Friday, May 30, 2008

Rick's Trial Begins Monday
Summary Judgments, Pre-trial Orders Back Market On All Major Issues

The Whiz might be flying when the dispute between Rick's Steaks and the Reading Terminal Market finally goes to trial Monday, but as far as the legal issues are concerned, it's all over but the shouting, of which there may be a lot.

A review of the report of docket entries on the Court of Common Pleas web site (you can read them here and here) leads one to the conclusion that the Reading Terminal Market has won on each major point of contention through a series of summary judgments and rulings on pre-trial motions from Judge Mark I. Bernstein.

Last summer, each side sued the other in this mess: Rick's Steaks proprietor Rick Olivieri sued the market alleging various misdeeds relating to the non-renewal of his lease; the RTM went to court seeking an order forcing his eviction.

Back in February Judge Mark I. Bernstein dismissed all save one of Rick Olivieri's original complaints against the market, its board chair Ricardo Dunston, and its general manager Paul Steinke.

Earlier this month, Judge Bernstein entered a partial summary judgment into the record on the RTM's eviction suit, finding in favor of the market on three counts: ejectment, breach of contract, and trespass. The judge also dismissed five counterclaims filed by Olivieri, including one charging conspiracy.

In February Judge Bernstein said Olivieri's attorneys can try to make the case that the RTM owes him any money he spent on renovation in anticipation of his lease being renewed, according to earlier press reports. However, the judge concluded the cheese steak scion could not seek punitive damages.

Bernstein ruled Rick's Steaks failed to offer any evidence of wrong-doing by the market, including claims of breach of oral contract, fraud, and failure to negotiate in good faith. He also dismissed Olivieri's complaints against Tony Luke, the market's prospective tenant to take over the prime space on the 12th Street side of the market, the main drag used by convention goers between their hotel rooms and the convention center.

Of course, after the trial is over and the judge issues his final decisions, Olivieri might be able to extend his tenancy until any appeal process is concluded.

No matter your views on the righteousness of Rick's cause, or the market's, things look bleak for Olivieri.

It's hard to imagine it is mere coincidence that a rumor just reached the surface in the last couple of weeks, a rumor that's been fed to reporters as well as merchants: Tony Luke's wasn't going to operate at Rick's, but someone else would under his name. In other words, it would in essence be a franchise, even if it wasn't called that.

Why is that rumor a big deal? Because if true it would be a clear violation of the intent of the market's "operating policy guidelines". The relevant portion of the guidelines reads:
Leases shall require the owners to be actively involved in the management and operation of their businesses within the Market.
I put the question directly to RTM General Manager Steinke this week, and he stated flatly: "We do not lease to franchises."

Yet before talks ended when Olivieri filed his suit late last July, the RTM had never held discussions directly with Tony Luke Jr., but with parties the market believed represented him, according to Steinke. "We always felt we were dealing with him." That may be the case, but Steinke's response has as much fudge in it as the display cases at Mueller's Chocolates and Pennsylvania General Store.

Steinke said "All discussions were shut down before they got very far by Luke himself. I know he had interest in becoming a tenant here, but once the lawsuit was filed those discussions were terminated and, by his own decree, won't restart until the legal issues are resolved. We haven't had any discussions with Tony Luke's since last July." Any rumor, he said, "is speculation at best."

So, why did the TL franchise rumor appear just a week or so before the trial? It's mere speculation at best on my part, but Olivieri's only hope is for politics to save his bacon . . . I mean, cheese steak.

Where do the merchants stand on all of this? I've yet to find a merchant who supports the market's decision to oust Olivieri, but every one I've spoken with thinks it should never have reached the litigation stage. At least a couple are puzzled why Olivieri continues to spend big bucks fighting a losing battle (he's complained to many, including me, about his legal bills).

All the merchants I've spoken with support the general direction and management of the market under its current leadership (board and manager), even though they remain critical of Rick's ouster. What confidence the merchants do have in market management would be undermined should it try to bring in a franchise or any business that smells of franchise, even if it isn't a franchise in legal form.

Unless there's a weekend surprise settlement (never an impossibility as a trial date nears), it's come down to Crushing Your Enemies on both sides come Monday's court date.

No comments:

Post a Comment