Filed 12/7/22

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

TUFELD CORPORATION,

Plaintiff, Cross-defendant and 

Appellant,

v.

BEVERLY HILLS GATEWAY, L.P.,

Defendant, Cross-complainant 

and Appellant.

 B314862

 (Los Angeles County

 Super. Ct. No. BC691352)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Dennis Landin, Judge. Affirmed in part and 

reversed in part with directions. 

Loeb & Loeb, Daniel G. Murphy and Daniel J. Friedman; 

Shoreline, and Andrew S. Pauly; Greines, Martin, Stein & 

Richland, Robin Meadow, David E. Hackett and Stefan Caris 

Love for Defendant, Cross-complainant and Appellant.

Miller Barondess, James Goldman and Mara Hashmall;

Law Office of Bruce Adelstein and Bruce Adelstein for Plaintiff, 

Cross-defendant and Appellant.

____________________________
2

This is a commercial landlord-tenant dispute. 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 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. No published case has directly 

answered this question. It makes a difference here because if the 

lease is voidable, BHG can assert equitable defenses against 

Tufeld’s claims for declaratory relief. We hold the part of the 

lease exceeding 99 years is void. 

BACKGROUND

Tufeld is a family-owned company founded in 1945. It 

owns prime commercial real property in Beverly Hills (the 

property). In 1960, pursuant to a ground lease, Tufeld rented the 

property to two original tenants. The annual rent was 6 percent

of the appraised value of the property subject to periodic

reappraisals. The lease term was for 98 years ending in 2058. 

In 1964, the original tenants constructed an office building 

on the property. By 2003, Douglas Emmett Realty Fund 1997 

(Douglas Emmett) had become the tenant. 

1 Unless otherwise stated, all further statutory 

references are to the Civil Code.
3

On October 28, 2003, via two virtually simultaneous 

transactions, BHG purchased Douglas Emmett’s interest in the 

ground lease. Douglas Emmett granted and assigned its interest 

to BHG and two other companies, and then those two companies 

immediately granted and assigned their interests to BHG. BHG

borrowed money from a lender to finance these transactions. 

In 2007, BHG wished to renovate the building on the 

property. To make its investment more attractive, BHG sought 

to extend the term of its tenancy. 

On May 24, 2007, BHG and Tufeld executed an amendment 

to lease. Under this amendment, the lease term was extended to 

December 31, 2123, and future rent was increased to 6.5 percent

of the appraised value of the property. BHG also agreed to pay 

Tufeld $1.5 million. Additionally, pursuant to a memorandum of 

agreement, Tufeld granted BHG a right of first refusal to match 

any bona fide written offer to buy any interest in the property. 

In October 2007, BHG refinanced its loan, borrowing $47 

million from a new lender. As part of that transaction, Tufeld 

signed an estoppel certificate confirming, among other things, 

that the lease “terminates on December 31, 2123.” BHG 

subsequently invested about $8.8 million in renovations to the 

building on the property over several years. 

In late 2016 or early 2017, Tufeld increased the monthly 

rent from $30,500 to $200,000 based on a scheduled reappraisal 

of the property’s value. The parties litigated the reappraisal and 

rent increase in arbitration and court but settled the matter 

before a judgment was rendered. 

In September 2017, BHG again refinanced its secured loan, 

this time borrowing $49 million. Tufeld signed a second estoppel 

certificate, confirming that BHG’s lease “terminates on 
4

December 31, 2123.” BHG used some of the loan proceeds to 

make improvements to the building on the property.

In about December 2017 or January 2018, Tufeld’s 

president Howard Tufeld learned that leases longer than 99 

years are invalid under section 718. Mr. Tufeld had not 

consulted with a lawyer when he signed the documents for the 

2007 lease amendment.

In January 2018, Tufeld commenced this action by filing a 

complaint for declaratory relief and quiet title against BHG in 

superior court. Tufeld sought an order cancelling the ground 

lease or, alternatively, an order cancelling the 2007 lease 

amendment on the ground the lease term exceeds 99 years.

BHG filed a cross-complaint for declaratory relief, unjust 

enrichment, and reformation. It sought a declaration that section 

718 does not affect the ground lease. Alternatively, BHG prayed 

for a declaration that the ground lease is valid for a period of 99 

years commencing in 2003 (or other proposed dates) and for 

restitution of sums by which Tufeld was unjustly enriched. 

After a bench trial, the trial court issued a statement of 

decision and judgment, both of which were amended. The court 

concluded that BHG’s acquisition of the lease in 2003 constituted

a novation and that the lease term ended in 2102. The court 

further found the lease is void under section 718 to the extent its

term exceeds 99 years. In light of this determination, the court 

concluded that BHG could not maintain its estoppel, laches, and 

waiver defenses. 

