Correction: A Sept. 18 article on Page B1 about the Laureate School's legal disputes with its landlord contained some errors and points needing clarification.
DW August Co., which owns the land that the school sits on and its buildings, alleged in court testimony entered into case records that Laureate's owner, Eucasia Schools Worldwide, was behind on rent. However, in a Feb. 1 judgment, the court ruled that the school's rent to its landlord never went unpaid.
Eucasia did have to pay more than $16,000 in attorney's fees to DW August. But that was to compensate for expenses in a breach-of-contract lawsuit, not a separate legal action over whether Eucasia had the first right of refusal in an option to buy the land the school sits on. That lawsuit is pending.
The article stated that DW August's attorney said a representative of Laureate was present during what Eucasia says was an unauthorized surprise visit by the landlord. Eucasia's attorney disputes this, and said that Laureate's groundskeeper, who lives nearby, was summoned when the school's alarm was triggered. His role during that visit was only to turn the alarm off, Eucasia's attorney said.
DW August has never owned the Laureate School business. Eucasia bought the school from its founders.
The Laureate School, a San Luis Obispo private school for children from 18 months to eighth grade, is battling in court to keep its landlord from selling the campus property out from under it.
The school, located at the base of Bishop’s Peak, was started by Jeannine Schmid and Laura Lehmann in 1981 in a home on Mill Street in San Luis Obispo. By 1994 it had grown to 14 buildings totaling 16,000 square feet on 10 acres overlooking the Los Osos Valley.
The Laureate Private School, as it was then called, continued to grow until both founders retired.
The school was sold in 2007 to a Nevada corporation, Eucasia Schools Worldwide, founded by Uwe Gemba and RuthJean Kennedy.
It was then sold to another entity, the DW August Company, which is owned by Edna Valley resident and builder Duane Hei and his wife, Wendle Schoniger.
Although Eucasia calls itself “worldwide,” it does not appear to have any other schools except for the San Luis Obispo Laureate School, according to its corporate filings.
Eucasia continued to operate as The Laureate School, dropping the word “private” from its title, with a 10-year lease with DW August at more than $12,000 a month, according to court documents.
However, in 2009, Gemba left the area to pursue other interests in Southern California. The school fell behind in its rent, and the owners began to worry that the school was having trouble with its finances, according to their court filings.
DW August Company then decided to sell the property to someone who would want to continue the lease with the school —about seven years are left on that lease — or find a new tenant or use for the site once the lease had expired, according to Danny Sullivan, who is selling the property on behalf of DW August Company.
According to court filings and Sullivan, the lease had an option that gave the school the first right of purchase, and Eucasia Worldwide made an offer to buy the property. However, the offer came after the option expired and was about half of the $3.2 million that the owners are asking for the property. The offer was not accepted.
At that point, the court battle was on. The owners sued Eucasia, alleging that the school was preventing them from showing the property to potential buyers and had taken down a for-sale sign on the property.
In May, Judge Charles Crandall agreed with the owners, declaring that they had the right to sell the property to another buyer. The school was also required to pay the owners more than $16,000 that they spent in attorney fees to settle the issue.
But Eucasia Worldwide has refused to give up.
Roz Reymers, the headmaster, told The Tribune the school is continuing to pursue options to buy the property.
They have also sued the owners for about a million dollars, alleging infliction of emotional distress, trespassing, invasion of privacy and negligence.
The charges stem from the owners allegedly having cut a chain across the parking lot and entering the school without permission from school officials by way of a locksmith making them a new set of master keys.
The lawsuit alleges DW August Company also accessed the plaintiff’s computer system, looked at papers, “maliciously” switched telephone and fax wires, and failed to secure a rear door, leaving the school’s confidential student and employee records unsecured. The school feared more “malfeasance, unlawful activity and/or possible thefts may have occurred that are as of yet undiscovered,” according to the suit.
However, DW August Company lawyer Roy Ogden said that a school representative was present when it was inspected as part of a decision to make sure the property was being kept up, and that no wrongdoing occurred. Ogden said the owners have full legal rights to sell the property if they wish.
A hearing on the issue is set for December. In the meantime, the owners are continuing to advertise the property as a “fabulous income property” with an “excellent location and superb setting with Bishop’s Peak.”
Staff Writer Nick Wilson contributed to this report.