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Stamatakis v. Ho

California Court of Appeals, First District, Fourth Division
Jul 22, 2008
No. A118916 (Cal. Ct. App. Jul. 22, 2008)

Opinion


NICHOLAS STAMATAKIS et al., Plaintiffs and Respondents, v. STEVEN HO, Defendant and Appellant. A118916 California Court of Appeal, First District, Fourth Division July 22, 2008

NOT TO BE PUBLISHED

Alameda County Super. Ct. No. CH158710

Reardon, J.

After a court trial on an action to recover rent due from defendant and appellant Steven Ho pursuant to a commercial lease, the trial court awarded plaintiffs and respondents Nicholas and Emanuel Stamatakis $106,200, in addition to $110,089 in interest. Ho appeals the judgment, contending that (1) the trial court abused its discretion by requesting and accepting his direct examination in the form of his attorney’s trial brief, thus precluding a sound credibility assessment and (2) no substantial evidence supports its finding that the Stamatakises acted reasonably to mitigate their damages. We affirm the judgment.

Ho filed a timely notice of appeal from the June 25, 2007 judgment. The record on appeal revealed that this judgment was amended on August 6, 2007—several weeks before the August 23, 2007 notice of appeal was filed—but did not include a copy of the amended judgment. We take judicial notice of the amended judgment, that adds specific amounts of attorney fees and costs to the terms of the initial previous judgment. (See Evid. Code, §§ 452, subd. (d)(1), 459, subd. (a)(1).) An amended judgment that substantially modifies the initial judgment supersedes that initial judgment, effectively vacating it. A new period for filing a notice of appeal runs from the notice of entry of the amended judgment. (See Neff v. Ernst (1957) 48 Cal.2d 628, 634; In re Marriage of Micalizio (1988) 199 Cal.App.3d 662, 670.) Typically, any appeal from such a superseded judgment is dismissed as a nullity. (See Pacific Home v. County of Los Angeles (1953) 41 Cal.2d 855, 858; In re Marriage of Micalizio, supra, 199 Cal.App.3d at p. 670; Medak v. Cox (1970) 12 Cal.App.3d 70, 74.) However, as the original judgment anticipated the possibility of an award of attorney fees and costs and the amended judgment makes no change other than to award specific amounts for those fees and costs, we find no substantial modification of the original judgment. (See Neff v. Ernst, supra, 48 Cal.2d at p. 634.) In such circumstances, we liberally construe the notice of appeal to constitute an appeal from the amended judgment. (See Cal. Rules of Court, rule 8.100, subd. (a)(2).)

I. FACTS

In 1990, appellant Steven Ho entered into a 10-year lease to rent San Leandro commercial real estate owned by the real estate general partnership of respondents Nicholas and Emanuel Stamatakis. The lease required Ho to pay the Stamatakises $2,250 per month in rent, in addition to a $2,250 security deposit. Ho occupied the property beginning in June 1990. In August 1991, Ho notified the Stamatakises that he was abandoning the property. By this time, he had fallen behind on his rent, having paid only $9,000 rent due on the lease. Despite Ho’s failure to pay, the Stamatakises were still obligated to pay a $20,000 commission to the leasing agent who arranged the lease. As late as March 1991, Ho’s possessions were still at the site.

In November 1991, Nicholas Stamatakis filed a complaint against Ho seeking payment of $261,000—the remainder of the rent due over the 10-year life of the lease. In April 1992, Nicholas and Emanuel Stamatakis filed a first amended complaint. An order granting default entered in October 1992. The site remained vacant until February 1993, when the Stamatakises leased it to another occupant that they found through their leasing agent, at $1,500 per month rent for the first year and $1,800 per month rent for the remaining years of the lease.

The new lessees were unable to pay $1,800 per month after the first year of the lease, but the Stamatakises permitted them to remain in occupancy at the $1,500 rental rate.

In March 2005, Ho obtained an order setting aside the default judgment for lack of notice of the proceedings. Ho filed an answer to the complaint in April 2005. In this answer, he alleged as affirmative defenses that the Stamatakises released him from any obligation under the lease after he vacated the premises and that they failed to mitigate damages.

The matter was tried to a court in June 2007. Nicholas Stamatakis testified at trial, denying that he ever told Ho that he could abandon the lease without any obligation. He also denied that Ho ever introduced him to someone who was willing to sublet the site.

Ho testified in his own defense through an interpreter. At the trial court’s suggestion, the recitation of facts contained in Ho’s trial brief was submitted as direct evidence in support of Ho’s case. The trial brief set out that Ho wanted to sublease the site to a third party for $2,800 per month, but when he sought the Stamatakises’ permission to do so, they refused to consent. Instead, they agreed that if Ho would surrender the premises, they would rent to the proposed sublessee directly and benefit from the increased rent.

Ho’s counsel argued that the Stamatakises had released Ho from the obligations of the lease after he provided a replacement tenant to them at $2,800 per month rent. Given the fact that the site was later rented to a third party for $1,500 per month—which was less than the $2,250 monthly rent specified in the Ho lease, the trial court found Ho’s evidence that a tenant had existed who had been willing to pay $2,800 per month rent to lack credibility. Accordingly, it rejected the affirmative defense that Ho had been released from any obligation under the lease when he abandoned the premises. It also found that the Stamatakises acted reasonably to mitigate their damages. The trial court found Ho liable for $106,200 in damages—the sum due under the lease with credits for rent received from Ho and the tenants who rented the site after he abandoned it—plus $110,089 in interest. Judgment entered accordingly.

II. MANNER OF DIRECT EXAMINATION

First, Ho contends that the trial court abused its discretion by suggesting that the recital of underlying facts contained in his trial brief be admitted in lieu of his direct examination. He argues that by proceeding in this manner, the trial court was precluded from making a sound assessment of his credibility.

