Judge: Elaine W. Mandel, Case: 23SMCV02575, Date: 2023-10-20 Tentative Ruling
Case Number: 23SMCV02575 Hearing Date: February 21, 2024 Dept: P
Tentative Ruling
The HW Singleton
Company v. Kids Artistic Sense et. al., Case No. 23SMCV02575
Hearing Date
February 21, 2024
Plaintiffs HW
Singleton’s and defendant Kids Artistic Sense, Inc.’s Motions for Summary
Judgment/Adjudication
This is a
commercial unlawful detainer action, with plaintiff HW Singleton (HW) alleging
defendant Kids Artistic Sense (Kids) owes approximately $88,893 in rent due
from June 2022 through May 2023. HW and Kids both move for summary
judgment/adjudication.
Kids Artistic
Sense MSJ
Kids moves for
summary judgment on the grounds that the notice to pay rent or quit is
defective. It argues the notice failed to accurately state “the usual days and
hours” Singleton would be available to receive rent payment. “A landlord must
serve a tenant with a valid three-day notice in order to prevail in an unlawful
detainer action.” Bawa v. Terhune (2019) 33 Cao.App.5th Supp. 1, 5. The
three-day notice must state “the amount that is due, the name, telephone
number, and address of the person to whom the rent payment shall be made, and,
if payment may be made personally, the usual days and hours that person will
be available to receive the payment[.]” Cal. Code of Civ. Proc. §1161(2).
Under §1161(2), “the decision to allow personal payment of the rent, in
addition to allowing payment by mail by the tenant, is up to the landlord.”
Andy Hsieh v. Burton Pederson (2018) 23 Cal.App.5th Supp. 1.
When determining
the meaning of words used in a statute, courts must give them their “usual and
ordinary” meaning. In re. Jose S. (2017) 2 Cal.App.5th 1107, 1113. “When
attempting to ascertain the ordinary, usual meaning of a word, courts
appropriately refer to the dictionary definition of that word[.]” Wasatch
Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122.
Kids presents HW’s
three-day notice, which states payment could be made by check delivered to
landlord’s agent/president Singleton “Mondays through Fridays, between the
hours of 9:00 a.m. and 5:00 p.m” at the property. Defendant’s exhibit A. Kids
argues this notice was defective, since Singleton admitted at deposition he was
“unpredictably . . . floating in and out” of the property during in the days
following service of the notice. Kids argues this proves Singleton was
“unavailable” during the period identified in the three-day notice, rendering
the notice false and defective. They analogize this to a three-day notice that
includes the wrong phone number or overstates the amount of rent owed.
The court agrees
with Kids that if Singleton was “unavailable” to accept rent during the period
identified in the notice, the notice is defective. The court disagrees,
however, that Singleton’s deposition statement constitutes an admission of
unavailability. The language Kids relies on is ambiguous. Singleton states he
was “floating in and out” during the relevant period. He does not identify the
location in and out of which he was floating. Without context, the court cannot
determine what “floating in and out” means. There is no evidence that Singleton
was so far from the property that he could not have returned if Kids called to
arrange personal delivery of payment. Singleton mentions an office at the
property in his deposition testimony. Kids exhibit B at pgs. 38-39. “Floating
in and out” might mean Singleton was physically present but not in his office –
without more context and explanation, the court cannot conclude one way or the
other.
Kids cites no
authority supporting its argument that “available” means “physically present”
at all times at the address where payment is to be made. “Available” to accept
payment at a certain time and place means that payment at that time and place
can be easily arranged. There is no authority that the person must be
physically present at all identified times. The language of the unlawful
detainer statute supports this conclusion. §1161 requires a three-day notice to
include the phone number of a person who can accept personal payment. This
suggests that the statute’s drafters anticipated tenants would need a means
call the person in advance so that payment in person could be arranged. If
Singleton could be easily reached and summoned to accept a check during the
hours identified in the three-day notice, he was “available” within the meaning
of the statute even if he was not physically present at the address at all
times.
HW points out that
Kids’ interpretation of the statute is unworkable. Requiring a landlord or
landlord’s agent to be physically present and “on call” at all times identified
in the notice would “create chaos in eviction cases,” retroactively
invalidating a three-day notice whenever the landlord steps away, however
briefly. HW presents deposition testimony from Kids’ CEO Caldwell, who admits
she never tried to personally pay Singleton the past-due rent identified in the
notice. Since Caldwell never attempted to pay Singleton directly, there is no
evidence Singleton was actually “unavailable” to receive payment during the
period identified in the notice. DENIED.
