LSC, LLC v. Fitness & Sports Clubs, LLC
Filing
19
MEMORANDUM OPINION & ORDER: (1) DENYING pla's 12 MOTION for Summary Judgment ; (2) GRANTING dft's 13 MOTION for Judgment on the Pleadings. Signed by Judge Joseph M. Hood on 9/4/15.(KJR)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
LSC, LLC,
)
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
FITNESS & SPORTS CLUBS, LLC,
Defendant.
Civil Case No.
5:15-cv-134-JMH
MEMORANDUM OPINION & ORDER
***
This matter is before the Court upon the parties’ crossmotions for a dispositive ruling in this breach of contract
action.
See DE 12, 13.
Both Plaintiff and Defendant have filed
briefs in opposition to the other party’s motion and each has
agreed
to
forgo
the
filing
of
reply
memoranda.
The
Court,
having reviewed the matter and being sufficiently advised, is
prepared to issue a ruling.
I.
BACKGROUND
This action involves the termination of a sublease for the
seventh floor of the Lexington Financial Center parking garage
structure, located at 230 West Main Street, Lexington, Kentucky
(the
“Premises”).
Plaintiff
is
the
master
tenant
of
the
Premises, having leased the property from the Commonwealth of
Kentucky since 1986.
Until recently, the Defendant operated an
L.A. Fitness franchise at the Premises.
On January 1, 2004, Plaintiff subleased the Premises to
Global
Fitness
Contemporaneously,
Holdings,
Global
LLC
Fitness
(the
“GFH
subleased
Downtown Fitness, LLC (the “DFL Sublease”).
the
Sublease”).
Premises
to
Downtown Fitness
maintained operations at the Premises from 2004 through 2012.
On
October
Fitness,
26,
and
2012,
Plaintiff,
Defendant
entered
Global
into
an
Fitness,
Downtown
agreement
by
which
Defendant acquired all rights and obligations under the GFH and
DFL Subleases.1
The Term of the GFH Sublease is for a period of 20 years,
commencing
on
January
1,
2004
(the
Commencement
Date)
and
expiring at 11:59 p.m. on December 31, 2023 (the Expiration
Date).
The Sublease provides that the Term shall begin and end
on
Commencement
the
Date
and
Expiration
Date,
respectively,
unless the sublease “is terminated earlier as provided elsewhere
herein.”
GFH
Sublease,
§
2.01.
Section
21.03
of
the
GFH
Sublease goes on to state:
Force Majeure. After expiration of the 120th month of
this Sub-Lease, if Tenant determines that the downtown
market is no longer capable of sustaining and
supporting the operation of this business at this
location, then Tenant shall have a one time privilege
1
Defendant contends that when it acquired the subleases, any viable rights
and/or obligations under the DFL Sublease were extinguished, as Defendant
acquired the rights of both landlord and tenant. Moreover, Defendant notes,
Plaintiff was not a party to the DFL Sublease.
It appears that Plaintiff
does not dispute this, as it does not seek to enforce the DFL Sublease in any
way.
Rather, Plaintiff argues, the DFL Sublease is extrinsic evidence
supporting Plaintiff’s interpretation of the Force Majeure Clause in the GFH
Sublease.
2
of terminating this Sub-Lease arrangement by giving
Landlord 180 days advance notice to this effect.
On April 10, 2015, Defendant gave its written notice to
Plaintiff stating that Defendant had elected to terminate the
Sublease.
Specifically, Defendant stated:
As it is after the 120th month of the Sublease (i.e.,
after December 31, 2013), formal notice is hereby
given to Landlord that Tenant elects to exercise its
right to terminate the Sublease pursuant to the terms
of 21.03 of the Sublease.
Accordingly, the Sublease shall terminate on October
10, 2015 (i.e., 180 days after receipt of this written
notice).
Plaintiff rejected Defendant’s contention that it had a right to
terminate, arguing that the contract language provided for a
“one time” right to terminate that both arose and expired on
December 31, 2013—120 months into the Term of the GFH Sublease.
Despite Plaintiff’s rejection of Defendant’s notice, Defendant
ceased operations of LA Fitness at the Premises on May 29, 2015.
The parties seek a determination as to whether Defendant’s
termination was proper under the terms of the contract.
II.
STANDARD OF REVIEW
Plaintiff has styled its request for relief as a motion for
summary judgment, while Defendant has styled its as a motion for
judgment on the pleadings.
Summary judgment is appropriate when
the movant has shown that “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter
3
of law.”
judgment
Fed. R. Civ. P. 56(a).
bears
the
initial
basis for its motion.
pleadings,
The party seeking summary
responsibility
for
providing
the
It must identify the portions of “the
depositions,
answers
to
interrogatories,
and
admissions on file, together with the affidavits, if any,” which
demonstrate the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).
A
motion
for
judgment
on
the
pleadings
attacks
the
sufficiency of the complaint and is resolved by reference to the
same standard applicable to motions to dismiss under Federal
Rule of Civil Procedure 12(b)(6).
Penny/Olmann/Nieman, Inc. v.
Miami Valley Pension Corp., 399 F.3d 692, 697 (6th Cir. 2005).
Accordingly,
all
factual
allegations
in
the
complaint
are
accepted as true and a motion for judgment on the pleadings will
be granted only if the complaint fails to allege “enough facts
to state a claim to relief that is plausible on its face.”
