373-381 PAS Associates, LLC v. Ideko Productions, LLC, et al.

Summary

The Appellate Division, First Department reversed an order granting summary judgment to the tenant and guarantor in an action for commercial lease rental arrears. The court held that pandemic-related restrictions did not affect the tenant's office premises or excuse its lease obligations, and that the guarantor was not protected by the guaranty’s notice carve-out or pandemic-related statutory relief. The matter was remanded to determine damages.

Holdings

1. The tenant was not released from its lease obligations because the leased office space was not affected by pandemic-related government restrictions and was not required to cease operations.
2. The lease provision stating that the tenant's obligations would not be affected if the landlord was prevented or delayed by government restrictions did not release the tenant from liability for its lease obligations.
3. The guarantor was not protected by the 90-day notice carve-out because the tenant did not provide 90 days' notice of intent to vacate and did not pay arrears through the vacate date.
4. The guarantor was not relieved of its obligations under Administrative Code of the City of New York § 22-1005 because the tenant was not required to cease operation under Executive Order 202.3.
5. Summary judgment was proper as to liability, but an issue of fact remained concerning the amount of damages.

Questions Presented

1. Whether pandemic-related government restrictions excused the commercial tenant from its lease obligations when the leased premises were office space not affected by the restrictions.
2. Whether the lease's force-majeure-related provision released the tenant from liability for rent.
3. Whether the guarantor was protected by the 90-day notice carve-out in the guaranty or relieved of liability under Administrative Code of the City of New York § 22-1005.
4. Whether summary judgment could be granted on liability when the amount of damages remained disputed.

Disposition

reversed_and_remanded