Plaintiff HW
Singleton MSJ
HW argues
undisputed facts show Kids failed pay rent due under its lease and is liable
for unlawful detainer. The unlawful detainer notice alleges a rent due of
$88,893. This represents unpaid monthly rent of $9,834 for June 2022 through
February 2023 and unpaid monthly rent of $10,129 for March 2023 through May
2023, less a $30,000 payment on January 11, 2023. Singleton decl. exh. 2.
HW argues this
amount is correct despite failing to credit a $15,000 payment from Kids in July
2022. Singleton’s declaration states the $15,000 payment was not applied to the
amount sought in the unlawful detainer, but to $200,000 in earlier unpaid rent from
2020, 2021, and the first half of 2022. Singleton decl. ¶21. The $15,000
check’s memo line reads “COVID-19 rent”; there is no indication Kids intended
it to be applied to rent due after June 2022, rather than to prior accrued
rent. The Singleton declaration is sufficient to meet the initial summary
judgment burden, showing the three-day notice accurately reflects the unpaid
rent owed by Kids, or is a reasonable estimate of the amount owed.
Kids argues when
the payment was made, it was Kids’ stated intention that the payment cover
ongoing COVID-19 rental payments, rather than earlier debts from 2020-2022.
Caldwell decl. ¶2. Under Cal. Civ. Code §1479, when a debtor is under several
obligations and does an act that could constitute performance of two or more
obligations, the performance is first applied to an obligation specified by the
debtor, then to an obligation specified by the creditor. If neither party
specifies, payment is applied first to interest, then to principal, then to the
earliest obligation to mature. Cal. Civ. Code §1479.
The Caldwell
declaration creates a triable issue of fact as to whether Kids communicated to
HW that the $15,000 check was meant to be applied to ongoing debt, rather than
prior debt. If the Caldwell declaration is correct, Kids erred by failing to
deduct $15,000 from the amount stated in the three-day notice. This in turn
creates a triable issue of fact as to whether the three-day notice contained a
“reasonable estimate” of the amount due.
Under §1161.1,
there is a rebuttable presumption that an estimate of rent due is reasonable if
the amount claimed is at maximum 20 percent more or less than the amount
actually due. If the $15,000 credit should have been applied to the rent
requested, HW’s demand was off by 17%, falling within the 20% “safe harbor”
zone under §1161.1. §1161.1’s presumption of reasonableness for a discrepancy
of less than 20% is not absolute, however. It can be rebutted WDT-Winchester
v. Nilsson (1994) 27 Cal.App.4th 516, 531. A reasonable finder of fact
could conclude HW’s failure to reduce the amount demanded by $15,000 to reflect
Kids’ July 2022 payment was unreasonable, and that therefore the three-day
notice was defective.
There is a triable
issue of fact as to whether HW failed to include Kids’ $15,000 payment in its
three-day notice, and whether that failure rendered its estimate of the amount
of rent due unreasonable. Additionally, for reasons stated below in the court’s
analysis of the MSA to Kids’ affirmative defenses, there is a triable issue of
fact as to the affirmative defense of retaliation. DENIED.
HW also moves for
summary adjudication as to all of Kids’ affirmative defenses.
New Lease
HW presents Kids’
responses to requests for admission, where Kids admits it did not enter into
any agreement to renew the lease, create a new tenancy or extend the term of
the lease after termination. Lorman decl. exhibits 1 and 2, RFAS 24, 29. Kids
cannot disclaim its RFA responses, where it admits no new lease was created.
This affirmative defense fails. GRANTED.
Estoppel
Kids’ affirmative
defense for estoppel is based on the allegation that it detrimentally relied on
a promise from HW that, despite the terms of the lease placing responsibility
for repairing HVAC on the tenant, HW would maintain the HVAC system using its own
contractors. HW admits that it “took it upon itself to repair the heating,” but
cites Caldwell’s admission during her deposition she knew Kids had to pay rent
even if the heater did not work. Lorman decl. ¶5(m), deposition 46 5-14. There
is no evidence the condition of the heater relieved Kids of its obligation to
pay rent, especially since maintaining the HVAC was Kids’ responsibility under
the lease agreement. Therefore, there is no basis for an estoppel defense.
GRANTED.
Force
Majeure//Frustration of Purpose
Kids asserts an
affirmative defense for force majeure, arguing the COVID pandemic was an act of
God that made compliance with the terms of the lease impossible. Recent cases,
however, have found that as a matter of law the COVID-19 pandemic does not constitute
a force majeure event or give rise to a defense of impossibility. E.g. SVAP
III Poway Crossings, LLC v. Fitness International, LLC (2023) 87
Cal.App.5th 882. GRANTED.
