Case Title: Osprey L.L.C. v. Kelly-Moore Paint Co.

Citation: 

Docket Number: 90206

State: oklahoma

Court: Oklahoma Supreme Court

Date: 1999-05-25T00:00:00Z

Document:
Osprey L.L.C. v. Kelly-Moore Paint Co.  Osprey L.L.C. v. Kelly-Moore Paint Co. 1999 OK 50 984 P.2d 194 70 OBJ 1809 Case Number: 90206 Decided: 05/25/1999 Mandate Issued: 06/24/1999 Supreme Court of Oklahoma OSPREY L.L.C., a limited liability company, Plaintiff/Appellant, v. KELLY-MOORE PAINT CO. INC., a California corporation, Defendant/Appellee. Honorable James B. Croy, Trial Judge ¶0 [984 P.2d 195] The appellee, Kelly-Moore Paint Company, leased its store in Edmond, Oklahoma, from the appellant, Osprey, an Oklahoma limited liability company. The fifteen-year commercial lease contained two five-year renewal options. The lease required that the lessee give notice of its intent to renew at least six months prior to its expiration. It also provided that the renewal "may be delivered either personally or by depositing the same in United States mail, first class postage prepaid, registered or certified mail, return receipt requested." On the last day of the six-month notification deadline, Kelly-Moore faxed a letter of renewal notice to Osprey's office at 5:28 p.m., Oklahoma time. In addition, Kelly-Moore sent a copy of the faxed renewal notice letter by Federal Express that same day. Osprey denies ever receiving the fax, but it admits receiving the Federal Express copy of the notice on the following business day. Osprey rejected the notice, asserting that it was late, and it filed an action for forcible entry and detainer in the district court of Oklahoma County. After a trial on the merits, the trial court granted judgment in favor of Kelly-Moore, finding that the faxed notice was effective. Osprey appealed. The Court of Civil Appeals reversed, determining that the plain language of the lease required that it be renewed by delivering notice either personally or by mail, and that Kelly-Moore had done neither. We granted certiorari to address the first impression question of whether a faxed or facsimile delivery of a written notice renewing a commercial lease is sufficient to exercise timely the renewal option of the lease. Under the facts presented, we hold that it is. CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED. Anton J. Rupert Oklahoma City, Oklahoma, For Plaintiff/Appellant, Darian B. Anderson Edmond, Oklahoma,For Defendant/Appellee. ¶ 1 KAUGER, J.: ¶2 The first impression question presented is whether a faxed or facsimile delivery of a written notice renewing a commercial lease is sufficient to exercise timely the renewal option of the lease. Under the facts presented, we hold that it is. ¶3 FACTS ¶4 The appellant, Osprey, an Oklahoma limited liability company (Osprey), owns commercial property in Edmond, Oklahoma. On March 18, 1977, the appellee, Kelly-Moore Paint Company (Kelly-Moore), a California corporation, negotiated a fifteen-year lease for its Edmond, Oklahoma, store with Osprey's predecessors James and Victoria Fulmer. ¶5 It is undisputed that after the first fifteen years, Kelly-Moore timely informed Osprey's predecessors by certified letter of its intent to extend the lease an additional five years. The first five-year extension was due to expire on August 31, 1997. According to the property manager of Kelly-Moore, she telephoned one of the owners of Osprey in January of 1997, to inform him that Kelly-Moore [984 P.2d 196] intended to extend its lease for the remaining five-year period. On Friday, February 28, 1997, the last day of the six-month notification deadline, Kelly-Moore faxed a letter of renewal notice to Osprey's office at 5:28 p.m., Oklahoma time. Kelly-Moore also sent a copy of the faxed renewal notice letter by Federal Express the same day. ¶6 Although the fax activity report and telephone company records confirm that the fax was transmitted successfully and that it was sent to Osprey's correct facsimile number, Osprey denies ever receiving the fax. The Federal Express copy of the notice was scheduled for delivery on Saturday, March 1, 1997. However, Osprey actually received it on Monday, March 3, 1997. In a letter dated March 6, 1997, Osprey acknowledged that it had received Kelly-Moore's Federal Express notice; denied that the notice was timely according to the terms of the lease; and it rejected the notice as untimely. In July of 1997, Osprey wrote Kelly-Moore reminding it to vacate the premises by August 31, 1997. Kelly-Moore refused to vacate, insisting that it had effectively extended the lease term for the remaining five years. ¶7 On September 2, 1997, Osprey filed an action for forcible entry and detainer in the district court of Oklahoma