Atl.
Corp.
v.
Twombly,
550
U.S.
544,
570
(2007).
Bell
Courts
typically do not look outside the pleadings when considering
these motions, but the court may consider “exhibits attached to
the complaint, public records, items appearing in the record of
the case and exhibits attached to defendant’s motion to dismiss
so long as they are referred to in the complaint and are central
to the claims contained therein.”
Rondigo, L.L.C. v. Twp. Of
Richmond, 641 F.3d 673, 680–81 (6th Cir. 2011).
4
Since the parties do not ask the Court to look outside the
contracts attached to the complaint, there is no weighing of
evidence of evidence to be done.2
is
no
factual
dispute
at
The parties concede that there
issue—only
contractual interpretation.
a
disagreement
as
to
While either type of decision is
subject to de novo review, the Court notes that this decision is
more properly characterized as a judgment on the pleadings.
III. DISCUSSION
The
Sublease
parties
Court
and,
begins
by
examining
specifically,
contend
that
the
disagree as to its meaning.
the
the
Force
language
is
language
Majeure
of
the
Clause.
unambiguous,
but
GFH
Both
they
While Plaintiff maintains that the
clause gave Defendant a single termination right that both arose
and expired on December 31, 2013, Defendant argues that the
plain language of the clause gave it the right to terminate the
Sublease at any point in time after the expiration of the 120th
month of the Term.
Force Majeure. After expiration of the 120th month of
this Sub-Lease, if Tenant determines that the downtown
market is no longer capable of sustaining and
supporting the operation of this business at this
location, then Tenant shall have a one time privilege
of terminating this Sub-Lease arrangement by giving
Landlord 180 days advance notice to this effect.
2
Defendant has also filed as exhibits various entries from dictionaries
providing definitions for the word “after.” The Court is permitted to take
judicial notice of dictionary definitions without converting the motion into
a motion for summary judgment, as the definitions are not subject to
reasonable dispute. See Comerica Bank v. Lexington Ins. Co., 3 F.3d 939, 944
(6th Cir. 1993).
5
As Plaintiff stresses, the parties’ intent is to be given
full
effect
parties’
whenever
intent,
possible.
however,
contractual language.
from
The
the
Court
plain
determines
meaning
of
the
the
See Energy Marketing Servs. Inc. v. Homer
Laughlin China Co., 229 F.3d 1151, 2000 WL 1276751, *5 (Table)
(6th Cir. Aug. 29, 2000).
It is a cardinal rule of contract
interpretation that words and phrases are to be given their
ordinary meanings.
Bd. of Regents of Ky. State. Univ. v. Gale,
898 S.W.2d 517, 521 (Ky. Ct. App. 1995).
analysis
begins
with
dispute—“after.”
the
most
Plaintiff
Accordingly, this
controversial
contends
that,
word
here,
in
this
when
the
parties used the word “after,” they meant immediately or shortly
thereafter the expiration 120th month of Term of the Sublease—
December 31, 2013.
to
determine
question.
the
Kentucky courts have looked to dictionaries
“ordinarily
used
meaning[s]”
words
in
Character & Fitness Comm. Office of Bar Admissions v.
Jones, 62 S.W.3d 28, 31–32 (Ky. 2001).
defines
of
“after”
as
“following
following in time or place.”
definitions.
in
time;
Webster’s Dictionary
a
later
time;
or
Other dictionaries provide similar
See BLACK’S LAW DICTIONARY (5th ed. 1979); AMERICAN
HERITAGE DICTIONARY (5th ed. 2011); RANDOM HOUSE DICTIONARY (2nd ed.
2001).
Notably, no dictionary that the Court consulted provided
any definition wherein “after” is qualified by any word such as
“immediately.” Plaintiff provides a compelling argument when it
6
points out that “after” takes on different meanings in different
contexts.
One helpful example that Plaintiff provides is, “Our
son moved home after four years in college.”
The Court agrees
with Plaintiff that in this particular context, the listener
would most likely conclude that the student moved home shortly
after finishing college.
Certainly, “after” could be used in a
contractual context to convey a similar sense of promptness.
Unless the context of this contract requires such a definition,
however, the Court is obligated to assign the word’s general,
ordinary meaning.
Plaintiff contends that the inclusion of the phrase “one
time” provides the context needed to demonstrate the parties’
intent that Defendant’s termination right would begin and end on
December 31, 2013.
Plaintiffs argue that any other reading
would eviscerate the “one time” language because the right to
terminate a lease is inherently a one-time right.
disagrees, however.
The Court
While the plain meaning of “one time” might
render the parties’ inclusion of the language unnecessary, it
does not render it meaningless.
Further, the reading suggested
by the Plaintiff goes too far, giving meaning to language that
simply is not there.
As the Court agrees with the parties that
the Force Majeure Clause of the GFH Sublease is unambiguous,
resort
to
the
language
of
the
inappropriate.
7
DFL
Sublease
would
be
Accordingly, IT IS HEREBY ORDERED:
(1)
that Plaintiff’s motion for summary judgment, [DE 12],
is DENIED; and
(2)
that Defendant’s motion for judgment on the pleadings,
[DE 13], is GRANTED.
This the 4th day of September, 2015.
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?