Thannhaeuser v. TKH Zuma, LLC CA2/8 ( 2024 )

Filed 10/11/24 Thannhaeuser v. TKH Zuma, LLC CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
CHRISTOPHER THANNHAEUSER, B318438
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 19STCV11326)
v.
TKH ZUMA, LLC,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Los
Angeles County, David Sotelo, Judge. Affirmed.
Kordestani Legal Partners, Harrison P. Kordestani; Sutter
Maritime and Howard T. Sutter for Defendant and Appellant.
Myers Law Group and Robert M. Kitson for Plaintiff and
Respondent.
_________________________
In this landlord-tenant dispute, the trial court entered
judgment against landlord TKH Zuma, LLC (Zuma) in the
amount of $114,000, after a trial during which Zuma’s corporate
powers were in suspension by the Franchise Tax Board (FTB).
As a consequence, Zuma did not participate in the trial. Zuma
appeals, contending the trial court abused its discretion in
denying Zuma’s motion to continue the trial to permit Zuma to
revive its corporate powers, erred in awarding damages to tenant
Christopher Thannhaeuser without sufficient supporting
evidence, and erred in awarding statutory damages under Civil
Code section 1950.51 without making a specific finding of bad
faith on the record.
We affirm the judgment.2
BACKGROUND
Thannhaeuser rented a residential property in Malibu from
Zuma for $13,000 per month pursuant to a written lease
agreement. The term of the initial lease was from December 15,
2014 to December 15, 2015. At that time, Theodore Phelps
managed the Malibu property as a court-appointed receiver for
Zuma and the property. Thannhaeuser paid a $26,000 security
deposit.
1 Undesignated statutory references are to the Civil Code.
2 Thannhaeuser has filed a request for judicial notice of 13
documents. We grant the request as to Exhibits 1, 2, and 10 only.
Exhibits 1 and 2 are pleadings which confirm the dates of the
receivership for Zuma. Exhibit 10 is a document filed by Zuma in
small claims court after Zuma sought a continuance in this court
on the ground of lack of capacity. The dates of the remaining
exhibits render them irrelevant to any issue on appeal.
2
According to Thannhaeuser and his real estate agent
Dennis Beesley, the property was not in move-in condition when
Thannhaeuser took possession. Thannhaeuser described
“garbage everywhere. . . . It was very, very dirty.” “There was
some damage to the walls. A few things were broken.”
Thannhaeuser hired a company to remove the debris, a
professional cleaning company, and someone to do “paint work
and things like that to clean it up.”
Thannhaeuser continued to encounter problems with the
residence. The air conditioning would often go off due to its poor
condition. The stove and the gas connection to the stove had
problems. There were “very often” indoor plumbing problems.
Real estate agent Beesley assisted Thannhaeuser in resolving
many of the problems. Basically, Beesley coordinated with the
receiver; many repairs were done under a home warranty
agreement.
The pool was a constant problem. The pool maintenance
company hired by the owner would rarely come; the heating did
not work. The chlorine/salt mixture did not work, resulting in
murky green water covered with a white layer. Thannhaeuser
hired his own pool maintenance company.
The outdoor lighting worked only intermittently. At some
point, Thannhaeuser hired his own electrician to replace all the
outdoor lighting.
During the time that Phelps was the receiver,
Thannhaeuser obtained approval for the work on the property
from Phelps or his agents.
In December 2015, the lease was extended for a year. In
late February 2106, the receivership was discharged. In early
3
March 2016, Thannhaeuser learned that Mary Anne Keshen had
become the property manager.
According to Thannhaeuser, the property continued to have
maintenance problems. Keshen was very slow to have the
problems repaired or was non-responsive. At some point, Keshen
quit paying the gardener and pool maintenance company;
gardening and pool maintenance were the landlord’s
responsibility under the lease. When a new gardener was hired,
Thannhaeuser paid him.
At trial, Thannhaeuser was asked to estimate the amount
he paid “out of pocket from . . . May of 2015, a few months after
the lease began, until the end of the lease . . . for things that were
supposed to be taken care of by the landlord under the lease[.]”
He replied: “Must have been well over $20,000. It was
continuous little things and a few bigger ones.” Thannhaeuser
did not provide any breakdown of this amount.
Thannhaeuser also testified that he received a water bill
for $19,653.49 in May 2016, as the result of a water leak at the
property.3 It is undisputed that the leak was in the irrigation
system. Gardener Ruben Banuelos testified that he discovered
the leak in a main irrigation pipe on the hillside behind the
house. Thannhaeuser paid the water bill, in installments,
because otherwise the water to the property would have been cut
off.
