1

Filed 7/15/15 Safeway, Inc. v. Lee CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

SAFEWAY, INC.,

Plaintiff and Appellant,

v.

PHILLIP M. LEE et al.,

Defendants and Respondents.

A141150, A142759

(Contra Costa County

Super. Ct. No. MSC11-00234)

Plaintiff Safeway, Inc. appeals the dismissal of its complaint for declaratory relief 

based on the ground that the controversy it seeks to resolve is not ripe for adjudication.

Safeway and the owners of a shopping center disagree whether Safeway has the right to 

sublease its space in the shopping center to a health/fitness club. Although we agree with 

the trial court that the issue is close, we conclude that the controversy is sufficiently 

framed to permit meaningful adjudication and shall reverse so that the dispute may be 

resolved.

Background

Safeway is the lessee of anchor space in a retail shopping center in El Cerrito now 

owned by respondents. Safeway holds its interest in the property pursuant to a written 

lease and a recorded amended declaration of restrictions and grant of easements (the 

declaration or CC&Rs1). “Paragraph 2 of the original declaration provides that “the 

tenants occupying the [shopping center] shall be primarily retail and service tenants of 

 

1 CC&Rs is the abbreviation for covenants, conditions, and restrictions.
2

the type normally associated with a retail shopping center.” Paragraph 13 of the lease 

provides: “Lessee may assign this lease or sublet the whole or any part of the leased 

premises provided the use thereof by any such subtenant or assignee shall be for retail or 

service purposes.”

After initially operating a market in the leased space, in late 2009 Safeway 

informed respondents that it would be ceasing operations in the leased premises because 

it would be opening a larger store in the same vicinity. In June 2010, Safeway advised 

respondents that it intended to sublet the premises to 24 Hour Fitness and requested 

respondents’ approval. In July, respondents responded: “Unfortunately, [subleasing the 

space to 24 Hour Fitness] does not meet the subleasing/assignment criteria’s set forth in 

the lease. 24 Hour Fitness[’s] primary use is a gym and not a retailer. In addition, 

subleasing to 24 Hour Fitness would adversely have a negative impact on the overage 

distribution to the Landlord.” Safeway replied: “In our opinion these days it is not 

unusual to find a gym operation like 24 Hour Fitness as a service operation in a retail 

shopping center and thus such an operation would be permitted by both the lease and the 

CC&Rs.” To this respondents replied: “24 Hour Fitness is a gym . . . and is neither a 

retail nor service type of business,” and in the email reply set forth its concerns and a 

proposal under which it would agree to the sublease. Further negotiations proved 

unsuccessful and in January 2011 Safeway filed its complaint seeking declaratory relief.

In its complaint for declaratory relief Safeway alleged that it “desires to sublet the 

leased premises to a third party for the purpose of operating a health/fitness club at the 

leased premises. [¶] . . . [¶] Safeway further contends that the operation of a health/fitness 

club that provides, among other things, facilities and equipment for physical fitness and 

exercise, as well as instruction, training, or assistance in physical culture, body building, 

exercising, reducing, figure development, or any other such physical skill is a use for 

‘retail or service purposes’ within the meaning of the lease.” The complaint continues by 

alleging that “a health/fitness club is ‘of the type normally associated with a retail 

shopping center’ within the meaning of the declaration” and that such use is a permitted 

use under the lease and under the declaration. On information and belief, Safeway alleged 
3

that respondents contend that such use is not a use for retail or service purposes and was 

not permitted by the lease or the declaration. The prayer requests a judicial declaration 

that “[t]he operation of a health/fitness club that provides, among other things, facilities 

and equipment for physical fitness and exercise, as well as instruction, training, or 

assistance in physical culture, body building, exercising, reducing, figure development, or 

any other such physical skill is a use for ‘retail or service purposes’ within the meaning of 

the lease,” is “of the type normally associated with a retail shopping center” within the 

meaning of the declaration, and is a permitted use under the lease and the declaration. 

