DEPARTMENT 78 LAW AND MOTION RULINGS
Case Number: BC664614 Hearing Date: January 07, 2019 Dept: 78
County of Los Angeles
Defendants Wind Chime Properties, L.P., White Spring Associates, Inc.; Jack Nourafshan, and Reliable Properties’s Motion for Summary Judgment is DENIED.
This is an action for fraud and breach of contract. The Complaint alleges as follows. Plaintiff Jimenez Brothers Enterprises, Inc. (“JBE”) is a tenant in a commercial property owned by Defendant Wind Chime Properties, LP (“Wind Chime”). (Complaint ¶ 16.) In August 2015, Defendant Jack Nourafshan (“Nourafshan”), an agent for Wind Chime, approached JBE regarding some repairs and renovations to the property. (Complaint ¶ 19.) Nourafshan promised that JBE’s store could remain open throughout the renovations, that the renovations would not affect their business, and that the renovations would last for no more than three months. (Complaint ¶¶ 20–22.) Nourafshan and JBE executed a First Addendum to the Lease, which gave JBE a rent-reduction to continue until renovations were completed, but to last no more than three months. (Complaint ¶ 24.) But the renovations were not completed within three months and caused damage to the property. (Complaint ¶¶ 25–26.)
JBE filed the Complaint on June 13, 2017, alleging four causes of action:
The Fourth Cause of Action for Fraud was dismissed on August 14, 2017.
Defendants filed a Cross-Complaint on August 7, 2017, for contribution and declaratory relief against several Roe defendants.
Defendants filed the present Motion for Summary Judgment on October 19, 2018.
A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)
The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (p)(2).) Plaintiffs moving for summary judgment may meet their initial burden by “prov[ing] each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc. § 437c(p)(1).)
Once the plaintiff has met that burden, the burden shifts to the defendant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. (Code Civ. Proc. § 437c(p)(1).) The defendant may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto. (Code Civ. Proc. § 437c(p)(1).) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)
Defendants here move for summary judgment on the grounds that JBE’s complaint, which rests on Defendants’ performance of unworkmanlike repairs upon the property, is barred by JBE’s signing of a release. The original lease between JBE and Wind Chime stated as follows:
TENANT acknowledges that LANDLORD might be remodeling the CENTER and shall make additional improvements and renovations to the CENTER from time to time. Such work may cause noise, inconvenience, dust, possibly temporary disconnection of utilities, including electricity, water, and telephone, and blocking off of areas of the CENTER to permit construction. TENANT acknowledges that such work may cause interference with TENANT’S business and inconvenience to TENANT. TENANT waives any and all claims that TENANT may have against LANDLORD arising from any such construction work, including any claim of constructive eviction or claim of offset against or reduction of rent because of such activities. TENANT shall have no right to terminate this Lease or claim any offset against or reduction in any rent payable because of interference with or impairment, to any extent, of light, air, visibility or view, waiving all claims against LANDLORD with respect thereto, shall permit persons authorized by LANDLORD upon the demised premises for the purpose of doing such work as may be necessary to protect the demised premises or the CENTER from injury or damage.
Byrne Decl. Exh. B ¶ 9, italics added, strikethrough in original.)
Defendants also point to language in the Lease Addendum stating that, in return for three months’ rent reduction,
Upon the application of the Rent Relief to Tenant’s Minimum Rent, until the completion of construction mentioned above, Tenant hereby fully releases, acquits and discharges Landlord and its contractors from any and all claims, actions, causes of action, in law or in equity, damages, losses, costs or expenses of any nature, known or unknown, which Tenant has or may have against Landlord arising out of the Center Construction Work, the Lease or this First Addendum from the beginning of time to the Effective Date [August 4, 2015].”
(Byrne Decl. Exh. D.)
Defendants rely on Frittelli, Inc. v. 350 North Canon Drive, LP (2011) 202 Cal.App.4th 35, in which the court of appeal affirmed a grant of summary judgment against a plaintiff suing their landlord for negligence when the plaintiff had signed a lease with an exculpatory clause. (Motion at p. 6.) That clause stated:
Notwithstanding the negligence or breach of this lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee …, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, … or (iii) injury to Lessee’s business or for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.
