Boston LLC v. Juarez , 199 Cal. Rptr. 3d 452 ( 2016 )

Filed 2/25/16
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
BOSTON LLC, B267267
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 14U02675;
v. App. Div. No. BV030948)
JUAN JUAREZ,
Defendant and Appellant.
APPEAL from a judgment the Superior Court of Los Angeles County, Leland B.
Harris, Judge. Reversed.
Public Counsel, Lisa R. Jaskol and Robert J. Reed for Defendant and Appellant.
Neighborhood Legal Services of Los Angeles County, Alexander Prieto, Eliza
Schafler, Lena Silver; Western Center on Law and Poverty and Maria Palomares as
Amici Curiae on behalf of Defendant and Appellant.
Legal Aid Foundation of Los Angeles, Anna Levine-Gronningsater; Inner City
Law Center and Lorraine Lopez as Amici Curiae on behalf of Defendant and Appellant.
Allen R. King for Plaintiff and Respondent.
________________________________
Plaintiff and respondent Boston LLC (Boston) rented defendant and appellant Juan
Juarez an apartment under the Los Angeles Rent Stabilization Ordinance (LARSO) (L.A.
Mun. Code, § 151.00 et seq.). Their rental agreement contained a forfeiture clause
stating that “any failure of compliance or performance by Renter shall allow Owner to
forfeit this agreement and terminate Renter’s right to possession.” (Italics added.) The
agreement also contained an insurance clause stating that Juarez “shall obtain and pay for
any insurance coverage necessary to protect Renter” “for any personal injury or property
damage.” (Italics added.) After 15 years of Juarez failing to obtain this insurance,
Boston gave Juarez a three-day notice to perform or quit. Juarez obtained insurance
shortly after the three-day period expired.
Boston then sued Juarez for unlawful detainer. (Super. Ct. L.A. County,
No. 14U02675.) The trial court ruled for Boston. Juarez appealed to the appellate
division of the superior court. (Super. Ct. L.A. County, App. Div., No. BV030948.) The
appellate division affirmed, holding that because of the forfeiture clause, Juarez was
properly precluded at trial from defending himself on a materiality ground or raising
certain affirmative defenses. (Boston LLC v. Juarez (2015) 240 Cal.App.4th Supp. 28(Boston I).)
We asserted jurisdiction over the matter pursuant to California Rules of Court, rule
8.1002,1 to settle an important question of law: Whether a tenant’s breach of an LARSO
rental contract, regardless of the breach’s materiality or impact on the landlord, justifies
the landlord forfeiting the agreement and terminating tenancy. We hold a tenant’s breach
must be material to justify forfeiture. Here, the tenant’s obligation to obtain and pay for
insurance protected the tenant’s interest, not the landlord’s; accordingly, the tenant’s
failure to obtain a policy could not have harmed the landlord and therefore was not a
material breach of the agreement constituting grounds for forfeiture.
1 Undesignated rule references are to the California Rules of Court.
2
BACKGROUND
Juarez rented an apartment in Los Angeles from Boston for more than 15 years
under LARSO. Juarez and Boston’s rental agreement called for Juarez to obtain renter’s
insurance. Juarez did not obtain renter’s insurance, however. On February 14, 2014,
Boston gave Juarez a three-day notice to perform by obtaining renter’s insurance or quit.2
February 14th was a Friday and began a three-day weekend for Presidents’ Day, a legal
holiday, which was on Monday, February 17th. Likely due to the holiday weekend,
Juarez failed to obtain renter’s insurance within the three-day period; he did, however,
obtain it by February 21st.
Boston then sued Juarez for unlawful detainer. Boston argued the rental contract
contained a forfeiture clause which allowed it to terminate Juarez’s tenancy for any
breach, regardless of the breach’s materiality. Juarez countered that the law requires a
material breach to justify forfeiture. Juarez argued he should therefore be allowed to
present evidence that his breach was immaterial and, in any event, he was in substantial
compliance with the insurance clause. He also asserted a number of affirmative defenses,
including retaliation and waiver. The trial court, however, agreed with Boston that the
forfeiture clause made any breach by Juarez, regardless of materiality, grounds for
Boston to terminate Juarez’s tenancy. Juarez agreed to a bench trial upon the parties
stipulating to undisputed facts. The court ruled Juarez had breached the rental agreement
by failing to obtain renter’s insurance within the three-day notice period and Boston
could thereby forfeit the lease. The trial court did not make a determination about the
breach’s materiality. Juarez appealed to the appellate division, but it affirmed, two to
one. We review this matter under rule 8.1002.