County. It alleged that Kelly-Moore wrongfully possessed the property and that it refused to vacate the premises. Kelly-Moore argued that it was entitled to possession of the property because of its timely renewal of the lease. After a trial on the merits, the trial court granted judgment in favor of Kelly-Moore, finding that the faxed notice was effective. Osprey appealed. The Court of Civil Appeals reversed, determining that the plain language of the lease required that it be renewed for an additional term by delivering notice either personally or by mail, and that Kelly-Moore had done neither. We granted certiorari on April 13, 1999, to address the question of first impression. ¶8 UNDER THE FACTS PRESENTED, THE FAXED DELIVERY OF THE WRITTEN NOTICE OF RENEWAL TIMELY EXERCISED THE RENEWAL OPTION OF THE LEASE. ¶9 The precise issue of whether a faxed or facsimile delivery of a written notice to renew a commercial lease is sufficient to exercise timely the renewal option of the lease is one of first impression in Oklahoma. Neither party has cited to a case from another jurisdiction which has decided this question, or to any case which has specifically defined "personal delivery" as including facsimile delivery. ¶10 The contested portions of the lease provide in pertinent part: ". . . 20. OPTION TO RENEW. . . .The Lessee must, in order to exercise each such renewal option give to the Lessor at least six (6) months prior to the expiration of the term hereof or the extended term, written notice of the Lessee's intention to renew this lease as by this paragraph provided. . . . . . . 26. NOTICES. All notices required to be given hereunder by Lessee or Lessor shall be given in writing and may be delivered either personally or by depositing the same in the United States mail, first class postage prepaid, registered or certified mail, return receipt requested, addressed to the party to receive the same at that party's address hereinabove first written or to such changed address as the party may have from time to time during the term hereof notified the other party. Notices which are mailed shall be deemed delivered three (3) days after having been deposited in the United States mail as herein. . . . 29. TIME. Time is hereby expressly declared to be the essence of this lease and of all the covenants, agreements, terms, conditions, restrictions and obligations herein contained." (Emphasis supplied) ¶11 Osprey argues that: 1) the lease specifically prescribed limited means of acceptance of the option, and it required that the notice of renewal be delivered either personally or sent by United States mail, registered or certified; 2) Kelly-Moore failed to follow the contractual requirements of the lease when it delivered its notice by fax; and [984 P.2d 197] 3) because the terms for extending the lease specified in the contract were not met, the notice was invalid and the lease expired on August 31, 1997. Kelly-Moore counters that: 1) the lease by the use of the word "shall" mandates that the notice be written, but the use of the word "may" is permissive; and 2) although the notice provision of the lease permits delivery personally or by United States mail, it does not exclude other modes of delivery or transmission which would include delivery by facsimile. Kelly-Moore also asserts that the lease specified that time was of the essence and that faxing the notice was the functional equivalent of personal delivery because it provided virtually instantaneous communication. ¶12 Although the question tendered is novel in Oklahoma, the sufficiency of the notice given when exercising an option contract or an option to renew or extend a lease has been considered by several jurisdictions. ¶13 A lease is a contract and in construing a lease, the usual rules for the interpretation of contractual writings apply. ¶14 [ 981 P.2d 199 ] Language in a contract is given its plain and ordinary meaning, unless some technical term is used in a manner meant to convey a specific technical concept. ¶15 The purpose of providing notice by personal delivery or registered mail is to insure the delivery of the notice, and to settle any dispute which might arise between the parties concerning whether the notice was received. ¶19 CONCLUSION ¶20 Use of an alternative method of notification of the exercise of a lease option does not render the notice defective if the substituted notice performed the same function or served the same purpose as the authorized method. ¶21 CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT AFFIRMED. ¶22 SUMMERS, C.J., HODGES, LAVENDER, OPALA, WILSON, KAUGER, WATT, JJ. concur. ¶23 HARGRAVE, V.C.J, SIMMS, J. dissent. 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