A trial court has a duty to exercise reasonable control over the cross-examination of a witness. (Evid. Code, § 765, subd. (a); Marshall v. Marshall (1965) 232 Cal.App.2d 232, 255.) One purpose of this exercise of control is to make examination as rapid, distinct, and effective as possible for the ascertainment of truth. (Evid. Code, § 765, subd. (a).) Considerable latitude is allowed as long as the judge is fair to both sides. (People v. Raviart (2001) 93 Cal.App.4th 258, 270.) In essence, Ho argues that the trial court’s manner of proceeding was unreasonable within the meaning of the statute.

The procedure did not appear unreasonable to the attorneys at trial. Both counsel consented to the trial court’s suggestion that the facts contained in Ho’s trial brief be deemed to constitute his direct testimony about the underlying facts in this matter. Contrary to the suggestion in Ho’s opening brief, the record on appeal establishes that he was fully cross-examined and his counsel conducted a redirect examination after the trial brief was admitted into evidence. Before the trial court rendered its decision, Ho’s counsel agreed that his client had had a full and fair opportunity to present his defense. This is not a trial by affidavit—Ho was present and the trial court had a full opportunity to evaluate his credibility. (See Corwin v. Los Angeles Newspaper Service Bureau, Inc. (1971) 4 Cal.3d 842, 852.) Based on our independent review of the record, we reject Ho’s claim that he was deprived of the right to present a defense.

III. MITIGATION OF DAMAGES

Ho also contends that the trial court’s finding that the Stamatakises acted reasonably to mitigate their damages lacks substantial evidence to support it. He argues that the delay between the termination of his lease and the releasing of the premises was unreasonable. He also contends that the Stamatakises failed to put on any evidence of the efforts of their leasing brokers to find new tenants, suggesting that this evidence was necessary to any finding that their efforts to mitigate damages were reasonable.

We disagree with Ho’s claim of error for two reasons. First, the Stamatakises did not have the burden of proof of failure to mitigate—Ho did. By statute, the amount that a lessor may receive in damages from a lessee who breaches a lease for real property and abandons the property before the end of the lease is calculated based on the rent due under the lease. The amount of rental loss may be reduced by sums that the lessee proves could have been reasonably avoided. (Civ. Code, § 1951.2, subd. (a)(2); Zanker Development Co. v. Cogito Systems Corp. (1989) 215 Cal.App.3d 1377, 1381 (Zanker); see Green v. Smith (1968) 261 Cal.App.2d 392, 396.) Under the terms of the statute, the lessee—in our case, Ho—had the burden of proving the amount of rental loss that lessors could have reasonably avoided. (Civ. Code, § 1951.2, subd. (a)(2); see Zanker, supra, 215 Cal.App.3d at p. 1383.) This burden of proof is consistent with Ho’s assertion of an affirmative defense that the Stamatakises failed to mitigate their damages. (See Evid. Code, § 500 [party asserting defense has burden of proof of essential facts].)

Second, Ho would impose an excessive amount of reasonableness on the Stamatakises. In fact, the standard by which we measure the reasonableness of efforts in mitigation of damages is not as high as in other legal contexts. It is sufficient for mitigation of damages purposes if the plaintiff acts reasonably, in good faith with due diligence. (Green v. Smith, supra, 261 Cal.App.2dat p. 397.) The test is not whether, in hindsight, other steps might have been taken to reduce the damages, but whether the steps that the plaintiff took were reasonable. (Zanker, supra, 215 Cal.App.3d at p. 1381; see Green v. Smith, supra, 261 Cal.App.2d at pp. 396-397.) The fact that a lessor sought and found a new tenant may constitute evidence of reasonable mitigation. (See Zanker, supra, 215 Cal.App.3d at p. 1382.)

The reasonableness of a plaintiff’s mitigation effort is a question of fact. On appeal, we uphold the finding of the trier of fact if that finding is supported by substantial evidence. (Green v. Smith, supra, 261 Cal.App.2d at p. 397.) In this matter, the Stamatakises offered evidence that their leasing agent located a new tenant who was able to lease the premises beginning in February 1993. The rent under this new lease was significantly lower than that required by the Ho lease, raising the inference that the property was somewhat difficult to lease. This evidence was sufficient to establish that the steps that the lessors took to mitigate their damages were reasonable. (See Zanker, supra, 215 Cal.App.3d at p. 1382.)

For his part, Ho failed to offer evidence establishing that the Stamatakises’ efforts to lease the property to a new tenant were unreasonable. (See, e.g., Zanker, supra, 215 Cal.App.3d at p. 1383.) The issue was discussed at length in the trial court. After the close of evidence, the trial court offered Ho an opportunity to reopen the case in order to offer additional evidence that might have shown a failure to mitigate damages. Ho declined the offer, mistakenly believing that the Stamatakises had the burden of proving that they had acted reasonably to mitigate their damages. (See Civ. Code, § 1952.1, subd. (a)(2).) We find that Ho failed to meet his burden of proof of his affirmative defense of failure to mitigate damages.

The judgment is affirmed.

We concur: Ruvolo, P.J., Sepulveda, J.


Summaries of

Stamatakis v. Ho

California Court of Appeals, First District, Fourth Division
Jul 22, 2008
No. A118916 (Cal. Ct. App. Jul. 22, 2008)
Case details for

Stamatakis v. Ho

Case Details

Full title:NICHOLAS STAMATAKIS et al., Plaintiffs and Respondents, v. STEVEN HO…

Court:California Court of Appeals, First District, Fourth Division

Date published: Jul 22, 2008

Citations

No. A118916 (Cal. Ct. App. Jul. 22, 2008)