## Facts

- Oklahoma Plaza Investors, Ltd. (OPI) owned the Rolling Hills Shopping Center in Catoosa, Oklahoma and leased space to Wal-Mart Stores, Inc. (Wal‑Mart) under a 20‑year lease executed in 1977.
- Wal‑Mart opened and operated a discount store in the leased premises for a number of years.
- The lease’s use clause stated that the premises would be used in the operation of a discount store, but also stated that the store “may be used for any lawful purpose,” except operating a supermarket.
- The lease defined certain events of default, including failure to pay rent and “desertion” of the premises for more than 30 days.
- Wal‑Mart later stopped operating a retail discount store at the location, removed fixtures, and papered over the windows.
- After closing to the public, Wal‑Mart continued to pay rent and kept possession, using the premises for storage and occasional meetings.
- OPI filed a Chapter 11 bankruptcy case and brought an adversary proceeding against Wal‑Mart, asserting that Wal‑Mart’s closure breached the lease and seeking damages on contract and related theories (including claims framed as tortious breach and breach of implied obligations).
- The bankruptcy court concluded the lease was complete and unambiguous, found Wal‑Mart in breach, and awarded OPI $132,000 in damages.
- Wal‑Mart appealed to the United States District Court for the Northern District of Oklahoma. OPI cross‑appealed on aspects of the relief and theories of liability.

## Issues

1. Whether the bankruptcy court erred, as a matter of law, in concluding that the lease was unambiguous.
2. Whether the lease imposed a duty on Wal‑Mart to continuously operate a discount store despite language allowing “any lawful purpose” (other than a supermarket).
3. Whether Wal‑Mart’s closure to the public—while continuing to pay rent and use the premises for storage/meetings—constituted “desertion” under the lease’s default provision.
4. Whether OPI rejected the Wal‑Mart lease under 11 U.S.C. § 365 and, if so, what effect that had on OPI’s ability to pursue claims.
5. Whether Wal‑Mart’s defenses of waiver and estoppel barred OPI’s claims based on OPI’s conduct (including rent acceptance) after the store closure.
6. Whether the bankruptcy court’s $132,000 damages award could stand given the lease language and the theories of breach accepted by the bankruptcy court.
7. Whether Oklahoma law permitted recovery on tort-style theories (tortious breach) or on implied-covenant theories that would add a continuous-operation requirement.

## Decision

- The district court treated lease interpretation and the existence of ambiguity as legal questions and reviewed the bankruptcy court’s interpretation without deference.
- The district court held the bankruptcy court erred by treating the lease as unambiguous in a way that imposed a continuous retail-operation duty, given the lease’s express authorization that the premises “may be used for any lawful purpose” (except a supermarket).
- The district court rejected equating a shutdown of public retail operations with “desertion” where the tenant retained possession, continued paying rent, and continued using the space.
- The district court limited OPI’s ability to expand liability beyond the lease’s express terms, rejecting theories that depended on adding implied obligations inconsistent with the broad permitted-use clause.
- The district court also addressed the bankruptcy overlay and equitable defenses (including § 365 treatment and waiver/estoppel arguments) in assessing whether OPI could pursue the asserted remedies.
- Because the bankruptcy court’s breach and damages findings rested on an incorrect view of the lease’s clarity and operative duties, the district court set aside the bankruptcy court’s liability/damages determination to the extent it depended on an asserted continuous-operation obligation and related implied/tort theories.

## Legal Principles

- Whether a written contract is ambiguous is a question of law; if a lease is unambiguous, courts enforce it according to its text rather than adding obligations not stated.
- A use clause that states an intended use but also permits “any lawful purpose” generally does not create an express continuous-operation duty to run a particular type of retail business throughout the lease term.
- A lease default provision for “desertion” commonly requires abandonment or vacating in a meaningful sense; a tenant’s cessation of public retail operations, standing alone, is not necessarily “desertion” when the tenant keeps possession and continues paying rent.
- Implied covenants may not be used to rewrite an arm’s-length commercial lease by imposing duties that conflict with the lease’s express allocation of rights, including broad use permissions.
- Claims styled as tortious breach are generally disfavored in ordinary commercial contract disputes absent a separate basis for tort liability recognized by state law.
- Waiver and estoppel require proof of intentional relinquishment of a known right or reasonable reliance on conduct inconsistent with later enforcement; accepting rent does not automatically waive all lease-based remedies.
- In bankruptcy, treatment of executory contracts under § 365 and plan provisions can affect remedies, but courts still begin with the lease’s text to determine what duties existed and what conduct constituted a default.

## Conclusion

In *Oklahoma Plaza Investors v. Wal‑Mart Stores*, the district court reviewed a bankruptcy judgment holding Wal‑Mart liable for closing a leased discount store and concluded the bankruptcy court’s reading of the lease overstated its clarity and its operational requirements. Because the lease both referenced operation of a discount store and allowed “any lawful purpose” (except a supermarket), the district court declined to treat the lease as plainly imposing a continuous-operation obligation and did not equate Wal‑Mart’s closure to the public with “desertion” where Wal‑Mart kept possession, paid rent, and used the premises for storage and meetings; the court therefore curtailed liability and damages that depended on implied or tort-style theories inconsistent with the lease text.


Oklahoma Plaza Investors v. Wal-Mart Stores, 203 B.R. 479 (1994)