Judge: Anne Richardson, Case: 24STCV21275, Date: 2024-11-07 Tentative Ruling

Case Number: 24STCV21275    Hearing Date: November 7, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

A. Pleadings

Plaintiff 3133 FigFlower, LLC (Landlord) sues Defendant CA Living Student USC, LLC (Tenant) pursuant to an August 20, 2024, Complaint for unlawful detainer.

Landlord owns tracts of land and improvements located at 3100 South Figueroa Street, Los Angeles, CA 90017 (the Property). Landlord and Tenant are parties to a May 31, 2022, Ground Lease for the Property whereby Landlord agreed to ground lease the Property to Tenant, and Tenant agreed to ground lease and hire the Property from Landlord, under certain terms, covenants and conditions for a term of 99 years. The Ground Lease requires, among other things, that the Tenant pay taxes for the property as well as any fines or penalties resulting from Tenant’s failure to pay the same. The Ground Lease also prohibits the Tenant from committing waste upon the Property and requires that the Tenant maintain the Property and the improvements thereon.

Landlord alleges that the Tenant failed to pay $85,571.49 in taxes for the Property that were due to be paid on April 10, 2024, which remain due, plus accrued interest and penalties. Landlord further alleges that the Tenant has allowed the condition of the Property to deteriorate, failed to protect the Property against waste and nuisances thereon, and failed to keep and maintain the Property in safe condition and repair.

On May 13, 2024, Landlord served a Notice of Default and Opportunity to Cure upon Tenant. The Notice of Default demanded that the Tenant cure the defaults within 30 days or such failure would constitute an Event of Default, entitling Landlord to exercise its remedies to terminate the Tenant’s right to possession of the Property. On August 12, 2024, served Tenant with a three-day notice to quit or otherwise vacate the Property. Landlord asserts that as of the filing of this Complaint, the Tenant has not cured the defaults and remains in possession of the Property.

B. Motion Before the Court

On October 3, 2024, Landlord filed the instant motion for summary judgment, or in the alternative, summary adjudication.

On October 24, 2024, Tenant opposed the motion.

On November 1, 2024, Landlord replied.

The Landlord’s motion is now before the Court.

II. Motion

A. Requests for Judicial Notice

Pursuant to Evidence Code section 452, subdivisions (c) and (h), the Court may take judicial notice of “(c) [o]fficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States” and “(h) [f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” The court however may not take judicial notice of the truth of the contents of the documents. (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.) Documents are only judicially noticeable to show their existence and what orders were made such that the truth of the facts and findings within the documents are not judicially noticeable. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885.) 

Per Landlord’s request, the Court takes judicial notice of the following:

(1)   Notice of Building(s), Structure(s), or Premises Classified as Either Hazardous, Substandard or a Nuisance – Abatement Proceedings, recorded August 1, 2024 in the Official Records of the Los Angeles County Recorder’s Office as Instr. No. 20240512773. (Compendium of Exhibits (COE), Ex. 18.)

(2)   Prior Year Tax Statements for property taxes as of August 30, 2024, for Assessor’s Parcel Nos. 5123 020 004, 5123 020 005, 5123 020 006, 5123 020 007, 5123 020 016, 5123 020 017, 5123 020 018, 5123 020 019, 5123 020 020, 5123 020 021, 5123 020 022, 5123 020 031, and 5123 020 032 (COE, Ex. 12.)

(3)   Property Tax Payment Inquiry Reports dated as of July 12, 2024 (COE, Ex. 34, pp. C-0557 to C-0570.)

B. Evidentiary Objections

In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review. (Code Civ. Proc., § 437c, subd. (q).) Evidentiary objections not made either in writing or orally shall be deemed waived. (Code Civ. Proc., § 437c, subd. (b).) 

Landlord Evidentiary Objections to Scott Declaration

OVERRULED: Nos. 6-7, 10-11

            The remaining objections are not ruled on as they are not material to disposition of the motion.

C. Legal Standard

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact for trial or that the moving party is entitled to a judgment as a matter of law. (Code of Civ. Proc., § 437c, subd. (c).) 

A party may also seek summary adjudication of select causes of action, affirmative defenses, claims for damages, or issues of duty, which may be made by a standalone motion or as an alternative to a motion for summary judgment and proceeds in all procedural respects like a motion for summary judgment, but which must completely dispose of the challenged cause of action, affirmative defense, claim for damages, or issue of duty. (Code Civ. Proc., § 437c, subds. (f)(1)-(2), (t).) 

The moving party bears the initial burden of production to make prima facie showing no triable material fact issues. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) This burden on summary judgment or adjudication “is more properly one of persuasion rather than proof, since he must persuade the court that there is no material fact for a reasonable trier of fact to find, and not to prove any such fact to the satisfaction of the court itself as though it were sitting as the trier of fact.” (Id. at p. 850, fn. 11.) 

If the moving party meets this burden, the burden shifts to the opposing party to make a rebuttal prima facie showing that a triable issue of material fact exists. (Id. at p. 849.) 

