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If At First You Don’t Succeed…Appeal, Appeal Again
by Ron Davis

Persistence has saved the owners of a Louisiana shopping center more than $1 million in a dispute with a tenant over construction rights.

The shopping center is Kenner Plaza in suburban New Orleans, and the dispute began shortly after the center’s owners and the tenant signed a lease agreement. The tenant hoped to a build a restaurant on the property but couldn’t settle on the exact site. That’s because the shopping center’s owners had apparently suggested a “swap” site at the center instead of the site called for in the lease, and the tenant needed to modify has plans accordingly.

The swap ran into obstacles, however, and the tenant charged that the shopping center’s owners had reneged on their agreement to allow his construction of the restaurant at Kenner Plaza.

In the ensuing lawsuit, a Louisiana court ruled that the shopping center’s owners had breached the lease by preventing the tenant from beginning construction. The judge consequently ordered the shopping center’s owners to pay the tenant $1.25 million in damages, plus interest and attorney’s fees.

The shopping center’s owners appealed, claiming that they never informed the tenant that he could not build a restaurant at Kenner Plaza. In fact, they added, the tenant had breached the lease himself by not providing them with construction plans, as required by the lease between the two parties.

A Louisiana appellate court rejected the award of damages to the tenant and required the lower court to reconsider the case.

The lower court judge again ruled in the favor of the tenant, however, this time finding that the shopping center’s owners had never actually given the tenant approval to build his restaurant. The judge thus awarded the tenant $702,585, plus $17,683 per month for lost profits, and $183,494 for attorney’s fees.

The shopping center’s owners appealed for a second time, contending that they were not required to give the tenant additional construction permission because the lease had already afforded him that right.

A Louisiana appellate court agreed with the shopping center’s owners, explaining, “Although it certainly would have made perfect sense for the lease to require Kenner Plaza’s owners to given written permission to begin initial construction of the tenant’s restaurant, as the lease is presently written no such permission was required. Therefore, Kenner Plaza’s owners did not breach the terms of the lease.” (Premier Restaurants v. Kenner Plaza, 833 So.2d 446 [La.App. 5 Cir. 2002])

Decision: December 2002
Published: March 2003



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