Tour de Force: COVID-19 Continues to Impact Leases While Cases Implicating Force Majeure Await Decisions

Pillsbury Winthrop Shaw Pittman LLP

Real estate litigation and landlord-tenant disputes continue to dominate the COVID-19 force majeure litigation landscape. Meanwhile, several COVID-related cases are teed up for judicial decisions implicating force majeure clauses.

Real estate litigation continues, presenting new force majeure arguments.
Seven months into the pandemic, the real estate sector continues its struggle to conduct day-to-day commercial operations in light of the continued spread of COVID-19 and varying degrees of government-imposed shutdowns. Recently, we have seen parties assert creative arguments to oppose or invoke force majeure defenses, including the following:

  • Force majeure clause does not excuse damages caused by third-party interference. Tenant hotel management company has sued its landlord under an alleged warranty to provide unfettered access to its offices, arguing that this warranty guaranteed third parties would not impair its access to the building, for any reason. Because the government has prevented the tenant’s access, not the landlord, Plaintiff tenant argues that the force majeure provision does not excuse such third-party interference and the landlord is liable for its damages. DHG Mgmt. Co. v. French Partners LLC, et al., No. 654319/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020).
  • Reformation and rescission based upon “implied force majeure clause.” Plaintiff tenant, who moved from California to Long Island City and entered into a residential lease on March 2, 2020, has sued for rescission, arguing the COVID-19 pandemic “has caused the lease to be frustrated” with tenant having “no ability to use the Demised Premise or to generate income out of obvious health and safety concerns.” In addition to claims for impossibility and frustration of purpose, tenant seeks reformation of the lease to include an “implied force majeure clause,” and rescission based upon that implied clause. Williams v. 4545 East Coast LLC, No. 713984/2020 (N.Y. Sup. Ct. Queens Cty. 2020).
  • Judicial declaration sought that COVID-19 is a force majeure event. Similarly, a fitness center, which was forced to close its premises due to government shutdowns, seeks a declaration that COVID-19 constitutes a force majeure event casualty, thereby suspending its obligation to pay rent during the COVID-19 pandemic, despite the absence of a force majeure provision in the lease. Change Your Life LLC v. 9E16 by 1771 Holdings LLC, No. 157335/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020).
  • Force majeure clause only covers “acts of disorder,” not acts of “law and order.” Plaintiff landlord sued its tenant, Discovery Channel, for rent after it overstayed following the lease’s expiration, rejecting Discovery Channel’s assertion that the contract’s force majeure clause excused its obligation to vacate the property because government restrictions prevented it from vacating. Landlord argues that the clause—which excuses performance in the event of “strikes, acts of God, shortages of labor or materials, war, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party”—does not apply, as these enumerated events are “acts of disorder,” but the government order at issue was an event or act of “law and order.” 850 Third Avenue Owner, LLC v. Discovery Commc’ns, No. 654148/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020)

Several cases are awaiting decisions on motions requiring application of force majeure provisions.

Meanwhile, several COVID-related cases are teed up for judicial decision based on fully briefed dispositive motions with force majeure implications.

  • Scope of force majeure provision in breach of contact cases. Plaintiff Brazilian bank invoked a credit card branding agreement’s force majeure clause, arguing COVID-19 resulted in American Airline’s temporary cessation of flights to Brazil, warranting termination of the agreement. American has moved to dismiss, arguing that there is no contractual obligation to provide uninterrupted service to Brazil, and therefore no breach triggering the force majeure clause. Plaintiff argues that flying to Brazil without interruption is a fundamental assumed obligation under the contract, even if not explicitly stated. Banco Santander (Brasil), S.A. v. American Airlines, Inc., No. 20-cv-3098 (E.D.N.Y. 2020). See also JN Contemporary Art LLC v. Phillips Auctioneers, LLC, No. 1:20-cv-04370-DLC (S.D.N.Y. 2020) (Defendant auction house has moved to dismiss plaintiff’s breach of contract claim arising from defendant’s termination of consignment agreement, arguing force majeure provision justified termination where scheduled auction was prohibited by COVID-related governmental orders.).
  • Whether the existence of a force majeure clause forecloses tenant’s impossibility and frustration of purpose grounds for rescission. Where the lease’s force majeure clause excludes the payment of rent from those obligations that may be excused upon certain force majeure events, Defendant landlord argues common law defenses may not be used to rescind lease. Williamsburg Climbing Gym Co. LLC and Fifth Concerto Holdco, Inc. v. Ronit Realty LLC, No. 1:20-cv-02073 (E.D.N.Y. 2020). See also The Gap, Inc. v. Ponte Gadea New York LLC, No. 1:20-cv-04541 (S.D.N.Y. 2020) (Defendant landlord argues that force majeure clause bars Gap’s reliance on doctrines of frustration of purpose and impossibility.).
  • Whether the absence of a force majeure clause forecloses tenant’s impossibility and frustration of purpose grounds for rescission. Defendant landlord argues that the absence of a force majeure clause in a lease between sophisticated parties precludes reliance on a force majeure event (such as the governmental lockdown restrictions resulting from the COVID-19 pandemic) in support of common law excuse doctrines such as impossibility and frustration of purpose. Victoria’s Secret Stores, vs. Herald Square Owner LLC, No. 651833/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020).

