Novack and Macey Attorneys Obtain a Motion to Dismiss for Their Real Estate Client, in a Lease Dispute with a WeWork Subsidiary
Attorneys Eric Macey, Andrew Shelby and Yvette Mishev won a major motion to dismiss in favor of their client, the owner of a commercial office building in Denver, that had entered into a long-term lease of the entire building with a wholly-owned subsidiary of WeWork.
WeWork guaranteed the lease up to approximately $2.5M, but as additional security, the building owner obtained an approximately $7.7M surety bond from an affiliate of Chubb. The WeWork subsidiary paid rent for several months under protest, claiming that the building owner had not satisfied certain “legal requirements” under the lease. When they stopped paying rent, Novack and Macey attorneys sent a notice of default on the tenant and served a payment demand on the surety because of the lease default. Before the relevant cure periods elapsed, the tenant sued the firm’s client in Colorado state court, raising breach of contract, fraud, and negligent misrepresentation claims, among others.
Novack and Macey moved to dismiss and filed counterclaims against the tenant on the lease and WeWork on the guaranty. Also, when the surety refused to honor the building owner’s payment demand on the bond, the firm filed suit on its client’s behalf against the surety for payment in a separate case.
The tenant, WeWork, and Surety tried to consolidate the two suits and argued that the building owner was not entitled to draw on the bond until the tenant’s claims against it were adjudicated.
In a 16-page, single-spaced opinion, the judge granted our motion to dismiss the tenant and WeWork’s complaint, and then entered a separate order denying the motion to consolidate.