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The trial court granted summary judgment to Tustin, concluding that the 2001 Estoppel Certificate terminated Miner's 1997 option to extend. The appellate court reversed and remanded for further proceedings. The appellate court held that the 1997 lease, including the addendum, and the Estoppel Certificate were fully integrated because the Estoppel Certificate referenced the lease as being in full force and effect. However, the entire contract (the lease, the addendum and the Estoppel Certificate) contained an ambiguity because the Estoppel Certificate stated that there were no options. The appellate court remanded the matter for trial to determine the meaning ' if any ' of the Estoppel Certificate.

PIERCING THE CORPORATE VEIL

The corporate veil may not be pierced where, inter alia, the corporation conducts business as a separate entity, maintains separate checking accounts and files separate tax returns. Quinn-Matchet Partners v. Parker Corporation, CA03-458, Court of Appeals of Arkansas, Division One, Feb. 18, 2004.

Quinn-Matchet (the landlord) and Parker Corporation (the corporation) entered into a lease for commercial space in October 1993. Richard Parker, the sole shareholder of the corporation, personally guaranteed the lease for 3 years from the commencement date of the lease (October 1993). The lease further provided that if the Parker Corporation was not in default of the lease, the personal guaranty would be released after 3 years (October 1996). In February 2000, the landlord filed an unlawful detainer action against the corporation. The landlord alleged that the corporation had not paid its monthly rental payments since February 1998 and had not surrendered possession of the property. Thereafter, the corporation surrendered the property, and the landlord amended its complaint, alleging that Parker was personally liable for the corporate debts under the personal guaranty of the lease and also because Parker used the corporation as his “alter ego.”

The trial court held that the evidence produced at trial was insufficient to pierce the corporate veil; therefore, Parker was not personally liable for the debts of the corporation. It considered that the corporation conducted business as a separate entity, maintained separate checking accounts, filed separate tax returns, held articles of incorporation and tax certificates, and that formal resolutions were executed when required. The evidence produced by the landlord that the corporation had paid Parker personally more $31,500, even though the corporation was not paying other creditors, and that the corporation made lease payments on Parker's automobile, was insufficient to pierce the corporate veil. With regard to the personal guaranty, even though the corporation delayed making timely payments under the lease in 1995, by October 1996 the corporation was in full compliance with the terms of the lease, and, therefore, the personal guaranty was released. The appellate court affirmed, holding the trial court's finding that there was no abuse of the corporate entity was not “clear error.” The appellate court noted that the landlord had waited 4 years after becoming aware of the corporation's defaults and 2 years after the last lease payment was made before filing a lawsuit against the corporation; the appellate court held that such a long delay “militates against a finding of injustice.”

ASSIGNMENT OF LEASE

Even when a landlord did not waive its right to withhold consent to an assignment, the landlord may be considered to have unreasonably withheld its consent to an assignment of the lease when the nature and occupancy of the premises did not change under the assignment and when the same employees continued to occupy the premises. Ring v. Mpath Interactive, et al., 01 Civ. 11329 (VM), U.S. District Court for the Southern District of New York, Feb. 17, 2004.

HearMe leased commercial space from Ring in June 1999. In January 2001, Gamespy purchased HearMe, and HearMe attempted to assign its lease to Gamespy. Gamespy did not intend to alter the business on the premises, and the same employees occupied the premises. Nevertheless, Ring resisted the assignment and instead attempted to negotiate an independent lease with Gamespy for a higher monthly rent. HearMe paid rent to Ring for February, March and April 2001. Gamespy also tendered checks to Ring for those months, plus May and June 2001. Ring did not cash Gamespy's checks. Gamespy and Ring were unable to negotiate a new lease and by the summer of 2001, Gamespy vacated the premises before the expiration of the lease term. Ring sued for the rent owed for the remainder of the lease term.

Each party moved for summary judgment, and the district court awarded partial summary judgment to each party. The district court held that Ring did not consent to an assignment of the lease and did not waive its right to withhold consent by accepting rent from HearMe and Gamespy. The evidence produced demonstrated that even though Ring continued to accept rent from HearMe, it did not cash checks tendered by Gamespy. Moreover, Ring had notified Gamespy in writing that it did not consider the parties to have a landlord-tenant relationship. However, the district court also held that Ring unreasonably withheld its consent to the assignment of the lease. The court considered that the nature and occupancy of the premises did not change after Gamespy acquired HearMe and that the same employees continued to occupy the premises. The court concluded that Ring provided no reasonable explanation to withhold its consent to the assignment of the lease.

