Fresh & Easy Neighborhood Market v. WCPP-CT CA2/4

Filed 2/26/14 Fresh & Easy Neighborhood Market v. WCPP-CT CA2/4
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
FRESH & EASY NEIGHBORHOOD B244843
MARKET INC.,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No. BC430419)
v.
WCPP-CT, LLC, et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court for Los Angeles County,
Barbara M. Scheper, Judge. Affirmed.
Freeman, Freeman & Smiley, Steven E. Young; Greene, Fidler & Chaplan,
and Gary D. Fidler for Defendants and Appellants.
McKenna Long & Aldridge, Andrea T. Prohaska and Wayne S. Grajewski
for Plaintiff and Respondent.
Defendants WCPP-CT, LLC and WCPP-LK, LLC (collectively, Landlord)
appeal from a judgment in favor of plaintiff Fresh & Easy Neighborhood Market
Inc. following a bench trial on Fresh & Easy’s complaint for declaratory relief
regarding the lease agreement between Landlord and Fresh & Easy. The trial court
found that the lease agreement did not authorize Landlord to charge Fresh & Easy
a management or administrative fee as part of the common area maintenance
(CAM) costs the Landlord incurred in its operation of the shopping center in which
Fresh & Easy was located, and ordered Landlord to reimburse Fresh & Easy all
amounts it had paid to Landlord for management/administrative fees. We affirm
the judgment.
BACKGROUND
In the spring of 2006, Landlord was contacted by the Legaspi Company
(Legaspi), a real estate broker, regarding a possible lease of space in Landlord’s
shopping center in West Covina by Fresh & Easy (formerly known as Tesco Stores
West, Inc.). Legaspi sent a broker’s questionnaire to Eric Treibatch, seeking
information about the space and the Landlord. Treibatch and his father, Chaim
“Chuck” Treibatch,1 are the owners of Ophir Management Services, Inc. (Ophir
Management), the company that manages the shopping center. Treibatch and his
father also are two of the three members of WCPP-CT, LLC, which owns a 55
percent interest in the shopping center; the other owner is WCPP-LK, LLC, which
is controlled by Larry Kuppan. Treibatch filled out the broker’s questionnaire and
returned it to Legaspi. Landlord’s responses to the questionnaire indicated, among
other things, that Fresh & Easy would be required to pay common area charges,
which Landlord estimated would be $3.72 per square foot for the first year of the
1
We will refer to Eric Treibatch as Treibatch, and to Chaim Treibatch as Chuck
Treibatch.
2
lease. Fresh & Easy (or its representative) did not ask for, and Landlord did not
provide, a breakdown of the components of the common area charges.
In May 2006, Fresh & Easy presented to Landlord, in the form of a letter of
intent (LOI), an offer to lease an approximately 16,700 square foot retail space at
Landlord’s shopping center. The parties conducted negotiations over the next two
months, and Fresh & Easy sent Landlord the final LOI in July 2006. The LOI
included a term requiring Fresh & Easy to pay “its proportionate share of . . .
common area charges including expenses, maintenance and repair for the common
areas.” Landlord formally accepted the offer on August 1, and the parties began
negotiating the terms of the lease.
Jonathan Hunt, an attorney at the Atlanta office of McKenna, Long &
Aldridge, represented Fresh & Easy in the negotiations, and Treibatch and his
father Chuck Treibatch represented Landlord.2 On July 28, 2006, Hunt emailed to
Treibatch a draft lease based upon the terms of the LOI and the broker’s
questionnaire. That initial draft included, among others, the following provisions
regarding Landlord’s maintenance of the common areas and the CAM charges.
Paragraph 16.1 obligated Landlord to operate the shopping center “in a first-
class manner.”
Paragraph 16.2 set forth Landlord’s obligations regarding the maintenance
and operation of the common areas, and gave examples of the kinds of services
required to operate and maintain the common areas “in a manner commensurate
with the highest standards of retail maintenance.”
