Judge James C. Chalfant, Case Number: 23STCV31162, Date: 2024-11-21 Tentative Ruling

Chol Enterprises, Inc. v. 740 South Broadway Associates, LLC,

23STCV31162

Tentative decision on motion to reduce right to attach order: denied

Cross-Defendant Erik Chol (“Chol”) moves to reduce the right to attach order granted to Defendant/Cross-Defendant 740 South Broadway Associates, LLC (“740 LLC”) from $274,955.55 to $17,422.25, as well as to release the attached Assessor Parcel Number 4159-028-012.

The court has read and considered the moving papers and opposition (no reply was filed) and renders the following tentative decision.

Plaintiff Chol Enterprises, Inc. (“Chol Inc.”), commenced this action on December 21, 2023. The operative pleading is the Second Amended Complaint (“SAC”), filed on July 1, 2024, against Defendant/Cross-Complainant 740 LLC, Houman Sarshar (“Sarshar”), and Globe Theater Entertainment, Inc. (“Globe Inc.”), alleging causes of action for (1) breach of contract, (2) trespass to chattels, (3) conversion, and (4) unfair competition under Business and Professions Code section 17200. The SAC alleges in pertinent part as follows.

Chol Inc.’s headquarters and principal place of business is located at the Globe Theatre at 740 South Broadway, Los Angeles, CA 90014 (the “Property”). Compl., ¶1.

On October 10, 2012, Chol Inc. entered a commercial tenancy with 740 LLC for the Property. Compl., ¶19.

On May 17, 2022, Chol Inc. agreed to transfer the Trademark of the “Globe Theatre” to 740 LLC, at the direction of Sarshar, as part of a Settlement Agreement between Chol Inc. and 740 LLC. Compl., ¶20, Ex. E.

On November 11, 2023, Chol Inc. received an eviction notice of the Property. Compl., ¶21, Ex. F.

On November 14, 2023, Plaintiff's CEO, Chol, spoke with 740 LLC’s agent and manager, Sarshar, and they orally agreed that Chol Inc. would have until December 13, 2023, to vacate its belongings from the Property. Compl., ¶22.

On November 27, 2023, 740 LLC changed the locks and brought a security guard with a dog to the Property, withholding Chol Inc.’s access to its belongings and making it impracticable and/or impossible for Chol Inc. to fulfill its obligations under the November 14 oral agreement. Compl., ¶23.

On December 4, 2023, Chol Inc. and Sarshar, accompanied by their respective counsel met at the Property to take inventory of Chol Inc.’s personal belongings to be vacated. Compl., ¶24, Ex. G. Such personal belongings include chandeliers, stage barriers, station posts, audio-visual equipment, lighting equipment except walking lights, liquor inventory from bar areas, music speakers throughout the premises (but not speakers related to any public announcement, PA, fire life safety or alarm systems), other equipment affixed to the walls, LED video screens, refrigerators and icemakers, stage platform, non-mounted and freestanding framed mirrors, free-standing tables, chairs, special effect equipment, free-standing shelving units, CO₂ tanks and syrups, POS systems, disco balls throughout the theatre, projectors, wall sconces and mirrors in downstairs women’s restroom, laundry room items except sinks and plumbing fixtures, personal property in the downstairs kitchen area except the sink and plumbing fixtures, personal items from cold storage area except sink and plumbing fixtures, loose furniture except couches and other items which are covered in red velvet, personal belongings in the office area of the premises, CCTV and video equipment, Certificate of Insurance, Chol Inc.’s cash in the amount of $15,000 and accompanying registers, and third-party belongings, including employees’ paychecks and tips, suppliers’ rental equipment, and cleaning company supplies and machines (collectively, “Belongings”). Compl., ¶24.

In addition, to cure the fact that 740 LLC made the November 14, 2023 agreement impractical and/or impossible for Chol Inc. to perform, Chol Inc. and 740 LLC orally agreed that Chol Inc.’s five HVAC compressors outside the venue could stay in place in lieu of any storage fees for Chol Inc.’s Belongings. Compl., ¶24.

