Judge: Lisa K. Sepe-Wiesenfeld, Case: 22SMUD00094, Date: 2022-10-03 Tentative Ruling
Case Number: 22SMUD00094 Hearing Date: October 3, 2022 Dept: S
8:30 a.m.
TENTATIVE RULING
CASE NAME: Ritterbacher
Sunset LLC, et al., v. Osik Media LLC, et al.
CASE NO.: 22SMUD00094
Legal
Standard
A party may move for summary
judgment in any action or proceeding if it is contended the action has no merit
or that there is no defense to the action or proceeding. (CCP, § 437c(a).) “The
purpose of the law of summary judgment 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. (2001) 25 Cal.4th 826, 843.)
“A party may move for summary adjudication as
to one or more causes of action within an action, one or more affirmative
defenses, one or more claims for damages, or one or more issues of duty, if the
party contends that the cause of action has no merit, that there is no
affirmative defense to the cause of action, that there is no merit to an
affirmative defense as to any cause of action, that there is no merit to a
claim for damages, as specified in Section 3294 of the Civil Code, or that
one or more defendants either owed or did not owe a duty to the plaintiff or
plaintiffs.” (CCP, § 437c(f)(1).) If a party seeks summary
adjudication as an alternative to a request for summary judgment, the request
must be clearly made in the notice of the motion. (Gonzales v. Superior
Court (1987) 189 Cal.App.3d 1542, 1544.) “[A] party may move for
summary adjudication of a legal issue or a claim for damages other than
punitive damages that does not completely dispose of a cause of action,
affirmative defense, or issue of duty pursuant to” subdivision (t).
(CCP, § 437c(t).)
To
prevail, the evidence submitted must show there is no triable issue as to any
material fact and that the moving party is entitled to judgment as a matter of
law. (CCP, § 437c(c).) The motion cannot succeed unless the
evidence leaves no room for conflicting inferences as to material facts; the
court has no power to weigh one inference against another or against other
evidence. (Murillo v. Rite Stuff Food Inc. (1998) 65 Cal.App.4th
833, 841.) In determining whether the facts give rise to a triable issue of
material fact, “[a]ll doubts as to whether any material, triable, issues of
fact exist are to be resolved in favor of the party opposing summary judgment…”
(Gold v. Weissman (2004) 114 Cal.App.4th 1195, 1198-99.) “In other
words, the facts alleged in the evidence of the party opposing summary judgment
and the reasonable inferences there from must be accepted as true.” (Jackson
v. County of Los Angeles (1997) 60 Cal.App.4th 171, 179.) However, if
adjudication is otherwise proper the motion “may not be denied on grounds of
credibility,” except when a material fact is the witness’s state of
mind and “that fact is sought to be established solely by the [witness’s]
affirmation thereof.” (CCP, § 437c(e).)
Once
the moving party has met their 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.” (CCP § 437c(p)(1).) “[T]here is no obligation on the opposing party... to establish
anything by affidavit unless and until the moving party has by affidavit stated
facts establishing every element... necessary to sustain a judgment in his
favor.” (Consumer Cause, Inc. v. SmileCare (2001) 91
Cal.App.4th 454, 468.)
“The pleadings play a key role in a summary
judgment motion. The function of the pleadings in a motion for summary judgment
is to delimit the scope of the issues and to frame the outer measure
of materiality in a summary judgment proceeding.” (Hutton v. Fidelity
National Title Co. (2013) 213 Cal.App.4th 486, 493, quotations
and citations omitted.) “Accordingly, the burden of a defendant moving for
summary judgment only requires that he or she negate plaintiff's theories of
liability as alleged in the complaint; that is, a moving party need
not refute liability on some theoretical possibility not included in the
pleadings.” (Ibid.)
Analysis
Defendant’s Motion
Defendant’s motion for summary
judgment should not be granted because they have not shown entitlement to
judgment as a matter of law
As to the classification argument, they
merely point out that this case should be re-classified as an unlimited case
based on the value of the property in question. First, this argument was
apparently rejected by the Court on the motion to reclassify. Second, even if
true, this does not show why Defendant is entitled to a judgment in its
favor. Instead, this would justify, at most, a transfer to an appropriate
department.
