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Law360 (June 1, 2021, 6:11 PM EDT) -- Victoria's Secret owes $32.4 million for abandoning its store at the Westfield World Trade Center shopping center, the mall's operator alleged in the latest New York state court spat to break out between the retailer and landlord.
Westfield alleged in the Friday lawsuit that its former tenant has wrongly used temporary COVID-19 closures as reason to pack up and leave the mall with $4.3 million in past-due rent, as well as $28.1 million in future payments left on the lease that runs through 2029.
Victoria's Secret Stores LLC informed Westfield in January that it was invoking a "co-tenancy failure" clause to terminate the lease that it inked with the underground mall, managed by Unibail-Rodamco-Westfield SE, in February 2015. The clause stated that Victoria's Secret could cancel the contract early if Westfield failed to keep 75% of the mall's stores open and operating for 12 consecutive months, according to the lawsuit.
But Westfield said it has clear evidence that its stores' operations did not dip beneath this 75% threshold for an entire year. And even though it provided this data to Victoria's Secret, it said, the company completely vacated the premises at the end of April.
"The Westfield WTC Mall was never in co-tenancy failure for 12 consecutive months — a fact Westfield proved to Victoria's Secret — and therefore Victoria's Secret had no right to early termination of its lease," Westfield said. "Nonetheless, Victoria's Secret refused to pay rent and abandoned its leased premises with years remaining, all in breach of its lease."
Westfield wants the court to force Victoria's Secret to pay $4.3 million in rent that it skipped between January and April, as well as the full $28.1 million in lease payments it would have delivered through 2029 if the store hadn't been improperly shuttered.
Victoria's Secret previously sought to cancel the lease at Westfield WTC in an October 2019 lawsuit, alleging that ongoing construction at the mall had barred it from being able to open its store. Despite a grand opening initially planned for October 2015, Victoria's Secret alleged in its complaint, Westfield still hadn't provided it with a planned opening date more than four years later.
New York Supreme Court Judge Gerald Lebovits threw out Victoria's Secret declaratory relief claims in August, ruling that the delay in opening had been foreseeable. The judge allowed Victoria's Secret to proceed on its breach of contract claims against Westfield.
An appellate panel affirmed Judge Lebovits' ruling on May 4. That lawsuit remains pending.
Counsel for Westfield and a representative for Victoria's Secret did not respond to requests for comment Tuesday.
Westfield is represented by Mara B. Levin and Daria Morgan Barry of Blank Rome LLP.
Counsel information for Victoria's Secret was not immediately available.
The case is New WTC Retail Owner LLC v. Victoria's Secret Stores LLC, case number 653497/2021, in the Supreme Court of the State of New York, County of New York.
--Editing by Regan Estes
For a reprint of this article, please contact reprints@law360.com.
