The Law

Store Can Close in Erie Case by Ron Davis A tenant with mounting financial losses from operating a store at an Erie, PA, shopping center can finally close the business for good. That’s despite the best efforts of the shopping center’s owners, however. They are the principals of Summit Towne Centre, Inc., which has leased space to the tenant—a shoe retailer—for the past several years. They have contended that the tenant agreed in the lease between the two parties to remain open for business during the entire lease term. They therefore have sued the tenant to try to enforce the lease restrictions. The lease does in fact clearly state that the tenant must not abandon the premises or any part of the premises during the lease term. A breach of that agreement allows the shopping center’s owners to collect substantial monetary penalties—not including those the courts might impose for such a breach. Nevertheless, the tenant reached a point where financial losses exceeded $100,000 annually, forcing the store to cease operations. The shopping center’s owners responded by suing the tenant, arguing that closure of the store could cause in a “domino effect” of other store closings at the facility. The result, they added, would mean irreparable damage to the center’s continuity. They therefore asked the courts to force the tenant to resume operations at the shopping center—or face huge financial penalties exacted by the courts. A Pennsylvania court noted, however, that the premises leased to the shoe store at the shopping center occupied less than 1 percent of the center’s total floor space. The court therefore ruled that the shopping center’s owners had failed to prove immediate and irreparable harm from the closing of the tenant’s store. The shopping center’s owners appealed. The Pennsylvania Supreme Court also ruled in favor of the tenant, explaining, “The record supports the conclusions that the shopping center’s harm was speculative in nature, that it had an adequate remedy through the collection of penalties, and that the tenant would have sustained more harm than the shopping center’s owners had the tenant’s store reopened.” (Summit Towne Centre, Inc. v. Shoe Show of Rocky Mount, Inc., 828 A.2d 995) Decision: August 2003 Published: November 2003