Opinion
B318784
09-29-2023
DILLER SOUTHERN PARTNERSHIP, Plaintiff and Respondent, v. ALTAMED HEALTH SERVICES CORPORATION, Defendant and Appellant.
Ryan and Associates, Gregory Ryan, Andrei Armas, and Joseph Bahij for Defendant and Appellant. Sinclair Braun & Kargher, Nathaniel S.G. Braun, and Samantha J. Aceves for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. 21NWCV00348 Brian F. Gasdia, Judge. Affirmed.
Ryan and Associates, Gregory Ryan, Andrei Armas, and Joseph Bahij for Defendant and Appellant.
Sinclair Braun & Kargher, Nathaniel S.G. Braun, and Samantha J. Aceves for Plaintiff and Respondent.
RUBIN, P. J.
Diller Southern Partnership (Diller), a commercial landlord, and AltaMed Health Services (AltaMed), a health services provider, entered a lease agreement for a term that ended on May 31, 2021. Prior to the end of the term, Diller told AltaMed that it needed to vacate the property by that date for a new tenant. Instead, AltaMed stayed put, prompting Diller to file this unlawful detainer action. AltaMed then sent Diller checks, describing them as "rent" payments. Diller deposited the checks, informing AltaMed that it was accepting the payments not as rent, but as damages resulting from AltaMed's refusal to vacate. Concluding that Diller's conduct did not waive its right to possession under the lease terms, the trial court granted Diller's motion for summary judgment and entered a judgment for possession in favor of Diller. AltaMed appeals from that judgment. We affirm.
FACTS
1. The Lease Agreement and Extensions of Lease Term
Diller owns a medical building in Downey, California (the property). AltaMed is a healthcare service provider who, in 2010, entered an agreement with Diller to lease the property for a term of five years, with two five-year options to extend. AltaMed exercised its first option to extend the lease from January 2015 through December 2019, but declined to exercise the second five-year option. Instead, AltaMed asked, and Diller agreed, to extend the lease by one year, through December 2020. In July 2020, AltaMed and Diller agreed to extend the lease once more- this time until May 31, 2021, the operative date for this appeal. 2. Relevant Lease Provisions
Section 2.04 of the lease, captioned "holding over," provides that AltaMed "shall vacate the Property upon the [lease's] expiration" and "shall reimburse" Diller for "all damages" it incurs from AltaMed's "delay in vacating the Property." It continues, "If [AltaMed] does not vacate the Property upon the expiration . . . of the Lease and [Diller] thereafter accepts rent . . . [AltaMed's] occupancy of the Property shall be a 'month-to-month' tenancy, subject to all of the terms of this Lease . . . except that the Base Rent then in effect shall be increased by fifty percent (50%)."
Section 10.06, entitled "automatic termination," states: "Notwithstanding any other term or provision . . . to the contrary, the Lease shall terminate on the occurrence of any act which affirms [Diller's] intention to terminate the lease ...."
Section 13.06, governing "waivers," states: "All waivers must be in writing and signed by the waiving party. [Diller's] failure to enforce any provision of this Lease or its acceptance of rent shall not be a waiver and shall not prevent [Diller] from enforcing that provision or any other provision of the Lease in the future. No statement on a payment check from [AltaMed] or in a letter accompanying a payment check shall be binding on [Diller]. [Diller] may, with or without notice to [AltaMed], negotiate such check without being bound to the conditions of such statement."
3. AltaMed Refuses to Vacate Property and Files Suit
On March 9, 2021, Diller sent AltaMed a letter stating that it had signed a lease with another tenant and that AltaMed needed to vacate the building by May 31, 2021-the end of the lease term. Diller also informed AltaMed that it intended to conduct a site visit with the new tenant and requested the keys to the property. AltaMed did not respond to that notice or cooperate with Diller in its attempt to schedule a visit of the property.
On March 19, 2021, AltaMed filed a complaint against Diller seeking an injunction and declaratory relief and asserting various contract-related claims. By letter and email of May 5, 2021, Diller advised that it would "hold liable" AltaMed for "all damages occasioned by AltaMed's breach," and demanded AltaMed reimburse it for the attorney fees Diller had incurred in connection with AltaMed's refusal to vacate the property.
