An N.C. Business Court judge has denied a summary judgment motion by Qorvo to allow the company to avoid paying millions of dollars to restore a former leased facility in Greensboro to its initial shell condition.
The ruling from Judge Julianna Earp was posted on the court’s website Wednesday.
Qorvo requested the court dismiss the lawsuit filed in October 2022 by BCORE Timber EC Owner LP, an affiliate of Link Industrial Properties of New York City.
BCORE sued Qorvo for breach of the lease contract in July 2022 in Delaware Superior Court. The lawsuit was transferred to N.C. Business Court in June 2023.
The summary judgment request was based on Qorvo’s assertion of three-year statute of limitations grounds. The company claims it had repudiated the building restoration obligations more than three years before BCORE initiated its breach of lease claim.
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Earp ruled the three-year statute of limitations that began in October 2021 had not expired, thus not relieving Qorvo of its restoration obligations.
Qorvo could not be immediately reached for comment on the court order.
Earp’s order also lifted a stay in the complaint. She ordered the parties to file within 10 days an updated case management report, a proposed case management report and next steps that could include mediation.
The legal dispute centers on a 15-year lease that RF Micro Devices — the predecessor of Qorvo — signed in September 2007 for a 120,000-square-foot shell building in a Greensboro industrial park. At the time, RF Micro had announced plans for expanding operations for the fourth time in Greensboro with its third fabrication plant that represented a 300-job, $103 million capital investment.
As part of the manufacturing expansion, Qorvo made several upgrades to the building, including a steel-framed mezzanine, in 2007 and 2008 that represented overall a $34 million expenditure.
According to the court order, BCORE said Qorvo agreed to restore the building to its initial shell condition upon request at the end of the lease term on Sept. 30, 2022.
Qorvo disagreed with BCORE’s interpretation of the lease and declined its building restoration demands.
In March 2008, RF Micro bought a semiconductor fabrication plant in the United Kingdom that supplanted its need for the third Greensboro plant. The facility was converted to use for general storage and warehousing.
When RF Micro paid $1.6 billion to buy TriQuint Semiconductor of Hillsboro, Ore., in January 2015 to form Qorvo, Qorvo took over the facility lease.
In January 2020, BCORE acquired the facility as part of a massive $233.4 million Link Industrial purchase of Highwoods Properties Inc.’s industrial and single-story flex portfolio in Greensboro.
According to the court order, BCORE officials spoke with Qorvo in December 2019 before the Highwoods portfolio sale was closed.
The order listed that Steve Bean, Qorvo’s facilities director, was quoted as saying the company “had been keeping in mind a budget of millions of dollars to restore the property when the lease term ended.” A later discussion indicated the amount could be up to $3.5 million.
However, Qorvo removed the restoration language from the tenant estoppel letter in January 2020, saying its legal department had determined “under the terms of the lease, we are not responsible for restoring the building back to its initial shell condition.”
Highwoods and BCORE signed a cost-sharing agreement before closing the portfolio sale that acknowledged the lease dispute with Qorvo.
In September 2021, BCORE sent Qorvo a notice of breach of lease related to Qorvo not commencing with restoration of the building.
When the lease expired on Sept. 30, 2022, Qorvo returned the building to BCORE with no restoration done. Shortly thereafter, BCORE conducted the restoration project.