Mitchell v. Exhibition Foods, Inc.

The major issue on this appeal by plaintiff Mitchel L. Mitchell from a judgment requiring him to execute a new lease of real property to defendants Exhibition Foods, Inc., and Jax Steak House—San Francisco, Inc., is the construction of a “first right of refusal” provision in the antecedent lease between the parties.

I

The original lease executed in February of 1968 concerned a parcel of improved real property located in downtown San Francisco. The lease, whose term would end on January 31,1979, was thereafter amended in two pertinent particulars. First, Exhibition Foods, the original lessee, assigned “all of its right, title and interest” in the lease to Jax Steak House. Plaintiff consented to this substitution, subject to the provision that “Exhibition Foods . . . shall assume all responsibility under the terms of the . . . lease agreement in the event of default by Jax Steak House.” Second, the lease was modified to include the “first right of refusal” provision. As relevant here, it reads as follows: “Right to lease for an additional period. Lessee shall have the first right of refusal to lease for an additional five years under the following conditions: . . . [1f]…