PERSONAL GUARANTY

A personal guaranty may terminate upon the tenant's full retirement and sale of the business to its partner. 27th Street Associates v. Lehrer et al, 1933 27, Supreme Court of New York, Appellate Division, First Department, Feb. 17, 2004.

In 1987, Art Station leased premises from 144 Holding Company, the predecessor in interest to 27th Street Associates (the landlord). At the time that the lease was executed, Kallan was the president of Art Station and executed a personal guaranty of Art Station's performance, which included payment of rent. Lehrer, another principal of Art Station, also executed a personal guaranty in 1987. In 1995, the landlord and Art Station extended the lease to Jan. 31, 2001. In 1996, Kallan retired and sold his entire interest in Art Station to Lehrer. In November 2000, Lehrer alone extended the lease to Jan. 31, 2006. On Sept. 21, 2001, the landlord sent a “Notice to Guarantors” notifying Kallan that Art Station was in default of the terms of the lease, and the landlord sought payment under the personal guaranty.

Kallan moved for summary judgment, arguing that his personal guaranty had terminated in 1996 when he retired and sold his share of the business to Lehrer. The trial court granted Kallan's motion and the appellate court affirmed. It held that the landlord was aware that Kallan had retired and sold his share of the business to his partner. It considered that the terms of the lease did not require any formal or written notice of termination of the guaranty and that the landlord understood it was dealing solely with Lehrer after 1996. Furthermore, the landlord's actions in seeking a second guaranty by Lehrer after Kallan's retirement were evidence of its understanding that Kallan was no longer involved in the business of Art Station.

TIMELY PAYMENT

Rent is due at the time stated in the lease, even if the lease indicates an alternate time when the tenant may be found in default for failure to pay rent. Silvermine Investors, LLC v. Call Center Technologies, AC 23307, Appellate Court of Connecticut, March 2, 2004.

On Aug. 1, 2000, the parties entered into a 3-year lease for a 4800 square foot unit in a building owned by the landlord. On Dec. 7, 2000, the lease was amended. The lease required rent to be paid by the 1st of each month and that a late fee would be charged for rent received after the 15th of each month. The lease further provided that “in any event, any payment not received by the 30th of the month shall be deemed a default under the lease.” The tenant did not pay the January 2002 rent. The landlord sent a notice to the tenant on Jan. 17, 2002, informing the tenant that the rent was past due and charged a late fee under the terms of the lease. On Jan. 29, 2002, the tenant still had not paid the January 2002 rent, and the landlord served a notice on the tenant to quit possession. The tenant did not vacate the premises, and the landlord commenced a summary process action because of the tenant's failure to pay the January 2002 rent.

After a trial, the court found in favor of the landlord, and the tenant appealed. The appellate court affirmed. The tenant argued that the language in the lease that stated “any payment not received by the 30th of the month shall be deemed a default …” implied that rent was not due until the 30th of each month. The appellate court disagreed and held that the lease clearly required rent to be paid on the 1st of each month and that the clause at issue raised by the tenant involved whether the tenant was in default of the lease, not an indicator of when rent was due.

OPTION TO EXTEND

A lease and an addendum signed simultaneously are integrated with an Estoppel Certificate subsequently signed with a new landlord where the Estoppel Certificate references the lease as being in full force and effect; however, the fact finder must resolve any ambiguity regarding an option to extend caused by the integration. Miner v. Tustin Avenue Investors, LLC, G031703 Consol. With G032006, Court of Appeal of California, Fourth Appellate District, Division Three, Feb. 27, 2004.

