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Commercial Leasing Law & StrategyColumns & DepartmentsLandlord Tenant LawLitigation

Case Notes

By ssalkin
March 01, 2020

Exculpatory Clause Bars Tenant's Claim for Lost Profits Resulting from Landlord's Negligence

In a New York commercial tenant's action for a full rent abatement and lost profits, tenant appealed from the New York Supreme Court's grant of summary judgment to landlord. The Appellate Division modified to reinstate the claim for rent abatement, and otherwise affirmed. Chaitman v. Moezinia, NYLJ 12/30/19 (AppDiv, First Dept.)

The lease provided that if more than 30% of the premises is damaged and the premises cannot be opened for business to the general public, all rent would be abated until the premises can be opened for business. The lease also provided that "notwithstanding anything to the contrary … Tenant waives, to the full extent permitted by law, any claim for consequential or punitive damages in connection [with damage to Tenant's property.]" Finally, the lease also required landlord to use reasonable efforts to minimize inconvenience, annoyance and injury to the tenant's business and its use of the demised premises. The landlord allegedly performed negligent renovations to the premises that permitted tenant to remain open for its existing clients, but precluded tenant from accepting new clients. The tenant brought this action for a rent abatement and lost profits, but the Supreme Court granted summary judgment to landlord.

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