Failure to
Mitigate
Kids admitted in
its RFA responses that HW’s claims are not barred due to a failure to mitigate.
Lorman decl. exh. 1 and 2, RFA No. 40. Therefore, this affirmative defense
fails. GRANTED.
Waiver
Kids admitted in
response to RFAs that HW did not waive its right to declare a breach of the
lease. Lorman decl. exh. 1 and 2, RFA No. 10. This affirmative defense cannot
proceed. GRANTED.
Retaliation
HW argues a
retaliation defense is unavailable as a matter of a law to a commercial tenant.
Motion at pgs. 16-17. In opposition, however, Kids presents caselaw
indicating commercial tenants may raise a common-law claim for retaliation as a
defense to an unlawful detainer. Custom Parking, Inc. v. Superior Court (1982)
138 Cal.App.3d 90, 91. The Caldwell declaration includes evidence of a
retaliatory motive related to Kids’ request that HW fulfil its promise to
repair the HVAC. This is enough to create a triable issue of fact. Caldwell
decl. ¶¶13. DENIED.
Ownership and
Standing
Kids’ RFA
responses admitted HW is the real party in interest and does not lack corporate
capacity to pursue an unlawful detainer action. Id. Nos. 51 and 52. This
affirmative defense fails. GRANTED.
Defective Notice
HW argues this
affirmative defense must fail because Kids admitted the notice was served and
there is no evidence of any defect. Id. Nos. 1-3. In opposition, Kids argues
the notice is defective because it does not state “the usual days and hours
that [Todd Singleton will be available to receive the [rent] payment.” The
court addressed that argument above.
Kids argues the
three-day notice is defective because it omits the $15,000 partial payment made
in July in 2022. As explained above, there is no dispute Kids made this
payment, and there is a triable issue of fact as to whether it was intended to
apply to the unpaid rent detailed in the unlawful detainer or to rent that
became due earlier. DENIED.
Defective Service
Kids admits the
notice was properly served. Lorman decl. exh. 1 and 2, RFA NO. 56. This
affirmative defense fails. GRANTED.
Violation of
Tenant Protection Acts
Kids admitted in
its discovery responses that the premises are not subject to any rent control
or eviction control regulation. Lorman decl. exh. 1 and 2, RFAS Nos. 14, 57-59.
This defeats their affirmative defense for violation of tenant protections. GRANTED.
Unclean Hands
This affirmative
defense is based on the allegation that HW failed to maintain heat on the
premises. HW states in its MSJ that it had no legal duty to maintain the
premises. The lease provides that Kids was responsible for maintaining HVAC
equipment on the premises. See lease §7.1 “Lessee shall, at Lessee’s
sole expense, keep the Premises, Utility installations . . . and Alterations in
good order, condition and repair . . . including, but not limited to, all
equipment or facilities, such as plumbing HVAC equipment[.]” Kids does not
dispute this provision of the lease. or provide any evidence that a new,
enforceable agreement was created imposing an affirmative duty on HW to
maintain the HVAC. GRANTED
Unjust Enrichment
Kids admitted in
their RFA responses that the amounts demanded in the complaint would not result
in unjust enrichment to HW. Lorman decl. exh. 1 and 2, RFA No. 62. GRANTED.
Laches
Kids admitted in
their RFA responses that the demands contained in the complaint are not barred
by the doctrine of laches. Id. RFA Nos. 64, 65. GRANTED.
Acquiescence,
Ratification, Knowledge
HW states “defendant
admitted that plaintiff did not agree to amend the lease,” but does not clarify
how this applies to the defense of ratification. HW also states “there no
evidence that [p]laintiff ‘ratified’ defendant’s non-payment of rent,” and Kids
does not dispute this in its opposition. The court will treat Kids’ failure to
address this in its opposition as an admission that the defense has no merit.
GRANTED.
Acts of Third
Parties
HW states Kids has
presented no evidence in support of this defense, and the Singleton declaration
claims that no such evidence exists. Singleton decl. ¶56. Kids does not address
this in its opposition, meaning the cause of action fails. GRANTED.
Commercial
Reasonableness
There is no
affirmative defense for “commercial reasonableness” in an unlawful detainer
action. GRANTED.
Frustration of
Purpose and Failure to take Corrective Action
Both of these
defenses are based on HW’s alleged failure to fix the heater on the premises.
As stated above, §7.1 of the lease placed responsibility for maintaining the
property’s HVAC on Kids. Although Kids and HW acknowledge that HW took it upon
itself to maintain the HVAC during Kids’ tenancy, there is no evidence or
argument that the term of the lease related to HVAC repair was ever altered.
GRANTED.