Date
October 21, 2026
Added to tracker
October 22, 2026
Court or forum
Michigan Court of Appeals
State
Michigan
Property type
Retail
Amount / scale
$411,131.50 arbitration award affirmed
Parties
Tenant/Plaintiff-Appellant: Trucks Rx, Inc.Tenant/Plaintiff: Jana Trucking Line, Inc.Landlord/Defendant-Appellee: Padilla Investments, LLC

The Michigan Court of Appeals affirmed a $411,131.50 arbitration award in favor of landlord Padilla Investments, LLC against tenants Trucks Rx, Inc. and Jana Trucking Line, Inc., who had abandoned a Detroit retail space after the city cited it for code violations, including the lack of a required sprinkler system. The arbitrator found the tenants, who took the property "as is" under a three-year commercial lease, were contractually responsible for bringing the premises into compliance, not the landlord, and the appellate panel held that finding was not legally erroneous or in excess of the arbitrator's authority.

Why it matters

The ruling confirms that Michigan courts will give an arbitrator's interpretation of an unambiguous "as is" and compliance-with-law clause heavy deference, even where curing a code violation is costly and the tenant did not anticipate the expense. Commercial landlords leasing older or previously differently-used space can rely on such clauses to shift code-compliance risk to the tenant, while tenants and their guarantors face real personal exposure if they walk away from a lease rather than litigate or negotiate a cure.

Weekly email

New on CREdocket, every Monday

The week's new commercial real estate lawsuits, rulings in cases we follow, and market signals. Free; unsubscribe in one click.

The Michigan Court of Appeals has affirmed a $411,131.50 arbitration award against a commercial tenant that abandoned a Detroit retail space after the city flagged it for code violations, holding that the tenant, not the landlord, bore the contractual risk of bringing the premises into compliance. The decision in Trucks Rx, Inc. v. Padilla Investments, LLC rejects the tenant's bid to vacate the award and leaves intact a judgment that reaches the tenant's principals personally through their lease guaranties.

Free · no account needed

Keep reading

Read the full write-up. Up to 10 a month are free without an account; a free account is unlimited and adds email alerts.

Read the full write-up

Or create a free account with just your email:

Alerts

Get an email when new landlord–tenant matters in Michigan are filed

Case Value Calculator · free beta

Facing a dispute like this one?

Get a damages range for your own facts, with the reasoning and the cases behind it. What is a commercial lease dispute worth?

Estimate your case
Share LinkedIn Email

Looking for something else?

More landlord–tenant matters

Other matters in Michigan

Recently added

CREdocket summarizes public court records and reporting; see our sourcing standards and corrections log. Not legal advice. Facing something similar? Contact us.