For years, our clients had owned a well known family restaurant and the land on which the restaurant was located. They sold the restaurant to a group of employees in 2004. Part of the transaction included an agreement in which the employees would lease the land and then purchase it by way of a land installment contract.
In April 2008, the restaurant was destroyed by fire. The new owners asserted that, based on equitable considerations, they were, in effect, the owners of the land. As a consequence, they contended they were entitled to $690,000 in insurance proceeds for rebuilding the restaurant structure and a declaration from the court that they were the title owners to the land.
We asserted on our clients’ behalf that the new owners owned only the restaurant business but not the land. When the fire occurred, the new owners had possession of the land pursuant to a lease and that, while a land contract was part of the overall transaction, the land contract did not become effective until July 2009.
These issues were presented to the court in cross-motions for summary judgment. The court agreed with our position and held that the new owners’ rights were limited to those of tenants when the fire occurred. Our clients were awarded the $690,000 in insurance proceeds, and the court held that title for the land, valued at roughly $500,000, remained in their name.
[Stan’s Restaurant, Inc. v. William R. Loscko (Franklin County Court of Common Pleas, case no. 08CVH7-10771)]