Owner's Denial of Tenant's Access to Elevators Breached Lease

Facts: A restaurant tenant signed a lease for space in a food court area of an office building. The tenant sued the building's owner for fraud and breach of contract, alleging that its food and supply delivery people were being refused access to the entrance of the building and the elevators, in violation of its lease, which provided that the tenant would have access to the entire building.

The tenant also complained that the owner leased two full floors of the building to a for-profit café, in violation of its lease, which provided that the food court area would be the only location within the building where food would be sold other than another restaurant tenant that leased space in the building lobby.

The tenant asked a Pennsylvania trial court for a judgment in its favor without a trial. The owner asked the trial court to dismiss the case.

Decision: The trial court granted judgment in the tenant's favor on its first claim and dismissed its second claim.

Reasoning: The trial court determined that it's clear from the “explicit and unambiguous” language of the lease that the owner leased to the tenant—in addition to the premises—the “right of nonexclusive use of elevators, stairways, loading docks, food market seating area, concourses, lobbies, and corridors as they may exist from time to time in the building for common use and access to the premises.” The trial court pointed out that the “Public Areas” provisions in the lease gives the tenant and “its agents, employees and customers, a non-exclusive license to use the Common Areas.” Common areas are defined in the lease as “the portions of the building that are not leasable to tenants and are intended for the common use and benefit of the building's tenants and users of the building.”

Based on those lease provisions, the trial court determined that the tenant had a valid claim for breach of contract for denial of access to elevators.

However, the trial court disagreed with the tenant's assertion that the owner had breached the lease by permitting a restaurant to operate in the upper, non-food court floors of the building. The trial court pointed out that “the language of the contract does not support the tenant's allegations of a breach.” The trial court explained that the lease “makes no representations that food vendors would only be located on the street and concourse levels of the building or that the upper floors were solely restricted to office space.”

However, the lease contains a restriction as it pertains to the sale of retail pizza in the food court. That provision stated: “except as otherwise specifically set forth in this section, from and after the date of this Lease and for so long as Tenant is not in default hereunder beyond any applicable cure period, Landlord shall not enter into any lease for any space in the Concourse Gourmet Food Market, which permits the primary use of the premises demised therein to be the sale at retail of pizza.”

But no such use restriction exists as it pertains to the area of the building designated as the upper, office space floors of the building, the trial court noted. Accordingly, the trial court dismissed this portion of the tenant's claim.

In its decision, the trial court pointed out that the tenant's claim for fraud also failed because it was barred by the “parol evidence rule.” The alleged fraud stemmed from the tenant's assertion that the owner orally told the tenant prior to the execution of the written lease that the food court location would be the only location within the physical structure of the property where food would be sold, other than in the current restaurant. The rule provides that, “where the parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement. All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract…and the writing constitutes the agreement between the parties, and its terms and agreements cannot be added to nor subtracted by outside evidence.”

• CC Pizza LLC v. Liberty/Commerz 1701 JFK Boulevard, L.P., August 2011