Judge: Richard Y. Lee, Case: 30-2021-01188333, Date: 2022-08-11 Tentative Ruling
Plaintiff and Cross-Defendant Center of the Universe, LLC (“Plaintiff” or “CENTER”) seeks summary adjudication on its Complaint as well as on Defendants and Cross-Defendants Rock of the 80s, LLC dba Decades Bar and Grill (“DECADES”) and Randy Carrillo (“CARILLO”) (collectively “Defendants” or “Cross-Complainants”) First Amended Cross-Complainant (“FACC”) as to the following issues:
(1) Issue 1: There is no triable issue of material fact that Defendant Rock of the 80s, LLC dba Decades Bar and Grill, LLC is liable to Plaintiff for breach of lease under Plaintiff’s 1st cause of action;
(2) Issue 2: There is no triable issue of material fact that Defendant Randy Carrillo is liable to Plaintiff for enforcement of guaranty under Plaintiff’s 2nd cause of action; and
(3) Issue 3: There is no triable issue of material fact that the Cross-Complaint is time barred.
Plaintiff’s Evidentiary Objection in Reply.
The Court OVERRULES Plaintiff’s evidentiary objection, No. 1, to paragraph 5, lines 19-22, Exhibit A.
Issue 1: 1st Cause of Action for Breach of Lease (Complaint).
“The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) damage to plaintiff therefrom.’” (Wall St. Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)
Plaintiff seeks summary adjudication on its cause of action for breach of the lease on the grounds there is no triable issue of fact that DECADES breached the lease and is liable for its damages. Plaintiff produces evidence that it entered into written lease (“Lease”) with DECADES; that Plaintiff performed all of its obligations under the Lease by leasing the premises to DECADES; that DECADES breached the Lease by failing to pay Plaintiff $302,526.04 in rent and common area maintenance charges; and that DECADES acknowledged it owes this amount and does not dispute same. (See SUMF Nos. 1-3; see also Sadeghi Decl., ¶¶ 2-3, Exhs. A and C; Usaha Decl., Ex. H [Carrillo Depo., pp. 77:25-78:7, 99:17-100].)
Plaintiff also produces evidence that DECADES’ only defense to the breach of lease claim is that the premises and equipment were not in working order; that the defects complained of by DECADES involved electrical work, restrooms which were not ADA compliant, the air conditioning, and the equipment; that the defects complained of by DECADES were its responsibility under the Lease, not Plaintiff’s; and that DECADES accepted the equipment “as is” under the Lease. (See SUMF Nos. 4-6; see also Sadeghi Decl., ¶ 5, Exh. A, Lease, Sections 11 & 12and Exhibit A thereto; Usaha Decl., Exh. F and H [Carrillo Depo., pp. 55:10-25, 66:22- 68:2, 72:4- 76:13, 84:20-85:19].) As such, Plaintiff contends that DECADES’ only defense fails as a matter of law.
Defendant DECADES disputes that Plaintiff performed all of its obligations under the Lease and disputes that DECADES breached the Lease. (See Response to SUMF No. 2 and 3.) DECADES contends that Plaintiff breached its obligations under the Lease by failing to repair the roof and by failing to pay for the costs of repairs for the restroom to make it ADA compliant. (See Id.) DECADES presents evidence that Section 11 and FF of the Lease requires Plaintiff to repair the roof and allows the parties to agree on who will bear the cost regarding ADA compliance; that the roof began to leak after they took possession; and that even after Plaintiff was notified of the leak, Plaintiff failed to repair the leak. (See Lease, sections 11 and FF; see also Carrillo Decl.¶ 10, Exh. B (emails dated 3/1/18 and 3/12/18 between Randy Carrillo and Tina Greene-Martin) and Exh. C (emails dated 10/2/18 and 10/4/18 forwarding photographs which appear taken by Mr. Carrillo and sent to Munish B and T. Greene-Martin).)
Defendant DECADES also disputes that its claims of breach by Plaintiff is limited to the electrical work, the restrooms, the air conditioning and equipment; disputes that the defects it complains of was its responsibility under the Lease; and disputes that it took the equipment “as is” (as DECADES contends it was fraudulently induced to take the equipment). (See Response to SUMF Nos. 4-6. See Lease, Sections 11 and FF, Photographs, emails, Carrillo declaration and deposition transcript.)
The Lease does state that the “Landlord” is responsible for the roof and does state that the parties can agree who will bear the cost to have the premises inspected by a Certified Access Specialists (CASp) as follows:
“11. Maintenance and Repair. ... Landlord shall, subject to Tenant’s reimbursement as a common area expense, maintain or cause to maintain in good repair the exterior walls, roof, sidewalks, common areas of the Project. Tenant agrees that it will not, nor will it authorize any person to go onto the roof of the building of which the Premises are a part of without the prior written consent of Landlord...
“FF. California CASp Inspection. The Premises described in this Lease have not undergone inspection by a Certified Access Specialists (CASp)...The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”
Here, however, the evidence produced by Defendant DECADES does not establish that Plaintiff failed to repair the roof. (See Carrillo Decl., Exhs. B and C.) Rather, the emails produced by Defendant DECADES shows that Plaintiff was corresponding with Defendant in order to get the roof repaired. Mr. Carrillo’s declaration also does not state that Plaintiff failed to repair the roof. (See Mr. Carrillo declaration.)
Further, although section FF of the Lease does state the parties can mutually agree as to who will bear the cost to make any repairs needed by a Certified Access Specialist (“CASp”), Defendant DECADES does not produce any evidence that the premises was inspected by a CASp, that the CASp noted that repairs needed to be made, and that Plaintiff agreed to bear the cost for same.
