Eucasia Schools Worldwide, Inc. (appellant) filed a lawsuit against its landlord, DW August Company and Wendle Schoniger (respondents), which resulted in a jury verdict favoring the respondents. The court awarded DW attorney fees totaling $124,997. The appellant's primary argument on appeal was that the trial court incorrectly denied its motion for a directed verdict regarding a breach of contract claim, asserting that DW failed to provide proper notice before inspecting the leased property.
The lease specified that DW could inspect the premises with reasonable notice, and all notices to the appellant were to be in writing and delivered to the premises. Communication between the parties had been primarily through DW's legal counsel since 2009, especially after a letter from appellant's attorney, Dennis Balsamo, instructed DW's counsel to refrain from direct contact without permission. Despite this, DW's counsel sent a notice of inspection to Balsamo's office after not receiving a response to an inquiry about who to contact for inspections. However, Balsamo claimed he did not receive this notice. On July 18, 2010, respondents, including Schoniger, proceeded to the premises for inspection, during which a locksmith and building inspector were present to gain access. The case underscores the complexities of lease notice provisions and the impact of attorney communications on such legal obligations.
Schoniger, the locksmith, and an inspector entered a property, where the locksmith picked a lock, triggering the burglar alarm. Mark Charbonneau, an independent contractor on the alarm company’s call list, was present in the parking lot and was informed by Schoniger that she was conducting an inspection. Charbonneau, knowing Schoniger was the property owner, assured the alarm company that there was no issue, failing to notify the property owner, appellant. The inspector then conducted a detailed inspection, leading to a 30-page report. Four days later, appellant filed an 11-count complaint against respondents, alleging, among other things, breach of contract against DW for entering the premises without required notice or consent. During trial, appellant sought a directed verdict on the breach of contract claim, arguing DW had not proven compliance with the notice requirement in the lease. The court denied this motion, and the jury ruled in favor of respondents, indicating DW did not breach the contract. Appellant contested the verdict on appeal, asserting that DW had violated the lease's notice provision as a matter of law. The lease stipulated that notices should be sent to addresses specified by each party, with the premises serving as the lessee's address for notice after possession was taken. The court indicated that the interpretation of this provision is a legal question, reviewed de novo, and that contracts must reflect the mutual intentions of the parties, interpreted according to their clear language.
The lease notice provision, requiring inspection notice to be mailed directly to the appellant at the premises, was interpreted in light of written instructions from the lessee, Balsamo, prohibiting direct contact without his permission. This directive was issued by Balsamo's legal assistant on March 16, 2010, indicating that all communications should go through Balsamo, who was aware that DW's counsel was managing the property. On April 13, 2010, DW's counsel sought clarification on inspection contacts, implicitly suggesting that notice should be directed to Balsamo or his designee, to which Balsamo did not respond. The court concluded it would be unreasonable to penalize DW for adhering to Balsamo's instructions, emphasizing that strict contract adherence should not conflict with clear directives from counsel. The interpretation of contracts must avoid absurd outcomes and be fair and reasonable, allowing DW's counsel to mail inspection notices to Balsamo instead. Furthermore, the appellant was likely equitably estopped from claiming the notice to counsel violated the lease provision due to his conduct. The judgment, including attorney fees awarded to respondents, was affirmed, with costs on appeal to be recovered by respondents and reasonable attorney fees to be determined by the trial court.