DISCUSSION
On appeal, Juarez argues the law demands that a tenant’s breach must be material
to justify a landlord’s forfeiture of a rental contract. We agree. Because we agree, we do
2 Juarez,a monolingual Spanish speaker, could not read the notice because it was
written in only English.
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not reach his argument that the forfeiture clause constituted an unlawful penalty or
whether he should have been allowed to present certain affirmative defenses.
Whether the law requires a material breach to enforce a forfeiture clause in a
residential lease is a question of law which we review de novo in the absence of disputed
facts. (Cohn v. Corinthian Colleges, Inc. (2008) 169 Cal.App.4th 523, 527 [appellate
courts exercise “independent judgment” on “pure question[s] of law” where “the facts are
not disputed”].)
1. Code of Civil Procedure section 1161, subdivision 3 governs forfeiture
procedure and does not create substantive rights
Boston brought its unlawful detainer action under Code of Civil Procedure section
1161, subdivision 3.3 Section 1161, subdivision 3 establishes that a “tenant of real
property . . . is guilty of unlawful detainer: [¶] . . . [¶] 3. When he or she continues in
possession . . . after a neglect or failure to perform other conditions or covenants of the
lease or agreement under which the property is held . . . than the one for the payment of
rent, and three days’ notice, in writing, requiring the performance of such conditions or
covenants, or the possession of the property.” On appeal, Boston argues that section
1161, subdivision 3 provides for statutory forfeiture, as opposed to contractual forfeiture,
and, therefore, Boston was permitted to forfeit the contract as a matter of law after Juarez
failed to obtain insurance within the notice period.
Boston is incorrect. Section 1161, subdivision 3 does not create a substantive
forfeiture right. Rather, “‘[t]he purpose of the unlawful detainer statues is procedural.
The statutes implement the landlord’s property rights by permitting him to recover
possession once the consensual basis for the tenant’s occupancy is at an end.’” (Foster v.
Britton (2015) 242 Cal.App.4th 920, 930, quoting Birkenfeld v. City of Berkeley (1976)
17 Cal.3d 129, 149.) This procedural statue does not speak to what kinds of substantive
“neglect or failure to perform [] conditions or covenants of the lease” allow the statute to
3 Undesignated statutory references are to the Code of Civil Procedure.
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take effect. In the absence of such a statutory directive, we look to case law for the
substance of what kinds of breaches allow the procedural statute to take effect.
2. Case law dictates a breach must be material to justify forfeiture
Case law is clear as to what kinds of “failure to perform” justify forfeiture. Courts
have consistently concluded that “a lease may be terminated only for a substantial breach
thereof, and not for a mere technical or trivial violation.” (Keating v. Preston (1940)
42 Cal.App.2d 110, 118 (Keating) [discussing breach of implied covenants].) This
materiality limitation even extends to leases which contain clauses purporting to dispense
with the materiality limitation. For example, in Randol v. Scott, a forfeiture clause
provided “that ‘if default shall be made in any of the covenants herein contained, then it
shall be lawful for the lessor to re-enter the said premises.’” (Randol v. Scott (1895) 110
Cal. 590, 593 (Randol); id. at pp. 597–598.) Despite the forfeiture clause’s language that
any breach permitted forfeiture, the court refused to allow forfeiture for an “entirely . . .
trivial” matter, especially when the lessor had permission to enter and inspect the
premises at any time, which would have given the lessor the chance to detect, and
demand remedy for, the complained-of breach. (Id. at pp. 597–598.) Similarly, in
Keating, the lease contained a clause authorizing the lessor “to re-enter the premises . . .
‘if default shall be made in any of the covenants herein contained.’” (Keating, supra, 42
Cal.App.2d at p. 114, italics omitted.) The court held that even if the offending behavior
could be considered a breach, “it was so slight and trivial a violation . . . that it [did] not
constitute ground for terminating the lease on that account.” (Id. at p. 117.)4
Juarez and Boston’s agreement contained a forfeiture clause stating: “Renter’s
performance of and compliance with each of the terms hereof . . . constitute a condition
on Renter’s right to occupy the Premises and any failure of compliance or performance
4 That cases have not specifically spoken on a materiality requirement for
forfeiture of residential leases does not mean the well-established materiality requirement
does not apply to such leases. On the contrary, residential leases especially should be
protected by the materiality requirement due to the parties’ unequal bargaining power, as
explained further in part 4.a.
