High Performance Properties No. 3, LLC v. Education Management, Inc.

District Court, E.D. Louisiana·Decided April 15, 2025·No. 2:24-cv-01821·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

HIGH PERFORMANCE CIVIL ACTION PROPERTIES NO. 3, LLC, Plaintiff

VERSUS NO. 24-1821

EDUCATIONAL MANAGEMENT, INC., SECTION: “E” (1) Defendant

ORDER AND REASONS Before the Court is High Performance Properties No. 3, LLC’s (“Plaintiff”) motion for summary judgment.1 Defendant Educational Management, Inc. (“Defendant”) filed an opposition.2 Plaintiff filed a reply.3 After Plaintiff’s motion for summary judgment was fully submitted, the Court permitted supplemental briefing.4 Plaintiff filed a supplemental memorandum in support of its motion for summary judgment.5 Defendant filed a supplemental opposition.6 Plaintiff filed a supplemental reply.7 Also before the Court is Plaintiff’s motion for disbursement of registry funds.8 Defendant filed an opposition.9 BACKGROUND On July 19, 2024, Plaintiff filed a complaint alleging that it owns a commercial

1 R. Doc. 14. 2 R. Doc. 17. 3 R. Doc. 20. 4 R. Doc. 26; R. Doc. 34. 5 R. Doc. 27. 6 R. Doc. 29. 7 R. Doc. 38. 8 R. Doc. 41. 9 R. Doc. 43. building located at 3200 Cleary Avenue in Metairie, Louisiana (the “Property”).10 Plaintiff alleges that on July 1, 2013, it began leasing the Property to Defendant (the “Lease”).11

Plaintiff alleges the Lease was renewed on July 1, 2021 for a five year period, which extended the Lease through June 30, 2026.12 Plaintiff alleges, under the Lease, Defendant owes rent of $33,500 per month.13 Plaintiff alleges that, if rent is not paid before the tenth day of each month, the Lease stipulates a late fee of 5% of the rental payment due.14 On October 17, 2024, Defendant filed an answer to Plaintiff’s complaint.15 As affirmative defenses, Defendant alleges Plaintiff “failed to properly maintain the leased premises as required by Section 15 of the” Lease and “failed to provide proper notice of default and an opportunity to cure the default as required by Section 21 of the” Lease.16 Plaintiff’s sole claim is breach of contract.17 In Plaintiff’s complaint, Plaintiff alleged that as of July 19, 2024, Defendant had failed to pay rent for the months of May, June, and July, 2024.18 Plaintiff alleged it has made multiple amicable demands on

Defendant.19 Plaintiff alleged Defendant still occupies the Property.20 Plaintiff alleged it has put Defendant in default for past due rent through a June 28, 2024 email.21 Defendant allegedly is in default of its lease with Plaintiff due to Defendant’s failure to pay rents and penalties.22

10 R. Doc. 1 at ¶ 3. 11 Id. at ¶ 4. 12 Id. at ¶ 5. 13 Id. at ¶ 6. 14 Id. at ¶ 7. 15 R. Doc. 9. 16 Id. at pp. 3-4. 17 See generally R. Doc. 1. 18 Id. at ¶ 8. 19 Id. at ¶ 9. 20 Id. 21 Id. at ¶ 10. 22 Id. at ¶ 11. On October 21, 2024, Plaintiff filed a motion for summary judgment arguing that it is uncontested that Defendant failed to pay Plaintiff multiple months rent and is liable

to Plaintiff for the unpaid rent.23 Plaintiffs asks that the Court “grant its motion for summary judgment for the payment of all past due rent and penalties, as well as attorney fees and costs.”24 In its first opposition, Defendant argues only that there are disputed facts with respect to whether Plaintiff satisfied the Lease’s pre-suit notice provisions.25 Plaintiff filed a reply in support of its motion for summary judgment.26 On February 4, 2025, Plaintiff moved the Court for leave to file a supplemental memorandum in support of its motion for summary judgment and a supplemental statement of undisputed material facts to reflect that it has satisfied the Lease’s pre-suit notice requirements.27 The Court granted Plaintiff’s motion and also granted Defendant leave to file a supplemental opposition.28 On February 7, 2025, Plaintiff filed a supplemental memorandum in support of its motion for summary judgment and a

