Judge Teresa A. Beaudet, Case Number: 22STCV26260, Date: 2024-01-16 Tentative Ruling

Plaintiff Gateway Pointe, LLC (“Gateway”) filed this action on August 12, 2022 against Defendant Fitness International, LLC fka L.A. Fitness International, LLC (“Fitness”). The Complaint alleges one cause of action for breach of lease.

In the Complaint, Gateway alleges that at all relevant times, it was and now is the

owner of real property located at 1275 E. Foothill Blvd., La Verne, CA 91750 (the “Property”). (Compl., ¶ 1(b).) On or about March 8, 1999, Gateway’s predecessor in interest, La Verne Retail Partners, LLC and Fitness entered into a written lease whereby Fitness leased the Property. (Compl., ¶ 5.) On February 10, 2011, Gateway and Fitness entered into a written First Amendment to Lease. (Compl., ¶ 6.) Gateway alleges that “[o]n or about April 1, 2020, and at various times thereafter, [Fitness] breached the LEASE by failing to pay rent when due. This constitutes a material breach of LEASE. As of August 1, 2022, [Fitness] owes, at least, the sum of $954,808.52 in unpaid rent, exclusive of interest, late charges and attorney’s fees.” (Compl., ¶ 8.)

On October 14, 2022, Fitness filed a Cross-Complaint in this action against Gateway. The Cross-Complaint alleges causes of action for (1) breach of written contract (lease), (2) common count – monies had and received, (2) common count – monies paid by mistake, (4) common count – monies paid and expended, (5) declaratory relief – closure period, and (6) declaratory relief - ongoing restrictions.

In the Cross-Complaint, Fitness alleges, inter alia, that “Fitness, a nationwide operator of indoor health clubs and fitness centers, including in California, is among the many businesses that were materially and negatively impacted by the government-mandated closures due to COVID-19.” (Cross-Compl., ¶ 2.) Fitness alleges that it leases from Gateway approximately 41,000 usable square feet of floor at the premises located at 1275 E. Foothill Blvd., La Verne, CA 91750 for the operation of its indoor health club and fitness center (the “Premises”). (Cross-Compl., ¶ 3.)

Fitness alleges in the Cross-Complaint that “it was illegal for Fitness to use the entire Premises for nearly a year as a result of certain closure orders by state and local government officials due to COVID-19. Because Fitness could not use or enjoy the Premises during this time, Landlord was in breach of the covenant of quiet enjoyment causing harm to Fitness in an amount to be proven at trial.” (Cross-Compl., ¶ 4.) Fitness further alleges that “during the periods of the government-mandated closures, the essential purpose of the parties’ lease was temporarily frustrated and Fitness did not receive the benefit of its bargain. Fitness’s performance was rendered temporarily impossible and impracticable because Fitness was prohibited from using the Premises and Fitness did not generate any revenue from the Premises, as membership dues/fees/monetary payments were frozen. Prior to the government mandated closures, Fitness had dutifully and consistently timely paid its rent as part of a once cooperative and fruitful relationship with Gateway. Nevertheless, and in contravention of the lease and the legal principles applicable to the circumstances, Gateway demands Fitness pay full rent.” (Cross-Compl., ¶ 5.)

Gateway now moves for summary judgment or in the alternative, summary adjudication. Fitness opposes.

The Court grants Gateway’s request for judicial notice in support of the motion as to Exhibits A, B, C, D, E, F, G, H, I, J, and K. Gateway’s request for judicial notice in support of the motion is otherwise denied.

The Court grants Fitness’s request for judicial notice in support of Fitness’s opposition.

The Court denies Gateway’s request for judicial filed in support of Gateway’s reply. The Court notes that “¿¿[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.¿¿” (Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537¿.)

The Court rules on the parties’ Joint Statement of Evidentiary Objections in Dispute regarding Gateway’s Motion for Summary Judgment or, in the Alternative, Summary Adjudication as follows:

Objection to paragraphs 11-14 of the Alexander Declaration: sustained as to paragraph 13 and the second sentence of paragraph 12, overruled as to the remainder.

Objection to paragraphs 10, 13, and 15-23 and Exhibits B-D of the Alexander Declaration: sustained as to paragraphs 13, 15-23 and the first sentence of paragraph 21,

“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” ((Code Civ. Proc., § 437c, subd. (c).) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” ((Code Civ. Proc., § 437c, subd. (f)(1).)