On the same day, 740 LLC and Sarshar unilaterally sought from Chol Inc. a storage fee of $28,000, in addition to a daily fee of $2,000 ($500 of which affords 740 LLC’s daily security), both effective December 16, 2023, in contravention of the agreement entered into earlier that day. Compl., ¶25. 740 LLC and Sarshar also unilaterally sought to keep all of Chol Inc.’s Belongings that were nailed to the wall, including Chol Inc.’s equipment and a Certificate of Insurance that listed 740 LLC as an additional insured. Compl., ¶25.

On or about December 7, 2023, 740 LLC and Sarshar executed an “Exclusive Leasing Listing Agreement” with Kennedy Wilson Brokerage allegedly listing the Property for lease. Compl., ¶26, Ex. H. In the brochure, the broker listed the Property as “Move-in ready, fully equipped multi-level theatre with dance floor, mezzanine, dressing and press rooms and numerous bars.” Compl., ¶26.

On March 25, 2024, 740 LLC and Sarshar leased the Globe Theatre to another party. Compl., ¶27, Ex. I.

On May 15, 2024, Defendants held and participated in an online auction of Chol Inc.’s Belongings. Compl., ¶29.

On June 24, 2024, Chol, Inc. discovered a new entity, GTE, created by Sarshar. Compl., ¶30, Ex. K. GTE was created by Sarshar as a new entity to run the Globe Theatre. Compl., ¶30. It also was created to hold the Belongings of Chol Inc. and use them for its own benefit and profit. Compl., ¶30.

As of the filing of this complaint, Chol Inc.’s Belongings remain inaccessible to and withheld from Plaintiff and, upon information and belief, are located at the Property in use by Sarshar and GTE. Compl., ¶31.

Chol Inc. seeks (1) equitable relief granting Chol Inc. access to Belongings; (2) compensatory damages including but not limited to accruing rental fees for unreturned sound equipment ($540,000 as of the filing of the Complaint) and the fair market value of Belongings not returned; (3) attorney’s fees and costs; (4) pre-and-post-judgment interest on all sums allowed by law; (5) reasonably foreseeable consequential damages as to the second and third causes of action; and (6) punitive damages as to the second and third causes of action. Compl., at p. 18:4-14.

On May 31, 2024, Cross-Defendant Shine FX Production Inc. (“Shine FX”) filed the operative First Amended Cross-Complaint (“FACC”) against 740 LLC and Sarshar, alleging causes of action for trespass to chattels, conversion, replevin (claim and delivery), and intentional interference with contractual relations. The FACC alleges in pertinent part as follows.

Shine FX is a California corporation formed on January 1, 2020, for the purpose of event production and conducting sound equipment renting business. FACC ¶13. Shine FX has collaborated with Chol Inc. as its third-party vendor. FACC ¶¶14-15. Shine FX supplied equipment to Chol Inc. at the Property during the period of December 2021 through November 2023. FACC ¶20, Ex. C.

Shine FX has never entered into any type of agreement with 740 LLC, has not been involved in the commercial lease dispute between Chol Inc. and 740 LLC, and has no connection to the unlawful detainer proceedings against Chol Inc. FACC ¶¶17-19.

On January 12, 2023, Shine FX and Chol Inc. entered into an Asset Purchase Agreement wherein Chol Inc. transferred to Shine FX Air Motion Void Acoustic Speakers, Air Ten Void Acoustic Speakers, Amplifiers Power Soft, Void Acoustic Subbass Cabinet, and Sun Strip LED Bar (“Equipment”) with a total value of $53,907. FACC ¶23, Ex. E. In exchange for the Belongings, Shine FX installed, tunned, and rigged the new LED immersive video wall and lasers, blinders, movers, atomic strobes, CO2 jets, and fire flames FX. FACC ¶23, Ex. F.

Shine FX’s Equipment was rented to Chol Inc. and has been unlawfully locked within the Property, with Chol Inc. owing Shine FX $2,575 per day in late fees for not returning the Equipment in a timely fashion. FACC ¶21, Ex. D. 740 LLC has been wrongfully preventing Shine FX from retrieving the Equipment. FACC ¶¶24-26, Ex. G.

