Cohen v. Ratinoff

• Decision Date: 23 September 1983
• Citation: Cohen v. Ratinoff, 147 Cal.App.3d 321, 195 Cal.Rptr. 84 (Cal. App. 1983)
• Parties: Albert COHEN, etc., Plaintiff and Appellant, v. Arthur S. RATINOFF, Defendant and Respondent. Civ. 68663.
• Court: California Court of Appeals

Page 84

195 Cal.Rptr. 84

147 Cal.App.3d 321

Albert COHEN, etc., Plaintiff and Appellant, v. Arthur S. RATINOFF, Defendant and Respondent.

Civ. 68663.

Court of Appeal, Second District, Division 4, California.

Sept. 23, 1983.

[147 Cal.App.3d 324] Norman G. Axe, Santa Monica, for plaintiff and appellant.

Murray D. Fischer, Howard Moss, Beverly Hills, and David C. Alaynick, Encino, for defendant and respondent.

McCLOSKY, Associate Justice.

Plaintiff Albert Cohen, doing business as Brentwood Carpet & Drapery, appeals from the judgment on the pleadings entered on July 8, 1982, wherein it was ordered that plaintiff take nothing on his complaint and that defendant Arthur S. Ratinoff recover his costs.

CONTENTIONS ON APPEAL

Plaintiff contends (1) that a motion by defendant for judgment on the pleadings should be denied where the complaint does not entirely omit an essential allegation to the statement of a cause of action and it does not appear from the face of the complaint or from judicially noticed matter that the action is barred by an affirmative defense, (2) that an absolute prohibition in a lease against assignment by the lessee constitutes an unreasonable restraint on alienation in violation of Civil Code section 711, (3) that the trial court erred in not permitting parol evidence to be introduced to aid in the interpretation of the lease, and (4) that there were no substantial reasons for defendant Ratinoff's objections to plaintiff's assignment of the lease to another carpet business.

FACTS

Plaintiff, as lessee, and defendant, as lessor, entered into a four-year written lease, commencing on September 1, 1977, and ending August 31, 1981, for the rental of the building located at 11159 Santa Monica Boulevard in Los Angeles, California. Plaintiff was to use the premises solely for the selling of carpets, drapery and furnishings.

[147 Cal.App.3d 325] Paragraph 13 of the lease, in pertinent part provided: "13. ASSIGNMENT, SUBLETTING, ETC--Lessee shall not assign this lease or any interest therein, and shall not sublet the demised premises or any portion thereof, or any right or privilege appurtenant thereto, or suffer any other person (the employees of Lessee excepted) to occupy or use the demised premises or any portion thereof, without the prior written consent of Lessor, and the consent to one assignment, subletting, occupany, or use by any other person, shall not be deemed to be a consent to any subsequent assignment, subletting, occupancy or use by any other person. Any such assignment, subletting, occupancy or use without Lessor's prior written consent shall be void and, at Lessor's option, shall terminate this lease. Neither this lease nor any interest therein shall be assignable by operation of law, as to Lessee's interest, without Lessor's prior written consent, which consent shall not be unreasonably withheld. If Lessee shall have obtained Lessor's prior written consent to either assignment, or subleasing, then any rental paid by such assignee, or sublessee, in excess of the rental provided by this lease, shall be for the benefit of and shall be immediately paid to Lessor. In any event, Lessor's consent to any assignment, or subletting, shall not relieve Lessor from any obligation under this lease."

On July 30, 1980, plaintiff entered into a sales agreement with Floormart Inc. of Glendale, California (Floormart), a carpet company. Floormart agreed to purchase plaintiff's assets for $35,000 on the condition that plaintiff, as seller, fully execute a written assignment of the lease and obtain written acceptance of the assignment from defendant.

Plaintiff requested defendant to consent to the assignment of the lease to Floormart on several occasions. On September 12, 1980, defendant's attorney, Murray D. Tischer, informed plaintiff that " 'Your lease does not provide for assignment and thus my client [Ratinoff] may be as arbitrary as he chooses.' " As a result of defendant's refusal to consent to the assignment, Floormart terminated its purchase agreement with plaintiff.

On October 23, 1981, plaintiff filed his first amended complaint for damages. This pleading contained five causes of action for breach of contract, negligence, constructive eviction, bad faith breach of contract and declaratory judgment, respectively.

By May 13, 1981, the date set for trial, the second and third causes of action had been settled and dismissed; the fifth cause of action had been rendered moot. All that remained for trial were the first and fourth causes of action.

