Judge: Alison Mackenzie, Case: 23STCV01635, Date: 2024-06-18 Tentative Ruling
Case Number: 23STCV01635 Hearing Date: June 18, 2024 Dept: 55
NATURE OF PROCEEDINGS:
Plaintiff Ashland Pacific, LP’s Motion for Summary Judgment or in the
Alternative, Motion for Summary Adjudication.
BACKGROUND
ASHLAND PACIFIC, LP (“Plaintiff”)
filed a Second Amended Complaint (“SAC”) for Breach of Contract against ANTHONY
HASAN and MURIEL IWANOWSKI (“Defendants”), based on Defendants’ alleged failure
to pay rent and various late payments, property damage and cleaning, with respect
to a lease for property located at 1180 W. Adams Blvd., Los Angeles.
Plaintiff has filed a
motion requesting summary judgment against Defendants, or summary adjudication
of the one Cause of Action for Breach of Contract. Defendants oppose the motion.
LEGAL STANDARD
In moving for summary judgment or summary adjudication,
a “plaintiff . . . has met his or her burden of showing that there is no
defense to a cause of action if that party has proved each element of a cause
of action” Code Civ. Proc. § 437c(p)(2).)
Once the plaintiff has satisfied that burden, the
burden shifts to the defendant “to show that a triable issue of one or more
facts exists as to the cause of action or defense thereto.” Id.
EVIDENTIARY OBJECTIONS
The Court sustains Defendants’
evidentiary objections to Plaintiff’s evidence.
The Court overrules Plaintiff’s
evidentiary objections to Defendants’ evidence.
ANALYSIS
Plaintiff’s Burden
The elements of a claim
for breach of contract are: (1) existence of contract, (2) performance or
excuse for nonperformance, (3) defendants’ breach, and (4) resulting damage.
E.g., Wall Street Network, Ltd. v. N. Y. Times Co. (2008) 164
Cal.App.4th 1171, 1178.
With respect to the final
element of damages, Plaintiff contends that the undisputed evidence establishes
it is entitled to all the back rent because it could not relet the property:
14.
After Plaintiff took legal possession of the Premises on December 26, 2022,
Plaintiff had to inspect and restore the Premises to their original condition
prior to Defendant Hasan’s move in, by making necessary repairs due to
resident-related damages. A true and correct copy of the Final Account Statement
dated April 10, 2023, reflecting the cost of these repairs is attached hereto
as Exhibit G.
….
16.
Despite Plaintiff’s best efforts and diligence, Plaintiff was unable to relet
the Premises prior to the Lease End Date, on July 24, 2023, given the size of
the property and the time it took to fix the resident-related damages, as well
as the time of year that Plaintiff took possession of the Premises (i.e., in
the middle of the academic schoolyear).
17.
Through the Lease End Date, Defendants failed to pay a total of $97,300.60 in
installment payments and $26,428.02 in late fees (calculated at a rate of 6% of
the outstanding balance), for a total of $123,728.62, as shown in Exhibit C
attached hereto.
18.
Under the Lease, Defendants were required to pay a security deposit in the
amount of $9,750.00. Plaintiff applied the $1,525.00 security deposit that
Defendant Hasan paid for the prior lease as well as the $1,600.00 security
deposit that a former tenant paid under the prior lease, toward the $9,750.00
security deposit owed under the Lease. Defendants therefore failed to pay the
remainder of their security deposit in the amount of $6,625.00.
Julio Davila declaration,
¶¶ 14-18.
“A motion for summary
judgment must be decided on admissible evidence in the form of affidavits,
declarations, admissions, answers to interrogatories, depositions and matters
of which judicial notice may be taken. . . .
Personal knowledge and competency must be shown in the supporting and
opposing affidavits and declarations....
The affidavits must cite evidentiary facts, not legal conclusions or ultimate
facts..... Matters which would be excluded under the rules of evidence if
proffered by a witness in a trial as hearsay, conclusions or impermissible
opinions, must be disregarded in supporting affidavits.” Guthrey v. State of
California (1998) 63 Cal.App.4th 1108, 1119-1120 (internal quotation
omitted).
Defendants have filed
well-taken evidentiary objections to Plaintiff’s evidence. The Davila
declaration lacks foundation to show personal knowledge as to apparent hearsay
statements and conclusions, including those made in the Final Account
Statement. Further, since there is a shortage of evidence surviving the ruling
on evidentiary objections, the Court determines that Plaintiff failed to shift
the burden of proof as to all claim elements, particularly as to the amount of
damages.
