Strip Delaware L.L.C. v. Landry's Restaurants, Inc.
2011 Ohio 4075
Ohio Ct. App.2011Background
- The Strip Delaware, L.L.C. owned The Strip in Stark County; Joe's Crab Shack operated there under a 1997 20-year lease with a guaranty by Landry's Restaurants, Inc.
- Landry's closed Joe's Crab Shack on 11/17/2006; landlord repossessed on 12/22/2006 and sued for damages after default.
- The trial court awarded damages for April 15, 2008 to March 13, 2009 totaling $164,042.51 plus other items; Landry's was liable under the guaranty.
- Wasabi Japanese Steakhouse leased the premises in August 2008 and began paying rent on 3/13/2009, after remodeling.
- Guaranty language creates a rolling liability for debtor, with contested caps and offsets; trial court limited damages and awarded fees.
- Bar against future damages included attorney’s fees and reletting costs; cross-appeal sought reevaluation of guaranty time limits and damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether damages awarded for deficiency were proper | Strip Delaware argues replacement rent should offset damages | Landry's argues no windfall; Wasabi rents speculative | Damages upheld; replacement rent not a windfall, proper under the lease |
| Whether guarantor liability extended beyond the November 2008 cap | Strip Delaware: rolling guaranty; no fixed end date | Landry's: limit applies to 11/2006–11/2008 period | Guaranty is rolling; time-limit on damages reversed for base rent; reassess damages |
| Whether landlord could recover attorney’s fees and reletting costs | Strip Delaware seeks fees permitted by lease/guaranty | Landry's not liable for some claimed fees | Fees and reletting costs affirmed under guaranty and lease terms |
| Whether November 2008 cap governed damages for later claims | Damages lag behind defaults; cap inappropriate | Two-year cap applies to certain liabilities | Cross-appeal: limit on damages reversed; reassessment of base rent damages required |
Key Cases Cited
- Skivolocki v. East Ohio Gas Co., 38 Ohio St.2d 244 (Ohio 1974) (contract damages aim to place injured party in pre-breach position)
- Baxter v. Kendrick, 160 Ohio App.3d 204 (Ohio App. 2005) (damages for breach measure to restore benefit of bargain)
- The Way International v. Ohio Center, 3 Ohio App.3d 451 (Ohio 1982) (damages for pre-performance breach measured by difference in total rents; speculative rents discouraged)
- Dennis v. Morgan, 89 Ohio St.3d 417 (Ohio 2000) (rent due until lease term ends or premises relet with reasonable efforts)
- Schooley v. Wilker, 33 Ohio App.2d 462 (Ohio App. 1929) (windfall avoidance; speculative future rents not guaranteed)