Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC399094, Yvette M. Palazuelos, Judge.
Maynard J. Klein for Defendants and Appellants.
Law Office of Jacob Reich and Jacob Reich for Plaintiff and Respondent.
TURNER, P. 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 plaintiff’s 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 plaintiff’s 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 employer did not seek plaintiff’s 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 on another 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 Extension Justified 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, § 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 evidence introduced 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.)
All future statutory references are to the Civil Code.
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; Sunniland Fruit, 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 interest therein, be assignable as to the interest of Lessee, by operation of law, without the written consent of Lessor first had and obtained. A consent by Lessor to one assignment, subletting, occupation or use by any other person, whether by operation of law or otherwise, shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by any other person. Any such assignment or subletting, whether by operation of law or otherwise, without such written consent first had and obtained shall be void, and shall, at the option of Lessor, terminate this Lease. However, the consent of Lessor required herein shall not be unreasonably withheld. [¶] 12.2 The Parties acknowledge that Lessee is presently contemplating a sale of the laundry business conducted on a portion of the Premises and it is anticipated that an escrow will be opened for such purpose. It is contemplated that the Lessee intends to sublet said portion of the Premises to the purchaser of said laundry business, and in such event and not later than fifteen days prior to the date set for closing of said escrow, Lessee shall furnish to Lessor written information disclosing the financial status of the proposed subtenant and at said time shall also furnish written information disclosing the financial status of Lessee. Subject to approval by Lessor of the financial responsibility of the proposed sub-tenant, consent of Lessor will be given to the subletting of said portion of the Premises to the purchaser of said laundry business. [¶] 12.3 Regardless of Lessor’s consent, no subletting or assignment shall release Lessee of Lessee’s obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations to be performed by Lessee hereunder. The acceptance of rent by Lessor from any other person shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee of Lessee or any successor of Lessee, in the performance of any terms hereof, Lessor may proceed directly against Lessee without the necessity of exhausting remedies against said assignee. Lessor may consent to subsequent assignments or subletting of this Lease or amendments or modification to this Lease with assignees of Lessee, without notifying Lessee, or any successor of Lessee, and without obtaining its or their consent thereto and such action shall not relieve Lessee of liability under this Lease.”
The plain language of the master lease requires written consent before PWS, Inc. can sublease or allow another person to occupy the premises. There was no evidence introduced at the trial that Ms. Gole, her son or plaintiff ever gave written consent to any sublease. Moreover, there is no evidence that PWS, Inc. sought written consent for the May 2006 extension of the sublease or permission for any person other than PWS, Inc. to occupy Mr. Sanchez’s bar. The 2006 sublease amendment granted Mr. Sanchez a five-year extension on the sublease from May 31, 2006 until May 31, 2011. The sublease to Mr. Sanchez without the lessor’s written consent and any effort to obtain written consent was a breach of paragraph 12 of the master lease. The failure to obtain the lessor’s consent before subleasing the premises was an incurable breach of the lease which justified the lessor’s termination of the lease and retention of the premises. (Thrifty Oil Co. v. Batarse (1985) 174 Cal.App.3d 770, 775-776, Boston Properties v. Pirelli Tire Corp. (1982) 134 Cal.App.3d 985, 994; Crowell v. City of Riverside (1938) 26 Cal.App.2d 566, 579.)
C. Defendants’ Arguments
First, defendants rely on Kendall v. Ernest Pestana, Inc. (1985) 40 Cal.3d 488, 492-502, to show that forfeiture should not be required. In Kendall, our Supreme Court discussed the historical development of the law concerning a plaintiff’s right to refuse consent to an assignment or sublease of a commercial lease without a good faith reasonable objection. (Id. at pp. 492-502 & fn.2.) Our Supreme Court explained that, while the law generally favors free alienability of property including leasehold interests, California does permit contractual restrictions on the alienability of such interests. (Id. at p. 494.) Our Supreme Court concluded that a lessor of a commercial lease with a provision requiring consent to an assignment or a sublease cannot unreasonably withhold the consent. (Id. at pp. 496-497.)
The issue in Kendall involved the reasonableness of the refusal to consent. This case does not involve reasonableness of a refusal to consent. No employee of PWS, Inc. requested the consent of Ms. Gole, her son or plaintiff before the May 2006 sublease extension. California rules disfavoring forfeiture do no not apply when the plaintiff is seeking to quiet title and obtain possession for a breach of a covenant not to sublet when the lessee neither sought nor obtained consent. (See Roth v. Morton’s Chefs Services, Inc. (1985) 173 Cal.App.3d 380, 387-388; Boston Properties v. Pirelli Tire Corp., supra, 134 Cal.App.3d at pp. 993-995; Crowell v. City of Riverside, supra, 26 Cal.App.2d at p. 573.)
