U.S. Parking Sys. v. E. Gateway Cmty. Coll.
| Decision Date | 01 February 2022 |
| Docket Number | 4:20CV1967 |
| Parties | USA PARKING SYSTEMS, LLC, et al., Plaintiffs, v. EASTERN GATEWAY COMMUNITY COLLEGE, et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
USA PARKING SYSTEMS, LLC, et al., Plaintiffs,
v.
EASTERN GATEWAY COMMUNITY COLLEGE, et al., Defendants.
No. 4:20CV1967
United States District Court, N.D. Ohio, Eastern Division
February 1, 2022
MEMORANDUM OF OPINION AND ORDER [RESOLVING ECF NOS. 76, 87, 90, AND 92]
Benita Y. Pearson, United States District Judge.
Pending is Defendant Eastern Gateway Community College's Motion to Dismiss Plaintiffs' Amended Complaint (ECF No. 76). For the reasons set forth in Section III below, the motion is granted.
Also pending is Defendants Michael Perik and Higher Education Partners LLC's Motion to Dismiss the First Amended Complaint (ECF No. 87). For the reasons set forth in Section IV below, the motion is denied.
In addition, pending is STORE Master Funding VI, LLC, STORE Capital Acquisitions, LLC, and STORE Capital Corporation's Motion to Dismiss Plaintiffs' First Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) (ECF No. 90). For the reasons set forth in Section V below, the motion is granted.
Finally, pending is Defendant The Huntington National Bank, as Trustee for Bondholders, EGCC District General Receipts Improvement Bonds, Series 2020's Motion for
Judgment on the Pleadings (ECF No. 92). For the reasons set forth in Section VI below, the motion is granted.
I. Background
A.
The First Amended Complaint (ECF No. 57) presents 22 Causes of Action brought by Plaintiffs USA Parking Systems, Inc. (“USA Parking”) and USA Plaza Parking Inc. (“USA Plaza”) concerning the Property and Parking Garage located at 101 E. Federal St. in Youngstown, Ohio. Defendants are Eastern Gateway Community College (“EGCC”); HEP-EGCC Ohio, LLC (HEP-OH”); STORE Master Funding VI, LLC (“STORE VI”); STORE Capital Acquisitions, LLC (“STORE Capital Acquisitions”); STORE Capital Corporation (together “the STORE Defendants”); Michael Perik (“Perik”); Higher Education Partners LLC (“HEP”); and, The Huntington National Bank, as Trustee for Bondholders, EGCC District General Receipts Improvement Bonds, Series 2020 (the “Trustee”).
In 2014, STORE Capital Acquisitions, STORE VI, USA Plaza, and HEP-OH entered into a sale-leaseback transaction concerning the Property. The sale-leaseback transaction was structured as follows:
On or about March 20, 2014, STORE Capital Acquisitions and HEP-OH entered into a Purchase and Sale Agreement (ECF No. 90-2) concerning the Property. HEP-OH did not own the Property and did not transfer fee title to the Property to STORE Capital Acquisitions. See ECF No. 90-2 at PageID #: 2292, Section 1.01 (“The parties acknowledge and agree that (i) fee title to the Property is currently held by USA Plaza[.]”). STORE Capital Acquisitions and HEP-OH agreed that “[HEP-OH] is, or will be prior to Closing, under contract to acquire the Property
from [USA Plaza] pursuant to a purchase and sale agreement entered into, or to be entered into, between [USA Plaza] and [HEP-OH] (the “Owner PSA”)[.]” ECF No. 90-2 at PageID #: 2292, Section 1.01. The acquisition contemplated in ECF No. 90-2 did not, however, involve HEP-OH taking record title to the Property.
In ECF No. 90-2, HEP-OH acknowledged and agreed that, in connection with the sale-leaseback, it would not take title to the Property. Instead, HEP-OH would nominate STORE Capital Acquisitions as the party that would take title to, and become the owner of, the Property. See ECF No. 90-2 at PageID #: 2292, Section 1.01. In this regard, HEP-OH acknowledged and agreed that: “[HEP-OH] shall nominate [STORE Capital Acquisitions] to take title to the Property pursuant to the terms of the Owner PSA and the closing under the Owner PSA and the Closing [under ECF No. 90-2] shall be simultaneous.” ECF No. 90-2 at PageID #: 2292, Section 1.01. Thus, the Property's ownership would be transferred from USA Plaza to STORE Capital Acquisitions. HEP-OH would not become the Property's interim record title holder.
On or about April 16, 2014, and in connection with the sale-leaseback, STORE Capital Acquisitions and STORE VI entered into an Assignment and Assumption of Purchase and Sale Agreement (the “Assignment”) (ECF No. 90-3), wherein STORE Capital Acquisitions assigned and transferred to STORE VI all of its right, title and interest in the Purchase and Sale Agreement (ECF No. 90-2).
