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Tenant Dragged Back to Summit
by Ron Davis

The owners of a Pennsylvania shopping center are forcing a tenant to reopen the store that the tenant moved from several months ago.

The shopping center is Summit Towne Centre in Erie, and the owners had leased space to the tenant for the retail sale of shoes and related merchandise. Within two years of the signing of the 10-year lease, however, the tenant began pleading for a premature termination of the agreement. Then after the shopping center owners rejected the pleas of the tenant, the tenant eventually vacated the premises. At that point, the effort to force the tenant to reopen the store began.

The shopping center owners began the effort by asking the courts to order the tenant to reopen. The tenant had in fact agreed in the lease that "no part of the premises shall be abandoned or left vacant" unless destroyed by fire or other casualty.

The tenant also agreed in the lease to recognize that staying in business was essential "in order that the shopping center will retain an appropriate tenant mix." And finally, the shopping center owners presented expert testimony stating that the tenant’s departure would damage the shopping center’s credibility and reputation with other tenants in "incalculable ways." As such, the expert added, "a monetary award could not adequately compensate the shopping center for the loss."

A Pennsylvania court nevertheless refused to order the tenant to reopen his business, but instead required the tenant to pay for the losses suffered by the shopping center. The shopping center appealed.

The Pennsylvania Superior Court reversed that decision and ordered the tenant to reopen for business. Explained the judges, "The shopping center has suffered real and immeasurable harms to its credibility with tenants and to its ability to lease retail units. Furthermore, if the order for the tenant to reopen is not granted, the shopping center will lose the ability to enforce what it considers the ‘deal breaking’ provision in all of its leases that requires tenants to operate their stores." (Summit Towne Centre v. Shoe Show, 786 A.2d 240 [Pa.Super. 2001])

Decision: August 2001
Published: January 2002



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