Facts

Lincoln Center, LLC is the owner of a small two-tenant strip-style retail shopping center in Venice Beach, California. In 1979, Lincoln Center's principals executed a lease with what was then the Boys Market for a grocery store to be one of the two tenants at the Lincoln Boulevard center. Since 1980, Alpha Beta, and then Ralphs, has operated a supermarket at the location. The other tenant is a RiteAid store. Although retail rents have increased in the Venice area over the last decade, the Ralphs lease was a long term lease that locked in relatively low rental rates. Ralphs invested millions of dollars in this location in a 2015 renovation of the store interior and facade.

In 2019, after nearly 40 years of Ralphs operating at the location, Lincoln Center sent Ralphs a default notice with a laundry list of claimed "defaults" demanding that Ralphs either comply with the landlord's conditions or be evicted. This list of grievances included several practices common to virtually all supermarkets in Southern California. Lincoln Center demanded that Ralphs remove a water bottle filling machine, a Red Box DVD rental machine, and a firewood display, all in the front sidewalk area of the store. Although Ralphs believed these practices were well within their rights as a tenant, Ralphs voluntarily removed these items in an effort to keep the peace with the landlord. However, the landlord also insisted that Ralphs no longer provide shopping carts out front for its customers, nor use its exclusive loading docks for time consuming overnight deliveries of inventory. These are two long standing practices at the store that Ralphs could not compromise on, as no carts for customers and no fresh inventory would put the store out of business. Ralphs tried to reason with the landlord for months, to no avail. And, in late 2019, Lincoln Center served an unlawful detainer lawsuit on Ralphs seeking to evict Ralphs from this newly renovated store.

Lincoln Center filed a motion for Summary Judgment which was denied. Lincoln Center's principal conceded that it had suffered no damages as a result of these practices, and that it was unaware of any complaints--not from any government agency, nor any customers or the other tenant, RiteAid. Lincoln Center attempted to bolster its claims by retaining an ADA expert to opine that shopping carts that were not put back by customers could potentially be an ADA violation.

Following three days of a bench trial, Ralphs brought a motion for judgment under CCP section 631.8. Lincoln Center passed on the court's invitation to re-open evidence, and the Court rendered judgment against Lincoln Center and in favor of Ralphs, including awarding costs and fees under the lease. Ralphs filed its memorandum of costs and motion for fees, to which Lincoln Center objected. After a full hearing, the Court awarded Ralphs nearly all of the fees and costs requested (over 95%).

PLAINTIFF'S CONTENTIONS: Plaintiff Lincoln Center contended that Ralphs materially breached the lease by keeping shopping carts in the common area out in front of store for customers during business hours; and parking a refrigerated semi-trailer in one of the docks of the two-truck loading dock area.

DEFENDANT'S CONTENTIONS: Ralphs contended that its long standing practices regarding shopping carts and the loading dock were fully permitted under the lease, and even if not, these were not material breaches of the lease needed to justify eviction. Moreover, Lincoln Center was aware of these practices for decades, and thus the unlawful detainer was time barred.

Settlement Discussions

Months before trial, Ralphs offered to resolve the matter for a full dismissal in exchange for accepting a 10% discount on fees and costs Ralphs incurred. Lincoln Center never responded.

Result

Defense judgment with award of fees and costs.

Other Information

Defense judgment at trial per CCP 631.8

Length

Four days