HomeMy WebLinkAboutSherwin-Williams, Inc. - Whitham, Hebenstreit & Zubek, LLP i,_
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ATTORNEYS AT LAW
Larry F.Whitham Of Counsel
Michael J. Hebenstreit John M.Ross
S.Gregory Zubek David L.Carter .
Associate Registered Paralegal
Eric N.Engebretson November 9, 2005 Edna M.Wallace R.P.
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Les Olds
1 Civic Square
=- RECEIVED to
Carmel, IN 46032 - Nov 14 2005 to
RE: Sherwin-Williams, Inc. vs. City of Carmel, Indiana, On Behalf Of OCS
Its Depaitment of Redevelopment ° ' 44
Cause No: 29D05-0402-CT-178 /f9 I j
Our File No: C335 (a)
Dear Les:
Enclosed is Margie Stankoven's bill for serving as a witness in the Sherwin Williams
relocation case. Please see that she is paid by the CRC.
Also enclosed is a copy of the judgment that was entered against CRC for relocation
costs. The judgment is for$9381.12 plus costs of$109.00 for a total of$9490.12. Sherwin
Williams was seeking$18,002.00 plus $3,650.00 in prejudgment interest for a total of
$21,657.00, so the result was quite good; less than half of the claim.
Please see that the judgment is paid to Sherwin Williams, Inc. and sent to me so that I can
transmit it and obtain a satisfaction of judgment from the court.
Feel free to contact me to discuss this matter.
Ve l , yours, 9
r.
/ii 'u.ek,--
SGZ: ksg
cc: Karl Haas ag-',,/
R:\C335\(a)\Olds ltr I I-9-05.doc /f 1y A f-
Market Square Center, Suite 2000, 151 North Delaware Street, Indianapolis, IN 46204
(317) 638-5555 • Fax: (317) 638-5533
STATE OF INDIANA ) IN THE SUPERIOR COURT NO. 5
) SS:
COUNTY OF HAMILTON ) OF HAMILTON COUNTY
SHERWIN-WILLIAMS, INC., )
Plaintiff )
)
vs. ) CAUSE NO. 29D05-0402-CT-178
)
CITY OF CARMEL, INDIANA, ) FILED
L e D
on behalf of its Department of ) 1 C
Redevelopment, ) OCT 3 1 2005
Defendant )
CLERK OP THE
HAMILTON SUPERIOR COURT
JUDGMENT
Plaintiff having appeared by counsel, Jack G. Hittle, and Defendant having
appeared by counsel, S. Gregory Zubek, evidence and argument having been received,
the Court having taken the matter under advisement to permit post-trial briefing, and the
Court having received and reviewed the briefs from both parties, now enters its ruling.
FACTS
The Sherwin-Williams Company ("SW") which instituted this action as Sherwin-
Williams, Inc., entered into an original Lease, Exhibit 3, with Balcor Income Properties
("Balcor") in 1985. The Lease was for space in a shopping center in Carmel, Indiana,
and was in effect when the Carmel Redevelopment Commission ("CRC") bought the
shopping center from Balcor sometime before July of 2000. By that time, the City of
Carmel ("Carmel") had made known publicly, if not formally to SW, an intent to take
over the property under its right of eminent domain. On July 3, 2000, Carmel did file a
condemnation suit to acquire the leasehold of SW by eminent domain, but did nothing
else to disturb the possession of the leasehold by SW. On January 17, 2001, SW gave
1
notice that it was exercising its option to renew the Lease for an additional five-year
period commencing July 1, 2001, at a rental of $3,105 per month. All of the terms of
the Lease remain unchanged. Thereafter, SW continued to occupy the premises, and
paid rent through the end of October of 2001. After, SW vacated the property in
October, it paid no further rent.