As will be discussed, Northridge
would not apply. Here, there would be no analogous implied covenant that forbid
the sublessor from forfeiting the sublessor’s rights. The undisputed record
shows that the GCI-RSL agreement to terminate the Ground Lease was not
“voluntarily” entered into.
Plaintiff’s Motion
Plaintiff moves for summary
judgment on its unlawful detainer action against Osik regarding the Billboard
Lease.
CCP section 1161 provides, in
relevant part, as follows: “A tenant of real property, for a term less than
life ... is guilty of unlawful detainer: 1. When the tenant continues in
possession, in person or by subtenant, of the property, or any part thereof,
after the expiration of the term for which it is let to the tenant; provided
the expiration is of a nondefault nature however brought about without the
permission of the landlord ...”
Plaintiff reasons that there can be
no dispute regarding their right to possession. Defendant admits that Plaintiff
owns the Subject Property, including that portion upon which the billboard
structure is located. Defendant admits that it occupies the billboard structure
pursuant to a sublease which is by its terms coterminous with the Ground Lease.
The Ground Lease was terminated on September 3, 2021. Defendant admits that it
has occupied the Subject Property since at least that time without RSL's
permission.
Summary of Submitted Facts
In support, Plaintiff provides the
following evidence. RSL is the owner of the Subject Property. (Garrity Decl., ¶
3.) In that capacity, RSL leased the Subject Property to Golden Crest, Inc.
("GCI") pursuant to the Ground Lease. (Id. Ex. A [Ground Lease].) In
turn, GCI subleased the Subject Property to the hotel operator, Ferrado
Hollywood, LLC ("Ferrado"), successor in interest to the former
sublessee and hotel operator Hollywood Standard LLC (“Standard”). (¶5.)
(Standard would assign its rights to Ferrado in February 2008. ¶ 5.)
On April 5, 2001, GCI subleased the
northwest corner of the Subject Property to Melven Genser Outdoor Inc.
(“Genser”). Genser operated an existing billboard structure. (¶¶ 19-20.) The
Billboard Lease provided a ten-year term with two options to extend by five-years.
(¶ 20.) GCI had option to terminate the Billboard Lease "any time the
building on the property is demolished" upon 90-days written notice.
Simultaneously, GCI, Genser and Standard entered into the Billboard Agreement,
which modified the Billboard Lease to eliminate Genser's “right to install and
maintain illuminated advertising signs”. (¶ 21.) Later, Hollywood Standard
entered into an agreement with GCI and related individuals, whereby GCI
assigned its option to terminate the Billboard Lease to Hollywood Standard LLC.
(¶ 22.)
On May 1, 2010, Genser entered into
a Purchase and Assignment Agreement with Outdoor Specialists, LLC
("Outdoor") whereby Genser assigned its rights in the Billboard Lease
to Outdoor. (¶ 23.) Outdoor was dissolved on or about July 31, 2017. (¶
24.) Osik contends that it is one and
the same as Outdoor.
On June 24, 2019, GCI and Ferrado
entered into a First Amendment to the Billboard Agreement, which in part
confirmed that: i) the Billboard Lease would terminate April 4, 2021; ii)
Ferrado's transfer of its termination rights to GCI; and iii) a modified
revenue sharing between GCI and Ferrado regarding the billboard. (¶ 25.)
In 2019, a dispute arose between
RSL and GCI/Ferrado regarding the rent on the Ground Lease. (¶¶ 7-11.) RSL, on
the one hand, and GCI and Ferrado, on the other, were unable to reach an
agreement regarding the appraised value of the subject property.
In the midst of this dispute, on
September 12, 2019, Osik and GCI entered into an Amendment to the Billboard
Lease. The lease otherwise would have expired in 2021, but was extended to Dec.