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by Renter shall allow Owner to forfeit this agreement and terminate Renter’s right to
possession.” Boston argues this clause forecloses any materiality argument or defense by
Juarez. The above cases, however, demonstrate that despite such a clause, the materiality
requirement still applies. (Accord, Medico-Dental etc. Co. v. Horton & Converse (1942)
21 Cal.2d 411, 433 [“a breach of contractual right in a trivial or inappreciable respect will
not justify rescission of the agreement by the party entitled to the benefit in question”].)
This is especially so when, as in Randol, Boston had the ability to detect and cure the
breach far in advance of bringing suit, but chose to not do so.
3. The substantive law requiring a materiality limitation underlies, and
therefore applies to, section 1161, subdivision 3
“Although not expressly set forth in Code of Civil Procedure section 1161,
subdivision 3,” the “requirement” that a “breach be substantial” “is set forth in case law.”
(NIVO 1 LLC v. Antunez (2013) 217 Cal.App.4th Supp. 1, 5 (NIVO 1), citing Keating,
supra, 42 Cal.App.2d at p. 115.) That is, “[w]hether a particular breach will give plaintiff
landlord the right to declare a forfeiture is based on whether the breach is material.”
(NIVO 1, at p. Supp. 5.) This is because “‘[t]he law sensibly recognizes that although
every instance of noncompliance with a contract’s terms constitutes a breach, not every
breach justifies treating the contract as terminated. [Citations.] Following the lead of the
Restatements of Contracts, California courts allow termination only if the breach can be
classified as “material,” “substantial,” or “total.” [Citations.]’” (Ibid., quoting Superior
Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal.App.3d 1032, 1051.)
Although not binding on us, NIVO 1 demonstrates how courts apply the
materiality requirement in section 1161 cases. In NIVO 1, a rental agreement required a
tenant to obtain renter’s insurance. (NIVO 1, supra, 217 Cal.App.4th at p. Supp. 3.)
Under the original contract, the tenant’s violation of the insurance clause would result
only “in a waiver of the tenant’s rights to seek damages against the landlord” (id. at p.
Supp. 4) in the case of “‘personal property damage or loss’” (id. at p. Supp. 3). The
landlord attempted to unilaterally modify the rental agreement, however, by adding a
forfeiture clause stating: “‘Any failure of compliance or performance by Renter shall
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allow Owner to declare a forfeiture of this agreement and terminate Renter’s right to
possession. Any breach of the contract is a material breach.’” (Id. at p. Supp. 4, italics
omitted.) The appellate division held that the landlord’s attempted unilateral
modification in adding the forfeiture clause was illegal under LARSO and consequently
disregarded it. (Ibid., citing L.A. Mun. Code, § 151.09, subd. A.2(c).) Then, recognizing
the materiality requirement, the appellate division upheld the trial court’s determination
that the tenant’s failure to obtain renter’s insurance was immaterial. (NIVO 1, at pp.
Supp. 4–6.) The court reasoned “that the failure to comply with [the] lease provision was
a ‘trivial breach’ because the ‘provision benefits the tenant, not the landlord.’” (Id. at p.
Supp. 5.) Although NIVO 1 did not analyze the materiality requirement in light of a
forfeiture clause, Randol, supra, 110 Cal. 590, and other cases establish that a materiality
requirement would apply even in the face of a forfeiture clause.
Other California authorities recognize a materiality requirement as well. For
example, Miller and Starr admonishes that a “landlord cannot terminate the lease unless
the tenant’s breach of the condition is material or substantial.” (10 Miller & Starr, Cal.