I I
CLAIM OF SW FOR RELOCATION EXPENSES
SW instituted this action pursuant to Article XXII of the Lease that is Exhibit 3
which clearly was designed to protect SW against the effects of losing the leasehold
through eminent domain. Carmel argues that this was meant only to be a statement of
what SW could recover from a condemning governmental agency. Since neither party
to the original Lease had the power to bind any condemning authority, Carmel's
interpretation would relegate the entirety of Article XXII to irrelevancy as it pertained to
the two parties to the Lease. Under any rule of construction, the Court does not believe
this to be the case nor does the language suggest that Carmel is correct in its
interpretation. Rather, Article XXII is meant to be a remedy to pursue against the
landlord. Carmel may be correct, however, when it states in its post-trial brief that the
"crux of the Article is that it deals with the 'award'." The language of Article XXII
provides that SW shall be entitled to claim an award, and in the event the condemning
authority does not make a separate award to SW, then the lessor would be required to
assign a portion of any award it received to cover SW's damages.
In this particular case, SW is claiming an award for loss of business, damage to
merchandise and fixtures, removal and reinstallation costs, and moving expenses. It is
agreed between the parties that no separate award has been made to SW for these
2
particular expenses. Under the provision of Article XXII, therefore, SW can look to the
CRC/Carmel as the successor lessor to Balcor for a portion of its.award. Carmel, of
course, did not have to proceed through eminent domain with land it already owned, so
it received no award as the owner/lessor. Carmel has not raised this issue but rather
has argued an interpretation of "award" that avoids the issue. The Court nevertheless
finds that Carmel would be estopped from taking this position in any event. While it
makes absolutely no sense to go through a condemnation proceeding and have Carmel
award itself the value of the land taken, had Carmel been a private entity, this clearly
would have occurred, and an award would have been made. Therefore, Carmel would
not be permitted to raise the lack of any such award as a defense to any responsibility
under Article XXII of the Lease.
Having found CRC/Carmel liable under Article XXII of the Lease for SW's
damages, the Court turns to determining what those damages are. First, the Court
finds that no evidence was presented regarding any damages for loss of business or
damage to merchandise or fixtures. The Court does find that SW is entitled to
damages for removal and reinstallation costs incurred as a result of the leasehold being
taken through eminent domain proceedings. These would include the following:
Removal and reinstallation of satellite dish $ 3,018.75
Cost of removal of old business signage 624.80
Installation of business signage by Dualite 1,274.00
The Court finds the following were necessary moving expenses:
Manpower (labor), September 23, 2001 $ 953.77
Manpower (labor), September 30, 2001 1,090.03
Manpower (labor), October 7, 2001 235.68
3
Manpower (labor), October 14, 2001 117.84
Ryder Truck rental 206.35
Expenses of Robert Summers, May 1, 2001 220.63
(One-half of the $441.26 listed on Exhibit 4
since Mr. Summers serviced two stores
on this trip)
Expenses of Robert Summers, July 19, 2001 359.59
(One-half of$719.18 listed on Exhibit 4
since Mr. Summers also serviced the
Logansport store on this trip)
Expenses of Robert Summers, October 16, 352.04
2001
Expenses of Laura Anderson 81.03
(The Court finds no supporting documentation
for mileage, or for meals in Indiana)
Expenses of Warren Remein 166.01
(One-half of$332.01 listed on Plaintiffs
Exhibit 4 since Mr. Remein split his time
in Indiana between two stores and "other
projects")
Expenses of Chris Miller 243.03
Mileage for Chris Miller 200.26
Expenses of Peter Love, February 7, 2001 92.07
(Reduced from the amount shown on
Plaintiffs Exhibit 4 due to lack of support for
telephone or mileage charges being directly
attributable to Carmel store)
Expenses of May 10, 2001 111.34
(Reduced from the amount shown on
Plaintiffs Exhibit 4 since there is no support
for mileage specific to SW in Carmel)
Expenses June 26, 2001 27.77
(One-third of the $83.31 shown on
Plaintiffs Exhibit 4 since Mr. Love was
in Indianapolis regarding three separate
stores)
4
Expenses June 26, 2001 57.97
(Reduced from amount shown on
Plaintiffs Exhibit 4 since mileage was
among three stores)
Expenses of August 15, 2001 183.84
(The Court finds no support for mileage
for this trip)
The Court makes no award for "Dualite charge for Raceway" sign since this
involved signage that was an upgrade and not a reinstallation. Likewise, the Court
makes no award for the "Dualite sign" for the same reason. Finally, the Court finds no
support for the charge of $479.55 to Efficient Lighting. Total damages found equal
$9,381.12.