The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. ((Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. ((Ibid.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” ((Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Gateway seeks summary adjudication of its “Issue No. 5,” that “LA Fitness’s 31st affirmative defense fails because the doctrine of frustration of purpose and/or temporary frustration of purpose do not provide a defense to LA Fitness’s breach of its obligation to pay rent as a matter of law.” (Notice of Mot. at p. 2:23-25.)

On October 14, 2022, Fitness filed an answer to Gateway’s Complaint in this action. Fitness’s thirty-first affirmative defense is for “frustration of purpose/temporary frustration of purpose,” and alleges that “Landlord’s claims are barred because the intent of the parties in entering the Lease and the essential purpose of the Lease have been frustrated, and/or were temporarily frustrated.” (Fitness’s Answer, ¶ 31.)

Gateway cites to SVAP III Poway Crossings, LLC v. Fitness Internat., LLC (2023) 87 Cal.App.5th 882, 885 (Poway), where the Court of Appeal noted that “Defendant and cross-complainant Fitness International, LLC (Fitness), appeals from a judgment entered in favor of plaintiff and cross-defendant SVAP III Poway Crossings, LLC (SVAP), on SVAP’s breach of contract claim for Fitness’s nonpayment of rent under the parties[’] lease. Fitness contends that the trial court erred in granting summary judgment because its obligation to pay rent was excused due to the COVID-19 pandemic and resulting government orders prohibiting it from operating its fitness facility for several months. Specifically, Fitness contends that the court should have found that the obligation to pay rent was excused based on: (1) SVAP’s own material breach of the lease; (2) the force majeure provision in the lease; (3) Civil Code section 1511…(4) the doctrines of impossibility and impracticability; and (5) the doctrine of frustration of purpose. We conclude that these contentions lack merit and affirm the judgment in favor of SVAP.”

The Poway Court noted, inter alia, that “[t]he doctrine of frustration excuses contractual obligations where [p]erformance remains entirely possible, but the whole value of the performance to one of the parties at least, and the basic reason recognized as such by both parties, for entering into the contract has been destroyed by a supervening and unforeseen event. A party seeking to escape the obligations of its lease under the doctrine of frustration must show: (1) the purpose of the contract that has been frustrated was contemplated by both parties in entering the contract; (2) the risk of the event was not reasonably foreseeable and the party claiming frustration did not assume the risk under the contract; and (3) the value of counterperformance is totally or nearly totally destroyed. Governmental acts that merely make performance unprofitable or more difficult or expensive do not suffice to excuse a contractual obligation.” (SVAP III Poway Crossings, LLC v. Fitness Internat., LLC, supra, 87 Cal.App.5th at p. 895 [internal quotations and citations omitted, emphasis in original].)

The Poway Court found that “[a]ssuming, as Fitness argues, that the primary purpose of the lease was for Fitness to operate a health club and fitness facility (and the lease did not allocate the risk created by the government closure orders to Fitness alone), we still conclude that the orders did not result in the destruction of the lease’s purpose and value such that Fitness’s performance was excused…The parties entered into the lease in June 2002, and the current lease term ends in October 2025. The temporary government closure of a fitness facility for a period of months when the premises have been leased for more than 19 years—and the lease term spans more than 23 years total—does not amount to the kind of complete frustration required for the doctrine to apply. Even more clearly with respect to leases than in regard to ordinary contracts[,] the applicability of the doctrine of frustration depends on the total or nearly total destruction of the purpose. Frustration is not an available defense where, as here, counterperformance has been and remains valuable. Because the value of the lease has not been totally or substantially destroyed, Fitness’s performance is not excused.” (SVAP III Poway Crossings, LLC v. Fitness Internat., LLC, supra, 87 Cal.App.5th at pages 895-896 [internal quotations and citations omitted, emphasis in original].)

