Evidence Didn't Prove Owner Promised to Renew Lease

May 31, 2007

In April or May 2003, an oil change facility tenant asked an owner if it would renew its lease. The owner responded that “it would be business as usual,” but that it was too early to negotiate the lease. In October 2003, the tenant asked the owner for a letter regarding the owner's intention to renew the lease. The owner's letter stated that the tenant's lease renewal was conditioned on the owner's renewing a gas station lease.

In April or May 2003, an oil change facility tenant asked an owner if it would renew its lease. The owner responded that “it would be business as usual,” but that it was too early to negotiate the lease. In October 2003, the tenant asked the owner for a letter regarding the owner's intention to renew the lease. The owner's letter stated that the tenant's lease renewal was conditioned on the owner's renewing a gas station lease.

Later, the gas station refused to renew its lease, so the owner tried to evict the tenant. The tenant sued the owner for violating its promise to renew its lease. The tenant claimed that “business as usual” meant that the tenant could continue his oil change business at the same site.

A California appeals court ruled that the owner did not violate a promise to renew the lease. The tenant could not prove that the owner had made any promise upon which the tenant reasonably relied. Rather, the tenant's request for a letter in October regarding the lease renewal showed that the tenant did not rely on the owner's “business as usual” comment, said the court. And the owner's letter clearly conditioned the renewal of the tenant's lease on the renewal of the gas station's lease—and the gas station's lease was never renewed.

  • Wilson v. J.G. Bailey Corp.: No. F050434, 2007 Cal. App. Unpub. LEXIS 3792 (Cal. Ct. App. 5/11/07).

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