Gallery Sues Landlord, Claiming Covid-19 Shutdown Voids Lease
The lawsuit contends that since the Venus Over Manhattan gallery is closed by government orders during the pandemic, the lease should be terminated.
In early March, the Venus Over Manhattan gallery on the Upper East Side mounted an exhibition of paintings, drawings and wall reliefs by the artist Roy De Forest, the biggest presentation of his work in New York City since 1975.
But the show’s prospects may have been limited when Gov. Andrew M. Cuomo of New York banned most gatherings and ordered nonessential businesses to close by March 22 as part of an effort to limit the spread of the coronavirus.
Now the gallery is suing its landlord, arguing that the governor’s actions provide a basis to end its lease, which it says started in 2011 at $54,000 per month, and recover its deposit of $365,000.
“As a result of the Covid-19 pandemic, Governor Cuomo issued a number of executive orders, which by March 29, 2020, completely frustrated the very purpose of the lease,” a lawyer for the gallery wrote in a complaint filed last week in Federal District Court in Manhattan, adding that the gallery therefore “considers the lease terminated.”
The dispute is between companies run by two prominent art collectors, both with significant business experience and neither averse to attention.
The gallery’s owner, Adam Lindemann, who once ran an investment firm, briefly set an auction record for Jean-Michel Basquiat in 2016 when he sold a painting by the artist at Christie’s for $57.3 million.
The gallery’s Madison Avenue building is listed as a property of the real estate company run, with a partner, by Aby Rosen. He has displayed several Picassos in his Manhattan home and, in 2014, riled some neighbors by erecting on his Long Island estate a 33-foot, painted bronze sculpture of a naked pregnant woman with an exposed fetus.
Mr. Margolin said by email that the lawsuit involved “a dispute between a commercial tenant and a landlord” about whether a lease default had taken place. A representative for Mr. Rosen’s company, RFR Holding LLC, declined to speak about the suit.
The complaint filed by the gallery says that it considers the lease to have been terminated as of April 1. On March 25, it added, the gallery informed the landlord that it was vacating the premises on or about July 1 and demanded the return of the $365,000 deposit.
On April 8, the complaint states, the landlord declared a default under the lease and on April 23 seized the deposit.
The gallery claims it is entitled to end the lease based on two arcane legal doctrines: “frustration of purpose,” described in the complaint as when an unforeseen event destroys the reason for a contract; and “impossibility of performance,” which the complaint says allows performance of a contract to be excused if governmental activities render that performance impossible.
Joshua Stein, a commercial real estate lawyer not involved in the lawsuit, said that frustration of purpose is one of several doctrines businesses have considered asserting during the pandemic as a basis to withhold rent or walk away from a lease.
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