3 The water company later reduced the total by $2,500 as “a
courtesy.” This would make the total owed 17,153.49. The trial
court appears to have awarded $16,000 for this injury.
4
Thannhaeuser did not renew the lease when it expired on
December 14, 2016, but stayed in the house as a month-to-month
tenant.
On January 5, 2017, Zuma’s agent Aaron Eslamboly posted
a 30-day notice of termination of Thannhaeuser’s tenancy. On
January 13, 2017, Eslamboly emailed Thannhaeuser: “Please
keep in mind that rent is due on the 15th. Meaning that if you
intend to stay further throughout the 30-day period past the
15th, then you will owe rent for each day you are there at a rate
of $500/day.” Thannhaeuser emailed Eslamboly the same day,
stating that he had vacated the property. Thannhaeuser
requested an appointment for a walk-through inspection and the
return of his security deposit after the walk-through.
Zuma refused to return any of the security deposit. Zuma
stated it was withholding $15,000 as unpaid rent, and the
remainder for damages to the property. Zuma charged
Thannhaeuser an additional $11,000 above the security deposit
amount for “various costs.”
Realtor Beesley accompanied property manager Keshen
when she inspected the property on March 22, 2016, shortly after
she took over property management. She did not raise anything
negative about the condition of the property. She made no
negative remarks about Thannhaeuser’s tenancy. She did make
negative comments about the receiver. Beesley was also present
for the final walk-through inspection after Thannhaeuser vacated
the property. Beesley did not observe any substantial damage to
the property. He opined that Thannhaeuser had made “major
improvements on the property.” In Beesley’s opinion as a real
estate agent, there was nothing attributable to Thannhaeuser
about the condition of the property that amounted to more than
5
ordinary wear and tear. Beesley believed that the property was
left in better condition than when Thannhaeuser moved in.
Thannhaeuser filed this action against Zuma and Keshen
on April 2, 2019, alleging causes of action for breach of written
contract, conversion, violation of section 1950.5, violation of
section 1941.1, and breach of the warranty of quiet enjoyment.
Zuma filed a general denial in October 2019 and a cross-
complaint in March 2020. We take judicial notice of the fact that
the COVID 19 pandemic resulted in a slowdown in California
state services beginning in March 2020.
In January 2021, the trial court set a final status
conference for June 9, 2021 and the trial for July 6, 2021. On
May 24, 2021, the trial court ordered the parties into mediation.
On June 9, 2021, the final status conference was continued
to October 8, 2021 and the trial date was continued to November
2, 2021. The minute order for June 9, 2021 states both
continuances were on the trial court’s own motion.
According to Thannhaeuser, the court confirmed the
mediation requirement at the June 9, 2021 status hearing. The
parties scheduled mediation for September 21, 2021, but it was
subsequently continued to September 30, 2021.
On July 22, 2021, for reasons which are not clear from the
record, Thannhaeuser’s attorney sent an email to Zuma’s
attorney. (The email is partly redacted.) The last paragraph of
the email states: “On a related matter, TKH Zuma, LLC, has
again been suspended by the California Secretary of
State, this time apparently based on action by the FTB. As a
result, as has been previously discussed over emails between us,
and based on the authorities cited therein, TKH Zuma may not
litigate in California, unless and until it gets itself back in
6
good standing with the Secretary of State. If a motion for
judgment on the pleadings is filed by TKH Zuma, prior to TKH
[Zuma] regaining active status with the Secretary of State,
Plaintiff will apply ex parte for an order striking the motion on
that basis. In the meantime, please accept this email as a meet
and confer on a motion by Plaintiff to strike Defendant’s General
Denial and move for default judgment, on the basis of TKH
Zuma’s suspension by the Secretary of State.”
The record does not include a motion to strike the General
Denial or for default. The next pleading in the record is a case
management statement filed by Zuma on October 1, 2021. Both
that statement and Thannhaeuser’s October 1, 2021, Post-
Mediation Status Conference Statement show that Zuma
cancelled the mediation on September 30, 2021, less than 3 hours
before it was to begin because Zuma was a suspended corporation
and lacked the capacity to enter into a settlement agreement.
As part of its case management statement, Zuma sought a
continuance of the trial date based on Zuma’s suspended status.
In an attached memorandum of points and authorities, Zuma
acknowledged that it “was temporarily suspended toward the end
of 2020” but stated that Zuma’s managing member “did not
become aware of the suspension until just recently.” Zuma also
inconsistently stated that the managing member, Mary Anne
Keshen, “was not made aware of the suspension until late Spring
of 2021.” Zuma also stated that Keshen had received
“professional advice” that the process of revivor could take up to
six months.