31, 2027. There is no dispute that the Amendment further provided (¶ 4) that
GCI’s rights in the property derive from the Ground Lease and “if for any
reason the ground lease is terminated. . . all rights of Lessee under the
[Billboard] Lease shall automatically terminate and be of no further force or
effect contemporaneous with termination” of the Ground Lease.
On May 28, 2020, RSL sued GCI
seeking a determination regarding the valuation of the property. (See RJN Exs.
1-3.) On July 9, 2020, Ferrado brought a similar action challenging RSL’s
appraisal. On December 4, 2020, the Court ordered the parties to use RSL’s
valuation method. In June 2021, the parties settled the action. Pursuant to
this settlement, on September 3, 2021, RSL and GCI entered into an agreement to
terminate the Ground Lease. On September 13, 2021, RSL notified Osik that they
had terminated the ground lease. Plaintiff does not proffer any evidence
showing that they otherwise attempted to serve a three-day notice to quit or
cure.
Analysis
Plaintiff asserts that Defendant
remains in possession of the property after the lease ended pursuant to the
lease’s terms. (See Aviel v. Ng (2008) 161 Cal.App.4th 809, 820 [tenant
under subordinated lease who remains in possession after foreclosure sale is a
tenant at sufferance].) When a lease expires by its own terms, a tenant is
required to surrender possession of the leased property, even without notice
from the owner of the property. (Id.; Ryland v. Appelbaum (1924)
70 Cal.App. 268, 270.)
Both parties submitted evidence is
consistent with the fact that the Ground Lease expired by its own terms. Specifically,
the Billboard Lease expired within the meaning of § 1161(1) when RSL and GCI
entered into the Termination Agreement and terminated the Ground Lease on
September 3, 2021. The Billboard Lease, by its own terms, is subordinate to the
Ground Lease and ends upon the termination of the Ground Lease. Thus, the
sublease lapsed when the parties terminated the ground lease.
Defendant notes that there is an
exception to the general rule that voluntary termination of the master
lease does not terminate a sublease. (Buttner v. Kasser (1912) 19
Cal.App. 755, 760-761.) They note that if by “nonperformance of obligations . .
. the [primary] tenant has incurred a forfeiture of his lease, and for that
reason the landlord annuls the lease, the landlord is entitled to possession as
against the sublessee.” (Herman v. Campbell (1948) 86 Cal.App.2d 762,
766.) It is undisputed that GCI/F repudiated their ability to pay rent under
RSL’s calculations, which were fixed by Court order. (FAC ¶ 8, RJN Exs. 1-3.) Authority
accords that this agreement was involuntary in nature. (Herman v. Campbell
(1948) 86 Cal.App.2d 762; see also Fifth & Broadway P 'ship v. Kimny,
Inc. (1980) 102 Cal.App.3d 195, 203 [lessee only agreed to the forfeiture
after the lessor filed a lawsuit].) As stated by Herman:
Where a cause of forfeiture has
arisen, the fact that the lessee consented to the enforcement of the forfeiture
does not render the transaction a surrender as distinguished from a forfeiture
so as to bring it within the rule that a lessee cannot by surrender affect the
estate or the interest of third persons held under him.
(Herman, supra, 86 Cal.App.2d at 766.) GCI incurred a
forfeiture of the Ground Lease and RSL annulled the lease for that reason.
Thus, the rule against voluntary surrender would not be implicated here.
Defendant asserts that where an eviction
is based on a “curable” breach, a three-day notice will support eviction of a
subtenant only if the subtenant is separately named and served. (CCP §§
1162(a)(3), (b)(3), 1161.1; Briggs v. Electronic Memories & Magnetics
Corp. (1975) 53 Cal.App.3d 900, 904; see also Kimny, Inc., supra,
102 Cal.App.3d at 203.) However, the Court cannot fairly call these
circumstances curable. Although the basis of the settlement was GCI/F’s
inability to pay rent, Defendant’s sublease still expired via by the Billboard
Lease’s own terms. That is not curable.
Accordingly, Plaintiff’s motion is
GRANTED.