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T.K., Inc. v. National Community Reinvestment Coalition, Inc.

Court of Appeals of Columbia District

September 26, 2013

T.K., INC. et al., Appellants/Cross-Appellees,
v.
NATIONAL COMMUNITY REINVESTMENT COALITION, INC., Appellees/Cross-Appellants.

Argued May 21, 2013.

Page 896

Patrick G. Merkle, Washington, DC, for appellant/cross-appellee.

Roger D. Luchs, with whom Richard W. Luchs and Debra F. Leege, Washington, DC, were on the brief, for appellee/cross-appellant.

Before EASTERLY and McLEESE, Associate Judges, and PRYOR, Senior Judge.

PRYOR, Senior Judge.

These appeals arise from a dispute related to a commercial lease of restaurant space from the predecessor of National Coalition Reinvestment Coalition, Incorporated, (NCRC), lessor, to T.K., Incorporated (T.K., Inc.), lessee. In this action the trial court awarded damages to NCRC on its breach of contract claim and dismissed a counterclaim filed by T.K., Inc.; there are cross-appeals. For the reasons which follow, we reverse the dismissal of T.K., Inc.'s counterclaim and the other judgments and remand for further proceedings consistent with this opinion.

I. Factual and Procedural Background

(A)

Lease Agreement

On August 31, 1993, T.K., Inc. and Jefferson Associates Limited Partnership (Jefferson) entered into a ten-year lease agreement. The terms of the lease agreement permitted T.K., Inc. to lease the lower level of a property located at 727 14th Street, Northwest, from Jefferson for the purpose of operating a restaurant. Tadashi Kaneko, the then-president of T.K., Inc., signed both the lease and a guaranty agreement obligating him to pay all sums owed by T.K., Inc., under the terms of the lease, should T.K., Inc., fail to do so for any reason. An amendment to the lease included an option to renew the lease for an additional ten-year term.

Near the end of the initial lease term, T.K., Inc. elected to exercise its option to renew the lease. On March 4, 2003, T.K., Inc. and 727 15th Street Associates Limited Partnership (Associates), successor in interest to Jefferson, entered into a second amendment to the lease agreement in which the parties agreed to extend the term of the lease for an additional ten years, commencing September 1, 2003, and ending on August 31, 2013.

In early 2004, NCRC purchased the property from Associates. Thereafter, T.K., Inc. made its rent payments to NCRC. NCRC would not learn until later that on September 12, 2005, T.K., Inc.'s articles of incorporation were revoked by the District of Columbia for failure to comply with corporate filing requirements. [1]

Page 897

T.K., Inc.'s articles were reinstated on April 9, 2007, after T.K., Inc. satisfied the requirements for reinstatement.[2] Before, during, and after the period when its articles were revoked and reinstated, T.K., Inc. continued to make its rent payments to NCRC pursuant to the terms of the extended ...


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