Judge Colin Leis, Case Number: 25PDUD00113, Date: 2025-04-10 Tentative Ruling

Judge: Colin Leis, Case: 25PDUD00113, Date: 2025-04-10 Tentative Ruling

Case Number: 25PDUD00113 Hearing Date: April 10, 2025 Dept: 74

Arcadia Royale, LLC v. Goldwater SAG Holdings, LLC et al.

Plaintiff Arcadia Royale, LLC’s Motion for Summary Judgment

BACKGROUND

This motion arises from an unlawful detainer action.

On January 13, 2025, plaintiff Arcadia Royale, LLC (Plaintiff) filed a complaint against defendant Goldwater SAG Holdings, LLC (Defendant).

On February 18, 2025, Plaintiff filed a motion for summary judgment, or in the alternative summary adjudication.

EVIDENTIARY OBJECTIONS

Defendant’s Evidentiary Objections

Woods Declaration

· Sustained: 1, 3, 4

· Overruled: 2

Davis Declaration

· Overruled: 5, 6, 7, 8

Plaintiff’s Evidentiary Objections

Kang Declaration

· Sustained: 2 (Hearsay)

· Overruled: 1

Pak Declaration

· Sustained: 6

· Overruled: 3, 4, 5

Exhibits

· Overruled: 7, 8

LEGAL STANDARD

In an unlawful detainer motion, a motion for summary judgment may be made any time after the answer is filed and with five days’ notice. (Code Civ. Proc. § 1170.7.) In an unlawful detainer action, the requirements differ from non-unlawful detainer summary judgment motions as follows: a separate statement need not be filed in support of or in opposition to a motion for summary judgment in an unlawful detainer action (CCP § 437c(b), (s)), the provisions of CCP § 437c(a)-(b) concerning the time for making and hearing the motion (see §§ 13.12-13.16) do not apply to unlawful detainer actions (CCP § 437c(s)), and the provisions for summary judgment set forth in CCP § 437c do not extend the period for trial in an unlawful detainer action specified in CCP §1170.5 (CCP §437c(r)).

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) California Code of Civil Procedure Section 437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.)

Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Plaintiffs’ initial burden of proof, in moving for summary judgment, does not include disproving affirmative defenses, but instead involves proving each element of a cause of action. (Oldcastle Precast, Inc. v. Lumbermens Mutual Casualty Co. (2009) 170 Cal.App.4th 554, 564.)

DISCUSSION

The elements of an unlawful detainer are (1) a landlord-tenant relationship, (2) the relationship’s termination, and (3) the tenant’s continued possession of the property. (Ahlers v. Barrett (1906) 4 Cal.App. 158, 160.) The notice must state the amount that is due, the name, telephonic number, and address of the person to whom the rent payments shall be made, and if payment may be made personally, and the usual days and hours that person will be available to receive the payment.

According to the evidence Plaintiff produced, Defendant entered into a lease agreement with GKHB Royale Investments, L.P. (Woods Decl., Ex. 1.) GKHB Royale Investments assigned the lease to Plaintiff. (Woods Decl., Ex. 3.) Defendant remains in possession of the Premises. (Davis Decl. ¶ 6.) Defendant provided five Notices of Default. The notice of default stated that Defendant was required to provide proof of insurance and the name and phone number of the Assistant Property Manager. On April 26, 2021, Plaintiff provided a notice of default with a demand to (1) pay past due rent, (2) make repairs, (3) provide a copy of the rent rolls and operating statement for the premises and identify each guarantor. (Woods Decl., Ex. 6.) A second notice was provided on February 13, 2023. (Woods Decl., Ex. 7.) The second notice demanded that Tenant pay all amounts due within 5 days of the letter. (Woods Decl., Ex. 7.) On January 24, 2025, Plaintiff provided a notice of expiration of lease to Defendant. (Woods Decl., Ex. 10.) Plaintiff has met its initial burden in establishing each element of the unlawful detainer cause of action. The burden shifts to Defendant to establish that a triable issue of material fact remains regarding the elements of the cause of action or affirmative defenses.