2
Although Treibatch stated in his response to the broker’s questionnaire that
Landlord was represented by attorney Gary Fidler of Greene, Fidler & Chaplan, Fidler
was not available at the time of the negotiations. Treibatch, however, had substantial
experience negotiating commercial leases, having negotiated approximately 150 such
leases by that time.
3
Paragraph 16.4 obligated Fresh & Easy to pay its share of Landlord’s costs
related to maintenance of the common areas. The initial draft of the lease stated, in
relevant part: “Landlord shall pay all of the costs related to the maintenance of the
Common Areas. From and after the Date of Rent Commencement, Tenant shall
pay to Landlord Tenant’s Pro Rata Share of the Common Area maintenance costs
incurred by Landlord from and after the Date of Rent Commencement in fulfilling
Landlord’s obligations under Section 16.1 (‘Common Area Charges’). The
Common Area Charges shall not include and Tenant shall not pay: . . . (c) any cost
in the nature of an administrative, management, accounting, data processing,
custodial, general overhead or similar charge, whether or not expressed as a
percentage add-on to the costs and costs of maintenance. In no event shall there be
any duplication of costs billed to Tenant under any provision of this Lease.”
Paragraph 16.5 set forth the method of payment of CAM charges. It
provided that, for the first year, the amount charged would be as set forth in
paragraph 1.15, which stated that the “Common Area Charge” would be $3.72 per
annum per square foot (as stated in Landlord’s response to the broker’s
questionnaire). It also provided that this amount could be adjusted annually (but
could increase by no more than five percent each year), and that if the actual pro
rata share was less than the estimated “Common Area Charge,” Landlord would
refund the excess to Fresh & Easy when it delivers its annual statement of CAM
costs (or Fresh & Easy would remit the balance due if the actual pro rata share was
more than the estimate).
Paragraph 16.6 gave Fresh & Easy the right to audit the statement of CAM
charges (which Landlord was obligated to provide annually) and “challenge the
accuracy or validity of any items therein,” and required Landlord to refund any
overpayments the audit might reveal.
4
Treibatch returned by email a marked-up copy of the lease with his proposed
changes, additions, and deletions. One of his proposals was to delete
“administrative, management” from paragraph 16.4. A few days later, Hunt
emailed to Treibatch a copy of Treibatch’s mark-up, with handwritten notations
indicating which proposed changes were acceptable to Fresh & Easy. Next to the
proposed deletion of “administrative, management,” Hunt had written “Yes.”
Treibatch and Hunt spoke by phone a few days later to discuss the proposed
changes. Other than noting Fresh & Easy’s agreement to the deletion in paragraph
16.4, there was no discussion about it or any possible effect of that deletion.
The lease was signed by Landlord on August 22, 2006, and became effective
on August 28, 2006. The provisions governing CAM charges remained largely
unchanged from the initial draft, except for the deletion in paragraph 16.4 and
certain changes in figures that are not relevant to this appeal. The final version of
paragraph 16.4 stated: “Landlord shall pay all of the costs related to the
maintenance of the Common Areas. From and after the Date of Rent
Commencement, Tenant shall pay to Landlord Tenant’s Pro Rata Share of the
Common Area maintenance costs incurred by Landlord from and after the Date of
Rent Commencement in fulfilling Landlord’s obligations under Section 16.1
(‘Common Area Charges’). The Common Area Charges shall not include and
Tenant shall not pay: (a) the original capital costs of the Shopping Center and the
original equipment serving the same; (b) any capital expenditures or the capital
costs of improvements, replacements, additions and alterations of the Common
Areas; and (c) any cost in the nature of an accounting, data processing, custodial,
general overhead or similar charge, whether or not expressed as a percentage add-
on to the costs and costs of maintenance. In no event shall there be any duplication
of costs billed to Tenant under any provision of this Lease.” The lease also
included an integration clause and an “Interpretation, Construction” clause stating
5
that “Each Party and its respective attorneys have participated equally in the
drafting, preparation and negotiation of this Lease, which shall be construed
accordingly.”
