Indianapolis City Market Corp. v. Mav, Inc.

Decision Date30 October 2009
Docket NumberNo. 49A02-0905-CV-399.,49A02-0905-CV-399.
Citation915 N.E.2d 1013
PartiesINDIANAPOLIS CITY MARKET CORPORATION, Appellant-Defendant, v. MAV, INC., d/b/a/ Grecian Garden, Appellee-Plaintiff.
CourtIndiana Appellate Court

Jonathan L. Mayes, Justin F. Roebel, Office of Corporation Counsel, Indianapolis, IN, Attorneys for Appellant.

Clifford T. Rubenstein, Maurer Rifkin & Hill, P.C., Carmel, IN, Attorney for Appellee.

OPINION

BAKER, Chief Judge.

Appellant-defendant Indianapolis City Market Corporation (City Market) appeals the trial court's declaratory judgment and damage award entered in favor of appellee-plaintiff MAV, Inc., d/b/a Grecian Garden (MAV), regarding the renovation and construction of a restaurant in downtown Indianapolis's City Market building. Specifically, the City Market argues that the trial court erroneously determined that it was bound by the provisions of a purported letter-agreement that was executed after the original lease agreement and that the trial court erred in refusing to enforce the indemnification and "hold harmless" clause in the lease that allegedly protected both parties from any damage claims. The City Market also contends that the trial court erroneously calculated the amount of damages that it allegedly owed MAV.

MAV cross-appeals, claiming that this appeal should be dismissed because the City Market failed to appeal the declaratory judgment within thirty days. As a result, MAV contends that the appeal is frivolous and it is entitled to appellate attorney fees.

We find that the City Market brought this appeal in a timely fashion and conclude that MAV is not entitled to an award of appellate attorney fees. We also conclude that the judgment and damage award for MAV were proper. Thus, we affirm the judgment of the trial court.

FACTS1

The City Market is a not-for-profit organization that leases the City Market Building from the City of Indianapolis. Its purpose is to operate the historic City Market building in Indianapolis, which houses a variety of restaurants. MAV is an Indiana Subchapter S corporation that is incorporated for the sole purpose of operating a Greek restaurant stand in the City Market. Marina Mavrikis is MAV's sole shareholder.

On September 15, 2003, MAV entered into a lease agreement with the City Market to lease a 714-square-foot space in the historic Market House area of the building. In accordance with paragraph VI(D) of the lease, the City Market could relocate MAV's leased space to a similar sized space upon the condition that the City Market pay MAV's "reasonable costs and expenses" to accommodate any relocation. Ex. U. at 6. The lease also states that "[a]ll additions, alterations, or changes" must be "approved in writing by the Landlord" and "shall become the property of the Landlord[.]" Id. Moreover, the lease agreement contains an indemnification paragraph and an integration clause. The integration clause provides that the lease is the "final and entire agreement between the parties and requir[es] amendments or modifications to be a writing signed by both parties." Id. at 15.

Sometime before October 13, 2006, the City Market informed MAV that the historic Market House portion of the building would undergo renovation. As a result, the City Market tenants participated in a drawing to choose temporary spaces in the building. Thereafter, the City Market's executive director informed MAV of various relocation options during the renovation.

On November 1, 2006, the City Market sent MAV a letter, providing it with notice that on December 31, 2006, the City Market intended to relocate MAV either to a like-sized location in the Market House or into the east wing of the City Market. The letter reiterated the City Market's offer to permit MAV to occupy a previously-selected temporary space at one-half of the cost with reduced common expenses based on square footage, plus free water and electricity. The letter further stated that "[r]enovation is scheduled to begin January 2, 2007, and be completed on or about March 31, 2007." Ex. G. The letter certified that the reduced rates would not apply to a relocation space in the City Market, and it was estimated that MAV's rent would be approximately $1500 per month if they remained in the Market House area and $392 in the temporary location. Sometime after the November correspondence, MAV agreed to move into the temporary location with the cost reductions that were outlined in previous letters.

The renovations began with the relocation of tenants during the weekend of December 29, 2006. MAV relocated into the east wing of the City Market in January 2007 because it could not remain in the Market House area because of health code issues. While operating in the east wing, the MAV's daily gross income was significantly less than the daily gross income in the Market House after renovation.

