PRESS RELEASE: The Morris Law Firm Achieves Unanimous Jury Verdict on Behalf of Client Mezeh Mediterranean Grill

FOR IMMEDIATE RELEASE

(Bethesda, MD) — On January 19, 2017, a federal jury in Maryland returned a verdict in favor of Mezeh Mediterranean Grill on trademark infringement and unfair competition claims brought by one of its larger competitors. The lawsuit, brought by Cava Group, Inc., claimed that Mezeh’s logo unfairly infringed on one of Cava’s registered trademarks.

The jury deliberated for less than ninety minutes before returning a unanimous verdict in favor of Mezeh on all claims. The court had previously thrown out claims that Mezeh copied the design and layout of Cava’s stores.

Mezeh is a Virginia-based chain of fast casual restaurants serving Mediterranean-inspired food made with fresh, all-natural ingredients. Mezeh currently has six locations in Maryland and Virginia.

Mezeh had been represented by Sean Morris and the Morris Law Firm, LLC, of Bethesda, Maryland, since the lawsuit’s filing in early 2014, and Morris was the restaurant’s counsel through the three-day trial. “We are very grateful the jury listened closely to the case, and found in favor of Mezeh,” Morris said. “There is no question that this was the correct result, but it was also hard-earned.”

The Morris Law Firm also serves as outside general counsel to Mezeh, a role on which it now intends to focus. “Now that it this trial is behind us, we can turn our focus back to helping Mezeh grow. Mezeh is a great brand, and we look forward to being part of their next chapter.”

The case is Cava Group Inc. v. Mezeh-Annapolis, LLC, et al., 8:14-cv-355.

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Bad Agreements with Bad Actors: A Few Words on Contracts

deal-devil-dude-e1383095467983Contracts are a necessary element of business. They form the relationships and set the expectations on which we all rely as businesspeople. But, at the end of the day, a contract is nothing more than a promise. And a promise, as we all know, is only as good as the person who makes it.

When you enter into a contract, therefore, you have to consider two important things:

First, what is the quality of the actual contract? For example, does it clearly and unambiguously set forth what each party is supposed to do, and what happens if they don’t? Does it provide reasonable grounds for termination of the agreement is not working out, but still ensure that each side gets the benefit of their bargain.

Second, what is the quality of the person on the other side of the contract? Is this a person who will keep his promises? After all, if he doesn’t, all the contract allows for is me to seek a remedy, usually by going to court. All too often, that is not really a remedy at all, given the expense involved and the likelihood that the court can even provide the relief you need.

In my practice, I am often called upon to review a business contract (or, as the case may be, a commercial lease, which is nothing more than a specific type of contract) after the relationship has soured, a dispute has arisen, and a business owner comes into my office asking what he or she can do. In many of these instances, the contract involved either contains ambiguous or unfavorable terms, or is missing important terms altogether.  The counterparty to the contract is either using terms that were put into the contract to bludgeon my client, or taking advantage of the absence of terms to run roughshod over him.

More frequently than I care to mention, when that business owner is sitting in my office, it is the first time a lawyer has even looked at the contract. The opportunity to prepare a solid, comprehensive, clearly worded contract is long past – and now the only thing we can do is try to reach a negotiated resolution to the dispute (if that’s even possible), or litigate it. In either instance, the expense involved is far greater than it would have been to do it right in the first instance.

Humans are fallible, imperfect beings. And business, as is life, is unpredictable. Try as you might, you will never be able to predict with 100% accuracy who will keep their promises and who won’t, and what relationships will work out and which ones won’t. What you can do, however, is take control of those things you can. And one thing you can do is prepare rock solid contracts, and do so right from the beginning.

Hooters Waves White Flag: Will Voluntarily Close Rather than Face Revocation

There are some battles that are just not worth fighting, apparently.  For the Rockville, Maryland Hooters restaurant that was charged with overserving the drunk driver who killed Montgomery County police officer Noah Leotta late last year, that would include the battle to save their liquor license.  The restaurant faced a show cause hearing before the Montgomery County Liquor Board this week over whether their license should be revoked, or some lesser penalty (a suspension and/or fines) should be levied.  Apparently seeing the handwriting on the wall, the restaurant opted to forego battle and accept terms of surrender — namely, the surrender of their license.  They will voluntary turn over their license and close their doors permanently in November.

Many may wonder why the restaurant wouldn’t at least try to defend themselves — after all, there is no stronger penalty the liquor board can levy than revocation, and this result is tantamount to that very outcome.  Moreover, in our experience, it is notoriously difficult to make the case that an individual became intoxicated at a particular establishment, and as a result of drinks served to him at that establishment.  This was, however, a very high profile case and Hooters — a nationally recognized brand — may have had strong business reasons to not engage in what seem like an exercise of shirking responsibility.  The individuals who held the license for this establishment may have also had a strong interest to avoid a hearing and not tinker with the possibility of revocation — had their license been revoked they would have been permanently banned from ever holding a license again.  By voluntarily surrendering their license, they avoided that fate.

