Legal Question in Business Law in California

Re: Need to find out if have a case

To the extent the spa owners are using equipment or inventory that you owned, that would be the tort of conversion. In addition, if they have taken over your business opportunity by an improper act, this could be alleged as conversion of business goodwill.

Historically, California appellate courts have held that business goodwill (the expectation of future profits) cannot be the subject of conversion. However, some recent cases have moved in the direction of permitting recovery under a conversion theory, and I think a plaintiff with a really strong and clear-cut case could win. (As I said above, winning with respect to the equipment and inventory should be easy.)

Besides a conversion theory of recovery, you could probably also allege unfair competition and one or more other torts such as intentional interference with prospective economic advantage.

A critical part of making a case would be showing some kind of misconduct by the spa owner in handling the lease renewal. This would include reviewing the renewal provisions in the old lease, whether you acted promptly to exercise your renewal rights, and looking for one or more instances of unfair or contract-breaching conduct by the spa.

So in sum your case seems to have some potential to be a winner, but most of your potential damages would be dependent upon finding and proving some kind of breach of contract, fraud or other misconduct. Raising the rent 30% is not in and of itself such misconduct.

Re: Need to find out if have a case

"Legal" is not the question. Did they have the right under the terms of the agreement to do this? I doubt it. If you think they violated your agreement, then your remedy is to sue. Contact me if serious about doing so.