A commercial tenant alleged that it was induced to enter into a lease by fraudulent misrepresentations about the condition of the landlord’s plumbing system and later suffered business losses after repeated sewer back‑ups.
The landlord moved under Rule 21 to strike the amended statement of claim based on contractual provisions including a covenant requiring the tenant to insure against losses such as flooding and sewer backup, and a release executed after the first incident.
The court held that the covenant to insure barred the tenant’s claims for breach of contract, negligence, and negligent misrepresentation because the tenant had assumed the risk of those losses through insurance.
However, it was not plain and obvious that the covenant or the release barred a claim for fraudulent misrepresentation inducing the lease, particularly given allegations of economic duress surrounding the release.
The tenant was granted leave to amend its pleading to advance only the fraudulent misrepresentation claim.