The first lease year began on June 1, 2007. In accordance with the lease,
Fresh & Easy was charged for CAM costs at a rate of $3.72 per annum per square
foot. Sometime in the first half of 2008, Landlord provided Fresh & Easy’s third
party leasing administrator, Jones Lang LaSalle (Jones Lang) with a reconciliation
statement of CAM costs for 2007.
On July 2, 2008, Greg Calig from Jones Lang sent an email to Vera at Ophir
Management (Vera is the controller), asking about certain charges on the CAM
statement.3 Among other questions, Calig asked about the management fee. He
noted that the fee at the West Covina location was very high, especially compared
to the Fresh & Easy at another location, and asked for an explanation of the charge.
In her response, Vera explained that the management fee calculation was
dependent on monthly gross income collection, and the West Covina shopping
center was a larger property than the other location and did not have any vacancy.
Although Calig followed up with additional questions on other issues, he did not
further address the management fee; he did, however request supporting
documentation for the CAM statements at both locations. On August 1, 2008,
Calig sent Vera another email stating that Fresh & Easy was challenging a charge
for “LA Co Flood Control” because it was a capital expenditure, and capital
expenditures were specifically excluded from CAM charges under paragraph 16.4
of the lease.
3
Fresh & Easy also leased space at another shopping center managed by Ophir
Management, located in Vista. The email asked questions about charges on the CAM
statements for both locations.
6
In April 2009, after receiving the CAM reconciliation statement for 2008,
Carrie Gillis of Jones Lang asked for additional documentation. Ophir
Management provided the requested documentation, and on June 29, 2009, Vera
sent an email to Gillis asking Fresh & Easy to pay the outstanding balance due. On
August 13, 2009, Gillis sent an email to Vera that, among other things, challenged
the management fee on the ground that the lease prohibits such fees. On August
31, 2009, Gillis sent a letter to Vera, stating that the lease does not authorize any
management or administrative fees, and asking that the management fee be
removed from the CAM statement. Following further discussions, Treibatch sent
an email to Gillis to “finalize” the outstanding issues. With regard to the
management fee, Treibatch stated, “In our lease negotiations w/McKenna Long,
we intentionally struck ‘Admin & Mgt’ from the tenant[’]s exclusions from CAM.
. . . Also you can verify on the McKenna Long side that this indeed was removed
in order to include such fees in the CAM. BTW, you have been paying these
charges up until this point because this was pointed out to Greg Calig in August of
2008.” In response, Gillis maintained that the charges were not authorized by the
lease.
In January 2010, Fresh & Easy filed the instant lawsuit against Landlord for
declaratory relief, seeking a declaration that (1) the administrative/management
charge is not a proper CAM charge; (2) Fresh & Easy is entitled to be reimbursed
all amounts it has paid for administrative/management charges; and (3) Fresh &
Easy has no obligation to pay administrative/management charges for the
remainder of the lease term and any subsequent renewals.4
4
Fresh & Easy also sought similar declarations regarding the charge for the flood
control district rent, but the parties entered into a stipulation regarding those charges, and
Fresh & Easy ultimately dismissed the cause of action related to those charges.
7
The case was originally tried before Judge John A. Kronstadt, who
announced his tentative decision on March 11, 2011, finding against Fresh & Easy
on the management fee issue. Both parties timely filed requests for a statement of
decision, but before Judge Kronstadt issued the statement he was appointed to the
United States District Court. Fresh & Easy requested that a mistrial be declared
after the case was assigned to Judge Robert H. O’Brien, which request apparently
was denied, and, after the case was reassigned to Judge Barbara M. Scheper,
judgment was entered in accordance with Judge Kronstadt’s tentative decision.
Fresh & Easy moved for a new trial on the ground that where a statement of
decision is requested but the trial judge is unavailable to issue one, a new trial is
required. Judge Scheper granted the motion, and a new bench trial was conducted.