Nonetheless, “to avoid an unnecessary retrial in the event 

of an appellate reversal,” the trial court addressed the merits of 

BHG’s equitable defenses. The court found that if estoppel, 

laches, and waiver are available, then the facts of this case 
5

compel their application, requiring full enforcement of the ground 

lease term through 2123.

Both parties timely appealed.

DISCUSSION

I. The Part of the Lease Exceeding 99 Years is Void

We interpret statutes de novo. (Burden v. Snowden (1992) 

2 Cal.4th 556, 562.) “ ‘As in any case involving statutory 

interpretation, our fundamental task here is to determine the 

Legislature’s intent so as to effectuate the law’s purpose.’ ” (In re 

C.H. (2011) 53 Cal.4th 94, 100.) 

We start with the language of the statute. “If the statute’s 

text evinces an unmistakable plain meaning, we need go no 

further. [Citation.] If it is ambiguous, we may consider a variety 

of extrinsic sources in order to identify the interpretation that 

best effectuates the legislative intent.” (Beal Bank, SSB v. Arter 

& Hadden, LLP (2007) 42 Cal.4th 503, 508.) 

These extrinsic sources include the legislative history, the 

public policy underlying the statute, and the relevant statutory 

framework as a whole. (S.B. Beach Properties v. Berti (2006) 39 

Cal.4th 374, 379; People v. Cole (2006) 38 Cal.4th 964, 974.) 

“When examining a statute’s legislative history, it is appropriate 

for courts to consider the timing and historical context of the 

Legislature’s actions.” (MCI Communications Services, Inc. v. 

California Dept. of Tax & Fee Administration (2018) 28 

Cal.App.5th 635, 652.)

A. The text of the statute

The text of section 718 does not answer the question of 

whether a lease term that violates the statute is void or voidable. 

Section 718 does not use either term. Rather, it provides that no 
6

lease with a term in excess of 99 years “shall be valid.” “ ‘Not 

valid’ does not necessarily mean ‘void.’ ” (Safarian v. Govgassian

(2020) 47 Cal.App.5th 1053, 1067 (Safarian); accord Knapp v. 

Ginsberg (2021) 67 Cal.App.5th 504, 532.)

B. Historical context, legislative history, and public 

policy underlying the statute

When California became part of the United States in 1848 

and a state in 1850, it was not the global economic and cultural 

hub that it is today. It was a remote region, far from the centers 

of political power and commerce, with a population of less than 

100,000. (U.S. Census Office, Ninth Census (1872) vol. I, table II, 

p. 14.)2 

The California Legislature and courts immediately faced a 

chaotic state of the law. (See Kleps, The Revision and 

Codification of California Statutes 1849–1953 (1954) 42 Cal. 

L.Rev. 766 (Kleps); Parma, The History of the Adoption of the 

Codes of California (1929) 22 Law Libr. J. 8, 9.) With a skeletal 

political and judicial infrastructure, “[t]he state’s political 

authorities, such as they were, struggled to provide a legal order 

for a small and transitory population.” (Griffin, California 

Constitutionalism: Trust in Government and Direct Democracy

(2009) 11 U. Pa. J. Const. L. 551, 558.)

The Legislature considered whether to adopt an English 

common law system or a codified form of civil law. (See Kleps, 

2 We take judicial notice of California’s approximate 

population in 1850 and 1870. (Evid. Code, § 452, subds. (c) & (h); 

Moehring v. Thomas (2005) 126 Cal.App.4th 1515, 1523, fn. 4.) 

This information can be found on the United States Census 

Bureau’s website (https://www.census.gov). 
7

supra, 42 Cal. L.Rev. at p. 766.) It chose the former. (Ibid.) 

Since the beginning of California’s statehood, the common law of 

England has been the law of the state except where it conflicts 

with the United States Constitution or other California law. 

(Stats. 1850, ch. 95, now § 22.2.) 

In the first two decades of statehood, California’s law 

remained relatively undeveloped compared to the law of the far 

older and more populous states on the East Coast. Between 1850 

and 1870, the Legislature made several unsuccessful attempts to

enact more comprehensive statutes. (Kleps, supra, 42 Cal. L.Rev. 

at pp. 767–772.) The need to complete this task grew more 

urgent as the state rapidly developed. By 1870, the state’s 

population had more than quintupled to over 560,000. (U.S. 

Census Office, Ninth Census, supra, vol. I, table II, p. 14.)

In 1872, the Legislature took a major step toward filling 

the gaps in California law by enacting four codes, including the 

Civil Code, which was primarily adopted from the Civil Code of 

the State of New York (1865) (Field Code). (Fluor Corp. v. 

Superior Court (2015) 61 Cal.4th 1175, 1200 (Fluor); Estate of 

Duke (2015) 61 Cal.4th 871, 880; Standard Life Stock Co. v. Pentz

(1928) 204 Cal. 618, 640 (Standard Life).) The Field Code was a 

statutory scheme based on New York common law that was never 

enacted in New York. (Fluor, at p. 1200, fn. 33; Estate of Duke, at 

p. 880; Standard Life, at p. 640.) It was prepared by a 

commission headed by David Dudley Field. (Fluor, at p. 1200, fn. 

