Howard Ave. Station v. Kane (In re Howard Ave. Station)
| Decision Date | 22 September 2022 |
| Docket Number | 8:20-cv-2780-CEH[1],8:12-bk-08821-CPM |
| Parties | In re HOWARD AVENUE STATION, LLC, Debtor. v. FRANK KANE, THE DUBLINER, INC., and RICHARD CAMPION, Appellees. HOWARD AVENUE STATION, LLC, and THOMAS ORTIZ, Appellants, |
| Court | U.S. District Court — Middle District of Florida |
Appellants Howard Avenue Station, LLC (“HAS”) and Thomas Ortiz (“Ortiz”) each appeal the bankruptcy court's Amended Final Judgment Resolving Adversary Proceeding, entered on June 9, 2020 (Doc. 10-2). The bankruptcy court concluded that a finding of fact from a state court proceeding between the same parties precluded a finding in Appellants' favor in the bankruptcy proceeding. The bankruptcy court, accordingly, resolved the adversary proceeding by entering summary judgment in favor of Appellees Frank Kane (“Kane”), The Dubliner, Inc. (“Dubliner”), and Richard Campion (“Campion”) on the basis of collateral estoppel.
Appellants have filed their initial briefs (23, 48), Appellees have filed their response briefs (Docs. 30, 52), and Appellants have filed their replies (Docs. 54, 57).
Upon due consideration of the record, the parties' submissions, oral argument and otherwise being fully advised in the premises, the Court concludes that the Amended Final Judgment Resolving Adversary Proceeding should be reversed.
Appellee Frank Kane owns several adjoining properties in Tampa, including 2307 West Azeele Street (“2307 Azeele”) and 309-317 South Howard Avenue (“the Howard Building”). Doc. 30 at 10.[2] Since 2002, appellee The Dubliner, Inc. (“Dubliner”), a corporation whose principal is appellee Richard Campion, Doc. 10-17 ¶ 1, has leased the downstairs portion of 2307 Azeele from Kane in order to operate a bar called the Dubliner. Doc. 30 at 11; Doc. 37-8 at ¶¶ 6-7. After two five-year terms governed by a written lease agreement, Dubliner's occupancy continued under an oral month-to-month agreement beginning in August 2012. Doc. 30 at 12-13. The written lease (“the Dubliner Lease”) described the premises as “the land and improvements located at 2307 W. Azeele St.” The lease referenced an attached sketch but did not provide a legal description. Doc. 37-8 at ¶ 6.
Appellant Howard Avenue Station, LLC (“HAS”), of which appellant Thomas Ortiz is the managing member, also rented property from Kane. Doc. 10-25 ¶ 1. Pursuant to a lease signed in 2009 (“the HAS lease”), HAS rented the upstairs portion of 2307 Azeele and the Howard Building. Doc. 23 at 7.[3] The lease defined the premises as “[c]ollectively, the upstairs portion of 2307 Azeele Street, Tampa, Florida 33609 and 309, 311, 313 and 317 South Howard Avenue, 33606.” Doc. 10-26 at 2. The lease also stated: “Buildings and exterior space: see Composite Exhibit ‘A' which includes a photograph of the fenced off area and storage unit in the rear of the Howard Avenue bldg. to be included as part of the [premises].” Id.; see id. at 11 (photograph).[4]
An outdoor space lies between 2307 Azeele and the Howard Building. The space formerly housed a courtyard or patio and a wooden wheelchair access ramp; Dubliner constructed a deck on this space and relocated the access ramp. Doc. 37-8 at 2. The outdoor space between the buildings has been split into thirds for the purpose of the property dispute between the parties. Doc. 23 at 9. It is undisputed that the eastern third, which adjoins 2307 Azeele, and the western third, which adjoins the Howard Building, were correctly controlled by the party that leased the adjoining building. See id. at 8-11. At issue is the middle third of the outdoor space (“the deck area”).
Dubliner initiated an action in state court in May 2007 against Kane as well as HAS and Ortiz as the master tenant. Doc. 37-8. Dubliner sought a declaratory judgment that the Dubliner Lease, originally signed in 2002 and renewed in 2007, encompassed the deck area. Id. ¶¶ 19-21. Dubliner also sought injunctive relief to permit its continued use of the deck area. Id. ¶¶ 22-24. Dubliner alleged that it had constructed a deck and relocated the access ramp on the outdoor space with Kane's “full consent and approval and with his knowledge that both would be used by [Dubliner's] patrons.” Id. ¶ 9. Yet, during negotiations related to the 2007 lease renewal, Kane informed Dubliner that its “‘month-to-month lease for the deck/courtyard space' would terminate on May 31, 2007.” Id. ¶¶ 12-15. Dubliner asserted that Kane intended to sell or transfer the deck area to HAS and Ortiz instead. Id. ¶ 17.