Gateway asserts that the lease here is for a multi-year period and authorizes “ancillary uses” beyond merely operating an indoor gym, such that the value of the lease was not completely destroyed. Gateway submits the Declaration of Mark Lu, who is employed by Mar Investments as a property manager for Gateway. (Lu Decl., ¶ 1.) Mr. Lu states in his declaration that “[a]ttached hereto as Exhibit A is a true and correct copy of the Lease at issue in the above captioned matter and all amendments thereto. The lessor under the Lease is [Gateway’s] predecessor in interest.” (Lu Decl., ¶ 3.) Gateway notes that Section 1.15 of the lease provides as follows:

“1.15 Tenant’s Permitted Uses: Tenant use shall be restricted to the operation of a full service sports and health club facility and ancillary uses typically found in L.A. Fitness Sports Clubs such as a pro shop, physical therapy center, chiropractic care, personal training, weight loss advising and related programs, therapeutic massage, swim lessons, racquetball lessons, tanning salon, juice bar, child care facility for members and food and beverage service (‘Permitted Uses’). Subject to all other provisions of this Lease relating to subletting, Tenant shall be allowed to sublet the Premises for any legal use not in conflict with any exclusive use provisions or agreements then in force or with any proposed tenant with whom lease negotiations have started. In addition, Tenant may not sublet the Premises for any use prohibited by any other provision of this Lease or applicable law, ordinance, rule or regulation of any governmental entity or agency.” (Lu Decl., ¶ 3, Ex. A, p. 6.)

In the opposition, Fitness asserts that it has “presented evidence sufficient to create a triable issue of material fact regarding whether the doctrine of frustration of purpose excused Fitness’s obligation to pay rent during the Closure Periods.” (Opp’n at p. 15:16-18.)

Fitness asserts that “the Lease itself confirms the mutual purpose was for Fitness to use and occupy the Premises as an indoor gym in exchange for rent. Fitness was only permitted to use the Premises as ‘a full service sports and health club facility,’ and uses ancillary thereto.” (Opp’n at p. 13:17-19, citing to Lease, §§ 1.15, 4.1.)[1]

Fitness also provides the Declaration of Diann D. Alexander, the Director of Lease Administration, Vice President-Senior Real Estate Counsel to Fitness. (Alexander Decl., ¶ 1.) Ms. Alexander states that “Fitness opened its indoor health club and fitness facility at the Premises more than 20 years ago and has only operated the Premises as an indoor health club and fitness facility since opening…” (Alexander Decl., ¶ 9.) Fitness asserts that “[h]ere, the purpose of the Lease was for Fitness to use and occupy the Premises as an indoor gym, and in exchange pay rent. This purpose was completely frustrated during the Closure Periods.” (Opp’n at p. 14:24-25.) Ms. Alexander states in her declaration that “[b]ecause of the COVID-19 Pandemic, and related government closure orders, Fitness was forced to cease operating at all of its California locations, approximately 125, and was forced to close its corporate office located in Irvine, California.” (Alexander Decl., ¶ 27.)

However, Gateway notes that the Poway Court also held that “[o]ur conclusion is supported by the rule that where commercial frustration does apply, the legal effect … is the immediate termination of the contract…As amicus curiae points out, because the application of the doctrine of frustration under California law compels the termination of the contract, the law does not recognize the temporary frustration defense Fitness attempts to assert here.” (SVAP III Poway Crossings, LLC v. Fitness Internat., LLC, supra, 87 Cal.App.5th at p. 896 [internal quotations and citations omitted, emphasis in original].) The Poway Court further held that “[i]t is also clear from the parties’ actions and argument that neither considered the contract to terminate as a result of the orders. On the contrary, Fitness continued to occupy the premises throughout the closure periods and did not attempt to rescind the lease. It therefore remains obligated to pay rent while in possession of the premises.” (Ibid.)

Gateway asserts that accordingly, “[i]f there was frustration of purpose, LA Fitness could not remain on the Premises and refuse to pay rent.” (Mot. at p. 14:19-20.) In his supporting declaration, Mr. Lu states that “[f]rom April 2020 through March 2021 LA Fitness occupied the leased premises but did not pay all rent due,” and that “Plaintiff[2] has remained in possession of the Premises the entire time it failed to pay rent and has never attempted to rescind or terminate the Lease.” (Lu Decl., ¶¶ 4, 8.) Fitness does not appear to address this point in the opposition.

Gateway also seeks summary adjudication of its “Issue No. 2,” that “LA Fitness’s 19th and 24th affirmative defenses fail because the doctrine of impossibility and/or temporary impossibility are not defenses to LA Fitness’s breach of its obligation to pay rent as a matter of law.” (Notice of Mot. at p. 2:14-16.) In addition, Gateway seeks summary adjudication of its Issue No. 4, that “LA Fitness’s 30th affirmative defense fails because the doctrine of impracticability and/or temporary impracticability do not provide a defense to LA Fitness’s breach of its obligation to pay rent as a matter of law.” (Notice of Mot. at p. 2:20-22.)