In his first cause of action for breach of contract, plaintiff alleged that defendant unreasonably withheld his consent to plaintiff's assignment of the lease to Floormart. ¹ He also alleged that as a result of Floormart's termination of the sales agreement, he "sustained damages in the sum of $170.00 for the escrow charges and other costs, and loss of profit of $35,000.00."

In his fourth cause of action for bad faith breach of contract, plaintiff alleged that defendant acted in bad faith by purposely preventing him from receiving the benefits to which he was entitled under the lease. Plaintiff further alleged that the conduct of defendant was "malicious and done with the express intent and purpose of vexing, annoying, injuring and oppressing plaintiff." He then prayed for punitive damages in the amount of $100,000.

Just prior to the commencement of trial, defendant filed a motion for judgment on the pleadings or in the alternative for exclusion of evidence wherein he maintained, among other things, that plaintiff's first and fourth causes of action were fatally defective. This motion was granted as to the first and fourth causes of action. Judgment that plaintiff take nothing on his complaint and that defendant recover his costs was subsequently entered on July 8, 1982. This appeal followed.

DISCUSSION

In Baillargeon v. Department of Water & Power (1977) 69 Cal.App.3d 670, 675-676, 138 Cal.Rptr. 338, we noted that the standard of review of a judgment on the pleadings is the same standard that is used to review the propriety of a judgment following the sustaining of a demurrer. " 'Like the demurrer, the motion for judgment on the pleadings is confined to the face of the pleading under attack. [Citations.] This means two things: [p] First, if the pleading though uncertain or otherwise defective in form, sufficiently states a cause of action or defense, the motion cannot be granted on the basis of a showing of extrinsic matters by inference from attached exhibits, by affidavits, or otherwise. [Citations.] [p] Second, a sufficient complaint cannot be thus attacked by reference to matters set forth in the answer. [Citations.] [p] But the unqualified statement of the foregoing rule may be misleading ... [as] various outside matters may be looked to under the doctrine of judicial notice....' (4 Witkin, Cal. Procedure (2d ed. 1971) Proceedings Without Trial, § 162, pp. 2817-2818.) (Italics in original.)"

A motion for judgment on the pleadings admits all material and issuable facts contained in the challenged pleading. Therefore, the facts properly pleaded are accepted as true (Baillargeon v. Department of Water & Power, supra, 69 Cal.App.3d at p. 676, 138 Cal.Rptr. 338) and must be liberally construed in favor of the party against whom the motion is made (Pacific Architects Collaborative v. State of California (1979) 100 Cal.App.3d 110, 118, 166 Cal.Rptr. 184).

The ultimate question on appeal " '... is whether, disregarding imperfections of form which could be cured by amendment, the facts pleaded and judicially noticed entitle [plaintiff] to any relief, ... [Citations.]' " (Pacific Architects Collaborative v. State of California, supra, 100 Cal.App.3d at p. 118, 166 Cal.Rptr. 184, quoting Kachig v. Boothe (1971) 22 Cal.App.3d 626, 632, 99 Cal.Rptr. 393.)

In the first cause of action of his first amended complaint, plaintiff alleged that paragraph 13 of the lease provided in part "that consent to assign or sublet 'shall not be unreasonably withheld.' " Plaintiff further alleged that defendant, through his attorney stated that he could be "as arbitrary as he chooses" when deciding whether to consent to an assignment since the lease did not provide for assignment.

In his fourth cause of action, plaintiff alleged that at the time the lease was entered into the parties "agreed to do nothing which would injure the right of plaintiff to receive the benefits of the lease, and defendants and each of them, further agreed at said time, to do everything that the lease presupposed that the defendants would do to accomplish its purpose. [p] Defendants, and each of them, acted in bad faith and for the purpose of preventing plaintiff from receiving the benefits that plaintiff was entitled to under the said lease, ..."

Plaintiff contends that "[i]n ruling on defendant's motion for judgment on the pleadings, the trial court should have accepted the above matters as true. Thus, defendant's motion was improperly granted as plaintiff had stated a valid cause of action against defendant-lessor based on the latter's refusal to consent to the assignment."

Ordinarily a motion for judgment on the pleadings is confined to the face of the challenged pleading and cannot be granted on the basis of extrinsic matters inferred from attached exhibits. When, however, "a written instrument is attached to a pleading as an exhibit and incorporated into it by proper reference, the court may, upon demurrer [or motion for judgment on the pleadings], examine the exhibit and treat the pleader's allegations of its legal effect as surplusage." (Washer v. Bank of America (1943) 21 Cal.2d 822, 829-830, 136 P.2d 297, disapproved on other grounds in McLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 551, 343 P.2d 36.)

Plaintiff incorporated the lease into his first amended complaint by reference. With regard to assignments by "operation of law" paragraph 13 provides: "Neither this...