Sadati v. Terrace Oak Partners CA1/5 ( 2015 )

Filed 12/30/15 Sadati v. Terrace Oak Partners CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
MATT SADATI,
Plaintiff and Appellant, A144509
v. (Contra Costa County
Super. Ct. No. MSC1201205)
TERRACE OAK PARTNERS, LLC,
Defendant and Respondent.
________________________________________/
Plaintiff Matt Sadati appeals from a judgment for defendant Terrace Oak Partners,
LLC (Terrace Oak) following a bench trial. Sadati contends the court erred by
concluding Terrace Oak was not equitably estopped from enforcing a holdover provision
in a commercial lease. We affirm. We conclude Sadati has failed to provide an adequate
record on appeal. We also conclude Terrace Oak is entitled to reasonable attorney fees
on appeal, and we remand to the trial court with directions to award such fees.
FACTUAL AND PROCEDURAL BACKGROUND
Sadati is “an experienced and knowledgeable real estate professional[.]” In
October 2010, Sadati leased an office in a commercial building in Walnut Creek from
Terrace Oak for $2,355.55 per month. The one-year lease ended on October 31, 2011. It
did not have an option to renew; it included a holdover provision providing that if Sadati
held over after the lease expired, the monthly rent would increase to 250 percent of the
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former amount of $2,355.55, to $5,888.88 per month. The lease authorized the prevailing
party in “in any communication, action, and/or proceeding” brought under the lease “to
recover all its costs and expenses, including without limitation the fees of its attorneys in
[the] . . . action, and/or proceeding.” On November 1, 2010, Terrace Oak’s property
manager gave Sadati contact information for its property manager, accountant, and
principal, Charles Wall.
Sadati did not vacate the premises on October 31, 2011. Pursuant to the holdover
provision, the monthly rent increased to $5,888.88. In November and December 2011,
Sadati’s company sent Terrace Oak rent checks for $2,355.55. In January 2012, Terrace
Oak’s property manager advised Sadati the lease expired on October 31, 2011 and —
pursuant to the holdover provision — the rent had increased to $5,888.88. Sadati and
Wall were unable to reach an agreement regarding the holdover provision and Sadati
vacated the office in March 2012.
In May 2012, Sadati filed a complaint against Terrace Oak and others alleging
claims for, among other things, breach of contract and breach of fiduciary duty. Terrace
Oak cross-complained for breach of the lease, seeking to recover $15,762.20 in holdover
rent. Sadati moved for summary adjudication on the cross-complaint, claiming Terrace
Oak was equitably estopped from enforcing the holdover provision.1 The court denied
the motion, concluding Sadati did not establish equitable estoppel applied as a matter of
law, in part because he did not explain “how he was ‘ignorant of the true state of facts’ or
that his reliance was reasonable.” The court noted the lease was for one year, “included
no option for renewal[,]” and “clearly provide[d] that if the tenant holds over, rent would
increase by 250%.”
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“To establish equitable estoppel it must be shown that (1) the party to be estopped
was apprised of the facts and intended his or her conduct to be acted upon or so acted in a
way that the party asserting the estoppel had a right to believe it was so intended; (2) the
other party was ignorant of the true state of facts; and (3) he or she relied on the conduct
to his or her injury.” (Parmar v. Board of Equalization (2011) 196 Cal.App.4th 705, 717,
citing Strong v. County of Santa Cruz (1975) 15 Cal.3d 720, 725.)
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In a three-day unreported bench trial, both parties presented witnesses and offered
documentary evidence. Sadati claimed Terrace Oak was estopped from enforcing the
holdover provision because he wrote Patrick McGrath, the real estate agent who
represented Terrace Oak in the lease transaction, a letter in October 2011 asking to
extend the lease and because Terrace Oak accepted “three months’ rent before informing
[him] it expected him to pay any penalty.”2 Terrace Oak disagreed, contending it was not
estopped from asserting the holdover provision because it “had no knowledge that Sadati
allegedly thought the lease was renewed” and his “claimed ignorance of the non-renewal
of the lease was due to his own unreasonable behavior.”
In its statement of decision, the court concluded Sadati “failed to meet his burden
of proof as to liability.” The court awarded Terrace Oak $15,762.20 on its cross-
complaint, concluding the holdover provision applied and was not unconscionable. The
court observed Sadati was an “experienced and knowledgeable real estate professional
who knew or should have known the contents of the commercial lease he signed.
