The commercial lease agreement between The St. Luke’s
Hospital Center, as landlord, and WestSide Radiology Associates, as
tenant, prohibited WestSide from assigning the lease without St.
Luke's prior written consent.
The lease rider defined an assignment as a transfer of a
“Controlling Interest,” meaning “more than a
fifty percent (50%) interest in the [stock of the corporate
tenant]” or “the ability to control the decisions or
affairs of the [corporate tenant].” And the lease required
that any assignee be an active member of St. Luke’s medical
staff with admitting privileges.
In April 2015, undertenant RadNet, Inc., in effect, acquired
WestSide without notice to, or authorization by, St. Luke's
Hospital. The April 2015 transaction, consisted of a Purchase
Agreement and ancillary documents, effectively gave RadNet
“the ability to control the decisions or affairs of [the
tenant]” within the meaning of the plain terms of the lease
rider. And gave to Dr. John Crues,
