Court Opinion

ID: 9365037
Source: CourtListenerOpinion
Date Created: 2023-01-20 21:02:36.396056+00
Date Added: 2024-06-11T17:15:42.868178
License: Public Domain

Filed 1/20/23
                        CERTIFIED FOR PUBLICATION

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                               DIVISION ONE

                           STATE OF CALIFORNIA

 SVAP III POWAY CROSSINGS, LLC,            D079903

      Plaintiff, Cross-defendant and
 Respondent,
                                           (Super. Ct. No. 37-2020-
         v.                               00016039-CU-BC-CTL)

 FITNESS INTERNATIONAL, LLC,

      Defendant, Cross-complainant
 and Appellant.

       APPEAL from a judgment of the Superior Court of San Diego County,
Kenneth J. Medel, Judge. Affirmed.
       Schwartz Semerdjian Cauley & Evans, Dick A. Semerdjian,
John A. Schena; Klehr Harrison Harvey Branzburg and A. Grant Phelan for
Defendant, Cross-complainant and Appellant.
       Pryor Cashman, Benjamin S. Akley, Todd E. Soloway and
Rachel E. Shaw for Plaintiff, Cross-defendant and Respondent.
       Hodel Wilks, Fred L. Wilks for DDRM Hilltop Plaza L.P. as Amicus
Curiae on behalf of Plaintiff, Cross-defendant, and Respondent.
       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 non-payment 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; 1 (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.
              FACTUAL AND PROCEDURAL BACKGROUND
A. Lease for Premises at Poway Shopping Center
      SVAP is the owner and landlord of the building commonly known as
the Poway Shopping Center. Fitness is a California limited liability company
renting certain space in the shopping center pursuant to a retail lease
between the parties. The lease is dated as of June 12, 2002, as amended, and
provides Fitness the right to occupy the premises for a period of fifteen years,
subject to three five-year renewals. The parties later extended the initial
term of the lease to October 31, 2025.
B. COVID-19 Pandemic and Resulting Government Orders and Closures
      In March 2020, California Governor Gavin Newsom proclaimed a State
of Emergency in California due to the threat of COVID-19. Soon after, he
issued an executive order placing limitations on residential and commercial
evictions for non-payment of rent. The order also stated, however, that it did
not relieve a tenant of the obligation to pay rent, nor restrict a landlord’s

1     All subsequent statutory references are to the Civil Code.
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ability to recover rent due. Governor Newsom also issued an executive order
directing all California residents to follow the State public health directive to
stay home or at their place of residence, with certain exceptions, and
directing all non-essential businesses to immediately cease operating to
prevent further spread of COVID-19. Gyms and fitness centers were
included in the category of non-essential businesses.
      Because the government orders made it temporarily illegal for Fitness
to operate its health club and fitness center at the premises, it ceased doing
so in March 2020. Fitness was intermittently unable to operate its health
club and fitness facility for certain periods from March 2020 through March
2021 due to government closure orders.
C. Complaint and Cross-Complaint
      In May 2020, SVAP sued Fitness for breach of contract based on
defendant’s non-payment of rent. The complaint alleged that Fitness had
defaulted on its obligations pursuant to the lease by failing to pay rent for
April and May 2020, Fitness remained in occupancy of the premises, and
SVAP had not terminated the lease. SVAP further alleged that it had
performed or was excused from performing all its obligations under the lease.
The complaint sought damages from Fitness for the outstanding rent
payments, late payment service charges, interest, and attorneys’ fees and
costs. SVAP attached the parties’ lease and its three amendments to the
complaint.
      Fitness filed an answer asserting 37 affirmative defenses to the
complaint, including the equitable doctrines of frustration of purpose,
impossibility, and impracticability. Fitness also filed a cross-complaint
against SVAP for breach of contract, breach of the covenant of good faith and
fair dealing, declaratory judgment, specific performance, and promissory

