Judge rules against Del Mar on declaratory relief in case over Winston School’s lease

Del Mar City Hall
(Jon Clark)

A judge ruled against the city of Del Mar last week on a demurrer that the city filed in response to a complaint by The Winston School over a multiyear dispute about the school’s lease.

The city, which owns the Shores property that the school is located on, terminated The Winston School’s lease in August 2021. Council members and city staff said the school did not meet a redevelopment milestone required by the lease. The deadline for the school to submit the plans was December 2019, but was extended by the city to July 2021.

School officials have said the multiple plans they submitted during that timeframe did meet the requirements, and they filed a lawsuit in October 2021. They have also alleged that the city wants to evict the school to make room for more affordable housing, an allegation that the city has denied.

A jury trial is scheduled for March 2023. As of now, The Winston School’s tenancy ends that July. Before council members voted to terminate the lease, it ran through 2063.

The school, a nonprofit that serves about 100 special education students in grades 6-12, has occupied the property using prepaid rent credit based on $3 million it raised to help the city purchase the property. That rent credit runs out next year.

Earlier this year, the school filed a complaint in Superior Court that included a request for declaratory relief. If granted, it would have affirmed Winston’s interpretation of the terms of the lease on issues such as parking requirements and whether the COVID-19 pandemic should have invoked an “act of god” clause that protected the school’s lease.

The city responded with a demurrer, which is a legal argument to dismiss a cause of action based on lack of relevance. In March, Judge Kenneth Medel issued a tentative ruling largely in favor of Del Mar.

“Declaratory relief is not the proper vehicle to determine whether parties performed under the terms of a terminated lease agreement,” he wrote.

But Medel also gave Winston School attorneys time to submit a “second amended complaint,” which they did in April. The amended complaint argued that each cause of action for declaratory relief has an impact on how the remainder of the lease plays out.

Attorneys for the city again filed a demurrer that said the school’s breach of contract cause of action would allow for all the necessary evidence.

“Plaintiff’s only argument is that the termination was wrongful,” read a court filing from the city. “That is precisely the type of issue to be addressed in the breach of contract cause of action.”

But Medel issued another tentative ruling, which he confirmed during an Aug. 19 hearing, that overruled the city’s demurrer. He wrote that “ongoing obligations are at issue” that can be determined by declaratory relief. One obligation that school officials are concerned about if the lease ends next year, according to court records, is demolishing the buildings on campus at a cost they estimate would be $3-5 million before returning the lot to the city.

“We knew our case had a solid legal footing,” Laura Cunitz, president of The Winston School’s board of directors, said in a statement after the ruling against the city on the most recent demurrer. “The judge’s request for additional information in July only made it more robust.”

Del Mar Mayor Dwight Worden declined to comment because the case is ongoing.