First Balls Hamburgers filed a lawsuit against its landlord. Now the landlord strikes back with a countersuit. "Now come Defendants, as Counter-Plaintiffs," it begins, with a petition to show that it deserves "monetary relief" in excess of $1 million.
The plaintiffs — Preston Hollow Saticoy, Preston Hollow Indian School, Preston Hollow Westgate and Westwood Financial Corp. — claim that Balls is now occupying its space without a lease, and they were kept in the dark about corporate maneuverings executed by Balls owner Richard Hobrecht, who "secretly" transferred the ownership of Balls to an entity called Backbone.
Instead of Hobrecht operating a restaurant on the premises, evidently he secretly transferred that right to Backbone and allowed Backbone to occupy the premises. No notice of this was ever provided to Landlord. ... Landlord never approved of any transfer, sublease or assignment to Backbone. Any such transfer, sublease or assignment constitutes a default by Tenant under the Lease.
Balls' lease ended in April 2013. Owner Carol Hobrecht contends that her lease has an automatic extension that goes to April 2018.
The lawsuit says that it sent owner Carol Hobrecht a letter of intent with a 3 percent annual increase effective May 1, 2014, and that Hobrecht responded to that letter, requesting a final lease be provided for review. But when the lease was about to expire, "Hobrecht became non-responsive."
With what the landlords viewed as an expired lease, Balls' arrangement moved to month-to-month. "Tenant claims that because she was not required to provide written notice of her decision to exercise her option to renew the lease, then no written document renewing the lease is required.
"To the contrary, the statute of frauds prohibits enforcement of a lease for a term longer than one year unless it is in writing."
Hobrecht's lawyer, Peyton Healey, said he had not seen the countersuit, but that this was a simple issue. "It's a straightforward breach of contract," he said.