5th District: Final Judgement Determined in Landlord v. Tenant Case    

Strip Delaware, L.L.C. v. Landry's Restaurants (12/27/2010)     

          On December 27, 2010, a long fight between landlord and tenant beginning in 2006 finally came to a resolution with the majority of the decision in favor of the landlord, but with a partial victory after appeals for the tenants.

          The relationship between landlord and tenant originated in 1997 when Landry's Seafood House-Ohio, Inc. entered into a lease agreement with The Strip Delaware, L.L.C., to operate a Joe's Crab Shack restaurant in it's strip mall in Jackson Township. Several years later, Landry's sold most of their Joe's Crab Shack restaurants resulting in the closing of their restaurant at "The Strip" on November 17, 2006. According to Strip Delaware, Landry's was in violation of the lease agreement, which required them to continuously operate their restaurant at the leased premises.   The landlord repossessed the premises and changed the locks, therefore leaving all of the tenant's business equipment trapped inside and inaccessible for their retrieval. Strip Delaware then decided to eradicate the lease with Landry's on December 29, 2006, further causing them to request that Landry's withdraw any occupation of the space.

          Landry's was displeased with this decision and filed a complaint against the landlord for declaratory judgment on February 1, 2007.   The trial court ruled in favor of the landlord finding that the tenant had violated the terms of the lease agreement, thus terminating the lease. The trial court ruled that The Strip Delaware was "entitled to self-help repossession of the leased premises."   The tenant tried to appeal this matter in April 2008, but encountered another loss in attempting to overthrow the past judgment.

          Since The Strip was not able to acquire any tenants willing to sign a lease during the year and a half in which litigation was transpiring, they filed a complaint for money damages. The trial court again decided in favor of the landlord stating that Landry's was liable as a holdover tenant from December 2006 through April 14, 2008, and consequently owed The Strip 150% of the rent rate provided in the lease in addition to taxes and charges. A 'holdover tenant' is a term included in most landlord-tenant leases which describes a tenant occupying a landlord's space after the lease has expired, therein providing terms in the lease for what percentage on top of rent that the tenant will be responsible for paying each month that they reside on the premises. Throughout the course of multiple judgment entries, Landry's was required to compensate The Strip with $300,000 in damages and $250,000 in legal fees.

          The final tier of action in this case occurred when Landry's continued to fight and was determined as a "partial prevailing party" when the Court of Appeals of Ohio determined that the trial court had erred in ruling that Landry's was in fact a holdover tenant.   It was declared by the court that according to the lease, Landry's was in no obligation to repay The Strip holdover tenant damages, as they should not be considered a holdover tenant.   This resulted in the court holding proceedings to re-determine damages and legal fees due from Landry's. The Court found that Landry's should only be held accountable for 50% of damages and legal fees. After a cross-appeal from The Strip, the Court of Appeals held this decision.            

          EDEN provides safe and affordable housing to individuals and families who are low-income and either homeless and/or have a qualifying disability.   Their vision is to enable individuals who are disabled to maximize their full potential, exercise a degree of choice, and maintain their membership in the community. EDEN was founded in 1991 and broke ground by purchasing and renovating its first building, a 12-bed adult care facility for the elderly, in Cleveland Heights.  They also assumed ownership of 11 buildings and 22 housing units, all while functioning with a staff of 3 people. Today, EDEN now owns nearly 90 properties throughout Cuyahoga County, administers 22 housing programs, and employs a staff of 102.

          We are very proud of EDEN for their growth and accomplishments. They will undoubtedly continue to serve and improve the community around them well into the future! For more information about EDEN and their services please visit EDEN 

Upcoming Fanger & Associates LLC Events

Seminar - "Tax Exempt Organizations from Start to Finish"  

          Jeffrey J. Fanger will be presenting at the National Business Institute's 2011 Fall Seminar - "Tax Exempt Organizations from Start to Finish" in Independence, Ohio. This seminar is designed to help educate you on all of the accountability standards required, walk you through how tax-exempt status is achieved as well as the benefits, discuss the required forms and exemptions available, give you a better understanding of the potential liabilities of directors and officers, inform you of key methods to maintain an ethical practice, and guide you through this comprehensive process of all of the legal and tax aspects of exempt organizations. After attending the seminar, you will possess the knowledge you need to succeed in establishing or operating a tax-exempt organization, and the necessary tools to run you're nonprofit more efficiently.

          The seminar will be held on Thursday, October 27th, 2011 from 8:30 am - 4:40 pm at the Holiday Inn in Independence, Ohio. If you would like to register for the seminar or learn more information about the event, please visit NBI Seminar.   You may also contact us at (216) 382-0025 with any additional questions.