Judge Randolph M. Hammock, Case Number: 24STCV14299, Date: 2025-02-04 Tentative Ruling

Plaintiff 300 S. Clark Drive Apartments, LLC, as owner of the rental unit currently leased by Plaintiff Lucas S. Morales, brings this action to reform Plaintiff’s lease to reflect a higher monthly rental rate.

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843. In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294. Thus, summary judgment is granted when, after the Court’s consideration of the evidence set forth in the papers and all reasonable inferences accordingly, no triable issues of fact exist and the moving party is entitled to judgment as a matter of law. Code Civ. Proc. § 437c(c); Villa v. McFarren (1995) 35 Cal.App.4th 733, 741.

Where a plaintiff moves for summary judgment, the burden is to produce admissible evidence on each element of a “cause of action” entitling him or her to judgment. (CCP § 437c(p)(1); see Hunter v. Pacific Mechanical Corp. (1995) 37 CA4th 1282, 1287, 44 CR2d 335, 337 (citing text) (disapproved on other grounds by Aguilar v. Atlantic Richfield Co. (2001) 25 C4th 826, 107 CR2d 841)). This means that plaintiffs who bear the burden of proof at trial by a preponderance of evidence must produce evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not. At that point, the burden shifts to defendant “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)).

In analyzing motions for summary judgment or adjudication, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

Plaintiff moves for Summary Judgment to reform the Lease Agreement entered between the parties. Specifically, Plaintiff seeks “an order modifying the terms of the Transfer Agreement and Lease to reflect the true monthly rental rate of $2,650.00 per month.” (Compl., Prayer for Relief, ¶ 1.)

As alleged in the Complaint, Plaintiff 300 S. Clark Drive Apartments, LLC, is “the owner of the real property located at 300 S. Clark Dr., Los Angeles, California 90048.” (Compl. ¶ 1.) Statewide Enterprises, Inc. “at all relevant times was acting as agent for Plaintiff in managing the Building.” (Id. ¶ 6.)

In February 2024, Defendant Lucas S. Morales resided in unit 209 of the Building and paid $2,250.00 in monthly rent. (Id. ¶ 7.) Defendant expressed interest to Plaintiff in transferring to a loft unit in the Building if one became available. (Id.) “In February, 2024, Statewide informed Defendant that a loft unit in the Building, identified as ‘Penthouse 7,’ would become available for rent on March 20, 2024, and that it was being offered at the rental rate of $2,650.00 per month. Defendant replied that the price was a good price, expressed interest in renting the unit at that rate, and submitted a rental application for Penthouse 7.” (Id. ¶ 8.)

“On February 26, 2024 Statewide informed Defendant in writing that Defendant was officially approved to rent Penthouse 7 with a 12-month lease at $2,650.00 per month…” (Id. ¶ 9.) An employee for Statewide then prepared a Transfer Agreement and new Lease Agreement “by entering data into the contract preparation software utilized by Statewide.” (Id. ¶ 11.) “However, in entering the data, the employee incorrectly copied the Defendant’s old rental rate for Unit 209 rather than the given new rental rate for Penthouse 7.

Accordingly, the monthly rental rate on the transfer agreement and lease were entered as $2,250.00 rather than $2,650.00, and these erroneous contracts were transmitted to Defendant and digitally executed without Plaintiff or Statewide realizing the error.” (Id.)

“Immediately upon realizing the error Statewide notified Defendant of the mistake and requested that Defendant executed amended contracts reflecting the true intent of the parties. However, Defendant has refused to execute a new lease agreement or modification to correct the error, and instead has insisted on attempting to enforce the erroneous provisions of the written agreement.” (Id. ¶ 12.)
Therefore, Plaintiff brings this action for reformation of the Lease Agreement to reflect a monthly rental rate of $2,650.

Civil Code section 3399 provides: “When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved, so as to express that intention, so far as it can be done without prejudice to rights acquired by third persons, in good faith and for value.” (Civ. Code § 3399.)

“Reformation is an equitable remedy the essential purpose of which is to ensure the contract, as reformed, reflects the parties’ mutual intention.” (Komorsky v. Farmers Ins. Exch. (2019) 33 Cal. App. 5th 960, 974.) “In the classic reformation case a contract is formed, but a provision of the writing that is executed, through mistake such as a scrivener's error, contradicts the terms to which the parties agreed. In such a case, upon evidence of the actual agreement a court is empowered to correct the error by striking the mistaken language in the instrument and inserting appropriate language.” (Pac. Gas & Elec. Co. v. Superior Ct. (1993) 15 Cal. App. 4th 576, 593, abrogated on other grounds by Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal. 4th 362, 885 P.2d 994.) It is well-established that “the mistake of a draftsman is a good ground for the reformation of an instrument which does not truly express the intention of the parties.” (Mills v. Schulba (1950) 95 Cal. App. 2d 559, 561.)

