Judge: Michael Shultz, Case: 23CMCV00743, Date: 2023-10-31 Tentative Ruling
Case Number: 23CMCV00743 Hearing Date: October 31, 2023 Dept: A
[TENTATIVE] ORDER
The
complaint for unlawful detainer for Defendant’s breach of a 2019 commercial
lease agreement obligating Defendant to redevelop the property into a
multi-use, multi-tenant sports and entertainment complex. Defendant did not
commence construction despite numerous continuances. Plaintiff served a Notice
to Quit. Plaintiff sues for possession, an order terminating the lease, and for
damages of $821.91 per day from the expiration of the Notice to Quit.
II. ARGUMENTS
Plaintiff
moves for summary judgment on grounds there is no dispute that it is entitled to
judgment for Defendant’s failure to vacate and relinquish possession after
service and expiration of the Notice to Quit. Alternatively, Plaintiff asks for
adjudication in its favor on grounds there is no merit to any of the five
affirmative defenses asserted by Defendant in its answer.
In
opposition filed October 27, 2023, Defendant contends that Plaintiff accepted a
portion of April and May rent, which created a month-to-month tenancy. The date
of termination is a disputed fact. Plaintiff did not give proper notice to
terminate the month-to-month tenancy.
In
reply, filed October 30, 2023, Plaintiff accepted rent up to May 15, 2023,
which was the day Defendant was required to vacate. However, Defendant remains
in possession. Plaintiff had no intent to waive the Notice to Quit by accepting
the rent.
III. LEGAL STANDARDS
A
motion for summary judgment in an unlawful detainer action may be made at any
time after the answer is filed upon giving five days’ notice. The motion shall
be granted or denied on the same basis as a motion under Code
of Civil Procedure, section 437c. (Code Civ. Proc., §
1170.7). Summary judgment is proper “if all the papers submitted 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.” (Code Civ. Proc., § 437c, subd.
(c). The motion shall be granted only if it completely disposes of a cause
of action, an affirmative defense, a claim for damages, or an issue of duty.” Code Civ. Proc., § 437c, subd.
(c).
Where
a defendant seeks summary judgment or adjudication, defendant must show that
either “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 that
cause of action.” Id.
Once the defendant meets this burden, the burden shifts to the plaintiff to
show that a “triable issue of one or more material facts exists as to that
cause of action or defense thereto.” Id.
Until
the moving defendant has discharged its burden of proof, the opposing plaintiff
has no burden to come forward with any evidence. Once the moving party has
discharged its burden as to a particular claim, however, the plaintiff may
defeat the motion by producing evidence showing that a triable issue of one or
more material facts exists as to that cause of action. Code Civ. Proc., § 437c, (p)(2).
Where
the moving party asserts that Defendant cannot prove any of its affirmative
defenses, the moving party must establish
every element of the affirmative defense to prevail. (Consumer Cause, Inc. v.
SmileCare (2001) 91 Cal.App.4th 454, 468.)
IV. DISCUSSION
Plaintiff
alternatively requests adjudication of the following affirmative defenses: (2) estoppel
(3) waiver and (5) failure to mitigate damages. (Answer filed July 31, 2023.) A
tenant is guilty of unlawful detainer if the tenant continues in possession
after neglecting or failing to perform conditions or covenants of the lease
other than for payment of rent after the expiration of three days’ notice. (Cal
Code Civ Proc § 1161 (3); (Nicolaysen
v. Pacific Home (1944) 65 Cal.App.2d 769, 773 ["The tenancy is not
terminated upon the giving of the notice but upon the expiration of the period
therein specified."].)
The
undisputed material facts establish the elements for unlawful detainer. The
parties entered into a First Amended and Restated Lease Agreement wherein Plaintiff
granted Defendant an extension to commence the redevelopment of the Victoria
Golf Course by March 14, 2023. (COE[1],
page 0201.) Defendant admitted that it did not commence work by that date (COE
page 0319.) The County served Defendant with a Notice of Default and Breach.
(COE page 0209.)
On
April 24, 2023, Plaintiff served Defendant with a Notice to Quit, stating that
the lease was terminated, and Defendant must vacate by May 15, 2023. (COE page
0233.) Plaintiff gave Defendant more than three days to vacate. Defendant does
not allege that the Notice to Quit was defectively served. (COE page 0341,
Response to 72.1.)
Defendant
deposited the full amount of the May rent. Plaintiff returned the portion after
May 15, 2023, because that was the date Defendant was to vacate. Plaintiff also
refunded a rental payment for June 1, 2023. (COE page 0235, 0249.) The Lease
Agreement provides that acceptance of rent did not constitute a waiver of a breach
or relinquishment of any right. (COE page 0132.) Defendant attempted to pay
rent for July through October, each of which Plaintiff returned. (COE0275,
COE0280, COE0287, COE0293, COE0301.)
Defendant
argues that it did not “fail” to perform conditions of the lease; rather it did
not commence construction as provided for by the lease because Plaintiff failed
to adhere to its obligation to consider Defendant’s request for an additional
six-month extension, which constitutes Plaintiff’s breach of contract, and which
forms the basis for a separate action against Plaintiff bearing Case No.
