Filed 11/6/13 Pemstein v. Pemstein CA4/3 

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

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or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA 

FOURTH APPELLATE DISTRICT 

DIVISION THREE 

MARTIN PEMSTEIN, 

 Plaintiff and Appellant, 

 v. 

HAROLD PEMSTEIN, 

 Defendant and Respondent. 

 G047338 

 (Super. Ct. No. 30-2009-00119103) 

 O P I N I O N 

 Appeal from a judgment of the Superior Court of Orange County, Gregory 

H. Lewis, Judge. Affirmed. 

 Manahan, Flashman & Brandon, Amanda E. Manahan and Jeffrey S. 

Flashman for Plaintiff and Appellant. 

 Harold Pemstein, in pro. per., for Defendant and Respondent. 
2

 Martin Pemstein appeals from the judgment he obtained against his brother 

Harold Pemstein1 in this action for damages relating to rent defaults on leases for two 

commercial buildings. He challenges the amount of damages awarded. We find no error 

and affirm. 

FACTS AND PROCEDURE 

Background 

 Martin and Harold have been battling each other for years over the breakup 

of their family business comprised of a corporation called The Pemma Corporation 

(Pemma) and a partnership called HMS Holding Company (HMS). The corporate 

dissolution action has already been the subject of many appeals, including one filed 

concurrently with this opinion (Pemstein v. Pemstein (Nov. 6, 2013, G047107) 

[nonpub. opn.]; Pemstein v. Pemstein (May 16, 2011, G043349) [nonpub. opn.]; 

Pemstein v. Pemstein (June 9, 2004, G030217) [nonpub. opn.]; Pemstein v. Pemstein

(June 9, 2004, G029394) [nonpub. opn.]; Pemstein v. The Pemma Corporation (June 9, 

2004, G031227) [nonpub. opn.]). 

 The real properties that are the subject of this action are two commercial 

buildings located in Santa Ana at 515 South Santa Fe Street (the 515 Building), and 

519 South Santa Fe Street (the 519 Building). Originally, HMS was the owner of the 

buildings, and Pemma was the lessee. During the pendency of the corporate dissolution 

action, Pemma and HMS filed for bankruptcy. In 2006, the bankruptcy court entered an 

order allowing for Martin to become the sole owner of both buildings and for Harold to 

become the lessee of both buildings. The bankruptcy trustee created new leases for each 

 

1 We hereafter refer to the parties by their first names for ease of reading and 

to avoid confusion, and not out of disrespect. (In re Marriage of James & Christine C. 

(2008) 158 Cal.App.4th 1261, 1264, fn. 1.) 
3

building between HMS and Pemma and then assigned them to Martin and Harold 

respectively. 

 The two leases were identical. The lease term was for four years from 

January 1, 2007, to December 31, 2010. The monthly rent was $3,657.50 for the first 

year, subject to a three percent annual increase each year thereafter. The leases provided 

for rent to be paid on the first day of each month and provided for imposition of late 

charges and interest after five days. The leases also contained the following 

paragraph 3.1, pertaining to early termination of the lease term, which provided in 

relevant part: “While Lessee is in bankruptcy, Lessee . . . may terminate this Lease for 

any reason whatsoever, after providing thirty (30) days written notice to Lessor. If this 

Lease is terminated by Lessee during its bankruptcy, the maximum claim that Lessor may 

have against Lessee for early termination shall be four (4) months of rent. After Lessee’s 

bankruptcy, Lessee may terminate this Lease for any reason by providing at least 

120 days written notice, and upon such early termination, Lessee shall pay to Lessor a 

lump sum amount equal to four (4) months of rent.” 

The Complaint 

 Martin filed the instant action against Harold in May 2009, for damages 

relating to rent defaults on both buildings. 

 As to the 515 Building, Martin alleged that on October 30, 2007, Harold 

gave written notice of his intent to terminate the lease, saying he would be off the 

premises by November 30, 2007. Harold did not fully vacate the premises until 

December 20, 2007. Harold paid Martin the December rent but no rent thereafter, and 

did not make a lump sum payment equal to four months’ rent. 