Considering the business and legal implications, and the fact that the liquor board is not a court of law but an administrative body that has broad discretion to make decisions that it thinks are in the best interests of the community, this voluntary surrender and closure appears to be the proper result for all concerned.  Finally, considering that the establishment cannot face any civil liability under state law (because Maryland is one of only a handful of states that does not permit so-called “dram shop liability”), this should close the matter (and a sad chapter) for the restaurant and its licensees.

 

 

Landlords Come and Go. It’s What Your Lease Says That Matters Most.

Commercial leases, like most contracts, are subject to interpretation. Clauses and terms that may seem clear at the time they are drafted can later become ambiguous, or subject to more than one understanding, especially when words on paper become applied to real life situations. Or the terms may be unclear on their face, and such lack of clarity is simply not recognized until the lease has commenced and the tenancy begun. This reality is something that all business people and their lawyers must deal with, and must understand is part of doing business. Oftentimes landlords and tenants, given the passage of time and over the course of an extended term of dealings come to an understanding on the meaning and applicability of certain lease terms and engage with one another pursuant to that understanding. In the best circumstances, the landlord and tenant work together to ensure neither party is deprived of the benefit they believed they were obtaining at the time of the lease.  It is just good business to make it all work.

But what happens when a commercial building is sold and a new landlord takes over? While the words of that lease may stay the same, the new landlord’s understanding of what they mean (or its motivations in reviewing them) may be different – and perhaps be in conflict with that of the tenant and how it has been previously conducting its business under the lease. Or imagine where the previous landlord had tacitly (or even explicitly) agreed to disregard a lease a provision because it made good business sense to do so. What happens when the new landlord decides to adhere to – and enforce – the precise letter of the agreement?

Something like one of these scenarios appears to have happened in New York City where the high end health club Equinox had been operating its business under a lease for some fifteen years. Throughout that time it appears to have enjoyed a good relationship with its landlord and neighbors in a mixed used building in the Tribeca neighborhood of the City. Then, the building was sold and, earlier this year, the new owner served notice that Equinox was in breach of its lease due to the noise and vibrations its operations emitted. The landlord served Equinox with notice of default and sought to remove them from their long-standing home.

Equinox, not surprisingly, responded that nothing had changed in their operations and the prior landlord had never taken the position that the amount of noise and vibrations emanating from their business was in violation of the lease.  Moreover, Equinox had renewed the lease and invested a great deal in the space in reliance on that long-standing position. The owners of the gym filed suit to stop any eviction and to seek a judgment that they can remain in the premises. They have also claimed millions in damages to account for the investment made in the space based on the understanding the gym would be permitted to remain.

In our practice, we increasingly see this situation arise with our restaurant clients as various real estate investment companies purchase shopping centers and retail buildings. Often smaller local landlords, who have long standing relationships with their tenants, are replaced by out-of-state investment trusts which may not have the same level of tolerance and flexibility when it comes to lease compliance. And in other instances, it may simply be that the new landlord wants the old tenant out for some reason (to renovate, to redevelop, to seek a new tenant mix, etc.) and takes a fresh look at lease to see where a point of leverage – or an opportunity to evict – may be.

For these (as well as many other) reasons, we advocate for a thorough and detailed reading of any commercial lease before our clients commits to it. And we caution against placing too much faith in the past reasonableness or forbearance of a certain landlord. At the end of the day, it is the lease language that controls and it is only that language which is permanent. As such, the only way to ensure the lease’s terms will be read in a manner that is in keeping with your understanding, and that such interpretation will persist for the life of the lease, is to make that language as clear and unequivocal as possible at the time you sign it.

 

 

Lawsuit: DC Waterfront Developers Trying to Drive Us Out of Business

In a federal lawsuit filed last month, the owners of two fish markets and a seafood deli located at the Maine Avenue waterfront in Southwest Washington, DC, have sued the developers of the massive “Wharf” project for violating their lease and trying to drive them out of business.

As expected the lawsuit has gotten significant media attention, as the Wharf development (and the related redevelopment of the fish market) is one of the most ambitious in decades in the Southwest quadrant of DC, and these projects look to reshape the city’s waterfront for generations.   That this redevelopment is occurring at the oldest continuously operating fish market in America (dating to 1805) was bound to lead to disruptions.

