Commercial tenants who abandoned their leases due to the pandemic and government shutdown orders must still pay back rent, a state appeals court ruled Thursday.
A three-judge panel of the Colorado Court of Appeals sided against a fitness center in Highlands Ranch that argued it would have been illegal for it to stay open and pay rent.
“The (governor’s) executive order did not make it illegal for (the tenant) to pay rent, which is the only contractual duty that its landlord alleged the tenant breached,” the court ruled.
In January 2021, the fitness center Studio Barre was sued by its landlord at 9245 S. Broadway, which accused it of ending its lease early and not paying back rent. Studio Barre argued a clause in the lease exempted it from rent when unforeseeable acts of God make paying impossible.
After a one-day trial later that year, a judge in Douglas County sided with the landlord and ordered Studio Barre to pay $50,000 in back rent, plus attorney fees. Studio Barre was owned by Vanessa DiPentino. Its lease was signed by her, Suzanne DiPentino and Daniel DiPentino.
Studio Barre appealed that judge’s ruling to the Court of Appeals, which spent 14 months considering it. In its appeal, Studio Barre’s parent company, Barre Boss, again argued that because its business was shut down in March 2020, it could not be forced to pay back rent.
“Barre Boss did not cause the pandemic and the pandemic made Barre Boss’s performance impossible,” the company told the appeals court. “If Barre Boss continued to run its business during the nationwide shutdown, it would have been illegal.”
Its landlord, Highlands Broadway OPCO LLC — an entity affiliated with California-based shopping center owner Westwood Financial — responded by noting that it deferred rent at the property for April and May of 2020. Studio Barre then paid rent until December 2020, when it turned in its keys and left in violation of its lease, according to the landlord.
“The evidence showed that the tenants made a business decision to stay closed without any effort whatsoever to reopen the business, regardless of any governmental orders or restrictions or rent relief,” Highlands Broadway wrote to the appeals court.
On Thursday, the court sided with the landlord. It upheld the Douglas County ruling and ordered Barre Boss to pay attorney fees that Highlands Broadway incurred during the appeal process.
Highlands Broadway was represented by Littleton attorney Murray Wilkening. He did not respond to a request for comment on the court’s opinion.
Barre Boss was represented by Denver attorney Wayne Vaden with the City Park Law Group. He also did not respond to a request for comment Thursday.