                                        3
estoppel. Fitness alleged that the essential purpose of the lease was for
Fitness to operate a full-service health club and fitness facility in the
premises, but it was impossible for Fitness to do so for several months
because of the COVID-19 pandemic and resulting closure of the premises in
response to government orders. According to the cross-complaint, Fitness’s
inability to use the premises as a full-service health club and fitness facility
meant it was not required to pay rent during the closure periods.
      Fitness also alleged that SVAP breached the contract by failing to
provide Fitness a credit for rent paid, failing to comply with the lease’s
provisions regarding rent abatement, and violating various other
representations, warranties, and covenants by SVAP to Fitness in the lease.
The cross-complaint further alleged that SVAP acted in bad faith by
demanding payment under the lease and filing its lawsuit against Fitness.
Fitness sought a judgment declaring, among other things, that it was not
required to pay rent for the closure periods. It also sought specific
performance of the lease’s rent abatement provisions and the enforcement of
certain promises alleged to have been made by SVAP.
D. Summary Judgment Motion
      SVAP filed a motion for summary judgment seeking judgment in its
favor on its breach of contract claim and dismissing Fitness’s cross-

                                        4
complaint. 2 SVAP contended that it was undisputed that the parties had
entered into the retail lease, Fitness had withheld more than eight months’
worth of rent, and its failure to pay was not due to lack of funds. SVAP
argued that this failure to pay constituted a breach of the lease, the lease
(including its force majeure provision) allocated the risk associated with the
pandemic to Fitness and precluded Fitness’s asserted defenses, and none of
the other statutes or doctrines invoked by Fitness excused the breach.
      Regarding Fitness’s cross-claims, SVAP argued that Fitness’s breach of
contract claim based on abatement of rent failed because the obligation to pay
rent under the lease was absolute and the lease provision regarding
abatement of rent was intentionally omitted. SVAP argued that it was
entitled to summary judgment on Fitness’s remaining cross-claims because
the good faith and fair dealing and declaratory relief claims were duplicative
of the breach of contract claim, Fitness was not permitted to seek both
specific performance and damages under the contract, and promissory
estoppel did not apply because SVAP gave Fitness actual consideration in the
form of possession of the premises.
E. Summary Judgment Opposition
      Fitness opposed summary judgment, arguing that because its business
operations were restricted intermittently during the pandemic, its obligation

2       Fitness also filed a motion for summary judgment, which the trial court
denied. Although Fitness’s briefing sometimes references both summary
judgment motions and requests that we reverse both orders, Fitness has not
differentiated between the two motions in its briefing or explained why, even
if it is entitled to a reversal of the order granting summary judgment for
SVAP, that means it is also entitled to a grant of its own summary judgment
motion. For these reasons, and because we find the trial court properly
granted summary judgment in favor of SVAP, we decline to separately
address the order denying Fitness’s summary judgment motion.
                                       5
to pay rent was temporarily excused under Section 1511, the force majeure
provision of the lease, and the equitable doctrines of impossibility,
impracticability, and frustration of purpose. Fitness further argued that
SVAP had materially breached the lease because during the closure periods:
(1) Fitness did not have the right to use the premises as a health club or to
quietly enjoy the premises without interruption and disturbance as
warranted by SVAP; and (2) SVAP failed to abate rent as required.
According to Fitness, SVAP was therefore not entitled to summary judgment.
F. Trial Court’s Ruling and Judgment
      The trial court disagreed with Fitness and granted SVAP’s summary
judgment motion. The court found that the following facts were “essentially
undisputed”: (1) the parties entered into a valid and binding contract for the
lease of commercial premises in the Poway Shopping Center; (2) SVAP had
performed its obligations under the lease, allowing Fitness to occupy the
premises for more than 19 years; (3) beginning in April 2020, Fitness had
intermittently failed to pay rent for the premises; and (4) as of October 2021,
Fitness owed SVAP $520,361.29 in unpaid rent. Rejecting Fitness’s various
defenses, the court concluded that Fitness’s performance under the contract
was not excused. Specifically, the court found that Sections 1511(1) and
1511(2) did not apply, the force majeure provision of the lease did not apply,
Fitness’s performance was not impracticable or impossible, and the purpose
of contract had not been frustrated such that there was a failure of
consideration.
      The court’s decision rested in large part on its conclusion that the
purpose of the contract was not, as Fitness argued, for Fitness to provide rent
in exchange for SVAP providing the premises for a particular use. Rather, as
the court explained: “[T]he contractual performance owed here by the tenant