At trial, both sides presented testimony regarding what management and
administrative fees were, how they could be calculated, and custom and practice in
the commercial real estate field regarding those fees. For the most part, all of the
witnesses agreed that management fees generally related to costs associated with
managing the entire shopping center (including such things as advertising to fill
vacancies, negotiating leases, evicting tenants, collecting rents, etc.), while
administrative fees generally related to the maintenance of common areas. The
witnesses also agreed there were several ways that administrative or management
fees may be calculated for shopping center tenant leases: they may be based upon
(1) a percentage of CAM charges; (2) a percentage of a tenant’s rent; (3) a
percentage of the income the landlord receives from all tenants in the shopping
center, inclusive of tax and insurance payments; or (4) a percentage of income
from tenants, excluding tax and insurance payments. All witnesses agreed that the
8
method of calculation and the percentage to be charged usually are the subject of
negotiation, and the method and percentage are set forth in the lease.5
In addition to presenting evidence on custom and practice, both sides
presented testimony from Hunt and Treibatch, who participated in the negotiations
that led to the final lease in this case.6 Both men testified that there were no
discussions about management or administrative fees during the negotiations, nor
was there any discussion about the deletion of the words “administrative,
management” from the initial draft of the lease. Treibatch testified he believed that
by deleting those two words, Landlord would be allowed to charge Fresh & Easy
administrative and/or management fees. Hunt testified that when he agreed to
delete “administrative, management” from paragraph 16.4, he did not believe he
was agreeing to allow Landlord to charge an administrative or management fee,
because those two words were redundant of later language in that same subsection
-- i.e., “general overhead or similar charge, whether or not expressed as a
percentage add-on to the costs and costs of maintenance” -- and therefore the
deletion did not change the exclusion set forth in that subsection. Both Treibatch
and Hunt admitted that neither had expressed to the other his belief regarding the
meaning of the deletion.
After close of evidence and closing arguments, the trial court announced its
tentative decision in favor of Fresh & Easy and, pursuant to Landlord’s request,
5
Chuck Treibatch testified that the management fee charged to Fresh & Easy was
based upon the fee Landlord paid to Ophir Management to manage the entire shopping
center; that fee was equal to five percent of Landlord’s gross monthly collections from all
of the tenants.
6
Hunt testified in the first trial, but was unavailable for the second trial. For the
second trial, the parties agreed to rely upon portions of his testimony from the first trial,
which was read into the record.
9
issued a statement of decision. In the statement of decision, the court began its
analysis by noting that, although both parties offered evidence of their subjective
intent regarding the lease negotiations, neither party disclosed their subjective
intent to the other, and therefore their subjective intents were irrelevant to interpret
the lease. The court then turned to the plain language of the agreement, and
concluded that the lease neither specifically authorizes nor specifically prohibits
Landlord from charging a management or administrative fee as a component of
CAM charges. However, the court determined that the management fee at issue
could not be considered a proper CAM charge because it was based upon the fee
Landlord paid to Ophir Management for property management services, and many
of the categories of work Ophir Management performed were not common area
maintenance expenses. Finally, the court observed that, even if in theory a
management fee properly could be charged under the terms of the lease, the
agreement could not be enforced because there is no language setting forth how the
management fee is to be calculated and there is no single custom or practice as to
how one is calculated, and thus Fresh & Easy would have no ability to challenge
the fee if it believed it was excessive.
Having concluded that the lease does not contain an enforceable agreement
requiring Fresh & Easy to pay a management or administrative fee, the court
addressed Landlord’s argument that Fresh & Easy waived its objection to payment
of the management fee or is estopped from asserting an objection, and found
Landlord’s argument to be without merit. Judgment was entered in favor of Fresh
& Easy, and Landlord timely filed a notice of appeal from the judgment.
DISCUSSION
Landlord raises six issues in the appellants’ opening brief. Two involve
evidentiary issues, two involve Landlord’s affirmative defenses of estoppel and
10
waiver, and two involve Landlord’s objection to, and the adequacy of, the
statement of decision. In its respondent’s brief, Fresh & Easy seems to fight
battles it already had won, devoting a majority of its brief to arguments supporting
the trial court’s reasoning on issues that Landlord did not challenge in the
appellants’ opening brief. Landlord subsequently addressed those issues in the
appellants’ reply brief. Because they were not raised in the opening brief,
however, Landlord forfeited those issues and we decline to address them.
