Judge: Joseph Lipner, Case: 22STCV09549, Date: 2023-12-28 Tentative Ruling

Case Number: 22STCV09549    Hearing Date: December 28, 2023    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendants Kian Marimi MD, Inc. (“KKM”) and Kian Karimi, M.D. (“Dr. Karimi”) (collectively, “Defendants”) move for summary judgment on the Complaint filed by Plaintiff Wilshire West Medical tower, LLC (“Plaintiff”). In the alternative, Defendants move for summary adjudication on each cause of action in the Complaint.

The Court GRANTS Defendant’s motion for summary judgment.

The Court DENIES Defendants’ motions for summary adjudication as MOOT.

Background

This case arises out of a commercial lease whereby KKM agreed to lease premises owned by Plaintiff for use as a medical facility. Plaintiff contends that KKM breached the lease by abandoning the premises; Defendants contend that the lease was terminated.

On May 1, 2021, KKM entered a lease agreement (the “Lease”) with Plaintiff to rent the premises located at 11645 Wilshire Blvd, Suite 1100, Los Angeles, CA 90025 (the “Property”). Dr. Karimi is a guarantor under the Lease. (UMF 2; Additional Material Fact (“AMF”) 10.)

The Lease provides that “[t]his Lease contains the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes any previous negotiations …. [t]his Lease may not be modified except by a written document executed by the parties hereto.” (Lease, pp. 16-17, Sections 37.17-37.18.)

Defendants intended to operate an ambulatory surgery center at the Property where surgery could be performed on patients. (AMF 3.) Construction work on the Property was necessary to attain this function. (Undisputed Material Fact (“UMF”) 1; Karimi Decl., Exh. A (“Lease”) Exhibit C (“Work Agreement”), Section 1.5.) The Lease included a Work Agreement (Lease, Exh. C) which is incorporated into the Lease. (UMF 1; Lease, Section 7.1, Exh. C.) Under the Work Agreement, Plaintiff was obligated to construct tenant improvements to the Property at a cost of up to $299,355.00 (the “Tenant Improvement Allowance”). (Work Agreement, Section 1.1.)

Before entering into the Lease, on around February 19, 2021, Plaintiff provided Dr. Karimi with plans and a 2018 construction bid for a prior prospective tenant of the Property, Murtaza Rizvi, M.D. (UMF 3.) The bid for Dr. Rizvi’s planned improvements for the entire Property was $367,947. (UMF 3.)

The Work Agreement provided that Plaintiff’s interior architect, the Borsuk Company (“Borsuk”) would submit a Preliminary Space Plan (“PSP”) to KKM and Plaintiff for review. (Work Agreement, Sections 2.2, 2.4.) The PSP was required to itemize the work to be done by each party, including a cost excess of any work that Plaintiff would conduct in excess of the Tenant Improvement Allowance. (Work Agreement, Section 2.3.) KKM was then obligated to either approve the PSP and preliminary cost estimate or specify its objections thereto within 10 days of its receipt of the PSP. (Work Agreement, Section 2.5.) Under the Work Agreement, if KKM rejected any part of the PSP, the parties would have 10 days to attempt in good faith to modify the PSP to their mutual satisfaction. (Work Agreement, Section 2.6) If the PSP could not be modified to Plaintiff and KKM’s mutual satisfaction, “the Lease [would] terminate and neither party [would] thereafter be obligated to the other party for any reason whatsoever having to do with [the] Lease.” (Work Agreement, Section 2.6.)

The construction was planned to be carried out in two phases, Phase 1 and Phase 2. (Powers Decl. ¶¶ 5, 9; UMF 10.) Plaintiff contends that during the summer of 2021, Dr. Karimi requested that the scope of the PSP be limited to only Phase 1 so that Defendants could occupy the Property more quickly and begin treating patients sooner. (Powers Decl. ¶ 5.)

On December 8, 2021, Plaintiff provided Defendants with (1) Mancilla Construction Contract No. 3045-B for Tenant Improvement (the “Mancilla Bid”); (2) Mancilla’s Bid Addendum #1 for Phase 1 (“Addendum #1”); and (3) Boruk’s plan drawings for Phase 1 (the “Borsuk Drawings”) (collectively, the “December 8 Documents”). (Karimi Decl., Exh. I.) The Mancilla Bid estimated a total price of $585,207.05. (Karimi Decl., Exh. I at p. 7.) The Mancilla Bid contained a clause stating as follows: “NOTICE OF CANCELLATION: CONTRACT CANCELABLE FOR 72 HOURS FOLLOWING DATE OF ACCEPTANCE BY CONTRACT BUYER[.]” (Karimi Decl., Exh. I at p. 7.) Plaintiff contends that the December 8 Documents constituted a PSP under the Lease; Defendants contend that they do not.