Real Estate (4th ed. 2015) § 34:181, p. 34-566, citing NIVO 1, supra, 217 Cal.App.4th
Supp. 1.) It continues, “Every default by a tenant does not necessarily justify the
landlord’s termination of the tenancy,” and this “is especially true when the breach
involves a nonmonetary covenant in the lease.” (10 Miller & Starr, supra, § 34:181,
p. 34-565.) Witkin concurs that a “[s]ubstantial [b]reach [i]s [r]equired” to invoke a
“[f]orfeiture [c]lause.” (12 Witkin, Summary of Cal. Law (10th ed. 2005) Real Property,
§ 668, pp. 784–785; id. (2015 Supp.) § 668, p. 159, citing NIVO 1, at p. Supp. 4.)
Likewise, the California Practice Guide comments that a “‘trivial’ or ‘de minimis’ breach
is not sufficient ground for termination and may be raised an as ‘equitable defense’ to
unlawful detainer.” (Friedman et al., Cal. Practice Guide: Landlord-Tenant (The Rutter
Group 2015) ¶ 7:130, p. 7-80, citing NIVO 1, at p. Supp. 5.)
Others states, including Arizona, Illinois, Massachusetts, South Carolina, and
Utah, likewise recognize a materiality requirement. (See, e.g., Foundation Dev. Corp. v.
Loehmann’s (1990) 163 Ariz. 438, 443 [788 P.2d 1189, 1194] (Loehmann’s) [in a
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commercial lease context, it was unlikely that the Arizona Legislature “intended to
permit forfeitures under any and all circumstances, no matter how trivial, inadvertent,
non-prejudicial, or technical the breach,” given the “important interplay of property and
contract law that preceded the enactment of the statute”]; Wolfram Partnership v. LaSalle
Nat. Bank (Ill.Ct.App. 2001) 765 N.E.2d 1012, 1025 [“Regardless of the language used
by the parties, a breach, to justify a . . . forfeiture of a lease agreement, must have been
material or substantial”]; Banco do Brasil v. 275 Washington Street Corp. (D.Mass.
2010) 750 F.Supp.2d 279, 292 [quoting and agreeing with Loehmann’s materiality
requirement]; Kiriakides v. United Artists Communications, Inc. (1994) 312 S.C. 271,
275 [440 S.E.2d 364, 366] [agreeing with Loehmann’s after finding that a “majority of
courts have concluded that a lease may not be forfeited for a trivial or technical breach
even when the parties have specifically agreed that ‘any breach’ gives rise to the right of
termination”]; Cache County v. Beus (Utah Ct.App. 1999) 978 P.2d 1043, 1049–1050
[quoting and agreeing with Loehmann’s].)
4. Public policy and other considerations favor a materiality requirement,
especially for an LARSO lease
a. LARSO’s public policy goals outweigh freedom to contract and free
market rationales in this context
LARSO was born out of the shortage of affordable housing, especially for low-
income individuals, in Los Angeles. (L.A. Mun. Code, § 151.01.) It seeks to “safeguard
tenants from excessive rent increases” by imposing certain statutory limitations and
obligations on landlords which landlords would otherwise not be subject to under normal
freedom to contract principles. (Ibid.) For example, LARSO prohibits landlords from
terminating leases without one of 14 enumerated “good causes.” (Id., § 151.09.) We are
bound to uphold LARSO’s objectives unless they are patently unenforceable. (People v.
Otto (2001) 26 Cal.4th 200, 209–210 [“Courts have a ‘“duty to uphold a statue unless its
unconstitutionality clearly, positively, and unmistakably appears”’”].)
In its decision upholding the forfeiture clause, the appellate division focused on
Juarez’s and Boston’s general freedom to contract and held, notwithstanding NIVO 1’s
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and other cases’ materiality requirement, “‘[i]f contractual language is clear and explicit,
it governs . . . [citation]’ (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254,
1264).” (Boston I, supra, 240 Cal.App.4th at p. Supp. 34.) It reasoned that in Juarez and
Boston’s case, “[t]he clear and unambiguous terms of [the forfeiture] clause permitted
forfeiture of the agreement and termination of the defendant’s right to possession based
on any breach, regardless of the breach’s importance in relation to the entire agreement.”
(Id. at p. Supp. 35.)
