Jay Solomon, Partner, and Israel Katz, Associate, received another important decision for our client from the Second Circuit Court of Appeals affirming the lower courts’ final judgments rejecting Tenant’s appeal.
Specifically, the Court ruled that Tenant’s frustration of purpose and impossibility of performance arguments both failed because the lease allocated the risk of temporary closings (such as resulted from the Exec. Orders restricting retail sales and non-essential construction), and thereby allocated the risk of loss expressly to the Tenant. Moreover, the Court found that the pandemic was a natural occurrence and the temporary governmental shutdowns were changes to applicable law that were clearly foreseeable under the terms of the lease. The Court also rejected Tenant’s argument that the case was different from other reported cases rejecting these COVID defenses because the lease was signed in January 2020, and had not yet commenced when COVID hit NYC, finding that the Tenant failed “to explain why this timing should eclipse the ‘plain meaning’ of the Lease, which . . . unmistakably requires Tenant to pay rent in such circumstances.”
Should you like a copy of this decision or would like further information, please do not hesitate to contact us.