Second, defendant appears to argue that, once PWS, Inc. entered into a sublease transferring possession of the premises to Mr. Sanchez on May 1, 1993, thereafter, no consent was required for any extensions. Defendants argue we should apply the rule in Dumpor’s Case (1578) 76 Eng.Rep. 1110: “That a condition against assignment without the license of the plaintiff is entire and cannot be apportioned by the act of the parties; and that a license given and an assignment made pursuant thereto destroys the whole condition, leaving the assignee or any subsequent assignee at full liberty to assign the lease to whomever they please.” (Kendis v. Cohn (1928) 90 Cal.App. 41, 52.) The rule in Dumpor’s Case is not the law in California. (§ 1995.340; Boston Properties v. Pirelli Tire Corp., supra, 134 Cal.App.3d at p. 993; Kendis v. Cohn, supra, 90 Cal.App. at p. 59.) In any event, under California law the breach of the lease violated the covenant not to sublet without written consent. (See Boston Properties v. Pirelli Tire Corp., supra, 134 Cal.App.3d at pp. 994-995; DeAngeles v. Cotta (1923) 62 Cal.App. 691, 695.) And PWS, Inc. never sought nor obtained consent. (See Roth v. Morton’s Chefs Services, Inc., supra, 173 Cal.App.3d at pp. 387-388; Boston Properties v. Pirelli Tire Corp., supra, 134 Cal.App.3d at pp. 993-995; Crowell v. City of Riverside, supra, 26 Cal.App.2d at p. 573.)
Third, defendants assert that once PWS, Inc. subleased the premises to Mr. Sanchez, Ms. Gole, her son or plaintiff was deemed to have consented to any extension of the May 1, 1993 sublease. Defendants rely on language in the May 1, 1993 sublease which provides that if Mr. Sanchez remains on the premises after May 31, 2006, he is deemed to remain on the premises pursuant to a month to month tenancy. This contention has no merit. There is no evidence Ms. Gole ever consented to the May 1, 1993 sublease. Moreover, the express language of the master lease requires consent before any person occupies the premises. Even if Ms. Gole consented to the initial sublease, defendants’ contention has no merit because: the holdover provision does not give Mr. Sanchez permission to stay an additional five years which is the effect of the May 2006 extension; Ms Gole and her successors in interest including plaintiff were not parties to the sublease or its May 2006 extension; the holdover provision does not alter the duty to secure consent when any person is present on the premises (see Spaulding v. Yovino-Young (1947) 30 Cal.2d 138, 142); and if Mr. Sanchez did hold over as permitted by the sublease, the master lease still prohibits PWS, Inc. from allowing any other person to remain on the premises without plaintiff’s consent or any of its predecessors.
Fourth, defendants argue the May 2006 extension did not create a tenancy that would trigger the consent obligation of paragraph 12 of the master lease. To begin with, paragraph 12 of the master lease requires consent when PWS, Inc. allows any other person to remain on the premises. Further, contrary to defendants’ contention, a tenancy was created. Our Supreme Court has explained: “It is well recognized that no particular legal terminology is required in the making of a lease, but it is essential that the instrument show an intention to establish the relationship of landlord and tenant.” (Beckett v. City of Paris Dry Goods Co. (1939) 14 Cal.2d 633, 636; Baranov v. Scrudder (1918) 177 Cal. 458, 460; Morris v. Iden (1913) 23 Cal.App. 388, 393-394.) The controlling rule of law is: “‘Whatever words are sufficient to explain the intent of the parties, that one shall divest himself of the possession, and the other come into it, for such a determinate time, such words, whether they run in the form of a license, covenant, or agreement, are of themselves sufficient, and will, in construction of law, amount to a lease.’ [Citations.]” (Baranov v. Scudder, supra, 177 Cal. at p. 460, citing Williams v. Miller (1885) 68 Cal. 290, 292.) A subtenant has been defined as a party possessing the demised premises under an instrument reserving the original lessee the right of re-entry and forfeiture on breach of contract. (Kendis v. Cohn, supra, 90 Cal.App. at pp. 58-59; see also Barkhaus v. Producers Fruit Co. (1923) 192 Cal. 200, 205; Gilman v. Nemetz (1962) 203 Cal.App.2d 81, 86-87.) The instrument at issue in this case was called a sublease amendment. However, the sublease amendment by its terms gave the sublessee an additional five-year term with the specification, “All other terms and conditions shall remain unchanged.” The other terms and conditions obviously included the right to possess the premises and reserved the right of reentry to PWS, Inc. There is no merit to defendants’ reliance on: Schmitt v. Felix (1958) 157 Cal.App.2d 642, 647; Adlestein v. Greenberg (1926) 77 Cal.App.2d 548, 553; Knox v. Wolfe (1946) 73 Cal.App.2d 494, 502; and Safeway Stores, Inc. v. Buhlinger (1927) 85 Cal.App. 717, 719. None of these cases involve a sublease consent provision which extends to allowing any person to occupy the premises.
Fifth, there is no merit to defendant’s argument that a right appurtenant to the lease of the premises was granted. Section 662 defines an appurtenance as follows, “A thing is deemed to be incidental or appurtenant to land when it is by right used with the land for its benefit, as in the case of a way, or watercourse, or of a passage for light, air, or heat from or across the land of another.” No rights appurtenant to the lease were granted within the meaning of section 662 when the May 1, 1993 extension was executed. What was created was the right to continual occupancy if rent was paid-a subtenancy. (Beckett v. City of Paris Dry Goods Co., supra, 14 Cal.2d at p. 636; Baranov v. Scudder, supra, 177 Cal. at p. 460.)
