Capitol South, Inc., Appellant, v. Concord Fitness MO, LLC, Respondent.

CAPITOL SOUTH, INC.,

Appellant,

v.

CONCORD FITNESS MO, LLC,

Respondent. ) ) ) ) ) ) ) ) ) No. ED113250

Appeal from the Circuit Court of St. Louis County The Honorable Jason A. Denney, Judge Capitol South, Inc. (Capitol South) appeals from the trial court's judgment in favor of Concord Fitness MO, LLC (Concord Fitness) on its claim for unlawful detainer. We affirm. B ACKGROUND In April 2016, Capitol South and Concord Fitness entered into a lease for space owned by Capitol South in a shopping center in St. Louis County (Property). The terms required, inter alia, Concord Fitness to pay Capitol South rent of $8,467 per month, due the first day of the month. The lease defines eleven Events of Default in Article 16.1(i- xi). Relevant to this appeal, Article 16.1(i) requires Capitol South to provide notice in the

2 event "[Concord Fitness] shall fail to pay when due any rental or other sum hereunder and such failure shall continue for five (5) days after notice of same shall have been sent to [Concord Fitness]." "Upon the occurrence of an Event of Default," Article 16.1(a) provides "[Capitol South] may terminate this Lease, in which event [Capitol South] may immediately repossess the Premises . . . ." In addition, following the enumerated "Events of Default," is the next, but unnumbered, paragraph in Article 16.1 referred to by Capitol South as the "Repeated Default Provision" (Repeated Default Provision), which permits termination of the lease without notice or opportunity to cure in certain circumstances of default in the payment of rent. On May 16, 2024, after Concord Fitness failed to pay rent in March, April, and May, Capitol South sent a termination letter effective May 31, 2024, citing Article 16.1(a). Concord Fitness was directed to "restore possession" of the Property to Capitol South on or before that date. It is clear from the plain language of the lease, the May 16 termination letter, the verified petition for unlawful detainer, testimony at trial and Capitol South's arguments on appeal it was proceeding pursuant to the Repeated Default Provision beginning in March 2024, rather than subsection (i), which requires notice and an opportunity to cure within five days. Concord Fitness did not vacate the premises. On June 12, 2024, Capitol South filed an action for unlawful detainer. Following a bench trial, the court issued judgment in favor of Concord Fitness, finding because Capitol South did not properly terminate the lease, it did not have a legal right to possession of the Property. This appeal follows.

3 D ISCUSSION Capitol South presents two points on appeal. In its first point, it contends the trial court erroneously applied the law in finding the Repeated Default Provision of the lease requires compliance with the notice and opportunity to cure provisions found in Article 16.1(i) and holding "[w]ithout proper notice, [Concord Fitness] cannot be said to have defaulted under the lease." While application of the Article 16.1(i) requirements was erroneous, the court still reached the correct legal conclusion "the conditions of termination set forth in Article 16 were not met, rendering the termination ineffective." Upon this basis, we will affirm the judgment of the trial court where the correct result is reached even if for the wrong reason. Central Trust Bank v. Branch, 651 S.W.3d 826, 830 (Mo. banc 2022). As our analysis in point one is dispositive on the issue of notice, we need not address the merits of point two and it is denied. S TANDARD OF REVIEW Our review of a bench-tried case is governed by Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Vanguard Heights v. Sourakli, 713 S.W.3d 713, 716 (Mo. App. E.D. 2025). We affirm the trial court's judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, it erroneously declares the law, or erroneously applies the law. Id. "We view the evidence in the light most favorable to the trial court's judgment and disregard all contrary evidence and inferences." Id. (internal citation omitted). However, the question of interpretation of a lease agreement is a legal one, subject to de novo review. Id.