On October 6, 2021, Zuma filed a pleading entitled Notice
of Non-Waiver of Jury. On October 8, 2021, Zuma filed a
pleading entitled TKH Zuma, LLC Initial Jury Fees Posting.
7
On October 8, 2021, the trial court held a status conference.
The parties discussed the request for a continuance and the trial
court impliedly denied the request by ruling that the November
2, 2021 trial date would stand. The request for a continuance is
not mentioned in the minute order for the hearing.
On October 19, 2021, Zuma filed an ex parte application to
continue the trial. Zuma stated that it “was temporarily
suspended though unknowingly so until recently.” Zuma asked
for an unspecified amount of time to “resolve this temporary
suspension and defend itself at time of trial.” Zuma stated that
“[a]fter discovery of the suspension, which was not confirmed
until just recently, the managing member of the Defendant entity
has been seeking to determine the cause of the suspension as well
as how to remedy it. After repeated attempts to resolve the issue
with the FTB itself, [Keshen] hired a firm specializing in reviving
suspended entities and is working diligently with that company
in good faith, to resolve this temporary suspension. . . . (see
Exhibit A to the Declaration of May Anne Keshen). However,
based on discussions with this company there is no certainty as to
when the suspension may be lifted and could take a few months.”
The Keshen declaration does not provide a date for the
discovery of the suspension. The declaration states: “We only
recently found out that the entity was suspended by the FTB.
There was no confirmation of this until my assistant conducted a
site check of the California Secretary of State website. . . . We are
diligently working on getting this resolved as soon as possible.
There are numerous legal matters that this impacts, it is not
limited to this matter. We enclosed a true and correct copy of the
receipt of the company that assists corporations in the revivor
process (Exhibit A).” The document attached as Exhibit A is
8
undated and is not a receipt. It reflects an order for services, and
states that an invoice or receipt will be forthcoming. There is no
indication who placed the order.
Exhibit B to the Keshen declaration is an email from the
mediator concerning the cancelled mediation. The email confirms
the mediation was cancelled by Zuma on September 30, 2021,
and the reason given was Zuma’s suspension by the California
Franchise Tax Board. Among other things, the mediator notes
that “[b]oth sides [had] submitted to me substantial, confidential
briefs and cooperated fully with my requests for additional
information.”
The trial court rejected this application for a continuance
because it lacked a proposed order.
On October 26, 2021, Zuma filed a renewed ex parte
application for a continuance. In this new pleading, Zuma stated
“Defendant has not been informed that there are any outstanding
taxes or fees at this time. Defendant only recently found out that
the entity was suspended by the FTB.” The application also
states: “It is an impossibility [due to Covid restrictions] that
reinstatement will occur before year end, which is significantly
after the trial date of November 2nd, 2021.” The Keshen
declaration in support of this application was virtually identical
to her earlier declaration, with the exception of the statement
that Zuma’s attorney “Howard Kordestani is withdrawing with
the mutual consent of TKH Zuma, LLC for significant personal
reasons.” (Mr. Kordestani represented Zuma at least through the
briefing stage of this appeal, and we see no indication of any
withdrawal in the trial court.) Thannhaeuser objected to the
filing on the ground that it contained no new information.
9
Zuma contends the trial court held a hearing on this second
ex parte application on October 27, 2021 and denied the
application “without providing any legal or factual basis for its
ruling.” The record does not include a transcript of that hearing,
or a minute order for that date. The November 24, 2021 Keshen
declaration is no way an adequate substitute for those
documents. We can infer that the continuance was denied from
the fact that the trial took place as scheduled on November 2,
2021. The record simply does not reflect whether or not the trial
court indicated the reasons for its ruling.
Trial did proceed on November 2, 2021. Zuma did not
participate because it remained suspended on that date. The
case was tried by the court. Banuelos, the gardener hired by
Thannhaeuser, testified on the first day of the trial, and
Thannhaeuser and Dennis Beesley, the realtor who assisted
Thannhaeuser with the lease, testified on the second day. On
November 3, 2021, the trial court found in favor of Thannhaeuser
and awarded him $114,000. Zuma’s attorney did not attend the
trial.
On November 15, 2021, the FTB issued a Certificate of
Revivor for Zuma.
Thannhaeuser submitted a proposed written judgment for
the trial court’s signature. On November 17, 2021, Zuma filed a
written objection to the proposed judgment on the ground that it
was “refused the right to participate in the trial.” Zuma stated
that it now had a Certificate of Revivor. Zuma contended it had
been suspended because the yearly franchise tax fees “had not
been paid by the Receiver during his management of the LLC.”
