The owner of the Clark’s Market building, defending a lawsuit by the grocer’s parent company, admit they owe the longtime business money for improperly charged capital improvements but deny that the amount exceeds $800,000.
Aspen Grocery Inc. in September sued Puppy Smith LLC, which owns the nearly 38,000-square-foot building, and Aspen M&W Properties, which manages it. Clark’s officials in 1999 signed a long-term lease for the 19,520 square feet it occupies in the building.
Aspen Grocery alleges that the defendants since 2007 have charged for capital improvements that were outside the scope of the parties’ lease. M&W refuses or is “unable to account for” $1.5 million in common area maintenance (CAM) charges to commercial tenants in the Puppy Smith Building, the lawsuit says.
The grocer alleges that the landlords improperly charged for repairs to the building’s roof, floors and parking lot. The lawsuit also says the defendants were unresponsive when Aspen Grocery asked for documentation detailing how the common area maintenance (CAM) charges were calculated.
In an answer to the lawsuit filed last month, Puppy Smith LLC and Aspen M&W Properties admit they owe Aspen Grocery a credit for some capital improvements that were improperly billed but deny that the plaintiff “has suffered actual and consequential damages.” Attorney John Case of Aspen is representing the defendants.
The answer also denies that Puppy Smith LLC and Aspen M&W Properties were knowingly overcharging Clark’s for CAM charges from 2008 to 2011.
The landlords admit that they improperly “levied and assessed expenses” to Aspen Grocery, but they contend “that the amount at issue is much [smaller] than” the $814,682 amount the grocer is claiming it’s owed, the answer says.
The landlords “are actively seeking to correct the error,” Case wrote.
The lease between the companies involved “triple net” costs, meaning the tenant is responsible for paying the landlord’s insurance, maintenance and taxes on the building.
Case wrote that the landlord provided triple net reconciliation reports, and the defendants “deny the implication that there was no other communication between the parties to the lease as to CAM charges.”
Case’s answer also denies the grocer’s claim that the landlords “failed to produce any reconciliation or CAM summary statements for the years 2008-11.”
Those statements, when they were produced, allegedly did not disclose enough information for Aspen Grocery to independently verify whether the CAM charges were proper or not.
“Defendants admit that CAM summary statements alone do not verify an accounting, but affirmatively allege that more documentation was and is available,” Case wrote.