Madison Holdings, LLC ET AL. v. The Cato Corporation

In litigation commenced by landlord to recover unpaid rent, the tenant asserted a
counterclaim alleging violations of the parties’ lease agreement and seeking a declaration
of the parties’ rights and obligations. Featuring prominently in the parties’ dispute is a
lease provision providing for, among other things, rent abatement if a non-party to this
litigation, the designated “Major Anchor Tenant,” ceases operations in the shopping center
where the tenant’s store is located. Under another lease provision, which is also at issue,
the right to rent abatement is triggered, subject to certain exceptions, if landlord enters into
another lease agreement “with or by any national or regional tenant having . . . more than
one store for whom the majority of its revenue is from the sale of apparel and/or clothing
accessories.” In this case, the tenant has asserted rights to relief with respect to both of
these provisions. Following a bench trial, the trial court rejected various defenses raised
by landlord in the litigation and determined that the tenant was entitled to relief under the
parties’ lease. As part of its order, the trial court awarded the tenant a monetary judgment
against landlord related to rent overpayments the tenant had made during a period when
rent abatement was in effect. Although we conclude that the trial court erred in awarding
a monetary judgment related to the rent overpayments given that the remedy provided
under the relevant lease provision specifically provides only for an offset against current
or future rent, we otherwise affirm the trial court’s order in this case.