Filed 3 / 17 / 21 Dr. Leevil v. Westlake Health Car e Center CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 SIX

DR. LEEVIL, LLC,

Plaintiff and Respondent,

v.

WE STLAKE HEALTH CARE CENTER,

Defendant and Appellant

. 2d Civ. No. B304339 (Super. Ct. No. 56

- 2015

- 00465793

- CU

- UD

- VTA) (Ventura County)

W estlake Health Care Center (Westlake Health) appeals from the trial court’s denial of its motion for restitution

. We affirm.
FACTUAL AND PROCEDURAL HISTORY

In 2002, Westlake Village Property, L.P. (Westlake Village)

, leased a skilled nursing facility to Westlake Health for a term of 20 years

. ( Dr. Leevil, LLC v. Westlake Health Care
Center (2017) 9 Cal.App.5th 45 0, 452 ( Leevil I ), reversed in part by Dr. Leevil, LLC v. Westlake Health Care Center (2018) 6
Cal.5th 474 ( Leevil II

).) The lease had an automatic2

subordination clause providing that it was to be “ subordinated to all existing and future liens and encumbr ances against the [facility] .” ( Leevil I

, at p. 455, fn. 2.) Six years later, Westlake Village took out a loan from TomatoBank, N.A., secured by its deed of trust on the facility. ( Id. at p. 452.) When Westlake Village defaulted, TomatoBank sold the lo an to Dr. Leevil, LLC (Leevil)

. ( Id. at pp. 452

- 453.) Leevil instituted foreclosure proceedings , and purchased the facility at a trustee ’ s sale. ( Id. at p. 453.) The day after it purchased the facility, Leevil served Westlake Health with a notice to qu it. ( Leevil I

, supra , 9 Cal.App.5th at p. 453.) Leevil recorded title five days later. ( Ibid. ) When Westlake Health refused to vacate the facility,
Leevil sued for unlawful detainer. ( Ibid. )

The trial court foun d that Westlake Health’s lease

was su bordinate to Leevil’s deed of trust and had been extinguished by the trustee ’ s sale. ( Leevil I

, supra , 9 Cal.App.5th at p. 453.) The court also found that the notice to quit was valid notwithstanding that it was served before title was perfected

. ( Ibid. ) Westlake Health then “ withdr[ew] its defense as to service
of the three

- day notice” and stipulated to judgment of possession
in favor of Leevil

.

We affirmed the trial court’s findings on appeal. ( Leevil I

, supra , 9 Cal.App.5th at pp. 454

- 457.) The S upreme Court subsequently granted Westlake Health’s petition for review of our decision, limiting its review to the issue of whether title must be perfected b efore serving a notice to quit. ( Leevil II

, supra , 6 Cal.5th at p. 477.) The court concluded tha t it was, and reversed that portion of our decision holding to the contrary. ( Id. at pp. 484

- 485.)3 After the remittiturs issued, Leevil dismissed its unlawful detainer action against Westlake Health. Ten months later, Westlake Health moved for $5.7 mill ion in restitution, an amount representing the income it allegedly would have earned during the four years following its October 2015 surrender of the skilled nursing facility to Leevil.

The trial court denied Westlake Health’s motion. It
concluded that the law of the case was that Westlake Health’s
lease was subordinate to the foreclosure deed of trust and had been extinguished by the foreclosure sale

. (Cf. Morohoshi v. Pacific Home (2004) 34 Cal.4th 482, 49 1 [“‘ The decision of an appellate court, stat ing a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent

ret rial or appeal in the same case ’ ” ].) Westlake Health thus had no legal claim to p ossession of the skilled nursing facility after
the sale. Under these circumstances, the trial court ruled that a
restitution award would be i nequitable.

It also determined that Leevil’s failure to serve a valid notice to quit did not alter the balance o f equities. Between July 2015 (when Westlake Health surrendered possession of the facility) and December 2018 (when the Supreme Court issued its opinion), Leevil had no need to serve a new notice since the case had consistently been decided in its favor

. O nly after the Supreme Court issued its opinion did Leevil kn o w that a new notice would be required. But by that point Westlake Health had long since vacated the facility. A new notice would have been meaningless.4 DISCUSSION
Westlake Health contends t he trial court erroneously denied its motion for restitution. We disagree.

If an appellate court reverses a judgment or order, it may “ order restitution on reasonable terms and conditions of all property and rights lost by the erroneous judgment or order

. . . and may direct the entry of a money judgment sufficient to compensate for property or rights not restored. ” ( Code Civ. Proc., § 908 .) But “[e] ven if the reviewing court has not ordered restitution, the trial court whose order or judgment has been reversed on appeal has the inherent authority to afford restitutionary relief. ” ( Beach Break Equities, LLC v. Lowell (2016) 6 Cal.App.5th 847, 852 ( Beach Break ).) This authority includes “ the award of profits of business conducted on [property] taken fro m tenant following incorrect initial judgment .” ( Munoz v. MacMillan (2011) 195 Cal.App.4th 648,

662 ( Munoz ) .) “‘ “ The fundamental rule guiding the court in such proceedings is, so far as possible, to place the parties in as favorable a position as they co uld have been in had the judgments not been enforced pending appeal. ” [Citation.] ’ [Citation.]” ( Beach Break , at p. 852, alterations omitted.)

