Raschkovsky D.D.S. M.S. v. Delphi Investors CA2/5

I. BACKGROUND

A. Relevant Lease Terms In July 2010, Raschkovsky, as tenant, and Delphi, as landlord, entered into a “Standard Office Lease” (the lease) pursuant to which Raschkovsky leased an office suite in Beverly Hills (the premises) from Delphi. The basic term of the lease was five years. The lease provided Raschkovsky three options to extend the term of the lease for five-year periods (“option terms”). The lease also provided a schedule of market rent to be applied during the first option term. It did not, however, set a schedule of rent for any subsequent option terms.

2 According to the option extension procedure outlined in the lease, upon receiving Raschkovsky’s notice stating its interest in exercising the option, Delphi was to deliver a notice setting the rent for the option term. Raschkovsky was then required to provide a written acceptance, but it could also object to the stated rent. If Raschkovsky objected, the parties were to use their best good faith efforts to agree upon market rent. If they could not do so within fifteen days, then three arbitrators were to be selected, pursuant to procedures outlined in section 31(d) of the lease, “and within three (3)…