While specificity is typically a good thing in contract drafting, sometimes, too much specificity can backfire. A commercial landlord in Boston discovered this recently when the Suffolk County Superior Court discharged rent otherwise owed by a cafe operator during the period when the Governor had issued an emergency order banning on-premises consumption of food and drink. Interestingly, the case was filed not by the tenant, but by the landlord, who was seeking payment of back rent, eviction of the tenant due to default, and attorney’s fees. In fact, the tenant had already quit the premises after receiving an eviction notice.
The lease at issue expressly limited the tenant to using the premises to operate a “Caffé Nero themed cafe,” and not for any other purpose. Because the tenant’s café business was effectively shut down for several months by an executive order barring indoor or outdoor service of food and drink in response to the COVID-19 pandemic, the court found that the “frustration of purpose” doctrine excused the tenant from its obligation to pay rent during the period of that executive order.
The court cited to a 1991 decision by the Supreme Judicial Court (SJC) which held that the “frustration of purpose” doctrine excuses a party to a lease or other contract from performing its contractual obligations “when an event neither anticipated nor caused by either party, the risk of which was not allocated by the contract, destroys the object or purpose of the contract, thus destroying the value of performance.” The court further noted that “[n]either the force majeure provision (which addresses impossibility but not frustration of purpose) nor the independent covenant provision bars this defense.”
While it is anticipated that this decision will be appealed, it was issued by a well-respected jurist of the Business Litigation Section of the Suffolk County Superior Court, and was directly tied to prior SJC case law. As such, many commercial tenants whose businesses were shut down by executive order may find that their obligation to pay rent for that period is excused. Moreover, since the “frustration of purpose” doctrine is not unique to Massachusetts, it should be expected that this issue will continue to be litigated for some time to come. For more information, please contact PLDO Partner Joel K. Goloskie at 866-353-3310 or email jgoloskie@pldolaw.com.
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Joel K. Goloskie is a Partner with Pannone Lopes Devereaux & O’Gara LLC with over 25 years of experience providing an array of litigation, regulatory, and corporate services. While focusing deeply on the health care, data privacy, and construction industries, Attorney Goloskie delivers value and results for clients across a wide spectrum of business activities and professions.
Health Care
Repeatedly recognized by Best Lawyers® as a Best Lawyer in health care in the highly-competitive Boston market, Attorney Goloskie’s decades of health care experience ranges from compliance and HIPAA, to regulatory representations, to significant mergers and acquisitions.
In recent years, his focus has turned to the increasingly-central role of data, helping clients capitalize on the rapidly-evolving nature of health information in today’s consumer-centric, interoperable, app-enabled, IoT-connected world of empowered consumers.
Previously, he served as Deputy General Counsel/Director of Compliance, Privacy & Ethics of a multi-hospital system, and served as primary sell-side counsel in the sale of the entire system. He founded a nonprofit corporation comprising four hospitals and several community health centers. He also founded a highly successful health care consulting firm, providing reimbursement, compliance, and strategic advisory services to over sixty hospitals in fifteen states, and recovering many tens of millions of dollars from federal and state health care programs.
Privacy and Cybersecurity
Presently, he serves as Privacy & Compliance Counsel to the nation’s largest cloud-based analytics platform, housing medical data on over 230 million Americans and 30 billion medical events.
Unlike HIPAA, new privacy regimes such as the 21st Century Cures Act, GDPR, and CCPA reject the traditional view of customers’ information as the chattel property of the entity that created it. Today, ownership, privacy and security concerns threaten every business that compiles personal data, and Attorney Goloskie’s years of experience pay dividends for clients in every industry.
Construction
From the filing of (or defense against) Mechanics’ Liens to complex litigation or arbitration, Attorney Goloskie’s ability to speak the language of construction disputes and to assemble and manage the often-voluminous documentation supporting such claims has been the foundation of his successful representation of construction industry clients in often-sizable litigation or arbitration matters. Whether a dispute is governed by AIA agreement templates or the parties’ own contract documents, he revels in reducing a mountain of change orders, invoices, time cards, and emails into a well-supported narrative that a court or arbitrator can easily follow.
Litigation and Arbitration
Whether in court or in arbitration, Attorney Goloskie has assembled a notable string of successes in disputes ranging from the defense of licensure actions and employment discrimination charges to multi-million-dollar contract disputes. His ability to lead a team and manage large, document-heavy issues has allowed his clients to recover significant sums in arbitrations, state courts, and federal courts including the U.S. Circuit Court of Appeals. Perhaps informing his love for contested matters, Attorney Goloskie was previously a captain in the U.S. Air Force, flying in combat and serving as an Instructor/Evaluator Special Operations Navigator on C-130 and C-141 aircraft.
Attorney Goloskie received a J.D. from Boston College Law School, an M.B.A. from Webster University, and a B.S. from Thomas College. He is member of the American Health Lawyers Association and the American College of Healthcare Executives. He is licensed to practice in Rhode Island and Massachusetts and is a member of Rhode Island Bar Association and the Boston Bar Association, where he served as a member of the Health Law Section Steering Committee and co-chair of Health Law Education Committee.
To contact Attorney Goloskie, please call 401-824-5100 or email jgoloskie@pldolaw.com.