1600 Walnut Corp. v. Cole Haan Co.

1600 Walnut Corp. v. Cole Haan Co.

Opinion

 [*557]  MEMORANDUM

Joyner, J.

Presently before the Court is Plaintiff's Motion to Dismiss Defendant's Amended Counterclaims pursuant to Fed. R. Civ. P. 12(b)(6). For the following reasons, we grant the Motion.

Factual Background

Defendant Cole Haan Company Store, LLC ("Cole Haan"), a global footwear and accessories brand, entered into a long-term commercial [**2]  lease with Plaintiff 1600 Walnut Corporation, General Partner of L-A 1600 Walnut LP ("1600 Walnut") in 2004. In 2014, the parties agreed to extend the lease through March 31, 2025. The lease allocates certain risks between the parties. Under the force majeure clause of the lease:

If either party is delayed, hindered or prevented from the performance of an obligation because of strikes, lockouts, labor troubles, the inability to procure materials, power failure, restrictive governmental laws or regulations, riots, insurrection, war or another reason not the fault of or beyond the reasonable control of the party delayed (collectively, "Force Majeure"), then performance of the act shall be excused for the period of the delay; provided, however, the foregoing shall not: (A) relieve Tenant from the obligation to pay Rent, except to the extent Force Majeure delays the Commencement Date; and (B) be applicable to delays resulting from the inability of a party to obtain financing or to proceed with its obligations under this Lease because of a lack of funds.

(Compl., Doc. No. 1, Ex. A at § 21 (emphasis added).) The lease also states that it will automatically terminate if "the entire Premises is [**3]  appropriated or taken under the power of eminent domain by any public or quasi-public authority or conveyed in lieu thereof." (Id. at § 8(B)(1).)

Cole Haan permanently vacated the storefront in March 2020 and has not paid rent since that time. The March 23, 2020 Pennsylvania Governor's COVID-19 executive order prohibited Cole Haan from operating the store, but after June 5, 2020 Cole Haan and other retailers in Philadelphia were permitted to reopen with restrictions. (Def.'s Am. Answer, Doc. No. 16 at ¶ 41.) Cole Haan did not reopen and not restart rental payments. (Id. at ¶ 8.) 1600 Walnut brought this suit against Cole Haan to recover arrearages owed, base rent, additional rent, late fees, interest, attorneys' fees and costs. (Compl., Doc. No. 1 at 13-14.) Cole Haan offers six counterclaims: (I) for a declaratory judgment discharging its duties under the lease for frustration of purpose; (II) in the alternative, for a declaratory judgment for rent abatement for frustration of purpose; (III) for a declaratory judgment discharging Cole Haan's duties under the lease for impossibility or impracticability of performance; (IV) in the alternative, for a declaratory judgment for rent abatement for [**4]  impossibility or impracticability of performance; (V) for a declaratory judgment discharging Cole Haan's obligations under the lease for failure of consideration; and (VI) for a declaratory judgment of the contractual termination of the lease because the government's COVID-19 restrictions constituted a taking under the Fifth Amendment. (Def.'s Am. Answer, Doc. No. 16.) 1600 Walnut brings this motion to  [*558]  dismiss all of Cole Haan's Counterclaims. (Pl.'s Mot. to Dismiss Def.'s Am. Countercl., Doc. No. 20.)

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