Respondents’ answer to the complaint admits the allegation of the complaint that 

“[a]n actual controversy has arisen and now exists between Safeway and [respondents] 

concerning their respective rights, duties, and obligations under lease and declaration 

with respect to Safeway’s right to sublet the leased premises and the uses permitted under 

the lease and declaration.” The answer further “admit[s] that Safeway’s proposed 

subtenant does not meet the requirements of the lease and the CCR’s,” denies all other 

relevant allegations, and asserts several affirmative defenses. 

The litigation considered apace with discovery and other proceedings relating to 

the inclusion and ultimate dismissal of other parties with past or current interests in the 

shopping center. Mediation was unsuccessful. In April 2012 Safeway filed its case 

management statement, summarizing its position as follows: “plaintiff Safeway Inc. seeks 

a judicial declaration that: 1) it has the absolute right to sublease the leased premises to 

any third party without the [respondents’] consent so long as the third-party uses the 

leased premises for retail or service purposes, 2) the operation of a health/fitness club is a 

use for retail or service purposes within the meaning of the lease, 3) the operation of a 

health/fitness club is a permitted use under the lease, 4) the operation of a health/fitness 

club is a permitted use under the declaration, and 5) a health/fitness club is ‘of the type 

normally associated with a retail shopping center’ within the meaning of the declaration.”

In May 2012, respondents filed their issue conference statement. Their statement 

summarized the dispute as follows: “Safeway desires to sublet the premises to the 

membership based health club 24 Hour Fitness. [Respondents] contend that 24 Hour 
4

Fitness does not satisfy the requirements of the lease or CC&R’s. In particular, 

[respondents] contend that the lease and CC&R’s restrict the use of the premises to retail 

or service purposes and this does not include membership based clubs.” Respondents 

expanded on their contentions, stating that they “objected to this proposed sublease 

because a membership based club does not meet the requirements of the CC&R’s or the 

lease that the primary use of the premises by any tenant or subtenant must be for retail or 

service purposes. The statement continued by summarizing respondents’ contentions as 

to why a membership based club does not meet the intent of the parties when the lease 

and declaration were executed, and would deprive respondents of the benefit of the 

percentage rent provision of the lease.

Some two and a half years after the filing of Safeway’s complaint, in a letter 

relating to discovery issues, including respondents’ request for information concerning

Safeway’s negotiations with prospective subtenants, Safeway’s attorneys advised

respondent’s counsel of the following: “24 Hour Fitness recently informed Safeway that 

it is no longer interested in subleasing the premises from Safeway and has terminated all 

negotiations with Safeway relating to the premises. As a result, 24 Hour Fitness will not 

be subleasing the premises. Safeway, however, is still seeking a potential fitness/gym 

subtenant for the premises.” A month after receiving this letter, in August 2013, 

respondents filed a motion for summary judgment “on the grounds that there is no triable 

issue of any material fact. In particular, plaintiff’s verified complaint pleads a single 

cause of action for declaratory relief and the undisputed material facts establish that there 

no longer exists an actual present controversy and plaintiff is seeking an advisory opinion 

in violation of California law.” 

In opposing the motion, Safeway presented evidence implying that the reason for 

which 24 Hour Fitness had withdrawn its interest in subleasing the premises was

respondents’ refusal to sign the application for a permit to perform necessary tenant 

improvements. Further, Safeway presented evidence that “[d]espite the withdrawal of 24 

Hour Fitness from negotiations to sublease the leased premises, Safeway has continued to 

seek a subtenant for the leased premises to operate a health/fitness facility therein. . . .
5

Safeway has had communications with other potential health/fitness subtenants interested 

in subleasing the leased premises, including, without limitation, LA Fitness and Crunch 

Fitness. . . . [¶] Safeway has also had discussion with potential non-health/fitness 

subtenants, including discount retailers Savers and Big Lots, but Safeway has received 

most interest in the leased premises from operators of health/fitness facilities. ”

2

According to the declaration of Stephanie Davis, Safeway’s Director Real Estate for 

Property Development Associates, respondents’ “failure and refusal to cooperate with 

Safeway’s efforts — since 2010 — to sublease to a health/fitness business has prevented 

Safeway from completing a sublease with a health/fitness business. Because of 

[respondents’] unwillingness to cooperate in Safeway’s subleasing efforts, we have no 

choice but to ask the court to determine Safeway’s right to sublease to a health/fitness 

business under the lease and declaration so Safeway can complete a sublease of the 

leased premises to a health/fitness business.”

