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Roche owes Marsh Supermarkets $18M for breaking sublease

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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.

 

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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