FERA V. VILLAGE PLAZA, INC.
396 Mich. 639, 242 N.W.2d 372 (1976)
NATURE OF THE CASE: Fera (P) appealed order reversing a jury award of damages in action
for breach of lease agreement and anticipated lost profits.
FACTS: Fera (P) leased retail space from Village Plaza (D) in order to open a 'book and
bottle shop' in D's shopping center. A $1,000 deposit was paid by P After this lease was
executed, P gave up approximately 600 square feet of their leased space so that it could be
leased to another tenant. In exchange, it was agreed that liquor sales would be excluded
from the percentage rent override provision of the lease. Numerous work stoppages occurred
and eventually Bank of the Commonwealth received a deed in lieu of foreclosure after default
by Fairborn and Village Plaza. Schostak Brothers managed the property for the bank. When the
space was finally ready Ps were refused the space because the lease had been misplaced, and
the space rented to other tenants. Alternative space was offered but refused by Ps as
unsuitable for their planned business venture. P sued for his deposit and lost profits and
received a jury verdict of $200,000. The court of appeals reversed; it held that a new
business cannot recover damages for lost profits for breach of a lease, and that P was
barred from recovery because the proof of lost profits was entirely speculative. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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