The trial court granted respondents’ motion for summary judgment. Quoting 

extensively from the Supreme Court opinion in Pacific Legal Foundation v. California 

Coastal Com. (1982) 33 Cal.3d 158, the court stated that the Supreme Court “has made it 

clear that the requirement of ripeness, as a component of the doctrine of justiciability, 

prevents courts from issuing purely advisory opinions.” The court held that the questions 

presented by the complaint for determination “made sense when there was a concrete 

subtenant, 24 Hour Fitness, that wanted to sublease the leased premises. However, now, 

these questions may well result in an advisory opinion because Safeway may not lease 

the premises to a health/fitness club at all. . . . [¶] Here, there is only a hypothetical state 

of facts because Safeway does not currently have a tenant that it wishes to lease to. . . . 

[B]y this action, Safeway is simply finding out the parameters of the terms within the 

lease and declaration, so as to be able to sublease the premises without a prolonged fight 

 

2

Safeway’s opposition also provided evidence that “[o]ne potential subtenant that has 

recently expressed interest in subleasing the leased premises for the purpose of operating 

a health/fitness facility is Rockin’ Jump Inc. . . . an operator of trampoline parks that offer 

fitness opportunities for children and adults, and family entertainment.”
6

from [respondents]. While understandable, this is not the test for ripeness set out by the 

California Supreme Court in Pacific Legal Foundation, supra, 33 Cal.3d at 170-171: The 

‘controversy must be definite and concrete,’ . . . ‘admitting of specific relief through a 

decree of conclusive character.’ ” Thereafter judgment was entered denying the request 

for declaratory relief and awarding costs to respondents. 3In subsequent proceedings 

respondents were awarded their attorney fees. 

Subsequent to the entry of the initial judgment, Safeway filed a motion for a new 

trial. In addition to arguing that the summary judgment motion should not have been 

granted for numerous reasons, Safeway contended that newly discovered evidence 

warranted a new trial. The new trial motion was supported by a declaration from Jan 

Martin explaining that subsequent to the granting of the summary judgment motion she 

had learned for the first time “that 24 Hour Fitness might have a renewed interest in 

subleasing the leased premises” and that the parties “have resumed discussions regarding 

24 Hour Fitness subleasing the leased premises from Safeway for the purpose of 

operating a fitness center.” After argument, the trial court denied the new trial motion 

with the following explanation: “The issue is whether the dispute existed at the time of 

filing – the ‘newly discovered evidence’ is insufficient to justify a new trial. [¶] A 

potential new contract that might arise from new or renewed negotiations is insufficient.” 

Safeway filed timely notices of appeal from the initial and several amended 

judgments. All appeals have been consolidated for all purposes.

Discussion

In their appellate briefs both parties address numerous issues that we need not 

consider. These issues range from the proper standards and procedures for granting 

 

3 At the hearing on the summary judgment motion, following the issuance of the court’s 

tentative decision, Safeway obliquely requested leave to amend “to address even more 

specifics about what we’re doing in terms of finding a fitness tenant and the like and 

potentially consider whether it makes sense to file a breach of contract claim against the 

landlord for interfering with our ability to do the 24 Hour deal.” Among Safeway’s 

arguments on appeal is the contention that the court abused its discretion in denying it 

leave to amend.
7

summary judgment and a motion for new trial, to the court’s jurisdiction to enter a 

judgment including an award of attorney fees after having previously entered a judgment 

that did not include such an award, to whether respondents are entitled to attorney fees as 

the prevailing parties when the court has determined only that their dispute is not ripe for 

judicial resolution. To resolve the appeal it is necessary to decide only whether the trial 

court erred in determining that the controversy between Safeway and respondents is not 

ripe for adjudication.

The basic principles applicable to a suit for declaratory relief under Code of Civil 

Procedure section 1060 are well settled, although their application is frequently less clear. 