(Kovacevic v. Avalon at Eagles’ Crossing Homeowners Assn. (2010) 189
Cal.App.4th 677, 680, fn. 2.) Therefore, our review is limited to the six issues
raised in the appellants’ opening brief: (1) whether the trial court committed
prejudicial error by allowing Matthew Price, Fresh & Easy’s director of real estate,
to testify about Fresh & Easy’s policy regarding management fees; (2) whether the
trial court committed prejudicial error by admitting evidence regarding leases
between Landlord and other tenants at the West Covina shopping center;
(3) whether the evidence supported the trial court’s ruling on Landlord’s estoppel
defense;7 (4) whether the trial court erred in finding that Fresh & Easy did not
waive its right to challenge the imposition of a management fee; (5) whether the
trial court committed reversible error by failing to consider Landlord’s objections
to the proposed statement of decision; and (6) whether the trial court failed to fully
respond to Landlord’s request for a statement of decision.
A. Admission of Matthew Price’s Testimony
7
Landlord actually frames this issue as whether the trial court “failed to fully
consider the substantial evidence establishing [Landlord’s] affirmative defense of
estoppel.” As discussed in section C., post, Landlord misunderstands the appropriate
standard of review.
11
Fresh & Easy called Matthew Price to testify in its case in chief. Price
testified that he came to California in March 2006 as part of Fresh & Easy’s
original team in the United States. From March 2006 to December 2007, he was
Fresh & Easy’s regional real estate director for Orange, San Bernardino, and
Ventura Counties, responsible for finding sites, negotiating leases, and getting
stores permitted and open. In November 2010, he became the director of real
estate, responsible for the property acquisition and property management
departments for California, Nevada, and Arizona.
Over Landlord’s objection, Price testified that at the time of the lease
negotiations in this case, Fresh & Easy had a specific policy not to include
management fees in leases, and that the policy was communicated to attorneys who
were negotiating leases on Fresh & Easy’s behalf. He explained the difference
between management fees (which are charged for managing the general services of
the entire shopping center, and generally were based on a percentage of the gross
receipts of the center) and administrative fees (which is a charge for managing and
administering the maintenance of common areas, and generally is passed down to
tenants as a percentage of CAM costs), and testified that Fresh & Easy would
accept administrative fee provisions and negotiate the percentage to be charged.
On cross-examination, Price acknowledged that he had no involvement in the
negotiations of the lease at issue in this case.
On appeal, Landlord contends the trial court erred in overruling its objection
to Price’s testimony regarding Fresh & Easy’s policy not to include management
fees in leases and its communication of the policy to its attorneys, because the
testimony was irrelevant and prejudicial.
“The trial court has broad discretion in ruling on the relevance of evidence.
[Citation.] The court abuses its discretion only if its ruling is arbitrary, capricious
or patently absurd. [Citation.] We can reverse a judgment based on the erroneous
12
admission of evidence only if it is reasonably probable that the appellant would
have obtained a more favorable result absent the error, so the error resulted in a
miscarriage of justice. [Citations.]” (Faigin v. Signature Group Holdings, Inc.
(2012) 211 Cal.App.4th 726, 748.)
In this case, even if, as Landlord asserts, Price’s testimony was not relevant
-- an issue we do not decide -- Landlord failed to show prejudice from its
admission. Landlord contends “Price’s testimony was harmful and prejudicial to
[Landlord] because the Policy in question was never made known to [Landlord]
during the lease negotiations.” Landlord misunderstands the prejudice that must be
shown on appeal to require reversal of a judgment. To obtain reversal, Landlord
must show “it is reasonably probable that the appellant would have obtained a
more favorable result absent the error.” (Faigin v. Signature Group Holdings, Inc.,
supra, 211 Cal.App.4th at p. 748.) This Landlord did not -- and cannot -- do. In
considering Price’s testimony, the trial court was well aware that Fresh & Easy’s
policies regarding management and administrative fees were not disclosed to
Landlord, because both Treibatch and Hunt testified that they never had any
discussions about management or administrative fees during the negotiations.