Sixth, defendants’ argument a tenancy at sufferance was created has no merit. A tenancy at sufferance occurs when a tenant comes into possession by a lawful means but holds over after the expiration of the term without the owner’s consent. (Colyear v. Tobriner (1936) 7 Cal.2d 735, 742; Smith v. Ogg Shaw (1860) 16 Cal. 90, 91-92; Marquez-Luque v. Marquez (1987) 192 Cal.App.3d 1513, 1518; Stephens v. Perry (1982) 134 Cal.App.3d 748, 757, fn. 4; see also Aviel v. Ng (2008) 161 Cal.App.4th 809, 820.) Mr. Sanchez did not hold over as a tenant at sufferance.
Seventh, defendants also contend the restraint in this case is illegal because the plaintiff had no interest in the duration of the sub-tenancy. Defendants reason as follows. No decision recognizes a lessor’s right to withhold consent to a sublease on account of the length of its term. And no decision distinguishes between the lessor’s consent with an assignment in which the full term is extended and a sublease of possession for all or part of the lease term. This contention finds no basis in California statutory or decisional authority.
D. Summary Adjudication Of Waiver and Estoppel Issue
Defendants assert the trial court erred in summarily adjudicating the third affirmative defense based on waiver and estoppel defenses. Defendants assert the trial court erred in summarily adjudicating plaintiff did not waive the breach by serving notices on PWS, Inc. to provide sales reports and to pay the real property taxes. As noted, waiver is the voluntary relinquishment of a known right. (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196; Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 31; Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 162.) Defendants’ opening brief argues the trial court erred in summarily adjudicating that plaintiff did not waive the breach because it, with full knowledge of the sublease, requested PWS, Inc. pay the delinquent taxes and served notice demanding statements of sales reports and proof of insurance with knowledge of the sublease. There is authority for the contention that acceptance of rent payments with knowledge of a breach can result in a waiver of a breach. (Kern Sunset Oil Co. v. Good Roads Oil Co. (1931) 214 Cal. 435, 440-441; Karbelnig v. Brothwell (1966) 244 Cal.App.2d 333, 342.) But, the claim here does not involve acceptance of rent payments. And, paragraph 12.3 of the master lease provides that acceptance of rent does not constitute a waiver. The contention here is that service of notices for sales reports and the demand for payment of taxes amounts to a waiver of the right to claim a forfeiture of the lease for breach of the covenant against subleasing without consent. No authority is cited to support the claim. Waiver requires an intentional relinquishment of a right. (Thriftimart, Inc. v. Me & Tex (1981) 123 Cal.App.3d 751, 753-754; Karbelnig v. Brothwell, supra, 244 Cal.App.2d at p. 342.) Here, there is no evidence whatsoever of an intentional act to waive the right to declare the forfeiture caused by the Sanchez sublease. From the start, plaintiff asserted its right to declare a forfeiture based on the sublease. Plaintiff simultaneously served three notices demanding compliance with the lease provisions including paragraph 10.1 of the master lease for payment of taxes on the premises. The notice demanding payment expressly stated that by accepting payment for the taxes, plaintiff was not waiving the breach from the Sanchez sublease. Thus, the only evidence showed that there was never any intent to waive breach of the master lease due to the Mr. Sanchez sublease. The trial court properly summarily adjudicated the waiver issue in plaintiff’s favor.
Because defendants’ opening brief on appeal only addresses its waiver defense, the estoppel issue is abandoned. (Levin v. Ligon (2006) 140 Cal.App.4th 1456, 1486; In re S.C. (2006) 138 Cal.App.4th 396, 408; Dabney v. Dabney (2002) 104 Cal.App.4th 379, 384.) For the first time in the reply brief, defendants assert the existence of evidence to establish an estoppel. According to defendants this is sufficient because waiver and estoppel terms are used interchangeably. Waiver and estoppel are separate and distinct doctrines which rest on different legal principles. (Hoopes v. Dolan, supra, 168 Cal.App.4th at pp. 162-163; DRG/Beverly Hills Ltd. v. Chopstix Dim Sum Cafe & Takeout III, Ltd. (1994) 30 Cal.App.4th 54, 61.) We decline to consider any arguments related to the estoppel defense which defendants raised for the first time in their reply brief. (People v. Peevy (1998) 17 Cal.4th 1184, 1206; In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 214; Elite Shows Services, Inc. v. Staffpro, Inc. (2004) 119 Cal.App.4th 263, 270; Shade Foods, Inc. v. Innovative Product Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 894, fn. 10.)
IV. DISPOSITION
The judgment is affirmed. Plaintiff, Roco Investment Holding, LLC, is awarded its costs on appeal from defendants, PWS, Inc. and James W. Minges.
We concur: MOSK, J., KRIEGLER, J.