Judge Lee W. Tsao, Case Number: 21STCV07600, Date: 2023-09-12 Tentative Ruling

Judge: Lee W. Tsao, Case: 21STCV07600, Date: 2023-09-12 Tentative Ruling

Case Number: 21STCV07600 Hearing Date: November 15, 2023 Dept: C

KHOSHROZEH DENTAL, et al. v. S&P LEE INVESTMENT, et al.

CASE NO.: 21STCV07600

HEARING: 11/15/23 @ 10:30 AM

Defendant S&P Investment’s Motion for Summary Judgment is GRANTED.

Moving Party to give NOTICE.

Defendant S&P Lee Investment, LLC (Defendant) moves for summary judgment as to the first and second causes of action in the Complaint.

Background

Plaintiffs Khoshrozeh Dental Corporation and Mehrdad Khoshrozeh, DDS (“Plaintiffs”) operated a dental practice in Huntington Park for 23 years when it was destroyed in a fire on May 30, 2020. On September 18, 2016, Plaintiffs signed a Commercial Lease Agreement (“CLA”) with Defendant S&P Lee Investment, the property owner. Plaintiffs allege that Defendant maintained the “premises and the electrical systems therein, including the ‘plenum’ [attic], in such a manner that created a dangerous, defective and hazardous condition… [that] cause[d] a fire to initiate and ignite on May 30, 2020.” (Complaint, ¶ 19.) Based thereon, the Complaint asserts causes of action for:

1. General Negligence

2. Premises Liability

3. Insurance Agent/Broker Liability

The Complaint was brought against S & P Lee Investment, Pacific Western Insurance Services, Inc., Nima “Nick” Golbad, Newridge Insurance Management Agency, and Does 1-50. Plaintiffs later filed an amendment to the Complaint adding VII Commercial Corp., the property management company, as Doe 26. Only the first two causes of action apply to Defendant S&P Lee Investment.

Defendant’s Undisputed Material Facts

Plaintiffs filed suit against Defendant for Negligence and Premises Liability. (UMF Nos. 1-2.) Defendant filed its Answer on April 15, 2021. (UMF No. 3.) Plaintiffs allege that on May 30, 2020, a fire caused the complete destruction of Huntington Park Family Dentistry. (UMF No. 4.) Defendant entered into a Commercial Lease Agreement (CLA) with Huntington Park Family Dental Group in September 2016. (UMF No.5.)

Paragraph 17 of the CLA provides that “Tenant’s insurance shall name Landlord and landlord’s agent as additional insured” and that the Landlord shall maintain the roof, foundation, exterior walls, and common areas. (UMF Nos. 6-7.) Paragraph 29 provides that “Tenant’s personal property, fixtures, equipment, Inventory and vehicles are not insured by Landlord against loss or damage due to fire, theft, vandalism, rain, water, criminal or negligent acts of others, or any other causes. Tenant is to carry Tenant’s own property insurance to protect Tenant from any such loss …. Both Landlord and Tenant release each other, and waive their respective rights to subrogation against each other, for loss or damage covered by insurance.” (UMF No. 8.) Paragraph 40 provides that “Tenant must obtain Renter’s insurance …. If Renter’s Insurance is not obtained by the Tenant, it is agreed the tenant will not hold Landlord responsible for any personal property losses.” (UMF No. 9.)

Dr. Khoshrozeh testified at his deposition that his signature and initials were on the CLA. (UMF No. 10.) He testified that he received approximately $500,000.00 from his insurance provider as a result of the fire damages. ((UMF No. 11.) Dr. Khoshrozeh testified he first became aware that he was underinsured at the scene of the fire. (UMF No. 13.) Dr. Khoshrozeh did not know the cause of the fire at his deposition. (UMF No. 14.)

Legal Standard

A party seeking summary judgment has the burden of producing evidentiary facts sufficient to entitle him/her to judgment as a matter of law. (CCP § 437c(c).) The moving party must make an affirmative showing that he/she is entitled to judgment irrespective of whether or not the opposing party files an opposition. (Villa v. McFerren (1995) 35 Cal.App.4th 733, 742743.) Thus, “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 (citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)

When a plaintiff seeks summary judgment, he/she must produce admissible evidence on each element of each cause of action on which judgment is sought. (CCP § 437c(p)(1).) When a defendant seeks summary judgment, he/she has the “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, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.” (CCP § 437c(p)(2).)