Also on or about April 16, 2014, HEP-OH and USA Plaza entered into a Purchase and Sale Agreement (ECF No. 60-3) concerning the Property. Simultaneously, and consistent with ECF No. 90-2, HEP-OH executed a Designation of Transferee Purchase of Property From Third Party, dated April 16, 2014 (ECF No. 60-5). In ECF No. 60-5, HEP-OH designated STORE VI
as its designee “for the purpose of taking fee simple title to the Property.” ECF No. 60-5 at PageID #: 1521, ¶ 1. In addition, HEP-OH directed and instructed USA Plaza “to execute and deliver to STORE [VI], at the Closing, the Deed required by [ECF No. 90-2], identifying STORE [VI] as the grantee therein.” ECF No. 60-5 at PageID #: 1521, ¶ 2. Contemporaneously with executing ECF No. 60-3 and completing the sale-leaseback, HEP-OH directed USA Plaza to transfer the Property's title to STORE VI. See ECF No. 60-5 at PageID #: 1521, ¶¶ 1-2. Accordingly, HEP-OH did not become the Property's title owner and did not transfer the Property's title to STORE VI.
To evidence the transfer of the Property's title from USA Plaza to STORE VI as part of the sale-leaseback, USA Plaza executed a Limited Warranty Deed (ECF No. 90-5)) transferring the Property's title to STORE VI. On April 18, 2014, the 2014 Deed was recorded with the Office of the Recorder for Mahoning County, Ohio. See ECF No. 90-5 at PageID #: 2364.
On April 16, 2014, STORE VI and HEP-OH entered into a Lease Agreement (ECF No. 60-6) by which STORE VI leased the Property to HEP-OH. Also on April 16, 2014, STORE VI and HEP-OH entered into a Memorandum of Lease (ECF No. 90-7), which was recorded with the Office of the Recorder for Mahoning County, Ohio on April 18, 2014. See ECF No. 90-7 at PageID #: 2425.
Also in April 2014, USA Parking, as “the Operator, ” and HEP-OH entered into a Management Agreement (ECF No. 60-7) by which USA Parking would manage the Parking Garage for a period of 20 years. Pursuant to section 9(c)(ii) of the Management Agreement, Plaintiff expressly agreed and acknowledged that it had no possessory or real estate interest in the
Parking Garage. ECF No. 60-7 at PageID #: 1599 (“Operator has no possessory or real estate interest in the Parking Garage.”).
EGCC is the lawful owner of the Property and Parking Garage, having purchased them from STORE VI pursuant to an April 2020 Amended and Restated Purchase and Sale Agreement (ECF No. 60-4). The transactions contemplated by the sale of the Property to EGCC closed on or about June 30, 2020. See Affidavit of Lou Frangos Aff. (ECF No. 23-1) at PageID #: 467, ¶20. The Parking Garage spans five floors with approximately 1000 spaces. During its time as owner of the Parking Garage, STORE VI leased the Parking Garage to HEP-OH. HEP-OH never owned the Property. See ECF No. 60-3 at PageID #: 1458, Section 1.01; Memorandum of Opinion and Order (ECF No. 29) at PageID #: 939. ECF No. 60-4 did not assign the Management Agreement from STORE VI, as prior owner, to EGCC, or confer any duties or obligations from HEP-OH, as former lessee, to EGCC.
When USA Parking learned that EGCC intended to purchase the Property from STORE VI, to remind HEP-OH, EGCC, and STORE VI of USA Parking's management rights as contemplated in the Purchase and Sale Agreement (ECF No. 60-3) and as set forth in the Management Agreement, USA Parking prepared an Affidavit of Facts Relating to Title (ECF No. 23-5), which was recorded on June 22, 2020. See ECF No. 23-1 at PageID #: 466-67, ¶18. USA Parking then provided a copy of the Affidavit of Facts to HEP-OH, EGCC, and STORE VI before June 30, 2020. See ECF No. 23-1 at PageID #: 467, ¶19.
B.
As stated in the Telephonic Case Management Conference Scheduling Order (ECF No. 72 at PageID #: 1911), the Court requires a party to submit a written request for judgment or to
be dismissed to opposing counsel before a party may file a dispositive motion. Opposing counsel shall either agree to the judgment or request for dismissal or shall give explicit reasons in writing for refusing to do so. Upon such refusal, the party shall reassess its position and may file a dispositive motion if the party believes it is still entitled to summary judgment or dismissal. The dispositive motion must be accompanied by a statement certifying that this exchange has occurred. Only Perik, HEP, and the Trustee submitted the required certifications. See ECF No. 87 at PageID #: 2108; ECF No. 92 at PageID #: 2473.
II. Standards of Review
A. Motion to Dismiss Under Rule 12(b)(6)
In deciding a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court must take all well-pleaded allegations in the complaint as true and construe those allegations in a light most favorable to the plaintiff. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations omitted). A cause of action fails to state a claim upon which relief may be granted when it lacks “plausibility in th[e] complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 564 (2007). A pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (quoting Fed.R.Civ.P. 8(a)(2)). Plaintiff is not required to include detailed factual allegations, but must provide more than “an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 678. A pleading that merely offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.” Id. at 557. It must contain sufficient...
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