Will Pizza Hut continue to operate in Maywood Mart? Pizza Hut of America, LLC is trying to stay in its current location facing I-55N while landlord Maywood Mart Tei Equities, LLC is trying to terminate Pizza Hut's lease. Pizza Hut sued Maywood Mart in U.S. District Court on April 11.
Pizza Hut states that its lease does not expire until July 31, 2020. The annual rent is $29,186. However, the company complains in the complaint that Maywood Mart
contacted Pizza Hut repeatedly in recent months to try to persuade Pizza Hut to relinquish its rights under the lease.
11. On information and belief, Maywood Mart intends to redevelop the Shopping Center by demolishing and/or remodeling or reconstructing all or portions or the Shopping Center.
12. Maywood Mart also is seeking new tenants for the Shopping Center.
13. On information and belief, Maywood Mart is negotiating with a different potential tenant to
occupy the Leased Premises.
14. The terms of the lease that Maywood Mart is negotiating with the different potential tenant of the Leased Premises are more lucrative for Maywood Mart than the terms or the current Lease.
15. As part of its efforts to persuade Pizza Hut to relinquish its rights under the Lease, Maywood Mart has engaged in a variety of bad faith activities meant to disrupt Pizza Hut's business and force Pizza Hut to relinquish its rights under the Lease.
16. For example, Maywood Mart has intentionally demolished structures near or adjacent to the
Leased Premises in connection with its plan of redevelopment.
17. Also, Maywood Mart has intentionally engaged in construction activities to structures near or adjacent to the Leased Premises in connection with its plan of redevelopment.
18. During the activities described above, Maywood Mart intentionally impeded Pizza Hut's customer parking and customer access, within the Common Areas of the Shopping Center, to the Leased Premises.
19. Additionally, Maywood Mart has issued verbal and written offers to move Pizza Hut to a smaller retail space within the Shopping Center.
20. The smaller retail space Maywood Mart offered lo Pizza Hut was for a higher rental rate than what Pizza Hut currently pays for the Leased Premises.
21. The offers Maywood Mart made to Pizza Hut for the smaller retail space were made without sufficient compensation to Pizza Hut for its expenses associated with such a move and without sufficient compensation to cover Pizza Hut's lost business profits.
22. Maywood Mart's offers to Pizza Hut for smaller retail space were made in bad faith.
23. Pizza Hut has rejected Maywood Mart's offers for smaller retail space.
24. Pizza Hut has repeatedly advised Maywood Mart that Pizza Hut is not interested in terminating the Lease early, amending the Lease or otherwise surrendering the Leased Premises.
25. More recently, Maywood Mart engaged in a different bad faith tactic to persuade Pizza Hut to relinquish its rights under the Lease.
26. Maywood Mart sent Pizza Hut a letter (the "Termination Letter") on March 31,2016.
27. An accurate copy of the Termination Letter is attached as Exhibit B.
28. In the Termination Letterer, Maywood Mart's attorney claimed that "significant, ongoing structural movement" was causing damage to the Leased Premises.
29. Based on that allegation of "significant, ongoing structural movement," Maywood Mart stated
that it intended to exercise its right to terminate the Lease.
However, Pizza Hut argues that less than 25% of the property is damaged if any such damage occurred at all. Maywood Mart set the termination lease date on April 30. Pizza Hut also claimed that Maywood Mart notified Pizza Hut that it would send a contractor into the business on April 8 that would disrupt Pizza Hut's business.
Pizza Hut asked the court to declare the lease was still valid and prevent Maywood Mart from terminating the lease. Pizza Hut also asked for actual and punitive damages that were more than $75,000. Pizza Hut is represented by three lawyers from Lord Snow.
Maywood Mart replied to the complaint last month. Maywood Mart denied all of the allegations but blamed Yazoo Clay for causing the structural problems that forced the company to terminate the lease:
11. Denied as stated. Maywood Mart admits that structural damage caused by highly expansive Yazoo Clay has necessitated the reconstruction of significant portions of the Shopping Center, and that recent, current, and further shifting of highly expansive Yazoo Clay will necessitate further work in the future on other portions of the Shopping Center.
Maywood Mart also stated that it tried to mitigate Pizza Hut's losses:
made a written offer to Maywood Mart to relocate to the prime location within the Shopping Center at a rental rate higher than what it currently pays but also at a rental rate that is lower than the prime location’s market value leasable rate. Maywood Mart denies the remaining allegations contained in paragraph 20 of the Complaint.
Maywood Mart also filed a counterclaim for damages and asked the court to evict Pizza Hut from its current site. It claimed the shifting of the Yazoo Clay caused the slope of the roof to change so that water now "ponds" on the roof. It cited the collapse of the roof at Jackson Prep due to ponding of water as an example of what could happen if the alleged problem is not fixed. The counterclaim states that all of the rental spaces "north of Hibbet Sports" are affected by this "dangerous condition". Maywood claims the problem can only be fixes if those structures are demolished. Maywood Mart is represented by Adams & Reese.
Pizza Hut disputed those allegations in a response filed last week. The file is posted below.