In its Answer to the Complaint, Fitness’s nineteenth and twenty-fourth affirmative defenses are for “impossibility.” These affirmative defenses allege that “Landlord’s claims are barred by the doctrine of impossibility of performance.” (Fitness’s Answer, ¶¶ 19, 24.) Fitness’s thirtieth affirmative defense for “impracticability” alleges that “Landlord’s claims are barred by the doctrine of impracticability.” (Fitness’s Answer, ¶ 30.)

The Poway Court further held that “Fitness contends that the defense of impossibility applies here because the government closure orders made it illegal for it to operate its fitness facility. But, as we have explained, Fitness’s obligation under the lease was to pay rent, not to operate a fitness facility. The government closure orders did not make it illegal for Fitness to pay rent. In fact, one of the orders explicitly stated that it did not relieve a tenant of the obligation to pay rent.” (SVAP III Poway Crossings, LLC v. Fitness Internat., LLC, supra, 87 Cal.App.5th at p. 893.) The Poway Court found that “[n]othing about the pandemic or resulting closure orders has made Fitness’s performance of its obligation to SVAP—paying rent—impossible…And [t]here is no impossibility of performance where one party has rendered services as agreed and nothing remains for the other party to do but pay the agreed compensation. The doctrine of impossibility therefore does not apply here.” (Id. at pp. 893-894 [internal quotations and citations omitted].)

Gateway asserts that here too, “[t]he COVID Orders never made it illegal or impossible to pay rent. As such, the defense does not apply.” (Mot. at p. 15:14-15.) In support of this assertion, Gateway cites to March 16, 2020 and April 10, 2020 orders issued by the Los Angeles County Department of Public Health, as well as a March 19, 2020 executive order issued by Governor Newsom and the “Memorandum on Identification of Essential Critical Infrastructure Workers During Covid-19 Response” that is referenced in the Governor’s March 19, 2020 order. (Gateway’s RJN, ¶¶ 2-3, Exs. A-D.) In the opposition, Fitness does dispute these points or argue that there is an issue of fact as to its nineteenth, twenty-fourth, or thirtieth affirmative defenses.

Based on the foregoing, the Court finds that Gateway has met its burden of demonstrating that Fitness’s nineteenth, twenty-fourth, and thirtieth affirmative defenses have no merit, and that Fitness has failed to raise a triable issue of material fact as to these affirmative defenses.

In addition, Gateway seeks summary adjudication of its “Issue No. 3,” that “LA Fitness’s 26th affirmative defense fails because Civil Code section 1511(1) does not provide a defense to LA Fitness’s breach of its obligation to pay rent as a matter of law.” (Notice of Mot. at p. 2:17-19.)

In its Answer to the Complaint, Fitness’s twenty-sixth affirmative defense is for “performance excused.” This affirmative defense alleges that “Landlord’s claims are barred because Fitness’s performance and/or any delay in performance is excused under the circumstances. See California Civil Code Section 1511.” (Fitness’s Answer, ¶ 26.) Gateway notes that in its Cross-Complaint, Fitness alleges that “[a] justiciable controversy exists with respect to whether Fitness’s performance under the Lease is excused during the Closure Periods under operation of California law, including, without limitation, California Civil Code § 1511(1).” (Cross-Compl., ¶ 77.) Gateway asserts that Civil Code Section 1511(1) does not apply here.

Civil Code Section 1511(1) provides that “[t]he want of performance of an obligation, or of an offer of performance, in whole or in part, or any delay therein, is excused by the following causes, to the extent to which they operate: 1. When such performance or offer is prevented or delayed by the act of the creditor, or by the operation of law, even though there may have been a stipulation that this shall not be an excuse; however, the parties may expressly require in a contract that the party relying on the provisions of this paragraph give written notice to the other party or parties, within a reasonable time after the occurrence of the event excusing performance, of an intention to claim an extension of time or of an intention to bring suit or of any other similar or related intent, provided the requirement of such notice is reasonable and just…”

In Poway, the Court of Appeal found that “Fitness also contends that sections 1511, subdivisions 1 and 2 excuse its obligation to pay rent during the closure periods. SVAP counters that the trial court correctly found that neither section applies here. We again agree with SVAP.” (SVAP III Poway Crossings, LLC v. Fitness Internat., LLC, supra, 87 Cal.App.5th at p. 894.) The Poway Court found that “[a]s the trial court correctly concluded, section 1511, subdivision 1 does not excuse Fitness’s performance because the pandemic and resulting government orders did not prevent Fitness from performing its contractual obligation to pay rent. Indeed, one of the orders explicitly stated that commercial tenants (such as Fitness) remained obligated to pay their rent despite a moratorium on commercial tenant evictions. Section 1511, subdivision 1 therefore does not excuse Fitness’s payment of rent.” (Id. at p. 894.) Gateway asserts that accordingly, Civil Code Section 1511(1) does not provide a defense to Fitness in this case.

