Southwest Fuel Management, Inc. v. Ampak-I Enterprises, Inc. CA2/6 ( 2022 )

Filed 12/19/22 Southwest Fuel Management, Inc. v. Ampak-I Enterprises, Inc. CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
SOUTHWEST FUEL 2d Civ. No. B314590
MANAGEMENT, INC., (Super. Ct. No. 56-2020-
00545208-CU-UD-VTA)
Plaintiff and Respondent, (Ventura County)
v.
AMPAK-I ENTERPRISES,
INC.,
Defendant and Appellant.
Ampak-I Enterprises, Inc. (Ampak), the tenant, appeals a
judgment for unlawful detainer rendered in favor of plaintiff
Southwest Fuel Management, Inc. (Southwest), the landlord,
involving a commercial lease. We affirm.
FACTS
Ampak, the tenant, entered into a 10-year commercial lease
with Limoneira Mercantile, LLC (Limoneira) in 2009. Kaleem
Syed is the owner of Ampak. Ampak operates a Del Taco
restaurant on the leased premises.
The lease provided that Ampak had the option to extend
the lease for 60 months after the expiration of the lease by
providing “written notice of such election” at “least 3 but not
more than 6 months prior to the date that the option period
would commence, time being of the essence.” The period to
exercise the option to extend the lease was between April 6 and
July 6, 2019.
On May 19, 2019, Syed e-mailed the representatives of the
lessor stating, among other things, “I will need some time to meet
with you and go through with the Options and the New
Construction. Please let me know when we can meet.”
On July 20,, Syed e-mailed a notice to renew the lease.
Limoneira did not consider this notice to be timely because the
option period had expired. The lease subsequently ended.
In August 2019, Limoneira sold the property and assigned
the lease to Southwest.
On May 5,2020, Southwest sent a letter to Ampak stating:
1) Southwest is now the owner; 2) Ampak had not taken action to
timely renew the lease; 3) consequently, Ampak was now on a
month-to-month tenancy; and 4) Southwest is now giving Ampak
a 30-day notice to terminate the tenancy.
On September 8, 2020, Southwest filed an unlawful
detainer action against Ampak seeking to evict it from the
premises. At trial the court rejected Ampak’s defense that
Southwest waived its right to bring an eviction action because it
had received Ampak’s rent checks. Syed testified that he had
timely renewed the lease, but the trial court did not credit this
testimony. The court found his July 20, 2019, e-mail was a notice
to renew the lease. But this notice did not fall within the period
to exercise the option and the notice was therefore untimely. It
2.
found Southwest had properly served a 30-day notice to
terminate the tenancy.
The trial court entered judgment for Southwest.
DISCUSSION
Waiver of the Right to Proceed with the Unlawful Detainer
Ampak claims its payment of rent after it received the 30-
day notice barred Southwest from proceeding. It argues that “by
accepting rent from Ampak after serving a notice of termination,
Southwest created a new tenancy.” (Boldface omitted.)
Civil Code Section 19451
Ampak relies on section 1945. It provides, “If a lessee of
real property remains in possession thereof after the expiration of
the hiring, and the lessor accepts rent from him, the parties are
presumed to have renewed the hiring on the same terms and for
the same time not exceeding one month when the rent is payable
monthly, nor in any case one year.” (Italics added.)
Southwest contends section 1945 does not apply because it
relates to residential tenancies, and this is a commercial tenancy.
Section 1945 is in Chapter 2 of the Civil Code, beginning with
section 1940. This chapter relates to residential property leases.
(MES Investments, LLC v. Dadson Washer Service, Inc. (2020) 56
Cal.App.5th 451, 458.) Section 1940 applies to “dwelling units.”
(Id., subd. (a).) A dwelling unit is defined as a “home, residence,
or sleeping place.” (Id., subd. (c).) Ampak operates a commercial
business that sells food.
One court has suggested that section 1945 does not apply to
commercial leases. (MES Investments, LLC v. Dadson Washer
Service, supra, 56 Cal.App.5th at p. 458.) Another court has
concluded that it is “unambiguous that the various protections
1 All statutory references are to the Civil Code.
3.
set forth in chapter 2 are not limited to leases of dwelling units
but rather apply to all leases.” (Rich v. Schwab (1998) 63
Cal.App.4th 803, 812-813.)
But we need not resolve this dispute because, even if
section 1945 applies to commercial leases, the result does not
change. To prove the statutory defense of waiver the tenant must
prove the landlord “accept[ed]” the rent. (Ibid.) Here the trial
court rejected Ampak’s claim that Southwest waived its right to
evict by “accepting“ rent. It found Southwest did not cash any of
Ampak’s rent checks. Southwest’s May 5th letter advised Ampak
that it “must vacate the property.” Where a landlord makes such
a demand and does not cash the tenant’s rent checks, the
landlord has not accepted the rent within the meaning of the
statute. (Kaufman v. Goldman (2011) 195 Cal.App.4th 734, 740-
741 (Kaufman).)
Notice of Non-Wavier of the Right to Evict
Ampak claims Southwest was required to give notice that
its receipt of the rent checks did not constitute a waiver of its
eviction notice. But Ampak’s position was rejected in Kaufman,
supra, 195 Cal.App.4th at pages 740-741.