 As to the 519 Building, Martin alleged Harold was routinely late in his rent 

payments. On December 7, 2007, Martin served Harold with a three-day notice to 

perform covenant or quit, and on January 20, 2008, Martin commenced an unlawful 

detainer action. Martin obtained a judgment in the unlawful detainer action, entered 
4

May 7, 2008, and served on Harold May 8, giving possession of the premises back to 

Martin, and ordering Harold to pay Martin $1,463 in late fees for the months of 

August 2007 through November 2007. The unlawful detainer judgment stated Harold 

“may in the future become liable for daily damages, alleged in the complaint to be 

$139.73 per day, [but] such future damages are not properly included in this 

judgment . . . .” Harold did not vacate the premises until June 2008, and Martin was not 

able to find a new tenant. Martin alleged Harold was liable for rent throughout the 

remainder of the lease term, plus other damages. Martin’s complaint also contained a 

cause of action seeking to recover attorney fees he had incurred prosecuting the unlawful 

detainer action. 

The Trial 

 The matter proceeded to a bench trial in April 2012, conducted solely upon 

the parties’ trial briefs, argument of counsel, and exhibits submitted to the court. The 

joint exhibit list describes 90 exhibits that were provided to the court. Some of the 

exhibits (we have been able to identify approximately 26 of them) are attached to the trial 

briefs included in the clerk’s transcript, but most of the exhibits have not been provided 

to us. Martin’s designation of the record on appeal identifies only one exhibit to be 

included in the clerk’s transcript record on appeal (see Cal. Rules of Court, 

rule 8.122(a)(3))—a notice of eviction—but that exhibit is not in the clerk’s transcript. 

Martin has not filed a rule 8.224 notice (Cal. Rules of Court, rule 8.224) designating any 

trial exhibits to be considered by this court, nor have any of the other exhibits been 

transmitted to this court.2

 

2 “Where exhibits are missing we will not presume they would undermine 

the judgment. [Citation.]” (Western Aggregates, Inc. v. County of Yuba (2002) 

101 Cal.App.4th 278, 291; see also Heyman v. Franchise Mortgage Acceptance Corp.

(2003) 107 Cal.App.4th 921, 925, fn. 1.) 
5

 At the beginning of trial, the parties stipulated the primary legal issue to be 

determined was the interpretation of paragraph 3.1 of the leases regarding what future 

rent was owed upon early termination of the leases. Martin argued Harold was required 

to pay rent during the 120-day notice period, and then upon expiration of the notice 

period (i.e., termination of the lease) had to also pay an amount equal to another four 

months of rent, i.e., eight months total for potential future rent from the time notice of 

termination was given. Harold argued paragraph 3.1 established four months’ rent as the 

maximum he would have to pay upon giving notice he was terminating the lease. Harold 

argued if he had to pay rent during the 120-day notice period and then also pay an 

amount equal to another four months’ rent, the latter would constitute an illegal penalty 

or liquidated damages provision. 

 The trial court apparently agreed with Harold’s position. It explained: 

“A clear understanding of [paragraph 3.1] . . . is that [provision] allows for termination of 

the lease by giving 120-days notice, and upon such early termination, meaning of the 

notice period, that the lessee was to pay to less[or] a lump sum amount equal to four 

months of rent, so I think that the four months of rent is tied into the notice period of 

early termination of the 120 days. I do not believe that it’s disjunctive and would act as a 

liquidated damage clause or a penalty, but it fails 1546 of the Civil Code3 in that regard. 

That’s my ruling.” Before beginning presentation of evidence and argument, Martin’s 

counsel confirmed his understanding of the court’s interpretation of paragraph 3.1 was 

that he could only recover a maximum of four months of rent as future rent damages. 

