The Rent War on The 5th: The Valentino Complaint Is Thrown Out of Court

*** The writing does not, and is not intended to, constitute legal advice by any means***

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Source: Screenshot from Google

Last year, I reported that Valentino sued its 5th Avenue landlord under the theory that the ongoing pandemic had rendered the purpose of their lease contract "frustrated". The doctrine of frustration has recently gained prominence, especially in connection with force majeure - unforeseeable circumstances beyond the control the parties that can relieve them from certain contractual obligations or liabilities. Are COVID-19 and the ensuing governmental regulations the basis for invoking a force majeure provision in a lease contract? Judge Borrok of the Supreme Court of the State of New York answered in the negative in a legal battle between Valentino and its landlord.

In a slip opinion issued on January 27th, Judge Borrok dismissed the Valentino complaint in its entirety. In throwing the case out of court, Judge Borrok reasoned that:

"The fact that the COVID 19 pandemic was not specifically enumerated by the parties does not change the result because the Lease is drafted broadly and encompasses the present situation by providing that nothing contained in the Section 21.11 of the Lease including "restrictive governmental laws or regulations," certain cataclysmic events, "or other reason of a similar or dissimilar nature beyond the reasonable control of the party delayed in performing work or doing acts required" shall excuse the payment of rent." See Valentino U.S.A., Inc. v. 693 Fifth Owner LLC, No. 652605/2020, 2021 WL 668788, at *1 (N.Y. Sup. Ct. Jan. 27, 2021)."

Based on the expansive language of the lease, Judge Borrok concluded that Valentino has no actionable claim in this court because Valentino only pleaded conclusory facts, which does not meet the pleading requirement in New York Civil Practice Law and Rules. See N.Y. C.P.L.R. § 3211(a)(7). "A party may move for judgment dismissing causes of action asserted against him on the ground that the pleading fails to state a cause of action." That is, Valentino failed to allege facts that show that the current predicament was caused by "[the] wrongful act of the landlord". Valentino at *1.

Interestingly, I insinuated in my earlier post that Valentino's legal position can be weakened because Valentino started a curbside pick-up. Judge Borrok picked that up as well when he stated that the premises weren't not unusable because "it appears that the Valentino store continued to operate as of July 22, 2020. To wit, a sign was placed on the store indicating that it was open for curbside retail and by appointment." Id. Valentino immediately announced that it would appeal the decision. I will definitely keep you in the loop as the case proceeds to the appeal stage. On that note, have a wonderful weekend!