The facts supporting reformation must be shown by “clear and convincing” evidence. (See Shupe v. Nelson (1967) 254 Cal.App.2d 693, 700 [“In order to reform a written instrument, the party seeking relief must prove the true intent by clear and convincing evidence.”].) Thus, this “higher standard of proof must be taken into account in ruling on a motion for summary judgment or summary adjudication.” (Johnson & Johnson v. Superior Ct. (2011) 192 Cal. App. 4th 757, 762.)

Plaintiff presents the following evidence: While occupying Unit 209 at the building for a monthly rent of $2,250.00, Defendant expressed interest in transferring to a loft unit. (SSUMF 3, 4.) In February 2024, Plaintiff’s agent informed Defendant by text message that a loft unit would be coming available soon and that it would “be listed at 2650.” (Zura Decl. 2, Exh. 1; SSUMF 7.) Plaintiff responded by indicating interest in the unit and stating: “That’s a good price.” (Id.)

On February 26, 2024, Plaintiff sent Defendant an email indicating he was approved to transfer to the new unit “with a 12-month lease at 2650 monthly rent.” (Zura Decl. ¶ 3, Exh. 2; SSUMF 9.) The email also instructed Defendant that if he “wish[ed] to move forward” he should pay the security deposit and transfer fee, and then a Transfer Agreement and Lease would be executed. (Id.) Thereafter, Defendant paid the transfer fee and security deposit. (SSUMF 10, 11.)

However, “[d]ue to a clerical error, the transfer agreement and lease delivered by Plaintiff to Defendant contained Defendant’s previous monthly rent amount, $2,250.00, rather than the amount established by the parties, $2,650.00.” (Zura Decl. ¶ 4; SSUMF 12, 13.) Each party then executed the lease with this term.

On these facts, Plaintiff has met its burden to establish by clear and convincing evidence that the monthly rental rate listed in the Transfer and Lease Agreements does not reflect the mutual intent of the parties.

This switches the burden to Defendant to establish a triable issue of material fact. Defendant attests in his declaration that his “understanding of the lease terms was based on the written lease agreement that [he] signed” and that he “executed the lease with the understanding that [$2,250] was the agreed-upon rental amount.” (Morales Decl. ¶¶ 2, 7.) He says that “[a]ny claims suggesting otherwise are unsubstantiated and contrary to [his] understanding of the lease terms.” (Id. ¶ 9.) He further states that any prior communications where a higher rate was discussed were “informal and never resulted in any finalized agreement.” (Id. ¶ 4.)

Here, Defendant’s only evidence in support of his contention that the lower rental rate is the correct one is his own self-serving declaration. (See King v. United Parcel Services, Inc. (2007) 152 Cal.App.4th 426, 433 [generally, uncorroborated and self-serving declarations are insufficient to create a genuine issue of material fact].) It is essentially his contention in this declaration that the lease “says what it says,” and that he signed it believing it to be correct.

However, Defendant does not dispute—nor provide any additional evidence to refute—that in all communications leading up to execution of the lease, Plaintiff (or its agent) represented that the rental rate for the new unit would be $2,650. With that knowledge, Plaintiff paid the security deposit and transfer fee, effectively assenting to that rate.

It was then an expected but welcome surprise when Plaintiff presented him with lease documents reflecting a lower rental rate of $2,250 (the same rate he was paying for his current unit). Defendant kept quiet and signed the papers.

But it is unlikely that Plaintiff decided last minute to rent the unit at a steep discount. Rather, it is beyond clear from the evidence presented that Plaintiff made a simple error in preparing the lease documents, and that Defendant “at the time knew or suspected” this error. (Civ. Code § 3399.) Thus, reformation of the lease to reflect the mutual intent of the parties is an appropriate remedy.

Defendant’s attempts to avoid this result are unavailing. Defendant argues reformation requires either mutual mistake or fraud. However, as already noted, reformation under 3399 is also appropriate for unilateral mistake where a party “at the time knew or suspected” the other party’s mistake. (Civ. Code ¶ 3399.) It appears clear to this court that this was the case here.

Defendant also argues the parol evidence rule prohibits Defendant from introducing extrinsic evidence to prove a different rental rate was contemplated. Not so. Courts “may consider parol evidence” to determine whether there has been a mistake of the parties, and “such evidence may be introduced in the face of an integration clause.” (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal. App. 4th 1230, 1243. Indeed, in any action for reformation, “[e]xtrinsic evidence is necessary because the court must divine the true intentions of the contracting parties and determine whether the written agreement accurately represents those intentions.” (Id.)

Judge of the Superior Court

FN 1 - It must be noted that in the Prayer for Relief in the Complaint, Plaintiff expressly requests “an order modifying the terms of the Transfer Agreement and Lease to reflect the true monthly rental rate of $2,650.00 per month.” There is no mention or request anywhere in the Complaint to modify this agreement to an earlier date, or to apply the modification retroactively. Indeed, the same is true in the pending motion for summary judgment. Hence, this Court has designated the next date upon the rent will be due in this case.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.