Spector v. Fitness & Sports Clubs, LLC – 5/8/2023
Arizona Court of Appeals Division Two holds that a provision requiring notice and a cure period in a commercial lease was not a condition precedent to a breach of contract claim.
A sports and fitness club vacated the building it was leasing part way through a ten-year lease term, though it continued to pay rent. At the end of the term, the club surrendered the property and signed over insurance proceeds it had received after the HVAC units were vandalized. The landlord discovered other defects with the property upon reassuming possession, including broken windows and missing fixtures. The landlord filed suit against the club, claiming it materially breached the lease by failing to maintain the property, and sought compensatory damages.
The issue in dispute was whether the landlord was required to provide a notice and cure period in accordance with the parties’ lease. After a bench trial, the superior court ruled for the club, finding no evidence showed the landlord provided the club with written notice and a cure period. The Court of Appeals reversed. Analyzing the relevant contractual provisions, the Court of Appeals found that the section requiring notice and a cure period is a condition precedent to some relief under the lease, including those requiring default. But the plain language of the default section indicates that remedies for a default are in addition to all remedies available at law or in equity. Accordingly, the notice and cure period was not a condition precedent to the landlord’s breach of contract claim.
Judge Brearcliffe authored the opinion, in which Judges Eckerstrom and Kelly joined.
Posted by: Sarah Pook Lawson