                                        6
is payment of rent. The Landlord’s obligation was to provide possession of
the premises. The tenant’s particular use of the premises was not the
obligation under the contract. Covid did not prevent performance of the
obligation to pay rent.” Based on this reasoning, the court rejected each of
Fitness’s defenses.
      First, the court found, Section 1511(1) did not apply because it excuses
contractual performance only where the performance is prevented or delayed
by the operation of law, and no law had been enacted that prevented Fitness
from paying rent. The court noted that one of the executive orders explicitly
stated that commercial tenants remained obligated to pay their rent despite a
moratorium on commercial tenant evictions. Second, Section 1511(2) did not
apply because it excuses performance of contractual obligations only where
the performance is prevented or delayed by an “irresistible, superhuman
cause” and the parties have not expressly agreed otherwise. The court
concluded that the parties here had expressly agreed otherwise by including
a force majeure provision in their contract. Third, the lease’s force majeure
provision did not apply because (1) Fitness was not prevented by restrictive
laws from performing under the lease, as its performance required only
payment of rent, and (2) the lease stated that if failure to perform can be
cured by the payment of money, it is not a force majeure event. Finally, the
court similarly found that the doctrines of frustration of purpose,
impossibility, and impracticability did not apply because Fitness’s obligation
to pay rent had not been rendered impossible or impracticable.
      The court also determined that SVAP had not breached the lease.
SVAP’s obligation under the lease was to provide possession of the premises
to Fitness, and it had fulfilled that obligation. The court therefore entered

                                       7
judgment in favor of SVAP and against Fitness on SVAP’s complaint and
Fitness’s cross-complaint.
      On January 3, 2022, Fitness filed a notice of appeal without specifying
the date of the order being appealed. The notice stated that Fitness was
appealing from a judgment after an order granting a summary judgment
motion but attached only the minute order granting summary judgment. We
issued a notice to Fitness requesting that it submit a letter explaining why
the appeal should not be dismissed on the ground that it was taken from a
non-appealable order. We also stated that if either party provided a copy of a
final judgment, we would construe the notice of appeal as being from the final
judgment.
      On April 13, 2022, the trial court executed and filed a final judgment
against Fitness.
                                 DISCUSSION
A. Standard of Review
      Our review of the trial court’s order granting plaintiff’s motion for
summary judgment is de novo. (Ryan v. Real Estate of Pacific, Inc. (2019) 32
Cal.App.5th 637, 642.) Fitness does not contend there exist any disputed
issues of material fact here, so the question before us is purely legal.
(Nathanson v. Hecker (2002) 99 Cal.App.4th 1158, 1162.)
B. Analysis
      There is no dispute SVAP has established the following elements for its
breach of contract claim based on Fitness’s non-payment of rent: (1) the
existence of a valid and binding contract between the parties for the lease of
retail premises; (2) SVAP permitted Fitness to occupy the premises for the
term of the lease; (3) beginning in April 2020, after the start of the pandemic
and resulting closure orders, Fitness intermittently failed to pay rent to

