1600 Walnut Corporation v. Cole Haan Company Store

530 F. Supp. 3d 555 (2021)

Facts

D entered into a long-term commercial lease with P in 2004. In 2014, the parties agreed to extend the lease through March 31, 2025. Under the force majeure clause of the lease: If either party is delayed, hindered, or prevented from the performance of an obligation because of strikes, lockouts, labor troubles, the inability to procure materials, power failure, restrictive governmental laws or regulations, riots, insurrection, war or another reason not the fault of or beyond the reasonable control of the party delayed (collectively, 'Force Majeure'), then performance of the act shall be excused for the period of the delay; provided, however, the foregoing shall not: (A) relieve Tenant from the obligation to pay Rent, except to the extent Force Majeure delays the Commencement Date; and (B) be applicable to delays resulting from the inability of a party to obtain financing or to proceed with its obligations under this Lease because of a lack of funds. The lease also states that it will automatically terminate if 'the entire Premises is appropriated or taken under the power of eminent domain by any public or quasi-public authority or conveyed in lieu thereof.' D permanently vacated the storefront in March 2020 and has not paid rent since that time. On March 23, 2020, Pennsylvania Governor's COVID-19 executive order prohibited D from operating the store, but after June 5, 2020 D and other retailers in Philadelphia were permitted to reopen with restrictions. D did not reopen and did not restart rental payments. P sued D to recover arrearages owed, base rent, additional rent, late fees, interest, attorneys' fees, and costs. P filed six counterclaims: (I) for a declaratory judgment discharging its duties under the lease for frustration of purpose; (II) in the alternative, for a declaratory judgment for rent abatement for frustration of purpose; (III) for a declaratory judgment discharging Cole Haan's duties under the lease for impossibility or impracticability of performance; (IV) in the alternative, for a declaratory judgment for rent abatement for impossibility or impracticability of performance; (V) for a declaratory judgment discharging Cole Haan's obligations under the lease for failure of consideration; and (VI) for a declaratory judgment of the contractual termination of the lease because the government's COVID-19 restrictions constituted a taking under the Fifth Amendment. P brings this motion to dismiss all of P's Counterclaims.