Court: No ‘Prevailing Party’ Entitled to Attorneys’ Fees in COVID Rent Case

What Happened: Who won the legal showdown between the Florida mall and the retail tenant that cited the force majeure clause of its lease as an excuse not to pay rent in May due to business losses resulting from government COVID-19 shutdown orders? At stake was more than pride. Under terms of the lease, whoever was the winner, or “prevailing party,” would be entitled to tens of thousands of dollars in attorneys’ fees and legal costs.  

Ruling: The Florida federal court found that neither side was the prevailing party.  

Reasoning: Normally, courts are supposed to find that one of the parties to a lease prevailed when there’s a prevailing party attorney’s fee provision in the contract unless “compelling circumstances” dictate otherwise. The “compelling circumstances” exception applied in this case, said the Florida court. First of all, there was no substantive ruling because the sides reached a settlement. The fact that the tenant agreed to pay rent under the settlement proves that we were right and were the prevailing party, argued the landlord; the fact that the landlord agreed to voluntarily dismiss the lawsuit shows that it knew it had no case and made us the prevailing party, countered the tenant. But the court wasn’t persuaded by either argument and refused to declare a prevailing party.   

• Palm Springs Mile Assocs. v. Ross Dress for Less, Inc., 2020 U.S. Dist. LEXIS 197312, 2020 WL 6262980