Temporary COVID Closure Order Doesn’t Excuse Tenant’s Failure to Pay Rent

November 23, 2021

What Happened: A fitness center tenant that had to close down temporarily in response to the governor’s COVID-19 pandemic closure orders remained in its space but didn’t pay rent for the time it was closed. The landlord sued, and the tenant relied on the lease force majeure clause and a laundry list of legal defenses in seeking to excuse its failure to pay rent. The landlord asked for summary judgment—that is, a ruling in its favor without a trial.

What Happened: A fitness center tenant that had to close down temporarily in response to the governor’s COVID-19 pandemic closure orders remained in its space but didn’t pay rent for the time it was closed. The landlord sued, and the tenant relied on the lease force majeure clause and a laundry list of legal defenses in seeking to excuse its failure to pay rent. The landlord asked for summary judgment—that is, a ruling in its favor without a trial.

Ruling: The California federal court granted the motion and awarded the landlord $796,525 in unpaid rent.

Reasoning: The court rejected all of the tenant’s COVID-19-related defenses:

  • The force majeure clause didn’t apply because the language expressly excluded “delays or failures to perform resulting from lack of funds or which can be cured by the payment of money”;
  • Frustration didn’t work because the forced temporary closure of the premises didn’t completely destroy the value of the lease; and  
  • Impossibility and impracticability were non-starters because the closure orders didn’t make the tenant’s duty to pay rent impossible or more expensive.

 

  • Fitness Int'l, LLC v. DDRM Hill Top Plaza L.P., 2021 U.S. Dist. LEXIS 202670

 

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