The operator of a Blacksburg combination theater-bowling alley and restaurant was allowed back into its building last month after a judge criticized the premises owner’s padlocking the doors amid a rent dispute.
The theater company admitted it was behind on rent, but it said the building owner violated notice provisions in the lease when it locked the doors April 25 and removed signs for the business.
Montgomery County Circuit Judge Marcus H. Long ordered the doors unlocked after a hearing two days later, comparing the owner’s action to the Baltimore Colts’ midnight move to Indianapolis in 1984.
“I think what you did to the existing employees, the community, by chaining it and taking letters down or whatever, I will be candid, I don’t like that,” Long said April 27, according to a hearing transcript.
Long granted an emergency injunction ordering the building owner – Blacksburg AFP Partners – to allow Frank Theatres back into the property at the First & Main Shopping Center.
“Defendant shall immediately restore to the Plaintiff all rights of access to and use of the Premises,” read Long’s April 28 order. The order directed the building owner to re-install all signage removed during the lockout. The order also required Frank Theatres to put up an $80,000 bond.
Notice requirements cited
For the owner to boot Frank Theatres from the premises, there had to be a five-day nonpayment notice followed by a 30-day window to allow a possible cure of default, contended Roanoke attorney Gregory D. Habeeb on behalf of Frank Theatres.
Habeeb said the owner sent a notice that was received on April 20, only four business days before the padlocks went on the doors.
He said the owner apparently overlooked the 30-day cure opportunity that was part of an agreement with a funding company tied to Frank Theatres.
The proper course would have been to allow the lease deadlines to pass and then file an action for unlawful detainer, Habeeb told Long.
Habeeb suggested that the owner was anxious to get Frank Theatres out of the building so the owner could turn the theater over to a new operator.
“They went too fast, they didn’t provide the notice, and now we know why they did that, because they had a better deal,” Habeeb said, according to the transcript.
Potential harm argued
Frank Theatres had plenty of notice, argued D. Patrick Callahan on behalf of premises owner Blacksburg AFP Partners.
He said the owner had sent several letters notifying the theater chain that it was behind on rent. The arrearage was “in the neighborhood of $500,000,” Callahan said.
“The opportunity to cure this existed for quite some time,” Callahan said in the hearing transcript. “We’ve tried to work with this tenant for everyone’s interests in keeping the facility operating, so that we don’t have to go out and find someone else to operate it,” he continued.
He said the 30-day cure period was not a right that Frank Theatres could assert. It was a part of a contract with the theater’s funding source, an entity that had not entered the fray at the time of the hearing.
Callahan said the owner had a new operator for the theater complex and hoped to open about a week later. “We have the plans in place,” he told Long.
“This was not a decision we made lightly. We felt we had to do it in order to transition and get behind this,” Callahan said.
The potential harm to Frank Theatres was minimal, Callahan argued, since any loss could be remedied by money damages.
There was potential for irreparable harm, countered Habeeb.
“The obvious harm to Frank is they will lose this location forever,” he said.
“The balance of the harm is not even close. They wait 30 days, we have the opportunity to cure. That is all there is to it. There is no damage in maintaining the status quo” he said.
Long said he was troubled with the potential forfeiture of substantial rights and the owner’s use of self-help.
“I think both of you agree that any time we have a forfeiture there has got to be strict compliance.”
With self-help, “It shuts down something in the middle of the night … quite frankly, that’s not the way I like to see business done,” Long said, according to the transcript.
Addressing Callahan, Long questioned the claim that the owner was trying to get employees back to work.
“But they are not, sir, you did it in the middle of the night, like the Baltimore Colts leaving Baltimore at midnight. I am just telling you how I view it,” Long said.
Both Callahan and Habeeb declined to comment for the record on May 10. Another hearing was set for May 22.