Filed 4/14/21 Hawthorne Investment, LLC v. Lam CA2/8

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

HAWTHORNE INVESTMENT, 

LLC,

 Plaintiff and Respondent,

 v.

QUAN THIET LAM,

 Defendant and Appellant.

B303786

(Los Angeles County

Super. Ct. No. 19TRCV00994)

 APPEAL from a judgment of the Superior Court of Los 

Angeles County, Deirdre Hill, Judge. Affirmed.

Quadros & Cuellar, Sarah Cuellar and Micheli Quadros for 

Defendant and Appellant.

William C. Robison, APC, and William C. Robison for 

Plaintiff and Respondent.

____________________
2

Hawthorne Investment, LLC sought to evict Quan Thiet 

Lam after Lam failed to pay rent under a commercial lease. 

Following a bench trial, the trial court awarded Hawthorne 

possession of the premises, damages, and other relief. 

Lam claims the court improperly disallowed his contract 

defense as well as his defense based on the common law implied 

warranty of habitability. Alternatively, he urges us to take a 

precedent-setting step by extending this warranty beyond 

residential tenants to commercial tenants like him. We affirm. 

Statutory citations are to the Code of Civil Procedure. 

I

In 2015, Lam entered into a five-year commercial property 

lease. The agreement is a form contract from the California 

Association of Realtors entitled “Commercial Lease Agreement” 

with blanks filled in and some interlineations. One interlineation

divided maintenance obligations between landlord and tenant. 

Lam’s monthly rent was $7,000. 

On October 4, 2019, Hawthorne served Lam with a “3 

Business Day Notice to Pay Rent or Quit.” The notice stated Lam 

owed rent from July 1, 2019 to October 31, 2019, “amounting to a 

good faith estimate in the sum of $25,625.00.” The notice 

demanded that Lam pay the past due rent or leave the premises. 

It warned failure to pay would result in lease forfeiture and a 

lawsuit. 

Lam did not leave or pay rent. On November 6, 2019, 

Hawthorne sued Lam for unlawful detainer. Hawthorne sought 

possession of the property, past due rent, attorney fees, costs, and 

forfeiture of the lease agreement. 
3

Because Lam continued to shirk rent after receiving the 

three-day notice, Hawthorne also sought rental damages of 

$233.33 per day from November 1, 2019 through the judgment 

date, totaling $16,099.77. The parties and the trial court referred 

to this period as the holdover period. 

Lam asserted affirmative defenses, including a defense that 

Hawthorne materially breached the contract. His answer to the 

complaint cites Green v. Superior Court (1974) 10 Cal.3d 616 

(Green) and claims the rent sought is excessive due to 

“Damp/leaking ceiling/walls.” Lam claimed other offsets as well. 

Lam represented himself at a bench trial on January 8, 

2020. 

Our record contains a settled statement of the trial plus 

Hawthorne’s trial exhibits, which were admitted into evidence. 

Lam’s trial exhibits are not part of our record. 

Lam testified about a roof leak in December 2019 and 

resulting damage to his home furniture inventory. Hawthorne 

objected to this testimony as irrelevant, noting the damage in 

December 2019 was after service of the three-day notice and, in 

any event, “habitability” is not a defense in commercial unlawful 

detainer actions. The trial court sustained the objection as to a 

defense for possession but allowed the testimony on the issue of 

daily rental damages after the event. 

Hawthorne established the elements of its claim at trial. 

The trial court awarded Hawthorne possession of the premises, 

past due rent, holdover damages, attorney fees, costs, and 

forfeiture of the lease. The court said Lam had the right to bring 

a separate property damage action. 

Regarding the holdover period, Hawthorne had requested 

$233.33 per day as the daily rental value, but the court awarded 
4

only $25 per day, which yielded a damages award of $1,725 for 

this period. 

The court also deducted $2,000 from the past due rent 

Hawthorne claimed, reducing the award from $25,625 to $23,625. 

The minute order for the January 2020 trial has a notation from 

March 2020 stating this reduction was “for reasonable value 

during flooding and leaking.” 

Only Lam appealed. 

II

Unlawful detainer proceedings are summary proceedings 

concerning the right to possession of real property and associated 

damages. (See § 1174, subds. (a) & (b); Underwood v. Corsino

(2005) 133 Cal.App.4th 132, 135 (Underwood).) Defendants 

generally may not raise claims and defenses unrelated to the 

narrow issue of possession. (Underwood, at p. 135.) 

The Supreme Court recognized one such defense in Green. 

In that 1974 case, the court first recognized a common law 

implied warranty of habitability in residential leases whereby 

residential landlords covenant they will maintain their leased 

premises in a habitable state for the duration of a lease. The 

court held breach of this warranty can be a valid defense in an 

unlawful detainer action. (Green, supra, 10 Cal.3d at pp. 619, 

620, 637.) Green thus provided residential tenants a means of 

defeating eviction and reducing the rent owed if they can 

establish breach by the landlord. (See id. at p. 635.) 

