ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Thursday, October 7, 2021

At Last, A COVID-Related Breach Case that Might Succeed!

COVIDThere have been innumerable force-majeure type suits brought on by COVID-19.  This one might have a shot, because of one-sided cancellation provisions.  Plaintiffs, Jasmine and Robert Nicholson, have filed a class action lawsuit in the Court of Common Pleas of Pennsylvania against Defendant Wurzak Hotel Group Mark LLC (Wurzak), which operates the Hilton Philadelphia City Avenue and the Sheraton Valley Forge.

Plaintiffs allege that  they paid a  $10,000.00 deposit two years in advance in order to reserve space at the Philadelphia Hilton in September 2020.  When Pennsylvania Gov. Tom Wolf declared an emergency due to the COVID-19 pandemic in March 2020, Plaintiffs’ wedding as envisioned could not legally take place. Wurzak remained hopeful that the Governor would ease restriction by September 2020 and urged Plaintiffs to reschedule their wedding in lieu of a refund. But the Governor did not ease restrictions until May 2021, and even then wedding venues were to operate  at 25% venue capacity, well below the Plaintiffs’ 175 minimum guest count.

Plaintiffs sought a refund of their deposit, relying on the following contractual provision:

Screen Shot 2021-10-06 at 11.34.51 AMAfter being denied a refund, Plaintiffs held a smaller wedding ceremony in Delaware, where there were fewer restrictions.

Reagan Wedding
A Typical Philly Wedding

Plaintiffs’ complaint (register for free to view) alleges that the purported class may include more than 500 individuals who had events booked during the 15 months of pandemic closures from March 2020 to June 2021.  According to the complaint, Wurzak refused to offer refunds but instead assured class members that they could reschedule once COVID restrictions were lifted. 

Plaintiffs assert three claims: breach of contract, unjust enrichment, and violations of state unfair trade practices and consumer protection statutes.  Plaintiffs stress the unfairness and one-sidedness of the agreement.  The venue can cancel and offer a refund, but plaintiffs cannot cancel in similar circumstances. 

I admit, I don’t understand why the disparity is even an issue.  Plaintiffs wanted to have their wedding in September 2020 as planned, but the city’s ban on events made that impossible.  They couldn’t have their wedding; the venue couldn’t host the wedding.  This seems to be precisely the situation contemplated under Paragraph 6 of the agreement, and the venue seems obligated to offer a refund. 

I don’t know how else to read the paragraph. It is a sensible provision and is not actually one-sided.  People cancel their wedding plans all the time.  It is understandable that the venue would not want to refund deposits every time one party backs out, or a family death makes a wedding celebration ill-timed, or a car accident renders one or both celebrants unable to attend.  Contracts are risk allocation devices, and the people renting the venue bear the risk of cancellation.

But Paragraph 6 is about the venue being unavailable.  The venue was unavailable.   On a reading of the plain language of Paragraph 6, Wurzak should return the deposit.  I suspect that the plaintiffs did not notice Paragraph 6 until they had already sought to cancel and re-book, but the court should not allow unwitting plaintiffs to be victimized by such a trap for the unwary.  

H/T to @Hoffprof for alerting us to the case and to Alyssa Cross for her research assistance.

https://lawprofessors.typepad.com/contractsprof_blog/2021/10/at-last-a-covid-related-breach-case-that-might-succeed.html

Recent Cases | Permalink

Comments

Post a comment

If you do not complete your comment within 15 minutes, it will be lost. For longer comments, you may want to draft them in Word or another program and then copy them into this comment box.