The receivership had ended on February 29, 2016. It appears
10
Zuma did not schedule or reserve a date for a hearing on this
objection.
On December 1, 2021, Zuma filed a motion to set aside or
vacate the judgment, with a hearing scheduled for June 13, 2022.
On December 10, 2021, Zuma filed a motion for new trial, with a
hearing date to be determined. Zuma filed its notice of appeal on
February 3, 2022.
DISCUSSION
I. Respondent’s Contentions.
Thannhaeuser contends that (1) Zuma’s designation of an
incomplete record warrants dismissal of the appeal or a summary
decision in Thannhaeuser’s favor; and (2) Zuma is judicially
estopped from asserting error in the trial court’s denial of its
motion to continue because Zuma was actively litigating other
cases as a plaintiff at the same time. Thannhaeuser also makes a
third, confusing argument that a suspension for tax deficiency is
“an absolute jurisdictional bar and revival is not retroactive.”
A. The Record, Through Incomplete, Is Adequate for
Appellate Review.
“[A] respondent seeking a dismissal after the record is filed
in the reviewing court must, unless the rules provide otherwise,
‘serve and file a written motion stating the grounds and the relief
requested and identifying any documents on which the motion is
based.’ (C.R.C., Rule 8.54(a)(1).) (See American Alternative
Energy Partners II v. Windridge (1996) 42 C.A.4th 551, 557,
49 C.R.2d 686, citing the text.)” ( 9 Witkin, Cal. Proc. (6th ed.
2021) Appeal, § 768, pp. 790–791.) Thannhaeuser did not file
such a motion, and so we do not consider his claim that the
appeal should be dismissed.
11
We consider, and reject, Thannhaeuser’s alternate
contention that the state of the record warrants a summary
decision in his favor.4
We agree with Thannhaeuser that Zuma failed to designate
the reporter’s transcript for the first day of trial, which included
the relevant testimony of gardener Banuelos. Thannhaeuser,
however, elected to cure that deficiency by moving to augment
the record. We granted that motion. Similarly, Thannhaeuser
elected to lodge the trial exhibits with us. The trial court
announced its decision from the bench, and the written judgment
is part of the designated record on appeal. Thus, the record of the
trial is complete.
The completeness of the record as to the application for a
continuance is less clear. There is no dispute that the trial court
denied the request for a continuance without explanation at the
status conference hearing and then rejected the first ex parte
application because it was procedurally non-conforming. The
record does not include the reporter’s transcript of any hearing on
the second (or renewed) ex parte application for a continuance.
There is no dispute that it was denied, but without some record of
proceedings on that date, we have no idea if the trial court
provided an explanation or not. Zuma, as the party challenging
the ruling on the continuance, bears the burden of establishing
an abuse of discretion. (People v. Fuiava (2012) 53 Cal.4th
622, 650 (Fuiava).) We will review the ruling to determine
4 Thannhaeuser appears to contend that the record
designated by Zuma is both under and over inclusive. We are not
aware of any prohibition on designating the entire trial court
record on an appeal from a final judgment.
12
whether Zuma has shown that there could be no reasonable basis
to deny the motion.
B. Judicial Estoppel Does Not Apply.
Thannhaeuser contends Zuma should be judicially estopped
from claiming the trial court erred in denying a continuance of
the trial because it was actively litigating a small claims matter
against Thannhaeuser.5
Judicial estoppel applies when: “(1) the same party has
taken two positions; (2) the positions were taken in judicial or
quasi-judicial administrative proceedings; (3) the party was
successful in asserting the first position (i.e., the tribunal adopted
the position or accepted it as true); (4) the two positions are
totally inconsistent; and (5) the first position was not taken as a
result of ignorance, fraud, or mistake.” (Jackson v. County of Los
Angeles (1997) 60 Cal.App.4th 171, 183.)
“ ‘ “ ‘Judicial estoppel is “intended to protect against a
litigant playing ‘fast and loose with the courts.’ ” ’ ” ’ ” (Minish v.
Hanuman Fellowship (2013) 214 Cal.App.4th 437, 449.) In the
matter before us, Zuma and Keshen accurately stated that Zuma
lacked capacity to defend this action. There is no dispute that
Zuma was suspended, and the law is clear that a suspended
corporation cannot defend itself. Although Thannhaeuser has
requested judicial notice of a few documents filed in the small
5 We decline to consider Thannhaeuser’s argument that
Zuma was litigating another matter involving Southern
California Edison at the time. Nothing from that matter is part
of the record on appeal, and Zuma has not requested that we take
judicial notice of the other proceedings.
13
claims court, they are not sufficient to warrant application of
judicial estoppel.