Developing COVID-19 Force Majeure Case Law

(updates since the last issue in bold below)

FEDERAL

Central District of California (Extension of closing date)

Pacific Collective, LLC v. Exxonmobil Oil Corp., No. 2:20-cv-03887-ODW-RAO (C.D. Cal. 2020) (Commercial real estate buyer seeks to extend closing date of real estate purchase on basis that Safer-At-Home orders constitute force majeure as defined in purchase agreement; Removed from California state court on April 29, 2020; Case transferred from Judge John A. Kronstadt due to self-recusal.) (04/03/2020 Complaint; 04/30/2020 Order to Reassign Case; 05/05/2020 Order Returning Case for Reassignment upon Recusal)

Southern District of Florida (Excuse from rent payment)

Palm Springs Mile Assocs., LTD. v. The Men’s Wearhouse, Inc., No. 20-cv-21965 (S.D. Fla. 2020) (Men’s Warehouse invokes force majeure defense against breach of contract claim, alleging its obligation to pay rent was excused by COVID-19; Suit voluntarily dismissed on June 1, 2020.)
(05/11/2020 Complaint; 06/01/2020 Notice of Voluntary Dismissal)

Northern District of Illinois (Excuse from rent payment)

In re Hitz Rest. Grp., No. 1:20-br-05012 (Bankr. N.D. Ill. 2020) (Restaurant-group tenant invoked “governmental action” phrase of force majeure clause to argue rent obligation was excused by the Illinois Governor’s Coronavirus Order shutting down on-premises dining, theorizing that the Order prevented it from operating its business; Court agreed in part, holding tenant’s rent obligation would be reduced on a pro rata basis in accordance with the decrease in revenues from its inability to offer on-premises dining; Case dismissed on July 21, 2020.) (04/27/2020 Creditors’ Motion for Relief from Automatic Stay; 05/12/2020 Debtor’s Response; 05/26/2020 Creditors’ Reply; 06/02/2020 Memorandum Opinion) (See our prior article on this decision and a recent in‑depth analysis of this decision.)

Eastern District of New York (Excuse from transaction closing; Excuse from contract performance)

Gomel Capital Partners LLC v. 601 NE 29 Drive, LLC, et al., No. 1:20-cv-01922-FB-JO (E.D.N.Y. 2020) (Plaintiff seeks to terminate real property purchase contract and to recoup $275,000 deposit, alleging that the “outbreak of the COVID-19 global pandemic is a Force Majeure event, a quintessential ‘act of God’,” and invoking contractual provision that permits termination when a Force Majeure event prevents performance of the contract for “more than 30 days beyond the Closing Date;” Defendant’s Answer was due on May 20, 2020 but to date has not been filed; Court ordered that no later than July 3, 2020, one of the following events must occur: (a) the defendant must file an answer, (b) the parties must file a stipulation extending the defendant’s time to answer, or (c) the plaintiff must file a request for a certificate of default; Case voluntarily dismissed on July 13, 2020.) (04/27/2020 Complaint; 07/13/2020 Letter Motion by Plaintiff Informing Court of Settlement; 07/13/2020 Notice of Voluntary Dismissal with Prejudice)

