Park v. Landmark Equity Management

Filed 3/9/07 Park v. Landmark Equity Management CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

APPEAL from a judgment of the Superior Court of Los Angeles County.

Alice E. Altoon, Judge. Affirmed.

Law Offices of Victor Jacobovitz, Victor Jacobovitz for Plaintiffs and Appellants.

Haight Brown & Bonesteel, Bruce Cleeland, Rita Gunasekaran, J. Alan Warfield for Defendants and Respondents.

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Two commercial tenants sued their landlord for failing to properly maintain the building. The tenants shops were damaged by water, forcing them out of business. The trial court sustained the landlords demurrers to the second amended complaint, without leave to amend. On appeal, the tenants ask for leave to file a third amended complaint. We affirm the order of dismissal. There is no reasonable possibility that the tenants can succeed by amendment because their lease agreements expressly (a) make the tenants responsible for repairs, and (b) exempt the landlord from liability for damage to the tenants property or loss of income.

FACTS

Appellants Myung Woo Park and Daniel Lee are small business owners who rent spaces in a building on Western Avenue in Los Angeles. The building is owned and operated by respondents.^[1]Appellants signed commercial leases with respondents in 1997. The parties renewed the leases in 2000 and 2001.

In 2005, appellants filed suit against respondents. Appellants allege that at all times . . . during the time period of Plaintiffs tenancy at the Premises, said Premises and the Common Areas were and, at all material times herein, have been unsafe, unsanitary, unhealthy, and in a serious state of disrepair in gross violation of fire, health, building and safety codes, ordinances, regulations and laws. Appellants list the Propertys extensive defects, which include vermin infestations; an inadequate water supply; defective plumbing, electrical and heating systems; fire hazards; damaged walls, ceilings, windows and floors; and so on. Respondents were cited by government officials for various housing, safety, and fire code violations.

In their second amended complaint (SAC), the operative pleading, appellants assert claims for breach of the lease agreement; nuisance; negligence; intentional infliction of emotional distress; fraud; conspiracy; and unfair business practices. Respondents demurred to the SAC. Among other things, respondents contend that appellants claims are time-barred.

The trial court sustained the demurrers without leave to amend, finding that [a]ll causes of action are barred by the applicable statute of limitations. Plaintiffs allege the subject property was in a noncompliance condition when they first moved in in June and July of 1997. The court listed additional grounds for sustaining the demurrers: appellants accepted the Property as is; they did not allege that they followed specified lease procedures for claiming a breach; they cannot claim a violation of residential habitation laws because they were commercial tenants; they do not allege outrageous conduct; an integration clause in the lease prevents claims of reliance on oral misrepresentations; there is no recognized tort of conspiracy; and there is nothing unlawful or unfair about the lease. On December 12, 2005, appellants filed a notice of appeal from the order sustaining demurrers without leave to amend.

DISCUSSION

1. Appeal and Review

Appellants appeal was taken from the trial courts order sustaining demurrers without leave to amend. This is not an appealable order. (Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1115.) This Court brought the absence of an appealable order to appellants attention, in an order dated January 9, 2006. Appellants rectified the problem by securing a dismissal order on February 22, 2006. The dismissal operates as a final judgment and is appealable. (Code Civ. Proc.,  581, subd. (f)(1); Desai v. Farmers Ins. Exchange, supra, 47 Cal.App.4th at p. 1115.) We review de novo the ruling on the demurrer, exercising our independent judgment to determine whether a cause of action has been stated as a matter of law. All properly pleaded facts are deemed admitted. (Ibid.)

2. Statute of Limitations

An examination of the SAC (and predecessor pleadings), establishes the statute of limitations defense as a matter of law. The original complaint and the first amended complaint both allege that appellants entered their leases in 1997.^[2] All three pleadings allege that respondents provided unsanitary, unsafe, and unhealthy premises since the inception of the lease, thereby breaching the lease, creating a nuisance, causing emotional distress, and so forth. The original complaint states, Effective June and July 1997, the Common Areas and the [rented] Premises were . . . in a non-compliant condition. In their brief on appeal, appellants concede that [t]here was noncompliance in 1997.

The longest limitations period applicable to appellants claims is four years, for breach of a written contract. (Code Civ. Proc.,  337; McWilliams v. Holton (1967) 248 Cal.App.2d 447, 453.) Because appellants claim damage from torts and contractual breaches occurring throughout their lease, they were obliged to file suit no later than 2001. The statutory limitations period expired long before appellants filed suit in 2005.

3. Request for Leave to Amend Complaint

Appellants effectively concede that their case is time-barred: they do not argue that the claims made in the SAC are timely. Instead, appellants focus on obtaining leave to amend their pleading. As stated in their brief, By way of this Appeal, Plaintiffs/Appellants are simply requesting leave to amend the Complaint to reflect the true facts.

