Roco Inv. Holding LLC v. Pws Inc.

• Decision Date: 09 July 2010
• Docket Number: Los Angeles County Super. Ct. No. BC399094,B218156
• Court: California Court of Appeals Court of Appeals
• Parties: ROCO INVESTMENT HOLDING, LLC, Plaintiff and Respondent, v. PWS, INC., et al. Defendants and Appellants.

ROCO INVESTMENT HOLDING, LLC, Plaintiff and Respondent,

v.PWS, INC., et al. Defendants and Appellants.

B218156

Los Angeles County Super. Ct. No. BC399094

Court Of Appeal Of The State Of California

Second Appellate District

Division Five

July 9, 2010

Maynard J. Klein for Defendants and Appellants.

Law Office of Jacob Reich and Jacob Reich for Plaintiff and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, Yvette M. Palazuelos, Judge. Affirmed.

MOSK, J.

I. INTRODUCTION

Defendants, PWS, Inc., and James W. Minges, appeal from a judgment entered in favor of plaintiff, Roco Investment Holding, LLC, in an unlawful detainer action. Defendants contend the trial court incorrectly ruled the June 1, 1981 master lease (master lease) required plaintiffs consent before PWS, Inc. could sublet the premises to Mr. Minges and Abel Del Real Sanchez, who is not a party to this appeal. Defendants also assert the trial court erred in ruling the waiver and estoppel defenses had no merit. We affirm the judgment in all respects.

II. BACKGROUND

A. The First Amended Complaint And Answer

In June 1981, PWS, Inc. leased commercial real property from Betty Gole, for a term of 15 years. The master lease was extended by two five-year terms beginning June 1, 1996 and June 1, 2001. In 1995, Ms. Gole granted PWS, Inc. an option to extend the master lease by two additional five-year terms beginning June 1, 2006 and June 1, 2011. Attached to the first amended complaint is the lease which in paragraph 12 contains material limitations as to the right to sublet or allow another person to occupy the premises.

Plaintiff filed a first amended unlawful detainer complaint on September 11, 2008. The first amended complaint alleges, among other things, PWS, Inc. agreed to pay the rent on the premises to Ms. Gole. Plaintiff was the assignee of Ms. Gole's right to possession of the premises. Mr. Minges and Mr. Sanchez were in possession of the premises. Although Mr. Sanchez is named as a defendant in the first amended complaint, he is not a party to this appeal. The first amended complaint alleges: there is no privity of contract between the plaintiff and defendants; PWS, Inc. has failed to provide complete statements showing gross sales pursuant to the terms of the lease; and PWS, Inc. sublet the premises without plaintiff's written consent as required by the master lease.

PWS, Inc. and Mr. Minges jointly answered the first amended complaint on December 3, 2008. The answer admitted that Mr. Minges and Mr. Sanchez were in possession of the premises pursuant to a sublease. But, the answer alleged the acceptance of rental payments by plaintiff and Ms. Gole resulted in a waiver or an estoppel of the right to assert a breach for failure to obtain consent to the sublease.

The trial court granted plaintiffs summary adjudication motion as to the following issues: the first affirmative defense based on the statute of limitations; the second affirmative defense based on waiver and estoppel because plaintiff accepted rent; the third affirmative defense premised on waiver and estoppel by reason of the fact plaintiff required PWS, Inc. to provide profit and loss statements; the fourth affirmative defense premised on the theory plaintiff unreasonably withheld its consent to the sublease; and the ninth affirmative defense based on a then pending appeal from a prior unlawful detainer judgment. Plaintiff's summary adjudication motion was denied in all other respects. Defendants' summary judgment motion was denied. Given the trial court's rulings, it ruled the only remaining issue was the reasonable value of the property. Defendants raise no contention that the trial court erroneously limited the issues for trial.