Williamsburg Climbing Gym Co. LLC and Fifth Concerto Holdco, Inc. v. Ronit Realty LLC, No. 1:20-cv-02073 (E.D.N.Y. 2020) (Tenant seeks rescission and declaration that it lawfully terminated lease pursuant to common law doctrines of impossibility and frustration of purpose because COVID-19 pandemic and Governor’s executive orders mandated business closure and stoppage of construction; landlord asserts breach of contract counterclaim on basis that that lease’s force majeure clause expressly carves out rent payment obligations; tenant argues that force majeure clause is inapplicable because pandemic is not an enumerated event and frustration/impossibility are separate doctrines; counterclaims and answer amended on other grounds.) (05/06/2020 Complaint; 06/24/2020 Answer and Counterclaims; 06/24/2020 Defendant’s Pre-Motion Letter to the Court Re: Judgment on the Pleadings; 07/01/2020 Plaintiff’s Pre-Motion Response Letter to Court re: Judgment on the Pleadings; 07/23/2020 Amended Counterclaims; 08/06/2020 Answer to Amended Counterclaims; 08/14/2020 Plaintiff’s Pre-Motion Letter to the Court Re: Intent to file a Motion for Summary Judgement; 8/20/2020 Defendant’s Pre-Motion Letter to the Court Re: Plaintiff’s Intent to file a Motion for Summary Judgement)

Banco Santander (Brasil), S.A. v. American Airlines, Inc., No. 20-cv-3098 (E.D.N.Y. 2020) (Plaintiff seeks declaration that it is entitled to terminate pursuant to force majeure clause that covers “act of God” and “act of government”; Defendant argues that Plaintiff failed to state a claim because the agreement contemplated the force majeure event and those provisions govern; Plaintiff argues that it sufficiently plead that the agreement does not contemplate the force majeure event and is entitled to such declaration.) (07/10/2020 Complaint); 08/24/2020 Supplemental Complaint; 09/04/2020 Defendant’s Motion to Dismiss for Failure to State a Claim; 09/25/2020 Plaintiff’s Memorandum in Opposition to Motion to Dismiss for Failure to State a Claim, refiled under seal 10/07/2020; 10/09/2020 Defendant’s Reply in Support of Motion to Dismiss)

Southern District of New York (Excuse from contract performance; Excuse from payment obligation)

D’Amico Dry D.A.C. v. McInnis Cement Inc., No. 1:20-cv-03731-VEC (S.D.N.Y. 2020) (Shipping company alleges breach of contract against cement supplier and seeks maritime attachment of assets pending arbitration on the basis that supplier defaulted prior to COVID-19 and then invoked force majeure clause as a pretense to terminate; Court entered ex parte order of attachment and denied cement supplier’s motion to vacate same; Parties entered into a confidential settlement agreement.) (05/14/2020 Complaint; 05/25/2020 Defendant’s Motion to Vacate the Process of Maritime Attachment; 06/03/2020 Plaintiff’s Opposition to Defendant’s Motion to Vacate the Process of Maritime Attachment; 06/30/2020 Opinion Order Denying Motion to Vacate the Process of Maritime Attachment; 09/02/2020 Plaintiff’s Consent Letter; 09/03/2020 Memo Endorsement of Plaintiff’s Consent Letter; 09/04/2020 Order of Dismissal with Prejudice)

E2W, LLC v. Kidzania Operations, S.A.R.L., No. 1:20-cv-02866-ALC (S.D.N.Y. 2020) (Franchisee invokes force majeure clause in franchise agreement, alleging that government shutdown orders excuse its payment obligations and obligation to open an additional franchise location; Court, without any reasoning, granted franchisee’s application and compelled the parties to maintain the status quo during the pendency of their arbitration; parties arbitrating claims in the ICC.) (04/06/2020 Complaint; 05/11/2020 Order Granting Preliminary Injunction; 05/22/2020 Answer; 09/29/2020 Notice of Case Reassignment)

The Gap, Inc. v. Ponte Gadea New York LLC, No. 1:20-cv-04541 (S.D.N.Y. 2020) (Tenant seeks, inter alia, rescission/cancellation of lease, arguing that COVID-19 crisis and civil orders constitute a “casualty” within the meaning of the force majeure clause causing a permanent abatement of rent and the lease to terminate; Landlord counterclaims alleging breach of contract and argues that COVID-19 and civil orders are not within the scope of the force majeure clause and that the force majeure clause does not excuse contractual rent payment obligation; Tenant answers with general denials of landlord’s allegations regarding the force majeure clause and asserts affirmative defenses on other grounds; Tenant seeks stay pending decision by multidistrict litigation panel to consolidate this and 32 other substantively similar actions pending against Tenant in federal district courts; multidistrict litigation panel denied transfer.) (06/12/2020 Complaint; 07/07/2020 Answer and Counterclaims; 07/28/2020 Answer to Counterclaim; 08/11/2020 Plaintiff’s Motion to Stay Pending Decision by Multidistrict Litigation Panel to Accept Transfer of Federal Court Actions; 09/18/2020 Defendant’s Memorandum of Law in Further Support of Motion for Summary Judgment; 09/25/2020 Reply Memorandum of Law)

