A company that has rented space on the St. John’s Medical Center campus for 43 years alleges in a legal complaint filed last week that construction of the hospital’s new senior living center is causing “immediate and irreparable harm” to its tenants.
However, the hospital rejects that claim in a response it plans to file in Teton County District Court. The hospital counters that the lease for Medical Professional Landlease has expired, and the tenants need to leave.
The building in question is a medical office facility referred to as the “Brown Building.” It houses the family practice of Dr. Richard Sugden, who is a shareholder in the leasing company, and the Teton Free Clinic, among other providers.
The Brown Building is adjacent to where the new senior living center, Sage Living, is being constructed on the northwestern corner of the campus. During construction, a parking lot near the building was torn up and fences erected along its western side. The complaint alleges these actions have made patients visiting the facility walk farther and violated the ground lease, which gave the company the right to an acre of the campus and use of parking near it.
“The servants, employees, agents, and business invitees of Lessee or Lessee’s sublessees shall at all times have the free and uninterrupted right of access to the leased property,” the lease states, “by means of all roads, driveways, sidewalks, or entry ways, which afford access to the leased property.”
The complaint cites that language as evidence that the construction is causing harm and breaches the original agreement. The complaint asks for the fencing to be moved and the access and parking lot to be restored. The original document, drawn up in 1976, has been amended several times. In 2005, 2010 and 2014 the parties agreed to extend the lease, with the final extension terminating April 1, 2019.
Medical Professional Landlease’s claim includes a clause that states “a dispute arose concerning the correct termination date of the lease, however, based on correspondence between attorneys for the parties, the Lease Agreement will remain in full force and effect and will terminate not earlier than April 1, 2020.”
The complaint doesn’t include anything to corroborate the claim.
In arguing against the assertion that it has broken the lease, the hospital points to that 2014 extension. The counterclaim says Sugden’s company has been a “tenant in sufferance,” meaning the lease ended and the tenant does not have permission to stay, but the landlord has not yet demanded the tenant vacate. In such an agreement the terms of the original lease must generally be followed, according to the legal information site HG.com.
The hospital also cites its bylaws in rebutting the idea that the lease had been extended. It says its attorneys did not agree to a longer lease and that only its board of trustees could make the decision to extend the lease, which it has not done. The counterclaim says that the brown building should have been removed at the end of the lease and that it is suffering damages because the Sage Living construction is being made more costly because of the facility.
“To meet safety and financial requirements, the construction of Sage Living on the St. John’s Medical Center campus will require the removal of a small medical office building commonly called the Brown Building,” the hospital wrote in a statement to the News&Guide.
A hearing date had not been set as of press time.
This story has been updated to show that St. John's Medical Center's counterclaim had not been filed as of noon Friday. — Ed.