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Gotlieb v. Taco Bell Corporation

United States District Court for the Eastern District of New York
871 F. Supp. 147 (1994)


Facts

Gotlieb and Blaymore (plaintiffs) entered into a 20-year lease with Taco Bell Corporation (defendant). The lease provided that: (1) rental payments were to begin on June 15, 1992; (2) Taco Bell was required to pay a monthly base rent, along with additional rent for items such as taxes and utilities; (3) Taco Bell was obligated to obtain permits and approvals for restaurant construction and operation, but could cancel the lease if it was unable obtain the permits and approvals by February 15, 1992; and (4) Taco Bell was obligated to pay the plaintiffs liquidated damages for breach of the lease terms. Community groups opposed the restaurant’s construction. On February 10, 1992, Taco Bell sent the plaintiffs a letter requesting alteration of the lease terms. Taco Bell filed a permit application on February 14, 1992, and sent the plaintiffs a letter repudiating the lease on the same date. The plaintiffs responded with a letter denying Taco Bell’s request to alter the lease terms, rejecting the repudiation, and stating that the plaintiffs would hold Taco Bell liable under the lease. In June 1992, the plaintiffs sued Taco Bell for past and future rent, and for acceleration of all future rent due under the lease. Taco Bell refused to pay. During trial, the plaintiffs testified that: (1) on October 19, 1993, the plaintiffs met with Rite-Aid Corporation (Rite-Aid) representatives to discuss renting the premises, and (2) on November 3, 1993, the plaintiffs submitted a proposed lease to Rite-Aid. The plaintiffs subsequently entered a new lease that included higher rental payments than the Taco Bell lease.

Rule of Law

Issue

Holding and Reasoning (Orenstein, J.)

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