Hunter Commc’ns., Inc. v. Panasonic Avionics Corp., No. 20-cv-03434 (S.D.N.Y. 2020) (Defendant asserts force majeure defense against breach of contract claim brought by satellite communications provider, alleging that COVID-19 excused payment obligations under master service agreement for satellite bandwidth capacity services; Plaintiff argues that force majeure defense should be stricken because Defendant did not allege that payment breaches were result of COVID-19; Defendant file notice of intent to file amended answer; the Court grants Plaintiff’s motion to dismiss and then dismisses the case upon a settlement agreement.) (05/01/2020 Complaint; 06/26/2020 Answer; 07/17/2020 Plaintiff’s Letter Motion; 07/22/2020 Defendant’s Letter Reply; 08/21/2020 Amended Answer; 09/04/2020 Plaintiff’s Second Letter Motion; 09/11/2020 Defendant’s Second Letter Reply; 09/15/2020 Order Granting Second Letter Motion; 10/05/2020 Order of Dismissal)

JN Contemporary Art LLC v. Phillips Auctioneers, LLC, No. 1:20-cv-04370-DLC (S.D.N.Y. 2020) (Plaintiff seeks preliminary injunction preventing Defendant from invoking clause that allowed it to terminate consignment agreement if performance were delayed due to “circumstances beyond [the parties’] reasonable control,” and argues that Defendant’s decision to terminate was not caused by the pandemic but rather was the result of a deliberate business decision; Defendant argues that the pandemic is within the scope of the force majeure clause because it is a “natural disaster” and that performance is excused because the specific auction noted in the contract was postponed; Court denied mandatory injunction; Plaintiff amended complaint on other grounds; Defendant moved to dismiss the Complaint arguing that Plaintiff did not state a claim for breach of the agreement because Defendant’s performance was excused due to the force majeure clause; Plaintiff argues that the specific auction noted in the contract was not date nor site specific so Defendant was not prevented from performing and COVID-19 and government regulations were not specifically listed in the force majeure clause.) (06/09/2020 Complaint; 06/12/2020 Plaintiff’s Memorandum of Law in Support of Motion for Preliminary Injunction; 06/23/2020 Amended Complaint; 06/23/2020 Plaintiff’s Amended Memorandum of Law in Support of Motion for Preliminary Injunction; 07/02/2020 Defendant’s Memorandum in Opposition to Plaintiff’s Order to Show Cause for Preliminary Injunction and Temporary Restraining Order; 07/09/2020 Plaintiff’s Reply in Further Support of Motion for Preliminary Injunction; 07/15/2020 Order Denying Temporary Restraining Order and Preliminary Injunction; 07/31/2020 Plaintiff’s Second Amended Complaint; 08/28/2020 Defendant’s Motion to Dismiss Plaintiff’s Second Amended Complaint; 09/18/2020 Plaintiff’s First Memorandum of Law in Opposition to Motion to Dismiss; 10/02/2020 Defendant’s Reply Memorandum of Law)

Viamedia, Inc. v. WideOpenWest Finance, LLC, No. 1:20-cv-04064-VM (S.D.N.Y. 2020) (Plaintiff seeks preliminary injunction enjoining defendant from terminating television advertising management agreement, alleging that plaintiff’s late payments under agreement are excused based on “COVID-19 and the attendant economic crises prompted by government ordered lock downs and stay at home orders, which qualify as both acts of God and/or events beyond the reasonable ability of [plaintiff] to control”; Court denied preliminary injunctive relief; Parties commenced arbitration and award issued under seal.) (05/27/2020 Plaintiff’s Memorandum of Law in Support of Motion for Preliminary Injunction; 06/19/2020 Amended Complaint; 06/22/2020 Order Denying Temporary Restraining Order and Preliminary Injunction; 09/18/2020 Defendant’s Letter Motion to Seal Arbitration Award; 09/22/2020 Order Granting Letter Motion to Seal; 09/24/2020 Defendant’s Motion to Confirm Arbitration Award)

