Friday, March 25, 2011

Court Reviews Whether Individual Defendants are Additional Lessees in a Case Involving the Breach of a Commercial Lease

ASSOCIATED SHOPPING CENTER PROPERTIES, LTD. v. EDWARD H. HODGE ET AL. (Tenn. Ct. App. March 23, 2011)

The issue in this commercial real estate lease dispute is whether the individual defendants are additional lessees and, thus, personally liable under the lease. Plaintiff, the lessor of retail space, filed this action against the three defendants when the limited liability company, Decor Fabrics, LLC, a lessee, breached the lease by failing to pay rent for the term of the lease. The individual defendants denied liability, asserting that Decor Fabrics, LLC, was the only lessee.

The trial court found that the lease unambiguously identifies each of the individual defendants as additional lessees and assessed damages against them for breach of the lease, including the plaintiff's attorneys fees. Only one of the defendants appealed. He asserts that the trial court erred by finding the lease unambiguous as to the identify of the lessee(s) and by failing to consider the parties' conduct to conclude that Decor Fabrics, LLC, was the only lessee. We affirm.

Opinion Available at:
http://www.tba2.org/tba_files/TCA/2011/hodgee_032311.pdf

Monday, March 14, 2011

Court Reviews Whether All Necessary Parties were Included in a Declaratory Judgment Action Regarding Interpretation of a Real Estate Purchase Contract

MICHAEL ADLER v. DOUBLE EAGLE PROPERTIES HOLDINGS, LLC v. AIRWAYS COMMONS, LLC (Tenn. Ct. App. March 14, 2011)

In this declaratory judgment action, the parties sought interpretation of a real estate purchase contract. The contract between the buyer and the seller provided for the assignment of all leases on the property and proration of rents to the buyer. The parties disputed whether these provisions contemplated a separate agreement between the seller and a third party. At the behest of the parties, the trial court construed both agreements and granted summary judgment to the buyer.

On appeal, we raise, sua sponte, the question of whether all necessary parties were before the trial court pursuant to Tenn. Code Ann. section 29-14-107(a) and Tenn. R. Civ. P. 19. After concluding that all necessary parties were not included in this action, we vacate the judgment of the trial court and remand for further proceedings consistent with this opinion.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/adlerm_031411.pdf