In the opposition, Fitness does not address Civil Code section 1511(1) or assert that its twenty-sixth affirmative defense has merit.

Based on the foregoing, the Court finds that Gateway has met its burden of demonstrating that Fitness’s twenty-sixth affirmative defense has no merit, and that Fitness has failed to raise a triable issue of material fact as to this affirmative defense.

Gateway also seeks summary adjudication of its Issue No. 1, that “[t]he 3rd and 21st affirmative defenses in defendant Fitness International, LLC’s (LA Fitness) answer fail because Plaintiff did not breach the covenant of quiet enjoyment as a matter of law.” (Notice of Mot. at p. 2:11-13.) Fitness’s third affirmative defense for “Landlord’s failure to perform” alleges that “Landlord was unable to perform under the parties’ Lease. As a result, the Complaint and each and every cause of action, fails.” (Fitness’s Answer, ¶ 3.) Fitness’s twenty-first affirmative defense for “breaches by Landlord” alleges that “Landlord’s claims are barred by its material breaches of the parties’ written agreements and/or breaches of the covenant of good faith and fair dealing.” (Fitness’s Answer, ¶ 21.)

Gateway cites to paragraph 60 of Fitness’s Cross-Complaint, which alleges that “Landlord is in breach of its covenant that Tenant shall have and quietly enjoy the Premises for the Term set forth herein. Lease, § 19.” (Cross-Compl., ¶ 60.)

Gateway asserts that “a government order cannot cause a breach of the covenant of quiet enjoyment by Plaintiff.” (Mot. at p. 16:5-6.) Gateway cites to Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 588, where the Court of Appeal noted that “[i]n the absence of language to the contrary, every lease contains an implied covenant of quiet enjoyment, whereby the landlord impliedly covenants that the tenant shall have quiet enjoyment and possession of the premises…The covenant of quiet enjoyment insulates the tenant against any act or omission on the part of the landlord, or anyone claiming under him, which interferes with a tenant’s right to use and enjoy the premises for the purposes contemplated by the tenancy.” (Internal quotations, citations, and emphasis omitted.) Gateway asserts that “the covenant of quiet enjoyment protects the tenant from wrongful interference by the landlord…Here, the COVID-19 Orders were not the Plaintiff’s acts; rather, they were imposed by the government.” (Mot. at p. 16:9-12, emphasis omitted.)[3]

In the opposition, Fitness asserts that “Landlord’s reliance on Andrews is misplaced. The Court of Appeal in Andrews was discussing the ‘implied covenant of quiet enjoyment,’ not the express covenant that is included in Section 19 of this Lease.” (Opp’n. at p. 9:10-12, emphasis in original.) Fitness notes that the Andrews Court stated that “[i]n the absence of language to the contrary, every lease contains an implied covenant of quiet enjoyment, whereby the landlord impliedly covenants that the tenant shall have quiet enjoyment and possession of the premises.” (Andrews v. Mobile Aire Estates, supra, 125 Cal.App.4th at p. 588 [underline added, emphasis in original].) Both parties cite to Section 19 of the subject lease, which provides as follows:

“19 QUIET ENJOYMENT. Tenant, upon fully complying with and promptly performing all of the terms, covenants and conditions of this Lease on its part to be performed, and upon the prompt and timely payment of all sums due hereunder, shall have and quietly enjoy the Premises for the Term set forth herein, subject to all provisions of this Lease and all matters of record against the Project.” (Lu Decl., ¶ 3, Ex. A, p. 24.)