As of the filing of the FACC, Shine FX and Chol have no information regarding the location of the Equipment illicitly seized by Cross-Defendants. FACC ¶41.

Shine FX seeks: (1) equitable relief granting it access to its Equipment; (2) compensatory damages including but not limited to accruing rental fees for unreturned sound equipment ($481,525) as of the filing of this FACC) and the fair market value of Equipment not returned; (3) attorney’s fees and costs; (4) pre-and-post-judgment interest; (5) reasonably foreseeable consequential damages; and (6) punitive damages. FACC at 12.

On June 21, 2024, Defendant 740 LLC filed the operative First Amended Cross-Complaint (“740FACC”) against Cross-Defendants Chol Inc., Chol, Shine FX, and Florence Chol (“Mrs. Chol”), alleging causes of action for breach of amended lease, rent and damages – Civil Code Section 1951.2, breach of written guarantee, community property obligation, open book account, account stated, unjust enrichment, violation of Civil Code section 3439.04(a)(1), fraudulent transfer in violation of Civil Code section 3439.04(a)(2)(A), and declaratory relief. The 740FACC alleges in pertinent part as follows.

On or about October 12, 2012, Chol Inc. and 740 LLC entered into a Standard Industrial/Commercial Multi-Tenant Lease (the “Lease”), creating a tenancy for the Property. FACC ¶10, Ex. A.

On or around October 16, 2012, to induce 740 LLC to enter into the Lease and to extend credit, Chol signed a written Guaranty of Lease, personally guaranteeing the indebtedness of Chol Inc. relating to the amounts due 740 LLC under the Lease (the “Guaranty”). FACC ¶11, Ex. B.

On or about January 15, 2014, Chol Inc. and 740 LLC entered into an agreement titled First Amendment to Amended Lease and Consent of Guarantor (the “First Amendment”), amending the Lease. FACC ¶12, Ex. C.

On or about April 7, 2022, Chol Inc. and 740 LLC entered into an agreement titled Second Amendment to Lease and Consent of Guarantor (the “Second Amendment”), further amending the Lease. FACC ¶13, Ex. D.

The obligations of Chol Inc. under the Lease, as amended by the First Amendment and the Second Amendment (collectively, the “Amended Lease”) are personally guaranteed by Chol under the terms of the Guaranty and further to the Consent of Guarantor obtained in connection with the Amended Lease. FACC ¶14.

There was previously a civil action between 740 LLC, Chol Inc., and Chol entitled Chol Enterprises, Inc. v. 740 Broadway Associates, LLC, et al. 21STCV39031 (the “Civil Action”). FACC ¶16. 740 LLC also filed an unlawful detainer action entitled 740 Broadway Associates, LLC, et al. v. Chol Enterprises, Inc., 22STCV01203 (the “Unlawful Detainer Action”). The parties resolved the Civil Action and the Eviction Action through a Settlement Agreement and Release dated on or about April 7, 2022 (the “Settlement Agreement”). FACC ¶17, Ex. E.

Under Section 6(a) of the Settlement Agreement, 740 LLC, Chol Inc and Eric Chol agreed that 740 LLC “shall be entitled to a Judgment for the unpaid amount of the Stipulated Debt and for immediate possession of the Premises upon it being shown…that [Choi Inc. has] failed to timely perform one or more of [its] obligations contemplated by Section 2, 3, 4 and 6(c) of this Agreement…” FACC ¶18.

Cross-Defendants defaulted under the Settlement Agreement. FACC ¶19. Thereafter, 740 LLC brought a motion to enforce the Settlement Agreement and sought judgment for the unpaid amount of the Stipulated Debt and for immediate possession of the Premises. FACC ¶¶19-20, Ex. F. On or about August 29, 2023, the court entered judgment in the Unlawful Detainer Action finding, inter alia, that 740 LLC was entitled to possession of the Property and a money judgment for the Stipulated Debt. FACC ¶21, Ex. G. The court amended the Judgment on February 22, 2024 to include an award of fees and cost incurred relative to the Stipulated Debt and recovery of possession of the Property. FACC ¶21, Ex. H.

