Judge Margaret L. Oldendorf, Case Number: 23AHCV00338, Date: 2023-07-11 Tentative Ruling

Judge: Margaret L. Oldendorf, Case: 23AHCV00338, Date: 2023-07-11 Tentative Ruling

Case Number: 23AHCV00338 Hearing Date: July 11, 2023 Dept: P

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

NORTHEAST DISTRICT

CONCORD PROPERTY MANAGEMENT, INC., Plaintiff, vs. BENJAMIN YANBING LIN, aka BENJAMIN LIN, dba REMAX REALTORS; and DOES 1 to 10, inclusive, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No.: 23AHCV00338 [TENTATIVE] ORDER DENYING DEFENDANT’S MOTION FOR ATTORNEY FEES Date: July 11, 2023 Time: 8:30 a.m. Dept.: P

I. INTRODUCTION

This unlawful detainer action concerns a commercial lease for real property located at 9453-9455 Las Tunas Drive in Temple City. In November 2006, Defendant Benjamin Lin, dba Remax Realtors (Lin) signed a lease with a term of three years and three months, or through March 1, 2010. In December 2010, the parties agreed to an extension of the lease through December 31, 2016, with the right for one 5-year extension.

Plaintiff Concord Property Management, Inc. (Concord) alleges that Lin failed to vacate the premises on December 31, 2021, or at any time since then. It further alleges that Lin ceased paying rent in August 2022, and ceased to either quit or pay rent in response to a three-day notice served in October 2022.

At the final status conference, Concord dismissed this action without prejudice. Lin now seeks an award of attorney fees. Attorney fees are not recoverable on a contract claim where the action is dismissed. Lin attempts to bring himself within an exception to the rule by arguing that this action sounds in tort. This attempt fails, however, as this action sounds in contract. The motion is denied.

II. LEGAL STANDARD

Code Civ. Proc. §1032(b) provides that a prevailing party is entitled to recover costs. Code Civ. Proc. §1033.5(a)(10) provides for the recovery of fees as costs when authorized by contract, statute, or law.

Civ. Code §1717(a) provides for an award of attorney fees to the prevailing party in any action where the contract specifically provides for fees and costs.

Section 1717(b)(2) provides that where an action has been voluntarily dismissed there shall be no prevailing party.

Where the attorney fee provision in a contract is worded broadly enough to encompass both contract and noncontract claims, trial courts have discretion to determine whether the prevailing party is entitled to fees on the noncontract claims despite the voluntary dismissal. Santisas v. Goodin (1998) 17 Cal.4th 599, 617 and 622.

Where a pleading includes a prayer for fees pursuant to a written agreement but alleges claims that sound in tort, the rule, most succinctly stated, is this: “Civil Code section 1717 does not bar recovery of attorney’s fees for noncontract claims voluntarily dismissed by the plaintiff, as long as the attorney’s fees clause is broad enough to encompass such noncontract claims.” Drybread v. Chipain Chiropractic Corp. (2007) 151 Cal.App.4th 1063, 1071 (Drybread).

III. ANALYSIS

The central question posed by this motion is whether the complaint sounds in contract or tort. Because Concord dismissed the complaint, Lin is only entitled to fees as the prevailing party if: (1) the fee agreement is written broadly enough to encompass noncontract claims; and (2) the complaint sounds in tort.

Lin relies on Drybread in arguing that Concord’s claim sounds in tort. In Drybread, the question was “whether this unlawful detainer action was ‘an action on a contract’ (to which Civil Code section 1717 applies and bars attorney’s fees) or a noncontract claim.” Drybread, supra, 151 Cal.App.4th at 1072. The Drybread court noted that, “Unlawful detainer actions may be based on (1) a breach of the lease during the term of the lease (arguably suggesting contract claims), or (2) a tenant holding over after the lease expires (arguably suggesting tort claims for unlawful possession).” Id. at 1073. After exploring the dual nature of unlawful detainer actions, the Drybread court concluded that “this unlawful detainer action did not sound in contract.” Id. at 1077, emphasis in original. The court identified three reasons for this conclusion: the complaint was based on expiration of the lease itself and not the breach of any contract term; the thirty-day notice did not allege breach of a lease and did not include an election of forfeiture; and the complaint alleged that the tenant’s holdover was malicious. Id. at 1076. None of these circumstances is similar in this case.

