412 South Court Street, LLC v. Alabama Psychiatric Services, P.C.

163 So. 3d 1020, 2014 WL 3890957, 2014 Ala. Civ. App. LEXIS 140
CourtCourt of Civil Appeals of Alabama
DecidedAugust 8, 2014
Docket2121074
StatusPublished
Cited by3 cases

This text of 163 So. 3d 1020 (412 South Court Street, LLC v. Alabama Psychiatric Services, P.C.) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
412 South Court Street, LLC v. Alabama Psychiatric Services, P.C., 163 So. 3d 1020, 2014 WL 3890957, 2014 Ala. Civ. App. LEXIS 140 (Ala. Ct. App. 2014).

Opinion

DONALDSON, Judge.

This is an appeal by a landlord from a judgment entered in accordance with a jury verdict awarding damages to the landlord against a tenant for breach of a lease agreement. The landlord contends that the damages award was inadequate [1022]*1022and that it is therefore entitled to a new trial. We agree, and we reverse the judgment and remand the cause for a new trial.

Facts and Procedural History

The landlord, 412 South Court Street, LLC (“Court Street”), is a limited liability company controlled by Eugene Sak.1 The tenant, Alabama Psychiatric Services, P.C. (“APS”), is a professional corporation providing psychiatric medical services to patients in various locations throughout Ala-bama.

The subject matter of the lease agreement is a five-floor multitenant building located at 412 South Court Street in downtown Florence (“the Court Street building”). In 2005, the Court Street building was in a state of disrepair. Among other problems, the air conditioning was broken and only the first and second floors were usable by tenants. In 2005, another limited liability company controlled by Sak, SRS Group, L.L.C., purchased the Court Street building with the goal of renovating and developing it into modern commercial office space that would be custom-built to conform to requests from tenants. Sak also planned to build an atrium addition at the rear of the Court Street building after the initial renovations were completed. As part of the renovation process, demolition on the interior structure of the Court Street building began in the spring of 2006.

In May 2006, Mary Brown, the chief administrative officer of APS, contacted Pro South Realty to inquire about available office space in the Florence area. Pro South Realty was owned by Sak, John Rusevlyan, and another person. Brown spoke with Rusevlyan, a licensed real-es-táte broker and agent, and explained that APS had outgrown the office space it was leasing at that time in Florence (“the Hel-ton Drive office”) and wanted to rent larger office space. Rusevlyan visited the Hel-ton Drive office to assess the needs of APS. After the visit, Rusevlyan suggested that APS consider renting space in the Court Street building. Testimony showed that he told her .that the Court Street building was a multilevel and multitenant building, that it was being renovated, and that the offices would be custom-built to meet the requests of tenants. Rusevlyan ■testified that he also told Brown that Sak was planning to build an atrium addition at the rear of the Court Street building.

Around the same time, Sak or Rusev-lyan began negotiating a lease with Make Believe, LLC, for space in the Court Street building to operate a gym and fitness center, to be known as the Metro Athletic Club (“the MAC”). In August 2006, Make Believe signed a lease to operate the MAC on the first and second floors of the Court Street building.

Soon after the lease with Make Believe was signed, Brown and Sak met at the Court Street building to discuss available space. At that meeting, Sak told Brown that the fourth and fifth floors of the building were already leased, that the first and second floors of the building had been leased to the Make Believe, and that the third floor was the only floor that had available space suitable for APS. Brown testified that she talked to Sak about the possibility that patients of APS might be embarrassed to walk past the MAC to get to the elevator that would take them to the third floor.

In early September 2006, Rusevlyan electronically transmitted a form lease for the third floor of the Court Street building [1023]*1023to a representative of APS “so that [APS] could make modifications.” That document included an option for APS to obtain “exclusive” parking spaces for an extra monthly fee rather than nonexclusive parking that would be shared by other tenants. APS’s representative electronically transmitted back to Rusevlyan another lease reflecting APS’s proposed modifications. In that document, APS indicated that it did not want exclusive parking spaces. After Sak reviewed the proposal from APS, Rusevlyan electronically transmitted back to APS’s representative a proposed lease that incorporated the modifications to the original form lease that were acceptable to Sak. Sak testified that, aside from reviewing those documents, he did not negotiate the terms and conditions of the lease between Court Street and APS. Negotiating the terms of the lease, Sak testified, “[was] Rusevlyan’s job.”

While those documents were being generated and reviewed, Sak and Brown continued discussing design plans for the third floor of the building. In September 2006, Sak and Brown met with an architect at the building to “define the rules of engagement” and to review a design plan. Around that time, Sak again discussed his plan for the atrium addition with Brown. Brown testified that Sak’s plan for the atrium addition was “fine with [APS] ” so long as, “once you walked into the building, you walk down through a hallway.”

On October 19, 2006, the parties signed a lease for the third floor of the Court Street building (“the October 2006 lease”). The October 2006 lease named SRS Group, L.L.C., as the landlord and APS as the tenant. Brown testified that she did not negotiate any portion of the October 2006 lease and that she did not read it. She also testified that, at the time APS entered into the October 2006 lease, APS knew that the Court Street building was a multi-tenant building, it knew that there was only one elevator and that people other than patients of APS would be using that elevator, and it knew that a gym would be operating on the first and second floors of the building.

Exie Wallace, the business office manager for APS’s Florence office, testified that APS knew that their patients would have to ride the elevator up to the third floor of the building and that there would be other people on that elevator. She testified that APS knew that, when the patients exited the elevator on the third floor, other people on that elevator would know that they were entering into APS’s office space. She testified that APS knew “from the very beginning” that there would be a gym in the building.

The October 2006 lease term was to begin on June 1, 2007, and APS was obligated to start paying rent at that time. The delay of the commencement date of the lease, Rusevlyan testified, was to allow time for the space to be renovated to meet the requirements-of APS. Construction of the APS office space began shortly after the October 2006 lease was signed. Sak testified that, between October and December 2006, he had very little communication with APS, but, he stated, in January 2007 he and Brown became “highly engaged” in the design process. Also in January 2007, Make Believe took occupancy of the space and began .operating the MAC.

During a visit to the site in early 2007, Brown talked to Sak about the elevator opening up directly into the third-floor office space. She asked Sak if he could put a door between the elevator and APS’s office space that would allow for more privacy. Sak explained that it was not feasible to do so because of the design of the space. In February 2007, Brown approved the design plans for the APS space.

[1024]*1024On May 31, 2007, at the request of Sak, TUPS signed an amended lease naming Court Street as the landlord (“the amended lease”). See note 1, supra.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Caplan v. Benator
262 So. 3d 672 (Court of Civil Appeals of Alabama, 2018)
Tyler v. Davis
196 So. 3d 258 (Court of Civil Appeals of Alabama, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
163 So. 3d 1020, 2014 WL 3890957, 2014 Ala. Civ. App. LEXIS 140, Counsel Stack Legal Research, https://law.counselstack.com/opinion/412-south-court-street-llc-v-alabama-psychiatric-services-pc-alacivapp-2014.