The owner of the building that houses Clark’s Market has paid the Aspen grocer’s parent company nearly $190,000 for improperly charged maintenance fees.
But Aspen Grocery Inc.’s lawsuit against Puppy Smith LLC and Aspen M&W Properties LLC, referred to in court papers collectively as the landlord, is still pending. The sides remain apart on whether the refund satisfies the breach-of-contract claims and also on the issue of access to accounting documents kept, and the manner in which they’re kept, by the landlord.
Aspen Grocery sued the companies in September 2012, alleging that the landlord charged for capital improvements that were outside the scope of the parties’ lease. The lawsuit contends Aspen Grocery was wrongfully assessed more than $800,000 over a four-year period for common area maintenance (CAM) charges.
The CAM charges, assessed to tenants in the Puppy Smith building, include capital-improvement costs, roof repairs, the building’s boiler, parking lot, flooring, snow fences and on-site personnel, wrote Judge John Neiley of Pitkin County District Court.
Neiley last month ruled partly in the favor of Aspen Grocery, which filed a motion for partial summary judgment, or a ruling made before a trial.
The defendants have denied overcharging for some of the CAM issues, but acknowledged that they improperly assessed the grocer for repairs of the parking lot and boiler, Neiley’s ruling says.
Puppy Smith submitted a court exhibit that shows it refunded Aspen Grocery $98,465 for those repairs and $90,542 for attorney fees.
“Based on Puppy Smith’s own admission, there is no factual dispute that Puppy Smith breached the lease with respect to these specific charges, and only these specific charges,” Neiley wrote. “Puppy Smith ... continues to dispute that it overcharged for the roof repairs and other items besides the boiler and parking lot, and further asserts that the claims for the roofing expenses are” barred because too much time has passed.
The lease, signed in 1999, calls for Aspen Grocery to pay a monthly CAM charge in an amount representing its estimated proportional share of the costs of operation and maintenance of the building, wrote Clark’s attorney Peter Thomas of Aspen.
In a motion to force the landlord to produce accounting documents of the CAM charges, Thomas wrote that the defendants “are playing a game of 52-card pickup.”
“They apparently maintain their business records in a commingled mash with at least 14 other business entities,” the motion says.
M&W Properties, controlled by principals Tony Mazza and Frank Woods, allegedly insist that Aspen Grocery itself find accounting documents related to the lawsuit.
That would involve “pouring through a basement full of banker boxes containing what we conservatively estimate to include tens of thousands of pages of records of numerous other companies and individuals who have nothing to do with this litigation,” Thomas wrote.
But the defendants’ attorney, John Case of Aspen, said the records kept by both M&W Properties and Puppy Smith LLC are “well organized and labeled.” Mazza, in a deposition, also said that Aspen Grocery has been provided the proper documents.
If Neiley “were to order the type of document production the tenant seeks, [it] would substantially change the normal business practice of one of Aspen’s largest commercial landlords,” Case wrote.
Neiley was also unpersuaded and ruled last month for the defendants on the motion to compel the accounting documents.
“Plaintiff’s discovery requests are undeniably broad and encompass a large time frame from at least 2006 on,” Neiley’s ruling says. “Consequently, the plaintiff can hardly be heard to complain if the volume of produced documents is substantial.”
Still, if the documents are so well maintained, the initial burden is on the defendants and their record keepers to sift through them and produce what is relevant to the lawsuit, Neiley wrote.
“The parties are instructed to work this ... issue out between themselves and seek relief from this court only if the claimed failure to produce [the documents] continues and appears willful,” the ruling says.