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Restaurant owner sues Las Catalinas mall for $1M over COVID-19 closure

Vota Inc., which runs the Casa Mofongo Xpress restaurants, is suing the owners of the Las Catalinas Mall in Caguas for $1 million over losses related to the closure of the shopping center during the COVID-19 pandemic and other claims included in a lawsuit filed at the U.S. District Court for Puerto Rico.

In its suit against Urban Edge Properties and Urban Edge Caguas — which operates the shopping center — Vota Inc. claims that the COVID-19 outbreak radically changed the circumstances laid out in the original lease agreement.

Casa Mofongo Xpress, as well as other tenants, were required to close down and remain that way for extended periods of time, as per the government’s restrictions to curb the spread of the pandemic.

“Like innumerable other companies, Vota Inc. was required to make the difficult decision to furlough its restaurant employees to preserve their finances while revenue from the stores dropped to zero overnight,” Vota said in the lawsuit.

The restaurant owners said even as restrictions are eased, “the experience of eating at The food court in particular, is one of the riskiest of all because you have to take off your surgical/protective mask off and be vulnerable to this disease and the surrounding people at the mall. In a world of unforeseeable events, the circumstances stores have faced are at the extreme end of uncertainty.”

The COVID-19 circumstances not only changed the way restaurants do business but changed how leases should be honored, Vota said, claiming “applicable law nullified any obligation to pay rent beginning on Mar. 15, 2020 first lockdown, that entitles [Casa Mofongo Xpress] to a refund of rent and expenses paid in advance from Mar. 15, 2020, and requires that the lease be prospectively and drastically modified, or rescinded, canceled, or terminated as a matter of law.”

In its lawsuit, the company said it does not owe any additional money to the mall, and that the mall instead owes it about $75,000 in rent and utilities paid since April 2020.

Vota Inc. signed a 10-year lease with the Caguas mall operator in March 2013 that expires in three years, for 679 square-feet of space to run a Casa Mofongo Xpress restaurant at the food court. It was doing business at Las Catalinas until the closure in mid-March.

Although the mall reopened on June 1, 2020, “the lack of information, guidance and specific instructions as to how to proceed to prevent positive COVID-19 cases inside the restaurant and out at Food Court and other protocols when confronted with positive COVID-19 cases, where absent. The liability was too high to reopen,” Vota representatives said in the lawsuit.

Aside from the fact that the Las Catalinas food court has no independent entrance, the mall’s curbside pick-up service is not open to restaurants, further restricting sales, Vota Inc. said.

In its claim, Vota Inc. also stated that Urban Edge blocked a potential sale of the restaurant to an interested third party, Creolo Foods, in the summer.

“The resulting damages caused by withholding consent wayward unreasonably to a sale authorization, sent Vota Inc. downhill, since this small business operated on such small margins that they didn’t survive the pandemic recession and had to file for bankruptcy,” the company said.

The $1 million claim for compensation is for breach of contract and Urban Edge’s alleged denial of the sale of Vota Inc., among other damages, the lawsuit states.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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