The Legislature codified Green’s holding in section 1174.2. 

(Underwood, supra, 133 Cal.App.4th at p. 136.) By its terms, this 

provision applies only to unlawful detainers involving “residential

premises.” (§ 1174.2, subd. (a), italics added.) There is no similar

statute for commercial tenancies. (See Underwood, at p. 136.)
5

Lam’s appeal does not dispute the facts. Rather he argues 

the trial court erred in preventing him from establishing 

habitability and contract defenses to maintain possession of the 

property and in cabining evidence of the leaky roof to the issue of 

damages. 

We review the court’s evidentiary ruling for an abuse of 

discretion. (See Austin B. v. Escondido Union School Dist. (2007) 

149 Cal.App.4th 860, 885.) Additionally, because Lam’s appeal 

raises issues of law and does not involve the resolution of 

disputed facts, we independently review the judgment. (See 

SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 

Cal.App.4th 452, 461; Boyd v. Carter (2014) 227 Cal.App.4th 

Supp. 1, 6.) 

Lam’s attacks fail. The evidence was a leak occurred 

sometime in December 2019. Hawthorne served its three-day 

notice in early November 2019 based on Lam’s failure to pay rent 

for July through October 2019. Any leak or uninhabitable 

conditions in December did not excuse Lam’s earlier failure to 

pay rent. The timing of the leak ends the matter. Limiting the 

evidence of the leak to the issue of damages was not an abuse of 

discretion.

Both the three-day notice and the leak also predated the 

current global pandemic, so Lam’s arguments on this score lack a 

basis. 

Even were we to ignore this timing, Lam failed to establish 

an affirmative defense of habitability was available or should be 

available to him. California appellate courts consistently have 

refused to recognize a habitability defense to commercial property 

unlawful detainers. (See, e.g., Muro v. Superior Court (1986) 184 

Cal.App.3d 1089, 1098 (Muro); Fish Construction Co. v. Moselle 
6

Coach Works, Inc. (1983) 148 Cal.App.3d 654, 658; Schulman v. 

Vera (1980) 108 Cal.App.3d 552, 560–561.)

Further, the slim record before us provides no basis for 

extending this defense to Lam. There is nothing showing Lam is 

a “financially strapped small business owner,” as he claims on 

appeal; nothing showing the lease was presented on a take-it-orleave-it basis, as he argues; and nothing showing any gap in 

bargaining power between the parties. (See Green, supra, 10 

Cal.3d at pp. 624–625) [citing the unequal bargaining power of 

landlord and tenant resulting from scarce housing in urban areas 

and tenants’ inability to get financing for major repairs in 

adopting the implied warranty of habitability for residential 

leases]; see also Muro, supra, 184 Cal.App.3d at p. 1096 [policy 

consideration underlying Green is the need to insure safe, 

adequate housing for modern, urban residential tenants who are 

powerless to protect themselves].) Lam made no showing that 

the rationale underlying the implied warranty of habitability fits 

the facts of his case.

Lam argues the trial court in fact found a breach of this 

warranty and “opened the door” for him to litigate this breach 

when the court reduced damages for the holdover period and 

reduced the past due rent by $2,000; however, he argues, the 

court did not go far enough in allowing this defense. 

As far as the record shows, the trial court said nothing 

about the implied warranty of habitability. The law authorized 

the court to determine the amount of rent due and actual 

damages and to depart from the amounts Hawthorne claimed. 

(See § 1174, subd. (b); see also § 1161.1, subd. (a) [concerning 

estimated demands for commercial real property]; Superior 

Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal.App.3d 
7

1032, 1069, 1071 [measure of damages for unlawful detainer is 

reasonable rental value of the property, which may be greater or 

less than the agreed rent].)

In deducting $2,000 from past due rent “for reasonable 

value during flooding and leaking”, the trial court was not 

recognizing a habitability defense. It was providing Lam an 

accommodation, perhaps a sort of rough and equitable justice, for

damage that occurred after Hawthorne sought to evict him. 

This deduction gave Lam a financial break. Landlord 

Hawthorne could have attacked it. But apparently thinking the 

game was not worth the candle, Hawthorne accepted the trial 

outcome and, according to the settled statement, “made no 

objection to the court’s order for judgment.” 

If Lam is asking us to infer there was damage to the 

property before December 2019, this request has no record basis. 

Lam neither hired a court reporter nor requested a statement of 

decision, so we are left with a settled statement and minute order 

that confine the damage to December 2019.

The $2,000 deduction from past due rent, whether right or 

wrong, did not open a door to Lam’s proposed habitability 

defense. The court did Lam a modest favor. Hawthorne acceded. 

None of this gives Lam a right to possess the property or to retry 

damages.

We need not and do not address the arguments about 

mootness.
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DISPOSITION

We affirm the judgment and award costs to Hawthorne 

Investment, LLC.

WILEY, J.

We concur: 

 BIGELOW, P. J. 

 STRATTON, J.