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Seaford Village, LLC v. Delaware Eye Surgeons, P.A.

Superior Court of Delaware, New Castle

February 24, 2014

SEAFORD VILLAGE, LLC Plaintiff
v.
DELAWARE EYE SURGEONS, P.A. S. GREGORY SMITH, M.D. Defendants.

Date Submitted: February 3, 2014

On Seaford Village, LLC's Motion for Summary Judgment.

Patrick Scanlon, Esq., Law Offices of Patrick Scanlon, P.A., Milford, Delaware 19963. Attorney for Plaintiff.

Michael P. Morton, Esq., Michael P. Morton, P.A., Wilmington, Delaware 19801.

ORDER

Calvin L. Scott, Jr. Judge

Introduction

Before the Court is Plaintiff Seaford Village, LLC's ("Seaford") motion for summary judgment in this action against Delaware Eye Surgeons, P.A. ("DES") and S. Gregory Smith, M.D. ("Dr. Smith") (collectively, "Defendants") to recover amounts owed pursuant to a lease. Defendants have a counterclaim against Seaford in which they assert that Seaford's own material breach bars or reduces any right to recovery. The Court has reviewed the parties' submissions. For the following reasons, Seaford's Motion for Summary Judgment is DENIED.

Background [1]

On December 18, 1990, DES entered into a lease (the "Lease") with Seaford[2] to rent commercial property located at 23010 Sussex Highway, Unit 129 in Seaford, Delaware (the "Property").[3] The lease, which was personally guaranteed by Dr. Smith, was for a term of five years at a fixed annual rent of $30, 000. The Lease contained the following holdover provision:

Surrender of Premises and Holding Over: At the expiration of the tenancy created hereby, Tenant shall surrender the Leased Premises in the same condition as when delivered to Tenant…Tenant's obligation to observe or perform this covenant shall survive the expiration or other termination of this Lease. If Tenant shall default in surrendering the Premises hereunder, Tenant's occupancy subsequent to such expiration whether or not with the consent or acquiescence of Landlord, shall be deemed a tenancy at will, and in no event a tenancy from month to month, year to year, and it shall be subject to all the terms, covenants, and conditions of this Lease applicable thereto, and no extension or renewal of this lease shall be deemed to occur by such holding over. Tenant will pay as liquidated damages double rent for the entire holdover period, and will pay all attorneys' fees and expenses incurred by Landlord in enforcing its rights hereunder. No holding over by Tenant after the terms of this Lease shall operate to extend this Lease for a longer period that (sic) one month; and holding over with the consent of Landlord in writing shall thereafter constitute this contract a Lease from month to month…[4]

The lease also contained a non-waiver provision which provided that the failure of the parties

to insist upon a strict performance of any of the terms, conditions and covenants herein shall not be deemed to be a waiver of any rights or remedies that such party may have and shall not be deemed a waiver of any subsequent breach of default in the terms, conditions and covenants herein contained except as may be expressly waived in writing…[5]

In addition, the Lease set forth the parties' respective obligations for repair, including provisions addressing air conditioning. For example, Paragraph 20 provided that the "Tenant shall keep all interior portions of the building of the leased premises in good condition and state of repair such as (but not limited to) all non-structural plumbing, plumbing fixtures, lighting, wiring, store signs, heating, ventilating, air conditioning, all glass and plate glass and exterior doors and hardware, electric installations and floor surfaces…"[6]

In 1996, after the primary lease term, the parties executed an amendment to the lease to renew the term for three years at the same rate of annual rent.[7] In 1999, the parties again renewed the Lease for three years, but DES was given the option to extend the Lease for an additional three years at an annual rate of $33, 000.[8] On January 1, 2002, the parties executed a third amendment, extending the Lease to April 30, 2005 at the annual rate of $33, 000 and providing DES with two options for renewal.[9] The first option was exercised in the parties' fourth amendment to the Lease, which extended the term from May 1, 2005 to April 30, 2008 at an annual rate of $36, 000 ($3, 000 per month).[10] The second option was restated as an option in the parties' fourth ...


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