When two Sumner County "family fun centers" — operated by a company owned by long-time Nashville sports figure Larry Schmittou and current Florida Gov. Rick Scott — closed, it wasn't a simple spare pick-up. A split between the owner/landlord and the operator ended up in court, and last week the state court of appeals struck a decision.
At issue were the rights and responsibilities of S&S after the termination of a 10-year lease with James and Barbara Holder in 2011. When S&S vacated the family fun centers — one in Hendersonville and one in Gallatin — the company removed a number of fixtures in the bathrooms, a fire suppression system, exit signs and emergency lights, fire extinguishers, menu boards, a washer and dryer and the underlying bowling lane beds.
In addition, the Holders claimed S&S failed to properly maintain HVAC, electrical and plumbing systems and asserted S&S did not properly vacate the premises as required in the lease.
The crux of the suit was what assets were sold to S&S when the Holders sold the business end of the bowling alleys and which were retained by the Holders in the concurrent lease for the properties themselves.
The appeals court ruled that when S&S removed bathroom fixtures, it violated the contract, because bathroom fixtures, while necessary to operate any business, are not particular to bowling alleys. Further, with Schmittou's admission that he should not have removed the lane beds from the Gallatin location, he was liable for damages related to their removal, even though it certainly could be argued that lane beds are germane to operating bowling alleys.
Further, the court ruled that the HVAC system was not properly maintained and, again, found S&S liable for those damages, as well as those to a fire suppression system and exit signs.
On the question of failure to properly vacate, things are a bit more complicated. The sale of a theater system, refrigeration unit for an ice rink and emergency were undisputed, but those items were left behind at the end of the lease. The Holders sued for damages related to their removal and the trial court agreed; however, the appeals court noted the lease uses the phrase "may remove all trade fixtures," rather than "shall remove," thus removing S&S's duty to do so.
All told, the appeals court affirmed a total of $40,873 in damages to the Holders, but reversed a trial court grant of $15,650 related to the claim of failure to properly vacate. In addition, the court affirmed a grant of $21,500 in attorney's fees to the Holders.
The opinion is available here.
POSTDATA: WARRANTY DEEDS