“The purpose of declaratory relief is ‘to set controversies at rest before they lead to 

repudiation of obligations, invasion of rights or commission of wrongs.’ [Citation.] It ‘is 

to be used in the interests of preventive justice, to declare rights rather than execute 

them.’ [Citation.] To this end, Code of Civil Procedure section 1060, which authorizes 

actions for declaratory relief, provides, in pertinent part: ‘Any person interested under a 

written instrument . . . or who desires a declaration of his or her rights or duties with 

respect to another, or in respect to, in, over or upon property . . . may, in cases of actual 

controversy relating to the legal rights and duties of the respective parties, bring an 

original action . . . in the superior court for a declaration of his or her rights . . . including 

a determination of any question of construction or validity arising under the instrument or 

contract.’ (Italics added.) [¶] The ‘actual controversy’ language in Code of Civil 

Procedure section 1060 encompasses a probable future controversy relating to the legal 

rights and duties of the parties. [Citation.] For a probable future controversy to constitute 

an ‘actual controversy,’ however, the probable future controversy must be ripe. 

[Citation.] A ‘controversy is “ripe” when it has reached, but has not passed, the point that 

the facts have sufficiently congealed to permit an intelligent and useful decision to be 

made.’ [Citation.] [¶] Whether a claim presents an ‘actual controversy’ within the 

meaning of Code of Civil Procedure section 1060 is a question of law that we review de 

novo. . . . [¶] Once an ‘actual controversy’ exists, it is within the trial court’s discretion to 

grant or deny declaratory relief, and a reviewing court will not disturb that exercise of 
8

discretion absent abuse.” (Environmental Defense Project of Sierra County v. County of 

Sierra (2008) 158 Cal.App.4th 877, 884-885.)

“While trial courts do have discretion to decline to issue a declaratory judgment, 

that power has been strictly confined. ‘Where . . . a case is properly before the trial court, 

under a complaint which is legally sufficient and sets forth facts and circumstances 

showing that a declaratory adjudication is entirely appropriate, the trial court may not 

properly refuse to assume jurisdiction; and if it does enter a dismissal, it will be directed 

by an appellate tribunal to entertain the action. Declaratory relief must be granted when 

the facts justifying that course are sufficiently alleged.’ ” (AICCO, Inc. v. Insurance Co. 

of North America (2001) 90 Cal.App.4th 579, 590.) The same principles undoubtedly 

apply when a pleaded and acknowledged controversy is claimed to have been rendered 

nonjusticiable by events occurring subsequent to the filing of the complaint but prior to 

adjudication of the dispute.

The proper approach to evaluating the justiciability of a controversy claimed not to 

be ripe for adjudication is well stated in Witkin, California Procedure (5th ed. 2008) 

Pleading, section 865, page 281: “If the requirement of a present controversy were 

strictly applied, the benefits of the statute would be denied in some situations that seem 

appropriate for declaratory relief. Thus, a person in doubt about the legality of a 

contemplated action, or his or her right to take that action, may not be able to show that 

anyone so far has actually challenged it. But the person may be able to show a great

probability that there will be a challenge when the action is taken and others are affected 

by it. It is not a satisfactory answer to say that he or she is asking for an advisory opinion, 

and that the proper course is to engage counsel and follow counsel’s advice. The same 

answer could be made (and has been made) to the whole procedure for declaratory relief. 

It seems desirable to allow the action even in the absence of a showing of a present 

controversy, where the likelihood of a future controversy appears in the complaint. (See 

62 Harv. L. Rev. 797.)”

As the trial court recognized, in the case before us there is an actual controversy 

that undoubtedly was ripe for adjudication when Safeway was proposing to sublease the 
9

premises to 24 Hour Fitness. As indicated above, Safeway’s complaint requests a judicial 

declaration that “[t]he operation of a health/fitness club that provides, among other 

things, facilities and equipment for physical fitness and exercise, as well as instruction, 

training, or assistance in physical culture, body building, exercising, reducing, figure 

development, or any other such physical skill is a use for ‘retail or service purposes’ 

within the meaning of the lease,” is “of the type normally associated with a retail 

shopping center” within the meaning of the declaration, and is a permitted use under the 

lease and the declaration. Respondents acknowledged the dispute and claimed that a 

sublease to a membership fitness center such as 24 Hour Fitness would violate the terms 

of both the governing lease and the declaration. Although Safeway had not yet entered an 

agreement to sublease the premises to 24 Hour Fitness, both parties recognized the

existence of a justiciable controversy over whether the governing documents permit

Safeway to lease the premises to a health/fitness club such as 24 Hour Fitness.

