Roche Diagnostics Operations, Inc. v. Marsh Supermarkets, LLC
2013 Ind. App. LEXIS 147
| Ind. Ct. App. | 2013Background
- Marsh, a MSI subsidiary, leases the Building from MSI under a 2006 Prime Lease; MSI mortgage secures the Premises with Bank of America.
- Roche Diagnostics sought space in 2007; Marsh submitted a sublease proposal including SNDA terms and a non-disturbance framework.
- A March 28, 2008 Sublease subleased Floors 2–4 with a term to 2026 and Roche had termination options at five-year anniversaries.
- Section 17.01 required Marsh and Roche to cooperate to obtain an SRA from MSI and an SNDA from BOA; a May 2008 extension altered timing for SNDA delivery.
- May 30, 2008 SNDA was delivered; Roche refused to sign; Roche terminated the Sublease May 29, 2008; Marsh sued for breach.
- Trial court found Roche breached and awarded Marsh damages, calculating present value of rents, mitigated by a Marsh sublease to First Advantage; Roche appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court properly denied summary judgment | Roche's race theory is rejected; Extensions modified Roche's termination rights | The Sublease and Extensions unambiguously allow termination if SNDA not delivered timely | No; extensions modified termination rights and summary judgment denial proper |
| Whether Roche breached by failing to cooperate obtaining the SNDA | Parties had mutual duty to cooperate; Hamlin doctrine applies to good-faith consideration of third-party approval | May 16 SNDA rejected; cooperation not breached; Hamlin limited by third-party approval context | Partly; no breach for May 16 SNDA, but genuine issue regarding May 30 SNDA, so denial affirmed |
| Whether Marsh's damages were properly awarded and not speculative | Damages based on present value of remainder under the eighteen-year term with proper mitigation | Damages for long-term lease are speculative; limit to earlier termination window | Damages properly awarded; not speculative given default and mitigation framework |
Key Cases Cited
- Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494 (Ind. Ct. App. 2007) (summary-judgment standards and abeyance after final judgment)
- Barrington Management Co., Inc. v. Draper Family Ltd. Partnership, 695 N.E.2d 135 (Ind. Ct. App. 1998) (contract interpretation and intent; reading contracts as a whole)
- Hendershot v. Indiana Medical Network, Inc., 750 N.E.2d 798 (Ind. Ct. App. 2001) (breach, materiality, and contract interpretation factors)
- Curtis v. Indiana State Hwy. Comm'n, 704 N.E.2d 1019 (Ind. 1998) (Hamlin doctrine; good faith consideration of third-party approvals)
- Rauch v. Circle Theatre, 374 N.E.2d 546 (Ind. App. 1978) (damages for long-term leases; caution on speculative recovery)