Pursuant to a lock-out order obtained in connection with the judgment, the Los Angeles County Sheriff (“Sheriff”) forcibly evicted Chol Inc. from the Property on or about November 29, 2023. FACC ¶22.

As of the date of this filing, Chol Inc. is also indebted to 740 LLC for unpaid rent occurring after April 7, 2022 and damages for breaches of Chol Inc.’s Lease Repair Obligations as specified in the Lease and amended by the Second Amendment. FACC ¶23, Ex. D.

The Amended Lease provides that Chol Inc. shall pay 740 LLC a late charge on any monetary amount owed by Chol Inc. that is not paid when due. FACC ¶24. Such late charges have accrued and continue to accrue and 740 LLC is entitled to them as damages under this Cross-Complaint in an amount according to proof. FACC ¶24.

Under the Amended Lease, any monetary amount owed by Chol Inc. shall bear interest from and after the date such payment is due until paid. FACC ¶25. Such interest has now accrued and continue to accrue and 740 LLC is entitled to the same as damages under this Cross-Complaint in an amount according to proof. FACC ¶25.

The Amended Lease and the Guaranty both provide that in any action between the parties to those documents, the prevailing party shall be entitled to seek recovery of such party’s reasonable attorneys’ fees and costs. FACC ¶26. Chol Inc. has breached the Amended Lease, and Chol has breached the Guaranty, and 740 LLC has been compelled to retain counsel and to commence this action to enforce its rights under those documents. FACC ¶26.

740 LLC seeks (1) damages pursuant to the Amended Lease according to proof and no less than $1,450,000, (2) reasonable attorney’s fees and costs, (3) declaration that the interests of Chol and Mrs. Chol in the Chol Living Trust under the Instrument dated August 25, 2016 are liable for the debts of Chol pursuant to his Guaranty and are community property, (4) post-judgment interest at the maximum legal rate and (5) other and further relief the court may deem just and proper. FACC at 19-20.

On December 21, 2023, Plaintiff Chol Inc. filed the Complaint against Defendant 740 LLC.

On January 3, 2024, the court denied Chol Inc.’s ex parte application for order compelling 740 LLC to grant Plaintiff access to 740 South Broadway to retrieve its chattels. Chol, Inc. filed the First Amended Complaint (“FAC”) the same day.

On January 5, 2024, the court denied Chol Inc.’s ex parte application for a writ of possession.

On March 5, 2024, the court granted Chol Inc.’s application of writ of possession and ordered Plaintiff to post a cash or corporate surety bond in the amount of $300,000 with three days and provide evidence of posting to opposing counsel. Chol Inc. was also ordered to remove the belongings at issue by March 14, 2023.

On March 29, 2024, 740 LLC filed a notice of failure of Chol Inc. to comply and file bond or undertaking.

On April 2, 2024, 740 LLC filed a Cross-Complaint against Chol Inc, Erik Chol, and Shine FX.

On May 6, 2024, the court denied Cross-Defendant Shine FX’s ex parte application for a writ of possession.

On May 31, 2024, 740 LLC filed an Answer to Shine FX’s Cross-Complaint. On the same day, Shine FX filed its FACC.

On August 22, 2024, the court granted 740 Lc’s right to attach order against Chol in the amount of $274,955.55.

Attachment is a prejudgment remedy providing for the seizure of one or more of the defendant’s assets to aid in the collection of a money demand pending the outcome of the trial of the action. See Whitehouse v. Six Corporation, (1995) 40 Cal.App.4th 527, 533. In 1972, and in a 1977 comprehensive revision, the Legislature enacted attachment legislation (CCP §481.010 et seq.) that meets the due process requirements set forth in Randone v. Appellate Department, (1971) 5 Cal.3d 536. See Western Steel & Ship Repair v. RMI, (12986) 176 Cal.App.3d 1108, 1115. As the attachment statutes are purely the creation of the Legislature, they are strictly construed. Vershbow v. Reiner, (1991) 231 Cal.App.3d 879, 882.