33.) 

When the Legislature enacted the Civil Code in 1872, it 

had before it a report prepared in 1871 by the California Code 

Commission. (Fluor, supra, 61 Cal.4th at p. 1200.) In the preface 

to its proposed Civil Code, the commission noted that the 
8

common law was “found scattered throughout thousands of 

volumes of English and American reports and digests.” (Code 

Comm., Revised Laws of the State of California (1871) at p. iv

(Proposed Code); see Kleps, supra, 41 Cal. L.Rev. at p. 774

[commission presented proposed code].) The commissioners 

lauded the Field Code’s scholarly summary of the common law 

and candidly stated, “We . . . avail ourselves of the exhaustive 

labors of the New York Commission.” (Proposed Code, at p. iv.) 

Section 718 was first enacted as part of the 1872 Civil 

Code. This version of the statute stated: “No lease or grant of 

any town or city lot, for a longer period than twenty years, in 

which shall be reserved any rent or service of any kind, shall be 

valid.” (Former § 718, enacted by Stats. 1872.) The California 

Code Commission referred to an 1851 California statute3and 

section 203 of the Field Code (section 203)4as sources for former 

3 The 1851 statute stated: “No lands within this State 

shall hereafter be conveyed by lease or otherwise except in fee 

and perpetual succession, for a longer period than ten years; nor 

shall any town or city lots, or other real property, be so conveyed 

for a longer time than twenty years.” (Stats. 1851, ch. 11, § 1.)

4

Section 203 stated: “Restrictions upon the power to 

affix qualifications to the right of enjoyment are contained in 

sections 14 and 15 of article I of the Constitution of the state.” 

Section 14 of article I of the New York Constitution stated: “No 

lease or grant of agricultural land, for a longer period than twelve 

years, hereafter made, in which shall be reserved any rent or 

service of any kind, shall be valid.” (N.Y. Const. 1846, art. I, 

§ 14.) Section 15 of article I of the New York Constitution stated:

“All fines, quarter sales, or other like restraints upon alienations, 

reserved in any grant of land hereafter to be made, shall be void.” 

(N.Y. Const. 1846, art. I, § 15.)
9

section 718. (See Proposed Code, supra, at p. 164.) While section 

718 has been amended numerous times, the critical language for 

our analysis has remained the same: “No lease” with a term 

longer than a certain number of years “shall be valid.” Since 

1911, the time limit has been 99 years. (Stats. 1911, ch. 708, § 1.)

The Legislature’s enactment of section 718 in 1872 must be 

placed in context. At the time, article XI, section 16 of the 

California Constitution provided: “No perpetuities shall be 

allowed, except for eleemosynary purposes.” (Cal. Const. of 1849, 

art. XI, § 16.) The courts sometimes referred to indefinite leases 

as perpetuities. For example, in Morrison v. Rossignol (1855) 5 

Cal. 64, 65 (Morrison), the California Supreme Court held: “A 

covenant for a lease to be renewed indefinitely at the option of 

the lessee, is, in effect, the creation of a perpetuity; it puts it in 

the power of one party to renew forever, and is therefore against 

the policy of the law.” 

“The common law judges were much concerned with 

preventing the tying up of estates for long periods of time.” 

(Estate of Sahlender (1948) 89 Cal.App.2d 329, 335.) “[W]hen 

property was tied up in such fashion, it was known as a 

‘perpetuity.’ ” (Ibid.) Section 718 prohibits a “perpetuity” in real 

property. (Epstein v. Zahloute (1950) 99 Cal.App.2d 738, 739; see 

also Ginsberg v. Gamson (2012) 205 Cal.App.4th 873, 884–887.) 

The courts developed rules to address perpetuities, 

including the rule against restraints on alienation and the rule 

against perpetuities. (Estate of Sahlender, supra, 89 Cal.App.3d

at pp. 335–336; see also Estate of Harrison (1937) 22 Cal.App.2d 

28, 35 [discussing public policy against “tying up of property for 

an undue length of time”].) To avoid confusion between the two 

rules, the rule against perpetuities is sometimes more accurately 
10

referred to as the rule against remoteness in vesting. (Estate of

Sahlender, at p. 335; Victory Oil Co. v. Hancock Oil Co. (1954) 

125 Cal.App.2d 222, 230 (Victory Oil).)

The rule against perpetuities developed to curb excessive 

“dead-hand control” of property. (Atlantic Richfield Company v. 

Whiting Oil and Gas Corporation (Colo. 2014) 320 P.3d 1179, 

1184.) In the nineteenth century, the rule was extended to 

commercial transactions. (See Wong v. Di Grazia (1963) 60 

Cal.2d 525, 533 (Wong).) 

