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Free People of PA LLC v. Delshah 60 Ninth LLC

Neither Party Prevailing Party, But Defendant Entitled to Expenses Including Attorney Fees

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DECISION & ORDER

*1 Following a three-day bench trial, the Court rendered a decision awarding plaintiff Free People of PA LLC (“Free People”) $650,000 plus statutory interest based on a reasonable measure of damages stemming from the delay by defendant Delshah 60 Ninth, LLC (“Delshah”) in delivering commercial space in a building owned by Delshah in accordance with the Lease entered into between the parties. Plaintiff claimed that under the negotiated and agreed upon rent credits formula set forth in the Lease, plaintiff was entitled to 825 days of rent credits, which would have aggregated to more than $3 million in damages. The Court found that the “free rent provision bears no relationship to any foreseeable damages that the plaintiff could suffer from delay and that under well settled case law, the provision is an unenforceable penalty” and therefore awarded appropriate compensatory damages in lieu of the invalidated liquidated damages clause in the Lease (Decision dated October 18, 2017 at 2-3 [NYSCEF Doc. No. 291]). The Court reserved decision on the issue of attorneys’ fees as the Lease provides that the*2

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