With the withdrawal of 24 Hour Fitness from the negotiating table, respondents 

took the position, and the trial court agreed, that the controversy was no longer ripe for 

adjudication.4 However, although respondents characterize the controversy as a dispute 

limited to the permissibility of subleasing to 24 Hour Fitness, the disagreement was and 

is whether the premises may be subleased to any health/fitness club such as 24 Hour 

Fitness. That is how the dispute is framed in Safeway’s complaint, which makes no 

mention of 24 Hour Fitness. Although respondents’ answer refers to “Safeway’s 

proposed subtenant” allegedly not meeting the requirements of the lease and declaration, 

in their issue conference statement, respondents stated that at trial they would present, 

 

4

It should be noted that the trial court’s explanation for denying Safeway’s motion for a 

new trial is inconsistent with its rationale for granting the summary judgment motion. If, 

as the court stated in denying the new trial motion, “[t]he issue is whether the dispute 

existed at the time of filing” the complaint, the subsequent withdrawal of 24 Hour Fitness 

would not affect the justiciability of the controversy. Moreover, the court’s statement that 

“[a] potential new contract that might arise from new or renewed negotiations is 

insufficient” is inconsistent with its acknowledgment that the controversy was ripe for 

decision before 24 Hour Fitness withdrew, even though no sublease had yet been entered 

or agreed upon.
10

inter alia, “expert opinion testimony regarding . . . whether 24 Hour Fitness or other 

similar health and fitness clubs are an appropriate use of the premises under the lease and 

CC&R’s.” (Italics added.) Plainly there is an existing controversy over whether a 

health/fitness club is a “retail or service” business within the meaning of the lease and is 

“of the type normally associated with a retail shopping center” within the meaning of the 

declaration.

We disagree with the trial court that because “Safeway may not lease the premises 

to a health/fitness club at all” the dispute is not ripe for adjudication. That possibility 

existed when on-going negotiations with 24 Hour Fitness had not yet produced an

agreement, but no one then suggested that the dispute was not ripe for decision. As 

generalized in the Witkin treatise quoted above, and confirmed in numerous decisions 

upholding the propriety of declaratory relief, if the issues are sufficiently framed and a 

future controversy is likely, a declaration of rights is appropriate even if it is possible that 

the facts on which the dispute is premised will not eventuate. (E.g., Coronado Cays 

Homeowners Assn. v. City of Coronado (2011) 193 Cal.App.4th 602, 608; Leonard 

Carder, LLP v. Patten, Faith & Sandford (2010) 189 Cal.App.4th 92, 98; AICCO, Inc. v. 

Insurance Co. of North America, supra, 90 Cal.App.4th at pp. 590-591; Sattinger v. 

Newbauer (1954) 123 Cal.App.2d 365, 367.)

The Supreme Court opinion in Pacific Legal Foundation v. California Coastal 

Com., supra, 33 Cal.3d 158, on which the trial court heavily relied, does not support the 

conclusion that the present dispute is not justiciable. In that case, the plaintiffs were

seeking a declaration of the facial invalidity of guidelines to the California Coastal Act of 

1976 adopted by the California Coastal Commission. The plaintiffs acknowledged “that 

no specific application of the guidelines is involved; rather, the case is merely a general 

challenge on statutory and constitutional grounds to the Commission’s access policies 

contained in the guidelines.” (33 Cal.3d at p. 169.) In holding the controversy not ripe for 

adjudication, the court stated: “the abstract posture of this proceeding makes it difficult to 

evaluate even the issues relating to the consistency of the guidelines with the Coastal Act. 

Plaintiffs are in essence inviting us to speculate as to the type of developments for which 
11

access conditions might be imposed, and then to express an opinion on the validity and 

proper scope of such hypothetical exactions. We decline to enter into such a contrived 

inquiry.” (Id. at p. 172.)

The controversy in the present case is hardly contrived. The parties disagree 

whether specific contractual provisions permit Safeway to sublease the premises to a

health and fitness club.