Northern District of Texas (Excuse from refund obligation, Excuse from lease obligations)

W.L. Petrey Wholesale Co., Inc. v. V2 Incentives, LP, No. 20-cv-00447-A (N.D. Tex. 2020) (Plaintiff seeks refund of amounts paid to travel broker, arguing that force majeure clause requiring refund was triggered by government lockdowns and decrees that made trip impossible; Defendant argues affirmative defenses of repudiation, material breach, and failure to mitigate.) (05/19/2020 Amended Complaint; 06/16/2020 Answer)

Hibbett Sporting Goods, Inc. v. Weatherford Dunhill LLC c/o Dunhill Prop. Mgmt. Services, Inc., No. 4:20-cv-00607-O (N.D. Tex. 2020) (Tenant seeks declaratory judgment that rental and payment obligations and any obligation to continuously operate within mall were excused while Governor’s order mandated closure of the mall; Landlord moves for dismissal on procedural grounds.) (06/10/2020 Complaint; 07/20/2020 Motion to Dismiss on procedural grounds)

Southern District of Texas (Excuse from transaction closing)

Khan v. Cinemex USA Real Estate Holdings, Inc., No. 4:20-cv-01178 (S.D. Tex. 2020) (Plaintiff seeks, inter alia, specific performance ordering defendant to close on cinema chain purchase transaction, arguing that defendant’s reasons for refusing to close that relate to COVID-19 are invalid because the contract was negotiated after the pandemic was declared and the Material Adverse Effect clause expressly excludes pandemics; case automatically stayed because defendant filed for Chapter 11 bankruptcy.) (04/02/2020 Complaint; 06/01/2020 Order Staying the Case due to Defendant filing bankruptcy)

Eastern District of Virginia (Grounds for contract termination)

Sodexo Operations, LLC v. Va. Aquarium & Marine Sci. Ctr. Found., Inc., No. 2:20-cv-00309-AWA-RJK (E.D. Va. 2020) (Food services provider exercised right to terminate contract pursuant to “act of God” and “governmental policy” terms in force majeure clause and alleges defendant’s refusal to reimburse plaintiff for unamortized portion of capital investments is a breach of their contract.) (06/19/2020 Complaint) (8/18/2020)(Answer to Complaint and Affirmative Defenses) (8/28/2020)(Motion to Dismiss pursuant to proposed Order stating that parties entered into a Settlement Agreement) (9/3/2020 (case dismissed with prejudice)

STATE

Delaware (Excuse from transaction closing)

Forescout Technologies, Inc. v. Ferrari Grp. Holdings, L.P., No. 2020-0385 (Del. Ch. 2020) (Plaintiff/target asserts breach of contract and specific performance claims against defendant/buyer for failure to close merger deal worth $1.9 billion, on ground that COVID-19 does not constitute a Material Adverse Event permitting buyer’s termination of merger agreement; Buyer asserts declaratory judgment counterclaims that, inter alia, target’s financial troubles caused by COVID‑19 constitute a Material Adverse Event because, notwithstanding the explicit exclusion of “epidemics” and “pandemics” as Material Adverse Events, target’s financial troubles are disproportionate in comparison to other similar companies and therefore fall within the “materially disproportionate adverse effect” savings clause; trial is scheduled to start on July 20, because equitable relief will not be possible after August 6.) (05/19/2020 Complaint; 06/05/2020 Counterclaim; 07/14/2020 Letter Opinion re: Interlocutory Appeal)

Florida (Extension of closing date)

LFG Acquisitions, LLC v. CSPS Hotel Inc., No. 107048560 (Fla. Cir. Ct. Hillsborough Cty. 2020) (Plaintiff seeks to delay closing of real estate sale pursuant to force majeure provision in purchase agreement.) (05/05/2020 Complaint; 05/29/2020 Answer) (10/03/2020 (Rested Answer to Complaint)

New York (Grounds for contract termination, Excuse from default)

