I-65 Plaza, LLC v. Ind. Grocery Grp., LLC

167 N.E.3d 1161

I-65 PLAZA, LLC, and Bassam A. Abdulla, Appellants-Defendants,

v.INDIANA GROCERY GROUP, LLC, Appellee-Plaintiff

Court of Appeals Case No. 20A-CC-1537

Court of Appeals of Indiana.

FILED March 31, 2021

Attorneys for Appellants: Marc A. Menkveld, Stoll Keenon Ogden PLLC, Indianapolis, Indiana, Douglas R. Kvachkoff, Kvachkoff Law Offices, Crown Point, Indiana

Attorneys for Appellee: Megan L. Craig, John R. Craig, Craig & Craig, LLC, Merrillville, Indiana

Crone, Judge.

Case Summary

[1] Indiana Grocery Group, LLC (IGG), filed a complaint for ejectment against its sublessees I-65 Plaza, LLC, and its sole member, Bassam A. Abdulla (collectively Abdulla), based on Abdulla's alleged failure to exercise his option to extend the sublease. IGG filed a motion for immediate possession and requested a show-cause hearing. The trial court scheduled a hearing, and Abdulla filed a response to IGG's motion. Less than an hour before the hearing, IGG filed a reply to Abdulla's response in which it submitted new evidence, made new arguments, and asserted a new claim. The day after the hearing, Abdulla filed a motion for leave to file a surreply. Without ruling on Abdulla's motion, the trial court issued an order granting IGG's motion for immediate possession. IGG then filed a motion to strike Abdulla's motion for leave to file a surreply and requested attorney's fees. The trial court issued an order granting IGG's motion to strike and ordering Abdulla to pay IGG $750 in attorney's fees.

[2] On appeal, Abdulla argues that the trial court erred in granting IGG's motion for immediate possession, granting IGG's motion to strike, and awarding IGG attorney's fees. We agree, and therefore we reverse and remand.

Facts and Procedural History

[3] The relevant facts are undisputed. In November 2015, SVT, LLC, and Abdulla executed a sublease for Abdulla to operate a Boost Mobile kiosk inside SVT's supermarket in East Chicago. The parties made handwritten and initialed changes to the dates of the initial lease term and two optional extended terms. As modified, the sublease provided that the initial term would be from January 1, 2016, through December 31, 2017; the first extended term would be from January 1, 2018, through December 31, 2019; and the second extended term would be from January 1, 2020, through December 31, 2021. Appellants’ App. Vol. 2 at 15.¹

[4] On January 1, 2016, SVT and Abdulla executed a "First Amended and Restated Sublease" that reads in pertinent part as follows:

SECTION 2.01. TERM. The term of this Sublease shall commence on January 1, 2016 (the "Commencement Date") and shall end on December 31, 2017 (the "Term").

SECTION 2.02. LEASE YEAR. The phrase "Lease Year" means a period of twelve (12) consecutive months of the Term or any Extended Term. Each Lease Year shall commence on the first (1st) day of January.

SECTION 2.03. HOLDING OVER. In the event Tenant remains in possession of the Premises after the expiration of the Term without the execution of a new sublease, and without exercising an allowable option for an Extended Term under Section 2.04., or after the expiration of the Extended Term under Section 2.04., Tenant shall be deemed to be subject to all conditions, provisions and obligations of this Sublease insofar as the same are applicable to a month-to-month tenancy.

SECTION 2.04. OPTIONS TO EXTEND. Subject to Section 1.02, Landlord grants to Tenant two (2) options to extend this Sublease, the first one for the period commencing January 1, 2017 , and ending December 31, 2018, and the second one for the period commencing January 1, 2019 and ending December 31, 2020 (each, an "Extended Term") upon Tenant giving to Landlord notice of its exercise of said options at least ninety (90) days prior to the expiration of the initial Term or the first Extended Term, as applicable. Notice of the exercise of each option shall be given to Landlord in writing by certified mail, return receipt requested, at the place provided for notice to Landlord. Tenant's rights shall be conditioned upon there being no default in the obligations of Tenant to be performed pursuant to the terms of this Sublease, as of the time of notice of exercise of an option. Notwithstanding the foregoing, in the event that Tenant does not comply with the foregoing notice requirements, but nevertheless pays and Landlord accepts the Basic Rent (as defined below in Section 3.01) due for the first month of any Extended Term, then Tenant will be deemed to have exercised its option for such Extended Term for all purposes under this Lease.