“The traditional rule against restraints on alienation is 

based on the public policy notion that the free alienability of 

property fosters economic and commercial development.” (City of 

Oceanside v. McKenna (1989) 215 Cal.App.3d 1420, 1426, fn. 4.) 

This remains the policy of California. The Legislature has 

declared: “Real property is a basic resource of the people of the 

state and should be made freely alienable and marketable to the 

extent practicable in order to enable and encourage full use and 

development of the real property. . . .” (§ 880.020, subd. (a)(1), 

italics added.) 

When the Legislature enacted section 718, the rule against 

perpetuities and the rule against restraints on alienation were 

part of the common law of England and California. (See Victory 

Oil, supra, 125 Cal.App.2d at pp. 227–230; Estate of Sahlender, 

supra, 89 Cal.App.2d at p. 340.) Likewise, Morrison held

indefinite leases were invalid perpetuities under California law. 

(Morrison, supra, 5 Cal. at p. 65.) We presume the Legislature 

knew of this common law when it enacted section 718. 

(Presbyterian Camp & Conference Centers, Inc. v. Superior Court

(2019) 42 Cal.App.5th 148, 156; Mercy Hospital & Medical Center 

v. Farmers Ins. Group of Companies (1997) 15 Cal.4th 213, 221.) 
11

The Legislature’s subsequent revision of the law relating to 

perpetuities sheds more light on the matter. In 1991, the 

Legislature abolished the application of the rule against 

perpetuities (the rule against remoteness in vesting) in 

commercial transactions with the enactment of the Uniform 

Statutory Rule Against Perpetuities (Prob. Code, § 21200 et seq.; 

Uniform Act).5(Shaver v. Clanton (1994) 26 Cal.App.4th 568, 

574 (Shaver).) The Legislature determined that the rationale for 

the rule against perpetuities did not support its application to 

commercial transactions. (Ibid.) 

By adopting the Uniform Act while preserving section 718, 

“the Legislature intended the two statutes to be read together.” 

(Shaver, supra, 26 Cal.App.4th at p. 576.) When that is done, the 

rule is that commercial leases are exempt from the Uniform Act, 

but for the period they are longer than 99 years, they are not 

valid under section 718. (Ibid.) 

BHG argues that section 718’s purpose is to protect 

tenants, not landlords. According to BHG, New York’s 

constitutional prohibition against indefinite leases was enacted to 

protect tenants. Although BHG concedes New York’s prohibition 

“arose from circumstances unique to rural New York in the late 

1700s and early 1800s,” it argues that section 718, too, was 

enacted to protect tenants because it was “based on” New York 

law. 

5 Prior to its repeal, former section 715.2 codified the 

rule against perpetuities. Like section 718, former section 715.2 

was in division 2, part 1, title 2, chapter 2, article 3 of the Civil 

Code. 
12

When the Field Code was drafted, the New York 

Constitution prohibited leases of agricultural land greater than 

12 years. (See ante, fn. 4.) The purpose of this prohibition was to 

ameliorate “the feudal tenure of agricultural lands” that existed 

in New York. (Parthey v. Beyer (N.Y. App. Div. 1930) 228 A.D. 

308, 312.) The public policy in New York “was originally 

designed to protect the State and the inhabitants thereof from 

the consequences of long leases of agricultural lands and the 

consequences of the depreciation resulting therefrom because of 

the exhausting of the farm lands during the course of occupancies 

under long leases. This public policy [was] primarily for the 

benefit of the public and only incidentally for the benefit of 

private individuals.”6(Ibid.)

We are unpersuaded by BHG’s argument. BHG’s claim 

that section 718 was “based on” New York law is not entirely 

accurate. As we have explained, the source of the statute was 

both an 1851 California statute that predated the Field Code and 

section 203 of the Field Code, which referred to the New York 

Constitution. The language of both sources is significantly 

different than section 718. (See ante, fns. 3 & 4.) 

Moreover, prior to the enactment of section 718, our 

Supreme Court held that a lease giving the lessee unlimited 

power to renew was an invalid perpetuity contrary to public 

policy. (Morrison, supra, 5 Cal. at p. 65.) The Morrison court 

thus recognized that indefinite leases are against public policy 

6

“New York has discarded the provision in its current 

constitution. See N.Y. Const., art. I, § 10 (repealed 1962)

(repealing the provision on agricultural leases, which had been 

renumbered as article I, section 10 in 1938.)” (Gansen v. Gansen 

(Iowa 2016) 874 N.W.2d 617, 624 (Gansen).)
13

even if they benefit tenants. We have no reason to believe the 

Legislature intended to abrogate this principle when it enacted 

section 718. 

In Gansen, the Iowa Supreme Court rejected an argument 

similar to the one BHG makes here. The issue was whether a 

lease violated article I, section 24 of the Iowa Constitution 

(article I, section 24), which prohibits agricultural leases longer 

than twenty years. 

