Judge: Margaret L. Oldendorf, Case: 22AHCV00913, Date: 2022-12-19 Tentative Ruling

Case Number: 22AHCV00913    Hearing Date: December 19, 2022    Dept: P

 

 

 

 

 

 

 

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

NORTHEAST DISTRICT

 

ATLANTIC TIMES SQUARE, LLC, a Delaware limited liability company,

 

                                            Plaintiff,

vs.

 

MISS Q, LLC, a California limited liability company,

 

                                            Defendants.

 

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Case No.: 22AHCV00913

 

 

[TENTATIVE] ORDER OVERRULING DEMURRER AND DENYING MOTION TO STRIKE

 

Date:   December 19, 2022

Time:  8:30 a.m.

Dept.:  P

 

           

            I.         INTRODUCTION

            This unlawful detainer action concerns commercial property located at 500 N. Atlantic Boulevard, Unit 201, Monterey Park. Plaintiff Atlantic Times Square, LLC (Atlantic Times) is the landlord. Defendant Miss Q, LLC (Miss Q), the tenant, operates a restaurant on the premises. On October 14, 2022, Atlantic Times served Miss Q with two three-day notices to quit. When Miss Q failed to vacate, this action followed.

            Miss Q demurs on two grounds: (1) the Complaint fails to state a cause of action because it seeks unpaid rent that is more than a year overdue; (2) the three-day notices overstate the amount of rent due, making them defective and unable to support this Unlawful Detainer Complaint. For the reasons that follow, the demurrer is overruled and the motion to strike is denied.

 

II.        LEGAL STANDARD

Code Civ. Proc. §430.10(e) provides for a demurrer on the basis that a complaint fails to state a cause of action. A demurrer admits, provisionally for purposes of testing the pleading, all material facts properly pleaded. Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1247. A demurrer tests the legal sufficiency of a complaint. Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994. 

In unlawful detainer actions a defendant may demur within the time to answer, which is five days. Code Civ. Proc. §§1167.3; 1170.

            Code Civ. Proc. §436: “The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper:

(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

(b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”

For non-commercial tenants, a three-day notice to quit must (a) state the amount due and (b) must be served within one year after the rent becomes due. For commercial tenancies, the amount due may be estimated and a three-day notice demanding rent due for more than a year is not invalid. Code Civ. Proc. §§1161(2), §1161.1.

Levitz Furniture Co. of the Pacific, Inc. v. Wingtip Communications, Inc. (2001) 86 Cal.App.4th 1035, 1040-1041 explains it this way:

The key to understanding the impact of section 1161.1 on section 1161(2) in a commercial setting is to recognize that section 1161(2) embodies two separate requirements. One portion of section 1161(2) requires that a three-day notice state “the amount which is due.” The second permits service of the notice “at any time within one year after the rent becomes due.”

Different policies drive the two requirements. As noted above, a notice that seeks rent in excess of the amount due is invalid. (Ernst, supra, 139 Cal.App.3d at p. 359, 188 Cal.Rptr. 641.) Thus, the first provision discourages a landlord’s claiming an overdue rental figure that is so exaggerated that a tenant would never choose to pay. The second provision has to do with fairness. It prevents a landlord's sitting on his or her rights, when rent is unpaid at some point during the life of a lease, then using long-overdue rent (but no recently overdue rent) to effect an eviction.

In our view, section 1161.1 affects only the first of the two provisions of section 1161(2). Its effect is to “ameliorate[ ] the consequences of a commercial property landlord's failure to provide the correct claimed amount in the lessor's three-day notice to the tenant to cure or vacate the premises.” (Nellis & Dewees, Significant New State Legislation Enacted in 1990 (Cont.Ed.Bar 1991) 14 Real Prop. L.Reptr. 49.) Such amelioration makes sense in a commercial context, where monthly rent in not always easily fixed or readily ascertained by simply reading the terms of a lease. Often, rents are affected by a tenant’s revenues, assessments made by taxing authorities that are passed on to a tenant, and the like. If a landlord is required to fix the exact sum due at his peril, unlawful detainer becomes an elusive—if not unavailable—remedy. By permitting a landlord to set out a reasonable estimate of the sum due, unlawful detainer becomes a viable remedy for commercial landlords.

As noted, however, we do not see how section 1161.1 impacts the second provision of section 1161(2). The fact that a commercial landlord may estimate rent due does not necessarily mean that he or she is excused from serving a three-day notice within one year of the time that “the rent becomes due.” However, we see no reason why a three-day notice that demands payment of rents due within one year of the notice is automatically invalidated because it also sets out (or demands) rent due more than a year before the notice. Such invalidation is not mandated by the policy underlying the second provision of section 1161(2), that is, preventing a landlord from using long overdue rent—but no rent unpaid within one year—to effect an eviction.

 

III.      DISCUSSION

            Miss Q’s demurrer raises two arguments. The first is that the three-day notice is invalid because it exceeds the one-year limit on rent demands. But according to the very case Miss Q cites, Levitz, demanding rent for more than a year prior does not automatically invalidate the notice. This argument fails.

            Atlantic Times opposes the demurrer on the ground that this rule was not violated because rent did not become due until February 2022, pursuant to Code Civ. Proc. §1179.05(c) and the Los Angeles County Board of Supervisors Resolution Further Amending and Restating the County of Los Angeles Covid-19 Tenant Protections dated January 25, 2022, at §VI.A.1 (page 10 of 24). Together, these provisions mandate that the one-year limitation is tolled during any period a landlord is or was prohibited by Covid ordinance from serving a notice that demands payment of Covid-19 rental debt.

Miss Q replies that Atlantic Square is misapplying the rule because the Resolution gives commercial tenants with fewer than 10 employees until January 2023 to pay past-due rent (citing page 16 of the Resolution). This is a brand-new argument raised for the first time on reply and cannot be fairly considered without notice and an opportunity for Atlantic Times to be heard. What is more, it is an argument that improperly goes beyond the four corners of the Complaint and cannot be considered at the demurrer stage. Miss Q’s argument that “there is no dispute Defendant has less than 10 employees as of March 4, 2020” (Reply at 3:8) is not supported by the pleading. (And, in any event, it is not clear why the number of employees Miss Q had in March 2020 would be relevant to whether it falls under the current protection for commercial tenants with fewer than 10 employees.)

            The second argument Miss Q makes is that both three-day notices misstate the rent owed because they include charges for charges other than rent, such as common area maintenance and trash pick-up. Atlantic Times opposes by pointing out that pursuant to the lease at ¶7.2, these items of cost are considered rent. Miss Q raises no argument in reply.

            Miss Q raises another new argument in her reply. She urges that pursuant to the Resolution at page 17, § (C)(4), a commercial tenant’s failure to pay back unpaid rent incurred during the Protected Time Period under the terms of a payment plan or at the end of the repayment period “shall not be cause to evict the tenant.” But the three-day notice to quit is not based on unpaid rent from a protected period; rather, it runs from June 2022 when Miss Q stopped paying rent.

            In sum, neither of the arguments raised in the demurrer nor the new reply arguments have merit. The demurrer is therefore overruled.

            Miss Q incorporates a motion to strike into her demurrer, but it is based on the same arguments and is denied for the same reasons.

           

IV.  ORDER

            The demurrer is overruled. Motion to strike is denied. Miss Q is granted five days to answer.  

            Plaintiff is ordered to give notice. 

 

 

           

Dated:                                                                        _______________________________

                                                                                          MARGARET OLDENDORF

                                                                                 JUDGE OF THE SUPERIOR COURT