 

3 As there is no section 1546 of the Civil Code, we assume the trial court 

meant section 1671 of the Civil Code, the provision that addresses the validity of 

liquidated damages provisions. All further statutory references are to the Civil Code, 

unless otherwise indicated. 
6

The 515 Building Evidence and Argument 

 The following evidence/argument was presented to the trial court as to the 

515 Building. Harold gave written notice to Martin on October 30, 2007, he was 

terminating the lease on the 515 Building as of the end of November 2007. He did not 

vacate the premises until December 20, 2007. On December 29, 2007, Martin signed a 

one-year lease with new tenants for the 515 Building at a monthly rent of $4,250 

($592.50 more than Harold’s rent) and the new tenant took possession on January 1, 

2008. (The joint exhibit list indicates there was another lease provided to the trial court 

for the 515 Building to a tenant named “Stellar,” but that lease has not been provided to 

us.) 

 The record contains copies of checks (most of which were a few days late) 

from Harold to Martin for payment of rent on the 515 Building as follows: $3,657.50 for 

the months of January, February and March 2007; $4,754.75 (rent and late fees) for 

April 2007; and $3,657.50 for the months of May, June, July, and August 2007. 

Although the record does not contain checks for September or October 2007, Martin’s 

payment schedule provided to the trial court represented Harold timely paid rent for both 

those months. 

 The clerk’s transcript contains two different schedules prepared by Martin 

of the amounts he claimed Harold owed on the 515 Building. One was attached to 

Harold’s trial brief, but it is not clear if it was actually an exhibit admitted at trial—it 

does not appear on the parties’ joint exhibit list. It showed no rent paid by Harold for 

November or December 2007, but that Martin credited Harold’s security deposit to the 

rent due for November 2007. This schedule showed late charges Martin assessed Harold 

for several months in 2007, although those late charges are not at issue on this appeal. 

 Martin’s trial brief contained a different schedule by which he calculated 

what Harold owed him on the 515 Building. Martin claimed that as of October 2007, 

Harold would have owed $2,091.13 in late charges and interest on late rent. When 
7

Harold gave notice in October he was terminating the lease, he became obligated to pay 

Martin for four more months of rent (a total of $14,739.73) because the lease required 

120 days notice before it terminated. Martin then credited Harold for his security deposit 

(applying it to November rent), which brought the total to $14,400. Martin then added 

10 percent annual interest through trial, to bring the claimed total to $20,640. 

The 519 Building Evidence and Argument 

 Various documents relating to the unlawful detainer proceeding on the 

519 Building were before the trial court and we detail them first. Martin served a 

three-day notice to perform covenant or quit on Harold on December 17, 2007, which 

stated Harold owed $1,828.75 in late fees under the lease for the months of August 

through December 2007, and declaring the lease forfeit. 

 The unlawful detainer action was filed on January 20, 2008. In its April 23, 

2008, statement of decision in the unlawful detainer action, the court found Harold 

violated the lease by habitually making late rent payments and not paying the late charges 

and the lease was forfeited. It found Martin was entitled to judgment for late fees for 

August 2007 through November 2007—a total of $1,463. The court found Harold had 

paid December 2007 rent and it “[could not] award additional sums for unpaid rent 

following December of 2007, if any, as the evidence presented simply failed to establish 

what if anything more was owed by Harold.” The court declined to award any damages 

for a malicious holdover. The court found Martin was also “entitled to $139.73 per day 

in daily damages from the date of entry of judgment.” 

 The judgment in the unlawful detainer proceeding was entered May 7, 

2008. It gave Martin possession of the premises and awarded him $1,463 for late fees. 

The judgment stated, “Although [Harold] may in the future become liable for daily 

damages, alleged in the complaint to be $139.73 per day, such future damages are not 

property included in this judgment . . . .” Martin regained possession of the 519 Building 

on May 29, 2008. 
8

 The clerk’s transcript contains checks for Harold’s payment of rent on the 

519 Building as follows: $3,657.50 for the months of January, February, and March 

2007; $4,753.75 (rent and late fees) for April 2007; $3,657.50 for the months of May, 

June, July, and August 2007; $3,657.50 for the months of November and December 

2007; and $3,657.50 for the months of January, February, and March 2008. Although the 

record does not contain a check for April 2008, Martin’s payment schedule presented to 

the court represents that Harold timely paid rent for that month and Martin applied 

Harold’s security deposit to the May 2008 rent. Although the parties’ joint exhibit list 

indicates the 519 Building was subsequently re-let, the documents pertaining to the new 

lease are not before us, and thus, we do not know when and for how much. Martin’s 

counsel represented the new lease was obtained eight months after he regained 

possession. 

