A recent court decision has brought to light a contentious commercial lease dispute involving a landlord and tenant over the validity of an unsigned lease addendum. On September 19, 2024, Najib Batshon and Nadim Batshon filed a complaint in the Court of Appeal of the State of California against Rangoon Ruby Investment, LLC, seeking declaratory relief over an alleged lease extension agreement.
The plaintiffs, Najib and Nadim Batshon, own a commercial building in Belmont, California. They entered into a signed written lease with Rangoon Ruby Investment on July 1, 2015. The lease referenced an "Addendum A," which purportedly granted the tenant three options to extend the lease for up to 15 years. However, this addendum was never signed by either party. The Batshons claimed they never agreed to this addendum and sought a court declaration that it was invalid and non-binding.
During the bench trial, Najib Batshon testified that when he received the lease from John Lee, Rangoon Ruby's agent, Addendum A was not attached. He only saw it months later when Lee asked him to sign it, which he refused. Contrarily, Lee testified that Addendum A was included in the package he initially gave to Batshon and that Batshon had simply overlooked signing it.
Lily Pizano, who prepared the lease based on information from Lee, corroborated that Addendum A was part of the original documents she prepared. Malcolm Lee, Rangoon Ruby’s president and John Lee’s brother, also testified but admitted he overlooked signing Addendum A.
The trial court found inconsistencies in Najib Batshon's testimony and deemed it not credible. It ruled that Addendum A was incorporated by reference into the original lease despite not being signed separately. The court held that language stating “This Lease shall not be effective until and unless signed by all parties” referred to the base lease rather than just Addendum A.
The plaintiffs argued on appeal that they never received Addendum A before signing the lease and thus could not be bound by it. However, their evidence did not meet the burden of proof required to overturn the trial court's findings. The appellate court affirmed that even if Najib Batshon did not receive Addendum A initially, it was easily available upon request.
In their lawsuit, Najib and Nadim Batshon sought declaratory relief from having to honor an unsigned addendum they claimed they never agreed to. However, both lower courts found against them based on credibility issues and legal interpretations favoring incorporation by reference within contract law principles.
Representing themselves pro se were Najib and Nadim Batshon while Malcolm Lee represented Rangoon Ruby Investment LLC in these proceedings before Judge Stewart P.J., Richman J., Miller J., under Case ID: A169307.