Justia Landlord - Tenant Opinion SummariesArticles Posted in Business Law
Rreef America Reit II Corp, YYYY v. Samsara, Inc.
Samsara rented San Francisco office space from Rreef for a ten-year term, to be in “delivery condition” by November 1, 2019. Samsara provided an $11,384,368.00 letter of credit as “collateral for the full performance.” In 2021, Samsara sued, asserting that in July 2019, after Rreef had certified “delivery condition,” Samsara discovered that the premises were contaminated with lead and asbestos and that after Samsara conducted testing, Rreef cut off its access to the premises. The next day, Rreef served Samsara a 5-day notice to pay rent or quit based on Samsara’s alleged failure to pay rent for August-September 2021 ($1,826,697.95). Rreef subsequently filed an unlawful detainer complaint, alleging that Samsara stopped paying rent and had created a pretext to avoid its lease obligations. In October 2021, Rreef sought a writ of attachment in the unlawful detainer action, seeking $3,796,175.51: the amount demanded in the 5-day notice and $1,784,477.53 for October-November.The court granted Rreef’s application. The court of appeal reversed and remanded. The court rejected Samsara’s arguments that the amount that Rreef sought to attach must be reduced under Code of Civil Procedure 483.015(b)(4) by the amount remaining on the letter of credit and that the trial court erroneously refused to consider Samsara’s affirmative defenses of waiver and estoppel. However, the trial court declined to consider Samsara’s retaliatory eviction defense and whether Rreef sought attachment for an improper purpose. View "Rreef America Reit II Corp, YYYY v. Samsara, Inc." on Justia Law
West Pueblo Partners, LLC v. Stone Brewing Co., LLC
The landlord is a four-member LLC with a single asset--a building in downtown Napa. The tenant, Stone Brewing, a large beer brewing and retail corporation, operates a brewpub in the building. Stone Brewing did not pay rent for several months during the pandemic. The landlord sued for unlawful detainer. Stone argued it was excused from paying rent because COVID-19 regulations and business interruptions triggered a force majeure provision in its lease.The trial court granted the landlord summary judgment, finding that the force majeure provision only excused performance if the claiming party was unable to meet its obligations due to factors outside its control; the tenant admitted during discovery it had the financial resources to pay rent during the period of the COVID-19 regulations but simply refused to do so. The court of appeal affirmed. The force majeure provision does not apply where the tenant had the ability to meet its contractual obligations but chooses not to perform due to financial constraints. The plain meaning of the force majeure provision does not support an interpretation that ties a party’s obligation to pay rent to its profitability or revenue stream instead of a delay or interruption caused by the force majeure event itself. View "West Pueblo Partners, LLC v. Stone Brewing Co., LLC" on Justia Law
Safeway Stores v. WY Plaza
This appeal grew out of overpayments that lessee, Safeway Stores 46, Inc., made to its lessor, WY Plaza, L.C. The lease allowed Safeway to deduct construction costs from the payments to WY Plaza. But Safeway neglected to make these deductions for twelve years before demanding repayment. WY Plaza rejected the demand based on Safeway’s delay. Safeway responded by paying under protest and suing for restitution and a declaratory judgment. Both parties sought summary judgment. In its own motion, WY Plaza denied the availability of restitution because the parties’ obligations had been set out in a written contract. The district court agreed with WY Plaza. But the court went further, deciding sua sponte that Safeway’s delay prevented recovery under the doctrine of laches. So the court granted summary judgment to WY Plaza and denied Safeway’s motion. The Tenth Circuit disagreed as to both trial court rulings. Despite the lack of any laches argument in its motion, the district court relied on laches to grant summary judgment to WY Plaza on the claim for declaratory relief. The Tenth Circuit concluded the district court erroneously failed to notify Safeway before granting summary judgment to WY Plaza based on laches. Furthermore, the Tenth Circuit found that in granting WY Plaza’s motion for summary judgment, the district court relied on arguments that WY Plaza hadn’t raised. The district court also erroneously granted summary judgment to WY Plaza on the restitution claim: "The unilateral nature of Safeway’s mistake doesn’t prevent restitution." The Tenth Circuit held Safeway was entitled to summary judgment because WY Plaza failed to create a triable fact-issue, and Safeway was entitled to summary judgment on its claims for a declaratory judgment and restitution. View "Safeway Stores v. WY Plaza" on Justia Law
Griffith v. Hemphill, et al.
