Ez v. Mateo

• Decision Date: 04 April 2017
• Docket Number: BV 031618
• Citation: 13 Cal.App.5th Supp. 1,220 Cal.Rptr.3d 222
• Parties: SLEEP EZ, Plaintiff and Appellant, v. Martiniano MATEO et al., Defendants and Respondents.
• Court: California Superior Court

13 Cal.App.5th Supp. 1

220 Cal.Rptr.3d 222

SLEEP EZ, Plaintiff and Appellant,

v.Martiniano MATEO et al., Defendants and Respondents.

No. BV 031618

Appellate Division, Superior Court, California. LOS ANGELES COUNTY.

Filed April 4, 2017

Law Office of Allen R. King and Allen R. King, Los Angeles, for Plaintiff and Appellant Sleep EZ.

Neighborhood Legal Services, Alexander Prieto and Jeffrey Uno for Defendants and Respondents Martiniano Mateo and Maximina Mateo.

OPINION

RICCIARDULLI, Acting P.J.

INTRODUCTION

We hold here that, when a tenant mails rent at a landlord’s direction and, through no fault of the tenant, the landlord does not receive it, the tenant is not in default in the payment of rent in an unlawful detainer action.

Plaintiff and appellant Sleep EZ appeals the judgment in favor of defendants and respondents Martiniano Mateo and Maximina Mateo. Plaintiff contends the judgment should be reversed because it proved all the elements of its cause of action, including that defendants defaulted in paying their rent. As discussed below, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff alleged in its complaint that the parties had a written agreement wherein defendants were to pay rent in the amount of $523.98 per month, and defendants failed to pay rent as indicated in an attached three-day notice to pay or quit. On September 8, 2015, the statutory notice period expired with defendants neither paying rent nor vacating their apartment. Plaintiff requested it be awarded possession of the property, along with damages, attorney fees, and costs. The three-day notice indicated defendants were informed on September 5, 2015, that the rent of $523.98, which was due on September 1, 2015, had not been paid, and directed defendants to pay the rent or vacate the property. Defendants answered, generally denying the allegations in the complaint, including that they had defaulted in paying their rent, and the case proceeded to trial.

At the court trial on October 15, 2015, plaintiff’s manager, Victor Ricks, testified defendants rented one of plaintiff’s apartments pursuant to a written rental agreement, a copy of which was admitted as an exhibit. The agreement required defendants to pay $523.98 in rent on the first of every month. Ricks instructed tenants to pay their rent by mail to a post office box address, and to always pay by money order. Ricks did not receive the September rent by September 5, 2015, so he prepared a three-day notice. The notice period expired, Ricks did not receive the rent, and defendants remained in possession of the apartment.

Defendant Maximina Mateo testified Ricks instructed her family to pay the monthly rent by sending money orders to a post office box. On August 31, 2015, she purchased a United States Post Office money order in the amount of $523.98. On this same date, she mailed the money order to Ricks at the designated post office box address, as she had done for the past 30 years she had been living in the apartment with her family. A copy of the customer’s receipt for the $523.98 paid to the post office for the money order was admitted into evidence. Ms. Mateo testified that, on the day of trial, she received the envelope she had sent to Ricks back from the post office with a yellow sticker stating it was undeliverable. The sealed envelope addressed to Ricks was admitted into evidence.

Ms. Mateo’s 17-year-old son, Henry Mateo, testified that, after the three-day notice was posted on their apartment door, he made five to six attempts to speak with Ricks by telephone to determine if the money order had been received. He reached Ricks only once, and Ricks told him he had not yet had a chance to check the post office box.

On rebuttal, Ricks testified, "[H]e had never agreed that the mailing of the rent would constitute payment, whether the check was received or not." Ricks further testified he never received or successfully negotiated defendants’ money order for the September 2015 rent.

The court rendered judgment in favor of defendants. In its statement of decision, the court indicated it found as follows: "1. Defendants purchased a money order for the full amount of the rent due for September [¶] 2. Defendants mailed the money order to Mr. Ricks, with postmark August 31, 2015 [¶] 3. The Lease states that rent is to be paid ‘to landlord by U.S. Mail.’ [¶] 4. Mr. Ricks did not receive the money order [¶] 5. Defendants remain in possession of the unit [¶] 6. Defendants have not paid September rent."

The court further stated it found defendants mailed their rental payment as directed by plaintiff and "[t]heir payment was not received by plaintiff through no fault of their own." The court indicated defendants were entitled to judgment because they had timely sought to pay their rent by mailing their money order as directed by plaintiff.