This separate lawsuit is not directly at issue in this appeal. We do observe that on April 28, 2021, before the expiration of the tenancy, the trial court denied AltaMed's motion for preliminary injunction seeking to bar Diller from entering the property. In its order, the trial court stated: "Plaintiff [AltaMed] has failed to establish its probability of prevailing on the merits. Plaintiff's own allegations confirm that, upon agreement by the parties, the Lease is due to expire on May 31, 2021."
4. Unlawful Detainer Proceedings and AltaMed's Payments to Diller
AltaMed continued to occupy the property after May 31, 2021, and Diller filed its unlawful detainer complaint on June 1, 2021.
Beginning in June 2021, AltaMed sent monthly checks to Diller, which it contends were payment for "rent," of about $47,000 each-the same amount it had paid for rent before the lease term ended. Diller sent an email to AltaMed in June 2021 stating that it "does not accept rent from AltaMed and does not agree to a further tenancy by AltaMed" The email continued, "To date, Diller is owed over $150,000 in damages from AltaMed. Pursuant to the above-referenced sections of the Lease, as well as section 13.06 of the Lease, Diller intends to deposit the checks it has received from AltaMed in compensation for those damages. Diller emphasized that in depositing AltaMed's checks, Diller was not waiving its right to recover possession of the property. In October 2021, AltaMed sent Diller two checks-one for about $118,000, the other for about $71,000, which AltaMed purports made it current on rent at the holdover rate.
Also in October 2021, AltaMed filed its verified answer in the unlawful detainer action, in which it admitted that "Diller and AltaMed [had] negotiated a further extension [with] an end date of May 31, 2021" and that Diller had served AltaMed with a notice on March 9, 2021, advising AltaMed that it needed to leave by May 31, 2021.
Diller filed its motion for summary judgment in November 2021, arguing that the undisputed facts entitled it to judgment as a matter of law. Diller filed an opposition, and after a hearing, the trial court granted Diller's motion. The trial court entered judgment of possession in Diller's favor on December 21, 2021.
AltaMed filed its own motion for summary judgment, which was heard on the same day and which the court denied. That motion is not at issue in this appeal.
AltaMed filed a timely notice of appeal.
DISCUSSION
AltaMed argues that in granting summary judgment for Diller, the trial court erroneously allowed Diller to "evict a commercial tenant who was current in rent." (Italics omitted.) We independently review an order granting a motion for summary judgment. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860; Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal.App.5th 637, 642.)
AltaMed asserted in its opening brief that its eviction was for nonpayment of rent. This assertion is belied by the record, and AltaMed appears to have abandoned it in its reply brief.
1. Pertinent Law
A. Summary Judgment
"Summary judgment is appropriate only 'where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law.'" (Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618; Musgrove v. Silver (2022) 82 Cal.App.5th 694, 704.) "Where no extrinsic evidence is presented in the trial court on the issue of the meaning of contractual language, the appellate function is the same as that of the trial court, i.e., to arrive at a reasonable interpretation of the language in keeping with the applicable rules of construction." (Lombardo v. Santa Monica Young Men's Ass'n. (1985) 169 Cal.App.3d 529, 540-541 (Lombardo).)
B. Holdover Tenancy
"When a lease expires but the tenant remains in possession, the 'relationship' of the landlord and tenant 'changes.'" (Smyth v. Berman (2019) 31 Cal.App.5th 183, 192 (Smyth); Schmitt v. Felix (1958) 157 Cal.App.2d 642, 647 (Schmitt).) "The 'lessor-lessee relationship' based on' "privity of contract"' ends, and a new 'landlord'-'tenant' relationship based on' "privity of estate"' springs into being by the operation of law." (Smyth, at p. 192; Schmitt, at p. 647; Civ. Code, § 1945.) This new "holdover" tenancy is presumed to continue under the same terms contained in the lease," 'except [as those terms] may have been . . . modified'" by the parties. (Civ. Code, § 1945; Smyth, at p. 192; Miller v. Stults (1956) 143 Cal.App.2d 592, 598 (Miller).) Where a lease contains a holdover provision, that provision governs the tenant's continued occupancy of the premises after the termination of the lease's term. (Schmitt, at p. 647; Spaulding v. Yovino-Young (1947) 30 Cal.2d 138, 141.)
