Notice Provision in Written Commercial Lease Can Be Modified by Attorney Letter

In Eucasia Schools Worldwide, Inc. v. DW August Co. (2013) 218 Cal.App.4th 176,a landlord listed commercial real property for sale with a real estate broker. To facilitate the sale, the landlord decided to have the premises inspected by a building inspector. The landlord wanted to “find out all the things that may or may not be wrong with [the premises], and have them repaired so when a buyer came, the building would be in tiptop shape.”

However, the relationship between the landlord and tenants was strained with both sides retaining attorneys. The lease granted the landlord the right to enter the premises “at reasonable times after reasonable notice” and required that all notices to the tenant must be in writing and delivered or mailed to the premises. However, the tenant’s attorney wrote a letter to the landlord’s attorney instructing the landlord not to have any direct contact with the tenant. Pursuant to the instruction of the tenant’s attorney, the landlord’s attorney mailed an inspection notice to the tenant’s attorney rather than the premises.

The attorney denied receipt of the inspection notice. Pursuant to the inspection notice, the landlord entered into the property. To gain entry, and pursuant to the landlord’s direction, the inspector cut a metal chain to the parking lot and a locksmith picked a lock to the building triggering an alarm. Four days later, the tenant filed a lawsuit against the landlord asserting that, “without giving any prior required notice to [the tenant], and without [its] consent,” the landlord had unlawfully and forcibly entered the premises. The landlord prevailed in the trial court. The tenant appealed.

The California Court of Appeal upheld the judgment in favor of the landlord. Read literally and in isolation, the lease notice provision requires that the notice of inspection be mailed to the tenant at the premises. However, the Court of Appeal reasoned that it would be absurd if the law required strict adherence to the letter of the contract and disregard of counsel’s direction not to contact the tenant directly. Interpretation of a contract “must be fair and reasonable, not leading to absurd conclusions.” Accordingly, the landlord’s attorney was lawfully permitted to mail notice of the inspection to the tenant’s attorney instead of directly to tenant at the premises.