DALLAS – An appeals court has upheld the trial court's decision in favor of a landlord in a commercial lease dispute where the central issue involved interpreting the "inability to perform" provision during COVID-19 shutdowns.
According to court documents, the complaint revolves around a commercial lease dispute between BB FIT, LP (the tenant) and EREP Preston Trail II, LLC (the landlord). The central issue is the interpretation and application of the "inability to perform" provision in the lease, particularly in the context of government-mandated shutdowns during the COVID-19 pandemic.
The tenant and its guarantor argued that the pandemic-triggered government shutdown orders fall under the "inability to perform" provision, excusing their obligation to pay rent. However, the trial court concluded that the provision merely deferred the payment due date during the shutdown orders, emphasizing that it did not absolve the tenant of the rent obligation.
The appeals court affirmed the trial court's judgment in favor of the landlord and also addressed tort claims against a replacement tenant and its principal, ultimately affirming the summary judgment that dismissed these claims.
However, the appeals court took issue with the trial court's decision to award attorney's fees to the replacement tenant and its principal, determining that there was no legal basis for such a claim and, as a result, reversed the award of attorney's fees.