Despite two decisions in their favor by Lincoln County District and Superior Courts, Anya and Dick Reid of Damariscotta who operate Thistle Inn restaurant learned Maine Supreme Judicial Court overturned those decisions on May 28, clearing the way for building owner Max Ross to evict their business, RDR Enterprises, from his property in Boothbay Harbor.
Ross, of Jefferson, said he owns Thistle Inn under the business name 55 Oak Street. A footnote in the law court decision states, “Oak Street indicated that it was only seeking a writ of possession and waived any challenge to the amount of rent ordered.”
Asked by the Boothbay Register about rent payments RDR Enterprises made, Ross said the Reids are 100% current in their rental payments for the past 13 months and have paid the disputed rent between June 2020 and May 2021, as decided by the District Court at 40%.
The issue between RDR Enterprises and 55 Oak Street stems from interpreting a paragraph, known as “force majeure” in the rental agreement, saying neither party was liable if an act of God, restriction by the government, or other impediment occurred “...beyond such party’s reasonable control...”
The law court decision states, “For three years, RDR Enterprises operated the Thistle Inn in full compliance with the lease.”
Between March 18 and May 31, 2020, Maine restaurants were ordered to close due to COVID-19. According to the Reids, because the restaurant was not permitted to open, they believed they were not responsible for the rent during that time, under the force majeure provision.
In June 2020, restaurants were permitted to re-open with distanced seating. Under the restrictions, the Thistle with a staff of 45 would have been limited to 35 guests, or about 40% of its capacity, Anya Reid said. She explained, because operating at that reduced level would have created a loss for the business, they decided to remain closed.
The law court’s decision states RDR received a default letter while closed in June 2020 and in August was notified by 55 Oak that the lease was terminated; Ross sought payments for April, May, June and August 2020; on Oct. 14, 2020, 55 Oak filed a complaint in Lincoln County District Court seeking payment for the rent and to evict RDR; as required, the Reids escrowed the disputed $19,695 with the court.
The District Court agreed with the Reids that COVID-19 was a force majeure under the contract and excused RDR from payment of any rent for the period between March 18 and May 31, 2020. Further, the court said future rent would be reduced to 40% of the amount in the lease because government restrictions limited the inn to 40% of its total capacity. The court said RDR had not violated the terms of the lease and denied the request for an eviction.
The Reids said that, based on that decision, they continued to pay the 40% monthly amount set by the court to a trust account during the time the Thistle remained closed, which was until May 2021. Ross confirmed that after the business re-opened in May 2021, RDR paid the full pre-COVID amount each month as the lease required.
55 Oak appealed the District Court’s decision and took RDR to Superior Court in 2021 seeking to reverse the lower court’s order. In its August 2021 decision, the Superior Court agreed with the District Court and said, given the force majeure clause, the Reids did not break the lease. The eviction request was denied.
55 Oak next appealed to the Supreme Judicial Court this March asking to evict the Reids, arguing RDR had broken the lease in 2020 by not paying the full amount. “Nothing guarantees the business to be profitable, just to do business in this space,” Ross told the Register.
The law court reversed the decisions of the District and Superior Courts. According to the decision, “The plain language of the lease does not excuse nonperformance based on ... a ‘partial’ force majeure event,” therefore, the law court found, the lease agreement had been broken by RDR Enterprises because it had only paid 40%; as a result, 55 Oak Street could secure an eviction.
Asked about the future of Thistle Inn, Ross said it was unfortunate that it came to this conclusion. “There are interested parties following this case who want to purchase the building,” he added. He said he will list the property and while he doesn’t yet know the asking price, the number could be about $1 million, depending on the condition of the building’s interior.
According to Boothbay Harbor Region Chamber of Commerce, closing the inn brings the number of year-round restaurants in Boothbay Harbor to eight.
Ross also said, “The Thistle Inn is a staple of the community and I’m sure the new owners will be good stewards and continue its tradition.”
The Reids have temporarily closed the restaurant and are in the process of moving out unless circumstances change. Anya Reid told the Register, “We’re receptive to the idea that this could change. It’s been a wonderful experience with the relationships with our guests and staff.”
Dick Reid echoed her sentiments. “We have so much love for that place,” he said. “If something happens that can continue the place for the community it would be great.”