A writ of attachment may be issued only in an action on a claim or claims for money, each of which is based upon a contract, express or implied, where the total amount of the claim or claims is a fixed or readily ascertainable amount not less than five hundred dollars ($500). CCP §483.010(a). A claim is “readily ascertainable” where the amount due may be clearly ascertained from the contract and calculated by evidence; the fact that damages are unliquidated is not determinative. CIT Group/Equipment Financing, Inc. v. Super DVD, Inc., (“CIT”) (2004) 115 Cal.App.4th 537, 540-41 (attachment appropriate for claim based on rent calculation for lease of commercial equipment).

The court may issue a right to attach order (Optional Form AT-120) if the plaintiff shows all of the following: (1) the claim on which the attachment is based is one on which an attachment may be issued (CCP §484.090(a)(1)); (2) the plaintiff has established the probable validity of the claim (CCP §484.090(a)(2)); (3) attachment is sought for no purpose other than the recovery on the subject claim (CCP §484.090(a)(3); and (4) the amount to be secured by the attachment is greater than zero (CCP §484.090(a)(4)).

“Any defendant whose property has been attached pursuant to a writ issued under this chapter [Ex Parte Hearing Procedure for obtaining Writ of Attachment] may apply for an order (1) that the right to attach order be set aside, the writ of attachment quashed, and any property levied upon pursuant to the writ be released, or (2) that the amount to be secured by the attachment be reduced….” CCP §485.240(a).

The grounds for a motion to discharge an attachment include (1) the case is not one in which attachment may properly issue, (2) failure of the complaint, tested by pleading rules, to state any cause of action; (3) defects in the undertaking or affidavit; or (4) issuance of the writ for an amount greater than stated in the affidavit. Burke v. Superior Court of Sacramento County, 71 Cal.2d 276, 279 (1969).

“If the court finds that plaintiff is not entitled to the right to attach order, it shall order the right to attach order set aside, the writ of attachment quashed, and any property levied on pursuant to the writ released.” CCP §485.240(c).

On October 10, 2012, Chol Inc. entered into the Lease. Chol Ex. A. Cross-Defendant Chol personally guaranteed the Lease. Ex. A, pp. 78-79. The Lease term was through December 31, 2019, with option(s) to extend. Chol Ex. A.

“In order to exercise an option to extend, Lessee must give written notice of such election to Lessor and Lessor must receive the same at least 9 but not more than 12 months prior to the date that the option period would commence, time being of the essence. If proper notification of the exercise of an option is not given and/or received, such option shall automatically expire.” Chol Ex. A, p.39.

On January 15, 2014, Chol Inc. and 740 LLC entered into the First Amendment to the Lease. Chol Ex. B. The First Amendment provided for a First Option Period (wrongly referred to as a “Second Option Period”) for a duration of 36 months from November 1, 2019 through October 31, 2022. The First Amendment also provided for a Second Option Period for a duration of sixty (60) months from November 1, 2022 through October 31, 2027, p. 88. Chol Ex. B.

On April 7, 2022, 740 LLC, Sarshar, and Chol Inc. entered into the Settlement Agreement. Chol Ex. C. The Settlement noted that the Civil Action and the Unlawful Detainer Action were pending between the parties and the Settlement Agreement would settle both. Ex. C, p. 108.

Also on April 7, 2022, Chol Inc. and 740 LLC entered the Second Amendment to the Lease. Chol Ex. D. The Second Amendment provided for the same Second Option Period as in the First Amendment with a duration of 60 months from November 1, 2022 through October 31, 2027. Chol Ex. D.

“Lessee asserts, and Lessor disputes that Lessee has duly and timely exercised Lessee’s renewal option with regard to the Second Option Period. In that regard, the Parties agree that provided that Lessee timely performs all of the obligations of Lessee as detailed in Sections 2, 3 and 4 of the Settlement Agreement, then Lessee shall be deemed to have duly exercised Lessee’s renewal option with regard to the Second Option Period.” Chol Ex. D, p. 99.

On August 1, 2023, 740 LLC brought a motion in the Unlawful Detainer Action to enforce the Settlement Agreement. Chol Ex. E. On August 28, 2023, the court granted the motion. Chol Ex. E. On August 29, 2023, the court granted judgment in favor of 740 LLC in the Unlawful Detainer Action. Chol Ex. F.