Acceptance of the prior rental amount during the holdover period did not result in a
waiver of the right to recover the full holdover rate . . . in the lease. . . . Moreover, while
[the] conduct in accepting the old rental amount during the first few months of the
holdover period while secretly harboring an intent to assert the holdover penalty in the
lease may be ethically suspect, it does not rise to the level that requires the application of
the doctrines of waiver or estoppel.” The court entered judgment for Terrace Oak.
DISCUSSION
I.
Sadati’s Appeal Fails Because He Has Failed
to Provide an Adequate Record
Sadati claims the court erred by declining “to find that [Terrace Oak] was
equitably estopped from retroactively applying the holdover penalty against him[.]” “The
2
Sadati’s letter is dated October 3, 2012, and was not sent to the address designated
in the lease or in the property manager’s November 2010 letter to Sadati. McGrath and
Terrace Oak denied receiving the letter. The parties presented written closing arguments
and filed posttrial briefs.
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existence of an estoppel is largely a question of fact.” (Olofson v. Mission Linen Supply
(2012) 211 Cal.App.4th 1236, 1245 (Olofsson).) “‘When a finding of fact is attacked on
the ground that there is not any substantial evidence to sustain it, the power of an
appellate court begins and ends with the determination as to whether there is any
substantial evidence contradicted or uncontradicted which will support the finding of
fact.’ [Citations.] [¶] ‘It is well established that a reviewing court starts with the
presumption that the record contains evidence to sustain every finding of fact.’
[Citations.]” (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) “A
fundamental principle of appellate law is the judgment or order of the lower court is
presumed correct and the appellant must affirmatively show error by an adequate record.”
(Parker v. Harbert (2012) 212 Cal.App.4th 1172, 1178.)
As the party with the burden of proof, Sadati must establish no substantial
evidence supports the court’s factual finding. (Olofsson, supra, 211 Cal.App.4th at p.
1246.) He cannot. We have no reporter’s transcript and no record of what evidence the
trial court heard. As a result, we cannot determine whether the court erred by declining
to apply equitable estoppel principles. Sadati’s failure to provide an adequate record
“requires that the issue be resolved against [him].” (Hernandez v. California Hospital
Medical Center (2000) 78 Cal.App.4th 498, 502; see also Vo v. Las Virgenes Municipal
Water Dist. (2000) 79 Cal.App.4th 440, 447 (Vo) [record inadequate where it did not
“contain a trial transcript”] Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th
121, 129 [defendants who did not provide reporter’s transcript could not demonstrate
insufficient evidence supported trial court’s finding].) Sadati’s reliance on facts
undisputed on summary judgment does not establish estoppel as a matter of law. We
affirm the judgment based on Sadati’s failure to provide an adequate record. (Jameson v.
Desta (2015) 241 Cal.App.4th 491, 504 [affirming order granting nonsuit motion based
on “the absence of a reporter’s transcript”].)
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II.
Terrace Oak is Entitled to Reasonable Attorney Fees on Appeal
Terrace Oak contends it is entitled to recover attorney fees it incurred on appeal.
We agree. The lease authorizes Terrace Oak, the prevailing party, to recover attorney
fees. It provides “[i]n the event of an action or proceeding brought by either party against
the other under this Lease the prevailing party shall be entitled to recover all its costs and
expenses, including without limitation the fees of its attorneys in any communication,
action, and/or proceeding.” “‘Fees, if recoverable at all either by statute or the parties’
agreement, are available for services at trial and on appeal.’ [Citation.]” (Frog Creek
Partners, LLC v. Vance Brown, Inc. (2012) 206 Cal.App.4th 515, 547.) “‘Although this
court has the power to fix attorney fees on appeal, the better practice is to have the trial
court determine such fees.’” (Huntington Life Sciences, Inc. v. Stop Huntingdon Animal
Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1267, quoting Security Pacific National
Bank v. Adamo (1983) 142 Cal.App.3d 492, 498; Frog Creek Partners, LLC v. Vance
Brown, Inc., supra, 206 Cal.App.4th at p. 547 [directing trial court on remand to
determine a reasonable award for attorney fees incurred on appeal]; Vo, supra, 79
Cal.App.4th at p. 448 [prevailing party on appeal “is entitled to attorney fees for the time
spent . . . in this appeal” and remanding to the trial court to fix the amount of fees].)
DISPOSITION
The judgment is affirmed. The matter is remanded with instructions that the court
award Terrace Oak reasonable attorney fees on appeal. Terrace Oak is entitled to costs
on appeal. (Cal. Rules of Court, rule 8.278(a)(2).)
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_________________________
Jones, P.J.
We concur:
_________________________
Simons, J.
_________________________
Needham, J.
A144509
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