SECTION 2.05. TERMINATION OF SUBLEASE. Upon termination of this Sublease by reason of the expiration of its Term, or the expiration of an Extended Term, or by default, as hereinafter set forth, Tenant shall surrender the Premises in substantially the same condition as when leased ....

....

SECTION 3.01. BASIC RENT. Commencing on March 1, 2016, Tenant shall pay to Landlord for the remainder of the first Lease Year of the initial Term (March 1, 2016 through December 31, 2016) rent in the amount of $10,000.00, in ten (10) equal consecutive monthly payments of $1,000.00, in advance on the first day of each month, and for the second Lease Year of the initial Term (January 1, 2017 through December 31, 2017), annual rent in the amount of $12,000.00, which annual sum shall be paid to Landlord in twelve (12) equal consecutive monthly payments of $1,000.00, in advance on the first day of each month (the "Basic Rent").

SECTION 3.02. BASIC RENT DURING EXTENDED TERMS. Tenant shall pay to Landlord for each Lease Year of the first Extended Term, annual Basic Rent in the amount of $12,240.00, which annual Basic Rent shall be payable to Landlord in twelve (12) equal consecutive monthly installments of $1,020.00 in advance on the first day of each month. Tenant shall pay to Landlord for each Lease Year of the second Extended Term, annual Basic Rent in the amount of $12,485.00, which annual Basic Rent shall be payable to Landlord in twelve (12) equal consecutive monthly installments of $1,040.42 in advance on the first day of each month.

....

SECTION 15.01. RIGHTS ON TENANT'S DEFAULT. In the event of (a) any default by Tenant in the payment when due of any rent provided in Article III of this Sublease, which shall continue after ten (10) days written notice by Landlord to Tenant, or (b) any other default by Tenant in its obligations under this Sublease which is not cured within thirty (30) days after written notice by Landlord to [T]enant, or (c) in the case of a default which cannot be reasonably cured within said thirty (30) days, Tenant has failed to begin to cure said default within said thirty (30) days, then, in addition to any other rights or remedies Landlord may have by law or otherwise, Landlord shall have the immediate right of re-entry and may remove all persons and property from the Premises.... ....

SECTION 17.12. COMPLETE AGREEMENT. This Sublease, (a) contains a complete expression of the agreement between the parties and there are no promises, representations or inducements except such as are herein provided, and (b) supersedes in its entirety that certain Sublease respecting the Premises dated effective as of November 16, 2015, which is hereby agreed to be null and void and of no force or effect, without qualification, limitation or exception.

SECTION 17.13. SUCCESSORS OF INTEREST. The covenants, agreements, terms, conditions and warranties of this Sublease shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, executors, administrators, successors and assigns, but shall create no rights in any other person except as may be specifically provided for herein.

Id. at 39-53 (italicized emphases added) (underlining omitted). As indicated by the italicized dates in Sections 2.01 and 2.04, the second year of the initial Term overlaps with the first year of the first Extended Term.

[5] In August 2017, SVT assigned the sublease to IGG. On March 11, 2020, IGG filed a complaint for ejectment against Abdulla that includes the following allegations:

14. The First Amended Sublease, commenced on January 1, 2016 and ended on December 31, 2016, although there is a scrivener's error that states that the term ended on December 31, 2017.

15. Under the terms of the First Amended Sublease, the one-year term ("Lease Year") was defined as "a period of twelve (12) consecutive months of the Term or any extended Term. Each Lease year shall commence on the first, (1st) day of January."

16. Pursuant to the First Amended Sublease, the Tenant was granted two (2) options to extend the Sublease, the first period stated as "January 1, 2017, ending December 31, 2018 and the second period stated as January 1, 2019 and ending December 31, 2020.["]

17. In order for Defendants to exercise the option to extend, the Defendants were required to give the Landlord notice of its exercise of said options ... in writing ... at least ninety (90) days prior to the expiration of the initial Term of the first Extended Term, as applicable.

18. Defendants failed to provide notice of intent to exercise the second option and extend the lease the [sic] expiration of the last extended Term prior to the deadline as stated in The Sublease.

19. Due to the failure of the Defendants to timely provide notice of exercise of the option, The Sublease Term ended on December 31, 2018 and the Defendants became month-to-month tenants.

20. On January 9, 2020, notice was sent to Defendants of the lease expiration due to the failure to provide written notice of their option to renew and allowed Defendants until February 8, 2020 to vacate the premises.

21. Defendants are wrongfully holding over in breach of The Sublease and Landlord is entitled to possession of The Premises, but Defendants have willfully remained in possession of and occupied Landlord's property and still refuse to quit said premises.

22. Defendants have failed to pay the full amount of the rent due and

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