                                        8
SVAP for several months; and (4) as of October 2021, Fitness owed
$520,361.29 to SVAP in unpaid rent. (See Property Cal. SCJLW One Corp. v.
Leamy (2018) 25 Cal.App.5th 1155, 1162.) The crux of the parties’ dispute on
appeal is whether Fitness’s obligation to pay rent during the closure periods
was excused.
      Fitness urges us to answer this question in the affirmative. Relying on
its interpretation of the terms of the lease, Section 1511, and the equitable
doctrines of impossibility, impracticability, and frustration of purpose,
Fitness contends that its performance was excused. We address each of
Fitness’s arguments in turn, which are all founded on the same basic
premise: SVAP promised that Fitness would have the right to operate a
health club and fitness facility at the property throughout the term of the
lease. As we will explain, we disagree with this premise and therefore reject
each of Fitness’s arguments.
      1. SVAP’s Alleged Breach of the Lease
      Fitness first contends that its obligation to pay rent was abated during
the closure periods because SVAP breached its promise that Fitness would
have the right to operate a health club and fitness facility throughout the
term of the lease. Fitness points to Section 1.9 of the lease as guaranteeing
this right. Because SVAP allegedly breached its promise during the closure

periods, Fitness claims it was not required to pay rent for those periods. 3
      SVAP argues that Section 1.9 merely provides that Fitness would be
able to use the premises as a fitness facility at the commencement of the

3     Fitness also contends that SVAP’s guarantee of Fitness’s right to
operate the premises as a health club and fitness facility was a condition
precedent to Fitness’s performance. Because we find that the parties’ lease
did not guarantee Fitness the right to operate the premises for a particular
use, we need not reach this argument.
                                       9
lease, which it did (and continues to do now). The lease did not obligate
SVAP to guarantee Fitness would be legally permitted to operate a fitness
facility throughout its term. In further support of its argument that SVAP
was not required to ensure a particular use of the premises, SVAP points out
that Section 1.9 expressly permits any lawful use of the premises.
      We agree with SVAP’s interpretation of the lease. Section 1.9, on
which Fitness relies, is titled “Initial Uses” and provides that the initial uses
of the premises “shall be for the operation of a health club and fitness
facility.” Section 8.1, titled “Tenant’s Initial Use,” provides that Fitness
“shall open for business from the Premises for a period of at least one (1) day
for the Initial Uses set forth in Section 1.9.” Section 2.2, titled “Landlord’s
Representations, Covenants and Warranties,” provides that “as of the
Effective Date, Tenant’s Initial Uses of the Premises will not violate any
applicable rule, regulation, requirement or other law of any governmental
agency, body or subdivision thereof applicable as of the date hereof.” The
effective date, as defined in the lease, is June 12, 2002. The plain language of
the lease therefore demonstrates that (1) Fitness was required to operate the
premises as a health club and fitness facility for one day, and (2) SVAP
guaranteed that the operation of the premises as a health club and fitness
facility would be legally permissible only as of June 12, 2002. Both parties
satisfied those obligations more than 20 years ago.
      Section 1.9 also provides that Fitness “shall have the right throughout
the Term and all Option Terms to operate for uses permitted under this
Lease.” (Italics added.) Fitness repeatedly asserts that this means SVAP
“guaranteed” it the right to operate, free from government interference, a
fitness facility at the premises throughout the term of the lease. We cannot
agree. As Fitness noted, a key rule of contract interpretation is that, to the

                                        10
extent practicable, the contract should be read so as to give effect to all
provisions and avoid rendering some meaningless. (Zalkind v. Ceradyne,
Inc. (2011) 194 Cal.App.4th 1010, 1027.) The parties’ inclusion of Section
2.2—which requires SVAP to guarantee that, “as of the Effective Date,
Tenant’s Initial Uses of the Premises will not violate any applicable rule,
regulation, requirement or other law of any governmental agency, body or
subdivision thereof applicable as of the date hereof”—would be rendered
meaningless if Section 1.9 were read to require SVAP to make that guarantee
throughout the term of the lease.
      Instead, the reasonable interpretation of Section 1.9 is that SVAP
merely agreed not to restrict Fitness from using the premises in any way
permitted under the lease. Section 8.2 supports this interpretation, as it
specifically allows Fitness to “change the use of the Premises to any alternate
lawful retail use” not otherwise prohibited by the lease or certain other
restrictions. This language further underscores that SVAP’s obligation under
the contract was not to ensure Fitness’s ability to operate a health club and
fitness facility for the entire duration of the lease term, but rather to provide
Fitness with possession of the premises in exchange for its payment of rent to
SVAP.
      Fitness does not dispute that SVAP has provided possession of the
premises throughout the lease term, nor does Fitness argue that SVAP—as
opposed to the government—has restricted its use of the premises in any