Ampak relies on Sheldon Builders, Inc. v. Trojan Towers
(1967) 255 Cal.App.2d 781. There the issue was whether a party
received full payment for an invoice. The court held the party
receiving a check stating it was payment “in full” should have
notified the payor that the amount was insufficient to cover the
invoice. Because it did not give that notice, the trial court could
find the check was full payment.
In Kaufman, a landlord-tenant case, the appellate court
held Sheldon Builders is distinguishable because it did not
involve a landlord’s unequivocal intent to evict as shown by a
4.
notice demanding the tenant vacate the premises by a certain
date. In Kaufman, the “plaintiff sent defendant a letter in
October 2007 informing her that . . . she was required to vacate
the apartment by March 1, 2008.” (Kaufman, supra, 195
Cal.App.4th at p. 741, italics added.) That constituted the
relevant notice to the tenant of an unequivocal intent to evict.
The receipt of a rent check by the landlord without giving an
additional non-waiver notice to the tenant did not waive the
landlord’s right to evict.
Here, as in Kaufman, Ampak received an unequivocal
notice to vacate the property by a certain date. Ampak sent rent
checks, but Southwest did not cash them. As in Kaufman,
Southwest was not required to give an additional notice that its
receipt of the checks did not constitute a waiver of its right to
evict. (Kaufman, supra, 195 Cal.App.4th at pp. 740-741.)
But even apart from the Kaufman rule, Ampak has not
shown why the trial court could not reasonably find Ampak’s
claim of waiver of the right to evict was not credible. Ampak
received multiple notices showing Southwest was not waiving its
right to evict. Southwest gave Ampak notice that the lease
expired and notice that it was not renewing it. Southwest served
a 30-day notice to vacate. On June 8, 2020, Southwest sent a
letter to Ampak reiterating that Ampak had not renewed the
lease. Ampak responded that it knew Southwest had not cashed
its rent checks and there was a dispute about the amount it
owed. On June 23, 2020, Southwest responded stating that
“Ampak Must Vacate the Premises Immediately” and that
Southwest had not made a “waiver of any kind.” (Italics added &
boldface omitted.) When Ampak did not vacate, Southwest
served Ampak with an unlawful detainer complaint. On
5.
September 8, 2020, Ampak filed a Covid-19 financial distress
declaration. Southwest responded stating Ampak was “retaining
possession of the Property without authorization or consent.”
(Italics added.) Southwest filed a declaratory relief action
against Ampak in September 2020 reasserting its position that
the lease had ended.
A Lease Non-Waiver Provision
Moreover, Southwest did not have to give a notice to avoid
a waiver for another reason. Ampak agreed there would be no
waiver in the lease. (Woodman Partners v. Sofa U Love (2001) 94
Cal.App.4th 766, 771; Karbelnig v. Brothwell (1966) 244
Cal.App.2d 333, 340.)
The lease provides, “The acceptance of rent by Lessor shall
not be a waiver of any Default or Breach by Lessee. Any payment
by Lessee may be accepted by Lessor on account of moneys or
damages due Lessor, notwithstanding any qualifying statements
or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.” (Italics added.)
“[W]hile an intent to waive may be inferred from the
acceptance of rent under certain circumstances, such an inference
may be rebutted and is rebutted . . . by the express agreement
between the parties.” (Karbelnig v. Brothwell, supra, 244
Cal.App.2d at p. 342.) Where the commercial tenant signs a lease
containing a provision that acceptance of the rent shall not be a
waiver of the right to evict, the tenant has “actual notice” that
the waiver defense is not available. (Woodman Partners v. Sofa
U Love, supra, 94 Cal.App.4th at p. 771.)
6.
Ampak claims this lease provision is limited to nonpayment
of rent cases. But the terms of the lease are not so restricted.
The words “any Default or Breach” are “broadly worded” and
inclusive. (Hot Rods, LLC v. Northrop Grumman Systems Corp.
(2015) 242 Cal.App.4th 1166, 1180.) The failure to renew the
lease and failure to vacate fall within the broad language of
defaults or breaches. Moreover, from the multiple notices
Southwest gave Ampak, the trial court could reasonably infer
Ampak had no reasonable belief that Southwest ever waived its
right to evict.
The result does not change for another reason. Ampak
claimed it paid the rent. But the trial court found the checks
Ampak sent did not constitute the amount of rent due because
Ampak owed an additional $50,000 in back rent. Where the
tenant cannot prove it tendered the rent or where the “exact”
amount of rent is disputed or “unknown,” the statutory waiver
defense does not prevail. (City v. Hart (1985) 175 Cal.App.3d 92,
95; § 1945.) This was not a case based on a three-day notice to
pay rent or quit where the amount of rent paid is directly in
issue. But where a tenant raises the waiver defense, the trial
court must determine whether the defense is factually correct.
Ampak claims there was other evidence showing it did not owe
more rent. But we do not weigh the evidence or resolve
evidentiary conflicts; those are matters exclusively decided by the
trier of fact. (El Escorial Owners’ Assn. v. DLC Plastering, Inc.
