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275 A.3d 316
Me.
2022
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Background:

  • 55 Oak Street LLC leased the Thistle Inn (including a restaurant seating up to 99) to RDR Enterprises under a five-year commercial lease; tenant paid $2,500/month base rent plus additional rent for taxes, insurance, utilities.
  • The lease included a force majeure clause covering events like acts of God and governmental restrictions but contained no language expressly allowing a “partial” excuse of performance.
  • Governor’s COVID-19 executive orders closed indoor dining from March 18, 2020 through May 31, 2020; RDR closed the restaurant, largely stopped paying the restaurant portion of rent, and never offered takeout/delivery.
  • On June 1, 2020 limited indoor dining was permitted (at reduced capacity), but RDR chose not to reopen citing economic nonviability.
  • Oak Street issued notices of default and termination and filed a forcible entry and detainer (FED) action after RDR did not vacate; the District Court excused rent March–May and reduced rent after June 1 to 40% (denying possession); the Superior Court affirmed; Oak Street appealed to the Maine Supreme Judicial Court.

Issues:

Issue Plaintiff's Argument (Oak Street) Defendant's Argument (RDR) Held
Whether the lease’s force majeure clause can partially excuse rent after May 31, 2020 Clause is unambiguous and does not permit a "partial" excuse; force majeure applies only where performance is prevented, not where reopening is limited or unprofitable Pandemic and governmental restrictions qualify as force majeure and partially excuse rent obligations after restrictions eased; court may apportion rent Held: Clause unambiguous; no partial excuse. Force majeure applied only when performance was prevented (March 18–May 31), not to profitability-based decisions after June 1; District Court erred in apportioning rent.
Whether Oak Street is entitled to possession (writ) based on RDR’s nonpayment after May 31, 2020 Nonpayment of rent constitutes default and terminates the lease, entitling landlord to a writ of possession; later recovery from bond does not negate the prior breach RDR contends force majeure excused performance or that payment from the bond cured liability; Oak Street waived possession claim at hearing Held: Tenant’s failure to pay rent (after the period the clause could apply) justified termination; Oak Street entitled to writ of possession. Payment via bond in litigation does not retroactively cure the breach.

Key Cases Cited

  • Testa’s, Inc. v. Coopersmith, 105 A.3d 1037 (Me. 2014) (standard for when contract language is ambiguous and review of interpretation)
  • Opinion of the Justices, 123 A.3d 494 (Me. 2015) (describes force majeure as unanticipated, uncontrollable events)
  • Rubin v. Josephson, 478 A.2d 665 (Me. 1984) (landlord entitled to possession when tenant default terminates lease)
  • Hansen v. Sunday River Skiway Corp., 726 A.2d 220 (Me. 1999) (party asserting an affirmative defense such as force majeure bears the burden of proof)
  • In re Hitz Restaurant Group, 616 B.R. 374 (Bankr. N.D. Ill. 2020) (applied a partial-force-majeure apportionment; cited by trial court and characterized by Maine court as an outlier)
  • In re Cinemex USA Real Est. Holdings, Inc., 627 B.R. 693 (Bankr. S.D. Fla. 2021) (refused to excuse nonperformance based on economic concerns post-pandemic; contrasted with Hitz)
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Case Details

Case Name: 55 Oak Street LLC v. RDR Enterprises, Inc.
Court Name: Supreme Judicial Court of Maine
Date Published: May 24, 2022
Citations: 275 A.3d 316; 2022 ME 28
Court Abbreviation: Me.
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    55 Oak Street LLC v. RDR Enterprises, Inc., 275 A.3d 316