Judgment 

The trial court entered a judgment awarding Martin damages of $4,939.56 

relating to the 515 Building lease and no damages as to the 519 Building lease. It 

declined to award Martin any damages on his cause of action seeking attorney fees for 

the unlawful detainer action because he did not present any evidence on that cause of 

action. 

 A statement of decision was not requested, however, the trial court made 

comments on the record explaining its ruling. As to the 515 Building lease, the court 

concluded when Harold gave notice at the end of October 2007, he was terminating the 

lease he would have owed Martin for four more months rent pursuant to paragraph 3.1. 

Martin re-let the premises effective January 1, 2008, so Harold only owed for November 

and December 2007, plus late fees and interest. The court explained Harold owed Martin 

a total of $8,597.55, less the security deposit of $3,657.50, for a total of $4,939.56. As to 

the 519 Building, the court commented Harold had paid all rents due for January, 

February, March, and April 2008. The security deposit was used for May 2008 rent. 
9

Possession of the premises was returned to Martin on May 29, 2008, so no further rental 

damages would be ordered. 

DISCUSSION 

1. Standard of Review 

 “[I]t is settled that [on appeal]: ‘A judgment or order of the lower court is 

presumed correct. All intendments and presumptions are indulged to support it on 

matters as to which the record is silent, and error must be affirmatively shown. This is 

not only a general principle of appellate practice but an ingredient of the constitutional 

doctrine of reversible error.’ [Citations.]” (Denham v. Superior Court (1970) 2 Cal.3d 

557, 564.) Therefore, an appellant has an affirmative duty on appeal to overcome the 

presumption of correctness and demonstrate prejudicial error. (Hearn v. Howard (2009) 

177 Cal.App.4th 1193, 1207.) 

 Questions of law, such as the proper interpretation of a contract when it 

does not turn on the credibility of extrinsic evidence, are reviewed de novo (City of 

Manhattan Beach v. Superior Court (1996) 13 Cal.4th 232, 238), but if a party does not 

request a statement of decision, the appellate court will imply all necessary factual 

findings to support the judgment. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 

1133-1134.) Here, because no statement of decision was requested, we “imply all 

findings necessary to support the judgment, and our review is limited to whether there is 

substantial evidence in the record to support these implied findings.” (In re Marriage of 

Cohn (1998) 65 Cal.App.4th 923, 928.) 

2. The 519 Building 

 Martin contends the trial court improperly applied res judicata/collateral 

estoppel principles to conclude the unlawful detainer action resolved all rent damage 

issues as to the 519 Building lease and, thus, it erred by failing to award him the early 

termination fee provided for under paragraph 3.1 of the lease. We reject his contentions. 
10

 Before addressing what we discern Martin’s argument to be, we address 

what it cannot be. Martin’s argument is couched in terms of attacking the trial court’s 

failure to award him the early termination fee (equal to four months’ rent) provided for in 

paragraph 3.1. But by its terms, the provision has no applicability to the 519 Building 

lease for the simple reason Harold did not elect to terminate the 519 Building lease early. 

It was Martin who terminated the 519 Building lease by evicting Harold for nonpayment 

of approximately $1,400 in late fees. Thus, Martin was not entitled to payment of an 

early termination fee under Paragraph 3.1 as to the 519 Building. We turn then to 

Martin’s argument the trial court improperly concluded principles of res judicata and 

collateral estoppel precluded Martin’s recovery of “future rents” for the 519 Building. 

