Judge Gail Killefer, Case Number: 23STCV10843, Date: 2024-02-01 Tentative Ruling

on May 15, 2023, Kou Family Irrevocable Grantor Trust (“Plaintiff”) filed an unlawful detainer action against Stanford Mart, L.P. (“Defendant”) and Does 1 to 100.

On September 14, 2023, Plaintiff filed a First Amended Complaint (“FAC”) asserting the same single cause of action for unlawful detainer.

On September 25, 2023, the Defendant filed a demurrer to the FAC. The Plaintiff opposes the demurrer.

Demurrer[1]

Where pleadings are defective, a party may raise the defect by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.) A demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.¿ (CCP § 430.30(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) In evaluating a demurrer, the court accepts the complainant’s properly pled facts as true and ignores contentions, deductions, and conclusory statements. (Daar v. Yellow Cab Co. (1976) 67 Cal.2d 695, 713; Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Moreover, the court does not consider whether a plaintiff will be able to prove the allegations or the possible difficulty in making such proof. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 604.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿ The burden is on the complainant to show the Court that a pleading can be amended successfully. (Ibid.)

Defendant demurs to the FAC on the basis that (1) Plaintiff lacks standing to bring an unlawful detainer action because they are not the original Landlords under the Lease, (2) the Landlord breached section 12.1 of the Lease by failing to provide Notice of Change in Ownership (3) Section 12.2 also gave Defendant the Right of First Refusal (“ROFR”) in case the Premises was put on Sale, and (4) The Notice to Quit (“NTQ”) was invalid as it was not properly served on Defendants.

Whether the Landlords breached sections 12.1 and 12.2 of the Lease is not at issue as the remedies Defendant seeks should be brought by filing a complaint for breach of contract. The relevant issue is whether the NTQ was properly served.

The UD Complaint states that the Plaintiff is a trust and that “Plaintiff’s interest in the premises is as owner” and that the rent due, at the time the NTQ was served, was $613,023.78. (UD ¶¶ 4, 12.) The proof of service attached to the NTQ, shows that it was served via substitute service on a Sierra Velasco, with a copy mailed to the address of the Premises, 807 E. 12st. Ste. 401. (UD Ex. 3.)

CCP § 1161 states that when a tenant continues to remain on the premises “without the permission of the landlord, or the successor in estate of the landlord, if applicable, after default in the payment of rent, pursuant to the lease or agreement under which the property is held, and three days' notice” the notice must be served in writing before the filing of an unlawful detainer action. (CCP § 1161(2).) Nothing in section 1161 requires the NTQ be served by the landlord rather than the successor in interest. (See Lee v. Kotyluk (2021) 59 Cal.App.5th 719, 734 [“Plaintiffs, as Haynes' successors in interest, could rely on her notice and file an unlawful detainer action against defendant after perfecting title”].)

The right to maintain an action by ‘the successor in estate of his landlord’ is expressly conferred by section 1161 of the Code of Civil Procedure. Moreover, section 821 of the Civil Code provides: ‘A person to whom any real property is transferred or devised, upon which rent has been reserved, or to whom any such rent is transferred, is entitled to the same remedies for recovery of rent, for nonperformance of any of the terms of the lease, or for any waste or cause of forfeiture, as his grantor or devisor might have had.’

(Plummer v. Agoure (1912) 20 Cal.App. 319, 321; see also Lee v. Kotyluk, supra, 59 Cal.App.5th at p. 734.)

Here, the Complaint alleges that Plaintiff is a Trust and is the owner of the Premises. (UD ¶¶ 2, 4.) “Unlike a corporation, a trust is not a legal entity. Legal title to property owned by a trust is held by the trustee, and common law viewed the trustee as the owner of the trust's property.” (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1343.) Accordingly, under Lee v. Kotyluk (2021) and Plummer v. Agoure (1912), the Plaintiff as the trustee has legal title of the Premise and has standing to bring an unlawful detainer action because they are the “owner” or successors in interest in the Premises. (UD ¶¶ 2, 4.)

However, CCP § 1161 requires that NTQ be made “pursuant to the lease or agreement under which the property is held[.]” Defendant points out that under Paragraph 17.1, Plaintiff was required to serve the NTQ to Defendant at Stanford Mart, LP 3540 Wilshire Blvd., Ste 1215 Los Angeles, CA with a copy being sent to Ralph B. Kostant, 12650 Riverside Drive. Ste. 100, North Hollywood. CA 91607. (UD Ex. 3 § 17.1.) Nothing in the proof of service for the NTQ shows that Plaintiff complied with the notice requirements as required by the Lease. “In commercial leases the landlord and commercial tenant may lawfully agree to notice procedures that differ from those provided in the statutory provisions governing unlawful detainer. [Citation.] Thus, if the lease contains service requirements for the notice to quit at variance with the requirements in the unlawful detainer statutes, the lease provisions control.” (Culver Center Partners East #1, L.P. v. Baja Fresh Westlake Village, Inc. (2010) 185 Cal.App.4th 744, 750.) Therefore, according to section 11611 and the terms of the Lease, the NTQ was not served “pursuant to the lease or agreement under which the property is held,” otherwise the notice is invalid.

In opposition, Plaintiff asserts that the original notice information for Defendant on the Lease was provided over 20 years ago such that the fax line for Mr. Kostant no longer works and the legal address maintained by Mr. Kostant is no longer the address on the Lease. Moreover, under section 17.1 of the Lease, Defendant is obligated to provide notice of any changes to its address. If Defendant failed to provide an updated address as to where the notice of the NTQ was to be served, Defendant may have waived or be estopped from asserting that notice was invalid under the Lease.

Defendant failed to file a meet and confer declaration and failed to negate Plaintiff’s assertion that Mr. Kostant’s address was no longer valid or that Mr. Kostant is no longer Defendant’s counsel. Accordingly, triable issues of fact exist as to whether Plaintiff was required to serve the NTQ in accordance with the Lease and whether Defendant failed to provide an updated address for service of notice. “On a demurrer a court's function is limited to testing the legal sufficiency of the complaint. [Citation.] ‘A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.’ [Citation.]” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113-114.)

If Defendant can prove that the address for serving the NTQ remains valid then Defendant will be able to show that the NTQ was not properly served such that no judgment for possession can be obtained. (See Palm Property Investments, LLC v. Yadegar (2011) 194 Cal.App.4th 1419, 1425.) However, a demurrer lies only where the defect appears on the face of the complaint or from matters outside the pleading that can be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

As Defendant fails to show that defects in the Complaints appear on its face, the demurrer is overruled.

[1] No meet and confer declaration has been filed showing compliance with CCP § 430.41. “Any determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.” (CCP § 430.41(a)(4).) As the failure to meet and confer does not constitute grounds to overrule a demurrer, the court continues on the merits.