Judge sides with Aspen landlord in lease dispute | AspenTimes.com

Judge sides with Aspen landlord in lease dispute

Rick CarrollThe Aspen TimesAspen, CO Colorado

ASPEN – Ruth’s Chris Steak House, a struggling Aspen restaurant, must remain committed to a lease that commands $35,412 a month, based on a judge’s order issued Wednesday.In a 12-page ruling, District Judge Denise Lynch sided with Galena Corner LLC, the master-lease holder for the old Guido’s Inn space, located at the corner of Cooper Avenue and Galena Street in downtown Aspen.The ruling means that Ruth’s Chris cannot get out of its lease, which does not expire until 2016. The restaurant apparently has under-performed since it opened its doors in Aspen, as testimony in a July bench trial revealed it lost more than $1 million in 2007 and an estimated $700,000 last year. Witnesses also testified that the location is one of the most coveted in downtown Aspen. Lynch’s ruling came after Colorado Steakhouse LLC, a franchisee of Ruth’s Chris chain, sued Galena Corner LLC, controlled by the Aspen firm M & W Properties, for breach of contract in April 2008. The restaurant wanted the court to rescind its lease because of the alleged breach, which would have freed it up from paying the remaining seven-plus years on its lease, signed in September 2006. The restaurant also sought $157,657 in damages for what it alleged it overpaid in rent. At issue was whether Ruth’s Chris’ lease allowed it to use the north patio facing Cooper Avenue. At trial, attorneys for Ruth’s Chris argued that its lease entitled it to the patio, but its ground-level neighbor, Royal Street Fine Art, used the spot to store some of its inventory. Ruth’s Chris management discovered Royal Street was using the disputed space in April 2007, prompting Colorado Steakhouse to sue.Ruth’s Chris’ lease also said that it was allowed to use the patio in question, but Tony Mazza, of M & W Properties, testified that it was a scrivener’s error. That ran counter to testimony from Tom Becnel, a Ruth’s Chris principal, Florida developer and part-time Snowmass resident, who said the wording of the lease was clear about the use of the north patio.Judge Lynch noted the differences in her ruling.”The testimony of these men cannot resolve the issue since they are so contrary to each other,” she wrote.Instead, Lynch wrote she had to rely on other testimony, and concluded that it did not make sense for Ruth’s Chris to rent out the north patio unless if it had leased the entire building. Royal Street Fine Art occupies the part of the building that is accessed by the north patio door, Lynch noted.”The court finds that the most reasonable interpretation of the parties’ intent was that the north patio would be included in the lease only if the steakhouse was going to be leasing the entire building,” Lynch wrote. “Conversely, if they were not leasing the front retail space, the north patio would not be included.”Lynch also shot down the landlord’s slander of title claim against Colorado Steakhouse. The landlord had claimed that publicity from the Ruth’s Chris’ lawsuit hampered negotiations with prospective tenants that might want to occupy the Guido’s building. “There was some evidence presented that (prospective tenant) had looked at the building but there was no evidence presented that they lost interest because of the lawsuit,” Lynch ruled.Aspen lawyer Matthew Ferguson, of the firm Garfield & Hecht PC, said he was pleased with the ruling.”At this juncture there’s a lease in place,” he said, adding that prior eviction proceedings against Ruth’s Chris are “on hold.””They are current with rent,” he said.Ruth’s Chris attorney Kathryn Hopping of Denver could not be reached at deadline Wednesday.rcarroll@aspentimes.com

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