B. The Trial

As noted, the sole issue to be tried was the valuation of the property. At the court trial, the parties introduced conflicting opinion testimony about the value of the leased premises. Plaintiff also called Sharon Talkington as a witness. Ms. Talkington had worked for PWS, Inc. for 18 years. She was responsible for managing leases for PWS, Inc., which develops and leases locations within the laundry industry. Sometime around May 2006, after plaintiff purchased the property, PWS, Inc. entered into another agreement referred to as the Mr. Sanchez sublease amendment. Ms. Talkington testified that, prior to entering into the May 2006 sublease agreement or amendment, her employerdid not seek plaintiffs consent. Counsel for PWS, Inc. stipulated that it did not terminate the sublease with Mr. Sanchez nor attempt to do so.

On July 8, 2009, judgment was entered in plaintiff's favor for restitution and possession of the premises and damages of $216,187.50 plus $600 a day after June 15, 2009 until the entry of the judgment. Defendants appealed from the judgment on July 29, 2009.

III. DISCUSSION

A. Standard of Review

In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, our Supreme Court described a party's burdens on summary judgment or adjudication motions as follows: "[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court's action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.... [¶] [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.... A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]" (Fns. omitted, see Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878.) We review the trial court's grant of summary adjudication de novo. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68; Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 1188, disapproved onanother point in Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853, fn. 19.) The trial court's stated reasons for granting summary adjudication are not binding on us because we review its ruling not its rationale. (Continental Ins. Co. v. Columbus Line, Inc. (2003) 107 Cal.App.4th 1190, 1196; Dictor v. David & Simon, Inc. (2003) 106 Cal.App.4th 238, 245.) In addition, a summary adjudication motion is directed to the issues framed by the pleadings. (Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1250; Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1252; Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673.)

B. The Lack Of Consent To The May 2006 ExtensionJustified Termination Of The Lease

A lease is subject to the same general rules governing contract interpretation. (Bills Signs Trucking, LLC v. Signs Family Ltd. Partnership (2007) 157 Cal.App.4th 1515, 1521; ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1269.) The lease must be interpreted as a whole giving effect to each part if it is reasonably practicable. (Civ. Code, ¹ § 1641; Code Civ. Proc., § 1858; Manufactured Home Communities, Inc. v. County of San Luis Obispo (2008) 167 Cal.App.4th 705, 713.) The lease is interpreted to carry out the parties' lawful and ascertainable mutual intentions as they existed at the time of contracting. (§ 1636; Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18; Bills Signs Trucking, LLC v. Signs Family Ltd. Partnership, supra, 157 Cal.App.4th at p. 1521.) A court should avoid interpreting a contract in a manner which will render the contract unfair, harsh or absurd. (County of Humboldt v. Mckee (2008) 165 Cal.App.4th 1476, 1498; California Nat. Bank v. Woodbridge Plaza LLC (2008) 164 Cal.App.4th 137, 142; Bills Signs Trucking, LLC v. Signs Family Ltd. Partnership, supra, 157 Cal.App.4th at p. 1521.) We review the trial court's construction of the lease de novo unless there was conflicting extrinsic evidenceintroduced to explain the meaning of the terms. (California Nat. Bank v. Woodbridge Plaza LLC, supra, 164 Cal.App.4th at p. 142; ASP Properties Group, L.P. v. Fard, Inc., supra, 133 Cal.App.4th at pp. 1266-1267.)

Where a lease contains ambiguous provisions, parol evidence may be admitted to explain the parties' intentions so long as the language is reasonably susceptible to the suggested interpretation. (California Nat. Bank v. Woodbridge Plaza LLC, supra, 164 Cal.App.4th at p. 142; SunnilandFruit, Inc. Verni (1991) 233 Cal.App.3d 892, 898.) Where the language is not reasonably susceptible to the interpretation urged by the party, the parol evidence is irrelevant. (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 393; Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 847.) Because no conflicting evidence was presented as to the intent of the parties, we construe the lease provision de novo. (Casella v. Southwest Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1161; WRI Opportunity Loans II LLC v. Cooper (2007) 154 Cal.App.4th 525, 532.)

Paragraph 12 of the master lease contains an assignment and subletting provision. Paragraph 12 provides in part: "12.1 Lessee shall not assign this Lease, or any interest therein, and shall not sublet said Premises or any part thereof, or any right or privilege appurtenant thereto, or suffer any other person to occupy or use said Premises, or any portion thereof, without the written consent of Lessor first had and obtained. Furthermore, this Lease shall not, nor shall any...