Landlord's Claim For Rejection Damages Denied; Landlord Waived Rights To Claim Rejection Damages In New Lease.
In re Stock Building Supply, LLC, et al., Case No. 09-11572 (MFW) (July 28, 2010) (Walrath, J.)
The court disallowed Somerset Properties SPE, LLC’s (“Landlord” or “Somerset”) claim for rejection damages because the new lease entered into between the parties contained a waiver of any right to rejection damages in the Debtor’s bankruptcy case. Subsequent to the effective date of the plan for reorganization, the Debtor and Landlord entered into a new lease that contained a provision stating in relevant part:
Waiver of Proof of Claim. In consideration of the Tenant entering into this new Lease, the Landlord hereby stipulates that it has not suffered any damages and hereby agrees that it has not suffered any damages and hereby agrees not to file any proof of claim in the Bankruptcy Case by reason of the rejection of the Prior Lease by the Tenant. Landlord further waives any rights it may have to file any subsequent proof of claim for damages in the Bankruptcy Case.
The Court rejected the three arguments that Somerset offered to support its claim for rejection damages. Somerset argued that (1) the waiver of claim provision in the New Lease is not effective because Somerset’s bankruptcy counsel was not given notice of it, (2) Somerset did not knowingly or intentionally waive its rejection damages claim in signing the New Lease, and (3) the waiver does not cover its proof of claim which was filed before the effective date of the New Lease.
The Court rejected each argument in turn. First, the Court agreed with Debtor that no notice was required. The settlement was not a post-confirmation modification of the Plan as it did not affect any other creditors’ rights under the Plan. Next, the Court rejected Somerset’s contention that the waiver is not enforceable because it was not knowing and intentional applying North Carolina law. Under North Carolina law, one who assents to a writing is presumed to know its contents. Finally, the Court rejected the Landlord’s argument that the waiver provision is ambiguous because it is not susceptible to more than one reasonable meaning.