“[I]n ruling on motions for summary judgment courts are to ‘“liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”’ [Citations].” (Cheal v. El Camino Hospital (2014) 223 Cal.App.4th 736, 760.) 

D. Analysis

1. Summary Judgment

a. Relevant Law

Under Code of Civil Procedure section 1161 subdivision (3), a tenant of real property is guilty of unlawful detainer “When the tenant continues in possession…after a neglect or failure to perform other conditions or covenants of the lease or agreement under which the property is held…than the one for the payment of rent, and three days' notice, excluding Saturdays and Sundays and other judicial holidays, in writing, requiring the performance of those conditions or covenants, or the possession of the property, shall have been served upon the tenant…Within three days, excluding Saturdays and Sundays and other judicial holidays, after the service of the notice, the tenant…may perform the conditions or covenants of the lease or pay the stipulated rent, as the case may be, and thereby save the lease from forfeiture; provided, if the conditions and covenants of the lease, violated by the lessee, cannot afterward be performed, then no notice, as last prescribed herein, need be given to the lessee or the subtenant, demanding the performance of the violated conditions or covenants of the lease.” (Code. Civ. Proc. § 1161 subd. (3).)  

Accordingly, the elements of unlawful detainer under Code of Civil Procedure section 1161 subdivision (3) are: (1) tenant is still in possession of the property; (2) tenant holds the property under a lease or agreement; (3) tenant failed to fulfill a condition or perform a covenant of the agreement; and (4) if the covenant can be performed, Plaintiff must have served proper written notice to perform or deliver possession of the property. If the covenant cannot be performed, then plaintiff need not demand its performance and may simply serve notice of termination. (Code. Civ. Proc. § 1161 subd. (3).)  

b. Discussion

Here, the Landlord shows, and Tenant does not dispute, that the Tenant is still in possession of the property and that the Tenant holds the Property pursuant to a Ground Lease agreement between the parties. (Compl. ¶¶ 6, 15; Ex. 2.)

The Landlord asserts that the Tenant failed to fulfill or perform certain conditions of the Ground Lease including sections 18.1, 18.3 and 18.5 which require the Tenant to pay all taxes on the property, including property taxes, and any penalties or interest that may accrue due to Tenant’s nonpayment. (Compl., Ex 2., pp. 31-32, §§ 18.1, 18.3, 18.5.) The Landlord presents evidence that the property taxes for the second installment of the 2023-2024 tax year were due on February 1, 2024, and were delinquent if not paid by April 10, 2024 and that, despite reminders from the Landlord, the Tenant failed to timely pay the taxes. (COE Exs. 32-33.)

The Landlord also asserts that the Tenant failed to fulfill or perform the conditions stated in sections 5.2 and 5.3 of the Ground Lease which state that the Tenant may not commit waste or nuisance upon the Property and that the Tenant agrees to preserve the house on the Property, as well as section 6 which states generally that the Tenant “shall keep and maintain the Property (including all of the Improvements) in safe condition and repair and in compliance with all applicable Legal Requirements in all material respects.” (Compl., Ex 2., pp. 9-10, §§ 5.2-5.3, 6.) The Landlord presents evidence that the Tenant failed to prevent the Property from being occupied by homeless individuals and trespassers, who vandalized the Property and started multiple fires requiring the intervention of the fire department. (Ziakas Decl., ¶¶ 2-7.) The Landlord presents evidence that the Property was maintained in a derelict condition caused by the Tenant’s failure to secure and protect the Property and that repeated break-ins and occupancy by trespassers led to the Code Enforcement Bureau issuing an Abatement Order. (COE, Exs. 13-16 [UGS Incident Reports], 17 [Order to Abate Vacant Structure], 18 [Notice of Building Classified as Nuisance], 19 [8/15/24 UGS Incident Report], 31 [8/15/24 Property Photographs].)

Last, in so far as the above covenants in the Ground Lease could be performed, the Landlord shows that it served the Tenant with proper written notice on May 13, 2024 (Compl., Ex. 2-3.), and that the Tenant failed to cure the defects within 30 days (COE Exs. 13-16 [UGS incident reports detailing break-ins, trespassers, occupants, and fires at the Subject Property between June 20 and July 11, 2024]; Levinson Decl., ¶ 7 [property taxes still outstanding as of July 15, 2024.]

Thus, the Landlord has shown that (1) the Tenant is still in possession of the Property; (2) the Tenant holds the Property under a Ground Lease agreement; (3) the Tenant failed to fulfill certain conditions and perform certain covenants of the Ground Lease regarding property taxes, waste/nuisance, and maintenance; and (4) Landlord properly served the Tenant with written notice to perform or deliver possession of the property.

Accordingly, Landlord has met its burden to make a prima facie showing that no issues of triable material fact exist as to the unlawful detainer claim.

The burden thus shifts to the Tenant to make a rebuttal prima facie showing that a triable issue of material fact exists. In an unlawful detainer motion for summary judgment, a defendant must show either that there exists a complete defense to the action or that the plaintiff cannot prove one of the necessary elements of unlawful detainer. (Code. Civ. Proc. § 437c subd. (p)(2).)