850 Third Avenue Owner, LLC v. Discovery Commc’ns, No. 654148/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff-landlord sued defendant-tenant for unpaid rent after defendant-tenant allegedly overstayed at the property once its lease expired. The force majeure clause in the lease provides that performance is excused by “strikes, acts of God, shortages of labor or materials, war, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party.” Plaintiff classifies these events as “acts of disorder,” and has argued that the COVID-19 restrictions implemented by the State government do not constitute an “act of disorder.” Also, even if the government restrictions constitute a force majeure event under the lease, Plaintiff-landlord argues that it did not cause defendant’s inability to move out at the time the lease expired, as moving companies were considered essential businesses under the government’s stay at home order) (08/31/2020 Complaint)

Bath & Body Works, LLC v. 304 PAS Owner LLC Successor, No. 651836/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff seeks rescission of commercial property lease and declaration the lease is unenforceable because COVID-19 and related government mandated shutdowns frustrated the purposes of the lease. Defendant argues plaintiff tenant recognized that a variety of “force majeure” events might occur, including those forming the bases of plaintiff’s claims, but specifically agreed in a lease rider that such events would only permit delayed performance, not excuse payment of any monetary sums due under the lease and its supplemental rider.) (06/08/2020 Complaint; 06/29/2020 Answer and Counterclaims) (8/19/2020 Reply to Counterclaims)

Change Your Life LLC v. 9E16 by 1771 Holdings LLC, No. 157335/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff-fitness center seeks declaration that its obligation to pay rent to defendant-landlord should be suspended during COVID-19 pandemic, as plaintiff was forced to close its premises due to governmental decree) (09/11/2020 Complaint) (9/11/2020 Affidavit in Support of Order to Show Cause) (10/02/2020 Affirmation in Opposition to Order to Show Cause) (10/06/2020 (Answer with Counterclaims) (10/13/2020 Affirmation in Reply to Order to Show Cause)

D2 Mark LLC v. OREI VI Investments LLC, No. 652259/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Hotel group sought, inter alia, to preliminarily enjoin junior creditor from foreclosing after hotel group missed one payment obligation due to COVID-19, arguing that loan agreement expressly excused defaults occurring “in connection with” a force majeure event; Court enjoined junior creditor from holding a sale before July 23 and ordered junior creditor to issue new, commercially reasonable notice of sale.) (06/06/2020 Complaint; 06/23/2020 Decision and Order on Plaintiff’s Order to Show Cause; 08/03/2020 So-Ordered Stipulation Discontinuing the Action with Prejudice)

DHG Mgmt. Co. v. French Partners LLC, et al., No. 654319/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff-tenant sued landlord for breaching the lease agreement, which provided that landlord would provide tenant with access to the leased property seven days a week. Plaintiff-tenant argues that this promise was made, not just as to the landlord, but as to the “world.” When the government shutdown occurred, the landlord claimed that this was a force majeure event, excusing landlord’s obligation to provide consistent access to the leased premises. Plaintiff-tenant argues that the force majeure clause is inapplicable because plaintiff is not claiming that the landlord itself breached the covenant; rather, the plaintiff’s argument is that landlord issued a warranty as to third parties impairing Tenant’s access, and here, the government has prevented tenant’s access and the landlord is thus liable for those damages) (09/09/2020 Complaint) (10/05/2020 Notice of Motion to Dismiss and Affirmation in Support of Motion to Dismiss) (10/12/2020 Affirmation in Opposition to Motion to Dismiss)

Iluka Resources Limited v. Chemours International Operations Sarl, et al., No. 653398/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Supplier seeks, inter alia, breach of contract damages and declaratory relief, arguing that the COVID-19 pandemic is not among the specified force majeure “events” and did not actually prevent buyer from accepting and paying for shipments of materials.) (08/06/2020 Complaint) (10/05/2020 Motion to Dismiss and Memorandum of Law in Support of Motion to Dismiss)

N888JK Ltd. v. Equiom (Isle of Man) Ltd., No. 652122/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff seeks declaratory relief that it may keep a deposit paid pursuant to a used aircraft purchase agreement on the grounds that defendant unilaterally terminated the agreement; defendant asserts COVID-19 as a force majeure event permitting termination and demanded return of deposit.) (05/28/2020 Complaint; 07/22/2020 Answer with Counterclaims) (8/11/2020 Reply Counterclaims)

