West Jefferson Medical Center sues Rite Aid claiming rental agreement violates state constitution

Kyle Barnett Mar. 22, 2012, 7:36am

GRETNA - A Jefferson Parish Hospital is suing a nationwide pharmacy chain for allegedly entering into a rental agreement in violation of state law.

Jefferson Parish Hospital District No. 1 filed suit in the 24th Judicial District against K&B Louisiana Corporation and Rite Aid Headquarters Corporation.

The plaintiff claims the defendant had an agreement beginning in 1976 to rent space for a pharmacy inside of the hospital that was renewed under an option in the lease from 2007 to 2012. The terms of the renewal agreement were a violation of state law, according to the plaintiff. The plaintiff claims the rental agreement is voided because the defendants have a duty as a political subdivision under the Louisiana Constitution to charge fair market value for the rent.

Per the agreement, the plaintiff alleges the agreement was for $3.35 per square foot and 2.5 percent of the pharmacy's yearly net sales exceeding $2,150,432. The actual rent paid by the defendant, according to plaintiff, is far less than $5 per square foot and far less than what the space would be assessed at fair market value.

The plaintiffs suggest that the rental agreement be changed to $26 per square foot and a percentage increase in the rent each year or a termination of the lease with Rite Aid vacating the premises.

The plaintiff is being represented by Richard G. Passler of New Orleans-based Breazeale, Sachse and Wilson, LLP.

The case has been assigned to Division M Judge Henry G. Sullivan.

Case number 712557

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