But the lawsuit says that the interferences with the plaintiffs’ businesses have gone beyond the simple disruptions that a tenant could or would expect when a major project is being undertaken nearby.  For example, the lawsuit alleges that the developers are purposefully interfering with their use of the common areas (something they are entitled to under their lease), are blocking access to customers and delivery trucks, and ticketing and towing customers’ cars — all part of a “conspiracy” to drive the existing tenants out of business.

As with most landlord-tenant disputes, the outcome of this case will depend on the close reading and interpretation of the parties’ lease, and the provisions contained therein related to use of the common areas, and landlord liability in the event of business disruptions (especially those caused by the landlord itself).  As the developer/landlord has stated in this case, “with any large-scale project in a dense urban area, some temporary disruption is inevitable.”  I see this out my window here in Bethesda, throughout Montgomery County, and I certainly see it whenever I am down in Washington, DC.

But how much disruption is too much?  And where the disruption threatens a long-term business’s viability, what are the tenant’s rights?  Does it have any rights?  Or is its business just the price to be paid for progress?

 

UPDATE: SHA Opts Not to Appeal Pre-Condemnation Ruling from Montgomery County

This is to provide an update on this story from earlier this year, where we successfully defended a property owner’s right to deny the State Highway Administration’s efforts to gain access to his property for environmental testing, and actually had the statute in question declared unconstitutional.  As matters turned out, the State Highway Administration did not appeal this ruling.  Some observers argued that SHA had no choice but to appeal, as this statute was essential to their condemnation powers.

Perhaps, however, SHA determined that it would rather lose the ability to gain access to this one piece of property than risk an unfavorable opinion from the appellate courts of Maryland, which would have effectively invalidated the statute for all prospective eminent domain actions throughout the state.

Relatedly, the California Supreme Court is reviewing a lower appeals court’s finding that California’s similar pre-condemnation exploration — or, as the Maryland court called it, “test drive” — statute was also unconstitutional.  The parties are currently in the process of submitting their briefs and oral argument likely will be held next year.  We certainly will be watching.

Montgomery County Judge Declares Key Maryland Eminent Domain Statute Unconstitutional

On Monday, July 14, a judge of the Montgomery County Circuit Court declared unconstitutional a long-standing law that permits the Maryland State Highway Administration (SHA) to obtain a court order allowing it to enter private property, without the landowner’s consent, and conduct intrusive drilling, soil sampling, and subsurface engineering studies.  The law has been on the books for over thirty years and appears to have never before been subject to significant judicial scrutiny.

Sean T. Morris of The Morris Law Firm, LLC, successfully argued the case on behalf of a shopping center owner who objected to SHA’s demand that the landowner allow SHA engineers to drill multiple 50-foot deep holes through the shopping center’s parking lot in an effort to determine if the property is suitable for condemnation to construct a noise barrier along Interstate 270.  Upon receiving such objection, SHA’s attorneys sought a court order requiring the shopping center owner to grant such access.  The shopping center owner opposed the petition and the matter was set for hearing this past Monday.

During oral argument, the court characterized the relevant provision of the state’s eminent domain law as a “test drive statute” and questioned why the state should be permitted to engage in such actions without providing just compensation for the intrusion as required by the Maryland and United States Constitutions.  Ultimately, the court concluded that the state should not be permitted to do so, finding that such actions amounted to a taking, even if it were only a temporary one.  The court denied SHA’s petition to enter onto the shopping center property and declared the statute “clearly unconstitutional.”

In reaching its opinion, the court engaged in a detailed review of challenges to similar statutes around the country, many of which have previously been found to be unconstitutional by appellate courts around the nation.  One such case appears headed for the California Supreme Court for resolution later this year or next year.  Whether this case is similarly destined for Maryland’s appeals courts remains to be seen.

Bethesda Apartment Building Construction Causing Closures, Spawning Lawsuits

In the last two years, the Woodmont Triangle area of downtown Bethesda has seen a building boom in high-rise luxury apartment buildings.  Construction of one of those buildings, however, appears to be taking its toll on some established local businesses, and has now caused the closing of two local restaurants and an automotive repair shop.

To read more on this ongoing controversy, and the multiple lawsuits it has spawned, please see my post here, which summarizes the excellent coverage from the blog BethesdaNow.

Court of Appeals (Again) Declines to Bring Dram Shop Liability to Maryland

In a closely watched case (and one I have written about here, here, and here), the Maryland Court of Appeals last month, in a 4-3 decision, declined to recognize dram shop liability in the state of Maryland.  Dram shop liability is a theory of liability that holds a restaurant or tavern owner accountable if a patron kills or harms another person after drinking too much at the owner’s establishment.  The typical case involves an automobile accident and a drunk driver.  Maryland has been one of only a handful of states that do not recognize at least some form of dram shop liability.  And that will continue, at least for now.

[Read more here…]