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Appeals court probes lease default, grease‑trap billing and COVID defenses
Summary
Landlord argued default and termination were justified by unpaid grease‑trap remediation and post‑pandemic nonpayment; tenant countered the default notice misstated cure figures, cited insurance proceeds and argued frustration of purpose during COVID shutdowns prevented performance.
Robert McLaughlin Jr., representing the tenant High Street Restaurant, argued the landlord's default notice was inaccurate in form and substance, pointing to a long history of communications in which the tenant said it would apply insurance proceeds toward grease‑trap remediation. "What is that amount of money with the payment and the insurance proceeds?" McLaughlin asked, noting the notice demanded a larger figure than contemporaneous emails indicated.
Counsel for K & H (Bridal Lee) replied that the default notice sufficed under the lease and that prior demands and an attached aged‑delinquency report apprised the tenant of the charges. K & H argued there were multiple grounds for termination, including failure to pay pre‑pandemic grease‑trap charges, nonpayment after March 2020, and failure to open for business—each of which the landlord says supported termination.
Tenant counsel further argued that COVID shutdown orders and related doctrine (frustration of purpose; post‑COVID case law) stayed some obligations and that the guarantee should not revive obligations extinguished by termination. Landlord replied that the tenant chose not to operate, had other resources (e.g., PPP), and that the frustration doctrine does not negate fixed rent obligations; the panel reviewed the lease's casualty/subrogation and guarantee provisions and pressed the parties on whether notice formality requirements were met and whether cure amounts were known and unpaid at the time of notice.
The matter concluded with the panel submitting the case; counsel reserved arguments in briefs.