Judicial estoppel often raises factual issues. (Cloud v.
Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1000.)
Thannhaeuser has the burden of proof on this issue. Although
judicial estoppel need not be raised in the trial court, when it is
not, the record may be inadequate to support the doctrine.
A key element of judicial estoppel is that the contradictory
position not be taken as a result of fraud, ignorance or mistake.
Procedures are quite different in small claims court, and the
pleading of which Thannhaeuser complains amounts to
scheduling an event three months in the future.6 The record does
not show that Thannhaeuser raised this issue in the trial court,
or that Keshen was given an opportunity to explain Zuma’s small
claims court litigation. Under these circumstances, we decline to
apply judicial estoppel.
C. Thannhaeuser Has Waived His Jurisdictional Bar
and Non-Retroactive Revival Argument.
Thannhaeuser has headed one of his argument subsections
“Under Supreme Court Precedent, Suspension for Tax Deficiency
Is an Absolute Jurisdictional Bar and Revival Is Not
Retroactive.” Thannhaeuser’s argument under this heading
6 We have granted Thannhaeuser’s request to take judicial
notice of the November 1, 2021 Order to Produce Statement of
Assets and to Appear for Examination, attached as Exhibit 10 to
the request. That pleading was filed when Zuma asserted its
incapacity to defend this action. We have denied Thannhaeuser’s
request to take judicial notice of other documents from small
claims court, all of which predate Zuma’s assertion of incapacity
in this action and so are not relevant. (Ante, fn. 2.)
14
consists of several pages of case citations and quotes. The
application of this law to the facts of this case is not clear. (See
United Grand Corp. v. Malibu Hillbillies, LLC (2019)
36 Cal.App.5th 142, 153 (United Grand) [It is an appellant’s duty
to supply the court with some cogent legal argument; we are not
bound to develop an appellant’s argument for it].)
To the extent Thannhaeuser contends that the trial court
was not required to postpone the trial until Zuma revived its
corporate powers, even if that meant Zuma would be barred from
defending the action, we agree there is no absolute bar to denying
a continuance under such circumstances. To the extent that
Thannhaeuser argues Zuma was prohibited from making a
motion to continue, there is a judicially recognized exception for
that action. (Schwartz v. Magyar House, Inc. (1959)
168 Cal.App.2d 182, 188.) To the extent Thannhaeuser contends
Zuma could not appeal from the judgment, he is mistaken.
(Bourhis v. Lord (2013) 56 Cal.4th 320, 329 (Bourhis).) Any other
arguments are waived.
II. Appellant’s Contentions.
A. Zuma Has Not Shown the Trial Court Abused Its
Discretion in Denying a Continuance.
Zuma contends it was an abuse of discretion for the trial
court to deny a continuance to permit Zuma to pay its taxes and
revive its capacity to defend this action. Thannhaeuser contends
Zuma waived this claim by failing to appear on the first day of
trial. We see no abuse of discretion by the trial court and no
waiver by Zuma.
Thannhaeuser contends Zuma’s failure to appear for trial
waived its opportunity to have the trial court determine whether
15
“at the time of trial” Zuma had shown good cause to delay the
trial date. Thannhaeuser contends Zuma’s decision to file a
notice of “Statutory Prohibition for Participation at Trial” without
seeking specific relief, coupled with Zuma’s failure to appear at
trial and object or make some sort of new motion, waived its right
here to claim error in the trial court’s decision to proceed without
Zuma’s presence.
The trial court had clearly communicated its intent to
proceed with the trial even if Zuma remained suspended on
November 2. Absent some change in circumstances, Zuma was
not required to make a futile motion to preserve its claim.
Zuma was not required to participate in the trial by
objecting or making offers of proof. To the contrary, the law is
clear that a suspended corporation may not defend an action. We
are surprised Thannhaeuser would argue otherwise. His reliance
on Bourhis is misplaced. That case reaffirmed the general rule
that “a ‘corporation may not prosecute or defend an action, nor
appeal from an adverse judgment in an action while its corporate
rights are suspended for failure to pay taxes.’ ” (Bourhis, supra,
56 Cal.4th at p. 324.) Nothing in that case encourages, or even
permits, a suspended entity to defend an action, and nothing
supports retroactive validation of such actions. Bourhis
recognizes a very narrow exception, based on a long line of older
cases, that retrospectively validates an invalid notice of appeal.
(Id. at p. 328.)
Thannhaeuser also cites Duncan v. Sunset Agricultural.