Moreover, although the trial court referred to Price’s testimony in the statement of
decision, it is clear from the context that that testimony had no bearing on the trial
court’s determination. The court’s reference was included in its explanation of
Fresh & Easy’s subjective intent, which the court concluded was irrelevant to
contract interpretation. Thus, admission of Price’s testimony, even if erroneous,
did not prejudice Landlord.
B. Admission of Evidence of Other Leases
During Fresh & Easy’s case-in-chief, Fresh & Easy questioned Treibatch
about Landlord’s leases with several other tenants at the shopping center, and
13
offered those leases into evidence. Landlord objected to this line of questioning
and to admission of the leases, arguing the evidence was not relevant and that it
should be excluded under Evidence Code section 352 because the questioning
would require an undue consumption of time. Counsel for Fresh & Easy argued
the evidence was relevant because the leases would show Landlord’s custom and
practice with regard to “the charging of a management fee and how it is presented
in a lease.” The court allowed the questioning to continue conditionally, saying
that if it found the evidence was not relevant, it would stop the questioning. After
hearing the testimony regarding several of the leases, the court found that the
evidence was relevant and admitted the leases into evidence.
On appeal, Landlord asserts the admission of the leases and testimony about
them was prejudicial error. It contends that evidence of other leases was irrelevant
because the lease at issue here was different from the other leases, and the trial
court “never reviewed or considered the give-and-take that took place when the
Landlord . . . negotiated management and/or administrative fees with other
tenants.” Landlord argues admission of the evidence was prejudicial because the
court stated in its tentative ruling that it found important that in those leases, where
there is a provision for management or administrative fees to be paid, all of the
leases specify how that fee is to be calculated.
We conclude the trial court did not abuse its discretion in admitting this
evidence. The fact that the leases were different than the lease at issue here (and,
in fact, different from each other), or that the circumstances under which they were
negotiated were unknown to the court, does not render them irrelevant to the issue
of custom and practice with regard to how the obligation of the tenant to pay
management/administrative fees generally appears in leases. Indeed, the fact that
all of the other leases included a provision specifying how those fees are to be
calculated is relevant to the issue the court was asked to decide, i.e., whether there
14
was an enforceable agreement regarding the payment of management or
administrative fees. The leases, which corroborated the testimony of Fresh &
Easy’s expert witness regarding custom and practice in the industry, demonstrated
that there are a variety of ways that management and/or administrative fees may be
-- and are -- calculated with regard to the tenants in the shopping center at issue,
and are relevant to whether the lease at issue, which Landlord contends includes an
obligation to pay management/administrative fees but does not specify a method of
calculation, is enforceable.
C. Ruling on Landlord’s Estoppel Defense
In its next contention, Landlord argues the trial court “failed to fully
consider the substantial evidence establishing [Landlord’s] affirmative defense of
estoppel.” Landlord misunderstands the appellate court’s role on review of
findings regarding an estoppel defense. “The existence of an estoppel is generally
a question of fact for the trial court whose determination is conclusive on appeal
unless the opposite conclusion is the only one that can be reasonably drawn from
the evidence.” (Driscoll v. City of Los Angeles (1967) 67 Cal.2d 297, 305.) Thus,
the question we must answer is whether the conclusion asserted by Landlord -- that
Fresh & Easy should be estopped from claiming Landlord is not authorized to
charge a management fee -- is the only conclusion that can be reasonably drawn
from the evidence. We conclude it is not.