Defendant contends that it extended the lease and remains in lawful possession. Parties agree that for Defendant to exercise its option to extend the lease, Tenant must (1) not be in default and (2) deliver written notice of the option nine to twelve months before the option period. (Woods Decl., Ex. 1.) Defendant alleges that it verbally exercised the option in the summer of 2023 and again in November 2023. (Pak Decl. ¶ 2, 3.) Additionally, Defendant states that after verbally exercising the option, Plaintiff did not state that Defendant was in default on the lease, or that the acceptance needed to be in writing.

The nature of an option, which binds the lessor while the lessee is free to accept or not, obligates the court to require the lessee’s exact compliance with the option’s terms. (Bekins Moving & Storage Co. v. Prudential Ins. Co. (1985) 176 Cal.App.3d 245, 250-251.) In limited circumstances, the Court may grant equitable relief when the “mere neglect in fulfilling a condition precedent of a lease… would result in such hardship to the tenant as to make it unconscionable to enforce the condition precedent of the lease.” (Id. at 251-252.) The lessor’s conduct may waive the written requirement. (Id. at 251.)

Issues of waiver are generally a question of fact. (Old Republic Ins. Co. v. TSR Brokerage, Inc. (2000) 80 Cal.App.4^th 666, 679.) Waiver may either be express or implied. (Id. at 678.) The Court will find implied waiver when the “party’s acts are so inconsistent with an intent to enforce the right as to induce a reasonable belief that such a right has been relinquished.” (Ibid.) Here, Defendant alleges that it attempted to orally invoke the option in the summer of 2023 and again in November 2023. (Pak Decl., ¶¶ 3,4.) At the time, Plaintiff neither notified Defendant that it would not be considering the exercise of the option unless it was (a) in writing and (b) during the option period. A triable issue of material fact exists as to whether Defendants successfully orally exercised the option, and whether Plaintiff waived its right to enforce the notice terms of the option.

Plaintiff cites cases where the lessee alleged that the lessor waived its right to notice requirements because of discussions regarding improvements or should be estopped because the lessor knew of its intention to stay. (Simons v. Young (1979) 93 Cal.App.3d 170, 179; Bekins, 176 Cal.App.3d at 251; Hendren v. Yonash (1966) 243 Cal.App.2d 672, 678.) These cases are distinguishable because Defendant made efforts to remedy defaults, provide notice of the intent to take the option, and were never told that its attempts to exercise the option were insufficient. (Pak Decl., ¶¶ 2-5.)

Plaintiff argue that Defendant could not have reasonably relied on the Plaintiff’s words and conduct because it never asked counsel how to exercise the option. Defendant’s attorney may have provided guidance regarding the proper method of providing notice under the lease, but that notice is only relevant where acceptance did not already occur under a waiver principle. Defendant may have reasonably relied on the words of Plaintiff in believing its acceptance was sufficient.

Affirmative Defenses

Plaintiff also moves for summary adjudication on Defendant’s eighteen affirmative defenses. A Plaintiff moving for summary adjudication of an affirmative defense has the initial burden to make a prima facie showing that that the affirmative defense is without merit. (Continental Ins. Co. v. Columbus Line, Inc. (2003) 107 Cal.App.4th 1190, 1199-1200.) As discussed above, Defendant’s affirmative defenses of Waiver and Estoppel raise triable issues of material fact.

As to the other affirmative defenses, Plaintiff provides no evidence to support its conclusion that the defenses are meritless. Although a plaintiff’s initial burden on summary judgment does not require that the plaintiff disprove affirmative defenses, when seeking summary adjudication of an affirmative defense, a plaintiff must show there is no triable issue of material fact as to the defense. (See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 900.) Plaintiff fails to meet its initial burden. Therefore, the Court denies Plaintiff’s Motion for Summary Adjudication of each affirmative defense.

CONCLUSION

The Court denies Plaintiff’s Motion for Summary Judgment, or in the Alternative, Summary Adjudication.

Plaintiff to give notice.