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Monday, January 22, 2007

Ind. Decisions - 7th Circuit issues one Indiana decision today

In Omega Helathcare Investors v. Res-Care (SD Ind., Judge Young), a 20-page opinion, Judge Kane writes:

This diversity case concerns the lease and administration of a residential healthcare facility in Lexington, Kentucky. The appellant, Omega Healthcare Investors, brought suit against Res-Care alleging, among other things, breach of contract. The parties filed cross-motions for summary judgment, and the district court granted summary judgment in favor of Res- Care. Omega appeals. For the reasons set forth below, we reverse the judgment of the district court and remand for further proceedings. * * *

In summary, Robert Petrie, and later Res-Care as his successor, agreed to rent a fully-functional, fully-occupied, and fully-staffed medical facility from Omega. Recognizing that much of the residual value of the facility would depend on its return in substantially the same condition, Omega included certain protections in the lease. Omega required that the facility would be managed in a particular way, specifically requiring that the people who were entrusted with the facility not do anything that would result in its de-certification. The terms of the separate Management Agreement were properly incorporated into the Lease. Any deviation from them, or any termination of the agreement, constituted a breach of the lease. Any failure to surrender the premises at the end of the lease period constituted a separate breach of the lease. Res-Care, as Petrie’s successor in the lease, inherited those obligations. Even viewing the facts in the light most favorable to Res-Care, it is clear that Res-Care breached paragraphs 23, 25, and 36 of the lease. Omega is entitled to judgment as a matter of law, however the question of adequate damages is not properly before this court.

Posted by Marcia Oddi on January 22, 2007 12:08 PM
Posted to Ind. (7th Cir.) Decisions