Zlotolow v. United States

The partnership of Leon Pizante and Adolfo Zlotolow (plaintiff) owned a building leased to the United States government (defendant) for use as a post office. The five-year lease carried an option to renew on 90 days’ advance notice. The partnership assigned its rights in the lease to the building’s mortgagee, Franklin Life Insurance Company (Franklin). Halfway into the lease’s term, the government notified Franklin that it intended to renew the lease. The notice incorrectly gave the building’s street number as 3940 instead of 3950 but was otherwise correct. A few months later, the government sent a copy of the renewal notice to Pizante but misspelled his name as Pigante. One of the partnership’s employees signed the certified-mail return receipt. Pizante subsequently conveyed his interest in the partnership to Zlotolow. A month before the lease was set to expire, Zlotolow informed the government that, because it had failed to exercise its renewal option, he expected the government to vacate the building when the lease expired. The government responded by sending Zlotolow copies of its renewal notices and the certified-mail return receipt. When the government took no steps to vacate the building, Zlotolow filed suit in the United States Court of Federal Claims, seeking damages for his inability to lease the building at market rates. Zlotolow cited the government’s flawed renewal notices as proof that the government failed to give notice of its intent to renew the lease in the “unequivocal” and “unqualified” manner required by California law.