Business lost profits in a breach of contract termination case

Live_Music_Dallas
Background
In this case, the plaintiff, who was a owner of several outside music venues in the Dallas,Texas area, signed a eight year lease with the defendant for a 5 acre premise which included a restaurant.  Upon signing the lease the plaintiff, built a large performance stage for outside music performances. The venue opening received a significant amount of press and the revenues exceeded its’ initial earnings projections.
After four months of operation, the City informed the owners that the premise was not zoned for the music venue and would need to be rezoned.  The landowner initially agreed to assist the plaintiff in the obtaining the necessary permits and the rezoning application. The plaintiff undertook the necessary steps, such as building more parking, improving traffic flow, and improving water drainage around the premise to obtain the necessary permits and to have the property rezoned.
The final stage of the re-zoning required a property easement, or a right-a-way agreement, by the landowner to the City.  At the final stage, the landlord reversed course and stated that they would not grant the easement to the City and ultimately could not support the rezoning efforts.  The plaintiff ultimately were not able to offer live music at the facility.  After several months of non-payment of rent in protest of the alleged contract breach by the landowner, a local court allowed the plaintiff to be evicted from the premise and the music venue closed.
Legal Issues
In this case the plaintiff is suing their landlord for breach of contract.  The plaintiff alleges that the defendant landlord misrepresented the terms of the contract, specifically regarding how the property that they were leasing could be used.  At the heart of the issue, the plaintiff alleges that the defendant represented that they would be able to operate a live music venue restaurant from the location.  The plaintiff alleges that the defendant’s failure to support the permitting and rezoning efforts constituted a breach of contract.
See the next post for an analysis of the business damages…
Post Views: 302

Published by

Dwight Steward, Ph.D.

Dr. Steward regularly writes and speaks on topics involving business and individual economic damages, employment audits, and the analysis of payroll and time data in wage and hour investigations. Dr. Steward has also held teaching positions at The University of Texas-Austin in the Department of Economics and in the Red McCombs School of Business, The College of Business at Sam Houston State University, and at The University of Iowa. He has taught numerous courses in statistics, corporate finance, labor economics, business policies, managerial economics, and microeconomics.