Historical Timeline and Parties Course of Dealing
By Che Cafe Collective
A. Inception to 2008
The Ché Café Collective began approximately 34 years ago, on or about May 1, 1980. Since that time, the Ché Facility, 1000 Scholars Drive South, has been leased continuously by Plaintiff from Defendant, the Regents of the University of California. It has been and currently is used to operate a café, library, and a music-and-theater programming space, and to host other student organizations and events.
As one of the original buildings of Camp Matthews, the Ché Facility was originally used by the University of California, San Diego (“University”) as a diner and cafe in the 1960’s, called “The Coffee Hut.” It is known as the original student center. When there was an attempt to turn it into a faculty club, students argued that since student fees had paid for the building and its maintenance for many years, students should rightly take possession and operate it from that time forward.
Thus, all students of the University have an ownership interest in the Ché Facility as their referendum-based fees and other student fee revenue directly maintain the building and have since before the Ché Collective even inhabited the Facility. See University Centers’ website (“UCEN” site) www.ucen.ucsd.edu. Pursuant the Lease, the Ché Facility’s maintenance is paid for by student fee funding. All fixtures, alterations and tenant improvements are the financial responsibility of The Ché Café Collective as a tenant. (Space Agreement, §9). Unlike other facilities that the University Centers directly manages, The Ché Facility is unique in that it is leased independently to the nonprofit and student organization The Ché Café Collective under the Space Agreement lease.
In 1992-1993 there was an unlawful detainer lawsuit with the University during which the Co-ops, namely the General Store, sought and obtained an injunction against the University. (Burnett v. Regents, San Diego Superior Ct. (1992) Case no. 658358 [unpublished]). A resulting memorandum of understanding (“MOU”) was negotiated to settle the dispute and keep the Collective in possession of the Ché Facility. Ibid. In 2006, the MOU was renegotiated and superseded by a Space Agreement with all four Coops. It is the current commercial lease contract known as the “2006 Space Agreement Lease” (“Space Agreement” or “Lease”) (“Exhibit A”).
In June 2008, when the original two-year lease term under the Space Agreement expired, all four Coops, including the Ché Café, continued to seek a lease extension and new terms. Pursuant to the Lease, the “2016 Extension” provisions (“Extension”), and other relevant sections, the University and Coops were obligated to exchange new terms for an extension and obtain a renewed certification from the student government bodies, the Associated Students (“AS”) and the Graduate Student (“GSA”). See, Space Agreement, §1, 2.4, 2.5.
Repeated assurances and conduct of the University administrators, led students to believe an Extension was still realizable and “missed” preconditions would be waived. (Aronson Decl.). This was not unprecedented in the course and dealing of the parties and was done with respect to another matter, namely, changed terms for rents related to a rent dispute and amendments that were made to the lease and made retroactive for 5 years from 2013 to 2008. A true and correct copy of said Rent Amendment is attached hereto as “Exhibit D.”
The University’s waiver of the timeline for certifications encouraged AS and GSA to pass certification in June 2008 though outside of the required timeframe in the lease (January to April 2008), so that an Extension could still be completed. (Aronson Decl., Vera Decl., Morales Decl.). Therefore, on June 2, 2008 the GSA certified the Cooperatives as in the best interest of students. On June 4, 2008, AS certified the four cooperatives as in the best interest of students. These certifications were not passed within the time frame described in Section 2.2 of the Space Agreement (which would have been between January 31, 2008 and April 30, 2008). See: University Centers website (“UCEN” site) www.ucen.ucsd.edu and Space Agreement, §2.
The Co-ops and the Plaintiff diligently continue to pursue and Extension containing various lease amendments from 2010 through present, relying on assurances that they had an Holdover because of Extension negotioations through 2010. (Aronson Decl.). In 2010 all four Cooperatives were eventually in rent disputes and renegotiations with the University. (Id., Morales Decl., and Rent Credit Agreement, A true and correct copy of said agreement and is attached hereto as “Exhibit D).” There was an agreement between the University Centers Director Paul Terzino and the Co-ops that no default action would be taken as a result of rent non-payment (Aronson Decl.).. The Co-ops relied on these representations (Ibid.). Paul Terzino left in mid-2011, stalling the process (Ibid.).. A settlement and lease aendments as to rent were finalized in March 2013 (Rent Credit Agreement, Exhibit D). A further agreement on the credits owed the Co-ops and their distribution was signed in October of 2013 (Rent Credit Agreement, Exhibit D).
From 2010 to 2013, The Co-ops and the Che Café made tireless and strident attempts to achieve Extensions and reach agreements on changed lease terms therein (Aronson Decl.). The Co-ops and thus the Plaintiff as a member, was unsuccessful due to the University’s delays, avoidance and conduct that not only prevented a grant of an Extension but did so while communicating the opposite and giving explicit reassurances to Plaintiff as to them enjoying Holdover status until the Extensions were agreed to, signed and in place. (Ibid).
