Michael Dunham

On March 23, 2020, the Supreme Court of Appeals of West Virginia affirmed an order granting summary judgment for Kimco Realty Corporation, Kimco Riverwalk, 595, Inc., and Kimco Riverwalk, L.P. (collectively referred to as “Kimco”). Kimco was represented by SMS attorneys, Michael Dunham and Caleb David.

Pursuant to a lease agreement entered into by and between Petitioners and Kimco, Kimco agreed to lease to Petitioners a commercial space pursuant to terms and conditions set forth in the lease agreement. After the agreement was entered into, Kimco sold its entire interest in the commercial space to Plaintiff. Kimco also assigned all of its rights and interests in the lease agreement to Plaintiff.

The lawsuit arose when Plaintiff brought an action against Petitioners seeking recovery of monies due under the lease agreement. Petitioners filed third-party claims against Kimco in an attempt to explain Petitioners’ alleged breach of the lease. The circuit court ultimately awarded Kimco summary judgment. Petitioners appealed the circuit court’s award of summary judgment and dismissal of the third-party claims against Kimco.

On appeal, the Supreme Court found that the lease agreement specifically provided that “no . . . setoff will be interposed in any action . . .  based on nonpayment of [r]ent, even if such . . . set off is based on [an] alleged breach of a duty to repair or alleged breach of quiet enjoyment, or any other allegation.” Applying applicable contract law principles, the Supreme Court observed that pursuant to the express terms of the lease agreement, Petitioners’ third-party claims were improper as Petitioners were “barred from asserting any counterclaim or setoff in an action brought by” Plaintiffs for collection of past due rent.

Additionally, the Supreme Court affirmed the circuit court’s ruling that found that Petitioners failed to establish a prima facie fraud claim against Kimco. Petitioners alleged that they were improperly induced to enter into the lease agreement as a result of an oral promise made during lease negotiations. Specifically, Petitioners contended that a Kimco representative “orally represented that if [Petitioners] entered in to the lease agreement the monthly rent payments and size of the demised premises would be 45% less than the parties’ written contract.” Relying on the language in the lease between Petitioners and Kimco, the Supreme Court noted that “[n]o oral statements or representations or written matter not contained in this lease shall have any force or effect.” The Supreme Court agreed with the circuit court that the aforementioned provision was “sufficient to negate the essential fraud element of reliance[,]” thus defeating Petitioners’ claims against Kimco.