Elliott Greenleaf Wins Jury Verdict in Commercial Lease Dispute
On August 14, 2003, a jury of the United States Federal District Court in Philadelphia returned a verdict of almost $800,000 in favor of Elliott Greenleaf's business client, enforcing oral promises made to renew a commercial sublease for 35,000 square feet of retail space in Bucks County, Pennsylvania.
In this several day trial, in the United States District Court for the Eastern District of Pennsylvania, Elliott Greenleaf represented business owners who received promises from the senior executives of their landlord, to renew a commercial sublease for retail space for several years beginning in 2001. After making the oral promises, the Defendant failed to timely renew the lease, and Elliott Greenleaf's client lost its sublease, and its expensive equipment in the retail space. Elliott Greenleaf proved to the jury, through the use of several electronic exhibits, that the Defendant made the promise to renew the sublease; that Elliott Greenleaf's client's reliance on the promise was reasonable; and, that damages equal to the client's losses were required. This was a significant victory under the doctrine of promissory estoppel, which allows an injured party to recover damages when it proves reliance on a promise, even without the formality of a written contract. The Defendant, and its lease administration company, attempted to defeat these arguments by arguing that the non-renewal of the sublease was a business risk, and that the written documents, including the sublease and the loan documents, prohibited any type of renewal of the sublease. Elliott Greenleaf proved the reliance on the promises of senior executives to renew the sublease was reasonable, and that such oral promises are enforceable, particularly when the senior executives know that business owners are relying on their promises in investing hundreds of thousands of dollars into their business. In addition, Elliott Greenleaf showed that the Defendant landlord violated the Equal Credit Opportunity Act ("ECOA"), when it required a spouse to sign as a guarantor of the lease.
In this important case, Elliott Greenleaf shareholder Mark A. Kearney, along with associate Todd N. Barnes, represented the successful business owners before the jury and the Honorable Timothy J. Savage of the United States District Court for the Eastern District of Pennsylvania. |