On September 5, 2023, 740 LLC filed an Application for issuance of a writ of execution in the Unlawful Detainer Action. Chol Ex. G.

On September 6, 2023, the court in the Unlawful Detainer Action issued a writ of possession of real property to 740 LLC. Chol Ex. H.

On November 2, 2023, the Sheriff served Chol with a five-day notice to vacate the Property. Chol Exs. I, J. Per the Notice to Vacate, Chol was required to vacate the premises by November 7, 2023. Chol Ex. I.

On November 27, 2023, the Sheriff posted a Notice of Eviction at the Globe Theatre. Chol Ex. J.

On August 23, 2024, the court granted 740 LLC’s application for a right to attach order against Chol in the amount of $274,955.55. Chol Set Aside, Ex. K.

On October 2, 2024, 740 LLC filed and recorded a Notice of Attachment for Chol’s home at 807 Meyer Lane, Redondo Beach, CA 90278. Chol Ex. L.

Cross-Defendant Chol applies for an order reducing the amount to be secured by attachment from $274,955.55 to $17,422.25 and to release attached property exceeding the $17,422.25 amount.

Attachment is wholly a statutory scheme, and there is no statutory authority authorizing a motion to reduce the amount of a right to attach order granted after a noticed motion. Chol relies on CCP section 485.240, but it expressly only applies to attachment upon an ex parte application. “There is no equivalent procedure available for setting aside a [right to attach order] or writ of attachment issued after noticed hearing.” Weil & Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group), 9:924.

Nor would Chol be aided if his application were deemed a motion for reconsideration. A motion for reconsideration must be brought within ten days of the ruling. CCP §1008(a). The right to attach order was granted on August 23, 2024, or 47 days before Chol filed his application.

Chol argues that Chol Inc. did not validly exercise the amended Lease’s Second Option Period because the timing and manner of its notice did not comply with the strict requirements of the Option to Extend Addendum. “In order to avail himself of the right to renew a lease as provided for by a lease option, a tenant must apprise the lessor in unequivocal terms of his unqualified intention to exercise his option, within the time, in the manner and on the terms stated in the lease.” 42 Cal.Jur.3d, Land Law and Tenant, § 291, p. 328; Hayward Lbr. & Inv. Co. v. Const. Prod. Corp., (1953) 117 Cal.App.2d 221, 227–28.

The Option to Extend Addendum explicitly states: “In order to exercise an option to extend, Lessee must give written notice of such election to Lessor and Lessor must receive the same at least 9 but not more than 12 months prior to the date that the option period would commence, time being of the essence.” Ex. A, p. 28. The Second Option Period was to commence on November 1, 2022 and the notice was required to be given no later than February 1, 2022. App. at 5.

The notice was untimely as 740 LLC contended in the April 7, 2022 settlement Agreement: “Lessee asserts, and Lessor disputes that Lessee has duly and timely exercised Lessee’s renewal option with regard to the Second Option Period.” Ex. D, p. 192. This language clearly establishes that no valid notice had been given by Chol Inc. as of April 7, 2022, rendering the Second Option Period inapplicable. Any rent calculated under the disputed Second Option Period is void, and Erik Chol, as a guarantor, cannot be held accountable for rent purportedly owed under a lease term that no longer exists. App. at 5-6.

Chol is looking at the wrong document. The Option to Extend Addendum’s notice requirements were superseded by the April 7, 2022 Settlement Agreement (Chol Ex. C) and the Second Amendment (Chol Ex. D). The Second Amendment provided for the same Second Option Period as in the First Amendment, for a duration of 60 months from November 1, 2022 through October 31, 2027. Chol Ex. D. Paragraph 3(c)(i) of the Second Amendment states:

In Paragraph 3(c)(i), 740 LLC clearly forgives any untimely or improper exercise of the Second Option Period so long as Chol Inc. complies with sections 2, 3, and 4.

Chol argues that, if Chol Inc. timely noticed the Second Option Period, the renewal option would still be invalid because Chol Inc. failed to satisfy the condition precedents set forth in the Second Amended Lease. As such, the Second Option Period was never effectively exercised, and the calculation of rent based on that period remains improper. App. at 6.

