NSAS v. Pioneer Properties

Filed 7/27/06 NSAS v. Pioneer Properties CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of San Bernardino County. Christopher J. Warner, Judge. Affirmed.

Law Office of Patrick A. McCall and Patrick A. McCall for Defendants and Appellants.

Fullerton, Lemann, Schaefer & Dominick, Craig E. Wilson and Emma D. Enriquez for Plaintiff and Respondent.

Pioneer Properties and Lee Wetzel, defendants and appellants (hereafter referred to either individually by name or collectively as defendants) appeal from the judgment entered against them and in favor of NSAS, Inc., plaintiff and respondent (hereafter referred to as plaintiff), on plaintiff's complaint for damages based on breach of contract, intentional misrepresentation, negligent misrepresentation, and a common count for the reasonable value of work, labor, and services performed. Plaintiff filed its complaint against defendants on November 8, 2002, and alleged, in pertinent part, that Pioneer Properties is a limited liability partnership; Lee Wetzel is a member of that partnership; Pioneer Properties entered into a written lease agreement with plaintiff on January 29, 2001, pursuant to which Pioneer agreed to lease to plaintiff certain real property near the City of Fontana, but in the unincorporated area of San Bernardino County;^[1] plaintiff intended to operate a used vehicle sales business on the property, a purpose expressly stated in the lease; at the time the lease was negotiated, Wetzel represented to plaintiff that the property could lawfully be used for the intended purpose of selling used vehicles; that representation was false; the true facts were that the property was not zoned for the retail sale of vehicles and therefore could not lawfully not be used for that purpose; Wetzel either knew at the time he made the representations that they were false or he had no reasonable grounds for believing the representations to be true. Based on the foregoing allegations, plaintiff sought damages in the amount of $199,671.98 based on defendants' alleged breach of contract and intentional or negligent misrepresentation.

Instead of filing a cross-complaint, defendant Pioneer Properties filed its own complaint for damages against plaintiff NSAS, Inc., doing business as A-One Auto Center, and its shareholders, Nader Sami and Ahmad Sami. In its complaint, Pioneer Properties purported to allege a cause of action for breach of the lease based on plaintiff's failure to make monthly lease payments and also sought declaratory relief regarding the parties' respective obligations under the lease agreement. In accordance with the parties' stipulation, the trial court consolidated the two actions, deeming Pioneer Properties' action to be a cross-complaint.

Following a three-day court trial in October 2004, the trial court found in favor of plaintiff and against defendants on both the complaint and cross-complaint. According to the tentative decision^[2] the trial court found, in pertinent part, that in paragraph 7 of the lease agreement defendants specifically represented and warranted that the property could lawfully be used for the purpose of a used car sales business; in accordance with the terms of the lease, plaintiff paid defendants rent of $15,000 for the first month of the 10-year lease term, and a security deposit of $18,000; plaintiff paid defendants $62,109.17 for improvements defendants were required to make under the terms of the lease in order for plaintiff to operate its used vehicle sales business on the property; plaintiff attempted to obtain the requisite license from the Department of Motor Vehicles to sell used cars on the property but could not do so without a conditional use permit (CUP); defendant Wetzel undertook to obtain the CUP and to that end hired a consultant, Stephen Pleasant (Pleasant), to process the CUP application with the County of San Bernardino; Pleasant prepared and submitted an application for a CUP, but before the August 23, 2001, hearing on that application, the County of San Bernardino issued a cease and desist order on the construction taking place on the property; the planning commission hearing on the CUP took place on August 23 and according to Pleasant was â€