Background

• Lease Terms: Textile City subleased office space from Reliable Logistics, which prohibited retail activities.
• Allegations: Reliable alleged that Textile City breached this by operating retail sales from the premises and issued a termination notice. Textile City denied retail sales, claiming any such sales were for wholesale purposes only.

Key Issues and Court Findings

1. Breach of Lease:

   • Textile City was found to have conducted retail sales in the office space, supported by social media promotions and evidence of consumer-targeted marketing.
   • Court determined this retail activity breached the lease, which limited the space’s use to non-retail, general office purposes.

2. Waiver of Forfeiture Rights:

   • Textile City argued Reliable waived its forfeiture right by accepting rent. However, the court held Reliable’s acceptance of rent didn’t imply ongoing lease rights beyond termination due to repeated, clear communications about vacating.

3. Relief Against Forfeiture:

   • Textile City's breach was deemed modest and rectified; it ceased retail activities upon notice.
   • Reliable's bad-faith actions, including attempts to overcharge and interference tactics (e.g., replacing signage), favored granting relief.
   • Result: Textile City was permitted to remain in the office space under existing lease terms.

Orders and Costs

• Ancillary Orders: Reliable must return Textile City’s signage, garbage bins, and cover associated costs in the amount of $8,000.
• Costs: Reliable to pay Textile City’s legal costs, totaling $25,000.