Judge Holly J. Fujie, Case 21STCV31231 2023-01-26 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

RESPONDING PARTY: Defendants Lux Los Angeles, LLC (“Lux”), Adnan Sherazee (“Adnan”), Am’am Sherazee (“Am’an”), and Sabir Badami (“Badami”) (collectively, “Defendants”)[1]

This action arises out of a landlord/tenant relationship. Plaintiffs’ complaint (the “Complaint”) alleges: (1) breach of contract; (2) breach of guaranty; and (3) conversion.

In relevant part, the Complaint alleges: On around April 3, 2019, Plaintiffs and Lux entered into a lease agreement (the Lease Agreement”) pursuant to which Lux would rent a warehouse and manufacturing facility (the “Property”) from Plaintiffs beginning April 15, 2019 through May 14, 2024. (Complaint ¶ 15, Exhibit A.) On about April 9, 2019, Badami and Am’an executed a guaranty of lease (the “Guaranty”) wherein they agreed to guarantee Lux’s obligations under the Lease Agreement. (See Complaint ¶ 21, Exhibit B.) As a result of the impact of the COVID-19 pandemic on Lux’s business, Lux was unable to pay rent for one or more periods, and on or about December 15, 2020, Lux and Plaintiffs entered into a rent abatement agreement (the “Abatement Agreement”). (See Complaint ¶¶ 23-24, Exhibit C.) On April 12, 2021, Plaintiffs served a notice of termination (the “Notice”) to inform Defendants that Lux was required to vacate the Property on or before June 11. 2021. (Complaint ¶ 28, Exhibit D.) Lux did not vacate until on or after July 17, 2021. (Complaint ¶ 30.) When it vacated the Property, Lux removed shelving that was affixed to the Property that belonged to Plaintiffs and refused to return the shelving. (Complaint ¶ 31.)

On September 12, 2022, Plaintiffs filed a motion for summary judgment and/or adjudication (the “Motion”) to each of the causes of action alleged in the Complaint. Specifically, Plaintiffs argue that they are entitled to summary adjudication on: (1) the first cause of action because Lux breached the Lease Agreement and Abatement Agreement; (2) the second cause of action because Adnan, Aman, and Sabir were responsible for Lux’s obligations under the Lease Agreement pursuant to the Guaranty; and (3) the third cause of action because Defendants removed the shelves from the Property and did not return them to Plaintiffs.

Plaintiffs’ objections to the Declaration of Adnan Sherazee (“Adnan Decl.”) numbers 7 and 8 are SUSTAINED. The remainder of Plaintiffs’ objections are OVERRULED.

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.) CCP section 437c, subdivision (c) requires the 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.)

A plaintiff moving for summary judgment or summary adjudication meets the burden of showing that there is no defense to a cause of action if the plaintiff has proved each element of the cause of action entitling them to judgment on that cause of action. (CCP § 437c, subd. (p)(1).)

Once the moving party has met its burden, the burden shifts to the opposing party to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. Courts liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of the opposing party. (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Plaintiffs provide evidence of the Lease Agreement entered into on April 3, 2019 and the Guaranty entered into on April 9, 2019. (See Declaration of Rahmatollah Youssefzadeh (“Youssefzadeh Decl.”) ¶¶ 4, 6, Exhibits A-B.) Between April 3, 2019, and November 15, 2020, Defendants accumulated back rent and late charges in an amount of at least $145,585.89. (Youssefzadeh Decl. ¶ 7, Exhibit R.)