Roslyn Events Corp. v. Ber Dur Realty Corp., No. 607968/2020 (N.Y. Sup. Ct. Nassau Cty. 2020) (Tenant seeks declaratory relief and to enjoin landlord from holding tenant in default of commercial lease, arguing that COVID-19 pandemic and New York City regulations triggered the force majeure clause and excused rent payment obligations.) (08/05/2020 Complaint; 08/05/2020 Order to Show Cause)

Simpson Thacher & Barlett LLP v. VBGO 425 Lexington LLC, No. 653415/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff/tenant seeks a declaration that it is entitled to rent abatement under Force Majeure provision of commercial lease, alleging that it was forced to vacate its premises for a period of sixty (60) days due to a government order and a “national or other public emergency”) (07/27/2020 Complaint) (8/19/2020 Reply to Counterclaims)

Trustees of Columbia Univ. v. Edison Ballroom LLC, No. 156789/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff and defendant entered into an agreement for an event known as the “Barrister’s Ball,” which was scheduled to take place on March 28, 2020. The contract contained a force majeure clause stating that neither party would be responsible for failure to perform and either party may terminate the contract due to “Force Majeure or Acts of God, including, but not limited to force majeure, circumstances beyond its reasonable control, strike, governmental authority, terrorism, war...” In the event of an force majeure event, defendant was obligation to “promptly refund 100% of all payments made to [defendant] including the otherwise non-refundable deposit.” Defendant has refused to return plaintiff’s deposit, despite plaintiff being forced to cancel the event due to COVID-19 and governmental restrictions) (08/26/2020 Complaint) (9/28/2020 Answer with Counterclaims) (10/14/2020 Reply to Counterclaims)

Victoria’s Secret Stores, vs. Herald Square Owner LLC, No. 651833/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff seeks to annul commercial property lease under doctrines of frustration of purpose and impossibility resulting from COVID-19 and related government mandated shutdowns; Defendant argues the lease explicitly allocated the risk of plaintiff tenant being unable to occupy the premises in the absence of a force majeure clause in the lease; Defendant seeks summary judgment on the same grounds; Plaintiff opposes summary judgment, arguing that the absence of a force majeure clause does not preclude frustration of purpose and impossibility excuses; Defendant argues in further support of summary judgment that the lease allocated risk for this type of harm, and the precise cause of harm is irrelevant.) (06/08/2020 Complaint; 06/29/2020 Answer and Counterclaims; 06/29/2020 Defendant’s Memorandum of Law in Support of Motion for Summary Judgment; 07/29/2020 Plaintiffs’ Memorandum of Law in Opposition to Motion for Summary Judgment; 08/13/2020 Defendant’s Reply Memorandum of Law in Further Support of Defendant’s Motion for Summary Judgment) (8/19/2020 Reply to Counterclaims)

Valentino U.S.A., Inc. v. 693 Fifth Owner LLC, No. 652605/2020 (N.Y. Sup. Ct. N.Y. Cty. 2020) (Plaintiff/tenant seeks a declaration that the lease of its commercial property has been frustrated by the COVID-19 pandemic and related Executive Orders, and in the alternative, seeks a declaration that its performance under the lease agreement has been rendered impossible; Defendant/landlord seeks dismissal of the Complaint on the grounds that the lease agreement contains a clause allocating the risk of closure to the plaintiff/tenant in the event of “unavoidable delays”, defined to include “restrictive governmental laws or regulations ... acts of God ... or other reason of a similar or dissimilar nature.”) (06/21/2020 Summons and Complaint; 07/27/2020 Defendant’s Memorandum of Law in Support of Motion to Dismiss) (9/14/2020 Plaintiff’s Opposition to Motion to Dismiss) (09/28/2020 Defendant’s Reply Memorandum of Law in Support of Motion to Dismiss)

Williams v. 4545 East Coast LLC, No. 713984/2020 (N.Y. Sup. Ct. Queens Cty. 2020) (Plaintiff-tenant moved from California to Long Island City and entered into a lease agreement with defendant-landlord for a residential apartment on March 2, 2020. The COVID-19 pandemic “has caused the lease to be frustrated” with plaintiff-tenant having “no ability to use the Demised Premise or to generate income out of obvious health and safety concerns.” In addition to claims for impossibility and frustration of purpose, tenant seeks reformation of the lease to include an “implied force majeure clause”, and rescission based upon that implied clause.) (08/25/2020 Complaint) (10/09/2020 Answer with Counterclaims)

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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