Minerals (1969) 273 Cal.App.2d 489. In that case, the trial court
permitted a suspended corporation to defend an action. (Id. at
p. 490.) Whatever the merits of this approach were in 1969, the
Legislature subsequently enacted Revenue and Tax Code section
16
19719, which makes it a misdemeanor for anyone “to exercise the
powers, rights, and privileges of a corporation that has been
suspended pursuant to [Revenue and Tax Code] section 23301.”
(Rev. & Tax Code, § 19719, subd. (a).) Thus, Duncan cannot be
read as requiring a suspended party to defend an action and then
seek revival to validate its defense.
Turning to the merits of Zuma’s claim: We review a trial
court’s denial of a motion for continuance for an abuse of
discretion. (See Fuiava, supra, 53 Cal.4th at p. 650.) Generally,
however, a trial court should grant a short continuance to permit
a suspended corporation to seek revival of its corporate powers,
when the suspension comes to light shortly before trial. (Cadle
Co. v. World Wide Hospitality Furniture, Inc. (2006)
144 Cal.App.4th 504, 512–513.) This is consistent with
California Rules of Court, rule 3.1332, which authorizes a
continuance on the ground of a “significant, unanticipated change
in the status of a case as a result of which the case is not ready
for trial.” (Cal. Rules of Court, rule 3.1332(c)(7).)
That was not the factual circumstance present here. Zuma
had been aware of its suspension for at least two months (and
more probably four months) before it sought a continuance, and it
sought a lengthy continuance. Further, given the length of time
Zuma was aware of the suspension, it was Zuma’s burden as the
party seeking a continuance to demonstrate diligent efforts to
revive its corporate powers once it admittedly learned of its
suspension. This it failed to do.
As set forth above, Zuma gave vague but nonetheless
varying accounts of when it learned of the suspension. At one
point, Zuma stated Keshen was aware of the suspension in late
Spring of 2021. Zuma did not dispute that it had received the
17
July 22, 2021 email from Thannhaeuser’s counsel informing
Zuma of the suspension. Zuma cancelled mediation on
September 30, 2021 at the last minute due to the suspension,
implying that it had just become aware of the suspension. In an
October 8, 2021 filing Zuma stated, both, that it become aware of
the suspension “just recently” and that Keshen learned of the
suspension until “late Spring of 2021.” Thereafter, Zuma
reverted to using the phrase “just recently” or “only recently.”
We conclude Zuma failed to make an affirmative showing
that it was unaware of its suspension until shortly before trial.
On appeal, Zuma contends that the above-described
inconsistencies are minor and should not have resulted in a
denial of the motion to continue. We cannot agree they are minor
and Zuma has given us no reason to disregard the late spring or
July dates.
In addition, Zuma provided only a vague account of the
efforts it made during the time it knew it was suspended. Zuma
did not provide any information about the specific efforts it made
to contact the FTB: the dates and number of phone calls it made
or the emails it sent. There is no summary of the information
provided by the FTB. Similarly, Zuma did not provide a date for
its order of services from the revivor firm.7 Zuma also did not
explain what those services were, or if the “Gold” package was
the most expedited service available.
We hold Zuma failed to make a showing of diligence in
curing its suspension and failed to provide this court with any
7 In its briefing on appeal, Zuma gives a broad date of
October 2021 and provides a record cite to support this claim.
There is no date in the Keshen declaration or on the order
confirmation from the revivor firm.
18
reason to excuse its failures. Although Zuma points to the
continuing effect of the COVID pandemic on government services,
Zuma was still required to show diligence under the
circumstances. Zuma did not make even the minimal showing
that it at least began its efforts at revival promptly upon learning
(in late spring or July) of the suspension.
Zuma contends it was contrary to the purposes of the
suspension statute to deny the continuance because being able to
participate in litigation is what motivates a corporation to pay its
taxes. Zuma knew of the early-November 2021 trial date since at
least June 2021, and of its suspension since late spring or July,
but provided no evidence that it acted with any urgency to
remedy its suspension. The trial court could reasonably have
concluded that Zuma had no intention of paying its taxes even if
it received a continuance. Relatedly, given the length of the
continuance sought by Zuma, the trial court could reasonably
have concluded that Zuma was attempting to use its suspension
to delay trial for a lengthy period, and at least for four months.
Indeed, Zuma contended in its first application that the
revivor company estimated that reinstatement could take a few
months. In her supporting declaration, Keshen stated only that
FTB representatives said reinstatement would take “significant
time.” She did not mention an estimate from the revivor
company. Keshen did not repeat her statement about the FTB
representatives in her declaration in support of the renewed
application and did not give any indication of a time estimate
from the revivor company.
