Notice to Quit Not Properly Delivered Under Lease Terms

Facts: The lease between a shopping center owner and a restaurant tenant provided: “All notices, consents, approvals, or demands required under this Lease shall be in writing, and shall be deemed delivered when either: (1) deposited in the United States mail, certified or registered, postage prepaid; (2) transmitted by telegraphic or electronic means, with proof of service provided; or (3) delivered in person at the business address specified in this Section of the Lease or [emphasis added] to such other address as either party may from time to time designate for this purpose.”

Several months after signing the lease, the tenant sent the owner a change-of-address notice, which included its new business address and advised the owner that any future notices should be sent there—not the previous business address.

After the tenant failed to pay several months’ rent, the owner sent it a notice to pay the overdue rent or move out of its space. The owner transmitted the notice to quit by certified mail and facsimile to the tenant's previous business address and by an attachment to an email sent to the tenant's business email account. The owner neither personally served anyone at, or mailed the notice to, the tenant's new address. The tenant failed to pay the overdue rent, claiming that it never received the notice at its new address.

The owner sued the tenant for possession of the space, asking a California court for a judgment in its favor without a trial. The tenant asserted that it was entitled to a judgment in its favor without a trial because the owner's service of the notice to quit allegedly did not comply with the notice provisions in the lease—that is, to send any notices to the new address the tenant had advised the owner of.

The court granted the tenant's request, and the owner appealed.

Decision: The appeals court upheld the decision in favor of the tenant.

Reasoning: The appeals court determined that the owner didn't comply with the lease's provisions for service of a notice to quit. The lease specified four authorized methods to transmit the notice—including electronic transmission—but that no matter what means was used, the notice had to be delivered to the address provided in the lease or otherwise designated for service of notices by the tenant. There was no evidence that the electronic notice sent by email to the tenant's business email account had been delivered to the new street address specified in the lease; the owner could not prove where the email had been checked by the tenant—at the old address or the new designated address.

The appeals court acknowledged that “the focus on the physical location of the receipt of the e-mail had some artificiality,” but it found that the language of the lease was the problem in this case because it omitted any reference to an electronic notification address to accomplish service; it included terms regarding only physical addresses. The improper service of the notice therefore precluded the owner's lawsuit against the tenant.

• Culver Center Partners East #1, L.P. v. Baja Fresh Westlake Village, Inc., June 2010