supplemental statement of undisputed material facts.29 In Plaintiff’s amended statement of undisputed material facts, Plaintiff stated it is undisputed that Defendant owes Plaintiff “past due rent for the months, May, June, July, August, September, October, November and December, 2024, January and February 2025, as well as penalty payments of $1,675/mo for each of the past due monthly payments except for February.”30 On February 18, 2025, Defendant filed a supplemental opposition to Plaintiff’s

23 R. Doc. 14. 24 R. Doc. 14-1 at pp. 2-3. 25 R. Doc. 17. 26 R. Doc. 20. 27 R. Doc. 25; R. Doc. 25-1. 28 R. Doc. 26. 29 R. Doc. 27; R. Doc. 27-1. 30 R. Doc. 27-1 at ¶ j. (citing R. Doc. 27-2). motion for summary judgment.31 Defendant argues the Court should deny Plaintiff’s motion for summary judgment because there are genuine disputes of material fact

regarding the amount of rent Defendant owes Plaintiff and whether Plaintiff is responsible for repairing the Property’s air conditioning.32 Defendant no longer argues that Plaintiff has not satisfied the Lease’s pre-suit notice provisions.33 Defendant attached to its supplemental opposition to Plaintiff’s motion for summary judgment a declaration of Brent L. Mills (“Mills”), the President of Defendant’s parent corporation, signed under penalty of perjury.34 In his declaration, Mills attests that “[a]s [Defendant] has notified the Lessor” through “multiple written demands,” “the air conditioning systems, because of their age and because the Lessor has refused to upgrade [them], do not function properly and do not provide adequate cooling so that the building can be used for student classes and other student activities.”35 Mills attests that, “[t]o date, [Defendant] has spent $82,498.93 on unsuccessful repairs to the air conditioning system.”36 Defendant attaches

to Mills’s declaration “a spreadsheet which itemizes the sums spent by [Defendant] on its repair attempts.”37 On February 20, 2025, the Court granted Plaintiff leave to file a supplemental reply in support of its motion for summary judgment.38 On February 26, 2025, Plaintiff filed a

31 R. Doc. 29. 32 Id. Defendant also argues that the Court should deny Plaintiff’s motion for summary judgment because Defendant filed a motion to amend its answer to assert a counterclaim. Id. at pp. 8-9; R. Doc. 28. The Court denied Defendant’s motion for leave to amend its answer. R. Doc. 42. Accordingly, this argument is moot. 33 R. Doc. 29. 34 R. Doc. 29-1 (Mills Declaration). 35 Id. at ¶¶ 8-9. 36 Id. at ¶ 12. 37 R. Doc. 29-2. 38 R. Doc. 34. supplemental reply.39 Plaintiff argues Defendant is responsible for repairs to the Property’s air conditioning and that Mills’s affidavit is insufficient to defeat Plaintiff’s

motion for summary judgment.40 LEGAL STANDARD Summary judgment is appropriate only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”41 “An issue is material if its resolution could affect the outcome of the action.”42 When assessing whether a material factual dispute exists, the Court considers “all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.”43 All reasonable inferences are drawn in favor of the nonmoving party.44 There is no genuine issue of material fact if, even viewing the evidence in the light most favorable to the nonmoving party, no reasonable trier of fact could find for the nonmoving party, thus entitling the moving party to judgment as a matter of law.45

If the dispositive issue is one for which the moving party will bear the burden of persuasion at trial, the moving party “must come forward with evidence which would ‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’”46 If the moving party fails to carry this burden, the motion must be denied. If the moving party successfully carries this burden, the burden of production then shifts to the nonmoving

39 R. Doc. 38. 40 Id. 41 FED. R. CIV. P. 56; see also Celotex Corp. v.

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High Performance Properties No. 3, LLC v. Education Management, Inc., (E.D. La. 2025).

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