In Downtown Soho's case, the landlord filed a lawsuit in Superior Court, seeking damages and claiming that Downtown Soho breached its lease agreement and had been unjustly enriched by occupying the space without paying rent between March and September, 2020.

In response, the defendants raised various special defenses, including the doctrines of impossibility of performance and frustration of contract, owing to the adverse effects of the executive orders issued by Gov. Ned Lamont during the pandemic. The defendants claimed Lamont's executive orders rendered their lease agreement illegal as a matter of law, the opinion said.

Superior Court Judge Walter Spader disagreed, finding that the defendants failed to prove that the executive orders rendered the restaurant's operation impossible or frustrated based on the lease agreement. Spader put the burden on the landlord with respect to proving mitigation efforts, resulting in a lower award of $200,308.76, the opinion said.

The defendants appealed and the plaintiffs cross-appealed, arguing that the trial court incorrectly concluded that the doctrines of impossibility and frustration of purpose did not relieve them of their rent obligations and that the trial court improperly calculated the damages award, respectively.

The Connecticut Supreme Court sided with the landlord, upholding the trial court's ruling that the executive orders didn't cease the restaurant's obligatory payments. However, the case was sent back to the trial court for a damages hearing, as the burden of proof as to mitigation was incorrectly placed on the landlord and not the defendant.

"Applying these principles, we conclude that the doctrine of impossibility or impracticability does not excuse the defendants from their obligations to the plaintiff under the lease agreement. First, and most significant, as the trial court found, even under the most restrictive executive orders, use of the premises for restaurant purposes was not rendered factually impossible insofar as restaurants were permitted to provide curbside or takeout service, and the lease agreement did not prohibit curbside or takeout service," Chief Justice Richard Robinson wrote regarding the defense of impossibility.

Robinson further noted that the shutdown restrictions were "perhaps highly burdensome," but they did not make the lease agreement "impossible or commercially impracticable as a matter of law."

Additionally, the lease agreement lacked a force majeure clause that would govern the parties' mutual obligations in the event of a crisis, the opinion said.

"[W]e conclude that the purpose of the lease agreement was not frustrated by the pandemic restrictions imposed by the executive orders, even those that barred indoor dining entirely. The language of the lease agreement was not limited to a certain type of dining and—in contrast to the more restrictive language contained in the sister state cases on which the defendants rely—did not preclude the takeout and subsequent outdoor dining that the defendants sought to provide," Robinson wrote regarding the frustration of purpose doctrine. "Put differently, the lease terms did not by themselves render the lease agreement valueless in light of the executive orders."

"I think it was the right decision. … We're obviously very happy with that," Nevas said.

A message seeking comment from Downtown Soho's attorney, Philip Russell of the Law Offices of Philip Russell, was not immediately returned.