 “‘“The doctrine of res judicata gives certain conclusive effect to a former 

judgment in subsequent litigation involving the same controversy.” [Citation.] The 

doctrine “has a double aspect.” [Citation.] “In its primary aspect,” commonly known as 

claim preclusion, it “operates as a bar to the maintenance of a second suit between the 

same parties on the same cause of action. [Citation.]” [Citation.] “In its secondary 

aspect,” commonly known as collateral estoppel, “[t]he prior judgment . . . ‘operates’” in 

“a second suit . . . based on a different cause of action . . . ‘as an estoppel or conclusive 

adjudication as to such issues in the second action as were actually litigated and 

determined in the first action.’ [Citation.]” [Citation.] “The prerequisite elements for 

applying the doctrine to either an entire cause of action or one or more issues are the 

same: (1) A claim or issue raised in the present action is identical to a claim or issue 

litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the 

merits; and (3) the party against whom the doctrine is being asserted was a party or in 

privity with a party to the prior proceeding. [Citations.]”’ [Citation.]” (Boeken v. Philip 

Morris USA, Inc. (2010) 48 Cal.4th 788, 797.) In this context, the phrase “cause of 

action” means “the right to obtain redress for a harm suffered, regardless of the specific 
11

remedy sought or the legal theory (common law or statutory) advanced. [Citation.]” (Id.

at p. 798.) 

 The res judicata effect of an unlawful detainer proceeding is narrow, but 

substantial. “Generally speaking, an unlawful detainer judgment has limited res judicata 

force because it typically follows a summary proceeding focused only on deciding a 

party’s right to immediate possession of property.” (Gombiner v. Swartz (2008) 

167 Cal.App.4th 1365, 1371.) “But when litigants to an unlawful detainer proceeding 

fully try other issues besides the right of possession, the unlawful detainer judgment is 

conclusive as to those other litigated issues. [Citations.]” (Ibid.) 

 Martin is correct the unlawful detainer judgment does not preclude an 

award of damages that was not adjudicated therein. “In the unlawful detainer action, the 

statute prescribes the exclusive measure of damages. The landlord can only recover 

damages in the unlawful detainer proceeding incidental to the recovery of possession. 

His or her recovery is limited to the past due rent and damages for the value of possession 

after termination of the lease and prior to judgment in the unlawful detainer action.” 

(7 Miller & Starr, Cal. Real Estate (3d ed. 2012) § 19:208, fns. omitted.) In the unlawful 

detainer action, Martin was only entitled to recover the delinquent rent due on the 

effective date of the three-day notice to quit (in this case the unpaid late fees as of 

December 17, 2007), and any post-notice, prejudgment damages, i.e., the reasonable 

rental value of the property during the time Harold “wrongfully” occupied the property 

after failing to surrender possession. (Ibid.; see also § 3334, subd. (b)(2); Code Civ. 

Proc., § 1174.) Any claims Martin had for damages accruing after entry of the unlawful 

detainer judgment, and prior to his regaining possession of the property, and for “future 

rent damages,” i.e., damages for the remainder of the lease term after regaining 

possession, were only recoverable in a separate action for damages brought under 

section 1951.2. (7 Miller & Starr, Cal. Real Estate, supra, § 19:209, fns. omitted; see 
12

also Code Civ. Proc., § 1174.5 [unlawful detainer judgment does not bar subsequent 

action for damages under section 1951.2].) 