A landlord leased a commercial building to two tenants who operated an automotive repair business on the property. The landlord refused to adhere to provisions in the lease requiring him to maintain and repair the property and to cover the property insurance, so the tenants paid for the property insurance and for substantial repairs that were needed after the roof failed. The landlord initiated a forcible entry and detainer action after the tenants held over at the end of the lease term; the tenants counterclaimed for breach of contract. After trial, the superior court ruled that the landlord had breached the lease and awarded the tenants damages. The superior court also awarded the tenants attorney’s fees. The landlord appealed, arguing: (1) the tenants did not file their counterclaim within the applicable statute of limitations; (2) the evidence did not support the damages award; and (3) the attorney’s fees award was an abuse of discretion. Seeing no error, the Alaska Supreme Court affirmed the superior court’s decisions. View "Griffith v. Hemphill, et al." on Justia Law
Posted in: Alaska Supreme Court, Business Law, Landlord - Tenant
Tufeld Corp. v. Beverly Hills Gateway, L.P.
Plaintiff, cross-defendant, and appellant Tufeld Corporation (Tufeld) is the landlord. Defendant, cross-complainant, and cross-appellant Beverly Hills Gateway L.P. (BHG) is the tenant. The subject lease, as amended, has a term greater than 99 years. This contravenes Civil Code section 718,1, which provides in the relevant part: “No lease or grant of any town or city lot, which reserves any rent or service of any kind, and which provides for a leasing or granting period in excess of 99 years, shall be valid.” The main issue on appeal is whether a lease that violates section 718 is void or voidable. The Second Appellate District affirmed in part and reversed in part and the matter is remanded for the trial court to consider whether to grant BHG prejudgment interest on restitution. The court held that the part of the lease exceeding 99 years is void. The court reasoned that here contrary to BHG’s assertion, section 718 does not only protect tenants; it protects landlords too. Moreover, the legislative purpose of section 718 serves to promote a public benefit. The private benefit exception does not apply to section 718. View "Tufeld Corp. v. Beverly Hills Gateway, L.P." on Justia Law
Posted in: Business Law, California Courts of Appeal, Landlord - Tenant
DM Trans, LLC v. Scott
Arrive and Tech, compete to help customers coordinate shipments. Six employees at Arrive departed for Tech despite restrictive covenants. Arrive sued the six individuals and Tech for injunctive relief under the Defend Trade Secrets Act, 18 U.S.C. 1836(b)(3), claiming irreparable harm because the individuals had breached their restrictive covenants and misappropriated trade secrets.The Seventh Circuit affirmed the denial of a preliminary injunction. Arrive has an adequate remedy at law for each of its claimed injuries, and faces no irreparable harm. Even if its argument were not forfeited, lost opportunities cannot support a showing of irreparable harm under these circumstances. The type of harm Arrive alleges would ultimately translate into lost profits, albeit indirectly, as in the end there is no economic value to opportunities that are not converted to sales. Given the balance of harms, the district court was within its discretion to deny injunctive relief. The court noted that the expiration of the time period of a former employee’s restrictive covenants does not render moot an employer’s request for an injunction to prevent the former employee from violating those restrictive covenants. A court could still grant Arrive effectual relief in the form of an injunction, even though certain individual defendants no longer work for Traffic Tech. View "DM Trans, LLC v. Scott" on Justia Law
JJD-HOV Elk Grove, LLC v. Jo-Ann Stores
The co-tenancy provision in the parties’ lease required a shopping center to have either: (1) three anchor tenants; or (2) 60 percent of the space leased, and, if it did not, Tenant-respondent JoAnn Stores, LLC was permitted to pay “Substitute Rent.” In 2018, Jo-Ann informed JJD it intended to start paying Substitute Rent effective July 1, 2018, because the co-tenancy provision was not met after two anchor tenants closed. Landlord-appellant JJD-HOV Elk Grove, LLC (JJD) responded that the co-tenancy provision was an unenforceable penalty under the holding in Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc., 232 Cal.App.4th 1332 (2015). Jo-Ann contended Grand Prospect was distinguishable and the co-tenancy provision was enforceable. JJD and Jo-Ann filed competing complaints for declaratory relief and cross-motions for summary judgment. The trial court found the co-tenancy provision was enforceable, and thus granted Jo- Ann’s motion, denied JJD’s, and entered judgment accordingly. JJD appealed. The Court of Appeal declined to follow the rule announced in Grand Prospect here, and instead held that this case was governed by the general rule that courts enforce contracts as written. The Court therefore agreed with the trial court’s conclusion that the co-tenancy provision at issue in this case was enforceable, and affirmed the judgment. View "JJD-HOV Elk Grove, LLC v. Jo-Ann Stores" on Justia Law
Posted in: Business Law, California Courts of Appeal, Contracts, Landlord - Tenant
Horizon Ventures of W. Va., Inc. v. American Bituminous Power Partners, L.P.
