Executive Fitness LLC v. Healey Bldg. Ltd. Partnership

Executive Fitness, LLC, entered into a commercial lease agreement in September 2001, to rent space from Healey Building Limited Partnership. In October 2003, Executive Fitness executed a promissory note in favor of Healey Building for improvements funded by Healey Building and for rent and expenses due in August and September 2003. The president of Executive Fitness, Mark Montgomery, signed both documents as guarantor. In June 2004, when Executive Fitness failed to pay the rent due, Healey Building sued it and Montgomery for rent due through May 2004. The lease was not terminated, and Executive Fitness remained in possession of the premises.

In March 2005, while the action for rent was still pending, Executive Fitness entered into a sublease with Impact Sports, LLC, wherein Impact Sports agreed to sublease the premises from Executive Fitness. The master lease between Healey Building and Executive Fitness required Healey Building’s advance written consent to any assignment of the lease or sublease of the premises. The master lease also provided that such consent shall be preconditioned upon, among other things, Executive Fitness “remaining primarily liable under this Lease and shall guaranty the Lease if Landlord so requests.” Healey Building signed a document consenting to the sublease between Executive Fitness and Impact Sports. Healey Building did not release Executive Fitness from the original lease. Impact Sports eventually defaulted on its rent payments and filed for bankruptcy protection.