Washington-based law firm Crowell & Moring has sued its landlord, The TREA 1001 Pennsylvania Avenue Trust, seeking to recover $30 million in unpaid rent. The firm argued that it was not required to pay rent due to disruptions caused by the COVID-19 pandemic. The lawsuit was filed on March 10th in the District of Columbia Superior Court but was not previously reported.
According to the complaint, Crowell & Moring’s lease gave the firm the right to decrease rent after a “material interference” inhibited the use of its 391,757 square feet of office space located near the White House. The firm claimed that local orders restricted its office access from March 2020 through May 2021, contrary to its lease agreement on the use of the space. The law firm said it paid over $30 million in rent to TREA Trust between April 2020 and May 2021 but was entitled to a 98% reduction because office access was reduced to less than 2% of the everyday use and access under the lease.
TREA Trust spokesperson said in a statement that it will “vigorously defend against this meritless action.” Meanwhile, a Crowell & Moring spokesperson said the firm was “left with no choice” but to sue, despite having had a good relationship with its landlord for 30 years in the building.
The COVID-19 pandemic has caused various real estate and insurance disputes, with state, local, and federal orders directing employers and others to minimize physical contact. Law firm employees were among the millions of Americans who began working from home to help reduce the spread of the virus. Most firms have since encouraged or required lawyers and professionals to work from the office at least part of the week.
This is not the first time Crowell & Moring has sued its landlord concerning pandemic-era impacts. In December 2020, the law firm sued its San Francisco office landlord, but the case was voluntarily dismissed in April 2022.
Other law firms have also had to deal with similar legal disputes. Jenner & Block settled dueling pandemic-related claims with its landlord in Chicago in 2021. Schulte Roth & Zabel is pursuing a $10 million rent abatement claim against its landlord in New York, and a trial is expected later this year.
The outcome of the lawsuit against TREA Trust will be closely watched as it could have implications for other businesses that have experienced disruptions due to the pandemic. Many commercial tenants have sought to renegotiate leases or obtain rent reductions due to the pandemic’s impact on their business operations.
The legal battle between Crowell & Moring and TREA Trust highlights the challenges businesses faced during the pandemic and their efforts to recover losses. As the world emerges from the pandemic, businesses will continue to navigate the fallout and seek legal remedies where necessary.