Miner leased commercial space from Tustin's predecessor in interest in April 1997. The lease was scheduled to expire in August 2002. An addendum to the lease, also signed in April 1997, stated that Miner had an option to extend the lease until August 2007 as long as he notified the landlord at least 90 days prior to the termination of the lease. The option rent was scheduled to be the “greater of market rent” or 3% above the current rent paid by Miner. When Tustin purchased the commercial space, Miner executed an Estoppel Certificate, dated Nov. 21, 2001, in connection with the sale. The Estoppel Certificate stated that Miner had no options, rights of first refusal, termination or exclusive business rights. Thereafter, in May 2002, Miner notified Tustin that he intended to exercise the option to extend the lease. Tustin delivered a new lease to Miner with a rent schedule higher than that stated in the April 1997 amendment containing the option to extend. Miner sued Tustin for declaratory relief, seeking a declaration of what the proper rental rate should be. Tustin filed an unlawful detainer action, claiming that Miner had no option rights based upon the Estoppel Certificate signed in November 2001.

The trial court granted summary judgment to Tustin, concluding that the 2001 Estoppel Certificate terminated Miner's 1997 option to extend. The appellate court reversed and remanded for further proceedings. The appellate court held that the 1997 lease, including the addendum, and the Estoppel Certificate were fully integrated because the Estoppel Certificate referenced the lease as being in full force and effect. However, the entire contract (the lease, the addendum and the Estoppel Certificate) contained an ambiguity because the Estoppel Certificate stated that there were no options. The appellate court remanded the matter for trial to determine the meaning ' if any ' of the Estoppel Certificate.

PIERCING THE CORPORATE VEIL

The corporate veil may not be pierced where, inter alia, the corporation conducts business as a separate entity, maintains separate checking accounts and files separate tax returns. Quinn-Matchet Partners v. Parker Corporation, CA03-458, Court of Appeals of Arkansas, Division One, Feb. 18, 2004.

Quinn-Matchet (the landlord) and Parker Corporation (the corporation) entered into a lease for commercial space in October 1993. Richard Parker, the sole shareholder of the corporation, personally guaranteed the lease for 3 years from the commencement date of the lease (October 1993). The lease further provided that if the Parker Corporation was not in default of the lease, the personal guaranty would be released after 3 years (October 1996). In February 2000, the landlord filed an unlawful detainer action against the corporation. The landlord alleged that the corporation had not paid its monthly rental payments since February 1998 and had not surrendered possession of the property. Thereafter, the corporation surrendered the property, and the landlord amended its complaint, alleging that Parker was personally liable for the corporate debts under the personal guaranty of the lease and also because Parker used the corporation as his “alter ego.”

The trial court held that the evidence produced at trial was insufficient to pierce the corporate veil; therefore, Parker was not personally liable for the debts of the corporation. It considered that the corporation conducted business as a separate entity, maintained separate checking accounts, filed separate tax returns, held articles of incorporation and tax certificates, and that formal resolutions were executed when required. The evidence produced by the landlord that the corporation had paid Parker personally more $31,500, even though the corporation was not paying other creditors, and that the corporation made lease payments on Parker's automobile, was insufficient to pierce the corporate veil. With regard to the personal guaranty, even though the corporation delayed making timely payments under the lease in 1995, by October 1996 the corporation was in full compliance with the terms of the lease, and, therefore, the personal guaranty was released. The appellate court affirmed, holding the trial court's finding that there was no abuse of the corporate entity was not “clear error.” The appellate court noted that the landlord had waited 4 years after becoming aware of the corporation's defaults and 2 years after the last lease payment was made before filing a lawsuit against the corporation; the appellate court held that such a long delay “militates against a finding of injustice.”

ASSIGNMENT OF LEASE

Even when a landlord did not waive its right to withhold consent to an assignment, the landlord may be considered to have unreasonably withheld its consent to an assignment of the lease when the nature and occupancy of the premises did not change under the assignment and when the same employees continued to occupy the premises. Ring v. Mpath Interactive, et al., 01 Civ. 11329 (VM), U.S. District Court for the Southern District of New York, Feb. 17, 2004.