Defendants informed Plaintiffs that the economic effects of the COVID-19 pandemic impacted Lux’s ability to pay rent, and on around December 15, 2020, Plaintiffs and Lux entered into the Abatement Agreement. (See Youssefzadeh Decl. ¶¶ 8-9, Exhibit C.) Under the Abatement Agreement, Lux was required to pay monthly rent in the reduced amount of $15,000 per month between December 1, 2020 through November 30, 2021. (See id.) The Abatement Agreement included a provision stating:

“During the Rent Abatement Period and at all times thereafter Lessee shall provide access to Lessor, its agents, representatives and real estate brokers and prospective tenants for the inspection of the Premises. Provided that the Lessor finds a suitable replacement tenant to occupy the Premises, at its sole and absolute discretion, at any time hereinafter, Lessor may provide Lessee with a 60-day written notice of termination, which notice shall state the date of termination of the Lease (“Lease Termination Date”). Lessee shall vacate and deliver possession of the Premises to Lessor on or before the Lease Termination Date, as if the Lease had expired according to its terms on such date.” (Youssefzadeh Decl., Exhibit C at ¶ 4.)

On April 12, 2021, Plaintiffs served Lux with the Notice, which stated that pursuant to Paragraph 4 of the Abatement Agreement, Plaintiffs found a replacement tenant and Lux was required to vacate the Property on or before June 11, 2021. (Undisputed Material Fact (“UMF”) 22, Youssefzadeh Decl., Exhibit D.) Lux did not vacate the Property until July 17, 2021. (UMF 24.) Lux did not pay rent for the month of June 2021 or the portion of July 2021 during which it occupied the Property. (UMF 26-27.) When Lux vacated the Property, it removed shelves that were part of the Property; Lux has not since returned the shelves. (See UMF 31-33.)

As a result of Lux’s failure to vacate the Property by June 11, 2021, Plaintiffs were unable to timely deliver possession of the Property to their new tenants and were therefore required to reduce the new tenants’ rent. (See UMF 42.) In addition, Lux left the Property in a state of disrepair that required Plaintiffs to incur costs for cleaning and repairs. (See UMF 34.) In total, Plaintiffs suffered damages in the amount of $372,949.33. (See UMF 34-45.)

The elements of a breach of contract claim are: (1) the contract; (2) the plaintiff’s performance or excuse for nonperformance; (3) the defendant’s breach; and (4) damage to plaintiff therefrom. (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

The elements of a breach of guaranty claim are: (1) a valid guaranty; (2) the borrower has defaulted; and (3) the guarantor failed to perform under the guaranty. (Gray1 CPB, LLC v. Kolokotronis (2011) 202 Cal.App.4th 480, 486.)

The elements of conversion are: (1) the plaintiff’s ownership or right to possession of the property at the time of the conversion; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages. (Plummer v. Day/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 45.)

Defendants refute the recitation of facts set forth in the Motion. Relevantly, Defendants provide evidence that upon receiving the Notice on April 12, 2021, Lux notified Plaintiffs that it would be unable to vacate the Property by June 11, 2021. (Adnan Decl., Exhibit D.) On April 12, 2021, Michael Farahnik (“Farahnik”) responded to Adnan on behalf of Plaintiffs stating, in part, “I’m just sending this letter to you as per the lease I understand you’re going to be moving out a little later and we will deal with that accordingly there’s no reason for attorneys… .” (Id.) Defendants also provide evidence of emails between Adnan and Farahnik regarding the return of the shelves wherein Adnan represented that the shelves were available to be returned and Farahnik did not provide a time for Defendants to return them. (See Adnan Decl. ¶ 9, Exhibit E.)

Defendants argue that there are factual disputes over whether a breach of the Abatement Agreement occurred and whether Plaintiffs mitigated their damages. At minimum, there are triable issues of fact regarding Plaintiffs’ damages for all three causes of action. First, the contractual basis for certain claims for damages, such as amortized brokers’ commission related to securing the Lease Agreement, are unclear. (See UMF 39.) Second, Plaintiffs seek duplicative damages for the alleged conversion of the shelves in the breach of contract and conversion claims. Finally, Defendants’ evidence that they tried to return the shelves raises a factual dispute over the affirmative defense of waiver. The Court therefore DENIES the Motion.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative. If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person. The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date. This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

[1] The Court uses first names to distinguish persons with the same last name and intends no disrespect in so doing.

[2] On January 6, 2023, the Court continued the hearing to allow Plaintiffs to respond to evidence that Defendants inadvertently omitted from their opposition papers.