Ironically, Zuma contends that its revivor only two weeks
after the trial shows that the trial court should have granted the
continuance. We evaluate a trial court’s ruling on the basis of the
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information before the court at the time of the ruling. Zuma, of
course, told the court it would need a lengthy period of time to
obtain revivor. If we were to consider this evidence, we would
note that the apparently quick resolution equally suggests that if
Zuma had hired the firm two weeks earlier, it would not have
needed a continuance.
B. Zuma Has Waived Any Claims Related to Its Post-
Trial Motions.
Zuma contends that it filed notice of its Certificate of
Revivorship shortly after trial and prior to the entry of final
judgment, a motion to vacate the judgment, objections to the
judgment, and a motion for a new trial. We treat these pleadings
as abandoned, and any claims concerning those motions waived.
The certificate of revivorship was filed on November 17,
2021 as an exhibit to Zuma’s objection to the judgment. The
record does not show that Zuma obtained a hearing date for that
pleading. Zuma filed a “continued objection” on December 3,
2021, again with no indication that Zuma had obtained a hearing
date. As Zuma acknowledges, it withdrew its motion to vacate
and motion for a new trial.
C. Zuma Forfeited Its Argument That the Evidence Was
Insufficient to Support Damages for “Out-Of-Pocket”
Expenses.
Under the broad heading “The Trial Court Erred in Failing
to Require Respondent to Meet His Evidentiary Burdens in
Presenting his Proof of Contractual Damages at Trial,” Zuma
makes only one specific factual argument: the trial court erred in
accepting Thannhaeuser’s verbal testimony that he incurred
$20,000 in “out-of-pocket” expenses for “things that were
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supposed to be taken care of by the landlord under the lease”
without a “foundation based on factual proof” or sufficient
documentary evidence of damages. Zuma also complains of
Thannhaeuser’s “vague and speculative testimony” concerning
his out-of-pocket expenses, and lack of notice given to Zuma. The
trial court expressly found Thannhaeuser’s testimony credible.
Zuma relies entirely on the Evidence Code to support its
argument. Although Zuma cites to and provides excerpts from a
number of sections of the Evidence Code, Zuma does not make a
cogent argument applying those sections to the facts of this case.
For example, Zuma cites Evidence Code section 702 for the
propositions that testimony may not be based on speculation or
conjecture, and must be based on personal knowledge, but does
not explain how Thannhaeuser lacked personal knowledge of
the amount his out-of-pocket expenses for the property or how he
was speculating about that amount. Accordingly, Zuma has
forfeited this claim. (United Grand, supra, 36 Cal.App.5th at
p. 162 [failure to explain how cited legal authority applies to facts
of the case forfeits claim].) We are not required to develop an
appellant’s argument for it, and may disregard conclusory
arguments that “ ‘fail to disclose the reasoning by which the
appellant reached the conclusions [it] wants us to adopt.’ ” (Id. at
p. 163 & fn. 5.)
D. There Is Sufficient Evidence to Support Damages
Resulting from the Water Leak.
Under the heading “The Trial Court Erred in Failing to
Require Appellee to Prove His Breach of Contract Claim in
Accordance with His Burden to Factually Support the Elements
of Proof Required to Establish Duty and Breach of the Lease
Agreement,” Zuma’s only specific factual contentions concern a
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leak in the irrigation system which resulted in a $19,000 water
bill. Specifically, Zuma contends there is no evidence
Thannhaeuser notified it in writing of the water leak, which
resulted in a $19,000 water bill. Thannhaeuser was awarded
damages in that amount. Zuma contends that, in the absence of
such notice, the lease agreement places responsibility for
damages on Thannhaeuser, the tenant.
It appears to be true that the lease agreement required
written notice, and that Thannhaeuser did not notify Zuma in
writing of the leak. Gardener Banuelos testified at trial that he
discovered the water leak when he came to work; the leak was in
a main irrigation pipe at “the bowels to the sprinkler system” on
the hillside in the backyard, running down it. Banuelos testified
that he promptly called Dennis Beesley. Beesley told Banuelos to
shut off the water and repair the pipe, and Banuelos promptly
shut off the water. Banuelos’s testimony is substantial evidence
that no damages accrued as a result of a lack of written notice.
According to Banuelos, the water to the system was shut off as
soon as the leak was discovered. Put differently, the failure to
notify Zuma in writing was not a substantial or material breach
of the agreement which would relieve Zuma of its duty to
perform.
Zuma contends Thannhaeuser did not prove it was
responsible for damage to infrastructure or had a duty to inspect
water piping. While the lease provides that Thannhaeuser shall
pay for water, the lease more pertinently provides that Zuma
shall water and maintain the garden, landscaping, tree and
shrubs. Thannhaeuser testified that it was Zuma’s responsibility
to maintain the irrigation system under the lease. This is a
reasonable interpretation of the provision of the lease provision
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requiring Zuma to water and maintain the landscaping.
