Hanover eatery loses real estate lawsuit

Valley News Business Writer
Published: 7/14/2019 10:29:23 PM

HANOVER — For more than three years the Skinny Pancake waged a legal battle in New Hampshire courts to acquire the Hanover Park building on Lebanon Street where it has operated its signature creperie and music spot since 2016. Last week it conclusively lost the fight.

The New Hampshire Supreme Court in a 4-0 decision ruled in favor or Hanover Park owners Susan and Jim Rubens, affirming last year’s trial court decision that Skinny Pancake’s attempt to exercise an option agreement to purchase the building for $5.6 million did not represent an “unequivocal, unconditional” offer as called for under the terms of the contract.

In upholding the lower court’s decision, the high court affirmed the dismissal of all five of the Burlington-based chain’s claims, including breach of contract, breach of implied covenant of good faith and fair dealing and fraud.

“We conclude that the trial court did not err in determining that (Skinny Pancake) did not effectively exercise its option rights,” the justices wrote in the opinion issued July 11.

That was good news for the Rubens, who built Hanover Park in 1990 and own the majority of the units in the commercial condominium building.

“I’m thankful that this dispute is over,” said Susan Rubens. “The Supreme Court decided unanimously in our favor … now all of us can move on.”

She termed the three-year courtroom battle “very emotionally wrenching for me.”

The Supreme Court ruling was a blow to Skinny Pancake owners Jonny and Benjy Adler, who founded the crepiere known for locally sourcing ingredients on a pushcart in the streets of Burlington in 2003 and which today spans eight locations, including a recently opened location at Jake’s Quechee Market. The legal action was highly unusual for the brothers: Vermont online court records do not show Skinny Pancake previously involved in any litigation in the state.

Last week’s “decision has shaken our faith in the justice system,” Benjy Adler said in a statement. “We believe the landlord prevailed on a technicality. Our perspective is that we had a contractual right to purchase the building and they refused to accept it without fully explaining why, that they then ran the clock out and raised technical arguments … we feel it certainly violated the basic concept of operating in good faith and dealing fairly in business,” he said.

Skinny Pancake originally sued Crotix, the legal entity that owns a majority of the condominium units at Hanover Park and which is controlled by Jim and Susan Rubens, after the couple turned down an attempt by the restaurant to exercise an option to acquire the Rubens’ interest in the building.

The initial overture, made nine months after Skinny Pancake signed a 10-year lease for the ground floor space, would have required Crotix to accept certain conditions sought by Skinny Pancake, such as an submitting to inspection of the property during a 90-day due-diligence period — that also permitted Skinny Pancake the right to terminate the offer.

Crotix nonetheless countered that it was not obligated to accept Skinny Pancake’s offer because the option contract that had been executed as part of the lease required the buyer to make an unconditional offer without any hitches.

That was a critical factor in Crotix’s favor, according to Barry Schuster, one of the attorneys who represented the Rubens in the lawsuit.

“The crux of the dispute before the court was what does it take to exercise an option. An option effectively is an irrevocable offer,” said Schuster. “What the Skinny Pancake sent was a proposed contract that gave them the right to terminate it at any time ... but if you retain the right to walk away, you have not accepted” the terms of the option, he said.

Benjy Adler, for his part, said he was similarly relieved to move on.

“This is our first and hopefully last experience ever in a lawsuit. We’re eager to put it all behind us and keep our focus on building the sustainable food system,” he said.

John Lippman can be reached at jlippman@vnews.com.

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