On December 8, 2021, Dr. Karimi initialed each page of the Mancilla Bid and signed the last page. (Hudson Decl. ¶ 14; Karimi Decl., Exh. I at p. 7.) Defendants contend that Dr. Karimi initially mistakenly believed that the Mancilla Bid, for $585,207.05, was for the entire project, but later realized that it was for Phase 1 only. (Karimi Decl. ¶ 13.) On December 10, 2021, Dr. Karimi sent an email to Edward Hudson and Cody Powers, individuals associated with Plaintiff, stating that due to the unexpectedly high cost, he “decided not to approve the bids for the buildout of [the Property]” and stating that “the bids and the plans are not approved.” (Karimi Decl. ¶ 15, Exh. J; Hudson Decl. ¶ 15, Exh. 6.) On December 11, 2021, Dr. Karimi sent another email to Martha Garcia, Plaintiff’s manager of the property, with copies to Powers and Borsuk, stating his intent “to PAUSE everything for now” and “please disregard the signed bids and plans [Dr. Karimi] sent[.]” (Karimi Decl. ¶ 16, Exh. L.)

On February 1, 2022, Defendants sent Plaintiff a formal “Rejection, Cancellation and Notice of Termination,” stating Defendants’ position that the Lease had been terminated. (Karimi Decl., Exh. M.)

Plaintiff never moved into the premises and never paid rent on the Lease.

On May 15, 2023, Plaintiff learned that Defendants had advertised the Property on www.costar.com, seeking a subtenant and proposing a ten-year sublease. (AMF 22, 52.)

Plaintiff filed the Complaint against Defendants on March 18, 2022, stating claims for (1) breach of contract; (2) abandoning the premises; and (3) breach of guarantee agreement.

Defendant moved for summary judgment on August 31, 2023.

Legal Standard

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 843.) “Code of Civil Procedure section 437c, subdivision (c), requires the trial 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.) 

“In ruling on the motion, the court must consider all of the evidence and all of the inferences reasonably drawn therefrom [citation] and must view such evidence [citations] and such inferences [citations] in the light most favorable to the opposing party.” (Aguilar, supra, at pp. 844-845 [quotation marks omitted].) 

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)  A defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(2).)

“Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)

Discussion

Breach of Contract – First Cause of Action

To state a cause of action for breach of contract, Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

The core issues here are (1) whether the December 8 Documents were a PSP; and (2) if Plaintiff was provided with a PSP, whether Plaintiff rejected the PSP.

First, the undisputed facts show that the December 8 Documents were not a PSP as required by the Work Agreement. The December 8 Documents concerned only Phase 1 of the construction and thus did not “include[e] a cost estimate of any work required of Landlord in excess of the Tenant Improvement Allowance” as required by the Work Agreement. (Work Agreement, Section 2.3 [emphasis added].) Furthermore, the December 8 Documents were not even submitted to Defendants by Borsuk, Plaintiff’s architect, but rather by Plaintiff. Although Plaintiff has provided evidence that Dr. Karimi requested that the PSP be submitted only for Phase 1, the Lease specifically provided that it could only be modified by a written document executed by the parties. Plaintiff has provided no such evidence of such a modification. Thus, Plaintiff’s mere request, even if taken as accurate, would not change the requirements to which the PSP was subject.

Second, even if the December 8 Documents were a PSP, Defendants properly rejected them. The Mancilla Bid provided that Defendants could cancel the contract within 72 hours of the date of acceptance. Both Dr. Karimi’s December 10, 2023 and December 11, 2023 emails to Plaintiff stating that he was cancelling the agreement and work were within the 72-hour timeframe provided for by the Mancilla Bid and within the 10-day timeframe to reject the PSP provided for by the Work Agreement. Plaintiff does not fundamentally dispute any of these facts.

The parties do not dispute that there was no subsequent PSP which was accepted by Defendants. Thus, the Lease was terminated pursuant to Section 2.6 of the Work Agreement. Defendants therefore did not breach the Lease by failing to take possession of the Property and pay rent.

Plaintiff contends that Defendant’s attempt to sublease the Property creates a triable issue of fact as to whether Defendants had a right to possession of the premises, since a basic right to possession is a prerequisite to the ability to sublease a property. Plaintiff has it backwards. Because Defendants, pursuant to the cancellation of the Lease, had no right to possess the Property, they could not validly sublease it either.

Defendants are therefore entitled to judgment as a matter of law on this claim.

Abandoning the Premises – Second Cause of Action

Plaintiff’s cause of action for abandoning the premises hinges on the enforceability of the Lease. Because the Lease was cancelled, this cause of action must fall as well. Defendants are therefore entitled to judgment as a matter of law on this claim.

Breach of Guarantee Agreement – Third Cause of Action

Plaintiff’s cause of action for breach of the guarantee agreement hinges on KKM’s initial alleged breach of the Lease. Because the Lease was cancelled, this cause of action must fall as well. Defendants are therefore entitled to judgment as a matter of law on this claim.