No Slam Dunk that COVID Left Restaurant Premises ‘Untenantable’

What Happened: It’s become a familiar pattern. A landlord sues to evict a restaurant tenant for not paying rent. The restaurant cites COVID-19 as an excuse and asked the court to dismiss the case. But what makes this case from Illinois different is that the tenant, Ruth’s Chris Steak House, relied not on force majeure, frustration of purpose, or impossibility, but a provision of the lease specifically relieving it of its rent payment duties in the event that the premises became “totally untenantable,” defined as occurring when “the Premises are ordered closed by relevant governmental authorities through no fault of Lessee.” Accordingly, the tenant asked the court to dismiss the landlord’s eviction case.

Ruling: The Illinois federal court refused to grant summary judgment and allowed the landlord to take its claim to trial.

Reasoning: The second part of the “totally untenantable” clause stipulated that rent isn’t totally excused but only abated when the premises become only “partially untenantable”—that is, where some or “any substantial portion” of the property remains open in the tenant’s reasonable business judgment. The landlord’s argument that the clause didn’t apply because Ruth’s Chris made a business decision to close down even though government COVID-19 orders didn’t require it to and allowed for operating at limited capacity and offering takeout, curbside pickup, and delivery had enough merit to warrant a trial, the court concluded.

• 40 W. Hubbard v. Rcsh Operations, 2021 U.S. Dist. LEXIS 75710, 2021 WL 1546424