Blaming Business Losses on Landlord’s Failure to Plow Snow Is ‘Mere Speculation’

What Happened: A tenant leased property on a pair of shopping center outlots to operate restaurants. The ground lease required the tenant to pay a pro-rata share of the CAM costs the landlord incurred to keep the common areas in good repair. The landlord sold the property to a new owner who notified and demanded that the tenant pay outstanding balances due on both outlots or face eviction. The tenant didn’t pay, and the landlord evicted it.

The tenant then sued the landlord for allegedly cheating it on CAM charges and failing to maintain the common areas, claiming that its failure to provide snow removal and adequate lighting in the parking lots cost the restaurants “thousands of dollars per month in revenue and hundreds of thousands of dollars or more of losses over time.” The lower court granted the landlord summary judgment and dismissed the case without a trial.

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

Reasoning: The court agreed with the trial court’s determination that the tenant didn’t specify exactly how the landlord failed to conduct the required common area maintenance. And even if it had, it didn’t demonstrate how that failure caused damages to its businesses. An unkempt shopping center might result in the loss of some business. But snow removal and properly lit parking areas “have limited applicability” to the tenant’s operations because lighting is an issue only at night and snow is an issue only during winter months, according to the court. “Nowhere do the affidavits, for example, tie particular instances of poor lighting or snowy parking areas with lower-than-expected revenues at the restaurants.” The assertion of business losses “amounted to mere speculation” and wasn’t enough to create a question of material fact justifying a trial, the court concluded.  

• JRR Props. Westland, LLC v. Westland Mall Realty, LLC, 2023 Mich. App. LEXIS 7506, 2023 WL 6931924