Owners of an Anderson hotel that has operated as a Motel 6 since its construction in 1974 – but soon won’t – withdrew a federal lawsuit Tuesday that claimed the national chain had not maintained the site “as a first class motel” required under its decades-old lease.
The suit initially filed in state court in February sought an adverse possession order of the motel along Scatterfield Road off Interstate 69 at Exit 226. The suit claimed the facility didn’t measure up to prototypes and improved design standards the chain announced in press releases in 2008 and afterward.
Motel 6 removed the suit to federal court, where Magistrate Judge Debra McVicker Lynch presided over a preliminary hearing before this week denying from the bench plaintiff’s motion for a preliminary injunction entitling plaintiffs to take possession of the leased property.
Lynch “called this an overreach by plaintiffs of significant proportion,” said Brian S. Jones, a Bose McKinney Evans partner representing Motel 6. “We are obviously pleased with the court’s decision on this.”
The case in District Court for the Southern District of Indiana, Indianapolis Division, is 5810 Scatterfield Road, LP v. Motel 6 Operating LP, 1:14-cv-00327.
The plaintiffs, a Nevada limited partnership, sought to gain possession of the hotel under the ejection and quiet title statute, I.C. 32-30-3, which Jones said typically is applied as a remedy when a tenant isn’t paying rent. That wasn’t the case here; he said Motel 6 has paid as required under the lease, and no such claim is made in the complaint.
Jones said Motel 6 also strongly disagreed with the suit’s contention that it hadn’t maintained the site as a first-class facility. Jones said the suit essentially requested a complete renovation.
“This is a 40-year-old lease, and a lot of the older leases in some industries use the term ‘first class’ without deciding what that means,” Jones said. He said Lynch also noted the term in the lease was inherently ambiguous.
Wooden & McLaughlin LLP partner Matthew Adolay, who represented 5810 Scatterfield, did not immediately return a message seeking comment Wednesday.
Jones said the record showed that the landlord had no complaints about Motel 6 until the chain notified owners in 2010 that it would not renew its lease and planned to vacate the property when the lease expires this year at the end of October.
Until then, Motel 6 is operating two hotels in Anderson nearly across the street from each other. The chain has leased and rebranded a property that formerly operated as a Fairfield Inn. That site will continue to operate as a Motel 6 after the lease with 5810 Scatterfield expires, Jones said.
Lynch didn’t rule on a defense argument that 5810 Scatterfield lacked standing to bring the suit, Jones said.
The defense claimed that the owner of record is a California partnership called 5810 Scatterfield that was voluntarily terminated some years back, and there was no evidence filed regarding assignment of rights before termination, Jones said. The 5810 Scatterfield LP that brought the suit was an entity organized as a Nevada limited partnership some years later.