 Martin served a three-day notice to perform covenant or quit on Harold on 

December 17, 2007, and filed his unlawful detainer action on January 20, 2008. The 

unlawful detainer complaint is not part of the record on this appeal. Accordingly, we 

have no record as to the damages Martin sought to adjudicate. But the court in the 

unlawful detainer action determined Harold owed Martin $1,463 in late fees for August 

2007 through November 2007. As for Martin’s post-notice, prejudgment damages, the 

court in the unlawful detainer action concluded Harold paid the December 2007 rent, and 

Martin failed to introduce any evidence as to any additional amounts Harold owed, i.e., 

the reasonable rental value of the premises from January 2008 until the unlawful detainer 

judgment was entered on May 7, 2008. Moreover, to the extent Martin argues the 

unlawful detainer action did not adjudicate those post-notice, prejudgment damages, the 

trial court in this case noted (and the evidence in this record demonstrates) Harold in fact 

paid rent for January, February, March, and April 2008, and Martin retained Harold’s 

security deposit which covered the rent for May 2008 (thus, also covering the rental value 

from the entry of judgment on May 7, until Martin regained possession on May 29, 

2008). In short, the record supports the implied findings by the trial court in this case that 

all rent claims due up until the time Martin regained possession were resolved. 

 Martin argues he was also entitled to prospective damages for the unpaid 

rent for the remainder of the original lease term—an amount he asserts would be equal to 

the early termination fee specified in paragraph 3.1, i.e., four months rent. (As we 

already have noted above, Martin was not entitled to an early termination fee, because 

Harold did not terminate the lease—Martin did.) 

 A lessor may only recover damages for the balance of a lease term in 

accordance with section 1951.2, subject to his duty to mitigate those damages. Under 

that section, “Subject to certain limitations, as additional damages caused by the tenant’s 
13

breach of the lease, the landlord may recover the amount by which the unpaid rent for the 

balance of the lease term that accrues after the time of the award exceeds the amount of 

rent loss the tenant proves could reasonably have been avoided by the landlord, 

discounted at the discount rate of the Federal Reserve Bank of San Francisco at the time 

of the award, plus 1%.” (7 Miller & Starr, Cal. Real Estate, supra, § 19:209, 

fns. omitted; see § 1951.2, subds. (a) & (b).) 

 A lessor cannot recover the excess of the unpaid rent for the balance of the 

term unless: “(1) The lease provides that the damages [the lessor] may recover include 

the worth at the time of award of the amount by which the unpaid rent for the balance of 

the term after the time of award, or for any shorter period of time specified in the lease, 

exceeds the amount of such rental loss for the same period that the lessee proves could be 

reasonably avoided; or [¶] (2) The lessor relet the property prior to the time of award and 

proves that in reletting the property he acted reasonably and in a good-faith effort to 

mitigate the damages, but the recovery of damages under this paragraph is subject to any 

limitations specified in the lease.” (§ 1951.2, subd. (c)(1) & (2).) 

 Martin has made no argument, let alone any showing, he satisfied the 

requirements of section 1951.2. Indeed, he does not mention the statute. Because there 

is no statement of decision, we must imply findings by the trial court that the requisites 

for recovery of future rents for remainder of the lease term were not met. Martin has not 

demonstrated any error by the trial court in declining to award damages for the remainder 

of the rent term. 

3. The 515 Building 

 Martin also challenges the damage award as to the 515 Building lease. 

Martin’s argument is not entirely clear, but the bottom line is he believes he should have 

been awarded four months’ rent attributable to the 120-day notice period from the time 

Harold notified him he was terminating the lease—offset by the rent he received upon re-
14

letting the premises two months into the 120-day notice period—plus the lump sum 

payment provided for in paragraph 3.1 of the lease. We reject Martin’s contention. 

 Although not clearly articulated in his brief, the gist of Martin’s argument 

appears to be the trial court incorrectly interpreted paragraph 3.1. Before trial, the court 

appeared to interpret paragraph 3.1 as establishing four months’ rent as the maximum 

Harold would have to pay Martin in the event the lease was terminated early. Martin 

does not discuss any law concerning contract interpretation. We apply a de novo 

standard of review. (Morgan v. City of Los Angeles Bd. of Pension Comrs. (2000) 

85 Cal.App.4th 836, 843.) 

 “A lease agreement is subject to the general rules governing the 

interpretation of contracts. [Citation.] ‘A contract must be so interpreted as to give effect 

to the mutual intention of the parties as it existed at the time of contracting, so far as the 

same is ascertainable and lawful.’ [Citation.] When possible, the parties’ mutual 

intention is to be determined solely from the language of the lease. ‘The “clear and 

explicit” meaning of these provisions, interpreted in their “ordinary and popular sense,” 

. . . controls judicial interpretation.’ [Citation.] ‘Interpretation of a contract “must be fair 

and reasonable, not leading to absurd conclusions. [Citation.]”’ [Citation.]” (Bill Signs 

Trucking, LLC v. Signs Family Limited Partnership (2007) 157 Cal.App.4th 1515, 1521.) 

