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Click here for the full text of this decision FACTS:In April 2001, Tenet HealthSystem Surgical LLC contracted to lease space in a building owned by Marrero Shopping Center Inc. The lease provided for an initial term of five years and granted Tenet the right to renew for additional five-year terms through April 2021. In June 2003, West Jefferson Medical Center (West Jefferson) purchased the property from MSC subject to the Tenet lease and other leases affecting the shopping center. The leased premises are located adjacent to the West Jefferson hospital campus and were a strategic purchase by West Jefferson to allow for future expansion of its facilities. Tenet ceased doing business as a surgery center in August 2003. It sought to assign the lease to Pelican Medical-West LLC (Pelican), for use as an occupational medicine clinic. West Jefferson responded that it would not approve the assignment, and, after a request by Tenet, explained that one of the reasons it had denied the requested assignment was that Pelican intended to use the premises in a manner that competed with West Jefferson. Tenet filed suit, asserting claims for breach of the lease, violation of the Louisiana Unfair Trade Practices Act and Consumer Protection Laws and unconstitutional deprivation of Tenet’s property rights. West Jefferson asserted a counterclaim seeking a declaratory judgment that its refusal to consent to the sublease was reasonable, that its refusal did not constitute an unconstitutional deprivation of Tenet’s property rights, and that it was reasonable in refusing consent to the assignment because the proposed use of the facility was not a permitted use under the terms of the lease. The district court granted summary judgment in favor of West Jefferson on its counterclaim. Tenet appealed the judgment of the district court dismissing its claims for breach of lease and other claims against the Jefferson Parish. HOLDING:Reversed. The court notes that the use provision of the parties’ lease states: “Tenant shall use and occupy the Leased Premises for out patient surgical procedures and general medical and physician’s offices, including related uses and for other purposes reasonably acceptable to Landlord.” Tenet used the facility for an outpatient surgery center. Pelican planned to use the facility for an occupational medical clinic. The court points out that West Jefferson’s main opposition to the assignment of the lease was that Pelican’s operations in the leased premises would be different and broader than those of Tenet. But the court finds that there was no evidence presented that an occupational medicine clinic did not fit within the category of a “general medical and physician’s offices, including related uses.” The court therefore concludes that Pelican’s proposed use of the premises does not exceed the uses permitted under the Tenet lease. West Jefferson also opposes the lease assignment from Tenet to Pelican on the basis that Pelican’s broadened scope of operations would include new areas of competition with its hospital. The court notes that withholding consent is unreasonable where there are no “sufficient grounds for a reasonably prudent business person to deny consent.” A landlord’s personal taste or convenience are factors not properly considered. Rather the landlord’s objection “must relate to ownership and operation of leased property, not lessor’s general economic interest.” Under this standard, the court holds that West Jefferson’s refusal to consent to the assignment of the Tenet lease because Pelican would be a new competitor relates not to the ownership and operation of the leased property, but to West Jefferson’s general economic interest as the operator of an adjacent business. The court finds that West Jefferson’s reason for denying consent to the assignment to Pelican based on increased competition is wholly personal to West Jefferson and does not relate in any way to an objective evaluation of Pelican as a tenant. Further, the court holds that allowing West Jefferson to deny consent on a basis personal to it, a successor owner who took subject to the existing lease, would expand West Jefferson’s rights under the lease to the detriment of the lessee in a manner not bargained for in the lease itself. Accordingly, the court concludes that West Jefferson’s refusal of consent to the assignment of the lease on the basis of increased competition was unreasonable. The court therefore reversed and remanded the district court’s judgment. OPINION:Davis, J.; King, C.J., Davis, J., and Fitzwater, D.J.

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