Plaza Freeway, L.P. v. First Mountain Bank, E025404.
| Decision Date | 13 June 2000 |
| Docket Number | No. E025404.,E025404. |
| Citation | 81 Cal.App.4th 616,96 Cal.Rptr.2d 865 |
| Parties | PLAZA FREEWAY LIMITED PARTNERSHIP, Plaintiff and Appellant, v. FIRST MOUNTAIN BANK, Defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Klein & Wilson and Gerald A. Klein, Newport Beach, for Plaintiff and Appellant.
Mower, Koeller, Nebeker, Carlson & Haluck, Irvine; Reynolds & Jensen, Riverside, and Barry R. Swan for Defendant and Respondent.
Plaza Freeway Limited Partnership (plaintiff) and First Mountain Bank (defendant) are successors in interest to the original landlord and tenant of (commercial real property under a 25-year lease agreement. The parties were unable to determine the termination date of the ground lease. Nevertheless, at the time of plaintiffs purchase of the property, defendant signed and delivered an estoppel certificate which provided a lease termination date of October 31, 1998. The trial court found the date on the estoppel certificate incorrect, and instead decided that the termination date was June 30, 1999. The court concluded that, based on the June 1999 termination date and the terms of the original lease agreement, defendant's exercise of its option to renew on January 26, 1998, was timely. Thus, the court found defendant in lawful possession of the property and not guilty of an unlawful detainer.
On appeal, plaintiff claims the doctrine of "estoppel by contract," as codified in Evidence Code section 622,1 requires that the facts contained in the estoppel certificate, including the termination date, are conclusively presumed to be true.2 Defendant contends the conclusive presumption is inapplicable because an estoppel certificate is not a written "instrument" under section 622.
Based on our analysis below, we conclude that the estoppel certificate was a written "instrument" within the meaning of section 622, and, therefore, defendant was bound by the representations contained therein. According to the October 31, 1998, termination date stated in the estoppel certificate, defendant's attempt to exercise its option to renew was untimely. We reverse the trial court's judgment that defendant was not guilty of an unlawful detainer.
Plaintiff and defendant are assignees of a 25-year lease that was executed on June 1, 1973. The subject property of the lease was part of a shopping center located in Big Bear, California. Under the lease, the original tenant was required to construct a building to house a Security Pacific National Bank. The lease provided as follows:
"As soon as the date of commencement of the Lease term has been determined, the parties hereto shall execute and deliver to one another an appropriate addendum to this Lease setting forth said date of commencement."
Article 11 of the lease agreement provides: "Landlord shall, at its sole cost, within one hundred twenty (120) days after the execution of this Lease, deliver possession of the demised premises to Tenant at final grade and at 90 per cent [sic ] compaction, ready for Tenant's construction in all respects."
Although a subsequent addendum to the lease was contemplated, none was found. Security Pacific National Bank opened for business on June 14, 1974.
In 1992, plaintiff purchased the shopping center from Chartered Pension Real Estate Investors (Chartered), a successor in interest to the original landlord. During the transaction, Chartered required each tenant of the shopping center, including defendant, to sign and deliver an estoppel certificate that set forth the key terms of each lease, including the termination date. Defendant's estoppel certificate provided that, "The term of this Lease commenced on November 1, 1973 and will expire on October 31, 1998." After review by defendant's highest officers, the chief financial officer, Hazel M. Hagy, signed the certificate without making any changes.
Under the lease, defendant had three successive five-year options to renew. According to article 3 of the lease, the tenant was required to notify the landlord of its intent to renew 12 months before the expiration date of the initial 25-year term.
On January 26, 1998, defendant's chief financial officer, Hazel M. Hagy, sent plaintiff a letter expressing defendant's intent to exercise its renewal option. Plaintiff rejected defendant's request as untimely. Defendant sent a second notice, which explained its belief that the termination date was on March 29, 1999.
Defendant remained in possession of the premises on and after October 31, 1998. Plaintiff filed an unlawful detainer action against defendant.
At the close of trial, the court explained that, based on the language of article 2 in the lease agreement, the original landlord and tenant had anticipated some delay prior to the delivery of the subject property. The court reasoned that the earliest possible termination date, albeit inconsistent with article 2, would have been May 31, 1998 (25 years from the date of execution) and the latest possible termination date would have been June 30,1999 (25 years from the date the bank opened).3 The court further reasoned that the October 31, 1998, date, as noted in the estoppel certificate, would not have been consistent with the language of article 2. Additionally, the court found that plaintiff failed to demonstrate any detrimental reliance on the estoppel certificate based on the list of rents paid by the tenants of the shopping center, which indicated that defendant paid only 1.7 percent of the total rent revenue. The court concluded that, in accounting for a six-month delay for delivery and a six-month period before commencement, as provided under article 2, the lease had started on June 30, 1974, and ended on June 30, 1999, 25 years later. Therefore, the court found defendant in lawful possession of the property and not guilty of an unlawful detainer. The court also awarded defendant approximately $45,000 in attorneys' fees and costs.
On appeal, independent review applies to a case involving only questions of law, such as the interpretation of statutes or contracts, and, therefore, this court is not bound by the trial court's analysis and conclusions. (People v. Taylor (1992) 6 Cal.App.4th 1084, 1103, 8 Cal.Rptr.2d 439; see also City of Manhattan Beach v. Superior Court (1996) 13 Cal.4th 232, 238, 52 Cal.Rptr.2d 82, 914 P.2d 160.)
Plaintiff claims that defendant was estopped from contradicting the October 31, 1998, termination date on the estoppel certificate under section 622.
Section 622 provides, in relevant part: "The facts recited in a written instrument are conclusively presumed to be true as between the parties thereto, or their successors in interest...." Defendant argues that the conclusive presumption contained in section 622 is inapplicable because the estoppel certificate did not constitute a written "instrument." Based on our analysis below, we conclude that the estoppel certificate constituted a written "instrument," within the meaning of section 622, and, consequently, defendant was estopped from contradicting the material terms contained therein.
In an early case, Hoag v. Howard (1880) 55 Cal. 564, 1880 WL 1992, the California Supreme Court, in considering the provisions of the Civil Code, stated that the word "instrument" "will be invariably found to indicate some written paper or instrument signed and delivered by one person to another, transferring the title to or creating a lien on property, or giving a right to a debt or duty." (Id. at p. 565, 1880 WL 1992.)
The written paper or instrument need not represent an agreement. (Generes v. Justice Court (1980) 106 Cal.App.3d 678, 684, 165 Cal.Rptr. 222.) In Generes, the court clarified the misconstruction of the term, "written instrument," by the court in People v. Fraser (1913) 23 Cal. App. 82, 137 P. 276. In Fraser, the court wrote: (Id. at pp. 84-85, 137 P. 276, emphasis added.) Based on its interpretation, the court concluded that a birth certificate did not constitute an "instrument" within the meaning of Penal Code section 115.4 (Fraser, supra, at p. 86,137 P. 276.)
In paraphrasing the definition of "instrument" set forth in Hoag v. Howard, supra, 55 Cal. 564, the Fraser court inserted the word "agreement." In doing so, the court...
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