(2007) 154 Cal.App.4th 1337, 1358.) The trial court did not err by
rejecting this defense.
7.
Ampak’s Failure to Renew the Lease
Ampak contends the trial court erred by ruling that it did
not give timely notice to exercise its option to renew the lease.
We disagree.
The lease provided that Ampak had the option to extend
the lease for 60 months after the expiration of the lease by
providing “written notice of such election” at “least 3 but not
more than 6 months prior to the date that the option period
would commence, time being of the essence.” The lease
commenced on October 6, 2009. The period to exercise the option
to extend the lease was between April 6 and July 6, 2019.
Ampak contends an e-mail dated May 19, 2019, was the
notice it gave to renew the lease, and it falls within the April 6 to
July 6, 2019, time period to renew the lease.
Southwest responds: 1) at trial, Ampak’s counsel claimed
the July 20th e-mail was the exercise of the option to renew the
lease; 2) counsel did not claim that the May 19th e-mail was the
exercise of that option; 3) this claim about the May e-mail should
have been raised at trial; and 4) Ampak may not raise it for the
first time on appeal.
There is merit to Southwest’s objection. A party cannot
raise issues that should have initially been raised in the trial
court for the first time on appeal. (Doe v. University of Southern
California (2018) 29 Cal.App.5th 1212, 1230.) That is unfair to
the trial court and the opposing party. (Ibid.) If Ampak’s counsel
believed that the May e-mail was the option to renew, he should
have raised that issue at trial. Consequently, Ampak forfeited
this claim on appeal. (Ibid.) But even had the issue been raised,
the result would not change.
8.
Southwest claims e-mails are not valid notices under this
lease. The lease provides all notices “shall be in writing and may
be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile
transmission.” The notice provisions specified in a commercial
lease are binding on the parties. (Culver Center Partners East
#1, L.P. v. Baja Fresh Westlake Village, Inc. (2010) 185
Cal.App.4th 744, 750.) “[C]ourts are strict in holding an optionee
to exact compliance with the terms of the option.” (Hayward
Lumber & Investment Co. v. Construction Products Corp. (1953)
117 Cal.App.2d 221, 229.) An e-mail does not fall within with the
authorized methods to give notice specified in this lease. But
even had the lease included e-mail notice, the result would not
change.
The e-mail provides, “Hello, Alex and Ryan, [¶] It has been
a long time since we meet. I hope both of you are doing well and
in good health. I will need some time to meet with you and go
through with the Options and the New Construction. Please let
me know when we can meet. [¶] Thank you [¶] Kaleem Syed.”
(Italics added.)
This e-mail is not a valid notice to exercise the option to
extend the lease. “To avail himself of an option of renewal given
by a lease, a tenant must apprise the lessor in unequivocal terms
of his unqualified intention to exercise his option in the precise
terms permitted by the lease.” (Hayward Lumber & Investment
Co. v. Construction Products Corp., supra, 117 Cal.App.2d at pp.
227-228, italics added.)
The e-mail does not contain “unequivocal terms of” an
“unqualified intention” to renew the lease. It only shows Ampak
9.
wanted a meeting at some unspecified future date – “let me know
when we can meet.” There was no indication that any decision
had been made about renewing the lease. The words “lease” and
“renewal” are not contained in this message. A recipient of such
an e-mail would reasonably understand that a meeting was
requested, but would not know the result of that meeting, or
what Ampak would decide, until after that meeting.
Ampak contends Syed’s testimony shows this was a notice
to renew. He was asked, “[T]his email doesn’t exercise the option,
does it?” Syed responded, “I did told him – yes, it does says that.”
But his testimony is not consistent with the terms of the e-mail.
Moreover, the trial court did not find him to be credible. We do
not decide credibility; that is a matter exclusively decided by the
trier of fact. (In re Sheila B. (1993) 19 Cal.App.4th 187, 199.)
Ampak notes that Syed sent an e-mail on July 20 stating, “ ‘I will
be exercising my option to extend the least for five years.’ ”
Ampak has not shown why the trial court could not reasonably
infer that he sent that July 20th e-mail because he knew his May
e-mail was not a notice to renew. The court found Ampak knew it
“dropped the ball on the exercise of” its option and it sent the
untimely July 20th e-mail to try “to correct the problem.”
The trial court found the July 2019 e-mail was “outside the
express window to exercise the option in the lease,” therefore the
option period ended and the lease expired. We must draw all
reasonable inferences in support of the court’s findings.
(Woodman Partners v. Sofa U Love, supra, 94 Cal.App.4th at
p. 771.) Ampak has not shown error.
We have reviewed Ampak’s remaining contentions and we
conclude it has not shown grounds for reversal.
10.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to
respondent.
NOT TO BE PUBLISHED.
GILBERT, P. J.
We concur:
YEGAN, J.
BALTODANO, J.
11.
Julia A. Snyder, Judge
Superior Court County of Ventura
______________________________
Ferguson Case Orr Paterson and Wendy Cole Lascher for
Defendant and Appellant.
Bleau Fox, Martin R. Fox and Elizabeth M. Martin for
Plaintiff and Respondent.