Silicon Valley trucking-technology company Peleton Technology
claims in a lawsuit that its landlord has locked it out of its
Mountain View offices in violation of a county-wide coronavirus
The landlord, Kelly Ventures, has also shut off power to the
offices, disabling computer servers, and is using the alleged
lockout to “muscle continuing and advance payment of rent in
full,” alleges the suit filed in Santa Clara County Superior
Court. Kelly is preventing “crucial activity needed to keep the
business in existence” and causing “specific financial
injury,” the suit claimed.
Kelly declined to comment. The moratorium on evictions from
commercial and residential properties bars landlords from kicking
out tenants who have suffered substantial losses from the
coronavirus pandemic. Landlords can still collect rent if a tenant
qualifies for the eviction ban, but the tenant has 120 days from
the end of the moratorium to pay. County supervisors have extended
the eviction protections until Aug. 31, but may not have state
authority to keep it in place after July 28. The moratorium does
not apply to lawful evictions unrelated to pandemic losses.
Peleton claims it has suffered “substantial losses of
income” as a result of the pandemic, according to its suit.
Although ithas since mid-April done â€œlimited
freight haulingâ€ to deliver goods and keep some drivers employed,
the main parts of its business have been â€œsignificantly
curtailedâ€ by the outbreak, the suit claimed.
Peleton creates and licenses â€œplatooningâ€ technology for
trucks to save on fuel by driving closely together in a practice
known as â€œdrafting.â€
Last October, Peleton told Kelly it was terminating its lease
and giving six monthsâ€™ notice, to end April 24, the suit
But in mid-March, Santa Clara County, and
subsequently the state, issued shelter-in-place orders to stem the
spread of coronavirus. Since March 17, Peleton employees have been
telecommuting and only going to the office for essential work such
as processing payroll and maintaining computer servers, the suit
filed May 28 claimed.
Peleton argued in the suit that it had tried to come to an
agreement with Kelly. In mid-March, the two sides started
discussing terms for Peleton to shrink its office space to half the
building and pay less rent but they couldnâ€™t agree, Peleton
On March 31, Peleton told Kelly it would exercise its right
under the countyâ€™s eviction moratorium ordinance to delay payment
of rent and building expenses, the suit said. Because Peleton
doesnâ€™t fall into the â€œessentialâ€ business category, it
claimed, it couldnâ€™t move out of the office by April 24.
Two days before the lease was to end, Peleton proposed paying
Aprilâ€™s rent in installments, then leasing half the building on a
month-to-month basis, the company claimed. Kelly said no, and
provided â€œan unreasonable counterproposal requiring payment of
all rent deferred via the ordinance plus three months of prepaid
rent and building expenses.â€
In late April, Kelly told Peleton it had locked Peleton out of
the offices and employees could no longer go in, the suit claimed.
Two letters from Peleton did not lead to any agreement, and on May
18, Kelly shut the power off, â€œdisabling servers and related
systemsâ€ to the extent that most Peleton employees canâ€™t do key
tasks, the suit claimed.
Peleton is seeking a court order forcing Kelly to allow it back
into the building and turn the power on, as well as â€œcompensation
for economic harmâ€ and unspecified punitive damages.
Source: FS – All – Real Estate News 1
Silicon Valley trucking-tech firm claims landlord broke
coronavirus eviction ban: lawsuit