KMWB’s Catherine Helwig successfully cross-moved for summary judgment on a tenant’s breach of a commercial lease and the Hon. Nancy Bannon awarded the landlord damages in the sum of $2.2 million dollars based on a rent acceleration clause in the lease. The Judge denied the tenant’s motion for summary judgment dismissing the complaint, and rejected the tenant’s argument that it was released from liability under the lease because it had vacated the premises. The Court held that the tenant’s alleged surrender and termination of the tenant’s obligations under the lease had to be in a writing signed by the landlord.
The tenant argued that several unilateral letters it sent to the landlord advising the landlord of the date it intended to move out met that requirement, but the Judge held that because they were not signed by the landlord, and concerned only the good guy guaranty, they did not terminate the tenant’s obligations under the lease. The Judge also granted the landlord’s request for attorney’s fees, and referred the amount of the fees to be determined at a Special Referee hearing.
As more commercial tenants may choose to close their businesses and vacate their space in the wake of Covid-19, a landlord should be careful in its dealings with the tenant not to enter into any agreement that may be interpreted as a termination of the tenant’s obligations under the lease.
Please do not hesitate to call our office and speak with Cathy Helwig if you have any questions about this matter.