United Properties Limited Co. v. Walgreen Properties, Inc.

Brief Fact Summary.

United Properties Limited Co. (UPL) sued Walgreen Properties, Inc. (Walgreen) when Walgreen refused to renew a lease as a result of UPL’s failure to give written notice of renewal of the lease in the time required by the lease.

Synopsis of Rule of Law.

Equity will not relieve lessees of the repercussions incurred when they fail to give written notice of renewal of the lease in the time required by the lease.

Facts.

Walgreen Properties, Inc. (Walgreen) leased property to United Properties Limited Co. (UPL). UPL spent $1.2 million on improvements to the property and subleased portions of the property to other businesses. When UPL failed to give notice to renew by September 30, 1999, Walgreen informed UPL that their option to renew expired. UPL attempted to renew the next day by written notice, but Walgreen refused to renew the lease. UPL sued Walgreen and judgment was granted to UPL.

Issue.

Whether equity will relieve lessees of the repercussions incurred when they fail to give written notice of renewal of the lease in the time required by the lease?

Held.

No. The judgment of the trial court is reversed. UPL is not entitled to renewal because UPL did not provide timely notice of renew per the lease agreement.

Dissent.

(Castillo, J.) UPL invested large sums of money in expectation of a longer lease term. If the lease is not renewed, Walgreen receives a valuable property without suffering the costs of investment.

Discussion.

Courts may relieve lessees of requirements to give timely notice to renew when: (1) there has been a slight delay, (2) the lessor experienced a slight loss, (3) and the lessee would experience substantial hardship if the terms of the lease were enforced.