As for its contention that it was fraudulently induced to take the equipment, although Defendants produce evidence that they were told to sign the Lease or Plaintiff would move on to the next prospective tenant, that that they were required to pay “key money” for the equipment before they could take possession of the premises; and that $100,000 of “key money” was demanded but it was agreed that $50,000 would be feasible to garner access to the premises (see Carrillo Decl., ¶ 9), this evidence is not evidence of “fraud” by Plaintiff. To simply tell a prospective tenant that they could sign the lease or the landlord would move on to the next prospective tenant or that a tenant would need to pay for the equipment before taking possession of the premises is not fraudulent.
Accordingly, the Court finds that Defendants failed to establish a triable issue exists as to the breach of lease cause of action, and summary adjudication is GRANTED.
Issue 2: 2nd Cause of Action for Enforcement of Guaranty (Complaint).
Plaintiff contends it is entitled to summary adjudication as to its 2nd cause of action for enforcement of guaranty because it is undisputed that DECADES breached the Lease (see supra) and that it is undisputed that CARILLO personally guaranteed all of DECADES’ obligations under the Lease pursuant to a Guaranty of Lease. (See SUMF Nos. 7-13; see particularly Sadeghi Decl., Exh. B; Usaha Decl., Exh. H [Carrillo Depo., pp. 86:11-20].) As set forth above, although Defendants contend they dispute certain facts, the evidence in support of the denials do not support same. Accordingly, for the same reasons stated above, the Court GRANTS summary adjudication as to the 2nd cause of action for enforcement of guaranty.
Issue 3: Whether the FACC is time barred?
DECADES and CARRILLO’s FACC asserted three causes of action against CENTER for: (1) breach of contract; (2) negligent misrepresentation; and (3) fraud in the inducement. CENTER contends that the only remaining cause of action in the FACC is the 2nd cause of action for negligent misrepresentation which the Court interpreted as a claim for promissory fraud. In Opposition, Cross-Complainants contend they still have a cause of action for breach of contract in their Cross-Complaint because the Court found that it could plead a breach claim for breach of section FF of the Lease and making the restrooms ADA compliant.
On March 3, 2022, the Court sustained CENTER’s demurrer as to the 1st cause of action for breach of contract but granted it 20-days leave to amend the pleading. Cross-Complainants, however, failed to amend their cross-complaint. As such, the operative pleading is still the FACC and since the breach of contract cause of action was not amended after the demurrer was sustained, it is no longer a part of the FACC. Accordingly, the Court finds that CENTER is correct that the only claim remaining is the 2nd cause of action for negligent misrepresentation which the Court found was essentially a claim for promissory fraud. (See 3/2/22 M.O.)
Code of Civil Procedure section 338 states: “Within three years...(d) An action for relief on the ground of fraud or mistake. The cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.”
CENTER seeks summary adjudication on the FACC on the grounds the only remaining cause of action is barred by the three-year statute of limitations applicable to fraud claims. CENTER produces evidence the FACC alleges that CENTER negligently misrepresented that the premises were up to code and in good condition and that the equipment was in good working order but that these representations were untrue because the “roof leaked” and the “walk in freezer was inoperable”; that on February 19, 2018, CARRILLO wrote CENTER about the roof leaking and the walk-in freezer not working; that DECADES’ manager, Munish Bharadwaya, testified that they actually discovered problems with the roof before February 19, 2018; and this action was not filed until March 10, 2021. (See SUMF Nos. 14-17.) Based on this evidence, CENTER contends that Cross-Complainants knew of the alleged misrepresentations at least as of February 2018, more than 3 years before this action was filed, and thus the claim is barred.
Cross-Complainants do not dispute that they were aware of the issues with the roof leaking and walk-in freezer not working on February 19, 2018 or before. (See Response to SUMF Nos. 15 and 16.) They contend in Opposition, however, that the statute of limitations was tolled under the doctrine of estoppel or the “continuing violation doctrine” because CENTER continually represented that it would repair the roof and pay for the repairs of the restroom; that these representations led them to believe that repairs and money would be forthcoming; that emails with CENTER were within the 3-year limit that this lawsuit was filed. CENTER, however, failed to produce evidence of same in its Response to Separate Statement and did not file any additional statement of material facts.
Although not referenced in their Response to Separate Statement, in support of the Opposition, Cross-Complainants did produce emails which pertain to the roof repairs (but not the restrooms). (See Carrillo Decl., Exh. B.) On March 12, 2018, CARRILLO emailed Tina Greene-Martin stating that he had emailed her on March 1st regarding the roof leaks and the roof still had not been repaired and she emailed him back on this date stating that she was advised the roofer had come out and made the repairs and other emails were exchanged regarding the roof. (Id.)
“Under the doctrine of estoppel, ‘a defendant may be equitably estopped from asserting a statutory or contractual limitations period as a defense if the defendant's act or omission caused the plaintiff to refrain from filing a timely suit and the plaintiff's reliance on the defendant's conduct was reasonable.’” (Wind Dancer Prod. Grp. v. Walt Disney Pictures (2017) 10 Cal.App. 5th 56, 79.)
This evidence, however, is not relevant to toll the statute of limitations as to the promissory fraud cause of action because the crux of the claim is that they were fraudulently induced to enter into the contracts by the false representations. The false assertions were made at the time the contract was entered into—not at some point thereafter. Accordingly, the Court finds that the only remaining claim in the Cross-Complainant is time-barred. Accordingly, summary adjudication is GRANTED as to Issue No. 3 and the 2nd cause of action in the FACC.
Moving Party is to give notice.