The court acknowledged that article I, section 24 was 

“copied” from the New York Constitution (Gansen, supra, 874 

N.W.2d at p. 624), and “that historically, article I, section 24 was 

intended in large part to protect agricultural tenants who 

suffered due to oppressive long-term relationships with 

established landlords.” (Id. at p. 626.) “Yet,” the court held, “the 

language of article I, section 24 does not run solely in favor of the 

tenant. The language instead is couched in more general terms 

and does not distinguish between the interests of landlords and 

tenants. While the language obviously is sufficiently broad to 

protect tenants from being locked into oppressive leases, it also 

appears to advance the larger purpose of promoting the 

alienation of agricultural lands by not excluding landlords from 

its terms.” (Ibid.)

Similarly, nothing in the language of section 718 indicates 

that the statute only protects tenants. The broad language of the 

statute advances the larger public policy purpose of not tying up 

land for an excessive period. BHG cites no authority supporting 

the proposition that when the Legislature enacted section 718, it 

only intended to protect tenants. 

BHG focusses too narrowly on New York law. The general 

policy disfavoring perpetuities first developed as part of the 
14

common law of England—not New York—before the founding of 

the United States, and then was adopted by American courts. 

(Estate of Sahlender, supra, 89 Cal.App.2d at pp. 335–336; Wong, 

supra, 60 Cal.2d at p. 533; Shaver, supra, 26 Cal.App.4th at 

pp. 572–573.)

When the Legislature enacted section 718 in 1872, it was 

seeking to promulgate a statutory scheme that generally followed 

the common law of England and the United States. The 

Legislature utilized the Field Code as a scholarly work and a 

convenient means of achieving that goal. There is no reason to 

believe the Legislature was particularly interested in New York 

law, much less law that addressed the unique needs of that state. 

The public policy underlying section 718’s application to 

commercial leases is that excessively long leases—those lasting a 

century or more—unduly hinder the use, development, and 

marketability of real property. Perpetuities are problematic 

because it is very difficult for the current generation to predict 

conditions future generations will face. (Korngold, Resolving the 

Intergenerational Conflicts of Real Property Law: Preserving Free 

Markets and Personal Autonomy for Future Generations (2007) 

56 Am. U. L.Rev. 1525, 1555–1556.) “Future generations deserve 

the opportunity to find the solutions to the problems of their day, 

and they most likely will have greater success than people long 

gone from the scene.” (Id. at p. 1556.) 

We recognize that respected commentators have advocated 

placing no limits on the terms of commercial leases. (See Rest.2d 

Prop., Landlord and Tenant, § 1.4.) But we do not pass judgment 

on the wisdom of the public policy the Legislature seeks to 

promote. (Siry Investment, L.P. v. Farkhondehpour (2022) 13 

Cal.5th 333, 365 [courts should not substitute their policy 
15

judgments for the Legislature’s].) Our task is to interpret the 

statute to effectuate the law’s purpose and underlying policy.

C. A lease term that violates section 718 is void

Several cases have indicated that a lease violating section 

718 or its companion statute, section 717,7is “void.” (See Harter 

v. San Jose (1904) 141 Cal. 659, 667 (Harter) [lease “would not 

be void, except as to the excess of the period”]; Kendall v. 

Southward (1957) 149 Cal.App.2d 827, 828, 830 (Kendall) [lease 

exceeding the statutory time limit is void per se]; Fisher, supra, 

213 Cal.App.2d at p. 842 [quoting Kendall]; Shaver, supra, 26 

Cal.App.4th at p. 576 [quoting Harter].) These cases, however, do 

not squarely address the issue of whether the lease is void or 

voidable. 

“A void contract is without legal effect. (Rest.2d Contracts, 

§ 7, com. a.) ‘It binds no one and is a mere nullity.’ ” (Yvanova v. 

New Century Mortgage Corp. (2016) 62 Cal.4th 919, 929

(Yvanova).) “A voidable transaction, in contrast, ‘is one where 

one or more parties have the power, by a manifestation of election 

to do so, to avoid the legal relations created by the contract, or by 

ratification of the contract to extinguish the power of avoidance.’

(Rest.2d Contracts, § 7.)” (Yvanova, at p. 930.) Thus, if a 

contract is void and not merely voidable, the equitable defenses of 

7

Section 717 provides: “No lease or grant of land for 

agricultural or horticultural purposes for a longer period than 51 

years, in which shall be reserved any rent or service of any kind, 

shall be valid.” This statute was enacted as part of the 1872 Civil 

Code and has since been amended. Cases interpreting section 

717 can sometimes shed light on section 718. (See Fisher v. 

Parsons (1963) 213 Cal.App.2d 829, 842 (Fisher).)
16

estoppel, laches, and waiver do not apply. (Colby v. Title Ins. & 

Trust Co. (1911) 160 Cal. 632, 644 (Colby); Tatterson v. Kehrlein

(1927) 88 Cal.App. 34, 49 (Tatterson).) 

