Stanford, landlords of former Sigma Chi house battle over property in dual lawsuits

July 8, 2019, 3:10 p.m.

Amid disputes over use of the former Sigma Chi fraternity house at 550 Lasuen Mall, Stanford and the longtime landlords of the house have sued each other, court records reviewed by The Daily show. 

Stanford maintains that the Alpha Omega House Corporation (AOHC) — a group of Sigma Chi alumni who lease the property from the University — breached Section 4 of the ground lease, which requires the building be used as a living space for Sigma Chi fraternity members and guests during the academic year. 

As required by the terms of the lease, Stanford gave AOHC 15 days to either cure its alleged breach or vacate the property after Stanford sent a notice of breach on May 24. AOHC refused to vacate the property, arguing that it had not violated the lease. This led Stanford to consider the lease terminated on June 8.

After learning of the termination, AOHC filed a suit against Stanford on June 11, accusing the University of breach of contract and insufficient care for student safety, among other violations. Stanford followed with an unlawful detainer action — a way to evict tenants who stay after a lease is terminated — on June 20. Now, the status of the former Sigma Chi house, which Stanford plans to award to one or more other University-recognized Greek organizations in the 2020-21 school year, will be decided in court.

The lease debate

550 Lasuen housed Sigma Chi fraternity members until the Stanford chapter lost its charter in May 2018, following a membership review process conducted by the Sigma Chi International Fraternity organization that concluded there were “few members who would carry the chapter forward in a positive manner.” Sigma Chi International began investigating the Stanford chapter in January 2018, after an alleged drugging by a non-Stanford affiliate at a party held at the Sigma Chi house that month.  

Stanford’s Sigma Chi chapter is not currently active with the international Sigma Chi fraternity, nor is it recognized by Stanford. Renamed 550 Lasuen in May 2018, the house has been reallocated as a self-op for students in 2018-19 and 2019-20. Former Sigma Chi members can still opt in as residents, and other students have been able to live in the house over the summer as allowed by the lease.

The lawsuits follow months of debate over the status and duration of the lease. In a Feb. 25 letter, Residential & Dining Enterprises (R&DE) director Shirley Everett wrote to provide notice of “Stanford’s election” not to renew the lease with AOHC, stating that it would expire on Aug. 31, 2019. In a March email to The Daily, Stanford spokesperson E.J. Miranda wrote that it was the University’s position that the lease ends on that date. However, Miranda did not answer this question in an email sent to The Daily on Monday. 

An amendment to the lease made on Sep. 1, 1977 extended its term to five years, with automatic additions of one year to the term each year since then in the absence of written notice or non-extension from the University. Since Stanford notified AOHC of non-extension in 2019, this means the lease — unless terminated — would not expire until at least Aug. 31, 2023, having been most recently renewed in 2018.

Another point of contention is Stanford’s claim that “at all relevant times prior to on or about May 10, 2018, the Alpha Omega Chapter [of Sigma Chi] operated as a chapter of the Sigma Chi International Fraternity.” Sigma Chi disaffiliated with the Sigma Chi International Fraternity in 1966 and remained disaffiliated until 1974, as reported by The Daily and revisited in 2014 by Stanford Magazine. 

Stanford has not responded to The Daily’s request for clarification as to whether the University overlooked the 1966 disaffiliation, as AOHC alleges, or whether it does not consider it to have taken place at a time relevant to the current lawsuits.

AOHC submitted a proposal to Stanford last year and again this year to sublease the property to the currently unhoused Alpha Epsilon Pi (AEPi) fraternity in Sigma Chi’s absence, but the University rejected the proposal. Though AOHC Chair Bob Ottilie ’77 told The Daily AOHC would have rather subleased the residence to AEPi, AOHC agreed to let Stanford use the house as a self-op for students last year, rather than lose income by letting the house sit empty. The house will again be a self-op in the 2019-20 school year, Miranda has confirmed to The Daily. 