III
DEFENDANT'S COUNTERCLAIM
Carmel/CRC counterclaims against SW for breach of the Lease by nonpayment
of rent. SW claims that the Lease was terminated when the eminent domain action
was filed and that the Lease became a month-to-month tenancy after that point. To
resolve the Defendant's Counterclaim, the Court must first determine when the relevant
Lease terminated. Article XXII says that if the premises are taken under eminent
domain, then the Lease will terminate and expire effective the date of such taking. SW
claims the taking took place when the condemnation suit was filed on July 3, 2000,
because there was a "substantial interference" with SW's property rights which it
believes "impaired the free use and enjoyment" of its rights in the property. No
evidence was presented, however, of what this impairment was. From the evidence
presented, the Court cannot find that SW was conducting its business on the premises
on July 3, 2000, any differently than it had conducted that business on July 2, 2000.
5
There is no question that at some point in the future, there would have been a
substantial interference with the use of the premises and the conduct of the business
on those premises, but there is no evidence of any immediate interference on July 3,
2000, such as to constitute a taking.
Therefore, the Court does not find that the Lease terminated on July 3, 2000.
Since it did not terminate on that date, SW was empowered by the valid and continuing
Lease to exercise its option to extend that Lease. This it did in January of 2001,
thereby extending the Lease term for an additional five years to June 30, 2006.
Although SW argues that it only did this to preserve its rights under the eminent domain
proceeding, the Court finds this does not alter their legal obligations under the extended
Lease. SW then remained in possession and paid rent through the month of October
of 2001. Thereafter, it vacated the property without payment of any rent for the
remaining balance of its Lease. Under these facts, the Court finds that SW has
breached its Lease.
The question remaining is what, if any, damages have been proven by
CRC/Carmel? The Court does not presume, as SW argues, that Carmel wanted SW
out of the premises and therefore had no right to collect the $3,505 per month rental to •
which it was entitled under the Lease. Wanting a tenant to vacate a property at some
future point, and wanting to collect rent from a tenant until that time, are not logically or
legally incompatible. On the other hand, the Court will not determine damages on
speculation. Carmel would only be permitted to recover under the extended Lease until
they had taken possession of the property. No evidence was presented as to when this
occurred, although Plaintiffs Exhibit 5 would indicate that the trial on that matter was
6
completed some time prior to April 4, 2003. Moreover, Carmel was under a duty to
mitigate its damages, and while the Court recognizes that it may have been difficult to
obtain a tenant for the SW space given all the circumstances, the Court heard no
evidence to this effect nor any evidence of any attempt to mitigate damages. Without
this, the Court has no basis to assess reasonable damages for SW's breach.
IV
CARMEL'S REQUEST FOR SET-OFF
The Court finds that the evidence does not support Carmel's claim for a set-off
for costs incurred for the investigation of an alleged chemical spill on the SW site.
V
JUDGMENT
Judgment is now ordered in favor of the Plaintiff and against the Defendant, City
of Carmel on behalf of the Carmel Redevelopment Commission, in the amount of
$9,381.12 plus the court costs of this action. This judgment will accrue legal interest at
the rate of eight percent (8%) per annum from this date forward, but the Court does not.
award prejudgment interest thereon.
Judgment is against the Defendant and in favor of the Plaintiff on the
Defendant's Counterclaim and request for set-off.
SO ORDERED this 31st day of October, 2005.
Wayne A. Sturtevant, Judge
Hamilton Superior Court No. 5
Distribution:
J. Hittle
G. Zubek
7
Prescribed by State Board of Accounts City Form No.201(Rev.1995)
ACCOUNTS PAYABLE VOUCHER
CITY OF CARMEL
An invoice or bill to be properly itemized must show: kind of service, where performed, dates service rendered, by
whom, rates per day, number of hours, rate per hour, number of units, price per unit, etc.
Payee
Sherwin Williams, Inc. Purchase Order No.
Terms
Date Due
Invoice Invoice Description • Amount
Date Number (or note attached invoice(s) or bill(s))
Court settlement on Cause 29005-0402—CT-178 $9,490.12
•
Total $9,490.12
I hereby certify that the attached invoice(s), or bill(s), is (are) true and correct and I have audited same in accordance
with IC 5-11-10-1.6.
, 20
Clerk-Treasurer
•