Even though defendants concede they breached their commercial lease of plaintiff’s property by failing to obtain insurance, plaintiff’s suit for possession is dismissed.
The lease specifies a procedure to reclaim the property in the event of a default. Plaintiff did not follow the procedure, which was a condition precedent to filing a repossession suit.
Defendants entered into a 10-year commercial lease with plaintiff. A lease provision required defendants to insure plaintiff’s property. Defendants did not do this from the effective date of the lease in December 2018 until April 13, 2021. Defendants acknowledged they were in default because there was no policy in effect when the lease was signed.
Plaintiff has sued to repossess the property. Defendants responded with a motion to dismiss because the lease required written notice of intent to repossess the property and plaintiff did not provide this.
“Paragraph 21 of the Lease lays out a clear procedure for the landlord to reclaim possession in the event of a default. After 30 days passed following the June 11, 2021, demand for proof of insurance without Plaintiff receiving acceptable proof of insurance, she was then required by the Lease to provide a written notice of default to Defendants to start the 60-dsy cure period required by the Lease.
“Defendants would then have 60 days to cure their default, and if they could not, then Plaintiff could ‘immediately, or at any time thereafter, commence legal action against Tenant for possession.’
“Defendants correctly argue that this provision created a condition precedent to filing suit; without written notice of default and the expiration of the 60-day cure period, Plaintiff cannot sue for possession for breach of the Lease.”
Plaintiff says the June 11, 2021, demand letter for proof of insurance gave defendants constructive notice of their default, “and that this should take the place of any written notice requirement.”
Plaintiff cites University of Richmond v. Stone, 148 Va. 686 (1927) to support her argument. But Stone is distinguished by the fact that there was no contractual obligation to provide written notice.
“Moreover, ‘constructive or actual knowledge does not vitiate the requirement of actual, written notice under Virginia law.”
Isn’t it ironic?
“[T]he Court is aware of a certain degree of irony in this outcome. Defendants have been in default of their insurance obligations from the inception of the lease until many months into this litigation – and they may well remain in default to this day.
“They freely acknowledge that they left Plaintiff’s property unprotected by insurance for a substantial period of time. Plaintiff is vulnerable to the very claims of loss the Lease was designed to protect her from – and she may well have to remain so.
“All of this was certainly within the knowledge of the Defendants when they received the June 11, 2021 , demands for proof of insurance, and it was unknown to Plaintiff.
“Defendants seek, and are obtaining, dismissal of this case on the grounds that Defendants did not receive a written notice of default.
“Even so, the contractual provisions of the Lease are clear, and Plaintiff must take the action on that the Lease requires before she may sue to reclaim possession of the premises.”
Eskandari v. Auto Imports, et al., Case No. FE- CL21001860-00, April 19, 2022, Prince William County Circuit Court (Horan). Thomas R. Breeden, counsel for plaintiff. Thomas R. Breeden, counsel for defendants. VLW 022-8-029, 4 pp.