                                       11
way. We therefore conclude that SVAP fulfilled its obligations and has not

breached the lease. 4
      2. Force Majeure Provision
      Fitness next contends that its performance is excused because the
government closure orders resulting from the COVID-19 pandemic constitute
a force majeure event under the lease. SVAP argues that because the
performance required of Fitness under the lease was the payment of rent,
and the closure orders did not prevent Fitness from paying rent, the force
majeure provision does not apply. SVAP has the better argument.
      Section 22.3, which defines what constitutes a force majeure event
under the lease, provides in relevant part: “If either party is delayed or
hindered in or prevented from the performance of any act required hereunder
because of . . . restrictive Laws . . . or other reason of a similar or dissimilar
nature beyond the reasonable control of the party delayed, financial inability
excepted (any ‘Force Majeure Event’), performance of such act shall be
excused for the period of the Force Majeure Event[.] . . . Delays or failures to
perform resulting from lack of funds or which can be cured by the payment of
money shall not be Force Majeure Events.” Fitness argues that the
government orders prohibiting the operation of health clubs during the
closure periods were “restrictive laws” beyond the reasonable control of the
parties and thus qualify as a force majeure event under the lease. According
to Fitness, the trial court erred in finding the force majeure provision did not
apply because the court “did not consider the effect of the Force Majeure

4      Fitness does not explicitly argue that the trial court erred in granting
summary judgment to SVAP on Fitness’s counterclaim for breach of contract.
We therefore need not reach this issue, but, if we did, Fitness’s counterclaim
fails for the same reasons its defense asserting SVAP’s breach of contract
fails: SVAP did not materially breach the lease.
                                         12
Event on Fitness’s right to operate a health club and fitness facility on the
Premises, or how the Force Majeure Event hindered Fitness’s performance.”
      While we agree with Fitness that the closure orders are “restrictive
laws,” we do not agree that these laws delayed, hindered, or prevented
Fitness from performing under the contract. Nor do we find any error in the
court’s analysis. First, as we have already explained, the lease does not
require SVAP to guarantee Fitness the unlimited right to use the premises as
a health club and fitness facility even when prohibited by law. Rather, the
obligation owed by SVAP was the delivery of the premises to Fitness. SVAP
fulfilled that obligation. Second, the trial court properly concluded that the
obligation owed by Fitness was the payment of rent. There is no evidence or
argument before us that the pandemic and resulting government orders
hindered Fitness’s ability to pay rent. Even if they had, the lease explicitly
excludes from the definition of force majeure event any “failures to perform
resulting from lack of funds or which can be cured by the payment of money.”
We thus conclude that the plain text of the force majeure provision precludes
its application here.
      3. Impossibility and Impracticability
      Fitness’s claims of impossibility and impracticability are similarly
unpersuasive. Impossibility is defined “as not only strict impossibility but
[also] impracticability because of extreme and unreasonable difficulty,
expense, injury, or loss involved.” (Autry v. Republic Prods. (1947) 30 Cal.2d
144, 149 (Autry); see also Mineral Park Land Co. v. Howard (1916) 172 Cal.
289, 293 [“ ‘A thing is impossible in legal contemplation when it is not
practicable; and a thing is impracticable when it can only be done at an
excessive and unreasonable cost.’ ”].) The defense of impossibility may apply
where, as here, a government order makes it unlawful for a party to perform