(Id. at p. 45, italics omitted.) The lease also included a provision stating:
At any time during the Term, Lessor may remodel or expand, in any manner, the existing Shopping Center…. Lessor shall use reasonable efforts to complete any work affecting the Premises in an efficient manner so as not to interfere reasonably with Lessee’s business. Lessee shall not be entitled to any damages for any inconvenience or any disruption to Lessee’s business caused by such work; provided, however, the Base Rent paid by Lessee for the period of the inconvenience shall be abated in proportion to the degree that Lessee’s use of the Premises is impaired.
(Ibid., italics omitted.)
JBE makes the following arguments in its Opposition. JBE’s president, Jesus Jimenez, declares that the particular list of harms was a matter of negotiation and or particular importance to JBE. (Jimenez Decl. ¶ 4.) JBE thus argues that that the lease’s list of foreseeable harms from renovation, including harms that have been crossed out, indicates that the lease’s waiver of liability does not extend to harms beyond the list. (Opposition at p. 5.) Because JBE suffered harms from the renovations due to flooding and interruptions of water service, which are not listed in the lease waiver, the waiver is no barrier to claims for damages from those harms. (Opposition at pp. 5–6; Jimenez Decl. ¶ 8.)
These arguments do not apply to the lease addendum executed in August 2015, but JBE argues that the release in that agreement applies only, by its own terms, to claims arising “from the beginning of time to the Effective Date,” defined as August 4, 2015. (Opposition at p. 5.) Thus no judgment can be granted against claims arising after the execution of the agreement, which, according to JBE, included additional flooding and water cut-offs. (Jimenez Decl. ¶¶ 11–12.) JBE finally argues that the addendum’s release was entered into based on the mistaken belief that construction would cease within three months of its execution, and that extending the release beyond that time would not comport with the reasonable expectations of the parties. (Opposition at pp. 6–7.)
Exculpatory clauses are ‘strictly construed against the person relying upon them.” (Frittelli, Inc., supra, 202 Cal.App.4th at p. 44.) Additionally, where a conflict of extrinsic evidence exists as to the parties’ intentions with respect to a contract, such conflict “must be resolved in the trial court, as with any question of fact, before the court can declare the meaning of the contract as a matter of law.” (Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1359.)
The above authority and JBE’s evidence persuade the Court that triable issues of fact exist as to the parties’ intentions with regard to the waiver of claims arising from renovations and construction in the original lease. This is because the lease itself lists a number of harms that are foreseeable from renovations, but some of these harms are struck through, as though specifically excluded. (Byrne Decl. Exh. B ¶ 9.) Jesus Jimenez declares that JBE negotiated for these exclusions, particularly the cutting off of utilities, because JBE could not legally operate its business without access to utilities. (Jimenez Decl. ¶ 4.) Thus, although this clause contains a broad waiver of “any and all claims that TENANT may have against LANDLORD arising from any such construction work,” a triable issue of fact exists as to whether “such construction work” included work causing harm beyond those listed.
Triable issues also prevent granting summary judgment based on the lease addendum. Although JBE’s mistaken belief that the construction would not continue beyond three months after execution of the agreement would form no basis for altering the contract — mistakes of fact must be as to “a fact past or present,” not future (Civ. Code § 1577) — the agreement is not clear whether it extends toall claims arising from the construction, including those post-dating the agreement, or only to those preceding it, “from the beginning of time to the Effective Date” of August 4, 2015. (Byrne Decl. Exh. D.) The Court cannot conclude as a matter of law that all of JBE’s claims fall within this release, particularly when JBE has presented evidence of substantial harms post-dating the execution of the agreement. (Jimenez Decl. ¶ 11.)
Defendants’ Motion for Summary Judgment is therefore DENIED.
Defendant to provide notice.
DATED: January 7, 2019 ________________________________
Hon. Robert S. Draper
Judge of the Superior Court