The law regarding the illegality of contracts is sometimes

confusing and difficult to understand. (McIntosh v. Mills (2004) 

121 Cal.App.4th 333, 344 [“ ‘Illegality of contracts constitutes a 

vast, confusing and rather mysterious area of the law’ ”].) 

Generally, when a contract or a provision in a contract is 

prohibited by a statute, it is void. (Asdourian v. Araj (1985) 38 

Cal.3d 276, 291 (Asdourian), superseded by statute on other 

grounds as noted in Construction Financial v. Perlite Plastering 

Co. (1997) 53 Cal.App.4th 170, 175; Vitek, Inc. v. Alvarado Ice 

Palace, Inc. (1973) 34 Cal.App.3d 586, 591 (Vitek); 1 Witkin, 

Summary of Cal. Law (11th ed. 2017) Contracts, § 432.) While 

there are several exceptions to this rule, none apply here. We 

shall address the exceptions raised by BHG’s briefs.

1. Statutes that protect specific parties and are not for 

the public benefit 

“The words ‘void’ or ‘invalid,’ when appearing in statutes 

which are not for the benefit of the public at large, are regarded 

as equivalent to ‘voidable’ where none other than a particular 

person or class of persons is the object of the statutory 

protection.” (Estate of Reardon (1966) 243 Cal.App.2d 221, 229.) 

This exception to the general rule is consistent with a maxim of 

jurisprudence: “Any one may waive the advantage of a law 

intended solely for his benefit. But a law established for a public 

reason cannot be contravened by a private agreement.” (§ 3513.) 

The exception applies if there is merely an “incidental 

benefit to the public from a statutory right.” (Bickel v. City of 

Piedmont (1997) 16 Cal.4th 1040, 1048, fn. 4.) Otherwise, the 
17

exception would almost never apply because it is difficult to 

conceive of a statutory right that does not have some benefit to 

the public. (Id. at p. 1049, fn. 4.)

Here, contrary to BHG’s assertion, section 718 does not 

only protect tenants; it protects landlords too. Moreover, as we 

have explained, the legislative purpose of section 718 serves to 

promote a public benefit. The private benefit exception does not 

apply to section 718. 

2. Statute of frauds and similar evidentiary statutes

One kind of statute that primarily benefits parties to a 

contract and not the public at large is the statute of frauds and 

similar evidentiary statutes. A contract made in contravention of 

the statute of frauds is voidable, not void. (O’Brien v. O’Brien

(1925) 197 Cal. 577, 586.) 

In Safarian, we held that a marital property agreement 

that does not meet the transmutation requirements of Family 

Code section 852 (section 852) is voidable by the parties and 

cannot be challenged as void by third parties. (Safarian, supra, 

47 Cal.App.5th at p. 1059.) This is because section 852 

“establishes a rule of evidence, similar to the statute of frauds,” 

and does not benefit the public at large. (Id. at p. 1068.) 

Contrary to BHG’s assertion, Safarian does not support its 

position. Section 718 is not a rule of evidence or its equivalent 

that concerns only the parties to a lease. 

3. The part of the lease that violates section 718 is void 

even though it is malum prohibitum

In deciding whether a contract that violates a statute is 

void or voidable, courts sometimes consider whether the contract 

is malum in se (inherently immoral) or malum prohibitum (illegal 
18

by statute). A malum in se contract is absolutely void. (Vitek, 

supra, 34 Cal.App.3d at p. 593.) A malum prohibitum contract is 

“void or voidable according to the nature and effect of the act 

prohibited.” (Ibid.) A malum prohibitum contract is void “if it 

falls within the area which the Legislature intended as part of 

deterrence necessary to protect the public interest.” (Ibid.) 

The lease here is malum prohibitum because section 718 

does not bar any immoral conduct. Nonetheless, to the extent the 

lease term is longer than 99 years,8it is void because it 

contravenes the public policy underlying section 718. 

BHG’s reliance on Vitek and Asdourian is misplaced. 

Under the particular facts of those cases, contractors who 

violated the provisions of the Contractors State License Law 

(Bus. & Prof. Code, § 7000 et seq.) were permitted to recover 

against their clients. In both cases, enforcement of the contract 

did not defeat the policy of the statutory scheme. (Vitek, supra, 

34 Cal.App.3d at p. 594 [the statutory policy would not be 

“frustrated” by allowing enforcement of the contract]; Asdourian, 

supra, 38 Cal.3d at p. 292 [enforcement of the contract would not 

“defeat the statutory policy”].) The same is not true here.

II. The 2003 Assignment Was a Novation That Reset the

99-Year Limit

The trial court ruled the 2003 assignment was a novation 

that reset the 99-year time limit of section 718. Tufeld argues 

the 2003 assignment did not result in a novation and, if it did, 

8

In section III infra, we explain that a lease that 

violates section 718 is not void in its entirety. 
19

the 99-year limit did not start anew. We reject Tufeld’s 

arguments.