Kane, HAS, and Ortiz responded together and asserted counterclaims against Dubliner. Doc. 37-9. They alleged that Kane and Dubliner had entered into a separate, oral month-to-month lease for a portion of property-belonging to the Howard Building -on which Dubliner had built a deck. Id. ¶¶ C9-10.[5] Under the oral lease, Dubliner agreed to pay Kane $700 per month for use of the deck area. Id. ¶ C12. Kane then provided written notice to Dubliner that its month-to-month tenancy was being terminated. Id. ¶ C13. Dubliner failed to vacate the deck area, and Kane, Ortiz, and HAS sought to evict Dubliner from it.[6] Id. ¶¶ C7-15.
A bench trial took place in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, in front of Judge Ralph C. Stoddard. Doc. 30 at 29. At the trial the parties presented evidence and put on lay and expert witnesses. Id. at 29-30. In March 2008, prior to issuing a written judgment, Judge Stoddard announced his factual findings regarding the disputed deck area and his interpretation of the Dubliner Lease. Doc. 10-108;[7] see id. at 9 ().
Rejecting HAS's contention that public records showed the deck area indisputably belonged with the Howard Building, Judge Stoddard stated that he could not “know that for sure” without a survey. Doc.10-108 at 4. Because the public records did not reference a street address or correspond with the property description in the Dubliner Lease, Judge Stoddard concluded that “2307” was merely a “mailing address.” Id. at 3. When HAS characterized the court as being “unsure” about the location of the property line despite the public records, the following exchange took place:
The court:
I am sure about that. I am positive that 2307 encompasses the deck area.
Take it up with the 2nd DCA. That's my finding of fact.
Judge Stoddard explained that, “if the contrary were true,” Kane would be subject to a lawsuit based on fraud because he had led Dubliner to believe the space on which he built the deck was a part of the leased premises. Id. at 5. Dubliner's belief was reasonable because the deck area was within the same fence and “communicated with the inside” of 2307 Azeele “by way of the wheelchair ramp.” Id. at 3-4. Judge Stoddard compared the situation to someone leasing their house and then telling the tenants, upon renewal, that the lease did not include the swimming pool. Id.
Counsel for HAS argued that the deck area had never belonged to Dubliner because it constituted the only access to the upstairs unit, which was not leased to Dubliner. Id. at 6. Judge Stoddard stated, Id.
HAS reiterated that the legal description of 2307 does not include the deck, to which the court again highlighted the lack of a survey tying the street address to the leased premises. Id. at 7. HAS stated, “If your finding is that [the legal description is] 2307.. .that[s] fine.” Id. The court responded, Id.; see also id. at 17 (). Judge Stoddard rejected as incredible Kane's testimony that there was a separate oral agreement for the deck area. Id. at 8.
Counsel for Dubliner also noted during this proceeding that it intended to continue to occupy the property during the remaining term of the lease, which continued through August 15, 2012. Id. at 13.
Id. at 22. Judge Stoddard further found that Dubliner had effectively renewed its lease through 2012, such that Kane, HAS, and Ortiz were precluded from terminating Dubliner's lease rights, including its right to the deck area. Id.
The state court issued a Partial Final Judgment on July 2, 2008. Doc. 37-11. Included among its findings was the following: “The written lease agreement includes the courtyard/deck area on the east side of the building, including the handicap access ramp.” Id. ¶ 3. The court incorporated the Partial Final Judgment into a Final Judgment issued on May 24, 2009. Doc. 37-12. C. Adversary Proceeding
In October 2012, HAS, as a Chapter 11 Debtor, initiated a proceeding in bankruptcy court against Dubliner and Campion demanding turnover of the deck area (“the Adversary Proceeding”). Doc. 23 at 7; Doc. 10-7. HAS asserted that the HAS Lease entitled it to possession of the deck area once the Dubliner Lease expired on August 15, 2012 Id. at ¶¶ 9, 11. Kane intervened and filed a counterclaim against HAS and Ortiz...
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