As Landlord correctly notes, “four elements must be present in order to
apply the doctrine of equitable estoppel: (1) the party to be estopped must be
apprised of the facts; (2) he must intend that his conduct shall be acted upon, or
must so act that the party asserting the estoppel had a right to believe it was so
intended; (3) the other party must be ignorant of the true state of facts; and (4) he
15
must rely upon the conduct to his injury.” (Driscoll v. City of Los Angeles, supra,
67 Cal.2d at p. 305.)
Landlord’s contention that it established estoppel in this case fails at the first
element. Landlord states that Fresh & Easy knew it had agreed to pay management
fees because it agreed to delete “administrative, management” from paragraph
16.4. But as the trial court found, supported by substantial evidence, Treibatch
never disclosed to Hunt or anyone at Fresh & Easy his intention that the deletion
would allow Landlord to charge a management fee. Therefore, Landlord cannot
establish the first element, and the trial court correctly found that its estoppel
defense had no merit.
D. Ruling on Landlord’s Waiver Defense
Landlord contends the trial court committed reversible error by failing to
consider facts showing that Fresh & Easy “conducted itself in such a manner that it
waived any rights to object to [Landlord’s] right to collect management fees.” We
disagree.
“Waiver requires an existing right, benefit, or advantage, actual or
constructive knowledge of the right’s existence, and either an actual intention to
relinquish it or conduct so inconsistent with any intent to enforce the right as to
induce a reasonable belief that it has been relinquished. [Citations.] The waiver of
a legal right cannot be established without a clear showing of intent to give up such
right. [Citation.] ‘The burden is on the party claiming the waiver to prove it by
clear and convincing evidence that “‘“does not leave the matter doubtful or
uncertain. . . .”’” [Citation.]’ [Citation.]” (Utility Audit Co., Inc. v. City of Los
Angeles (2003) 112 Cal.App.4th 950, 959.) “‘Waiver of a contractual right . . . is
ordinarily a question of fact and determination of this question, if supported by
substantial evidence, is binding on an appellate court.’” (Rubin v. Los Angeles
16
Fed. Sav. & Loan Assn. (1984) 159 Cal.App.3d 292, 298.) “[W]hen the evidence
gives rise to conflicting reasonable inferences, one of which supports the finding of
the trial court, the trial court’s finding is conclusive on appeal.” (Ibid.)
In this case, the trial court found there was no waiver because the evidence
was undisputed that Fresh & Easy did not know it was being charged a
management fee until it received the first CAM reconciliation statement in early
2008, and it waited only a year after that to challenge the fee. Landlord argues,
however, that the trial court misapplied the law of waiver because it stated that
“[w]aiver always rests upon intent” and therefore failed to consider whether Fresh
& Easy’s conduct constituted an implied waiver. (Citing Rubin v. Los Angeles
Fed. Sav. & Loan Assn., supra, 159 Cal.App.3d at p. 298 [“Although waiver is
frequently said to be the intentional relinquishment of a known right, waiver may
also result from conduct ‘which, according to its natural import, is so inconsistent
with the intent to enforce the right in question as to induce a reasonable belief that
such right has been relinquished’”].)
Landlord is mistaken. The trial court stated the law of waiver correctly.
Waiver does always rest upon intent, even when the waiver is implied. (Bickel v.
City of Piedmont (1997) 16 Cal.4th 1040, 1053 [“‘The waiver may be either
express, based on the words of the waiving party, or implied, based on conduct
indicating an intent to relinquish the right,’” italics added], superceded by statute
on other grounds.) And the court in this case correctly applied the law, finding that
neither Fresh & Easy’s one-year delay after learning it was being charged a
management fee, nor “Calig’s failure to press Ophir [Management] on the issue of
the management fee in 2008” was sufficient to show that Fresh & Easy intended to
relinquish its right to challenge the fee. Even if, as Landlord asserts, that conduct
could also support an inference that Fresh & Easy waived its right to challenge the
17
fee, “the trial court’s finding is conclusive on appeal.” (Rubin v. Los Angeles Fed.
Sav. & Loan Assn., supra, 159 Cal.App.3d at p. 298.)
E. Landlord’s Objections to Proposed Statement of Decision
Landlord contends we cannot infer that the trial court’s findings on certain
disputed facts were in favor of Fresh & Easy because Landlord timely filed
objections to the trial court’s proposed statement of decision, which objections the
court failed to resolve. (Citing Code Civ. Proc., § 634.) Landlord identifies issues
for which it contends we cannot infer factual findings in favor of Fresh & Easy
because the trial court failed to resolve its objection. It is mistaken.
