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Gamesa Energy USA v. Ten Penn Center Associates

Pennsylvania Supreme Court
217 A.3d 1227 (2019)


Facts

In 2008, Gamesa Energy USA (Gamesa) (plaintiff) leased space from TPC Center Associates, L.P. (TPC) (defendant). The lease gave Gamesa a tenant-improvement allowance to build out the space and allowed subleasing with TPC’s approval. If Gamesa submitted a proposed sublease, TPC had 30 days to approve or reject it. Gamesa subleased some space to Viridity Energy, Inc. with TPC’s approval. The next year, Gamesa notified TPC it was moving out, but would continue paying rent and attempting to find other sublessors. But when Gamesa requested TPC approve a second sublease to Busines Services International, LLC (BSI), TPC claimed Gamesa was in default and that TPC had no obligation to consider the sublease. Gamesa sued for a declaration that TPC had terminated the lease and sought recovery of rent paid since, plus lost revenue from the BSI sublease. Until trial, Gamesa paid rent, accepted subrent from Viridity, tried to find sublessors, and spent the rest of its tenant-improvement allowance. The judge found TPC breached and awarded Gamesa both its interim rent payments and the lost sublease revenue. TPC appealed. The appellate court affirmed as to damages for the lost sublease revenue, but reversed as to interim rent payments. The Pennsylvania Supreme Court granted review.

Rule of Law

Issue

Holding and Reasoning (Dougherty, J.)

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