United States District Court, E.D. Kentucky, Northern Division
MEMORANDUM OPINION AND ORDER
R. WILHOIT. JR. UNITED STATES DISTRICT JUDGE
matter is before the Court upon Plaintiff Louisa Lodging,
LLC's Motion for Partial Summary Judgment [Docket No. 44]
and Defendant Falls Creek, Inc.'s Motion for Summary
Judgment [Docket No. 54]. The motions have been fully briefed
by the parties [Docket Nos. 44-1, 54-1, 55, 56, 59 and 65].
For the reasons set forth herein, the Court finds that
Defendant is entitled to judgment as a matter of law.
cases arises from an almost twenty year lease of property in
Creek, Inc. is a Kentucky entity that develops land at the
intersection of U.S. Route 2');">23 and Kentucky Route 3 in Louisa,
Kentucky. Louisa Lodging is a South Dakota Limited Liability
Company. In early 1997, the parties entered into a lease.
[Lease, Docket 1-3]. By the terms of the Lease, Louisa
Lodging agreed to lease a portion of Falls Creek's
property for a term of forty years for the purpose of
constructing and operating a Super 8 Motel. Id. at
p.l. According to Falls Creek, this relationship continued
amicably for two decades.
2');">2, 2');">2016, Joel W. Albrecht, Treasurer of Louisa Lodging, LLC,
sent a letter to Mark Clevenger of Falls Creek advising him
that Louisa Lodging had entered into a Purchase and Sales
Agreement with three individuals prospective purchasers for
the Super 8 Motel. [Docket No. 61-9]. Those individuals were
identified as Pramod Kumar Patel, Nilesh Patel and Vipul
potential sale of the motel implicated several provisions of
the Lease. First, the Lease states that Louisa Lodging
"covenants and agrees that it will not sell, assign,
sublease, mortgage, pledge or otherwise transfer or
encumber.. .this Lease.. .without having first obtained the
written consent of Falls Creek. [Docket No. 1-3, at p. 4].
Lease also provides that Falls Creek has the discretion to
approve or disapprove any potential assignment of Louisa
Lodging's interest. Id.
Lease requires Louisa Lodging to provide Falls Creek with any
requested information to assist it with its evaluation of any
[Falls Creek] shall thereafter have at least sixty (60) days
time to conduct an examination of the purchaser's
credit standing, financial condition, business suitability to
function as a lessee of [Falls Creek] and to
evaluate the proposed sale of [Louisa Lodging's]
business. In this respect, [Louisa Lodging] and
purchaser(s) shall provide [Falls Creek] with all information
as [Falls Creek] requests for purposes of making its
examination of purchaser's credit standing.
[Docket No. l-3](emphasis added).
Lease also provides that if it is Falls Creek's
"opinion, based upon objective and accepted business
practices, such person does not have sufficient
credit standing or business
experience to function as a tenant in the manner
required by this Agreement, then [Falls Creek] shall notify
[Louisa Lodging] in writing of its opinion and may
refuse to permit the contemplated sale".
Id. at p. 6 (emphasis added).
per the express terms of the Lease, "[Falls Creek] shall
not be held liable for any losses caused [Louisa
Lodging] by such disapproval or conditioned
approval." Id. at p. 6. (emphasis
under the Lease, Louisa Lodging agreed to remain as a
guarantor under the Lease. The Lease specifies that Louisa
Lodging "shall remain fully liable for all of it's
[sic] obligations hereunder, notwithstanding any such
assignment or sublease." Id. at p. 5.
The potential sale and assignment.
after being notified of the potential sale, by letter dated
June 16, 2');">2016, Clevenger sought clarification of the proposed
transaction and certain financial information regarding the
potential buyers, including certified financial statements of
the purchasers, credit check and possible background check on
each potential owner, detailed information concerning the
experience of the proposed purchasers in operating motel
properties and federal tax returns of the proposed purchasers
for the past three years.. [Docket No. 61-10].
Lodging sent several documents to Clevenger. Clevenger,
however, felt that information provided was incomplete or
otherwise inadequate. [Docket No. 61-12');">2]. Moreover, despite
Louisa Lodging agreeing to guaranty the assignees, it
informed Falls Creek that all of its assets would be
liquidated after assignment, thus, according to ...