Jupiter Bowl sues SLC law firm over lease advice
June 19, 2015
The company that owns and runs Jupiter Bowl bowling alley at Kimball Junction has sued its former law firm, alleging the firm misinterpreted Jupiter Bowl’s lease and advised it to file a lawsuit that backfired. It is seeking at least $1.1 million in damages.
In 2008, Jupiter Bowl at Newpark, LLC was looking into leasing the space it currently occupies, 1090 Center Drive at Kimball Junction. Jupiter Bowl signed a lease with Newpark that provided for reduced "initial rent," based on a percentage of the bowling alley’s gross sales, until the rest of the Newpark development was three-fourths occupied, according to the complaint filed June 10 in 3rd District Court, Silver Summit.
Van Cott, Bagley, Cornwall & McCarthy, a firm of around 55 attorneys with offices in Salt Lake City and Ogden, was providing legal advice to Jupiter Bowl at the time it negotiated its lease, according to the complaint.
The Newpark development was financed by Bank of America, Jupiter Bowl says, backed by the development’s various leases. Jupiter Bowl alleges that Van Cott failed to advise it to obtain a clause in its lease that would protect the company in the case of a foreclosure on Newpark.
Jupiter Bowl says that problems with its lease arose when Newpark defaulted on its loan in 2012, and Gary Crandall, though a company called Harmony Health, LLC, acquired Newpark’s interests a few months later.
Harmony then demanded certain past rents due and Jupiter Bowl took the position that it did not owe any. It did so, it says, at the advice of Van Cott, who "misinterpreted" the lease.
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Harmony "asserted its right to terminate the lease" and moved to evict Jupiter Bowl, demanding that it leave "all of the furniture, equipment and fixtures," according to the complaint. Jupiter Bowl then filed an action against Harmony, and it claims it did so at the advice of Van Cott. Harmony countersued and the case progressed through discovery before, Jupiter Bowl claims, its attorneys "for the first time, advised Jupiter Bowl of its error in misinterpreting the rental provisions" of the lease and "encouraged settlement discussions with Harmony."
Jupiter Bowl says it then obtained new legal counsel and settled with Harmony, agreeing to pay back rent and "to pay a much higher rent" going forward than the original lease, as well as $155,000 for Harmony’s legal fees.
The difference between the original lease’s terms and the new terms, Jupiter Bowl says, have a "net present value" of $936,000.
Jupiter Bowl’s current legal counsel, Anderson & Karrenberg, did not respond to a request for comment before press time. Van Cott declined to comment.