4 A NALYSIS Pursuant to Section 534.030.1 RSMo (2016), 1 a cause of action for unlawful detainer lies when one "willfully and without force holds over any lands, tenements or other possessions, after the termination . . . ." The sole issue in this limited statutory action is whether a plaintiff was entitled to the immediate right of possession of the real property. O'Connell v. Deering, 631 S.W.3d 649, 653 (Mo. App. S.D. 2021) (internal quotations omitted). There can be no unlawful detention until the lease is terminated. Id. Here, Capitol South contends it is entitled to immediate possession of the Property because it properly terminated the lease with Concord Fitness pursuant to its terms. We disagree. While we find application of Article 16.1(i) to the Repeated Default Provision was erroneous, we agree with the trial court's sage conclusion in paragraph 4 of the judgment: Early termination or forfeiture of leaseholds are viewed with disfavor by Missouri courts. Fritts v. Oak Cloud [sic] Flooring Co., 478 S.W.2d 8, 14 (Mo. App. 1972). Accordingly, a lease term "permitting a forfeiture [of the lease] will be strictly construed against the party invoking the forfeiture.["] See Independence Flying Service [, Inc.] v. Abitz, 386 S.W.2d 399, 404 (Mo. banc 1965). Furthermore, a party must comply with conditions precedent imposed by the right to terminate a lease before that lease can be terminated. American Inst. of Mktg. Sys., Inc. v. Alfred F. La Marche, Inc., 469 S.W.2d 929, 931 (Mo. App. 1971); National Alfalfa Dehydrating [& Milling] Co. v. 4010 Washington, Inc., 434 S.W.2d 757, 766 (Mo. App. 1968). If the party has not complied with those conditions, the lease continues in force. National Alfalfa, at 766; Missouri Goodwill Indus., Inc. v. Johannsmeyer, 901 S.W.2d 154, 156 (Mo. App. E.D. 1995).

1 All further statutory references are to RSMo (2016).

5 "We follow the rules of contract construction when interpreting lease agreements." Vanguard Heights, 713 S.W.3d at 717 (quoting Dunn v. Baker, 533 S.W.3d 831, 835 (Mo. App. E.D. 2017)). We review the lease as a whole to determine the intent of the parties. Id. (quoting Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421, 428 (Mo. banc 2003)). We give the terms of the lease their "plain, ordinary, and usual meaning," and absent an ambiguity, the intent of the parties is based upon the four corners of the contract. Id. (internal citation omitted). The Repeated Default Provision of Article 16.1 of the lease states: Should [Concord Fitness] default in the payment of rental or other charges under this Lease . . . and such default shall continue or be repeated for two (2) consecutive months or for a total of four (4) months during any calendar year . . . then an Event of Default shall immediately occur upon the occurrence of the next ensuing default and [Capitol South] shall have no obligation to give [Concord Fitness] notice of such default and an opportunity to cure before such default shall become an Event of Default. Upon the occurrence of an Event of Default, [Capitol South], in addition to any other remedy available to [Capitol South] at law or in equity may, with or without notice to [Concord Fitness], exercise the following remedies: [Capitol South] may terminate this Lease, in which event [Capitol South] may immediately repossess the Premises . . . .

This provision sets forth two distinct grounds for termination without notice or opportunity to cure, each contingent upon four months of default in the payment of rent. An Event of Default occurs, as in this case, when the lessee fails to pay rent in consecutive months. The alternative allows for termination when such failure occurs in non-sequential months during any calendar year. It is undisputed Concord Fitness paid

6 rent late in March, April, and May; 2 and timely paid in June 2024, but Capitol South's petition only alleges termination upon Concord Fitness's "non-payment of rent for three (3) consecutive months . . . ." Our de novo review of the Repeated Default Provision must be considered in light of the precedent requiring, a lease term "permitting a forfeiture [of the lease] will be strictly construed against the party invoking the forfeiture." See Independence Flying Service, 386 S.W.2d at 404. Thus we find the Repeated Default Provision required: (1) an initial "default" in the payment of rent or other charges (March); (2) "such default shall continue or be repeated for two consecutive months" (April and May); and (3) "the next ensuing default," (June) in order to meet the terms for termination without notice or opportunity to cure. We hold the May termination was premature because the "next ensuing default" did not occur when June rent was timely paid. The trial court's conclusion "the conditions of termination set forth in Article 16.1 were not met, rendering the termination ineffective," was correct. Capitol South failed to properly terminate the lease and was not entitled to immediate possession of the Property; thus, judgment in favor of Concord Fitness on the claim for unlawful detainer was appropriate. Point one on appeal is denied.

2 Concord Fitness paid March rent on May 17, 2024; April and May rent were paid on May 23.

7 CONCLUSION The judgment of the trial court is affirmed.

_________________________________ Lisa P. Page, Judge

Robert M. Clayton III, Presiding Judge and Michael E. Gardner, Judge concur.