Although the tenants were initially told that the renovations would be completed by March 31, 2007, that date was extended several times in light of cost overruns, unexpected construction costs, and insufficient funds. The first tenants moved into the renovated Market House in July 2007; however, they were new tenants and did not include those who had been relocated into the east wing.

Sometime later that month, the City Market discussed plans with MAV to build out the space in the renovated Market House. The City Market's executive director, Joe Dayan, wrote a letter-agreement to MAV on August 24, 2007, confirming its obligation to fund or build the Grecian Garden space in the Market House area, with the work to be performed by the City Market's own contractor. However, the letter-agreement also provided that "[s]hould they so choose, Grecian Garden may seek an alternate contractor to complete their own build-out." Ex. 2. Moreover, it stated a method of payment that the City Market would follow if MAV decided to use its own contractor. Dayan initialed the document, which he considered to be an agreement with MAV's contractor "to facilitate the building of the space as quickly as possible." Tr. p. 264, 267-68.

Two exhibits were attached to the letter-agreement, indicating how the total $23,630 build out allowance would be paid. The original exhibit did not set forth the complete schedule of payments because a representative of the City Market had handwritten the schedule and wanted to "type it up to make it look neater and then she would attach it to [the letter-agreement]." Id. at 18-20. One of the exhibits that both parties had signed indicated the City Market's agreement to make an initial $5000 payment to the contractor, but no reference was made as to a particular contractor. A follow-up exhibit set forth the full schedule of payments that the parties had agreed upon.

At some point, MAV represented to the City Market that it had retained the Excel Construction Company (Excel) for the project. In response, on August 24, 2007, the City Market issued a check to Excel for materials in the amount of $5000. Subsequently, MAV and Excel could not agree to terms regarding the project. As a result, MAV decided to find another contractor. Excel issued MAV a refund of the $5000 that was paid, and MAV forwarded those funds to its attorney to hold in trust until a new contractor was selected.

On September 17, 2007, Dayan asked MAV when construction would commence. After Mavrikis stated that the restaurant "was still getting bids" from contractors, Dayan told Mavrikis that construction should commence or the City Market's money should be returned. Tr. p. 144. In light of the circumstances, Dayan believed that he had been deceived by MAV's intentions.

After learning that MAV intended to hire another contractor, the City Market demanded the return of the $5000 or, alternatively, that it be paid immediately to a new contractor. In response, MAV contended that its decision to select a new contractor and have the money held in trust by MAV's legal counsel did not violate the letter-agreement. As a result, MAV refused to return the $5000 to the City Market and promised to disburse the funds when the new contractor was selected.

MAV requested—and the City Market approved—William Bryant/Maintenance One LLC (William Bryant) as the new contractor on October 3, 2007. However, the City Market decreed that it would not pay the new contractor until it provided the City Market with invoices to substantiate the work. MAV argued that it was not required to submit any invoices because such a provision was not part of the letter-agreement amendment.

After MAV refused two additional demands to return the $5000, the City Market terminated the letter-agreement on October 24, 2007. As a result, it refused to continue funding MAV's build out. The City Market advised MAV that it had terminated the build-out agreement and that MAV would be responsible for the entire cost of any build-out if MAV wanted to return to the original premises.

On December 21, 2007, MAV filed a verified complaint for a declaratory judgment, requesting that the trial court:

A. Interpret and construe the lease, including modifications, and determine that Defendant should pay Plaintiff's approved alternate contractor to build-out the leased premises;

B. Interpret and construe the lease, including modifications, and declare that the Defendant cannot terminate the lease by reason of Plaintiff's failure to complete the build-out of its original space;

C. Pending the final determination of this Complaint, enjoin and restrain the Defendant attempting to terminate the lease because of Plaintiff's failure to complete the build-out of its original space.

Appellant's App. p. 19.

MAV also sought damages for loss of business, lost profits, and damages for the City Market's wrongful threat to file criminal conversion charges against it. MAV claimed that the City Market threatened to file criminal charges against it for the sole purpose of "retaliation, hindrance, delaying and damaging Plaintiff's...

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