C. Unlawful Detainer
Unlawful detainer is a remedy available to a landlord against a tenant who unlawfully holds over or breaches the lease and is" 'intended and designed to provide an expeditious remedy for the recovery of possession of real property.'" (Borden v. Stiles (2023) 92 Cal.App.5th 337, 344; see generally Code Civ. Proc., § 1161.) The elements of unlawful detainer based on the expiration of a fixed-term tenancy are: (1) the plaintiff owns the property; (2) the plaintiff leased the property to the defendant; (3) the plaintiff did not give the defendant permission to occupy the property after the lease term ended; and (4) the defendant still occupies the property. (CACI No. 4301; Code Civ. Proc., § 1161.)
2. Analysis
The trial court correctly granted summary judgment in Diller's favor. No one disputes that Diller is the owner of the property and leased it to AltaMed. The parties expressly agreed-in a document entitled "Second Amendment to the Lease"-that the lease term ended on May 31, 2021. Diller did not grant AltaMed permission to remain past the lease date; to the contrary, it advised AltaMed well in advance that it needed to leave by May 31, 2021, which AltaMed does not dispute. AltaMed admitted that it remained in possession of the property, despite the expiration of the lease term.
AltaMed insists that Diller's deposit of the checks AltaMed sent it beginning in June 2021-which it contends made it current on rent even with the 50 percent increase set forth in the holdover provision-constituted Diller's acceptance of "rent," thereby triggering "a 'month-to-month' tenancy." AltaMed argued the same in opposing summary judgment. The trial court expressly rejected the argument.
Diller's undisputed conduct, as well as the terms of the lease agreement, foreclose that argument as a matter of law. It is well established that"' "while an intent to waive may be inferred from the acceptance of rent under certain circumstances, such an inference may be rebutted . . . by the express agreement between the parties that the rent was paid and accepted without prejudice." '" (Rreef America Reit II Corp, YYYY v. Samsara Inc. (2023) 91 Cal.App.5th 609, 623, quoting Karbelnig v. Brothwell (1966) 244 Cal.App.2d 333, 341 (Karbelnig); see also Woodman Partners v. Sofa U Love (2001) 94 Cal.App.4th 766, 771 (Woodman) [antiwaiver provision provided "actual notice" to tenant that landlord's acceptance of rent did not constitute a waiver of its right to recover possession].) Under the lease, AltaMed and Diller expressly agreed that "all waivers must be in writing and signed by the waiving party," and that "acceptance of rent shall not be a waiver and shall not prevent [Diller] from enforcing . . . any . . . provision of the Lease." Although unnecessary in view of the antiwaiver provision (Woodman, at p. 771), Diller expressly informed AltaMed that in depositing the checks it "does not accept rent from AltaMed and does not agree to a further tenancy by AltaMed." Diller informed AltaMed it would "deposit the checks" as compensation for the damages and attorney fees it had incurred from AltaMed's "refusal to vacate," in accordance with section 2.04, which provides "[AltaMed] . . . shall reimburse [Diller] for . . . all damages [it] incurs from [AltaMed's] delay in vacating the Property." (Cf. Edc Assocs. v. Gutierrez (1984) 153 Cal.App.3d 167 [affirming the finding that landlord waived right to assert forfeiture for failure to pay timely rent where there was neither an antiwaiver provision in the lease nor evidence landlord rejected tenant's late rent payments].)
AltaMed attempts to distinguish Karbelnig and Woodman based on their facts, but those differences do not change our analysis. For example, although Karbelnig concerned a noassignment clause, the court's conclusion that the lessor's acceptance of rent did not constitute waiver in view of the contract's nonwaiver provision applies here with equal force. (Karbelnig, supra, 244 Cal.App.2d at pp. 341-343; see also Woodman, supra, 94 Cal.App.4th at p. 771 [acceptance of rent after breach not waiver in light of lease's nonwaiver clause].)