The opposing party on a motion for summary judgment is under no evidentiary burden to produce rebuttal evidence until the moving party meets his or her initial movant’s burden. (Binder v. Aetna Life Insurance Company (1999) 75 Cal.App.4th 832, 840.) Once the initial movant’s burden is met, then the burden shifts to the opposing party to show, with admissible evidence, that there is a triable issue requiring the weighing procedures of trial. (CCP § 437c(p).) The opposing party may not simply rely on his/her allegations to show a triable issue but must present evidentiary facts that are substantial in nature and rise beyond mere speculation. (Sangster v. Paetkau (1998) 68Cal.App.4th 151, 162.) Summary judgment must be granted “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) 7Cal.App.4th1110, 1119.)

Discussion

Defendant contends that Plaintiffs’ first and second causes of action fail because they are barred by the CLA. Paragraph 29 of the CLA provides, “Landlord and Tenant release each other, and waive their respective rights to subrogation against each other, for loss or damage covered by insurance.” Paragraph 40 of the CLA provides, “If Renter’s Insurance is not obtained by the Tenant, it is agreed that the tenant will not hold Landlord responsible for any personal property losses.” The court determines that Defendant has satisfied its initial burden of showing a complete defense to Plaintiffs’ causes of action.

Plaintiffs argue that Paragraph 29 does not contain a waiver of Plaintiffs’ claims, but rather a warning that Defendant has chosen not to insure for damage or loss to Plaintiffs’ personal property. This interpretation is not supported by the language in the CLA. Paragraph 29 begins by providing that Defendant will not insure Plaintiffs’ personal property against damage or loss from any cause. The next sentence requires Plaintiff to obtain insurance to protect against “any such loss.” It is evident that the language “any such loss” refers to damage or loss to Plaintiffs’ personal property. The last sentence of Paragraph 29 provides that Plaintiff and Defendant will release each other and waive their subrogation rights as to any damage or loss covered by insurance. Additionally, Paragraph 40 states that Plaintiffs will not hold Defendant liable for any personal property damage should Plaintiffs not obtain renters insurance to cover the loss. Paragraphs 29 and 40 make clear that the CLA contains a waiver of claims by Plaintiffs for loss of personal property.

Plaintiffs further argue that any waiver does not extend to the additional loss or damage to personal property which was not covered by Plaintiff’s renter’s insurance. “The rules governing policy interpretation require us to look first to the language of the contract in order to ascertain its plain meaning or the meaning a layperson would ordinarily attach to it.” (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18.) Plaintiffs’ interpretation would allow either party to intentionally underinsure itself, and thus, the waiver would be ineffectual. The plain meaning is that the waiver covers the types of damages that either party is obligated to insure itself against pursuant to the CLA. Further, Plaintiffs provide no evidence that their interpretation was the true intent of the parties.

Plaintiffs argue that the CLA is ambiguous because it can be interpreted to mean that losses to Plaintiffs’ personal property are insured by Defendant. Plaintiffs point to a portion of Paragraph 29 which states, “Landlord shall maintain … property insurance in an amount sufficient to cover the replacement cost of the property unless Tenant is responsible for maintenance pursuant to paragraph 17B …” Plaintiffs argue the term “property” as used here includes Plaintiffs’ personal property. According to Plaintiffs, this portion of Paragraph 29 fails to define “property,” and any ambiguity must be resolved against the party drafting the contract. However, it is evident that the term “property” in that sentence refers to the property Defendant is responsible for maintaining pursuant to Paragraph 17B. Paragraph 17B provides that “Landlord OR (If checked, Tenant) shall maintain the roof, foundation, exterior walls, common areas, and _.” Thus, the term “property” as used in Paragraph 29 means the property listed in Paragraph 17B and not Plaintiffs’ personal property.

Finally, Plaintiff argues that there is a triable issue of fact as to whether Defendant’s negligence caused the fire. The waiver in the CLA provides “Landlord and Tenant release each other, and waive their respective rights to subrogation against each other, for loss or damage covered by insurance.” The first clause of the waiver is a broad release of claims covered by insurance. Here, Plaintiff’s negligence claim against Defendant is covered by the waiver. Thus, it is not material whether the fire was caused by Defendant’s negligence.

Plaintiffs’ have failed to demonstrate a triable issue of material fact as to whether the waiver applies to Plaintiffs’ claims for loss or damage to personal property.

Accordingly, Defendant’s Motion for Summary Judgment is GRANTED.