No impediment is presented by appellants failure to show in the trial court how the complaint might be successfully amended: a plaintiff may demonstrate his ability to amend the pleading by doing so for the first time in the appellate court. (Code Civ. Proc.,  472c, subd. (a) [the question whether the trial court abused its discretion by sustaining a demurrer without leave to amend is open on appeal even though no request to amend such pleading was made]; Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 711; Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1386.) The plaintiff bears the burden of proving that there is a reasonable possibility the defect in the complaint can be cured by amendment. (Moreno v. Sanchez (2003) 106 Cal.App.4th 1415, 1423.)

Appellants propose an amendment to establish that the decrepit condition of the Property, starting in 1997, is irrelevant to the damages being claimed by the Plaintiffs/Appellants. In other words, appellants want to restrict the scope and time frame of their claims. They now seek to allege that the ceiling collapsed during January 2004, and water flowed into appellants rental spaces from the ceiling and walls. As a result of the cave-in, water damage and mold, appellants were put out of business. Appellants complained to respondents about the condition of the Property prior to the ceiling collapse and inundation, and contend that respondents falsely claimed that they had corrected all of the problems. Appellants write, The fact that there were conditions of noncompliance prior to the ceiling cave-in/water intrusion/mold of January 2004 is irrelevant to the damages claimed as a result of being: (1) forced out of the premises and (2) forced out of business.

Appellants proposed amendment conflicts with the terms of their commercial lease. When appellants renewed their lease agreements with respondents in 2000-2001, they were tenants in possession since 1997. As tenants in possession under a prior lease, they agreed to accept the Property in an as is condition. Since 1997, the lease has obliged appellants to maintain, at their sole expense, the plumbing, ceiling and walls, regardless of whether the area requiring repairs is reasonably accessible and regardless of whether the need for the repairs arose from any prior use, the elements, or the age of the damaged area. Placing the duty to repair on the tenant is typical for a commercial lease: a landlord is not obligated to keep nonresidential premises in repair. (Del Taco, Inc. v. University Real Estate Partnership V (2003) 111 Cal.App.4th 16, 23.)

Critically, appellants agreed to exempt the lessor from liability for the type of damage they seek to claim in their proposed amendment to the complaint. An exemption clause in the lease expressly prohibits appellants from seeking recovery for water damage, even if the damage is caused by leaking pipes or respondents negligence, and causes loss of income or profit.^[3]

The terms of appellants leases operate to foreclose appellants proposed claims that (a) respondents failed to maintain the Property and (b) respondents are liable for the damage to appellants businesses caused by water. Per the lease, appellants were solely responsible for maintaining the plumbing, ceiling and walls. Appellants agreed to exempt respondents from liability if appellants businesses were damaged or lost profits as a result of water of pipe breakage, leakage, or other defect. Even if respondents claimed to have repaired the water leakage problems (which proved to be wrong when the Property flooded in 2004), the plain language of the lease nevertheless prohibits appellants from recovering for their losses when the pipes leaked or broke.

Appellants seek to make allegations that are inconsistent with the recitals in their lease. In this situation, the express terms of the contract govern. When a written instrument is attached to a pleading as an exhibit, the court may, upon demurrer, examine the exhibit and treat the pleaders allegations of its legal effect as surplusage. (Weitzenkorn v. Lesser (1953) 40 Cal.2d 778, 785-786.) The well-pled allegations that we accept as true necessarily include the contents of any exhibits attached to the complaint. Indeed, the contents of an incorporated document (in this case, the agreement) will take precedence over and supercede any inconsistent or contrary allegations set out in the pleading. In the case of such conflict, we will look solely to the attached exhibit. (Building Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th 1400, 1409.)

Reading the complaint as a whole, including the leases that are attached as exhibits to the complaint, we conclude that there is no reasonable possibility that appellants can cure their pleading by amendment. Respondents had no responsibility to repair the Property, and are not liable for any damage or loss that occurred when the Property was damaged by water.

DISPOSITION

The judgment is affirmed.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

BOREN, P.J.

We concur:

ASHMANN-GERST, J.

CHAVEZ, J.

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Analysis and review provided by Poway Property line attorney.

^[1] Respondents are Landmark Equity Management, Inc.; Darren Stern; Rye Associates, LLC; Armen Petrosyan; and Highpoint Associates II, LLC.

^[2] To circumvent the statute of limitations, appellants eliminated references to the 1997 leases in their most recent pleading: the SAC alleges that appellants entered leases with respondents in 2000 and 2001. Inconsistent facts alleged in prior pleadings cannot be disregarded. (Freeman v. San Diego Assn. of Realtors (1999) 77 Cal.App.4th 171, 178, fn. 3.) As this Court once observed, A pleader may not attempt to breathe life into a complaint by omitting relevant facts which made his previous complaint defective. (Hills Trans. Co. v. Southwest Forest Industries, Inc. (1968) 266 Cal.App.2d 702, 713.)

^[3] The exemption clause reads, 8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Lessee . . . in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damages results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places. Lessor shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor nor from the failure of Lessor to enforce the provisions of any other lease in the Project. Notwithstanding Lessors negligence or breach of this lease, Lessor shall under no circumstances be liable for injury to Lessees business or for any loss of income or profit therefrom.