Judge: Mark H. Epstein, Case: 22SMCV00820, Date: 2024-01-05 Tentative Ruling

Case Number: 22SMCV00820    Hearing Date: March 13, 2024    Dept: I

The MJOP is DENIED.  This is a landlord tenant dispute.  The former tenant took the HVAC unit when the tenant left and the landlord has filed a cross-complaint for conversion.  The tenant says that the lease expressly states that the HVAC is a trade fixture belonging to the tenant and as such the tenant could not have converted the property.  In opposition, the landlord states that the clause is ambiguous.

The operative language is in section 7.3 of the Second Amendment to the Lease.  It states that “all installations, whether electrical, structural, or related to HVAC, which relate to cultivation, manufacturing, distribution, and retail activities to be performed by Lessee are hereby deemed to be Lessee’s Trade Fixtures and Lessee’s sole property, and Lessor shall not have the right to elect ownership thereof provided that such Trade Fixtures (i) can be and are removed by Lessee without causing material damage to the Premises (ii) with respect to any structural or HVAC Trade Fixtures, the same were originally installed in conformity and compliance with the terms of the Lease, (iii) with respect to any proposed removal of any structural or HVAC Trade Fixtures, Lessee shall comply with the conditions of Section 7.3(b) with respect to any such removal, it being agreed that the terms thereof shall apply to any removal as well as installations.”

The court tends to agree with the moving party that this clause cannot really be read as excluding the HVAC unit itself.  But the court is not quite prepared to say that the contract is so clear that parol evidence could not be adduced to create an ambiguity.  Further, the clause kicks in only if three conditions are met.  That is not the way the court would have written the contract, but it is how the contract is written.  The court cannot ascertain on a pleading motion whether those conditions were or were not met.  Nor does the court believe that the failure to allege detail in that regard is fatal to the cross complaint.  This issue is better resolved at summary adjudication or trial.

Cross-defendant has 30 days to answer.