Date: 02-16-2013

Case Style: 8102 8272 S Lewis Ave Holdings, LLC v. Kay Lawson

Case Number: CJ-2012-4164

Judge: Jefferson D. Sellers

Court: District Court, Tulsa County, Oklahoma

Plaintiff's Attorney: Eric Mitchell Daffern

Defendant's Attorney: John Frederick Heil, III and John r. Richer

Description: 8102 8272 S Lewis Ave Holdings, LLC sued Kay Lawson claiming:

1. This is an action to recover money due under a Lease in Tulsa County, State of Oklahoma. This Court has jurisdiction over the parties and subject matter herein.

2. Plaintiff claims that Tenant leased the real property at 8156-A South Lewis Avenue, Tulsa, OK 74137 (hereinafter referred to as the “Property”),

3. Plaintiff claims that Tenant failed and refused to pay the Rent and other expenses due and owing under the Lease in the amount of $26,645.49 after proper demand was made and is therefore in default.

4. Landlord is entitled to its costs, which include a reasonable attorney fee.

WHEREFORE, upon jury trial, Plaintiff, 8102-8272 SOUTH LEWIS AVENUE
HOLDINGS, LLC, SUCCESSOR IN INTEREST TO HSMEP THE PLAZA TULSA, LP, I
demands judgment in its favor and against the Defendant, Kay Lawson for actual damages in the amount of $26,645.49, costs, interest and a reasonable attorney fee, plus any other relief the Court deems just and reasonable.


Defendant appeared and answered as follows:

1. The allegations in paragraph 1 of the Petition are admitted.

2. Regarding the allegations in paragraph 2 of the Petition, Lawson admits she was a party to a certain Shopping Center Lease and one or more amendments thereto. These documents speak for themselves and require no interpretation by Lawson.

3. The allegations in paragraph 3 of the Petition are denied.

4. The allegations in paragraph 4 of the Petition are denied.
Regarding the unnumbered paragraph of the Petition beginning with the word “WHEREFORE, “Lawson denies that The Plaza is entitled to any relief whatsoever.

AFFIRMATIVE DEFENSES

1. The Plaza’s Petition is barred in whole or in part by the doctrines of accord and satisfaction, settlement, laches, release, payment, waiver, equitable estoppel, promissory estoppel, mistake, impossibility, knowledge and acquiescence, knowledge and consent, modification of contract, novation of contract and unclean hands.

2. The Plaza’s Petition is barred because The Plaza failed to mitigate its damages.

3. The Plaza’s Petition is barred inasmuch as Lawson fully and/or substantially performed all obligations under the parties’ contract.

4. The Plaza’s claims are barred by its own fraudulent acts.

5. Plaintiff’s claims are barred because any recovery from Lawson would result in an unjust enrichment to The Plaza.

6. The Plaza’s alleged damages, if any, were caused by the acts and omissions of The Plaza.

7. The Plaza has failed to satisfy all conditions precedent to its right to assert causes of action against Lawson.

8. The Plaza is barred from raising any claim related to its contract with Lawson inasmuch as The Plaza is in breach of that same contract.

9. Lawson is entitled to recoup and set off, against any amounts claimed to be owed to The Plaza, all amounts due and owing to Lawson from The Plaza.

10. Lawson reserves the right to add affirmative defenses as discovery progresses in this case.
PRAYER

WHEREFORE, premises considered, Lawson requests that The Plaza’s Petition be dismissed with prejudice, that The Plaza’s Petition be denied in its entirety, that The Plaza take nothing from Lawson, that Lawson be awarded her reasonable costs and attorneys’ fees in defending against the allegations in the Petition and that the Court grant Lawson any such other and further relief to which she may justly be entitled.

COUNTERCLAIM AND CROSS-CLAIM

Peek A Boo Baby, Inc. (“Peek A Boo”) and Kay Lawson (“Lawson”), for their Counterclaim and Cross-Claim against 8 102-8272 South Lewis Avenue Holdings, LLC, Successor in Interest to HSMEP The Plaza Tulsa, LP (“The Plaza”) and Commercial Realty, LLC d/b/a CB Richard Ellis Oklahoma (“CBREOK”), allege and state as follows:

1. Peek A Boo is a corporation authorized to conduct business in the State of Oklahoma with a place of business in Tulsa County, Oklahoma.

2. Lawson is an individual residing in Tulsa County, Oklahoma.

3. The Plaza is a limited liability company authorized to conduct business in the State of Oklahoma with a place of business in Tulsa County, Oklahoma.

4. CBREOK is a limited liability company authorized to conduct business in the State of Oklahoma with a place of business in Tulsa County, Oklahoma.

5. Jurisdiction and venue are proper in this Court.

FACTS

6. Lawson is the former owner of Peek A Boo, which is a specialty baby store. On or about October 21, 2002, Lawson entered into a Shopping Center Lease with MRO Southwest, Inc. (the “Lease”).