While the freedom to contract is important, as the appellate division noted, the
California Supreme Court has recognized in Green v. Superior Court that free market
principles, which justify, in part, the freedom to contract, do not apply to urban
residential leases, such as Juarez’s LARSO lease. (Green v. Superior Court (1974)
10 Cal.3d 616, 625 (Green).) This is because “the severe shortage of low and moderate
cost housing has left tenants with little bargaining power . . . and thus the mechanism of
the ‘free market’ no longer serves as a viable means for fairly allocating” rights and
duties between landlords and tenants. (Ibid.) Citing Green, courts acknowledge that due
to the “unequal bargaining power [between] landlord and tenant resulting from the
scarcity of adequate housing in urban areas,” tenants in urban residential leases are
treated more favorably by courts than lessees in commercial leases where the “parties are
more likely to have equal bargaining power.” (Schulman v. Vera (1980) 108 Cal.App.3d
552, 561; Henrioulle v. Marin Ventures, Inc. (1978) 20 Cal.3d 512, 519 [“tenants are
likely to be in a poor position to bargain with landlords”].)5 Here, Juarez and Boston’s
lease reflects the unequal bargaining power recognized by Green and other courts in that
the unilateral forfeiture clause entirely benefits Boston as the landlord. The forfeiture
clause makes any breach by Juarez grounds for Boston to forfeit the lease and imposes
5 In addition to unequal bargaining power, tenants often sign form leases without
understanding the full import of their terms, and consequently unknowingly sign away
important rights. The Legislature has acknowledged in a related context that tenants need
protection from “‘unknowing[ly] signing away [such] valuable rights.’” (Jaramillo v. JH
Real Estate Partners, Inc. (2003) 111 Cal.App.4th 394, 403 [referring to Civ. Code,
§ 1953].)
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not only no reciprocal obligation on Boston, it imposes no obligations at all on Boston.
Granted, Boston would be restricted by general contract principles permitting punishment
for Boston’s breaches. Under these general contract principles, however, a trivial breach
by Boston would likely result in either nominal or negligible damages, which would be of
little value to Juarez. (Avina v. Spurlock (1972) 28 Cal.App.3d 1086, 1088 [nominal
damages are awarded when “there is no loss or injury to be compensated but where the
law still recognizes a technical . . . breach”].)
Permitting landlords like Boston with superior bargaining power to forfeit leases
based on minor or trivial breaches would allow them to strategically circumvent
LARSO’s “good cause” eviction requirements and disguise pretext evictions under the
cloak of contract provisions. Such provisions, which enable pretext evictions, are
“‘unenforceable on grounds of public policy if . . . the interest in its enforcement is
clearly outweighed in the circumstances by a public policy against the enforcement of
such terms.’” (Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832,
840, quoting Rest.2d Contracts, § 178.) Here, LARSO’s public policy goals of providing
stable affordable housing to low-income Angelenos and preventing pretext evictions
outweigh the free market and freedom to contract principles allowing a landlord to
include a unilateral forfeiture clause in an urban residential rental contract.
b. Forfeiture is avoided where possible and forfeiture clauses are strictly
construed against the party they benefit
“A condition involving a forfeiture must be strictly interpreted against the party
for whose benefit it is created.” (Civ. Code, § 1442.) Courts recognize the full import of
this rule, reasoning that “[i]f the agreement can be reasonably interpreted so as to avoid
the forfeiture, it is our duty to do so.” (Quatman v. McCray (1900) 128 Cal. 285, 289;
see also McNeece v. Wood (1928) 204 Cal. 280, 284, quoting Cleary v. Folger (1890) 84
Cal. 316, 321 [“‘Forfeitures . . . are not favored by the courts’”].) Because the forfeiture
clause allegedly made any breach by Juarez grounds for Boston to forfeit the contract, all
the agreement’s clauses, including the insurance clause, should be “strictly interpreted”
against Boston.
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The insurance clause provides that Boston “does not insure Renter for any
personal injury or property damage” (italics added) and that Juarez “shall obtain and pay
for any insurance coverage necessary to protect Renter” from such damage. This
provision is overreaching. Boston cannot absolve itself of liability for “any . . . property
damage” to Juarez by demanding that Juarez obtain insurance when that damage could be
caused by Boston itself or could be damage Boston is liable for as a landlord. (Italics
added.) In the balance of our analysis, the overreaching and unrealistic nature of the
clause weighs against enforcing it, especially when enforcing it would benefit Boston,
“the party for whose benefit it [was] created.” (Civ. Code, § 1442.)
