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Strict Adherence to Lease Not Required Where Counsel Instructs Otherwise

DW August Co. (“DW”), landlord, rented commercial property to Eucasia Schools Worldwide, Inc. (“Eucasia”), on which Eucasia operated a private school. DW and Eucasia had a strained relationship involving prior litigation. Starting in April of 2010, DW always communicated with Eucasia through DW’s counsel.

 

In April of 2010, DW listed the property for sale with a real estate broker, and intended to have the property inspected by a building inspector to facilitate a sale. The lease between the parties provided that DW had a right to inspect the property “at reasonable times after reasonable notice.” The lease also provided that all notices to Eucasia must be in writing and delivered or mailed to the property. A month prior, DW’s counsel wrote a letter to Eucasia concerning the security deposit and other matters. Eucasia’s counsel responded to the letter with: “Please have NO DIRECT CONTACT with our client without the express permission of this office.”

 

So, when the time came to notify Eucasia of the pending inspection, pursuant to Eucasia’s counsel’s request, DW’s counsel wrote a letter to Eucasia’s counsel asking whom they should contact to notify regarding property inspections. A month later, after receiving no response, DW’s counsel mailed the notice of inspection to Eucasia’s counsel’s office. The building inspector, after a locksmith picked the lock, conducted its inspection at the appointed date and time.

 

Four days later, Eucasia filed a complaint against DW arising out of the inspection. Eucasia argued that DW had breached the lease by failing to provide Eucasia proper notice to perform an inspection. The jury found in favor of DW. The appellate court affirmed on the grounds that even though the lease provision literally requires that notices must be mailed to Eucasia at the property, it would be “absurd” if the law required strict adherence to the letter of the contract in total disregard of counsel’s explicit instructions to not contact Eucasia directly, and to punish DW for following instructions of counsel. Given the animosity between the parties, and the failure of Eucasia’s counsel to respond to DW counsel’s query of who to notify, DW’s counsel was reasonable in and lawfully permitted to mail the notice to Eucasia’s counsel instead of Eucasia itself.

 

Eucasia Schools Worldwide, Inc. v. DW August Co., et al. (2013) 218 CA4th 146