HearMe leased commercial space from Ring in June 1999. In January 2001, Gamespy purchased HearMe, and HearMe attempted to assign its lease to Gamespy. Gamespy did not intend to alter the business on the premises, and the same employees occupied the premises. Nevertheless, Ring resisted the assignment and instead attempted to negotiate an independent lease with Gamespy for a higher monthly rent. HearMe paid rent to Ring for February, March and April 2001. Gamespy also tendered checks to Ring for those months, plus May and June 2001. Ring did not cash Gamespy's checks. Gamespy and Ring were unable to negotiate a new lease and by the summer of 2001, Gamespy vacated the premises before the expiration of the lease term. Ring sued for the rent owed for the remainder of the lease term.

Each party moved for summary judgment, and the district court awarded partial summary judgment to each party. The district court held that Ring did not consent to an assignment of the lease and did not waive its right to withhold consent by accepting rent from HearMe and Gamespy. The evidence produced demonstrated that even though Ring continued to accept rent from HearMe, it did not cash checks tendered by Gamespy. Moreover, Ring had notified Gamespy in writing that it did not consider the parties to have a landlord-tenant relationship. However, the district court also held that Ring unreasonably withheld its consent to the assignment of the lease. The court considered that the nature and occupancy of the premises did not change after Gamespy acquired HearMe and that the same employees continued to occupy the premises. The court concluded that Ring provided no reasonable explanation to withhold its consent to the assignment of the lease.

PERSONAL GUARANTY

A personal guaranty may terminate upon the tenant's full retirement and sale of the business to its partner. 27th Street Associates v. Lehrer et al, 1933 27, Supreme Court of New York, Appellate Division, First Department, Feb. 17, 2004.

In 1987, Art Station leased premises from 144 Holding Company, the predecessor in interest to 27th Street Associates (the landlord). At the time that the lease was executed, Kallan was the president of Art Station and executed a personal guaranty of Art Station's performance, which included payment of rent. Lehrer, another principal of Art Station, also executed a personal guaranty in 1987. In 1995, the landlord and Art Station extended the lease to Jan. 31, 2001. In 1996, Kallan retired and sold his entire interest in Art Station to Lehrer. In November 2000, Lehrer alone extended the lease to Jan. 31, 2006. On Sept. 21, 2001, the landlord sent a “Notice to Guarantors” notifying Kallan that Art Station was in default of the terms of the lease, and the landlord sought payment under the personal guaranty.

Kallan moved for summary judgment, arguing that his personal guaranty had terminated in 1996 when he retired and sold his share of the business to Lehrer. The trial court granted Kallan's motion and the appellate court affirmed. It held that the landlord was aware that Kallan had retired and sold his share of the business to his partner. It considered that the terms of the lease did not require any formal or written notice of termination of the guaranty and that the landlord understood it was dealing solely with Lehrer after 1996. Furthermore, the landlord's actions in seeking a second guaranty by Lehrer after Kallan's retirement were evidence of its understanding that Kallan was no longer involved in the business of Art Station.

TIMELY PAYMENT

Rent is due at the time stated in the lease, even if the lease indicates an alternate time when the tenant may be found in default for failure to pay rent. Silvermine Investors, LLC v. Call Center Technologies, AC 23307, Appellate Court of Connecticut, March 2, 2004.

On Aug. 1, 2000, the parties entered into a 3-year lease for a 4800 square foot unit in a building owned by the landlord. On Dec. 7, 2000, the lease was amended. The lease required rent to be paid by the 1st of each month and that a late fee would be charged for rent received after the 15th of each month. The lease further provided that “in any event, any payment not received by the 30th of the month shall be deemed a default under the lease.” The tenant did not pay the January 2002 rent. The landlord sent a notice to the tenant on Jan. 17, 2002, informing the tenant that the rent was past due and charged a late fee under the terms of the lease. On Jan. 29, 2002, the tenant still had not paid the January 2002 rent, and the landlord served a notice on the tenant to quit possession. The tenant did not vacate the premises, and the landlord commenced a summary process action because of the tenant's failure to pay the January 2002 rent.

After a trial, the court found in favor of the landlord, and the tenant appealed. The appellate court affirmed. The tenant argued that the language in the lease that stated “any payment not received by the 30th of the month shall be deemed a default …” implied that rent was not due until the 30th of each month. The appellate court disagreed and held that the lease clearly required rent to be paid on the 1st of each month and that the clause at issue raised by the tenant involved whether the tenant was in default of the lease, not an indicator of when rent was due.