ILNews

Roche owes Marsh Supermarkets $18M for breaking sublease

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Court of Appeals upheld judgment Monday in favor of Marsh Supermarkets LLC on its complaint alleging that Roche breached a contract to sublease space in the Fishers building that houses Marsh’s headquarters.

Marsh is a subsidiary of MSI Crosspoint Indianapolis Grocery LLC, which owns the building and land that Marsh leases for its headquarters. The property is mortgaged with Bank of America, and the lease allows for Marsh to sublease the building.

Roche Diagnostics Corp. executed a sublease with Marsh to rent space in the building in March 2008. The lease would begin April 1 and expire Nov. 21, 2026, with rent payments to begin Jan. 1, 2009.

The agreement contained a subtenant recognition agreement and a subordination, non-disturbance and attornment agreement. The parties were required to cooperate in obtaining these two documents. The original sublease said both must be delivered to Roche by April 25, 2008; if not, Roche could terminate the lease on or before May 15.

This case hinges on the SNDA. Roche originally rejected Marsh’s proposed draft of the SNDA, in which Bank of America had removed Roche’s 12-month liability limit. Two extension letters were executed, pushing back the deadline that the SNDA had to be obtained to May 30. Roche wanted the liability limit in the SNDA. On May 29, Roche decided it would not sublease the building and sent a letter overnight to Marsh. When Marsh received the letter, it contacted the bank and got the SNDA with the 12-month liability limit. The SNDA was hand delivered to Roche at 4:57 p.m. on May 30.

After Roche declined to participate in the lease, Marsh sued. Both parties moved for summary judgment, and the trial court denied both motions. At a bench trial, Hamilton Superior Judge William J. Hughes ruled in favor of Marsh, finding Roche’s failure to pay rent under the sublease was more than $47 million. Hughes set off that amount based on a new sublease Marsh obtained with First Advantage Background Services Corp. and found Roche owed $18,188,933.

In Roche Diagnostics Operations, Inc. v. Marsh Supermarkets, LLC, 29A02-1201-PL-4, Judges Patricia Riley and L. Mark Bailey affirmed in favor of Marsh. Roche challenged the denial of its motion for summary judgment, but the majority held that the extensions entered into contain the parties’ clear intent for Roche to have its termination option effective only upon a failure to deliver a compliant SNDA by May 30, 2008. The language of the extensions modified Roche’s unilateral option to terminate the sublease under the original agreement.

Regarding the judgment from the bench trial, the judges noted that Roche’s challenge is essentially the same as its argument on the denial of its motion for summary judgment. The trial court correctly interpreted that the original agreement was modified by the extensions, Riley wrote. They also affirmed that Roche breached its duty to cooperate by not accepting the May 30 SNDA.

Also, based on the language of the original agreement, Hughes didn’t err in determining Roche is on the hook for the $18 million calculated based on the entire length of the sublease for breaking it.

Judge Terry Crone dissented, believing the extension letters didn’t nullify Roche’s bargained-for right to terminate the sublease after April 25. He wrote that Roche terminated the sublease before Marsh delivered the SNDA, therefore, Roche wasn’t in default and its damages should be limited to up to Dec. 31, 2013, based on the sublease.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  2. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  3. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  4. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  5. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

ADVERTISEMENT