Shadkor, Inc. v. Volwood Mgmt. Co.

• Decision Date: 15 November 2021
• Docket Number: B305950
• Parties: SHADKOR, INC., Plaintiff and Respondent, v. VOLWOOD MANAGEMENT COMPANY, L.P., et al., Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

SHADKOR, INC., Plaintiff and Respondent,
v.
VOLWOOD MANAGEMENT COMPANY, L.P., et al., Defendants and Appellants.

B305950

California Court of Appeals, Second District, Fourth Division

November 15, 2021

NOT TO BE PUBLISHED

APPEAL from judgment of the Superior Court of Los Angeles County No. BC643470, Richard L. Fruin, Jr., Judge. Affirmed and remanded for determination of attorneys' fees on appeal.

Hamrick & Evans, A. Raymond Hamrick, III, Jonathan Dutton, and Adam Koslin for Plaintiff and Respondent.

Cozen O'Connor, Frank Gooch III and Matthew E. Lewitz for Defendants and Appellants.

CURREY, J.

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INTRODUCTION

This appeal arises out of a dispute between Shadkor, Inc., dba Milt and Edie's Master Dry Cleaners (Shadkor) on the one hand, and Volwood Management Company, L.P. (Volwood) and Pass Avenue Partnership (PAP) (collectively, the Landlords) on the other, over the terms of a commercial lease.^[1] After a jury trial during which Shadkor and the Landlords presented conflicting testimony regarding their intentions when they negotiated the lease and amendments to it, the jury found in favor of Shadkor on its breach of contract claims.^[2]

On appeal, the Landlords contend: (1) the trial court erred by permitting the jury to decide issues the court previously determined as a matter of law in connection with Shadkor's motion for summary adjudication; and (2) the trial court abused its discretion by denying the Landlords' motion to bifurcate the trial. We reject both contentions and affirm. We also find the lease agreement between the parties entitles Shadkor to an award of attorneys' fees on appeal, and remand to the trial court to calculate the amount of those fees.

FACTUAL AND PROCEDURAL BACKGROUND

Shadkor is a family-owned laundry and dry-cleaning business. Since 1988, Shadkor has conducted its business on property it owns at the corner of North Pass Avenue and West Alameda Avenue in Burbank.

In 1995, Shadkor rented corporate office space in a building owned by PAP, located north of, and directly adjacent to,

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Shadkor's dry-cleaning business. Under the terms of the lease, Shadkor received five customer parking spaces.

In 2005, Shadkor relocated its corporate office from the building owned by PAP to a building owned by Volwood, located next door and to the east of Shadkor. In connection with the relocation, Shadkor and Volwood entered into a new lease (the Lease). Article 3 of the Lease stated: "The term of this Lease shall be seventy-two (72) months and shall commence on October 1, 2005 ('Commencement Date') and terminate on September 30, 2011." Article 57 of the Lease provided Shadkor with two successive five-year options to extend the term of the Lease. To exercise the option, Shadkor was to "give written notice to Landlord of its intention to exercise said option at least four (4) months prior to the end of the initial term of this Lease." The Lease also included ten parking spaces for the term of the Lease "for customer parking of [Shadkor]" (the Customer Parking Spaces). The Customer Parking Spaces consisted of the five parking spaces Shadkor received under the terms of the lease it signed with PAP in 1995, and an additional five spaces, for a total of ten spaces.^[3]

In 2007, Volwood and Shadkor entered into a First Amendment to the Lease (the First Amendment), which deleted and/or modified certain provisions of the Lease. The First Amendment did not, however, delete the "Option to Extend" provision contained in Article 57 of the Lease. Paragraph 4 of the First Amendment states: "Except as expressly modified hereby, all terms and conditions of the Original Lease shall remain in full force and effect."

On August 30, 2011, Volwood and Shadkor entered into a Second Amendment to the Lease (the Second Amendment). Pursuant the Second Amendment, the parties agreed to "further

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modify, change and alter the Original Lease." As relevant here, Paragraph 1 of the Second Amendment states the parties mutually agree to "add to the existing language of Article 3. 'TERM' as follows: Tenant is extending the term of the Original Lease, as amended, for an additional seventy-two (72) months commencing October 1, 2011 and terminating September 30, 2017." In the Second Amendment, the parties also agreed to delete and/or modify other terms in the Lease including the "base rent," "rent redetermination: annual adjustment of rent," "increase in taxes," and "operating expenses." Like the First Amendment, paragraph 6 of the Second Amendment similarly states: "Except as expressly modified hereby all terms and conditions of the Original Lease and any Amendments shall remain in full force and effect."

On September 16, 2016, Shadkor provided Volwood with written notice that it was exercising its first option to extend the term of the Lease for a period of five years (or until September 30, 2022).

On October 3, 2016, Volwood provided Shadkor with written notice of its intention to "relocat[] [Shadkor's] (10) customer parking spaces [in the building owned by PAP] . . . to (10) un-reserved parking spaces at [the building owned by Volwood, located approximately 230 feet away from the entrance of the dry cleaners.] Later that month, Volwood provided Shadkor with a notice of termination of tenancy and demand for payment of unpaid rent. The notice stated the Lease expired on September 30, 2017 under the terms of the Second Amendment. The...