Banuelos, who discovered the leak on his first day on the job,
testified the landscaping was in a state of extreme neglect. There
is evidence that Zuma had stopped paying the former gardener
who then stopped working, evidence that Zuma had breached its
duty to maintain the landscaping, including the irrigation
system.
Zuma also contends Thannhaeuser did not provide any
evidence Zuma’s breach of the lease caused Thannhaeuser’s
damages.8 Specifically, Zuma contends that Thannhaeuser did
not provide admissible proof that he actually paid the water bill.
Zuma also appears to contend that there is no admissible
testimony that Thannhaeuser received such a water bill. By this,
Zuma appears to mean that Thannhaeuser’s testimony violated
Evidence Code section 1523, subdivision (a), which prohibits oral
testimony to prove the contents of a writing.
Plaintiff’s Trial exhibit 7, admitted into evidence, is a
customer transaction summary from Valencia Heights Water
Company which shows a charge of $19,653.49 on June 2, 2016, a -
$2,500 adjustment by the water company on August 4, 2016 and
a zero balance on November 21, 2016, as a result of six payments
made between that date and the initial charge. Thannhaeuser
was competent to testify that he received the written summary
from the water company and took steps to effectuate the
payments shown on it.
8 Because Zuma’s brief is not entirely clear, we again note
that Thannhaeuser testified that maintenance of the irrigation
system was Zuma’s responsibility under the lease. Thus, Zuma
was responsible for damages caused by the leak.
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E. The Trial Court Was Not Required to Make a Specific
on-the-Record Finding of Bad Faith to Support
Punitive Damages under Former Section 1950.5.
Zuma makes a two-page argument which focuses entirely
on its claim that the trial court was required to make a specific
finding of bad faith on the record. Zuma has not cited, nor are we
aware of, any case requiring the trial court to make a specific on-
the-record finding of bad faith. We see nothing in the plain
language of former section 1950.5, subdivision (l) which required
such a specific finding. Subdivision (l) stated only: “The bad faith
claim or retention by a landlord or the landlord’s successors in
interest of the security or any portion thereof in violation of this
section, . . . may subject the landlord or the landlord’s successors
in interest to statutory damages of up to twice the amount of the
security, in addition to actual damages. The court may award
damages for bad faith whenever the facts warrant that award,
regardless of whether the injured party has specifically requested
relief. In an action under this section, the landlord or the
landlord’s successors in interest shall have the burden of proof as
to the reasonableness of the amounts claimed or the authority
pursuant to this section to demand additional security deposits.”
(Former § 1950.5, subd. (l), repealed on July 2, 2024.)
Although Zuma also asserts in subheading B that “There
Was Not An Evidentiary Basis” for the award of damages, Zuma
does not repeat this contention in the body of its argument, much
less make a cogent argument as to why the evidence is not
sufficient to support the award. Arguably, Zuma has waived this
claim. (United Grand, supra, 36 Cal.App.5th at p. 153.) Even if
we were to treat Zuma’s statement that there is “nothing in the
trial transcript that even mentions the required element of bad
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faith” as an argument for lack of evidence, such an argument
would fail. This is primarily an alternate way of stating that the
trial court was required to make a specific finding of bad faith,
which we have already rejected. Section 1950.5, subdivision (l)
expressly states the tenant need not specifically request statutory
damages, so even if Thannhaeuser did not mention bad faith,
that omission would have no significance.
In its reply brief, Zuma does provide a more detailed
factual analysis of the evidence, but we do not consider this
analysis provided for the first time in the reply brief. (See United
Grand, supra, 36 Cal.App.5th at p. 158 [issue raised for the first
time in a reply brief “ ‘deprives the respondent of the opportunity
to counter the appellant by raising opposing arguments’ ”].)
F. Any Post Judgment-Amendment of the Judgment Is
Outside the Scope of This Appeal.
Zuma contends that, in a March 25, 2022, minute order
granting Thannhaeuser’s motion for attorney fees, the trial court
improperly amended the judgment to add a cite suggesting that
Zuma was able to appear at trial. In this matter, Zuma has
appealed from the judgment filed December 3, 2021. That is the
operative judgment on appeal. Zuma has separately appealed
from the attorney fees award, in case No. B321283. To the extent
the claimed amendment is relevant to and raised in that appeal,
we will consider it there.
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DISPOSITION
The judgment is affirmed. Costs are awarded to
respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
STRATTON, P. J.
We concur:
WILEY, J.
VIRAMONTES, J.
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