While RDR Enterprises followed Gov. Janet Mills' executive order in March 2020 that temporarily prohibited indoor dining through May 31, 2020, it was the RDR Enterprises' decision not to reopen its restaurant at the Thistle Inn bed-and-breakfast under reduced capacity orders starting on June 1, 2020. RDR Enterprises cited concerns about financial feasibility of a partial reopening, the court's opinion said.

The tenant stopped paying rent to the landlord for the restaurant portion of Thistle Inn. In response, Oak Street terminated the lease agreement for its failure to pay and ordered the tenant to leave the property. The landlord filed a forcible entry and detainer action, according to the high court'snopinion.

Both the district and superior courts sided with RDR Enterprises, finding it had not breached the terms of its lease agreement with Oak Street because the "pandemic itself constitutes a force majeure event and, therefore would excuse RDR's performance under the lease agreement, at least in part," the opinion said. Thus, the lower courts denied the landlord's possession of property in its forcible entry and detainer action after the tenant failed to pay or vacate the property.

Oak Street appealed to the state high court.

The Maine Supreme Judicial Court unanimously disagreed with the lower courts on Tuesday, finding there's nothing in the contractual lease agreement that indicates events affecting economic viability constitutes force majeure events. Additionally, the state high court held that the district court's "partial-excuse ruling cannot be sustained under the language" in the contract, the opinion said.

"Because it has not been challenged on appeal, we accept the District Court's conclusion that the pandemic or the Governor's executive orders completely prohibiting indoor dining until June 1, 2020, fall within the language of the force majeure clause as an 'act[] of God' and 'governmental restrictions,'" Associate Justice Catherine R. Connors wrote. "Beginning on June 1, 2020, however, the force majeure clause does not apply to partially excuse RDR Enterprises' duty to pay rent because the unambiguous language of the clause (1) contains no indication that it can apply to partially excuse a party's nonperformance and (2) does not excuse a party's nonperformance based on governmental restrictions that limit the party's ability to make a profit, rather than preventing the party from carrying out the use contemplated by the contract."

The state Supreme Court vacated the district court's judgment and remanded it for entry of a judgment issuing a writ of possession to the landlord. Chief Justice Valerie Stanfill and Associate Justices Andrew M. Mead, Thomas E. Humphrey, and Andrew M. Horton concurred.

"Nothing in the language of the clause indicates that events affecting economic viability constitute force majeure events," Connors wrote. "Such an interpretation would go against the weight of force majeure law because, as a general matter, events causing economic hardship, such as market downturns, do not constitute force majeure events unless specifically designated in the contract. See eg. In re Millers Cover Energy Co., 62 F.3d 155, 158-59 (6th Cir. 1995); B.F. Goodrich Co. v. Vinyltech Corp., 711 F. Supp. 1513, 1518-19 (D. Ariz. 1989); Stand Energy Corp. v. Cinergy Servs., Inc., 760 N.E.2d 453, 457 (Ohio Ct. App. 2001)."

Wiscasset District Court Judge John Martin concluded in December 2020 that RDR Enterprises was excused from its contractual obligation to pay rent between March 18, 2020, and May 31, 2020, because the executive orders prohibited indoor dining and constituted a "governmental restriction" force majeure event. He further concluded that after May 31, 2020—when limited indoor dining was permitted—that the "pandemic itself constitutes a force majeure event and, therefore, would excuse RDR's performance under the lease agreement, at least in part," the opinion said.

The landlord appealed to to the Lincoln County Superior Court and Judge Daniel I. Billings affirmed the district court's judgment.

"The clause does not include any language incorporating the concept of 'partial' force majeure or partial rent payments based on a force majeure event," Connors wrote. "To the contrary, the clause provides that protection from default for nonperformance only applies if 'such' nonperformance was due to a force majeure event. This language indicates that either nonperformance is excused by the force majeure clause or it is not excused—it provides no support for the District Court's conclusion that some, but not all, of RDR's Enterprises' nonperformance was excused by the partial shutdown."

One of the potential implications of the Maine decision—and likely other courts—may be a change in the standardized force majeure clause language, Monteleone said.

"This development of the law that's honing in on exactly what it says, it's going to lead to parties negotiating and modifying their force majeure clauses with a similar kind of scrutiny that give other critical sections of their contracts," he said.

While the Connecticut Supreme Court recently held in AGW Sono Partners v. Downtown Soho that the shutdown orders did not excuse restaurant owners from paying rent, that lease agreement did not contain a force majeure clause. In that case, Superior Court Judge Walter Spader concluded that the defendants failed to prove that the executive orders rendered the restaurant's operation impossible or frustrated based on the lease agreement.

A message seeking comment from solo practitioner William Avantaggio, on behalf of RDR Enterprises, was not immediately returned.