The Tenant argues that there is a triable issue of material fact as to whether the Tenant’s failure to timely pay the property taxes is a material breach sufficient to give the Landlord a right to terminate the Ground Lease considering the Tenant has since paid the outstanding taxes in full, and the delay has not resulted in any detriment to the value of the Property. (Opp. pp. 4-5; Scott Decl. ¶¶ 6-7.)

Next, the Tenant argues that summary judgment is not proper because it has an equitable defense to the unlawful detainer action, specifically invoking the doctrine of substantial compliance. Tenant asserts that it has substantially complied with sections 5.2, 5.3 and 6 of the Ground Lease because the Tenant has hired a new security company, increased security at the Property, removed the graffiti and trash at the Property, and further secured the Property with a fence and barrier. (Reply, p. 8; Scott Decl. ¶¶ 10-11, 13-14.)  

In reply, the Landlord argues that materiality is not at issue because the Landlord is not seeking rescission based on a material breach of the Ground Lease, but rather is seeking to terminate the Ground Lease pursuant to the specific grounds for termination as provided in the Lease. The Landlord argues that the Tenant “may not escape accountability by characterizing its breach as minor or trivial as the express terms of the Ground Lease govern the question and do not exempt such breaches.” (Reply, p. 4:8-9.)

However, upon review of the relevant termination provision in the Ground Lease, the provision in the Lease does explicitly contemplate materiality. Section 29.1(c) states: “if Tenant shall fail to perform or comply in any material respect with any term of this Lease (other than those referred to in subdivisions (a) or (b) above or (d) or (e) below) and, in any such case, such failure shall continue for more than thirty (30) calendar days after Tenant’s receipt of written notice of such failure from Landlord, provided that, in the case of any such failure that is susceptible of cure but that cannot reasonably with commercially reasonable diligence, be cured within such 30-day period, if Tenant shall promptly have commenced to cure the same and shall thereafter prosecute the curing thereof with commercially reasonable diligence, the period within which such failure may be cured shall be extended for such further period as shall be reasonably necessary for the curing thereof with diligence.” (emphasis added) (Compl., Ex. 2, p. 51 § 29.1(c).)

Tenant asserts that it has since paid the outstanding property taxes and implemented measures to cure the waste, nuisance and maintenance defects. (Scott Decl. ¶¶ 10-11, 13-14.) Thus, although the Tenant does not dispute that it breached certain conditions of the lease, the Tenant has presented triable issues of fact, i.e. Tenant’s untimely payment of property taxes and belated efforts to secure and maintain the property, that the breaches were not material. The termination provision of the Ground Lease provides that an ‘Event of Default’ occurs if the Tenant fails to comply in a material respect with the terms of the lease. Consequently, determination of whether Tenant’s actions constitute a minor or material breach is relevant to the determination of whether an ‘Event of Default’ occurred thus triggering the Landlord’s right to terminate the Lease. Liberally construing the evidence in support of the party opposing summary judgment, as the Court must, a reasonable trier of fact could determine that the breaches were immaterial.

Thus, the Tenant has shown that a triable issue of material fact exists as to whether the Landlord can establish the third element of an unlawful detainer action – whether the tenant failed to fulfill a condition or perform a covenant of the agreement.

Accordingly, the motion for summary judgment is DENIED.  

2. Summary Adjudication

            In the alternative, Landlord moves for summary adjudication on the Tenant’s first through fourth affirmative defenses. In the opposition, the Tenant does not address or oppose the arguments for summary adjudication on its affirmative defenses.  

a.      First Affirmative Defense, Failure to State a Claim

The Landlord argues that it has alleged facts sufficient to state a claim upon which relief may be granted.  (Mot. p. 18:8-11.)

b.     Second Affirmative Defense, Failure to Mitigate Damages

The Landlord argues that a landlord cannot mitigate its damages by leasing a property to another tenant while the original tenant is still in possession of the property and further that the defense is inapplicable because the Landlord is not claiming damages. (Mot. p. 18:14-24.)

c.      Third Affirmative Defense, Equitable Defenses  

The Landlord argues that the Tenant has not established any facts supporting waiver, estoppel or unclean hands applicable to Landlord. (Mot. pp. 18:27-19:13.)

d.     Fourth Affirmative Defense, Intervening/Superseding Acts

The Landlord argues that the Tenant has not presented any facts establishing an intervening or superseding act that would excuse Tenant from its obligations to cure its violation of the Ground Lease. (Mot. pp. 19:16-20:2.)

Here, the Landlord has met its initial burden to show that there is no triable issue of material fact on the first, second, and fourth affirmative defenses, and Tenant has failed the rebut the showing because it does not address the arguments in the opposition. However, as discussed above, the Tenant does present facts showing substantial compliance as a potential equitable defense.

Thus, the motion for summary adjudication is GRANTED as to the first, second, and fourth affirmative defenses only.

III. Conclusion

Plaintiff’s Motion for Summary Judgment is DENIED. 

Plaintiff’s Motion for Summary Adjudication is GRANTED as to Defendants’ First, Second, and Fourth Affirmative Defenses.