7. Pursuant to the Lease, Lawson leased certain retail premises at “The Plaza” shopping center located at the corner of 81St Street and Lewis Avenue in Tulsa (the “Old Premises”). Lawson operated the Peek A Boo business at the Old Premises.

8. On or about April 20, 2007, Lawson entered into a Second Amendment to Lease Agreement with HSMEP The Plaza Tulsa, L.P., the successor-in-interest to MRO Southwest, Inc. (“HSMEP”). HSMEP was located and incorporated in Texas. Among other things, this amendment extended the original term of the Lease for five years, or until May 31, 2012, and raised the monthly rent for a specified amount during the first three years and another specified amount during the last two years.

9. After Lawson signed this amendment to the Lease, she sold and transferred her ownership interest in Peek A Boo to her son and daughter-in-law. At all material times herein, HMSEP knew that Peek A Boo was the tenant in possession of
the Old Premises (as opposed to Lawson) and that Peek A Boo was making the required monthly payments to HSMEP under the Lease.

10. In early May of 2011, Peek A Boo was beginning to outgrow the Old Premises and needed a larger space. Peek A Boo had also grown weary of the many issues with the Old Premises that had repeatedly arisen over the years, including issues with the HVAC and leaks in the roof. In fact, in settlement and resolution of these issues HSMEP had agreed to accept the monthly rental amount for the first three years under the Second Amended Lease for the remaining last two years.

11. Peek A Boo contacted HSMEP to inquire whether it had a larger space that would meet Peek A Boo’s needs. HSMEP responded that it did not have such a space unless it “chopped up” other vacant spaces at “The Plaza,” which was an undesirable option. Therefore, Peek A Boo asked HSMEP if it would allow Peek A Boo to terminate the Lease early. Peek A Boo had been a longstanding and loyal tenant of “The Plaza” for almost ten years. HSMEP agreed to modify the the Lease and permit its early termination by requiring no further monthly lease payments from Peek A Boo after October 31, 2011.

12. In exchange, Peek A Boo agreed to make the leased premises available for showings to prospective new tenants before the modified lease term expired on October 31, 2011, to answer any questions that new tenants may have and to otherwise maintain and leave the Old Premises in good condition. HMSEP agreed to prepare a written modification and amendment of the Lease to memorialize the parties’ agreement (the “Modified Lease”). Peek A Boo would also be formally substituted in place of Lawson under the Modified Lease.

13. In reliance upon the Modified Lease and HMSEP’s prior representations, Peek A Boo entered into a Letter of Intent agreement on or about June 22, 2011, with the Renaissance Shopping Center to lease space more suitable to Peek A Boo’s retail needs. This property is located at Memorial Drive and 82nd Street in Tulsa (the “New Space”).

14. On or about June 23, 2011, while Peek A Boo was still occupying the Old Premises, a representative of CBREOK came into the store, advised that HSMEP was no longer the owner and landlord, that The Plaza was the new owner and landlord and that CBREOK was the managing agent for the new owner and landlord. Peek A Boo advised the representative that HSMEP had agreed to modify the Lease, that it was preparing a written amendment to this effect and asked if The Plaza was aware of the modification and new agreement. CBREOK basically responded “not at this time, we will be getting all of the paperwork from Texas shipped to us so we can go through it and figure out what we need to do.”

15. On or about July 21, 2011, Peek A Boo entered into a formal lease with the
Renaissance Shopping Center for the New Premises. Peek A Boo subsequently advised
CBREOK that it would be moving into the New Premises in early October. On or about October
5, 2011, Peek A Boo moved into the New Premises at the Renaissance. Peek A Boo paid
CBREOK all rent, as agreed, under the Modified Lease through the end of October.

16. On or about October 17, 2011, CBREOK visited the New Premises and advised Peek A Boo that it was in discussions with Brenda Horan Photography (“Horan”) about leasing the Old Premises. CBREOK asked Peek A Boo to show Horan the Old Premises since Peek A Boo still had the keys and was the lawful tenant in possession of the Old Premises. Peek A Boo
agreed inasmuch as this was a term of the Modified Lease.

17. Peek A Boo met Horan at the Old Premises, showed it to loran and answered various questions, including those related to traffic flow and utilities. Horan called Peek A Boo later that day to advise that it had entered into a new lease for the Old Premises. Peek A Boo then called CBREOK and asked if The Plaza was going to sublet the Old Premises to Horan or enter into a new lease. CBREOK advised that Horan was going to enter into a new lease.

18. On or about November 1, 2012, Peek A Boo turned in the keys to the Old Premises. That same day, Peek A Boo visited Horan at the Old Premises and noticed that the electricity had been turned back on and that it was under construction.

