Quince & Co. v. The Barrel Cellar CA1/2

BACKGROUND

Barrel Cellar’s Lease Barrel Cellar operated a wine bar called Barrique on premises located at 461 Pacific Avenue in San Francisco, which it leased from Noel Margaret Lawrence. Howell signed the lease as president of Barrel Cellar and in his

1 individual capacity as guarantor of the lease. The lease, which ran from September 15, 2009, to April 14, 2015, provided for monthly rent of $3,280 beginning in April 2010, with specified annual increases. The lease gave Barrel Cellar a right to renew for an additional five-year term if it gave written notice of its “desire to exercise the option to renew” between October 15, 2014, and December 15, 2014. Rent for the first year of an extended term would be “95% of the then Fair Market Value of the Premises,” as agreed by the parties or determined by arbitration, with specified annual increases for subsequent years. In June 2013, Howell and Lawrence began to discuss “firming up the extension of the lease.” Howell told Lawrence, “I have not been able to take a penny out of the business since inception and still have investments I would like to make to the space that would increase the long-term value so I am hoping that we can be…