In 2012, the AS and GSA certified the Cooperatives, acting with the understanding that it was needed to realize another two-year Extension (Aronson Decl. at ¶ 37-39). Director Van Bruggen, reassured the Plaintiff once more and agreed that the Co-ops did enjoy holdover status for negotiations and seeking an extension or renewal under Section 2.5 and 2.5 and that the University’s position was, as a result, the terms of the Space Agreement still applied (Aronson Decl. at ¶ 37-39).
In late 2012 and into 2013, with the University Centers (UCEN) closing the Craft Center and implementing other austerity measures to compensate for its budget crisis resulting from financing and overspending on a new student center, “The Price Center,” the University’s attitude in negotiations and dealings with the Co-ops began to change and become more oppositional. (Aronson Decl. at ¶ 9-40, and UCSD Craft Center Website on Closure http:// crafts.ucsd.edu/).
Throughout 2013, the University violations increased markedly as to Plaintiff. In late Summer 2013, Despite some progress with student bodies and the UCAB board to finalize amendments and a lease Extension, University staff avoided meetings and only wished to discuss rent issues that had already been settled and other issues Van Bruggen thought to be violations of the lease. (Vera Decl.) Van Bruggen further assured Vera that the University would not be issuing any notices of default if proof and sufficient progress was made towards these matters and that the University did not want to find cause to close down the Ché Café Facility. (Ibid.) Ché Café representative Vera relied to his detriment on these assurances of good faith and proceeded to trust in the Co-ops status under the Space Agreement and that the University would proceed with re-negotiations to realize an Extension or renewal of the agreement (Ibid). Therefore, the Co-ops continued to negotiate in good faith. (Aronson Decl. at ¶ 35-36).
However, concerned with the lack of progress representatives of each Co-op reached out to and met with the UCSD ombudsman in their offices to discuss the Space Agreement amendment negotiations. Nothing further came of this process. Following it, the University did not make any proactive attempts to effectuate extensions or renewals. Further the University would not meet or cooperate with students in their attempts to effectuate Extensions or renewals. (Aronson Decl. at ¶ 27-29).
In November 2013, the Co-ops again met with Van Bruggen for the last time before the Ché Café Collective was given a notice of a health and safety violation, requiring the Café to install a fire suppression system under the hood in the kitchen. Though at this time Van Bruggen further communicated and gave assurances that the University had no intent to terminate the agreement or evict the Ché Café Collective from the current facility, and that the Ché Café was still on holdover for negotiations under the Space Agreement under Section 2.4 of the Agreement. (Aronson Decl. at ¶ 30-32).
Then again December 17, 2013, despite repeated assurances the University would not hold the Co-ops in default given the Co-ops progress, University Director Van Bruggen sent a formal written notice of default of the lease for insufficient progress made to cure the default based on the Che losing and needing to reinstate its nonprofit status. (Vera Decl at ¶ 4).
This prompted the Plaintiff to hire an attorney and reply as of January 2014, to the University as to Plaintiff’s progress made on reinstating its tax-exempt status and now just waiting for an IRS reply, and that the default should be cured if requires longer than 30-days under the lease section 17.1(e). (See Exhibit A, Space Agreement)
On April 17, 2014, at the request of the University, the Campus Fire Marshal conducted a second follow up inspection and walk-through of the Facility with Assistant Director John Payne. That same day, John Payne writes the Ché Café Collective and email thanking the Ché Café and signing off on all fire and fire code related issues until next year’s inspection. A true and correct copy of said email is attached hereto as “Exhibit E” (See Exhibit D, Payne Fire Marshal Email).
On April 28, 2014, Van Bruggen sent an email with documents attached from the UCAB Budget committee meeting of April 11, 2014 to UCEN staff, AS, GSA, and UCAB but not to the Co-ops. The email and attachments are all regarding the planning for the relocation of the Ché Café Facility. These were given to the Plaintiff on May 1, 2014. The non-negotiable proposal was to terminate the Che Facility and listed the terms and plans that would govern the Collective’s ouster and move from the Ché Facility to operate out of either the UCEN-run Facility, The Loft or Porter’s Pub, which is leased by another commercial tenant, subject to their already-existing programming and calendars. A true and correct copy of the proposal is attached as “Exhibit H” (See Exhibit E, Che Relocation). As a result, Plaintiff retained counsel.