The Complaint Alleges A Breach of the Contract

The Complaint alleges the following:

¶10 The Lease naturally expired by its own terms on December 31, 2021, and Defendant was required to vacate and surrender possession of the Premises to Plaintiff without further notice. At Section 26 of the Lease, it provides “No Right To Holdover.” Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by the Lessor to any

holding over by Lessee.” Defendant’s Base Rent is $3,671.36. Section 26 permits Plaintiff to recover $5,507.04 per month from at least October 3,2022, or from the day the Three Day Notice to Pay or Quit was given, to the date of Defendant's vacation of the Premises.

(Bolding added.)

¶11 Defendant failed and refused to vacate the Premises on December 31, 2021, and continues to remain in possession, operating his business and occupying the Premises without Plaintiffs consent.

¶12 Defendant also has unpaid rent owed to Plaintiff for the Premises starting in August 2022.

¶13 In breach of the Lease, Defendant has failed to pay Plaintiff rent under the Lease in the aggregate sum of at least $24,008.16 to date, not accounting for the “No Right to Holdover” provision as stated in Section 26 of the Lease. Unpaid Rent is comprised as Base Rent at a monthly rate of $3,671.36 per month from August 1, 2022 through February 28, 2023, and Additional Rent at the monthly rate of $330.00 per month, which includes Common Area Operating Expenses, which were due for the same periods monthly. Defendant is not protected by the COVID-19 eviction moratorium laws because this is a commercial tenancy, which expired in Los Angeles County on January 31,2022.

(Bolding added.)

In Drybread the pleading alleged “unlawful holdover possession after expiration of the lease” and “stated plaintiffs ‘demand [for] possession from each defendant because of expiration of a fixed-term lease.’” Id. at 1076.

Here, the Complaint alleges the lease expired on its own terms, but it does not allege an unlawful holdover. Rather, the Complaint alleges the specific terms that apply when a tenant remains after expiration of a lease term. And, importantly, the pleading here alleges that Lin breached the lease by failing to pay rent. Unlike in Drybread, the pleading does not simply demand possession based upon expiration of the lease. Instead, it prays for “forfeiture of Defendant’s interest in any tenancy under the Lease” and immediate return of

possession, as well as damages of at least $4,001.36 per month. These are remedies that sound more in contract than in tort.

Lin argues that this case is exactly the same as Drybread. Memorandum of Points and Authorities at 6:11-12. Lin’s argument is not well taken. There are meaningful distinctions between the two cases.

The Three-Day Notice Includes an Election to Declare Lease Forfeited

The Drybread court explained that the UD statute encompasses both breach of lease (arguably a contract claim) and holdover (arguably a noncontract claim). The court notes that this “duality” is reflected in Code Civ. Proc. §1174. That section provides that “a prevailing landlord in an unlawful detainer action alleging breach of lease is entitled to possession and a judgment declaring the lease forfeited, as long as the notice to quit stated the landlord’s election to declare the lease forfeited,” but if the notice does not state that election, no lease is forfeited. Id. at 1074. Because the notice to quit in Drybread asserted an unlawful holdover after expiration of the lease, the appellate court determined the claim did not sound in contract.

Here, the three-day notice details the claim for unpaid rent and states that unless the sums are paid in full or the tenant vacates, lessor elects to declare a forfeiture of the lease. No Allegation of Malice

The parties in Drybread were in the midst of a professional dispute regarding a chiropractic practice. The complaint alleged that the defendant “threatened to wreak financial hardship” on plaintiffs after they refused to sign a retroactive extension of the lease. The defendant’s answer alleged that the true motive for the eviction was that the defendant had fired plaintiff just days earlier. These circumstances resulted in an action that sounded in tort:

“The complaint stated plaintiffs ‘demand [for] possession from each defendant because of expiration of a fixed-term lease.’ The complaint also alleged defendant’s continued possession was ‘malicious’ (which would entitle plaintiffs to statutory damages

under section 1174, subdivision (b).) Malice pertains to tort claims, not contract claims.” Drybread, supra, 151 Cal.App.4th at 1076.

There are no such allegations here.

In sum, this action is distinguishable from Drybread. This action involves not merely a demand for possession based on expiration of a lease. It involves an alleged breach of the lease, and a demand for contract remedies. The complaint here thus sounds in contract.

IV. CONCLUSION AND ORDER

The motion for attorney fees is denied. Plaintiff is ordered to give notice.

Dated: _______________________________

MARGARET L. OLDENDORF

JUDGE OF THE SUPERIOR COURT