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COMPLAINT
Singing River MOB, LLC (“Singing River MOB” or “Plaintiff”) hereby submits this
Complaint against Singing River Health System (“SRHS” or “Defendant”) to recover rent and
other amounts owed under the four subleases between Singing River MOB and SRHS.
Jackson County, Mississippi through its ownership of a medical office building built pursuant to
agreements with SRHS. Singing River MOB’s members are citizens of the state of Alabama.
3. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C.
§ 1332 because the parties are completely diverse and the amount in controversy exceeds
$75,000.
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4. Venue is proper in the Southern Division of the U.S. District Court for the
Southern District of Mississippi because Defendant SRHS is located in and owned by Jackson
FACTUAL ALLEGATIONS
therewith, Johnson Development presented SRHS with proposals that would allow for the
development of the medical office building using advantageous financing through the use of
GoZone tax exempt bond financing and the use of new market tax credits.
reliance upon representations of SRHS regarding its verified authority to enter into a series of
transactions that included an initial ground lease from Jackson County (“the Prime Ground
Lease”) and a sub-ground lease to Singing River MOB (“the SRHS Ground Lease”), followed by
7. As a predecessor transaction to the SRHS Ground Lease and the SRHS Subleases,
on March 26, 2009 Jackson County and SRHS entered into the Prime Ground Lease, in which
Jackson County leased unimproved real property to SRHS for the leasehold improvements
8. SRHS proceeded to enter into subleases with Singing River MOB, namely the
SRHS Ground Lease and the SRHS Subleases. Copies of the SRHS Ground Lease and the SRHS
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9. Singing River MOB then entered into binding financing agreements and
proceeded with construction of the medical office complex for the benefit of SRHS.
10. The SRHS Subleases consist of four twenty-five year leases for: an “Imaging
Space” with a current annual lease payment of $341,965.11, an “Option Space” with a current
annual lease payment of $118,601.28, a “Multi-Use Space” with a current annual lease payment
of $612,322.25, and a “Wellness Space” with a current annual lease payment of $666,366.34.
These amounts are calculated according to the “Rental” section of each sublease. See Exhibits
B1–B4 at Section 5.
11. The SRHS Subleases each provide that SRHS shall make a monthly lease
payment on the first day of each calendar month. Id. at Section 5.1.
12. SRHS has not made the payments due January 1, 2019 under the SRHS
Subleases.
13. The SRHS Subleases each provide that “[a] late fee of ten percent (10%) of the
Base Rental then in effect shall be due and payable with respect to all installments of Rent more
than ten (10) days past due.” Id. at Section 5.3. Those late fees incurred on January 11, 2019 total
$18,261.51.
14. SRHS has not paid the 10% late fee on the past due rent installments.
15. Each of the SRHS Subleases defines “any failure of Tenant to pay any Rental or
other sums of money when due hereunder” as an event of default by which SRHS “shall be
deemed in breach and default of this Lease . . . .” Id. at Section 24.1. “Rental” is defined as “the
Base Rental and any other sums to be paid by Tenant to Landlord hereunder.” Id. at Section 1.2.
16. In the event of default by SRHS, Singing River MOB is entitled to, “without
further notice or demand of any kind” and in addition to other available remedies, accelerate the
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rent due under the subleases. Additionally, Singing River MOB may “proceed by . . . suit or
otherwise to collect” delinquent or accelerated rent and any other amounts due under the
17. The SRHS Subleases each provide for the recovery of attorneys’ fees and court
costs incurred by Singing River MOB in the event of default by SRHS and in connection with a
18. The SRHS Subleases each provide for the recovery of interest on past due rental
amounts and on “any costs or expenses incurred by Landlord” in the event of default. Id. at
19. On January 24, 2019, Singing River MOB, through its counsel, issued four
demand letters to SRHS for the rental payments and late fees owed. However, to date, SRHS has
not paid the past-due amounts owed under the SRHS Subleases. See Exhibits C1–C4.
20. On the morning of January 28, 2019, Singing River MOB, through its counsel,
issued four notices of acceleration for the respective SRHS Subleases. See Exhibits D1–D4.
22. On March 26, 2009, SRHS entered into the four SRHS Subleases with Singing
River MOB. Under the SRHS Subleases, SRHS agreed to make monthly lease payments on the
first day of each calendar month and to pay late fees on past due lease payments.
23. SRHS has defaulted according to the terms of the SRHS Subleases and has
breached the subleases by failing to make the lease payments due January 1, 2019 and the late
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24. As a result, Singing River MOB is entitled to judgment against SRHS in the
amount of the lease payments due January 1, 2019, and the late fees due January 11, 2019, which
25. Also as a result of SRHS’s default, Singing River MOB has accelerated the
remaining rental amount due under the SRHS Subleases according to the terms of the subleases.
Singing River MOB is entitled to the accelerated rent, which amount totals $49,295,542.79.
26. Under the SRHS Subleases, Singing River MOB is additionally entitled to its
reasonable attorneys’ fees and court costs incurred in collecting these past-due amounts.
27. Under the SRHS Subleases, Singing River MOB is entitled to interest on the
accelerated rental amounts and on its attorneys’ fees and court costs incurred in collecting these
past due-amounts.
28. WHEREFORE, Singing River MOB prays that this Court will enter an order
payments and late fees and the remaining rental amount due under the SRHS
Subleases;
b. its attorneys’ fees and court costs incurred in bringing this action and in
Subleases.
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CERTIFICATE OF SERVICE
I hereby certify that I have served a copy of the foregoing document on the following by
U.S. First Class Mail, hand delivery, fax, or email on this the 28th day of January, 2019.
Patrick R. Buchanan
Michael E. Bruffey
Brown Buchanan, P.A. – Biloxi
P.O. Box 1377
Biloxi, MS 39533-1377
Telephone: (228) 374-2999
mailb@brownbuchanan.com
Attorneys for Defendant Singing River Hospital System