But as noted by Gateway, Section 19 of the lease provides that “Tenant, upon fully complying with and promptly performing all of the terms, covenants and conditions of this Lease on its part to be performed, and upon the prompt and timely payment of all sums due hereunder, shall have and quietly enjoy the Premises for the Term set forth herein.” (Lu Decl., ¶ 3, Ex. A, p. 24, underline added.) Gateway asserts that “[n]ot only did LA Fitness agree to adhere to all applicable laws, it failed to pay rent during the period it complains its rights of quiet enjoyment were breached.” (Mot. at p. 16:14-16.) As set forth above, Mr. Lu states in his declaration that “[f]rom April 2020 through March 2021 LA Fitness occupied the leased premises but did not pay all rent due.” (Lu Decl., ¶ 4.) Fitness does not appear to address this point in the opposition.

Gateway also seeks summary adjudication of its “Issue No. 7,” that “[t]he lease at issue in Plaintiff’s complaint and LA Fitness’s cross-complaint is not a divisible monthly installment contract for purposes of the permanent excusal of suspended rent payments.” (Notice of Mot. at p. 3:1-3.) Gateway asserts that “[h]ere, LA Fitness remains liable for the unpaid rent…So, to avoid this obvious problem, LA Fitness made the specious argument…that the Lease is a divisible monthly installment contract such that Plaintiff is not entitled to its rent for any month where a temporary frustration of purpose, impossibility, or impracticability existed.” (Mot. at p. 17:1-5.) Gateway asserts that “a monthly lease is only an installment contract for the purpose of the statute of limitations.” (Mot. at p. 17:6-7, emphasis omitted.)

In support of this assertion, Gateway cites to Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1344, where the Court of Appeal noted that “[i]t is settled in California that periodic monthly rental payments called for by a lease agreement create severable contractual obligations where the duty to make each rental payment arises independently and the statute begins to run on such severable obligations from the time performance of each is due…As the court in Lee v. DeForest, stated: As to instalment contracts generally, the weight of authority is to the effect that an action to recover any unpaid instalment must be brought within the period of limitations after the particular instalment becomes payable under the contract…It also has been held that the provisions of an express contract [in this case, the lease], and not the entries in an account kept by plaintiff, control the running of the statute.” (Internal quotations and citations omitted, emphasis in original.)

In the opposition, Fitness does not appear to address or dispute Gateway’s assertion that

“[t]he lease at issue in Plaintiff’s complaint and LA Fitness’s cross-complaint is not a divisible monthly installment contract for purposes of the permanent excusal of suspended rent payments.” (Notice of Mot. at p. 3:1-3.)

Based on the foregoing, the Court finds that Gateway has met its burden of demonstrating

that summary adjudication should be granted in its favor as to Issue No. 7, and that Fitness has failed to raise a triable issue of material fact as to this issue.

Gateway also seeks summary adjudication of its “Issue No. 6,” that “[t]he doctrine of failure of consideration and/or temporary failure of consideration do not provide a defense to LA Fitness’s breach of its obligation to pay rent as a matter of law.” (Notice of Mot. at p. 2:26-28.)

In its answer, Fitness’s eighth affirmative defense is for “failure of consideration,” and alleges that “Landlord’s claims are barred in whole or in part by its failure of consideration.” (Fitness’s Answer, ¶ 8.) Gateway asserts that this defense is “neither available nor applicable as a matter of law.” (Mot. at p. 17:16.)

Gateway cites to Taliaferro v. Davis (1963) 216 Cal.App.2d 398, 410-411, where the Court of Appeal noted that “[f]ailure of consideration is the failure to execute a promise, the performance of which has been exchanged for performance by the other party…Failure of consideration does not, however, vitiate the contract from the beginning; until rescinded or terminated a contract once in effect remains in effect.” (Internal quotations omitted.) Gateway asserts that “[h]ere, LA Fitness never rescinded or terminated the Lease, Plaintiff never altered LA Fitness’s right to occupy and use the premises, and LA Fitness remained on the Premises the entirety of the time it asserts it is excused from paying rent.” (Mot. at p. 17:21-24.) As discussed,

Mr. Lu states that “[f]rom April 2020 through March 2021 LA Fitness occupied the leased premises but did not pay all rent due,” and that “Plaintiff[4] has remained in possession of the Premises the entire time it failed to pay rent and has never attempted to rescind or terminate the Lease.” (Lu Decl., ¶¶ 4, 8.) In the opposition, Fitness does not address these points or assert that its eighth affirmative defense has merit.

Based on the foregoing, the Court finds that Gateway has met its burden of demonstrating that Fitness’s eighth affirmative defense has no merit, and that Fitness has failed to raise a triable issue of material fact as to this affirmative defense.