AltaMed urges that Diller's recharacterization of AltaMed's purported "rent" payments carries no legal significance, and that AltaMed's own labelling of the payments as "rent" is definitive. Specifically, AltaMed posits: "Nor can semantics alter a rent payment into something else on this record." This contention is neither correct nor material. Diller is not engaging in a semantical exercise; it is enforcing a contractual provision to which AltaMed agreed. The parties anticipated the very situation they now confront and agreed on a resolution that, in retrospect, AltaMed does not like. AltaMed essentially asks us to read section 13.06 out of the lease: "No statement on a payment check from [AltaMed] or in a letter accompanying payment shall be binding on [Diller]." More formally, Diller's acceptance of AltaMed's payment-whether characterized as rent or not-does not operate as a waiver of Diller's right to possession because, as we have already observed, the lease required "all waivers [to] be in writing and signed by the waiving party." There is no written waiver here.
Citing the principle that "ambiguities or uncertainties in the terms of an option to renew or extend are construed against the landlord," AltaMed urges that "[a]t best, the court was construing a conflict between the holdover provision and the antiwaiver provision." Yet AltaMed fails to identify any specific conflict or ambiguity, or to explain why it is relevant here." 'An appellate court is not required to examine undeveloped claims, []or to make arguments for the parties.'" (DeNike v. Mathew Enterprise, Inc. (2022) 76 Cal.App.5th 371, 388, fn. 11.) Based on its reply brief, AltaMed's argument appears to be that the provision in section 2.04 allowing the creation of a month-to-month tenancy if Diller "accepts rent" is inconsistent with the provision in section 13.06 that "acceptance of rent shall not be a waiver and shall not prevent [Diller] from enforcing . . . any other provision of the Lease in the future." "A contract must be considered as a whole and construed to give meaning to all of its parts if reasonably practicable." (Lombardo, supra, 169 Cal.App.3d at p. 541; Civ. Code, § 1641.) The trial court expressly concluded that the two provisions were "not contradictory, vague or ambiguous," and we agree. Diller and AltaMed agreed to conditions under which AltaMed's tenancy might continue on a month-to-month basis, but Diller always retained its right to terminate the lease as it pleased after the end of the lease term. AltaMed suggests that the contractual language is unfair, but these are the terms to which it agreed, and we "are not at liberty to revise an agreement under the guise of construing it." (Hinckley v. Bechtel Corp. (1974) 41 Cal.App.3d 206, 211 ["courts cannot make for the parties better agreements than they themselves made or rewrite contracts because they operate harshly or inequitably as to one of the parties"].)
Citing Civil Code section 1945, AltaMed argues that Diller's deposit of the post-lease-term checks created a month-to- month tenancy. That section establishes a presumption that when a tenant remains in possession after the end of a lease term and the landlord continues to accept rent, the tenancy continues" '[under] the same terms'" contained in the expired lease," 'except [as those terms] may have been . . . modified' by the landlord and tenant." (Civ. Code, § 1945; Smyth, supra, 31 Cal.App.5th at p. 192; Miller, supra, 143 Cal.App.2d at p. 598.) But Civil Code section 1945 is what it says: a presumption; it "may be rebutted"-as it was here-"by the express agreement between the parties." (Karbelnig, supra, 244 Cal.App.2d at p. 342.)
AltaMed's reliance on Gould v. Corinthian Colleges, Inc. (2011) 192 Cal.App.4th 1176 (Gould) is misplaced because that case bears no similarity to this one. The tenant there had a right to terminate its lease early if it satisfied four conditions, the last of which required payment of a certain amount. (Id. at p. 1178.) The tenant satisfied the first three conditions; as to the fourth, it applied a portion of its security deposit towards the payment. (Ibid.) The landlord accepted and retained the payments, but then sought a declaratory judgment to bind the tenant to the lease for the balance of the term, asserting that the tenant had "breached the lease by applying a portion of the security deposit to the termination payment." (Id. at pp. 1178-1179.) The court held that by accepting and retaining the payments the tenant made to terminate the lease early, the landlord "simply waived any defect in [the tenant's] performance of the early termination provision." (Id. at p. 1179.) Although the lease in Gould contained an antiwaiver provision, it concerned acceptance of payments for rent-not payments to satisfy the early termination requirements. (Id. at p. 1180 ["nothing in the lease prohibits waiver of defects in [the tenant's] performance of the early termination provision"].)