A. There was a novation that created a new lease

“Novation is the substitution of a new obligation for an 

existing one.” (§ 1530.) “The substitution is by agreement and 

with the intent to extinguish the prior obligation.” (Wells Fargo 

Bank v. Bank of America (1995) 32 Cal.App.4th 424, 431 (Wells 

Fargo).) In the context of a lease, a novation occurs if a new 

tenant is substituted for an old one and the parties intend to 

release the old tenant of all obligations. (Id. at pp. 431–432; 

§ 1531, subd. 2.) The landlord may agree to such novation in 

advance in the underlying lease. (Wells Fargo, at p. 432.) 

That is what happened here. The ground lease provides 

that the tenant may assign “all of its right, title and interest” in 

the lease to a third party. The lease further provides that “upon 

such assignment or transfer, the liabilities and other obligations 

under this lease of the assignor who shall have so assigned shall 

cease and terminate to the extent not theretofore accrued or 

incurred.” The 2003 transactions therefore resulted in a

novation. 

A novation “amounts to a new contract which supplants the 

original agreement and ‘completely extinguishes the original 

obligation . . . .’ ” (Wells Fargo, supra, 32 Cal.App.4th at p. 431.) 

Accordingly, in 2003, the ground lease was nullified (id. p. 432; 

People ex rel. Department of Public Works v. Auman (1950) 100 

Cal.App.2d 262, 263) and a new lease between Tufeld and BHG 

was created. (Alexander v. Angel (1951) 37 Cal.2d 856, 862 

[novation abrogates the existing agreement and “the rights and 

duties of the parties must be governed by the new agreement 

alone”]; Wells Fargo, at p. 435 [“a novation creates a new 
20

obligation which contemplates a new agreement among all the 

contracting parties”].) 

B. The novation did not extend the term of the lease 

beyond 2058 but did reset the 99-year limit

“Novation is made by contract, and is subject to all the 

rules concerning contracts in general.” (§ 1532.) A fundamental 

rule of contract formation and interpretation is that the terms of 

a contract are determined by the parties’ objective manifestations 

of consent. (Winograd v. American Broadcasting Co. (1998) 68 

Cal.App.4th 624, 632; §§ 1550, 1565.) 

Turning to the ground lease, successor tenants, including 

Douglas Emmett and BHG, had no right or power to change the 

terms of the lease without Tufeld’s consent. Tufeld did not give 

such consent in 2003. Therefore, the new lease between Tufeld 

and BHG incorporated all the substantive terms of the ground 

lease, including its expiration in 2058. 

While the 2003 novation did not change the date the lease 

expired, it did reset the clock on the 99-year limit of section 718. 

Section 718 thus limits the lease term to 2102.

This case is like Wells Fargo. There, in 1981, a transfer of 

a 1929 lease resulted in a novation, “nullifying” the old lease. 

(Wells Fargo, supra, 32 Cal.App.4th at p. 432.) At issue was a 

1977 federal statute that applied to obligations issued after its 

enactment. The court held that the statute applied to the new 

tenant’s obligations under the new lease. (Id. at pp. 435–436.) 

Similarly, section 718 applies to the 2003 new lease between 

Tufeld and BHG, not the nullified ground lease between Tufeld 

and its original tenants. 
21

III. The 2007 Lease Amendment Does Not Invalidate the 

Entire Lease

Under the 2007 amendment, the lease expires on 

December 31, 2123. This extends its term beyond the 2102 limit 

set by section 718. Tufeld argues the trial court erred in ruling 

that only the period of the lease longer than 99 years is void. It 

contends the entire lease, as amended, is void because it is an 

unlawful contract. 

“If the central purpose of the contract is tainted with 

illegality, then the contract as a whole cannot be enforced. If the 

illegality is collateral to the main purpose of the contract, and the 

illegal provision can be extirpated from the contract by means of 

severance or restriction, then such severance and restriction are 

appropriate.” (Armendariz v. Foundation Health Psychcare 

Services, Inc. (2000) 24 Cal.4th 83, 124; accord County of Ventura 

v. City of Moorpark (2018) 24 Cal.App.5th 377, 393.) 