Restitution is “a matter of a right if the judgment is reversed or set aside, unless [it] would be inequitabl e. ” ( Beach
Break

, supra , 6 Cal.App.5th at pp. 852

- 853.) “ Whether a party is entitled to restitution following reversal [thus] presents a question calling for judicial discretion. ” ( Id. at p. 853.) We will
not disturb a trial court’s denial of restituti on absent “ a showing
of manifest abuse of [that] discretion. ” ( Ibid. )

Westlake Health has failed to show that the trial
court abused its discretion here. After Leevil purchased the5

skilled nursing facility at the trustee’s sale, Westlake Health occupied it without a valid lease

— i.e., as a holdover tenant. (See
Aviel v. Ng (2008) 161 Cal.App.4th 809, 820 .) Westlake Health
then voluntarily gave up its holdover tenancy when it stipulated to Leevil’s possession of the facility. That stipulation is binding

. (Code Civ. Proc., § 664.6, subd. (a).) As such, Westlake Health cannot now claim that it is entitled to restitution for profits it would have earned had it remained in possession of the facility
post stipulation. (Civ. Code, § 3515 [party that “ consen ts to an act is not wronged by it” ].) Such a result would be inequitable, as the court below rightly concluded.

That Leevil prematurely served the notice to quit does not shift the balance of equities in Westlake Health’s favor. In the stipulated judgme nt, Westlake Health withdrew any defense to its possession of the skilled nursing facility based on the notice to quit

— valid or otherwise. 1 It thus cannot now claim
that it had the right to be served with a valid notice before dispossess ion. (Cf. Civ. Co de, § 3532 [“law neither does nor requires idle acts”].)

Additionally, a holdover tenant is entitled to possession of property only “ until the detainer action culminates in a judgment of forfeiture

. ” ( Four Seas Inv. Corp. v. International Hotel Tenants ’ Assn. (1978) 81 Cal.App.3d 604,

612 .) That the parties here secured that judgment through

1 Westlake Health claims that this court previously rejected Leevil’s arguments regarding its withdrawal of any notice

- to

- quit defense . But t hat withdrawal was separate from Westlake Health ’s preservation of its appellate right s in the stipulation

. O ur prior opinion considered only the latter. ( S ee Leevil I

, supra , 9 Cal.App.5th at p. 453

. )6

stipulation rather than at the conclusion of trial does not change
this rule. A “‘

judgment entered without contest, by consent or stipulation , is as conclusive a me rger or bar as a judgment
rendered after trial .’ [Citation.]” ( Studley v. Benicia Unified Sch.
Dist. (1991) 230 Cal.App.3d 454, 460.)

None of the cases on which Westlake Health relies supports a restitution award here. First, none of the cited cases
in volved a lease that had been extinguished. (See Beach Break

, supra , 6 Cal.App.5th at p. 850 [no evidence that foreclosure sale automatically extinguished lease]; Munoz

, supra , 195 Cal.App.4th at pp. 651

- 652 [existing lease with two five

- year options]; Sto ckton Theatres, Inc. v. Palermo (1953) 121 Cal.App.2d 616, 618

- 619 [competing claims over whether lease was valid].) And second, none involved a situation where the party moving for restitution had stipulated to giving up possession of the contested prope rty.

In short, the foreclosure sale extinguished Westlake Health’s lease of the skilled nursing facility. The stipulated judgment then terminated i ts right to possession of the facility.
Westlake Health thus stands in “ as nearly as may be in the
conditi on in which [it] stood previously” without a restitution
award. ( Ward v. Sherman (1909) 155 Cal. 287, 291. ) The trial court did not abuse its discretion in denying the restitution claim

.7 DISPOSITION
The trial court’s order denying Westlake Health ’s

mot ion for restitution , entered December 12, 2019

, is affirmed

. Leevil shall recover its costs on appeal.

NOT TO BE PUBLISHED.

TANGEMAN, J.

We concur:

YEGAN, Acting P. J.

PERREN, J.Vincent J. O’Neill, Jr., Judge

Superior Court County of Ventura

______________________________

Enenstein Pham & Glass , Ter i T. Pham and Matthew
W. Rosene for Defendant and Appellant.

Law Offices o f Ronald Richards & Associates and
Ro nald N. Richards ; Law Offices of Geof frey Long and Geoffrey S. Long for Pla intiff and Respondent.