Limited Partnership v. Flags and Things Enterprises

Filed 6/13/06 Pier 39 Limited Partnership v. Flags and Things Enterprises CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

Pier 39 Limited Partnership (Pier 39) leased commercial space for a retail store to Flags & Things Enterprises, Inc. (Flags). The lease required Flags to complete improvements to its store by a date certain. When Flags failed to complete the work on time, Pier 39 sued for rent and liquidated damages. Flags cross-complained, alleging breach of contract by Pier 39 in connection with its exercise of approval rights over plans for the improvements. In addition, Flags joined a cause of action for unfair business practices, alleging that Pier 39 gives preferential treatment to certain of its other commercial tenants. Ruling in response to a demurrer and its own motion to strike, the trial court substantially decreased the scope of the unfair business practices claim. It also enforced a clause in the lease waiving Flags's right to a jury trial on the contract claim. Flags elected not to pursue the narrowed unfair business practices claim, and Pier 39 prevailed in a bench trial on Flags's breach of contract claim, after having settled its original claims for rent and liquidated damages.

Flags contends that (1) the trial court erred in denying its request for a jury trial, citing Grafton Partners v. Superior Court (2005) 36 Cal.4th 944 (Grafton Partners), (2) the original cause of action for unfair business practices stated a claim, and (3) the trial court erred in granting damages to Pier 39 on a cross-complaint. We affirm the award of damages to Pier 39, but we reverse the trial court's rulings on the unfair business practices claim and vacate the judgment entered on Flags's claim for breach of contract.

I. BACKGROUND

Pier 39 operates its namesake, Pier 39 (Pier), a shopping and entertainment complex on the San Francisco waterfront. Pier 39 leases the structures constituting the Pier from the City and County of San Francisco (City), in turn leasing individual stores to business owners. Flags operates three retail shops located in the Pier, leasing the space from Pier 39.

When the lease for one of Flags's stores came up for renewal, the parties executed a new lease, dated February 1, 2002 (lease). The lease required Flags to undertake certain improvements to the store, described in â€