Teasers’ locale almost filled, mall landlord says
After more than a year and a half of litigation, Teasers’ restaurant owners and their former landlords recently settled the last of their disputes in Santa Monica Small Claims Court.
Tony Palermo and Dan Ringwood, Teasers’ owners, were awarded last week $5,000 of the $7,500 security deposit being withheld by their former landlords.
Landlords Ernest Kaplan and Bob Gindy argued they shouldn’t have to refund the security deposit because they had to pay to dispose of Teasers’ old kitchen and bar equipment. At issue was the restaurant’s 60-foot-long bar, which was anchored to the brick wall and the concrete floor, a walk-in freezer in the kitchen and another smaller bar in a back room.
Palermo said a settlement agreement prevented the landlords from seeking further damages and withholding the security deposit.
“We’re released from any and all damages and claims,” he said. “It’s all written down in an agreement signed months after we vacated the building.”
Palermo and Ringwood said the old equipment were permanent fixtures and therefore became the property of the landlords when they left the building.
“All the fixtures are 17 years old,” Palermo said. “They were installed when we first moved into the space.
“Nothing that we left was moveable pieces of equipment,” he added. “What was left could have damaged the building if we had tried to remove it.”
However, Kaplan and Gindy said much of the remaining items could easily have been removed by the owners and the expense should fall on their shoulders.
“Clearly some of those things could have been removed,” Kaplan said. “They have interpreted things all along as they chose to and not by the letter of the contract.”
Judge Pro Tem Peter M. Kunstler compromised between the two sides. He said while many of the remaining items were permanent fixtures, a handful of things should have been removed by Teasers’ owners before leaving the building.
Palermo and Ringwood were awarded $5,000 — the maximum amount allowable under small claims — while Gindy and Kaplan were credited $2,500 for expenses they incurred removing some of the less permanent items.
Teasers, which was one of the Third Street Promenade’s original tenants after the area was renovated in the mid ’80s, closed its doors last October because Palermo and Ringwood said the rent had become too high.
When the restaurant shut down, its owners were paying $18,000 in rent. When their lease expired, the building’s landlords wanted market rate, which would have increased the rent to $57,000 a month.
Palermo and Ringwood sued to lower the amount Kaplan and Gindy demanded, but a judge ruled the landlords had performed a reasonable market-rate analysis that proved the amount they were asking was fair for the Promenade.
Instead of paying the increased rent, Palermo and Ringwood closed Teasers’ and are now concentrating on their other restaurant, Tony P’s Dockside Grill in Marina Del Rey. Kaplan and Gindy have not yet found a new tenant for the location.
“The good news out of all of this is that we are becoming reasonably close to coming to a deal with a new tenant,” Kaplan said. “So hopefully we can say this will come to a happy ending.”
Palermo said removing the restaurant’s old equipment had not become an issue until it came time to return the security deposit.
“We’ve been suing each other back and forth for over a year and a half now,” Palermo said. “And not once was there a discussion about these... fixtures.”
“We’ve been suing each other back and forth for over a year and a half now. And not once was there a discussion about these... fixtures.” — — TONY PALERMO Teasers’ owner
Originally published in the Santa Monica Daily Press print edition on August 13, 2002. Read the original PDF.