Winternitz v. Summit Hills Joint Venture

Appellant operated a pharmacy. On January 31, 1983, Appellant’s six year lease expired. The lease provided that if Appellant remained in possession, Appellant would become a month-to-month tenant and the rent would continue to be $1,658. Either Appellant or Appellee could terminate the month-to-month tenancy with 30 days written notice. In October of 1982, Appellant discussed renewal of the lease with a partner and officer of Appellee and asked if the lease could be transferred. Appellee agreed to renew the lease and indicated there would be no objection to assignment to a financially sound assignee. In mid-January of 1983, Appellee’s property manager delivered to Appellant a proposal for a two year lease with an eight year renewal conditioned on renovations to be made by Appellant. After clarifying the conditions, Appellant asked when the lease could be signed. Appellant received a copy with the word SAMPLE printed on the first and last pages. Although both Appellant and Appellee’s property manager were authorized to sign the lease, the property manager told Appellant that the lease would be signed at some point. However, the property manager instructed Appellant to pay the new rent. Believing that the lease had been renewed and could be assigned, Appellant began trying to sell his business. Appellant soon found a buyer and on February 2, 1983, sold the business to the Suh family for $70,000. The contract for the sale of the business mentioned the assumption of the lease. In addition, the contract included a provision making the contract contingent upon the seller procuring the lease. The Suhs met with Appellee’s property manager to discuss their financial situation. The property manager stated that she did not foresee any problems. After a few days, Appellant contacted a partner and officer of Appellee. Later, the partner and officer contacted Appellant and told him that Appellee would negotiate their own lease and Appellant would no longer be able to transfer the lease. Appellant was informed that he would be refunded the difference in rent and Appellee gave him a thirty-day eviction notice. Because of this, Appellant had to renegotiate the contract with the Suhs for a new price of only $15,000.