The Rite Aid store at the Americana at Brand may have closed, but the convenience store's corporate parent is still pursuing litigation against the mega-shopping center.
Thrifty Payless Inc., Rite Aid's parent company, is suing Americana at Brand LLC in Los Angeles County Superior Court, claiming fraud because the property taxes and fees charged to Rite Aid substantially exceeded the Americana's estimates, according to court documents.
Rite Aid spokeswoman Ashley Flower said via email on Tuesday that company officials made a “business decision” to close the store in the Americana at Brand on Aug. 24.
“Despite our continuing efforts over several years and desire to do so, we were no longer able to continue operating at this location due to the exorbitant and ever increasing occupancy costs,” she said.
Rite Aid has another store in Glendale, located at 531 N. Glendale Ave.
A trial court initially sided with Americana management's argument that the negotiations between the two companies were just estimates and that it was Rite Aid's responsibility to verify them.
However, the Ninth Circuit Court of Appeals reversed that judgment in a decision handed down in July and the case is ongoing.
Rite Aid is seeking damages and cancellation of its lease.
The case centers around the differences between the estimated rates Rite Aid agreed upon in a letter of intent in 2004, prior to signing a lease, and the amounts it was actually charged.
According to the court documents, in 2009, the first year Rite Aid was due to pay its share of taxes, insurance and maintenance fees, the Americana charged it $169,686, $28,110 and $412,307, respectively, for those expenses.
Under the rates listed in the letter of intent, Rite Aid would have been charged only $43,836, $11,689 and $211,874.
In its reversal, the appeals court found that Americana officials had all or most of the information about the cost of operating in the shopping center before the lease was signed and did not share those details with Rite Aid. Therefore, a fraud claim can be made on the estimates, the court ruled.
Flower said that Rite Aid was, “confident in our legal position regarding this matter and expect to prevail.”
Representatives for Caruso Affiliated, owner of the Americana at Brand, declined to comment.