Lindner v. Meadow Gold Dairies, Inc.

Jeffrey Lindner (plaintiff) leased property on the Hawaiian island of Kauai to Meadow Gold Dairies, Inc. (Meadow Gold) (defendant) in 1988. Meadow Gold operated a dairy farm on the property. On May 28, 1997, Meadow Gold exercised a renewal option for an additional 15 years. The lease agreement contained a liquidated-damages clause that required Meadow Gold to pay up to five years’ worth of the present value of future rent if Meadow Gold terminated prior to the expiration of the lease. Meadow Gold assigned its interests and obligations under the lease to Southern Food Group, L.P. (SFG) (defendant), but Meadow Gold retained liability under the lease. A few months prior to the renewal, a parcel of real estate downstream from Meadow Gold’s dairy farm had been purchased by Mandalay Properties Hawaii, Inc. (Mandalay Properties) and developed into a home called the Tara Plantation. The Tara Plantation was designed to be a home for Peter Guber, the owner and chairman of Mandalay Entertainment, a film-production company. Guber took issue with the operation of the dairy farm. Guber complained of raw sewage and contamination of his land and water downstream from the dairy farm. Guber threatened a lawsuit under the Clean Water Act, 33 U.S.C. § 1251 et seq. Subsequently, Meadow Gold closed the dairy farm and terminated the lease approximately 13 years before the end of the term of the lease. Meadow Gold did not pay the liquidated damages provided for in the contract, and Lindner sued Meadow Gold for breach of contract. Meadow Gold filed a third-party complaint against SFG. Lindner filed a motion for partial summary judgment on his liquidated-damages claim.