Because of the burden not
being shifted, the Court need not address Defendants’ burden, which is nonetheless
addressed below. “Until parties moving for summary judgment satisfy the initial
burden of proof, opposing parties are not required to respond with
counteraffidavits.” Classen v. Weller (1983) 145 Cal.App.3d 27, 43.
Defendants’ Burden
Even if Plaintiff had established,
through admissible evidence, each element of its breach of contract cause of
action, Defendants have established that triable issues of fact exist that
preclude summary judgment or adjudication.
Leases in Dispute:
While Plaintiff contends the August 2022 lease signed by all the tenants is not
enforceable, the fact remains that Plaintiff provided the August 2022 lease to
Defendants after the initial February 2022 lease, though Plaintiff ultimately
refused to honor it based upon an error in understating the rent amount.
“Essential to a novation
is that it ‘clearly appear' that the parties intended to extinguish rather than
merely modify the original agreement.” Howard v. County of Amador (1990)
220 Cal.App.3d 962, 977.
The parties dispute which
of the multiple leases apply or were breached. Under the totality of
circumstances, the proof is unclear as to the parties’ intent. See Defendant
Anthony Hasan declaration, ¶¶2-4 (lessor requested superseding leases to
correct management mistakes, as to which Defendant stated some objections and
negotiated for reductions based on habitability issues); and Sinjun Astani
declaration, ¶¶ 1 and 4 (landlord quickly requested signing a second lease for
the reason that the manager erred as to a lowered amount of rent, but the
tenant moved instead of signing).
The Court therefore
concludes that triable issues of fact exist regarding which lease agreement
applies to this dispute.
Mitigation Issues:
Defendants contend that Plaintiff’s efforts to mitigate damages were not
reasonable.
A duty to mitigate gives
tenants a right of offset against the unpaid rent the sums that the landlord
reasonably could have been obtained via good faith efforts to re-rent. Cal.
Prac. Guide Landlord-Tenant § 7:488 (Cal. Prac. Guide).
Here, Defendants evidence
that Plaintiff unreasonably delayed in trying to mitigate damages via
re-renting. Attorney Maria Manning declaration, ¶¶ 3-4 (authenticating
Plaintiff’s document and admission responses, about delays); and Defendant Anthony
Hasan declaration, ¶¶ 5-7 (describing delays of continuing to collect from
Defendants, and doing construction and repairs that delayed property
availability for re-leasing).
Thus, the Court denies
the motion as to this subject, which is one of Defendants’ affirmative
defenses.
Habitability Issues:
Defendants assert that Plaintiff neglected to remedy and repair uninhabitable
conditions at the subject property, within a reasonable time after notice,
which effectively excused rental payments, pursuant to Civil Code section 1942,
subdivision (a).
That section provides for
delayed rent and tenant damages based on uninhabitable conditions. Cal. Prac.
Guide, supra, at § 2:462.
Here, Defendants show
that several habitability problems created excuses for rent payments. Defendant
Anthony Hasan declaration, ¶¶ 4 and 7; and Sinjun Astani declaration, ¶¶ 3-4
(reporting various uninhabitable conditions, such as backed up sewage causing
odors).
Hence, triable issues of
fact exist as to Defendants’ affirmative defense based on habitability.
Damages Penalty:
Defendants contend that the total late fees sought-- $26,428.02—are an
exorbitant penalty.
Generally, liquidated
damages clauses will not hold up in actions seeking damages for nonpayment of
rent as to residential property, because rent damages would not be
impracticable or extremely difficult to ascertain as required. Cal. Prac.
Guide, supra, at § 7:483.1.
Therefore, the Court denies
the motion as to this issue.
Repair Expense Issues:
Defendants argue that there is no evidence that Defendants caused the alleged
need for repairs beyond ordinary wear and tear. Also, they reason that
Plaintiff violated Civil Code section 1950.5, by not timely providing an
itemized and supported list of damages and by untimely seeking a deposit after
the tenancy had been terminated.
“California Civil Code
section 1950.5 requires that a landlord return the tenant's security deposit
within three weeks after the tenant has vacated the premises, except for
amounts necessary to compensate the landlord for the tenant's default in
payment to rent; to repair damages to the premises caused by the tenant,
not including ordinary wear and tear; to clean the premises; or to
restore personal property or appurtenances.” Cal. Prac. Guide, supra, at
Form 2E. (Underscoring added.)
Here, Defendants have filed
proof that some repairs related to damages not caused by the tenants, or to normal
wear-and-tear. Defendant Anthony Hasan declaration, ¶ 7.
Therefore,
the Court denies the motion as to these issues.
CONCLUSION
The Court denies the
motion and alternative motion.