Landlord evicts Laureate School in San Luis Obispo

Parents and teachers were still reeling this week from the eviction and abrupt closure of The Laureate School, a private campus nestled near the foot of Bishop Peak just outside San Luis Obispo.

The July 1 eviction, which took place months after The Laureate School’s owner stopped paying rent on the property, sent parents scrambling to find summer school and child care options for their kids, and left some wondering if their money would be refunded.

About 11 staff members, including eight teachers, were also caught off-guard by the eviction.

“We all came to work like it was just another day,” Christina Olgin-Lozano, a teacher in the preschool and toddler programs, said as she stopped by the school Thursday in hopes of collecting additional belongings. “It was frantic.”

In a letter to the families obtained by KSBY-TV, school owner Ruthjean Kennedy said her priority is to issue refunds to parents who paid for summer and fall sessions.

Kennedy did not answer calls for comment Thursday afternoon, and her voice mail was full. Her attorney, Stephen Ronca, did not return a call for comment.

An attorney for The Laureate School’s landlord, Full Circle Laureate LLC — which owns the classrooms, a playground and field — said Kennedy stopped paying the $17,700 monthly rent last October. She owed $172,000 as of February, said attorney Greg Connell of San Luis Obispo firm Belsher, Becker, Roberts & Connell.

“The ownership group did not want to evict a school,” Connell said. “The owners themselves were sick that they had to do this.”

Documents filed with the Secretary of State’s Office show that Kennedy and the corporation she helped found, Eucasia Schools Worldwide Inc., owe about $180,000 in federal tax liens.

Full Circle Laureate, the property owner, filed an unlawful detainer notice in San Luis Obispo Superior Court on April 13, the first step toward eviction. A trial date was set, but a judgment was reached five days before it was to begin, Connell said.

The property owner offered to postpone taking back possession of the buildings until after the school’s spring session ended, and agreed with Kennedy that the school would leave after June 8, he said.

“That was the date we picked, right between the two sessions,” Connell said. “June 8 comes rolling around and we were shocked to see the school still operating as usual. It was a blatant breach of the stipulated judgment.”

Kennedy was served with a notice five days before a San Luis Obispo County sheriff’s deputy arrived to enforce the July 1 eviction notice, Connell said.

Olgin-Lozano said Kennedy did not tell teachers about the impending eviction. Teachers had been getting paid, but some checks had bounced over the past year.

“We asked her many times if we were OK,” she said. “You know how you have that gut feeling. … I think some of us had a sense, but we didn’t want to believe it. We just kept the faith, we rallied together.”

Ben Fine, whose two daughters attended the school, said he and his wife were shocked by the sudden closure. They found child care quickly, but he said he knows that other parents are still looking for summer options.

Fine paid about $1,900 a month for his two children to attend the school, including before- and after-school care. Additional information on tuition costs was not immediately available, and The Laureate School’s website was down Thursday afternoon.

Long history

The Laureate School was founded in 1981 by two women as a preschool in a private house on Mill Street, according to information pulled from the school’s website before it was taken down.

The school moved to its current location in 1994; Eucasia Schools Worldwide Inc. purchased the school in 2007 and dropped “private” from its name.

One judgment lien shows that Eucasia, including Kennedy and another of its founders, Uwe J. Gemba, owes $227,128 to The Laureate School founders.

Connell said Kennedy initially stopped paying rent last June but negotiated an agreement with the property owners to pay the back rent and avoid an eviction. She made two payments and then defaulted on the back-rent and lease agreements, he said.

Then she informed the property owners that she was planning to sell the school and had entered into escrow with a Chinese investor. The school was in escrow for about four months, but the deal fell through, he said.

In her letter to parents, Kennedy wrote that she had offered $3.1 million to buy the property, but her business lawyer had advised her that the asking price was too high.

Connell said Kennedy had inquired last year about purchasing the property and an offer was made but not accepted.

He said Kennedy emailed at 5:43 a.m. July 2, the day after the eviction, to ask if the offer was still available. It was not, he said.

In her letter to parents, Kennedy blamed the former head-of-school, Diana Garrett, for the school’s more recent financial problems.

Garrett left last June to become head of school and an upper elementary teacher at Central Coast International School, and reportedly many students also left at that time. Garrett could not be reached for comment.

Olgin-Lozano said the school used to have more than 200 students but lost all of its upper grades and had about 60 students at the time of its closing.

This story was originally published July 9, 2015 at 8:51 PM with the headline "Landlord evicts Laureate School in San Luis Obispo."