                                       13
its contractual obligations. (County of Yuba v. Mattoon (1958) 160
Cal.App.2d 456, 458–459 (Yuba).)
      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.
      According to Fitness, our analysis should focus not on its ability to
perform its obligation to pay rent, but instead on the object of the contract, as
that is what became impossible. Fitness seems to be conflating impossibility
with frustration of purpose, but in any event provides no support for this
argument. Case law addressing the doctrine of impossibility almost
invariably refers to impossibility of performance, and the question to be
decided is whether the party asserting the defense has demonstrated that it
was impossible to perform its own contractual obligations to the other
contracting party such that it may avoid liability for its non-performance.
(See, e.g., Autry, supra, 30 Cal.2d at pp. 148–149; Yuba, supra, 160
Cal.App.2d at pp. 458–459; Glens Falls Indem. Co. v. Perscallo (1950) 96
Cal.App.2d 799, 801–802.) Nothing 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.” (Browne v. Fletcher Aviation
Corp. (1945) 67 Cal.App.2d 855, 862.) The doctrine of impossibility therefore
does not apply here.

                                        14
      4. Civil Code Section 1511
      Fitness also contends that Sections 1511(1) and 1511(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.
      Section 1511(1) provides that a party’s performance of its contractual
obligation is excused where the operation of law prevents or delays the
performance. (Civ. Code, § 1511(1).) Fitness relies on Baird v. Wendt
Enterprises, Inc. (1967) 248 Cal.App.2d 52 (Baird) to argue that the
government orders constitute an operation of law that prevented Fitness
from using the premises during the closure periods and thus excuses its
obligation to pay rent. Baird, which merely stands for the undisputed
proposition that there is no liability for breach of a contract where
performance has been made impossible by operation of law, is inapposite
here. (Id. at p. 55.) As the trial court correctly concluded, Section 1511(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(1)
therefore does not excuse Fitness’s payment of rent.
      Section 1511(2) similarly lends no support to Fitness. It excuses
performance only where prevented or delayed by an “irresistible,
superhuman cause” and the parties have not “expressly agreed to the
contrary.” (Civ. Code, § 1511(2).) The irresistible, superhuman cause
identified by Fitness here is the COVID-19 pandemic. Again, however, the
pandemic did not prevent Fitness from performing its contractual obligation

                                       15
to pay rent. Moreover, the parties had “expressly agreed to the contrary” by
including a force majeure provision in their contract stating that any failure
to perform that could be cured by the payment of money would not constitute
a force majeure event. Thus, Section 1511(2) does not excuse Fitness’s failure
to perform.
      5. Frustration of Purpose
      Finally, Fitness contends that its obligation to pay rent was excused
under the doctrine of temporary frustration of purpose because the value of
the lease was destroyed by the government orders during the closure periods.
We do not agree.
      The 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.’ ” (Dorn v. Goetz (1948) 85 Cal.App.2d
407, 410 (Dorn).) 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 counter-performance is totally or nearly totally destroyed.
(Id. at pp. 411–413; Lloyd v. Murphy (1944) 25 Cal.2d 48, 53–54 (Lloyd).)
Governmental acts that merely make performance unprofitable or more
difficult or expensive do not suffice to excuse a contractual obligation. (Lloyd,
at p. 55.)
      SVAP argues that the doctrine of frustration does not apply because
(1) the purpose of the contract here was to grant a lease in the premises to

                                       16
Fitness, not the operation of a fitness facility, in exchange for the payment of
rent; (2) the lease allocated the risk of government-ordered closures to
Fitness; and (3) even if the purpose of the lease were the operation of a
fitness facility, the closure orders preventing the operation of a fitness facility
for a period of months did not destroy the value of a decades’ long lease
agreement. We agree with SVAP as to its third argument, so we need not
decide the others.
      Assuming, 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. 5
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[.]” (Lloyd, supra, 25 Cal.2d at p. 53, italics added.)
Frustration is not an available defense where, as here, counter-performance
has been and remains valuable. (See id. at p. 54.) Because the value of the

