Next week the Utah Supreme Court will hear a case between a landlord and a tenant over whether a tenant's failure to pay rent during one month of a potentially 20-year contract gives the landlord the right to kick that tenant out.
The high court wants to hear the case because it would like to interpret its own previous decision to send the case back to district court over factual errors, said attorneys for the tenant.
But the case has also garnered public interest because the tenant is a gaudy strip club covered in fluorescent lights that sits directly in front of Intermountain Healthcare's newest hospital near 5400 S. State in Murray.
To gaze upon Intermountain Medical Center's five state-of-the-art towers and beautiful landscaping from State Street, one must look past the dilapidated buildings of the 13-year-old dance club Southern Exposure.
"I absolutely would like to see that area cleaned up," said Murray Mayor Dan Snarr, after noting that the club's owner, Kent Bangerter, has been a good corporate citizen and has consistently complied with city ordinances.
However, the mayor feels that landlord-tenant law should be upheld and that if Southern Exposure prevails, it has the right to stay.
For obvious reasons relating to community standards, many residents of Murray want Southern Exposure to leave, Snarr said. Intermountain also wants it to leave and has been trying to get it out since it purchased the property the club sits on in January 1998, IH spokesman Jess Gomez said.
The case has been in the works for almost a decade and has been to district court twice. If the Supreme Court next week upholds the two district court summary judgments and decides the case for the hospital corporation, Southern Exposure will be evicted. That could cost Bangerter the $600,000 a year he makes on the property, according to Supreme Court briefs, because Bangerter may be unable to relocate.
But the attorney for Bangerter and his corporation, D&K Management, thinks the court will decide in their favor and send the case back to district court for a jury trial. Both times the district court has seen the case so far, judges have issued judgments that have denied Southern Exposure a jury trial.
If the Supreme Court decides for Bangerter, Southern Exposure could stay put, said his attorney, Michael Zundel, of the Prince, Yeates and Geldzahler firm in Salt Lake City.
Prior to litigation, Intermountain was willing to help Southern Exposure move, but that was never in the best business interest for Bangerter, as he want to stay on State Street and wants to remain in Murray, Zundel said. If the lease is upheld, Southern Exposure could stay until 2014.
The only zoning that would accommodate the club is off State Street on 300 West, Snarr said.
The lease conflict began in March of 1998 when Southern Exposure failed to pay its rent, according to court documents. The next month, Southern Exposure paid its rent in a timely matter and also paid the March rent and a late fee. A few days later, Intermountain served the club with a notice of lease termination and returned the March check uncashed.
Thereafter, Southern Exposure continued to tender rent checks. Intermountain did not cash them, but put them in escrow. Also, Intermountain required the club to sign a new insurance agreement for the property.
Those and other actions on the part of Intermountain show that it waived its right to terminate the lease, Zundel said. Intermountain and the courts, so far, disagree.
Zundel also argues that termination of a lease for a one-month-late payment is grossly unfair unconscionable, in legal language. That argument was rejected by the first district court. Since then, the argument's language has changed and Zundel believes he has a right to argue it before a jury.
The hospital's attorney say the issue has been decided and that "D & K's current appeal is nothing more than an attempt to create issues and arguments where none existed before the trial court," according to court documents.
"We think that the district court's decision should be upheld," Gomez said.
The case boils down to whether desirable and undesirable businesses deserve equal treatment under the law, Zundel said.
"I think that we live in a capitalist, free-market private property system," he said. "Clearly, my client has a right to be there."
Zundel said Intermountain signed the lease when it bought the property, and that it should be bound by its contract regardless of the fact that the community as a whole desires the hospital and detests the club.
"Is this place treated differently because it's a strip joint?" he asked. "The law should be a nonrespecter of persons."The case will be heard Thursday at 10:30 a.m. Thursday at the Matheson Courthouse on the corner of State Street and 400 South in Salt Lake City.
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