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Breach of Lease

Our firm represented a commercial landlord that had leased space to a restaurant that later subleased the space to another restaurant. When the original tenant defaulted on the lease, we filed an eviction against the tenant and its subtenant. The original tenant eventually walked away from the lease, and our client entered into a direct lease with the subtenant.

The subtenant agreed to pay our client the same amount of rent it had paid the original tenant during the sublease. Because this was less than what the landlord had charged the original tenant, we pursued the original tenant for the difference—which the damages provision in the original lease allowed us to do.

The original tenant had a novel argument and argued that, once the landlord acquired a new tenant, the original tenant’s lease obligations ended. Both sides moved for summary judgment. To our surprise, the trial court granted judgment in favor of the tenant. In other words, the trial court disregarded the damages provision in the lease (and, in our opinion, established new law).

We appealed the case. The appellate court ruled in our favor and held that the trial court erred by not applying the damage provision the parties had agreed upon. It then sent the case back to the trial judge to determine our client’s damages. We showed the trial judge that our client was entitled to recover the remaining rent due for the last two years of the lease, minus what our client collected from the new tenant. That figure? $250,000.

[Plaza Development v. W. Cooper Enterprises (Franklin County Court of Common Pleas, case no. 11CVG03-3226)].