Owner Wins

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What Happened: A fitness center asked its landlord to refund the rent it paid during the 15 weeks that it couldn’t operate because government COVID-19 shutdown orders were in effect. The landlord refused. So, the tenant sued. Both sides moved for summary judgment—that is, a ruling on the merits of the case without a trial. The court granted the landlord’s motion and denied the tenant’s.

Ruling: The Florida appeals court rejected the tenant’s appeal.

What Happened: As courts continue to routinely reject force majeure, impossibility, frustration of purpose, and other defenses, it’s hardly surprising that retail tenants would come up with new theories to excuse their failure to pay rent during COVID-19 shutdowns. The fitness center tenant in this case contended that being barred from operating during the shutdown constituted a violation of the landlord’s covenant and warranty of quiet enjoyment. The trial court dismissed the claim without a trial, and the tenant appealed.

What Happened: Seven years into its 10-year lease, a restaurant decided to permanently shut down its business and surrender the premises to the shopping center landlord. The key question: Did the landlord actually accept the surrender? The landlord claimed it did no such thing and sued the tenant for past-due rent and rent remaining on the lease. The tenant won the first round when the trial court ruled that in taking exclusive control over the premises, the landlord accepted the surrender.

What Happened: In January 2021, a tenant signed an offer to purchase the building with closing to occur within 45 days. But after six months of unsuccessful negotiation, the deal fell through. The landlord then sued to evict the tenant for failing to pay rent for the period after the first three months of negotiations. The tenant claimed that the sides had orally modified the lease to relieve it of its duty to pay rent through closing (except for during the first 90 days). The tenant also accused the landlord of threatening eviction if she didn’t have sex with him.

What Happened: A restaurant exercised its renewal option but furnished notice only after the option period had expired. A month later, the landlord sold the property and notified the new owner that the restaurant’s tenancy was now month to month. The tenant sent the next month’s rent check, but the new owner didn’t cash it and gave the tenant a 30-day termination notice. When the tenant didn’t vacate, the owner went to court to evict. The tenant claimed that the new owner had waived its eviction rights by accepting the rent check.

What Happened: A landlord got agita after reading in the local newspaper that its tenant, the local Golden Corral restaurant, had closed down. Upon finding the property apparently abandoned and in very dirty condition, it changed the locks. It then sent the tenant a notice to cure the breach—that is, nonpayment of rent—within 15 days. When the tenant didn’t pay up, it terminated the lease and sued for breach of contract.

What Happened: The landlord and tenant performed a massive buildout to make the more than 100,000 square feet of office space leased suitable for a financial services firm with “immense computing power” and infrastructure needs. Once the 15-year lease expired, the question arose of who was responsible for restoring the space to its original condition. Citing lease language giving the landlord ownership over the improvements, the tenant asked the court for judgment declaring that it wasn’t on the hook for restoration.

What Happened: Two years into a five-year lease, a medical center stopped paying rent and abandoned the property. At least that’s what it looked like to the property manager who found the place empty and stripped of all furnishings. The sign on the door indicating that the tenant had closed its business reenforced the manager’s impression that the place was abandoned. But when the landlord sued for unpaid and accelerated rent, the tenant denied abandoning the property. We were forced out when the landlord reclaimed the premises, it argued.

What Happened:    J.C. Penney (JCP) subleased commercial property to Klairmont at below-market rates. Later, it filed for Chapter 11 bankruptcy, giving it the right to assume or reject its commercial leases.

 What Happened:  Stop me if you’ve heard this one before: A restaurant tenant struggled to pay rent after the governor issued a COVID-19 shutdown order in March 2020. In August, the landlord sued for breach of lease. The tenant admitted to owing the landlord rent but claimed impossibility and impracticability. The court rejected both defenses.