DISCUSSION

To prove its cause of action, plaintiff was required to establish defendants defaulted in the payment of rent and failed to comply with the three-day notice stating the amount due. (See Code Civ. Proc., § 1161, subd. (2).) Plaintiff argues there was no substantial evidence to support the court’s determination that defendants’ mailing of the money order on August 31, 2015, was sufficient to avoid a default under the rental agreement. Plaintiff also argues it established the remaining elements of its cause of action. As we conclude the mailing of rent constituted payment for purposes of avoiding a default, we do not address whether the remaining elements of the cause of action were proved.

Allocation of Risk When Payment is Mailed at a Landlord’s Direction

Ordinarily, " ‘[p]ayment is not effectuated by sending the amount due to the creditor by mail or other public carrier until the remittance gets into the hands of the creditor, ...’ [Citations.]" ( Cornwell v. Bank of America (1990) 224 Cal.App.3d 995, 999, 274 Cal.Rptr. 322 ( Cornwell ).) When the issuer of a check "does not deliver the check to the payee ..., the issuer remains liable to the payee on the underlying obligation. [Citations.]" ( Barrett Business Services, Inc. v. Workers’ Comp. Appeals Bd. (2012) 204 Cal.App.4th 597, 603, 139 Cal.Rptr.3d 109 ( Barrett ).)

But, Civil Code section 1476 provides, "If a creditor, or any one of two or more joint creditors, at any time directs the debtor to perform his obligation in a particular manner, the obligation is extinguished by performance in that manner, even though the creditor does not receive the benefit of such performance." (Italics added.)

Civil Code section 1476 applies when the party owed money directs the debtor to pay by mail and payment is not actually received. " ‘When a creditor directs a debtor to mail payment, it is deemed that the payment is made when it is deposited in the mail. Otherwise, the payment is not effective until received by the creditor.’ [Citations.]" ( Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 439-440, 129 Cal.Rptr.2d 436 ( Nguyen ), italics omitted; accord, Cornwell , supra , 224 Cal.App.3d at pp. 998-999, 274 Cal.Rptr. 322 [" ‘if the creditor directs the debtor to send him the money by mail, the loss of the money in the mail is at the risk of the creditor[; b]ut in the absence of such a direction, the payment sent by mail or through a public carrier does not become operative until it gets into the hands of the creditor, and a mere general direction to remit money is not a consent to a remittance by mail at the creditor’s risk’ "]; Barrett , supra , 204 Cal.App.4th at p. 603, 139 Cal.Rptr.3d 109 [same].)

Plaintiff argues Civil Code section 1476 does not apply when a United States Postal Service money order is used to pay a debt, because the money order is an uncertified check, and its effect on the underlying rent obligation is controlled by California Uniform Commercial Code section 3310. Plaintiff points out that, pursuant to California Uniform Commercial Code section 3310, a money order remains unnegotiated until it is honored.

California Uniform Commercial Code section 3310 provides in relevant part, "(a) Unless otherwise agreed, if a certified check, cashier’s check, or teller’s check is taken for an obligation, the obligation is discharged to the same extent discharge would result if an amount of money equal to the amount of the instrument were taken in payment of the obligation.... [¶] (b) Unless otherwise agreed and except as provided in subdivision (a), if a note or an uncertified check is taken for an obligation, the obligation is suspended to the same extent the obligation would be discharged if an amount of money equal to the amount of the instrument were taken, and the following rules apply: [¶] (1) In the case of an uncertified check, suspension of the obligation continues until dishonor of the check or until it is paid or certified. Payment or certification of the check results in discharge of the obligation to the extent of the amount of the check."

California Uniform Commercial Code section 3310 is inapplicable because, by its own terms, it is triggered only when an instrument "is taken for an obligation." This "refers to a situation in which the debtor has delivered an instrument with the intention that it constitute conditional payment for the underlying obligation and the creditor has accepted it as conditional payment for the underlying obligation." ( Canal-Randolph Anaheim, Inc. v. Wilkoski (1978) 78 Cal.App.3d 477, 490, 144 Cal.Rptr. 474.) In a situation where the payment remains undelivered, it is clearly not accepted for payment. California Uniform Commercial Code section 3310 does not apply when Civil Code section 1476 is satisfied. Civil Code section 1476 specifies that, when a debtor performs as directed by the creditor, "the obligation is extinguished by performance in that manner," and this occurs "even though the creditor does not receive the benefit of such performance."

The California Uniform Commercial Code is intended to preempt statutes that contradict or are inconsistent with its...