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SNH Medical Office Properties Trust v. Healthy Eateries L.L.C.

United States District Court, District of Columbia

April 26, 2018

SNH MEDICAL OFFICE PROPERTIES TRUST, Plaintiff,
v.
HEALTHY EATERIES L.L.C., Defendant.

          MEMORANDUM OPINION & ORDER

          AMY BERMAN JACKSON, United States District Judge

         Plaintiff, SNH Medical Office Properties Trust (“SNH”), brought this action against defendant, Healthy Eateries L.L.C. dba MASO (“Healthy Eateries”), for breach of contract. Compl. [Dkt. # 1]. Plaintiff alleges that defendant owes plaintiff money under the terms of a lease of commercial real estate. Id. ¶¶ 5-14.

         The Clerk of Court entered a default in this case on October 12, 2017, see Clerk's Entry of Default [Dkt. # 6], and plaintiff has filed a motion for entry of default judgment pursuant to Federal Rule of Civil Procedure 55. Pl.'s Mot. for Default J. [Dkt. # 7] (“Pl.'s Mot.”); Pl.'s Mem. in Supp. of Pl.'s Mot. [Dkt. # 8] (“Pl.'s Mem.”). Plaintiff seeks a judgment in the amount of $1, 130, 387.80, with interest and attorneys' fees and costs. Pl.'s Mem. at 1, 6.

         Having considered plaintiff's submissions and applicable case law, the Court will grant plaintiff's motion for default judgment. However, because the record does not contain sufficient information on damages and attorneys' fees, plaintiff is hereby ordered to provide more information to support its claim.

         BACKGROUND

         On December 4, 2012, plaintiff and defendant entered into a ten-year leasing agreement for commercial real estate located at 1145 19th Street, N.W., Suite 101, Washington, D.C. Compl. ¶ 5; Ex. A to Compl. [Dkt. # 1-1] (“Lease”).

         Under the terms of the Lease, defendant agreed to pay a fixed amount of rent per year in monthly installments. See Lease ¶¶ 1.1; 4.1. Table 1 lists the agreed fixed annual rent and the corresponding monthly installments during the term of the Lease, which was supposed to run until July 31, 2023.

         Table 1 Rent agreement

Year
Annual Fixed Rent
Monthly Installments
1
$117, 000.00
$9, 750.00
2
$120, 510.00
$10, 042.50
3
$124, 125.30
$10, 343.78
4
$127, 849.06
$10, 654.09
5
$131, 684.53
$10, 973.71
6
$135, 635.07
$11, 302.92
7
$139, 704.12
$11, 642.01
8
$143, 895.24
$11, 991.27
9
$148, 212.10
$12, 351.01
10
$152, 658.46
$12, 721.54

Id.

         Defendant also agreed to pay plaintiff “Additional Rent” consisting of a percentage of the real estate taxes on the property, Lease ¶ 4.2.1., and the landlord's “Operating Costs.” Id. ¶ 4.2. “Operating Costs” were to include “all costs and expenses paid or incurred for the operation, cleaning, management, maintenance, insurance, repair, replacement, decoration, upkeep, protection and security of the [leased p]roperty.” Id. ¶ 4.2.2.

         In the event of a late rent payment, the Lease provides that the tenant shall pay “interest (as Additional Rent) from the date due until the date paid” at “a rate . . . equal to the lesser of 6% over the Prime Rate or the maximum rate allowed by law.” Lease ¶¶ 4.6, 8.4. If the rent is overdue for more than five days, “[defendant] shall pay [plaintiff] a late charge equal to the greater of One Hundred Dollars ($100) or ten percent (10%) of the delinquent amount.” Id. ¶ 4.6.

         Finally, the Lease states that should the tenant default on its obligations to pay the annual fixed rent or additional rent when due, the landlord may terminate the Lease. Lease ¶ 8.1. Paragraph 8.2 of the Lease specifies the landlord's remedies following termination. Under this provision, the tenant is liable for any unpaid obligation as well as “the Annual Fixed Rent, Additional Rent and other charges which would be payable . . . for the remainder of the term of this Lease had such termination not occurred, ” regardless of “whether or not the Premises shall have been re-let.” Id. ¶ 8.2.

         In other words, defendant agreed to be liable for the full amount of the annual fixed rent and “additional rent” for the ten-year lease period, even after the Lease is terminated and regardless of whether the premises are leased to another tenant or not. Id. Additionally, the tenant is responsible for ‚Äúreasonable attorneys fees, together with interest thereon at a rate . . ...


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