c. A materiality requirement potentially prevents unmeritorious litigation
Permitting forfeiture for trivial breaches could unleash a torrent of unmeritorious
unlawful detainer litigation.6 Without the protection of a materiality requirement, tenants
potentially are in jeopardy of defending frivolous unlawful detainer actions for trivial
breaches. For example, Juarez’s lease prevents him from even bringing a musical
instrument on the premises, “unless noted in . . . Owner’s copy of this Agreement.” If we
upheld the forfeiture clause as Boston argues, Juarez could risk forfeiture of the rental
agreement, and eviction, for absurdly trivial reasons, e.g., if he hung a violin with no
strings on his wall for decoration because it was a family heirloom or if for a few days he
had in his apartment a gift-wrapped plastic piano for a niece’s upcoming birthday.
Litigation over these types of trivial breaches is not a proper or efficient use of court
resources.7
The appellate division attempted to refute this argument, holding that “[i]n
evictions based on three-day notices to perform or quit . . . breaches would only
constitute valid grounds for eviction if they [a]re not cured within the notice period,
6 Bilateral forfeiture clauses, although more favorable to the tenant, also
potentially open the floodgates and perhaps to an even greater degree.
7 In addition, an eviction for such a trivial matter would almost certainly be
pretext, as no rational landlord would expend the time or resources litigating such a
frivolous issue; again, we will not legally provide the basis for pretext evictions.
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meaning tenants could not be evicted based on single incidents.” (Boston I, supra, 240
Cal.App.4th at p. Supp. 36.) Even if that were true, Juarez would still be subject to the
risk of eviction if he refused to take the decorative, heirloom violin out of his home or if
he were out of town, say for a three-day weekend, when a notice about the piano gift was
posted. This court will not uphold clauses which could result in such frivolous litigation.
5. Given the facts, Juarez’s failure to obtain renter’s insurance within the three-
day notice period was not a material breach
“Normally the question of whether a breach of an obligation is a material breach
. . . is a question of fact,” however “‘if reasonable minds cannot differ on the issue of
materiality, the issue may be resolved as a matter of law.’” (Brown v. Grimes (2011)
192 Cal.App.4th 265, 277–278, quoting Insurance Underwriters Clearing House, Inc. v.
Natomas Co. (1986) 184 Cal.App.3d 1520, 1526–1527.)
The primary purpose of renter’s insurance is to protect the tenant, not the landlord.
As such, Boston has little ground to argue that Juarez’s failure to obtain insurance
harmed it. For example, Boston does not argue Juarez made claims against it that should
have been covered by renter’s insurance but were not because Juarez lacked it. Instead,
Boston argues it was harmed because there was a chance Juarez’s noncompliance
encouraged other tenants’ noncompliance. In the absence of evidence of actual harm, the
chance Juarez’s temporary noncompliance incited other tenants to not comply with their
insurance obligations is insufficient to demonstrate harm justifying forfeiture. (See Feder
v. Wreden etc. Co., Inc. (1928) 89 Cal.App. 665, 673 [a court cannot “overlook[]” when a
complaint fails to allege actionable harm]; Rest.2d Contracts, supra, ch. 16, introductory
note [“The initial assumption” in awarding damages “is that the injured party is entitled
to full compensation for his actual loss,” italics added].) Boston also fails to explain how
Juarez lacking insurance for a mere handful of days after he was noticed harmed Boston,
given the 15 years Juarez lacked insurance, a defect which Boston could have easily
discovered at any time and demanded Juarez remedy. Also, although technically
permissible, Boston giving Juarez the three-day notice to obtain insurance on the Friday
preceding a three-day weekend which encompassed a widely celebrated legal holiday
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smacks of gamesmanship, or possibly even retaliatory motives, in light of the 15 years
Boston failed to enforce the insurance clause. Given the facts of this case, Juarez’s slight
delay in obtaining renter’s insurance was not a material breach sufficient to justify
forfeiture.
Because Juarez’s breach was immaterial, we need not address his arguments that
the forfeiture clause constituted an unlawful penalty or that he should have been allowed
to present certain affirmative defenses.
DISPOSITION
The judgment is reversed. Juarez is awarded his costs on appeal under California
Rules of Court, rule 8.278.
CERTIFIED FOR PUBLICATION
LUI, J.
We concur:
CHANEY, Acting P. J.
JOHNSON, J.
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