Parking Sagas, Part II
I‘m probably going to develop a personal expertise in the limited field of Parking Sagas; be forewarned.
This case, Gietzen v. Goveia, B255925, out of the Second Appellate District of the Court of Appeal of California, concerned a shopping center that leased spaces to several businesses. One of these businesses was a restaurant called Yolanda’s and another of these businesses was a gym called 24 Hour Fitness. When Gietzen, the owner of Yolanda’s, entered into negotiations with the developers of the shopping center, he asked who the other tenants of the shopping center were going to be. Apparently, Amy Williams, one of the developers’ agents, told him that the anchor tenant was likely to be a marine hardware company. In fact, negotiations with the hardware company eventually fell through and the anchor tenant ended up being 24 Hour Fitness.
Apparently, in California at least, it is fairly well known among real estate-related business people that gyms can “cause major parking congestion problems.” Here is where I betray that I do not belong to a gym, so I have no first-hand experience of this. But apparently very many people are much more dedicated to working out than I realized, because the gym in this case ended up utilizing around 95% of the available parking spaces. Williams had apparently known this was likely to happen based on previous similar experiences with gyms in shopping centers she’d helped develop, and Gietzen also said that he knew gyms caused such issues and would never have leased space in the shopping center if he’d known a gym was going to be an anchor tenant.
Amid evidence that potential Yolanda’s patrons were actually eating at other restaurants because they didn’t want to deal with the lack of parking at the Yolanda’s shopping center, Gietzen complained, as did other tenants having similar problems. Eventually, several solutions were attempted, but the parking lot still remained almost entirely full of gym patrons to the detriment of the other tenants. So, eventually, Gietzen sued, alleging, among other things, breach of contract and breach of the covenant of good faith and fair dealing.
The relevant clause of the contract was Article 9.1: “The Common Area shall be available for the nonexclusive use of Tenant during the full term of this Lease or any extension of the term hereof . . . .” The Common Area included the parking lot. The court interpreted that clause to mean that the common area had to actually be available for the tenant to use; the availability could not be hypothetical. Because 95% of the common area was being monopolized by the anchor tenant gym, the court found that Gietzen had been denied use of the common area in breach of the contract. The shopping center developers tried to argue that this interpretation implied that gyms can never be allowed to be shopping center tenants because of their propensity to take up so many parking spaces at all times. The court found, however, that no such implication was required.
As far as the breach of covenant of good faith and fair dealing, the shopping center developers pointed to a clause in the lease that said no covenants were implied. But the court said that good faith is required of all contracts, and that courts would not allow a contract to permit a party to act in bad faith based on a statement as vague as the one this contract contained: “The good faith of the parties is essential to all contracts. No agreement, no matter how finely crafted, will protect a party if the other party is not acting in good faith. If indeed [the developer] is contending that the lease allows it to act in bad faith, it must point to a clause more specific than a general clause against implied covenants.”
Mainly I felt like I had to share this case so that I can spread around my guilt over not being one of those many people parked at the gym.