5      We note, however, that it is not clear from the lease that both parties
contemplated at the time of contracting that the sole purpose of the lease was
for Fitness to operate a fitness facility. (See Dorn, supra, 85 Cal.App.2d at
p. 411; Brown v. Oshiro (1945) 68 Cal.App.2d 393, 397.) The lease only
required Fitness to operate a fitness facility for one day and permitted other
uses thereafter.
                                        17
lease has not been totally or substantially destroyed, Fitness’s performance is
not excused.
      Our conclusion is supported by the rule that where commercial
frustration does apply, the “legal effect . . . is the immediate termination of
the contract.” (Johnson v. Atkins (1942) 53 Cal.App.2d 430, 435; see also 20th
Century Lites, Inc. v. Goodman (1944) 64 Cal.App.2d Supp. 938, 945 (20th
Century Lites) [“frustration brings the contract to end forthwith”].) 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.
      In 20th Century Lites, the defendant argued that the court should not
only apply the doctrine of frustration to excuse its payments under the lease,
but also find that the effect of the government regulation at issue “was to
merely suspend, rather than terminate, the contract” during the existence of
the regulation. (20th Century Lites, supra, 64 Cal.App.2d at p. Supp. 945.)
The court rejected this concept of “temporary” frustration, concluding that
“[s]uch is not the rule in cases where the doctrine of commercial frustration
applies. On the application of such doctrine, the promisor ‘is discharged from
the duty of performing his promise . . . [and] such a frustration brings the
contract to an end forthwith, without more and automatically.’ ” (Ibid.) The
court thus concluded that, conversely, where a government regulation is not a
permanent prohibition but merely temporary, the commercial frustration
doctrine does not apply. (Id. at p. Supp. 946.) The government closure orders
here were temporary, which precludes the application of a commercial
frustration defense.

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      It 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. (Grace v. Corninger
(1936) 12 Cal.App.2d 603, 606 [“liability under the lease continues as long as
the lessee continues in possession”].)
      Fitness’s reliance on Maudlin v. Pacific Decision Sciences Corp. (2006)
137 Cal.App.4th 1001 (Maudlin) in support of its argument for “temporary”
frustration is misplaced, because that case involved temporary impossibility.
The Maudlin court recognized in its discussion that the Second Restatement
of Contracts, on which it relied in part, “consolidates the subjects of
impracticability and frustration of purpose, substituting the term
‘impracticability’ for ‘impossibility.’ ” (Id. at p. 1017, fn. 6.) California law,
however, treats impossibility and frustration of purpose as distinct. Our
Supreme Court has made clear that “frustration is not a form of impossibility
of performance.” (Autry, supra, 30 Cal.2d at p. 148; see also Lloyd, supra, 25
Cal.2d at p. 53.) Maudlin therefore does not support Fitness’s position.
      We are sympathetic to the hardship Fitness and other businesses faced
due to the pandemic and resulting closure orders. However, neither the
terms of the lease nor the equitable doctrines invoked by Fitness afford it the
requested relief. We therefore conclude that the trial court correctly ruled

SVAP is entitled to summary judgment against Fitness. 6

6      We deny SVAP’s request for judicial notice of various rulings in other
cases involving Fitness, as the documents are not relevant or necessary to
resolve this appeal. (See Save Lafayette Trees v. East Bay Regional Park
Dist. (2021) 66 Cal.App.5th 21, 29, fn. 2.)
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                             DISPOSITION
     The judgment is affirmed. SVAP is awarded its costs on appeal.

                                                          BUCHANAN, J.

WE CONCUR:

HUFFMAN, Acting P. J.

O’ROURKE, J.

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