## Facts

- Gamesa leased roughly 35,000 square feet of office space under a commercial lease that included a tenant-improvement allowance and permitted subleasing with landlord consent.
- The lease required the landlord to approve or reject a proposed sublease within 30 days after receiving specified information about the proposed subtenant.
- The landlord approved Gamesa’s first sublease to Viridity for about 15,000 square feet, running through August 2018.
- Gamesa later vacated the premises during a corporate consolidation but continued paying rent, continued using the tenant-improvement allowance, and sought additional subtenants; Viridity remained and paid subrent.
- Gamesa requested consent to a second sublease to BSI for about 5,200 square feet.
- The landlord responded that Gamesa was in “default” for vacating and claimed it had no obligation to consider the request, while also offering consent only if Gamesa forfeited the remaining improvement allowance; the BSI sublease failed.
- Gamesa sued for, among other claims, breach of contract and sought (a) damages for lost sublease revenue and (b) return of rent paid after the landlord’s breach based on an effective termination/rescission theory.
- After a bench trial, the trial court found the landlord breached the sublease-consent provisions and awarded both lost-profit damages and “interim rent” restitution; the Superior Court affirmed damages but reversed interim-rent recovery.

## Issues

1. Whether a non-breaching commercial tenant that continues performing and accepting lease benefits after the landlord’s breach may recover both expectancy damages for breach and restitution of rent paid after the breach based on retroactive termination or rescission.

## Decision

- The Pennsylvania Supreme Court affirmed the Superior Court.
- Gamesa could recover traditional contract damages for the landlord’s breach, including lost revenue tied to the failed BSI sublease.
- Gamesa could not also recover rent it paid after the breach on a theory that the lease was retroactively terminated or rescinded.
- By continuing to pay rent and accept lease benefits, Gamesa elected to affirm the lease and was limited to remedies consistent with affirmance.

## Legal Principles

- Under Pennsylvania’s election-of-remedies doctrine, a party may not obtain both (a) expectancy damages premised on the contract’s continued validity and (b) rescissionary/restitutionary relief premised on disaffirming the contract and recovering consideration already paid.
- Continued performance and acceptance of contractual benefits after the other party’s breach is conduct consistent with affirming the contract, which bars later recovery premised on retroactive rescission/termination.
- Courts may permit pleading inconsistent theories, but a final judgment may not award inconsistent remedies that produce an impermissible double recovery.

## Conclusion

A commercial tenant who continues to perform a lease after a landlord’s breach may recover benefit-of-the-bargain damages for that breach, but cannot also obtain restitution of rent paid after the breach based on retroactive termination or rescission, because those remedies are mutually inconsistent under Pennsylvania’s election-of-remedies doctrine.


Gamesa Energy USA, LLC v. Ten Penn Ctr. Assocs., L.P., 217 A.3d 1227 (Pa. 2019)