Fitness Classes Violated Permitted Use for Batting Cage Space

Facts: A shopping center owner sued its tenant for violating the permitted-use provision of its lease, which allowed it to operate a batting cage and hold agility classes for team sports. Specifically, the tenant had been offering strength-and-conditioning classes, fitness-training classes, dance classes, and rowing machines on the premises. (Another tenant in the mall operated a gym and its lease limited the activities of other tenants offering sports and exercise services.)

The owner sent two notices to the tenant, informing it of the violations and asking it to comply with the lease. The owner served the tenant with a termination notice, but the tenant refused to move out of the space. A trial court ruled in favor of the owner. The tenant appealed.

Decision: An Arkansas appeals court upheld the trial court’s decision.

Reasoning: The tenant had generally denied that the activities violated the permitted-use provision of the lease. It argued that the rowing machines, fitness classes, and dance classes were necessary for “strength training,” and that speed-and-agility training “go hand in hand with strength-and-conditioning training.” Since the lease permitted speed-and-agility training, the tenant said it was within its permitted use.

The tenant also argued that it hadn’t breached the lease because the phrases “speed or agility training” and “exercise machines” were ambiguous and that any ambiguity should be construed against the owner. But the appeals court pointed out that the lease specifically barred the use of rowing machines and dance classes—two of the main services that the tenant used for strength conditioning.

It also pointed out that the tenant had had the opportunity to cure—that is, fix—the violation if it terminated the unauthorized use within five days after receipt of the notices from the owner. But the tenant didn’t remove the rowing machines from the space or cancel its classes. Thus, said the appeals court, the owner had the right to recapture the space.

• Wheatley v. Dixie Mall 2003, LLC, January 2016