19. At no point after Peek A Boo moved out of the Old Premises but before the expiration of the Modified Lease on October 31, 2011, did CBREOK or The Plaza ever represent through either actions or words that the Modified Lease would not be honored or recognized. To the contrary, CBREOK acted as if the Modified Lease was in full force and effect and had properly terminated under its terms at the end of October of 2011. This included CBREOK’s actions in asking Peek A Boo to take various actions consistent with its obligations under the Modified Lease. Indeed, CBREOK led all concerned to believe that at the end of October of 2011, the parties’ relationship had amicably concluded to the benefit of all.

20. The first time that Peek A Boo had any reason to believe that The Plaza would not recognize the Modified Lease and would enforce the terms of the original Lease was over a year and a half later shortly before it filed the captioned lawsuit.

21. Peek A Boo and Lawson reserve the right to add additional allegations as discovery progresses in this case.

FIRST CLAIM FOR RELIEF

(Request for Declaratory Judgment — Okia. Stat. tit. 12, § 1651 et seq.)

22. The allegations of Paragraphs 1 through 21 supra are incorporated by reference as if more fully alleged.

23. In May of 2011, HMSEP and Peek A Boo executed a valid and enforceable modification of the Lease under Oklahoma law. Among other terms, the original expiration of May 31, 2012, under the Lease was modified to October 31, 2011. Peek A Boo fully performed its obligations under the Modified Lease by paying all monthly rental amounts, as agreed,
through the end of October 2011. Peek A Boo also fully performed its obligation under the Modified Lease to make the Old Premises available for showings, to promote it with new tenants and to leave the Old Premises in good condition. As the successor-in-interest of HMSEP, The Plaza steps into the shoes of its predecessor’s contracts and is bound thereby to the terms of the Modified Lease.

24. By its action herein seeking payment of past due rent through the end of the original lease term of May 31, 2012, The Plaza refuses to recognize or be bound by the Modified Lease. Therefore, an actual and justiciable controversy exists regarding whether Lawson is in breach of the Lease and is liable to The Plaza as alleged in the Petition. Pursuant to Okia. Stat. tit. 12, § 1561 et seq., this Court has the authority to decide this issue.
25. Lawson is entitled to a judgment from this Court declaring that she does not owe any further obligation to The Plaza under the Lease, including those alleged in the Petition or otherwise.

SECOND CLAIM FOR RELIEF

(Fraud and Fraudulent Inducement)

26. The allegations of Paragraphs 1 through 25 supra are incorporated by reference as if more fully alleged.

27. CBREOK, at all material times herein, led Peek A Boo to believe that The Plaza would honor the Modified Lease and not hold Peek A Boo or Lawson to any further obligations under the old Lease. CBREOK also led Peek A Boo to believe that any possible monetary obligation it might owe to The Plaza related to the lease of the Old Premises would be satisfied in full when the Old Premises were relet to Horan. CBREK further concealed from Peek A Boo the fact that after Peek A Boo vacated the Old Premises and Horan begin to relet same, but before the original term of the Lease expired, The Plaza fully intended to disregard the Modified Lease and to enforce the original Lease against Lawson.

28. CBREOK’s representations, actions and concealment as described herein were fraudulent or, at a minimum, were made in reckless disregard of the truth. They were made with the intention of inducing the breach of the Lease to the detriment of Lawson and to Peek A Boo. They were relied upon by Peek A Boo and Lawson and were made at a time when Peek A Boo and Lawson, had they known the truth, could have acted to prevent the assertion of any claims under the Lease and to mitigate any damages that could be owed to The Plaza under the Lease.

29. Indeed, had Peek A Boo and Lawson been apprised by CBREOK of The Plaza’s true intentions, Peek A Boo would not have permitted the Old Premises to be relet to a new tenant. Instead, Peek A Boo would have continued to perform the obligations under the Lease and to operate its business in the Old Premises as well as the New Premises. Peek A Boo would have enjoyed the benefit of operating its business out of two locations for the remaining lease term in addition to avoiding any possible or potential liability under the Lease.

30. As a result of the fraudulent representations, actions and concealment of CBREOK described herein, Lawson and Peek A Boo have each sustained damages in an amount to be proven at trial, but believed to be in excess of $75,000.00 exclusive of costs and interest.

31. As a result of the fraudulent representations, actions and concealment of CBREOK described herein, Lawson and Peek A Boo have each sustained damages in an amount to be proven at trial, but believed to be in excess of $75,000.00.

32. Peek A Boo and Lawson are entitled to judgment in this amount against CBREOK and The Plaza, along post-judgment interest at the statutory rate. The Plaza is jointly and severally liable for the acts, representations and concealment of its agent CBREOK described herein under the doctrine of respondeat superior.

WHEREFORE, premises considered, Lawson and Peek A Boo each request that judgment be entered in their favor and against The Plaza and CBREOK as more fully set forth herein and that the Court grant them any other and further relief that is just and proper.

Outcome: Settled and dismissed with prejudice.

Plaintiff's Experts:

Defendant's Experts:

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