UPDATED, May 3, 12:05 p.m.: After Guess stopped paying rent unilaterally at all its stores last year, the clothing and accessories brand’s landlord on Miami Beach’s Lincoln Road sued — and won.
The Denison Corporation, a Miami Beach-based family business led by Robert Quittner, sued in May for $291,162 in rent and other expenses owed over three months. Guess made good on what it owed and kept paying during the course of the lawsuit, keeping its 7,000-square-foot space at 546 Lincoln Road, according to Denison’s attorney Boies Schiller Flexner partner Bruce Weil, and the property manager.
But Guess, led by Carlos Alberini, in August turned around to countersue Denison. The retailer sought a refund on some payments it had made since March 17, and said it should possibly get a break going forward, according to the suit.
Miami-Dade Circuit Court Judge Peter Lopez on Tuesday shot down Guess’ lawsuit, saying the lease is clear that rent still has to be paid during force majeure events, including government-imposed closures for the pandemic.
Guess and its attorneys, Mark Steiner in Miami and Amanda Groves in Los Angeles, did not respond to requests for comment.
They argued in the lawsuit that Guess agreed to its “exorbitant” $145,000 a month rent in 2007 because Lincoln Road is a “prestigious” stretch as well as a major tourist and shopping draw. But coronavirus was an “unimaginable” event that turned Lincoln Road into a “ghost town” and permanently changed consumer behavior.
“It is likely to be years (if ever) until retail operations return to something resembling the pre-Covid world. And it was this pre-Covid world in which the parties entered into the lease,” Guess’ lawsuit states.
Lyle Chariff, who leases and manages the property for Denison, said Guess’ decision not to pay rent at all its locations was a “business tactic.”
“We stood by our end because we didn’t think it was fair,” said Chariff, president of Chariff Realty Group. “On our end, there is no bad blood. It’s like business is business.”
The litigation marks yet another instance in which a tenant invoked force majeure, but lost, as judges nationwide largely have sided with landlords.
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Gap, which also declined to pay rent last year at Brookfield Property Partners’ malls, in March lost its suit seeking to wiggle out of paying another landlord at its East 59th Street location in Manhattan.
In April, Regal Cinemas was ordered to pay $880,000 to landlord Terranova for its movie theater location at Shadowood Square retail complex near Boca Raton