23CMCV01624 Plenitude Holdings, LLC v. County of Los Angeles.
The
Defendant’s breach of contract claim against Plaintiff does not create a
triable issue as to whether Defendant is entitled to possession of the premises
based on the notice to quit which unequivocally terminated the lease and
required Defendant’s relinquishment of the premises by May 15, 2022. Defendant
did not comply.
Contrary
to Plenitude’s argument, the April 24, 2023, date of the Notice to Quit does
not lend itself to a reasonable interpretation that the lease terminated on
that date, where the Notice to Quit states that Defendant was required to
vacate on May 15, 2023. (COE0233). The statute requires Plaintiff to give three
days’ notice where there is a failure to perform for other than payment of rent;
Plaintiff gave more than three days’ notice. Reasonably construed, the Notice
to Quit gave notice of termination of the lease which would be effective on May
15, 2023, when Defendant was required to vacate.
Defendant
argues that the County terminated the lease on April 24, 2023, but accepted
rent through April 30, 2023, and part of May 2023 which created a
month-to-month tenancy. That argument depends on ignoring that Plaintiff
required Defendant to vacate by May 15, 2023. Plaintiff did not send a notice
to pay rent or quit.
The
issue then becomes whether Plaintiff could declare its intent not to waive the
notice to quit by accepting rent through May 15, when Defendant was unequivocally
required to vacate. If the tenant “remains in possession after the expiration
of the hiring, and the lessor accepts rent from him, the parties are presumed
to have renewed the hiring on the same terms and for the same time, not
exceeding one month when the rent is payable monthly, nor in any case one
year." (Civ.
Code, § 1945.) There is no dispute that Plaintiff
did not accept rent after May 15. Plaintiff returned all rent after that
period. (COE0233, COE0235, COE0249.) Defendant has not established that a
month-to-month tenancy was created where Plaintiff did not accept rent after
May 15, the termination of the hiring.
Section
15.6 of the Lease agreement provides that “… nor any subsequent acceptance of
rent then or thereafter accrued shall be construed as a waiver of or
acquiescence in such default or as a relinquishment of any right.” (Plaintiff’s
Ex. 3, .pdf page 137, Section 15.6.) Waiver is a matter of intent; intent to
waive may be inferred from the acceptance of rent, however, "[t]he express
agreement on the part of the lessees, … to the effect that the acceptance of rent by
the lessor after knowledge of the breach of a covenant should not be deemed a
waiver of such breach, is tantamount to a relinquishment of the right of the
lessees and their assignees, to assert a waiver of estoppel, unless there has
been an express waiver on the part of the lessor of the right reserved, …” (Karbelnig
v. Brothwell (1966) 244 Cal.App.2d 333, 342–343.)
Given
the express terms of the parties’ agreement, Plaintiff’s acceptance of rent up
to the time Defendant was required to vacate, was not a relinquishment of the
right to terminate the lease. Contrary to Defendant’s argument, the non-waiver
provision is relevant to Defendant’s argument that Plaintiff’s acceptance of
rent through April and up to May 15 constituted a “periodic tenancy.” Plaintiff
did not accept rent after May 15, so a periodic tenancy could not have been
created pursuant to the terms of the parties’ lease agreement.
Plaintiff’s
motion does not proffer facts to establish they are entitled to holdover
damages as a consequence of Defendant’s failure to quit the premises.
Therefore, summary judgment cannot be granted as all elements of the claim,
including damages, have not been established based on the undisputed facts.
However, Plaintiff alternatively moves for adjudication of the second and third
affirmative defenses of waiver and estoppel, respectively on the same
undisputed material facts: Plaintiff did not waive its right to terminate the
lease because its acceptance of rent up to the May 15 date of termination did
not create a month-to-month tenancy.
Plaintiff
has also established that the fifth affirmative defense for failure to mitigate
is not an affirmative defense. If a lessee breaches the lease, the lease
terminates, and upon such termination, the lessor may recover from the lessee
the “worth at the time of award of the unpaid rent which had been earned at the
time of termination.” (Civ.
Code, § 1951.2 (a)(1). The undisputed facts establish that there was no
“unpaid rent” to trigger the lessor’s obligation to mitigate. Under these
circumstances, where there is no award of “future rent” section 1951.2 “does
not come into play at all.” (California
Safety Center, Inc. v. Jax Car Sales (1985) 164 Cal.App.3d 992, 1000.)
V. CONCLUSION
Based
on the foregoing, Defendant has not met its burden of providing evidence that
the date of termination is a disputed fact, or that Plaintiff’s acceptance of
rent up through the date of lease termination created a month-to-month tenancy.
Accordingly, the Court GRANTS Plaintiff’s alternative motion for adjudication
of the second, third, and fifth affirmative defenses. While the motion for
summary judgment establishes Plaintiff’s right to possession, Plaintiff has not
proffered any evidence in support of its holdover damages.