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Mattress store wins dispute over rent early in pandemic

April 26, 2021 GMT

BAY CITY, Mich. (AP) — A judge has ruled in favor of a Bay City mattress store that declined to pay rent for two months last year when the business was closed because of Gov. Gretchen Whitmer’s pandemic orders.

Mattress Firm argued a legal theory known as “frustration of purpose.” U.S. District Judge Thomas Ludington said it was an appropriate defense against paying $21,000 in base rent to Bay City Realty. The mattress store had been barred from conducting business.

“Whether ‘frustration of purpose’ or other common law defenses may be available is heavily dependent on the facts of each case, in particular the language of the operable lease, and the applicable law,” said Warner Norcross & Judd, a law firm that closely watched the case.

Businesses not considered essential were temporarily closed by Whitmer a year ago when the COVID-19 pandemic was blooming in Michigan. Mattress Firm didn’t pay rent for April and May, according to a summary of the dispute. It eventually paid June rent.

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“Everyone who could work from home was required to do so, and, therefore, the offices were essentially storage units for business equipment during the shutdown,” Ludington said on April 7. “The purpose of the lease, the retail sale of bedding products, was substantially frustrated during the shutdown.”