In the recent case of UNMV 205-207 Newbury, LLC v. Caffé Nero Americas, Inc., the Suffolk County Superior Court weighed in on the applicability of the frustration of purpose doctrine in connection with a commercial lease. In this specific case, the tenant ("Caffé Nero") operated a Caffé Nero restaurant under a 15-year lease that specified that the only purpose for which the tenant could utilize the leased premises was to operate a Caffé Nero location. On March 24, 2020, Governor Charlie Baker issued an executive order that prohibited any on-premises consumption of food or beverages at restaurants in response to the outbreak of the coronavirus pandemic. Caffé Nero thereafter wrote to its landlord and explained that it could not pay its rent for the month of April due to the mandatory closure of the cafe. The landlord responded by refusing to waive or reduce any of Caffé Nero's rent payments and, later, by proclaiming to terminate the lease and informing Caffé Nero that it must immediately quit and surrender the premises. Following further disputes and negotiations with the landlord regarding the amount that was owed for the unpaid rent, Caffé Nero vacated the premises in October 2020, having paid no rent for the months from April - October.
Back in June, Massachusetts saw the filing of the first suit seeking class action status challenging an insurance company's denial of coverage for COVID-19 related business losses, Rinnigade Art Works v. Hartford Financial Group.
In Knous v. Broadridge Financial Solutions, Inc., the United States District Court for the District Court of Massachusetts awarded summary judgment to an employer on the employee's claims of unpaid wages and earned vacation at the time of discharge.
A case recently filed with the United States District Court for the District of Massachusetts, Rinnigade Art Works v. Hartford Financial Group, is the first suit in Massachusetts seeking class action status in challenging an insurance company's denial of coverage for COVID-19 related business losses.
It is no exaggeration to state that the coronavirus (COVID-19) pandemic has been the largest disruptor to businesses this year. Productivity has slowed as co-workers self-quarantine to prevent the risk of exposure to the virus, and offices across the nation are closed as a way of slowing the spread of the disease. Naturally, one question that arises out of these events is whether businesses are expected to perform under their contracts or whether they are excused from performance in light of the current crisis. The answer to that question may rely on the heretofore rarely used force majeure clauses contained in their contracts.