Law Firms

BigLaw firm seeks COVID-19-era rent abatement in $30M suit

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Crowell & Moring has filed a lawsuit contending that it is entitled to a rent abatement and interest totaling $30 million because of a “force majeure event” that interfered with its use of the property.

The COVID-19 pandemic and related government orders amount to the type of force majeure event entitling the law firm to a rent abatement at its offices on Pennsylvania Avenue in Washington, D.C., the March 10 suit says.

Reuters has coverage.

Executive orders in the District of Columbia restricted public gatherings and directed businesses to take reasonable measures to enable employees to work from home.

“As a result,” the suit says, “Crowell & Moring was forced to cease normal business operations from the premises, and its use of the premises was restricted to having certain personnel access the premises on a very limited basis, such as to collect mail.”

The defendant in the suit is the property owner, the TREA 1001 Pennsylvania Avenue Trust.

The suit says Crowell & Moring is entitled to a 98% abatement of rent paid during a time period of a little more than one year, which amounts to $30 million in overpaid rent and prejudgment interest.

A separate “unavoidable delay” provision in the lease doesn’t apply to Crowell & Moring’s rights to a rent abatement, the suit says. That provision says that, when a time period is prescribed for action to be taken by the landlord or tenant, other than the payment of money, a party isn’t responsible for delays because of strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations or restrictions, or any other cause of any kind that is beyond the reasonable control of a party.

“The unavoidable delay provision provides only that Crowell & Moring may not cite the provision itself as a basis to avoid rent,” the suit says. “And that is not the case here.”

A spokesperson for the TREA 1001 Pennsylvania Avenue Trust told Reuters that it will “vigorously defend against this meritless action.”

Other firms that have filed suits seeking COVID-19-related rent abatements include Jenner & Block and Schulte Roth & Zabel. Jenner settled the rent dispute in September 2021, according to Reuters. A trial in the Schulte case is pending, according to Reuters.

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