 We generally agree with Martin as to the interpretation of paragraph 3.1. 

The provision must be read in full: “While the Lessee is in bankruptcy, Lessee . . . may 

terminate this Lease for any reason whatsoever, after providing thirty (30) days written 

notice to Lessor. If this Lease is terminated by Lessee during its bankruptcy, the 

maximum claim that Lessor may have against Lessee for early termination shall be four 

(4) months of rent. After Lessee’s bankruptcy, Lessee may terminate this Lease for any 

reason by providing at least 120 days written notice, and upon such early termination, 

Lessee shall pay to Lessor a lump sum amount equal to four (4) months of rent.” 
15

 A plain reading of paragraph 3.1 envisions two early termination 

circumstances. The first (encompassed by the first two sentences) was if the lessee 

(originally Pemma) was still in bankruptcy, the lease could be terminated on 30 days 

written notice and the maximum damages the lessor (originally HMS) could recover 

would be “four (4) months of rent.” The second circumstance, which the parties agree is 

the one applicable here, was that after the bankruptcy the lessee (now Harold) could 

terminate the lease by giving 120 days notice to the lessor (now Martin), and upon the 

termination of the lease, paying “a lump sum amount equal to four (4) months of rent.” 

Because the lease would not have terminated until expiration of the 120-day notice 

period (see, e.g., Highland Plastics, Inc. v. Enders (1980) 109 Cal.App.3d Supp. 1, 8 

[“[t]he tenancy is not terminated on the giving of the notice but on expiration of the 

notice period”]), paragraph 3.1 envisions payment of rent during the notice period (while 

the lease remained in effect) and then payment of a lump sum upon the termination of the 

lease at the conclusion of the notice period. 

 But we disagree with Martin his subsequent re-letting of the premises had 

no bearing on whether Harold was obligated to make the paragraph 3.1 payment. Harold 

gave notice on October 30, 2007, he was terminating the lease. Although Harold 

purported to give 30 days’ notice, the lease would not have terminated until expiration of 

the 120-day period in February 2008. Martin re-let the property effective January 1, 

2008, at a significantly higher rent, before the expiration of Harold’s lease and before any 

early termination payment accrued. “‘It has long been the settled law of this state, that 

while re-entry by the landlord and his resumption of the benefits, use and enjoyment of 

the premises terminates the lease, so far as the landlord’s right to rentals subsequent to 

such entry is concerned, this does not affect the tenant’s liability for rent accrued prior to 

such re-entry.’ [Citations.]” (Space Properties, Inc. v. Tool Research Co. (1962) 

203 Cal.App.2d 819, 826.) Gould v. Corinthian Colleges, Inc. (2011) 192 Cal.App.4th 

1176, the sole authority Martin cites in support of his argument, does not aid him. 
16

Although Gould observed a lease’s early termination payment provision was not “rent” 

but rather “payment[] for the exercise of a right or privilege” of terminating the lease 

early (Id. at p. 1180), it did not involve a circumstance like we have here—where the 

premises was re-let prior to expiration of the termination period. In sum, the trial court 

did not err by concluding Harold was liable only for the unpaid rent prior to re-letting the 

premises. 

DISPOSITION 

 The judgment is affirmed. In the interests of justice, each side shall bear 

their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).) 

 

 O’LEARY, P. J. 

WE CONCUR: 

RYLAARSDAM, J. 

BEDSWORTH, J.