Katrina Damage Didn't Justify Lease Termination

Facts: After Hurricane Katrina had damaged the premises, a Louisiana tenant moved its merchandise and other possessions out of the space that it had rented under a 25-year lease. The tenant also stopped paying rent and refused the owner's request to meet that lease duty.

The owner sued the tenant for past and future rent, and for the costs of repairing the premises. The tenant and the owner each asked that the court award it a judgment without a trial.

Decision: A Louisiana court awarded the owner a judgment without a trial.

Reasoning: Louisiana laws regarding the effect of a total or partial destruction of leased space on a tenant's duty to continue meeting lease-related duties apply only if a lease does not address that issue. In this case, the tenant's lease stated clearly that the tenant was responsible for using “due diligence to repair, restore and/or build the Demise Premises, or portions thereof, substantially to their condition and character immediately prior to” damage from a “fire or other casualty.”

Editor's Note: A commercial lease can include any requirement that does not violate an applicable law.

• Schwegmann Family Trust No. 2 v. Toys “R” Us Inc., March 2008