The central purpose of the lease is to rent the property. Its

invalid extension beyond 99 years is collateral to that purpose 

and does not taint the entire contract. The trial court therefore 

correctly ruled the lease is void only for the period that exceeds 

99 years. (See Harter, supra, 141 Cal. at p. 667 [lease is not void, 

“except as to the excess of the period”]; Kendall, supra, 149 

Cal.App.2d at p. 830 [lease void under section 717 only to the 

extent it is longer than permitted term]; Shaver, supra, 26 

Cal.App.4th at p. 576 [quoting Harter].)9

9 Because we hold the 2007 amendment is void in part, 

we do not reach the parties’ arguments regarding BHG’s 

estoppel, laches, and waiver defenses. (Colby, supra, 160 Cal. at 

p. 644; Tatterson, supra, 88 Cal.App. at p. 49.) 
22

IV. Restitution

A. The trial court did not abuse its discretion by 

awarding restitution 

Pursuant to the 2007 lease amendment, the lease was 

extended 65 years to 2123. The trial court, however, correctly 

found that under section 718, the lease term ended in 2102. The 

court also awarded BHG restitution on the ground “Tufeld was 

unjustly enriched as a result of the reduction of the lease term by 

21 years.” 

The trial court has “inherent equitable power” to award 

restitution when it finds one party has been unjustly enriched. 

(Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 

163, 177.) We review the trial court’s order awarding restitution 

for abuse of discretion. (See Pulte Home Corp. v. CBR Electric, 

Inc. (2020) 50 Cal.App.5th 216, 228 [appellate courts review the 

trial court’s exercise of inherent equitable power for abuse of 

discretion]; Holmes v. Williams (1954) 127 Cal.App.2d 377, 379–

380 [restitution award reviewed for abuse of discretion].) 

“Generally, one who is unjustly enriched at the expense of 

another is required to make restitution. [Citation.] The elements 

of a cause of action for unjust enrichment are simply stated as 

‘receipt of a benefit and unjust retention of the benefit at the 

expense of another.’ ” (Professional Tax Appeal v. KennedyWilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238.)

The trial court’s award of restitution to BHG was not an 

abuse of discretion. Tufeld received a benefit from BHG, namely 

$1.5 million. In return, Tufeld agreed to a 65-year lease 

extension. But because 21 years of the lease extension are void, 

BHG did not receive what it bargained for and Tufeld did not 
23

deliver what it agreed to provide. Under these circumstances, an 

award of restitution is readily justified. 

B. There was substantial evidence supporting the

amount of the restitution award

The trial court awarded $484,615 in restitution to BHG. It 

calculated this number by multiplying the $1.5 million Tufeld 

received under the 2007 lease amendment by the proportion of 

the term extension that it deemed void (21 ÷ 65). We must affirm 

the amount of restitution awarded by the trial court if it is 

supported by substantial evidence. (In re Tobacco Cases II (2015) 

240 Cal.App.4th 779, 792; Colgan v. Leatherman Tool Group, Inc.

(2006) 135 Cal.App.4th 663, 700.) 

As the trial court noted, the parties did not provide any 

“reliable alternatives” to the pro rata method it used. Further, 

neither party has cited any authority providing specific guidance 

on how to calculate restitution in a case like this. 

The courts have long distinguished between the proof 

needed to establish liability and the proof required to establish 

the amount of damages. “Where the fact of damages is certain, 

the amount of damages need not be calculated with absolute 

certainty. [Citations.] The law requires only that some 

reasonable basis of computation of damages be used, and the 

damages may be computed even if the result reached is an 

approximation.” (GHK Associates v. Mayer Group, Inc. (1990) 

224 Cal.App.3d 856, 873; accord Sargon Enterprises, Inc. v. 

University of Southern California (2012) 55 Cal.4th 747, 774.) 

The same principle applies to restitution. Where, as here, 

unjust enrichment is established with reasonable certainty, the 

amount of restitution need not be calculated with absolute 

certainty. A reasonable approximation will suffice. (See 
24

American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 

Cal.App.4th 1451, 1487–488; Uzyel v. Kadisha (2010) 188 

Cal.App.4th 866, 894.)

The trial court’s restitution award was a reasonable 

approximation of the amount BHG was entitled to recover. There 

was substantial evidence supporting the court’s finding.

C. The trial court did not apply the correct legal 

standard in deciding whether to award prejudgment 

interest

We review de novo whether the trial court applied an 

incorrect legal standard. (Gou v. Xiao (2014) 228 Cal.App.4th 

812, 817.) 

The trial court rejected BHG’s claim for prejudgment 

interest on its restitution award. It did so after concluding that 

section 3287, subdivision (a), only applies to “damages.” While 

that is true, the court had discretion in equity to award 

prejudgment interest as a component of restitution. (Espejo v. 

The Copley Press, Inc. (2017) 13 Cal.App.5th 329, 375; M&F 

Fishing, Inc. v. Sea-Pac Ins. Managers, Inc. (2012) 202 

Cal.App.4th 1509, 1539.) The court, however, did not consider its 

equitable discretion in deciding whether to award prejudgment 

interest. This was error. On remand the trial court is directed to 

consider whether it should award prejudgment interest as a 

component of restitution. 
25

DISPOSITION

The judgment is 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 parties 

shall bear their own costs on appeal.

TAMZARIAN, J. *

We concur:

RUBIN, P. J.

MOOR, J.

*

Judge of the Los Angeles County Superior Court, assigned 

by the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.