SAN FRANCISCO (Legal Newsline) - Pay your tab, a California court has told beer-maker Stone Brewing as it attempts to get out of forking over rent at its former Napa brewpub.
Stone tried to argue a force majeure provision in its lease absolved it of that responsibility while COVID restrictions were in place, but the First Appellate District has agreed with a trial court in ruling for landlord West Pueblo Partners LLC.
The provision would only be triggered if Stone were unable to meet its financial obligations while social gathering restrictions were in place for restaurants like Stone's. The company had plenty of money though, courts have found.
The provision extended the amount of time to pay rent by a period equivalent to the effects from the force majeure event. Stone has since closed up shop.
"...Stone admitted that it had the financial resources to pay rent to West Pueblo for the subject months, even though the brewpub (a small component of Stone's overall business) was operating at a loss," the ruling says.
"The mere fact that Stone was generating less revenue during this time period did not render its performance impossible or impracticable, and the force majeure event therefore did not impair Stone's ability to pay its rent."
During 2020, Stone could not offer on-premises dining from March 20 to May 18. Indoor dining was prohibited until Sept. 2, then limited to 25% capacity to Oct. 19.
That moved to half capacity from Oct. 20-Nov, 15, but indoor dining was again prohibited until Dec. 15. Then, on-premises dining was banned until Jan. 24, 2021.
Stone said the restrictions were devastating to its operating profits, leading to layoffs. It asked for rent relief from West Pueblo and withheld rent from December 2020 to March 2021, citing the force majeure provision.
Stone's lease at the building began in May 2016. The company started at $38,000 per month, with that amount increasing over 20 years.