The University on multiple occasions over time, made incorrect statements and gave misleading information to students and Ché Collective members regarding requested fire sprinkler upgrades, inter alia, that it said were necessary and that it said were University “deferred maintenance” obligations but ones for which the University did not have adequate funds to allocate either now or in the foreseeable future. (Party Admission of Sharon Van Bruggen, UCAB Meetings, May 10, 23 and private May 20, 2014, meeting with Co-ops and UCAB Chairs).
Lack of University funds for necessary fire sprinkler and other upgrades was the first reason given for why it was necessary that the Che Facility be shut down. All throughout May, the Collective Members were frantically trying to convince the University Centers Advisory Board (UCAB), who controls the allocation of student fee funding, that Plaintiff was worth allocating funding to and keeping open. This was a distraction from the University’s plan and already made decision to issue a 30-day Notice of Termination, which they did on June 13, 2014. (See Exhibit B) Defendants, however, maintained for the entire time prior to June 13, 2014 (when it gave Plaintiff a “Notice of Termination”) that it was UCSD’s obligation to make fire sprinkler and alarm upgrades that were recommended by the campus Fire Marshal in 2012. On June 13th the Defendants changed their stated position and claimed that it was the Plaintiff’s (i.e., the tenant’s) obligation to make the fire sprinkler and alarm upgrades. (Campus counsel admission in June 13, 2014 meeting). In the Notice of Termination, there is no mention of any fire upgrades or health-and-safety reasons, which the University later asserted as reason for termination and which for the entire month of May, the University told Plaintiff was the reason for closure. (See Exhibit B).
On May 20, 2014, formal notice was sent to all necessary parties: the Director of Facilities, to UCSD legal counsel, to GSA and AS, as well as the other Co-ops, to request and initiate informal dispute resolution (attached as “Exhibit F”). Dispute resolution was requested to address issues of disputed amounts of rent owed, clarifying the resolution of the Che’s nonprofit status, addressing Defendant’s denial of approval for fire hood upgrades the tenant’s requested, and the many University breaches of their own obligations of good faith and fair dealing. (See Exhibit F, Notice of Dispute Resolution)
During the first UCAB meeting, Van Bruggen directed UCAB Chair Sammy Chang when many people showed up to their meeting, that only 16 people could be in the room and all others could not attend the meeting except to cycle in when they wanted to give their two minutes of comment. The second UCAB meeting tried to restrict public comment in various ways. The last UCAB meeting went into Executive Session for their vote but that of these representative student bodies as well by: (1) advising them in and out of meetings; (2) directing them as to who they may and may not communicate with; (3) stating the University is representing them; (4) assisting them in drafting resolutions; (5) restricting them from communicating with the Cooperatives and Cooperative legal counsel; and (6) restricting the passing along of information the Coops sought to provide these student “independent” representatives.
At this third UCAB meeting on May 23, 2014 at 1pm, the UCAB Board like in other meetings where people were excluded from the room voted to first to restrict public comment to students only and then voted to go into executive session. Then the UCAB Board voted on the veto and passed it 9-4 (See website http://ucab.ucsd.edu/ for May 23, 2014 meeting minutes)
University legal counsel Park did not attend any of the UCAB meetings but did attend to assist the GSA board president in editing and drafting the resolution in the meeting to reflect what campus counsel advised. A true and correct copy of said minutes are attached as “Exhibit C.” (See Exhibit C, GSA June 2, 2014 Minutes)
On June 4, 2014, University administrators, the AS and GSA presidents and campus counsel emailed Ché Café students and principal core members asking for a meeting, without including Plaintiff’s counsel. It, according to the University Campus Counsel was to be “a productive opportunity for University administrators and the Ché Café student leaders to have a frank and candid conversation about the future of the Ché Café facility. Finally, we hope to be able to answer at this meeting at least some of the questions raised in your email. As I said earlier, we will also be interested in the students and your thoughts, ideas, and perspectives.” (Fwd: The Che Café Meeting, Email from Campus Counsel to Plaintiff’s Attorney, June 6, 2014)
On June 13, 2014, the University, served upon Plaintiff a 30-day Notice of Termination (attached as “Exhibit B”) of the 2006 Space Agreement lease (hereinafter also referred to as “Agreement” or “lease”), maintaining that no lease Extension was in effect, and ignoring that Plaintiff had been trying to seek and effectuate an Extension since the original term expired, and refusing to stay the notice or acknowledge Plaintiff’s holdover status under Section 2.4 and 2.5 of the Agreement (“Exhibit A”).
Subsequent to receiving the notice of termination, a renewed request for dispute resolution and/or mediation of disputes was made by the Plaintiff’s counsel to the University’s counsel and to administration. Campus counsel again in an email dated June 20, 2014 responded that the University was not interested in any dispute resolution (Re: University Notice, Email from Campus Counsel to Plaintiff’s Attorney, June 20, 2014)