing description is intended only as a description of the
general quality of the merchandise or services Tenant may sell
and the general quality of customer service, merchandising,
fixturing and decor Tenant must maintain in the operation of
the Premises. . . . Tenant shall operate its business at the
Premises in a respectable, reputable, tasteful, competent and
dignified manner in order to enhance the image of the Center
as a whole and its reputation as a dignified and desirable place
to shop and eat. . . .

(Emphasis added.) However, this provision provides only a “description of the general
quality” of the food court’s operation, and does not include explicit requirements. Nor has
Northtown alleged that Cloud Kitchens’ use of kiosks or failure to provide food displays
has interfered with its permitted use of the premises. The record supports the district
court’s determination.
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4. The district court did not abuse its discretion by determining that
Cloud Kitchens did not materially breach the lease by failing to
maintain the leased premises.

Northtown argues that the trial evidence shows that Cloud Kitchens materially
breached the lease by failing to maintain the premises by (1) allowing the awnings above
the restaurant spaces to be in disrepair; (2) leaving a damaged, unpolished concrete
subfloor in the premises; (3) failing to have an employee devoted to cleaning the premises,
resulting in it being dirty, overflowing trash receptacles and grease traps and a fruit fly
infestation; and (4) having a staff “runner” clean exhaust hoods in the kitchens, as opposed
to a third-party service provider.
As to the awnings, Northtown conceded at trial that the condition of the awnings
was not a material breach. Regarding the concrete floor, the lease does not specify a
required floor type, and Andrews testified that the floor was a design choice consistent with
the floors used in the Rosedale Mall. As to having an employee devoted to cleaning,
Andrews testified that there are three employees devoted to cleaning the premises after
hours, and that runners are responsible for cleaning the food court on an ong oing basis
during operating hours. Although Winther testified regarding cleanliness issues, she also
testified that Cloud Kitchens promptly remedied most of these issues when they arose .
Lastly, although the lease does require that the tenant “obtain and maintain . . . a service
contract for the regular cleaning, maintenance, repair and replacement of exhaust hoods”
in the premises, Cloud Kitchens’ utilization of a “runner” to clean the hoods is not a
material breach of the lease. The “root” of the contract here does not encompass which
party cleans exhaust hoods in the premises. BOB Acres, 797 N.W.2d at 728.
13
5. The district court did not abuse its discretion by considering data
produced by Cloud Kitchens regarding the food court’s
operations.

Northtown appears to argue that the data Cloud Kitchens presented at trial as proof
of its “sales numbers” to in-person mall customers is false and misleading.
At trial, Andrews testified to the accuracy of the data, which she had compiled based
on orders made through Cloud Kitchens’ food-court-ordering technology and which the
district court implicitly found credible. Although Northtown argues that the percentages
are meaningless and inaccurate without more data, Andrews was thoroughly cross-
examined regarding the data and its limitations. Northtown has not presented contrary data
points despite its burden to show a material breach justifying eviction, Skoglund, 906
N.W.2d at 908, and we will not reweigh the evidence or make credibility determinations,
Fairmont, 969 N.W.2d at 850.
In sum, the district court did not abuse its discretion when it determined that Cloud
Kitchens did not materially breach the lease.
II. The district court did not abuse its discretion by allowing Cloud Kitchens to
utilize Conforti’s affidavit for impeachment purposes.

Northtown lastly argues that the district court abused its discretion by admitting
Conforti’s affidavit as impeachment evidence, that it erroneously relied on the affidavit to
support its ruling, and that it should not have admitted the affidavit as evidence because it
was hearsay. We are not persuaded.
Appellate courts will not reverse a district court’s decision to admit or exclude
evidence “unless it was an abuse of discretion or based on an erroneous view of the law ”
14
and the error prejudiced the party challenging the error. Cloverdale, 580 N.W.2d at 51. At
trial in an eviction action, “the rules of evidence and civil procedure apply” and any exhibits
considered by the district court “ generally require foundation.” Schuette, 977 N.W.2d at
866. Generally, “[a]ll relevant evidence is admissible” unless otherwise excluded by law.
Minn. R. Evid. 402. Hearsay, an out-of-court statement made by a declarant and offered
as evidence to “prove the truth of the matter asserted,” is inadmissible absent an exception.
See Minn. R. Evid. 801(c), 802, 803, 804. However, a hearsay statement offered “not to
prove the truth of the matter asserted, but rather for impeachment purposes[,] falls outside
the hearsay rule.” State v. Carillo, 623 N.W.2d 922, 928 (Minn. App. 2001), rev. denied
(Minn. June 19, 2001).
Here, the district court did not admit Conforti’s affidavit into evidence. Instead, the
district court allowed Cloud Kitchens to use the affidavit for the limited purpose of
impeaching Reznick. Cloud Kitchens used the affidavit to challenge the credibility of
Reznick’s testimony as to the parties’ intent when they entered into the lease, and to
discredit Reznick’s testimony about Conforti, including Reznick’s statements that Conforti
was not involved with the lease and that WPG did not enforce the lease consistent with
Northtown’s interpretation because “[WPG] didn’t have time.” This evidence was relevant
to the weight the district court gave Reznick’s testimony. See Minn. R. Evid. 402. Further,
the district court sustained Northtown’s objections to Cloud Kitchens’ attempt to utilize
the affidavit to corroborate Andrews’s testimony. The district court did not abuse its
discretion.
Affirmed.