In the motion, Gateway also asserts that “alternatively, Plaintiff is entitled to summary adjudication on individual claims and defenses.” (Mot. at p. 18:6-7.) Gateway asserts that “[e]ach of LA Fitness’s affirmative claims and each of its material defenses are barred as a matter of law, and summary adjudication can be granted to individuals claims and defenses if necessary.” (Mot. at p. 18:13-15.) Although it is not entirely clear, Gateway appears to assert that in the alternative, the Court should grant summary adjudication as to the causes of action alleged in Fitness’s Cross-Complaint.

In light of the foregoing discussion, the Court finds that summary adjudication is warranted in Gateway’s favor as to Gateway’s Issues Nos. 1-7. Thus, it appears that Gateway’s “alternative” request for adjudication of Gateway’s additional issues is unnecessary. Moreover, as to Issues Nos. 8-13, Gateway’s notice of motion provides as follows:

“Issue No. 8: Plaintiff’s first cause of action for breach of contract is barred as a matter of law.

Issue No. 9: Plaintiff’s second cause of action for common count (monies had and received) is barred as a matter of law.

Issue No. 10: Plaintiff’s third cause of action for common count (monies paid by mistake) is barred as a matter of law.

Issue No. 11: Plaintiff’s fourth cause of action for common count (monies paid and expended) is barred as a matter of law.

Issue No. 12: Plaintiff’s fifth cause of action for declaratory relief (closure period) is barred as a matter of law.

Issue No. 13: Plaintiff’s sixth cause of action for declaratory relief (ongoing restrictions) is barred as a matter of law.” (Gateway’s Notice of Mot. at p. 3:4-15, emphasis added.)

As noted by Fitness, Gateway defines “Plaintiff” as “Plaintiff Gateway Pointe, LLC (Plaintiff).” (Notice of Mot. at p. 2:4-5.) Fitness notes that “[w]hile presumably a mistake, Landlord has sought summary adjudication that its own claims are barred. This defect is a basis for denying the motion as to these issues.” (Opp’n at p. 17:19-20.) This point is not addressed or disputed by Gateway in the reply. Pursuant to California Rules of Court, rule 3.1350, subdivision (b), “[i]f summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.”

Based on the foregoing, the Court does not find that Gateway has met its burden of demonstrating that summary adjudication is warranted as to Gateway’s Issues Nos. 8-13.

Gateway’s motion for summary adjudication is granted as to Gateway’s Issues Nos. 1, 2, 3, 4, 5, 6, and 7. Gateway’s motion for summary adjudication is denied as to Gateway’s Issues Nos. 8, 9, 10, 11, 12, and 13.

[1]Section 1.15 of the lease is discussed above. Section 4.1 of the Lease provides, “4.1 Permitted Uses. Tenant shall throughout the Term of this Lease use the Premises solely for the business purposes set forth in the Summary of Basic Terms. Landlord’s approval of the uses set forth in the Summary of Basic Terms shall not be deemed to grant to Tenant an exclusive right to such use in the Project unless such exclusive use is explicitly set forth in the Summary of Basic Terms.” (Lu Decl., ¶ 3, Ex. A, p. 12.)

[2]It appears that Gateway inadvertently referred to “Plaintiff” in paragraph 8 instead of Fitness.

[3]In support of this assertion, Gateway cites to March 16, 2020 and April 10, 2020 orders issued by the Los Angeles County Department of Public Health, as well as a March 19, 2020 executive order issued by Governor Newsom and the “Memorandum on Identification of Essential Critical Infrastructure Workers During Covid-19 Response” that is referenced in the Governor’s March 19, 2020 order. (Gateway’s RJN, ¶¶ 2-3, Exs. A-D.)

[4]As discussed, it appears that Gateway inadvertently referred to “Plaintiff” in paragraph 8 of Mr. Lu’s declaration instead of Fitness.

GATEWAY POINTE, LLC, Plaintiffs, vs. FITNESS INTERNATIONAL, LLC, fka L.A. FITNESS INTERNATIONAL, LLC, et al., Defendants.	Case No.:	22STCV26260
	Hearing Date:	February 6, 2024
	Hearing Time:	1:30 p.m.
	[TENTATIVE] ORDER RE: PLAINTIFF/CROSS-DEFENDANT’S MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
AND RELATED CROSS-ACTION

Superior Court of California

County of Los Angeles

Department 50