Chol contends that Sections 2, 3, and 4 required Chol Inc. to make timely payment of the Settlement Amount, obtain adequate insurance coverage, and complete specific construction and repair obligations. Ex. C, pp. 86–87. The undisputed evidence shows that these conditions were not fulfilled within the designated timeframe, as confirmed by 740 LLC’s motion to enforce the Settlement Agreement the Unlawful Detainer Action (Ex. E), and court’s subsequent order finding Chol Inc. in breach of these obligations (Ex. F). Because the specific obligations under Sections 2, 3, and 4 of the Settlement Agreement were not met, the conditions precedent to exercising the Second Option Period were not satisfied. Consequently, the Second Option Period was never validly exercised. App. at 7.

Absent a Second Option Period, Chol Inc.’s tenancy was month-to-month once 740 LLC accepted rent on November 1, 2022. See Civil Code §1945. The First Option Period terminated on October 31, 2022. After this termination, Chol Inc. continued to occupy the premises without a new option period in effect, and 740 LLC’s acceptance of rent on November 1, 2022 legally transformed the tenancy into a month-to-month periodic tenancy. Therefore, the attachment amount of $274,955.55 sought by 740 LLC is inflated due to the inclusion of rent for periods that Chol Inc. was not obligated to pay. See Chol Ex. M. The correct amount is $17,422.25. Chol Ex. N. Mot. at 9.

This argument is untenable. Paragraph 3(c)(i) of the Second Amendment and Paragraph 39 of the Lease both exist for the benefit of 740 LLC and may be enforced or waived at its election. See Bank of America v. Moore, (1937) 18 Cal.App.2d 522, 526. Neither Chol nor Chol Inc. can end the Lease as extended by refusing to perform a required condition. Any forfeiture of the lease occurs at the election of lessor. Id. at 526.

740 LLC also points out that the language of Paragraph 3(c)(i) does not provide that the renewal option is void ab initio if Chol Inc. does not perform the conditions precedent. It merely states that Chol Inc. shall be deemed to have duly exercised the Second Option Period if the condition is performed. Therefore, Paragraph 3(c)(i) gives 740 LLC the option to accept or reject the exercise of the option even if Chol Inc. is in breach. Chol Inc. does not have the power to waive this breach, only 740 LLC does:

“The rule that the provision that a default shall make the contract null and void is not to be understood as a favor to the defaulting party, [and] is not the rule of this state… The provision that the agreement should terminate on the failure of Lessees to perform those conditions of the lease which were obligatory to be carried out on their part is a covenant in favor of Lessors exclusively, and does not make the lease void except at their [lessors’] option… [A] clause in a lease that it shall be null and void on the failure of Lessee to pay rent or keep other covenants is not self-operating so as to make the lease void ipso facto by the default, but, being a provision for the benefit of Lessor, may be enforced or waived at his [lessor’s] option….” Bank of America v. Moore, supra, 18 Cal.App.2d at 527-28 (emphasis added).

740 LLC states that it elected to waive any forfeiture based on a claim that the option was untimely exercised and elected instead to continue the Lease. Opp. at 8-9. The attachment amount was properly calculated.[3]

Chol’s application to reduce the amount of attachment is both procedurally and substantively defective and is denied.

[1] The following list does not include the parties’ various demurrers.

[2] Chol requests the court to judicially notice (1) all pleadings in this case and (2) all pleadings in the Unlawful Detainer Action. There is no need to judicially notice documents in the case file; a judge can always look at the instant file. Chol’s request to judicially notice documents from the Unlawful Detainer Action does not comply with CRC 3.1113(l) and 3.1306(c) by providing the court with copies and is denied. Nonetheless, the court has considered Chol’s exhibits from the Unlawful Detainer Action.

740 LLC requests the court to judicially notice Chol Inc.’s opposition to the motion to enforce settlement in the Unlawful Detainer Action (Ex. A). The request is granted. Evid. Code §452(d).

[3] The court need not consider 740 LLC’s estoppel argument. Opp. at 9-10.