Ottilie challenges the contention that the absence of an official Sigma Chi chapter is grounds for termination of the lease, drawing a comparison to the erstwhile Chi Theta Chi house, which began functioning as a co-op in 1973. While that organization split from the international Theta Chi Fraternity in the late 1980s, as reported by The Daily, it lost its housing only in 2012 amid alleged lease violations and safety concerns. 

Officially known as 576 Alvarado since 2013 — and the focus of a recent trademark infringement lawsuit filed by Theta Chi Fraternity — the non-renewal of the house’s lease sparked fierce student pushback, leading administrators to announce a temporary compromise where the house would be owned by Stanford, and operated jointly by the University and the Chi Theta Chi Alumni Board. The arrangement left Sigma Chi as the only fraternity with a residence owned and operated by an organization other than Stanford.

In an email sent on Feb. 25, Residential Education (ResEd) Associate Dean Nate Boswell told 550 Lasuen residents of Stanford’s plans for the building to house one or more University-recognized Greek organizations in the 2020-21 academic year. This was the same day of Everett’s email to AOHC, and the same day that Vice Provost for Student Affairs Susie Brubaker-Cole announced Stanford’s intention to maintain 10 Greek houses. R&DE’s website lists nine such residences — with 1047 Campus Drive shared by two Greek organizations.

The Kappa Alpha (KA) fraternity, which was housed as recently as last school year, will lose its housing privileges in fall 2019 for at least two years, barring a successful appeal, after an investigation into KA’s housing of students who did not pay room and board to the University.

Safety concerns

Though Sigma Chi was suspended on grounds of inappropriate conduct — including underage drinking and throwing an unregistered party — Ottilie argues that the conduct in question has been disproportionately punished, and that other organizations have practiced underage drinking in the house since Sigma Chi’s removal.

He also pointed to past conflicts between AOHC and Stanford, citing a lack of University communication to AOHC regarding incidents at 550 Lasuen, as further reasoning for AOHC’s current lawsuit against the University. Stanford will respond to Ottilie’s allegations in court, Miranda told The Daily on Monday.

Less than 24 hours after learning of the January 2018 party that sparked investigation into Stanford’s Sigma Chi chapter, AOHC requested a conduct member review from the International Fraternity organization and banned the chapter from using the house for the rest of the year, an AOHC press release stated. AOHC also banned alcohol from common areas of house and asked Stanford to make the house substance free in the 2018-19 and 2019-20 school years. Stanford has declined to do so in both cases, Ottilie said.

Even before the investigation into Sigma Chi, Ottilie said the University has opposed AOHC on measures intended to decrease risky behavior at the house. Efforts by AOHC to put cameras in the residence were stalled when Stanford stopped communicating the status of AOHC’s application for the cameras, AOHC alleges. AOHC also reports that Stanford refused to place an unaffiliated RA in the house after AOHC requested the University do so to motivate more mature behavior and less bias in favor of Sigma Chi residents. For each of three underage drinking incidents in 2014, 2016 and 2018, Stanford did not discipline RAs for their lack of action, AOHC claims.

When Ottilie found out about the suspected drugging on Jan. 16, 2018, three days after the incident, he called Stanford Public Safety Department spokesperson Bill Larson only to learn that the University had not yet filed a police report into the incident. The Fountain Hopper first reported on the incident earlier that day.

Facing forward

Ottilie said he expects depositions for AOHC’s lawsuit against Stanford to begin in two weeks, and that AOHC is “aggressively litigating” the cases surrounding 550 Lasuen. Miranda wrote that “Stanford will defend itself against the claims of [AOHC], and will file its response to the complaint — which was served to the University on July 2 — within 30 days.”

Charlie Curnin contributed to this report.

Contact Holden Foreman at hs4man21 ‘at’

Holden Foreman '21 was the Vol. 258-59 chief technology officer. Holden was president and editor-in-chief in Vol. 257, executive editor (vice president) in Vol. 256, managing editor of news in Vol. 254 and student business director in Vol. 255.

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