Delay cuts fish market loose from contract claims
February 8, 2022-A Superior Court judge ruled Monday that a commercial property owner waited too long to bring claims against a fish market that gave advance notice it would break its lease.
The Court dismissed the landlord’s case, highlighting the danger that statutes of limitations can pose for a party sitting on his rights.
In early June of 2018, the tenant, Wilmington’s Ronnie’s Crab Shack, Inc., and its landlord, The Other Company, LLC, agreed in writing that Ronnie’s would terminate its lease as of the first of July, which was more than a year before the lease term was to end.
Apparently, the landlord had a change of heart. Three years and nearly one month after signing that notice of termination, the landlord sued Ronnie’s on the theory that the three-year statute of limitations didn’t begin to run until Ronnie’s vacated the premises. Reiss & Nutt, representing Ronnie’s, moved to dismiss the case on the grounds that the statute began to run when the landlord received notice that Ronnie’s did not intend to honor the lease term.
“The Defendants clearly repudiated this contract,” W. Cory Reiss said.
"Anticipatory repudiation" of a contract occurs when one party unequivocally informs the other party that it cannot or will not abide by the contract. Such advance notice of a breach may start the statute of limitations clock, which requires a breach of contract claim to be filed within three years.
In this case, the landlord filed its action more than three years after receiving notice that the lease would terminate early, which was when the statute of limitations began to run rather than when the landlord contended it regained possession of the property.