[RPPTL LandTen] Interesting Casualty Damage Case

Tue Jun 5 10:40:25 PDT 2012

Landlord sues Hogan Lovells after leaving flooded Sabadell Financial Center offices
By Gregg FieldsContact<mailto:gfields at alm.com>All Articles<http://quest.law.com/Search/Search.do?Ntt=%22Gregg%20Fields%22&x=0&y=0&Nty=1&N=0&site=law&Ntk=SI_All&cx=0&sortVar=1>
Daily Business Review
June 5, 2012
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1111 Brickell Ave. Sabadell Financial Center
Photo by J. Albert Diaz

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1111 Brickell Ave. Sabadell Financial Center
Photo by J. Albert Diaz
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On Jan. 5, the offices of the Hogan Lovells law firm in Miami's Brickell district were flooded, forcing the law firm to relocate.
Now, the landlord, a limited liability company called 1111 Brickell Office, says the law firm owes it more than $8 million for breach of lease.
The issue: After the flood at 1111 Brickell Ave. building, Hogan Lovells sent a letter terminating its lease, which runs until 2015. The lease allows Hogan Lovells to terminate the agreement if its offices are destroyed "to the extent of twenty-five percent or more of the replacement cost," according to the complaint, filed in Miami-Dade Circuit Court.
But the landlord, represented by Robert Allen Law, said Hogan Lovells "substantially overstated the replacement cost of carpeting and used an unreasonably high estimate for demolition and construction."
The damage claim, it alleges, was simply a ruse to find smaller quarters, at a better rate, elsewhere.
The building in question, better known as the Sabadell Financial Center, is 31 stories tall. A leak started on the 22rd floor and damaged most offices beneath it. The Hogan Lovells offices were on the 19th and 20th floors.
Hogan Lovells first went to temporary quarters at 2525 Ponce de Leon Blvd. in Coral Gables and has since relocated to the Southeast Financial Center at 200 S. Biscayne Blvd. However, it has been reported that the firm is shopping for space at 600 Brickell Avenue, a new tower.
The dispute appears to center on how the word "premises" is defined. The 25 percent lease termination rule applies to premises, but there is disagreement on what that covers. Hogan, in calculating its losses, included secretarial stations, "which are removable trade fixtures that are not part of the 'Premises' as defined in the office lease," the lawsuit reads.
In its termination letter, Hogan Lovells defined "premises" as the improvements it made, the complaint says, an assumption that "ignores the plain meaning of the office lease and the defined terms contained therein." Besides, the law firm's estimated damage was "overstated and inflated," the landlord added.
Hogan Lovells "did not have the right to terminate the office lease and its termination letter constitutes [an] unjustifiable breach of the office lease," the complaint states. It said it has the right, therefore, to accelerate all future payments due under terms of the lease.
The landlord declined to comment further. Hogan Lovells officials couldn't immediately be reached for comment.
Gregg Fields can be reached at (305) 347-6688.

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