First, Landlord observes that the trial court found that the lease did not
authorize Landlord to charge the management fee because the terms of the lease do
not specifically authorize the charge, but the court failed to consider that the lease
was drafted “in an exclusionary format” that specified certain categories of charges
that Fresh & Easy did not have to pay, and “management” was deleted from that
list of categories. The statement of decision belies this assertion. In concluding
that Fresh & Easy’s agreement to delete “administrative, management” from
paragraph 16.4 did not constitute an agreement to pay a management fee, the court
observed that in order for a management fee to be authorized under the language of
that paragraph, the management fee must be “‘related to the maintenance of the
Common Areas,’” and the court found that the management fee at issue here was
not related. In reaching this conclusion, the trial court quoted from the first part of
paragraph 16.4. The fact that the remainder of the paragraph was “exclusionary”
because it listed categories of costs that Fresh & Easy did not have to pay was
irrelevant to the trial court’s analysis.
Second, Landlord argues the court misapplied case law when it concluded
that an obligation to pay a management fee was not part of the accepted terms of
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the contract and could not be read into the contract. Even if Landlord’s objection
to the trial court’s resolution of this issue had merit (which it does not), Code of
Civil Procedure section 634 does not apply. That statute provides: “When a
statement of decision does not resolve a controverted issue, or if the statement is
ambiguous and the record shows that the omission or ambiguity was brought to the
attention of the trial court either prior to entry of judgment or in conjunction with a
motion under Section 657 or 663, it shall not be inferred on appeal . . . that the trial
court decided in favor of the prevailing party as to those facts or on that issue.”
(Code Civ. Proc., § 634.) There is no question that the statement of decision
unambiguously resolved the issue whether there was an enforceable obligation for
Fresh & Easy to pay a management fee. In any event, we conclude the trial court
correctly applied the law in determining there was no enforceable obligation
because the terms of the alleged obligation were completely undefined. (Ladas v.
California State Auto. Assn. (1993) 19 Cal.App.4th 761, 770 [“To be enforceable,
a promise must be definite enough that a court can determine the scope of the duty
and the limits of performance must be sufficiently defined to provide a rational
basis for the assessment of damages”].)
Third, Landlord asserts the trial court erred by stating that Calig questioned
the management fee, because he only questioned the amount of the fee rather than
the management fee itself. Landlord, however, fails to explain how the court’s
failure to specify the nature of Calig’s questioning renders the statement of
decision ambiguous or incomplete. We find that the court’s omission is
immaterial.
We have already addressed the remaining issues Landlord raises – that
admission of Price’s testimony regarding Fresh & Easy’s policy against paying
management fees was erroneous because the policy was never communicated to
Landlord or to Hunt, and that the trial court failed to consider evidence showing
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that Fresh & Easy’s conduct established that it knew or should have known about
the existence of the management fee and is estopped from denying the existence of
the fee -- and need not address them again.
F. Adequacy of Statement of Decision
Landlord contends the statement of decision is inadequate because the trial
court failed to address several issues Landlord set forth in its request for a
statement of decision. We disagree.
“[T]he trial court is not required to respond point by point to issues posed in
a request for a statement of decision. ‘The court’s statement of decision is
sufficient if it fairly discloses the court’s determination as to the ultimate facts and
material issues in the case.’ [Citations.]” (In re Marriage of Burkle (2006) 139
Cal.App.4th 712, 736-737, fn. 15.) Here, the statement of decision fairly disclosed
the trial court’s determinations as to all of the ultimate facts and material issues in
this case. The trial court did not err by failing to address all of the issues Landlord
raised in its request.
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DISPOSITION
The judgment is affirmed. Fresh & Easy shall recover its costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
WILLHITE, J.
We concur:
EPSTEIN, P. J.
EDMON, J.*
*Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
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