5 While respondents argue that the dispute is not concrete in the 

absence of a specific potential lessee, the complaint describes the nature of a health and 

fitness club with sufficient particularity to permit a meaningful resolution of the 

controversy. Respondents contend that 24 Hour Fitness is not a permissible subtenant 

under the controlling documents because of the nature of a health and fitness club, not 

because of any reasons unique to the operations of 24 Hour Fitness. As the respondents 

stated in their issue conference statement, they “have objected to this proposed sublease 

because a membership based club does not meet the requirements of the CC&R’s or the 

lease that the primary use of the Premises by any tenant or subtenant must be for retail or 

service purposes.” 6 While the operations of different health and fitness clubs may differ 

in marginal respects, respondents’ contention—which Safeway disputes—is that no

health and fitness club is permissible under the lease and declaration. “ ‘A controversy is 

“ripe” when it has reached . . . the point that the facts have sufficiently congealed to 

 

5 Although the description in the complaint of the type of business as to which an 

adjudication is requested does not include the term “membership,” membership is 

implicit in a “club,” the term that is used in the complaint. 

6

Expanding their argument, respondents asserted that “the evidence will show that the 

intent of the parties at the time the CC&R’s and lease were executed was to restrict the 

type of tenants who could occupy the Premises. Those restrictions expressly provide that 

the Premises can only be occupied by tenants whose use is for retail or service purposes. 

Had the parties intended to include membership based clubs and organizations in the 

permitted uses, the CC&R’s and lease would reflect that intention. To include a 

membership based club in the permitted uses of retail or service would expand the use 

beyond what the parties intended and will have the effect of altering the nature and 

makeup of the tenant mix at Moeser Shopping Center.” Respondents argued further that 

subtenancy by a membership club would adversely affect their ability to collect 

percentage rent as provided in the lease. 
12

permit an intelligent and useful decision to be made.’ ” (Pacific Legal Foundation v. 

California Coastal Com., supra, 33 Cal.3d at p. 171.) We have no doubt that an 

intelligent and useful decision can be made to determine whether a health and fitness club 

satisfies the conditions prescribed by the lease and declaration. As the court also stated in 

the Pacific Legal Foundation opinion, the ripeness doctrine “should not prevent courts 

from resolving concrete disputes if the consequences of a deferred decision will be 

lingering uncertainty in the law, especially when there is widespread public interest in the 

answer to a particular legal question.” (Id. at p. 170.)

Moreover, in Pacific Legal Foundation, the Supreme Court also approvingly 

referred to the criteria adopted in the federal courts to determine the ripeness of a 

controversy. In addition to evaluating the fitness of the issues for judicial decision, the 

courts also consider “the hardship to the parties of withholding court consideration.” 

(Pacific Legal Foundation v. California Coastal Com., supra, 33 Cal.3d at pp. 171, 172-

173.) Here the hardship is readily apparent. The disagreement between the parties over 

the permissibility of subleasing to a health and fitness club has already caused one

breakdown in the negotiations with 24 Hour Fitness, and undoubtedly is an on-going 

impediment to further negotiations with them and with other health and fitness clubs.

Safeway has an obvious and legitimate interest in subleasing the space which it is no 

longer using but for which it is obligated to pay rent. Other tenants of the shopping center 

also have an interest in the resolution of the controversy and subleasing of the space. 

Indeed, even the public and the local government have a more remote interest in putting 

the space to use. Respondents’ interests in enforcing the terms of the lease and 

declaration will be fully vindicated by resolution of the dispute, not by continuing 

uncertainty which interferes with the ability to obtain a new tenant for the premises. 

Thus, we conclude that the present controversy is ripe for decision, so that we 

shall reverse the judgment and remand the matter to permit prompt resolution of the

dispute, whether the lease and declaration permit Safeway to sublease the property to a 

health and fitness club. The reversal of course vacates the award of attorney fees.
13

Disposition

The judgment is reversed and the matter is remanded to the trial court for further 

proceedings consistent with this opinion. Safeway shall recover its costs on appeal.

_________________________

Pollak, Acting P. J.

We concur:

_________________________

Siggins, J.

_________________________

Jenkins, J.

A141150, A142759