Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Los Angeles County No. MC017952, Carlos P. Baker, Jr., Judge.
Glickfeld, Fields & Jacobson and Craig M. Fields for Defendants and Appellants.
Law Offices of Shaffer & Gonor, Alan J. Shaffer; Law Offices of Fattorosi & Chisvin and Craig L. Chisvin for Plaintiff and Respondent.
ARMSTRONG, Acting P. J.
Defendants Setha Ieng Enterprises, Inc. ("SIE") and its president, Mouly Ieng, appeal the judgment entered against them in an unlawful detainer action with respect to the sublease of a gas station and mini mart. Mr. Ieng complains that he was not a party to the sublease and did not guarantee it, so that it was error to enter judgment against him personally. We agree and reverse the judgment against Mr. Ieng. SIE contends that the trial court failed to make certain deductions from the outstanding rent due, and so entered judgment in a higher amount than the facts warranted. We disagree, and affirm the judgment against SIE.
Plaintiff Moawia Alazawi was the lessee under a written lease agreement with lessor J.E. DeWitt, Inc. ("DeWitt") with respect to a gas station located in Palmdale. With DeWitt's consent, Alazawi sublet the premises to defendant SIE. Under the terms of the written sublease, SIE assumed all of the terms, covenants and conditions of the master lease between Alazawi and DeWitt, including payment of rent "directly to Landlord."
Alazawi has not filed a brief on appeal.
In February 2007, Alazawi served SIE with a five-day notice to pay rent or quit, demanding delinquent rent in the amount of $83,951.98. Alazawi soon after filed an unlawful detainer complaint seeking that sum in past due rent.
The matter was tried on April 13, 2007. No evidence was presented at trial that Mr. Ieng was a party to the sublease, a guarantor of SIE's obligations thereunder, or otherwise personally liable for SIE's debts. Indeed, no argument was made that Mr. Ieng was a subtenant or liable under the terms of the sublease.
SIE purchased its fuel from DeWitt on an open account pursuant to a Branded Supply Agreement. SIE presented evidence that the previous year, DeWitt received an overpayment on SIE's fuel account in the amount of $27,151. Several days before trial, DeWitt notified SIE of its intention to apply that overpayment to its past due rent obligations, an offset permitted by the Branded Supply Agreement, which provided: "DeWitt shall have the right at any time to offset any sums owed to DeWitt by buyer against any monies due and owing buyer from DeWitt from any source whatsoever, including, but not limited to, deposits and credit card balances." DeWitt's bookkeeper testified at trial that the overpayment had not yet been applied to the past due rent, and remained a credit in SIE's favor on its fuel account.
Judgment was entered on both defendants and in favor of Alazawi for possession of the premises, $83,951.98 in past due rent, and $3,000 in attorney fees.
On appeal, Mr. Ieng challenges the trial court's judgment against him personally, as he had no personal liability with respect to the sublease. SIE contends that the trial court erred in failing to deduct SIE's $27,151 overpayment to DeWitt from the amount due as past rent.
We agree with Mr. Ieng that he cannot be held personally liable for an obligation owing solely by the corporation of which he is president. Plaintiff's unlawful detainer action is based upon a written agreement between plaintiff and the defendants. However, the record contains no written agreement entered into by plaintiff and Mr. Ieng for the sublet of the premises. Consequently, the judgment entered against Mr. Ieng must be reversed.
The evidence presented at trial established that SIE owed $83,951.98 in back rent. SIE claims that it was entitled to an offset of $27,151 on account of an overpayment it made to DeWitt under the Branded Supply Agreement. However, affirmative defenses and cross-claims may not be asserted in an action for unlawful detainer. (Nork v. Pacific Coast Medical Enterprises, Inc. (1977) 73 Cal.App.3d 410, 413.) "The purpose of the unlawful detainer statutes is to provide the landlord with a summary, expeditious way of getting back his property when a tenant fails to pay the rent or refuses to vacate the premises at the end of his tenancy. If a defendant were allowed to assert affirmative defenses or cross-claims which were irrelevant to the right of immediate possession, the summary character of the proceedings would be lost. A defense which 'arises out of the subject matter' of the original suit, and, thus, is permitted in the usual case, is normally excluded in an unlawful detainer if the defense is extrinsic to the issue of possession, (Knowles v. Robinson [(1963)] 60 Cal.2d 620, 625). This does not mean the defendant may not present any defense; rather, he may only assert those defenses which, if proven, would either preserve his possession as a tenant or preclude the landlord from recovering possession (Green v. Superior Court [(1974)] 10 Cal.3d 616, 631-632.)" (Nork v. Pacific Coast Medical Enterprises, Inc., supra, 73 Cal.App.3d at p. 413.) Because SIE's claim of a right to offset the credit balance in its fuel account against the outstanding rent due did not affect its right to possession of the premises, it was not cognizable in the unlawful detainer action. Consequently, the trial court did not err in failing to deduct from the rent due the monies DeWitt owed SIE on account of the Branded Supply Agreement.
In short, if SIE's fuel account with DeWitt continues to reflect a credit balance, and DeWitt does not refund that money to SIE, its recourse is to file a lawsuit against DeWitt. However, the rights of SIE and DeWitt concerning the fuel account are not properly subject to this unlawful detainer action.
DISPOSITION
The judgment against Mouly Ieng is reversed; the judgment against SIE is affirmed. Parties to bear their own costs on appeal.
I concur: KRIEGLER, J.
MOSK, J., Concurring and Dissenting.
I concur in the reversal of the judgment against Mouly Ieng. I dissent from the judgment against SIE to the extent of the award of $27,151. Plaintiff specifically gave notice to SIE that an overpayment by SIE of the $27,151 would be applied to rent. Plaintiff’s only rebuttal was that the bookkeeper had not yet officially recorded that credit in certain records. This not persuasive.
Notice of the application of the overpayment to rent is the equivalent of actual payment. Moreover, an exception “to the rule that affirmative defenses or cross-claims may not be asserted in an action for unlawful detainer” is that the court may “examine equitable considerations.” (Nork v. Pacific Coast Medical Enterprises, Inc. (1977) 73 Cal.App.3d 410. 413.)
Even if the notice does not qualify as payment, the idea that the landlord can acknowledge owing money to the tenant and agree to apply that amount to unpaid rent and yet claim that amount in this action strikes me as being inequitable. For that reason I would give credit to SIE for $27,151.