Unlike Gould, AltaMed sent Diller checks that it labeled as payments for "rent" after the lease term had already ended and well after Diller had notified AltaMed that it did not consent to AltaMed occupying the property past the lease term. Diller informed AltaMed that in depositing the checks it was not accepting the payments as rent but as damages, and that it was not waiving its right to recover possession of the property. (See Karbelnig, supra, 244 Cal.App.2d at pp. 342-343 [acceptance of payment did not constitute waiver where lessor "not only relied upon the express agreement in the . . . lease against waiver . . . but it also gave notice that its acceptance of the rent after the breach . . . was not to be construed as . . . a waiver of its right to assert a forfeiture"].) The antiwaiver provision in the lease here is broader than that in Gould-it provides that AltaMed's labels on its payments are not binding on Diller; that even if Diller did accept rent from AltaMed, that did not preclude it from enforcing other provisions of the lease; and that all waivers had to be made in writing and signed by both parties. Gould's acknowledgement that "under most circumstances," "an antiwaiver provision would militate against a finding of waiver," actually aides Diller. (See Gould, supra, 192 Cal.App.4th at p. 1180.) The "unconscionable" circumstances in Gould of the landlord accepting the early termination payments while also trying to bind the tenant to the lease for the balance of the term, all in the absence of any applicable antiwaiver provision, are not present here, and AltaMed fails to identify any circumstance that would warrant an exception to the general rule that parties are bound by the antiwaiver provisions in their agreements.
AltaMed also cites Multani v. Knight (2018) 23 Cal.App.5th 837, in which the court of appeal concluded that a commercial tenant's month-to-month tenancy-created by presumption under Civil Code section 1945-"was terminated by the tenant's failure to pay rent coupled with the landlord's filing of the wrongful detainer action." (Mutlani, at p. 840.) AltaMed observes that "only after . . . the tenant got behind in rent and ceased making payments [was] the [month-to-month] tenancy terminated." This observation is of no moment because Civil Code section 1945 never came into play-rather, the parties overrode the statutory presumption with the express terms of their lease. Under section 10.06, the lease "terminate[d] on the occurrence of any act which affirms [Diller's] intention to terminate the lease ...." It is undisputed that on March 9, 2021, Diller affirmed its intention to terminate the lease on the date the parties to which the parties had agreed-May 31, 2021. Although section 2.04 of the lease left open the possibility that Diller could create a month-to-month tenancy on the same terms and conditions by accepting rent, Diller expressly declined to do so.
We also reject AltaMed's argument that there was a triable issue of material fact as to "whether AltaMed was in lawful possession, either under Civil Code section 1945 and/or section 2.04 of the lease agreement." The relevant facts are undisputed. (Cf. Borden v. Stiles (2023) 92 Cal.App.5th 337, 341 [factual issues such as when the tenant performed work for landlord, when landlord died, and when tenant was notified of landlord's death precluded summary judgment].) The trial court simply applied the law to those undisputed facts. In doing so the trial court did not act as a trier of fact. (Shaw v. Superior Court (2017) 2 Cal.5th 983, 993 [issues of law are not determined by jury]; McConnell v. Advantest America, Inc. (2023) 92 Cal.App.5th 596, 607 [statutory interpretation is an issue of law]; DFS Group, L.P. v. County of San Mateo (2019) 31 Cal.App.5th 1059, 1079 [contract interpretation is issue of law]; see also Lombardo, supra, 169 Cal.App.3d at pp. 540-541 [where no extrinsic evidence is presented on issue of meaning of contract, trial court's function is to apply rules of construction to arrive at reasonable interpretation].)
In its reply brief, AltaMed relies on facts that are not in the record and that it admits were not before the trial court when it decided the summary judgment motion. In particular, AltaMed refers to its "discover[y]" "[a]fter the hearing on the summary judgment," "that [Diller] was double dipping by simultaneously collecting rent from AltaMed and a third party during the relevant period." This matter is improper and outside the scope of our review."' "[I]n reviewing summary judgment, the appellate court must consider only those facts before the trial court, disregarding any new allegations on appeal. [Citation.] Thus, possible theories that were not fully developed or factually presented to the trial court cannot create a 'triable issue' on appeal." '" (Los Angeles Unified School Dist. v. Torres Construction Corp.(2020) 57 Cal.App.5th 480, 502-503.)
DISPOSITION
We affirm the judgment. Diller is awarded costs on appeal.
WE CONCUR: MOOR, J., KIM, J.