The Supreme Court reversed the business court's orders in this rent dispute, holding that the business court erred in granting summary judgment to either party.American Bituminous Power Partners, LP (AMBIT) and Horizon Ventures of West Virginia, Inc. created a contractual relationship with a lease agreement. The current rent dispute involved the relationship between the lease, a 1996 settlement agreement, and a 2017 order of the business court. Without resolving the relationship between those documents the business court granted summary judgment to AMBIT on Horizon's claims and summary judgment to Horizon on AMBIT's claims. The Supreme Court reversed, holding that summary judgment was improper because the various agreements were ambiguous and the parties' intent was not clear. View "Horizon Ventures of W. Va., Inc. v. American Bituminous Power Partners, L.P." on Justia Law
Kimp v. Fire Lake Plaza II, LLC
A business owner formed a brewing company with plans to open a brewpub. He signed a lease that provided rent-free access to a commercial unit for a period of time to allow him to prepare the rental space prior to opening for business. But the brewing company encountered numerous delays during construction and did not open for business as planned. It also did not pay rent once the rent-free period ended. After the property owner received no rent for several months, it entered the property and changed the locks. The business owner then sued, claiming the property owner breached the lease, tortiously interfered with a business relationship, and breached the implied covenant of good faith and fair dealing. The property owner counterclaimed that the brewing company breached the lease. On cross-motions for summary judgment, the superior court dismissed all claims against the property owner and ruled in the property owner’s favor on its counterclaim. The court also denied the business owner’s request to compel discovery and awarded the property owner over $200,000 in damages. The business owner appealed the superior court’s grants of summary judgment, its denial of his motion to compel discovery, and its award of damages. Finding no reversible error, the Alaska Supreme Court affirmed. View "Kimp v. Fire Lake Plaza II, LLC" on Justia Law
Posted in: Alaska Supreme Court, Business Law, Civil Procedure, Landlord - Tenant
Aljabban v. Fontana Indoor Swap Meet, Inc.
Mohamed Aljabban appeals from an adverse judgment after a bench trial in the lawsuit that he and his wife, Jacqueline Carrasco, filed against defendants Fontana Indoor Swap Meet, Inc. (FISM), Jonathan Shapiro and Victor Ramirez. Aljabban and Carrasco operated a beauty salon on the premises of an indoor swap meet managed by FISM and its president, Shapiro. Aljabban contended: (1) the trial court erred in concluding that he and Carrasco were not permitted to remove a sink/cabinet unit, a water heater and some decorative molding when vacating the premises of the beauty salon; (2) FISM and Shapiro improperly withheld $680.00 of the security deposit to cover expenses it incurred to repair damage to the premises; (3) the trial court should have found that FISM and Shapiro breached the parties’ agreement under which Aljabban and Carrasco occupied the premises because they wrongfully failed to renew it; and (4) he did not receive a fair trial because of alleged misbehavior during trial by Shapiro. After review, the Court of Appeal determined only one of Aljabban’s contentions had merit: FISM was not entitled to withhold $680.00 of the security deposit to cover the expense of repairing damage to the premises, as the parties did not specifically agree that the security deposit could be used to cover repairs. Accordingly, the Court reversed in part the trial court's judgment with respect to this contention, but affirmed in all other respects. The matter was remanded for further proceedings on the issue of attorney fees and costs. View "Aljabban v. Fontana Indoor Swap Meet, Inc." on Justia Law