Judge: Jon R. Takasugi, Case: 22STCV21061, Date: 2022-12-15 Tentative Ruling

Case Number: 22STCV21061    Hearing Date: December 15, 2022    Dept: 17

uperior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s motion for summary judgment is DENIED.

On 6/28/2022, Plaintiff 2010 East 7^th Street, LLC (Plaintiff) filed an unlawful detainer against Sensu, Inc. (Defendant). 

Now, Defendant moves for summary judgment of Plaintiff’s Complaint.

Discussion

            Defendant argues that Plaintiff’s action for unlawful detainer must fail as a matter of law because City Ordinance section 49.99.3 remains operative and bars eviction for nonpayment of rent due to COVID-19 related financial hardship.

            Section 49.99.3 of the City Ordinance provides that:

During the Local Emergency Period and for three months thereafter, no Owner shall endeavor to evict or evict a tenant of Commercial Real Property for nonpayment of rent during the Local Emergency Period if the tenant is unable to pay rent due to circumstances related to the COVID-19 pandemic.

            Section 49.99.3 further provides that:

These circumstances include loss of business income due to a COVID-19-related workplace closure, child care expenditures due to school closures, health care expenses related to being ill with COVID-19 or caring for a member of the tenant’s household or family who is ill with COVID-19, or reasonable expenditures that stem from government-ordered emergency measures.

            Here, to show that Defendant’s nonpayment of rent stems from COVID-19 related financial hardship, Defendant submitted evidence that:

-         On or about August 1, 2019, Defendant Sensu, Inc. and Plaintiff executed a commercial lease agreement pertaining to the Premises, located in the City of Los Angeles. The term of the lease agreement was 5 years and 3 months. (SS ¶¶ 1-2.)

-         Defendant was forced to close its store for 6 months due to COVID-19 (SS ¶ 8.)

-         Forced to close its doors due to the stay-at-home order in the City of Los Angeles, Defendant’s sales collapsed to $ 0, rendering it unable to pay its operating expenses, including rent due to Plaintiff. (Hadar Decl., Exh. 2, ¶ 4.)

-         Lorenzo Hadar, Defendant’s owner, apprised Plaintiff of Defendant’s dire financial position and pleaded for rent relief.  (Hadar Decl., Exh. 2, ¶¶ 4-8.)

-         On June 24, 2020, Hadar emailed Plaintiff to explain Defendant’s predicament “I have been in the business for 36 years and never have I experienced such a financial fall. We have generated $0 sales in the past 3 months and we have committed to over $1 Million worth of merchandise without any tools to generate any revenue.” (Hadar Decl., Exh. 3, ¶ 4.)

Taken together, this evidence supports a reasonable inference that Defendant experienced COVID-19 related hardship during the first six months of the pandemic. However, Defendant’s evidence fails to support a reasonable inference as to continued financial hardship past the six-month mark. The only evidence submitted by Plaintiff to show that it has been experiencing COVID-19 related hardship in 2022 or that it is unable to pay Plaintiff for any rent for 2022 (i.e., the period at issue in this litigation is an assertion from Lorenzo Hadar stating, “Even after the lockdown was lifted and the store re-opened, Sensu could never get back on its face. Its sales never recorded, and Sensu has been, and continues to be, unable to pay its operating expenses, including rent to Plaintiff. The collapse in foot traffic stemming from the COVID-19 pandemic is to blame. Sensu’s financial position has not recovered; as a result Sensu is unable pay [sic] rent to Plaintiff.” (SS ¶ 8.) Defendant does not submit any additional evidence to show the recent or current state of Defendant’s sales, foot traffic, balance sheets, or any documentation which could support this assertion.

In opposition, Plaintiff notes that it does not seek any damages from prior to February 2022. Moreover, Plaintiff submitted evidence that:

-         On 1/25/2022, Defendant filed for a termination for its corporate status with the California Secretary of State. As such, its representations about continued financial hardship, which strongly imply that it remains an existing entity, are misleading.

-         Defendant has refused to produce any financial documents for the relevant period (i.e., 2022). (RSS ¶ 9.)

-         All of the exhibits referenced by Defendants as proof of financial hardship are devoid of any documents, evidence, or even testimony from the material period at issue in this litigation (i.e., 2022.) (RSS ¶ 10.)

-         During the deposition of Defendant’s PMQ, the PMQ was unable to identify what current debts existed for Defendant, whether Defendant had taken out any COVID-19 related loans, or answer any questions concerning what rent was ever paid, what amount of rent was paid or owed, or how long the stores were closed due to COVID-19. (PSS ¶¶ 13-46.)

Taken together, the Court concludes that Defendant’s evidence fails to support a reasonable inference that, for the subject period (i.e., 2022), Defendant has failed to pay rent due to COVID-19 related hardship. Indeed, the only evidence submitted to establish this contention is a single unsupported statement in declaration. Moreover, even assuming the evidence did support a reasonable inference of such hardship, the Court would readily conclude that triable issues of material fact exist for this issue as a result of Plaintiff’s evidence.

Based on the foregoing, Defendant’s motion for summary judgment is denied.

It is so ordered.

Dated:  December    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

            Due to Covid-19, the court is strongly discouraging in-person appearances.  Parties, counsel, and court reporters present are subject to temperature checks and health inquiries, and will be denied entry if admission could create a public health risk.  The court encourages the parties wishing to argue to appear via L.A. Court Connect.  For more information, please contact the court clerk at (213) 633-0517.  Your understanding during these difficult times is appreciated.