Court Opinion

ID: 2683541
Source: CourtListenerOpinion
Date Created: 2014-07-15 00:01:16.670088+00
Date Added: 2024-06-11T12:40:01.767596
License: Public Domain

Filed 7/14/14 530 Hewitt Subsidiary v. P.G.C.A. Holdings CA2/8
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 EIGHT

530 HEWITT SUBSIDIARY, LLC,                                          B249812

         Plaintiff and Respondent,                                   (Los Angeles County
                                                                     Super. Ct. No. BC432695)
         v.

P.G.C.A. HOLDINGS, INC. et al.,

         Defendants and Appellants.

         APPEAL from a judgment of the Superior Court of Los Angeles County.
Kevin C. Brazile, Judge. Affirmed.

         The Linde Law Firm, Douglas A. Linde, Erica A. Gonzales and Benjamin R.
Fliegel, for Defendants and Appellants.

         Greenberg Glusker Fields Claman & Machtinger, Matthew N. Falley and Caroline
S. Heindel, for Plaintiff and Respondent.

                                        _________________________
       Defendants and appellants Primo Hospitality Group, Inc., Anthony Riviera, and
Charlton Lui (collectively “Primo”) challenge a trial court judgment issued against them
in a commercial lease dispute. Primo, as tenant, entered into a commercial lease with
plaintiff and respondent 530 Hewitt Subsidiary, LLC (530 Hewitt), for a space intended
to be used as a restaurant. Primo contends the trial court erred in concluding it materially
breached the lease, since 530 Hewitt did not provide it with a notice of default or
opportunity to cure the particular breaches the court found material. Primo also asserts
the court erred in finding any of the alleged breaches material, in calculating the award of
damages, and in awarding attorney fees to 530 Hewitt as the prevailing party. We affirm
the judgment.
                 FACTUAL AND PROCEDURAL BACKGROUND
       We summarize the facts in accordance with the usual rules on appeal.
Specifically, we review the record in the light most favorable to the judgment and resolve
all evidentiary conflicts in favor of the prevailing party. (Burch v. Premier Homes, LLC
(2011) 199 Cal.App.4th 730, 744.)
       In December 2007, 530 Hewitt and Primo entered into a commercial retail lease
for a property near downtown Los Angeles. Primo agreed to use the property to operate a
full-service restaurant and gourmet market (“Primo Cucina” or “the project”) within a
larger commercial and residential development, for a 10-year term. The parties agreed
there would be a one-year period of construction, or “build out”, of the leased property.
530 Hewitt anticipated the restaurant would open in January 2009.
       Under the lease, Primo and 530 Hewitt were to share the costs of “tenant
improvements” required to build out the space. Primo was to deposit $250,000 in a joint
bank account with 530 Hewitt. Primo was to use the $250,000 solely to pay for the costs
of “designing and constructing the Tenant Improvement Work.” After exhausting these
funds, Primo was entitled to receive a $406,800 construction allowance from 530 Hewitt,
in two disbursements. 530 Hewitt had “no obligation to disperse any portion of the
Construction Allowance until all of the funds in the account have been expended by
Tenant for the design and construction of the Tenant Improvement Work and Tenant has

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provided Landlord with reasonable evidence of the application of all those funds for that
purpose.” A “base rent” of $13,560 per month was abated for the first 24 months of the
lease term following the “rent commencement date.”1 For months 25 to 60, Primo agreed
to pay a monthly base rent of $13,560, to increase to $16,950 from month 61 to the end
of the initial lease term.
       To begin construction, the project required a conditional use permit, and a permit
from the city’s building and safety department. The city issued an amended conditional
use permit in January 2009. The building and safety permit was issued in March 2009.
At the end of January 2009, Primo informed 530 Hewitt it had spent the $250,000
deposited in the joint account, and it requested the first portion of the construction
allowance. 530 Hewitt asked Primo to provide documentation reflecting its expenditures.
After Primo forwarded various invoices and copies of checks, 530 Hewitt released the
first $203,000 of the construction allowance.
       In April 2009, soon after 530 Hewitt disbursed the construction allowance, Primo
sent 530 Hewitt a letter demanding it comply with the terms of the lease. Primo asserted
530 Hewitt was required to construct all walls within the property, while 530 Hewitt had
taken the position that it was only required to build certain perimeter walls, not interior
walls. As a result of this dispute, the parties began discussing an amendment to the lease.
       In August 2009, 530 Hewitt installed a required grease trap.2 Around that time,
530 Hewitt’s project manager began asking Primo for “milestone dates” that could be

1      The lease defines “commencement date” as “the date that is the later of a) January
15, 2008, or b) the date upon which Landlord delivers the Premises to Tenant in its ‘AS
IS’ condition after the full execution and delivery of this Lease.” The “rent
commencement date” is defined as “the date that is one (1) year (the ‘Construction
Period’) after of [sic] the Commencement Date. The Construction Period shall be
extended by one (1) day for each day that substantial completion of Tenant’s Work is
actually delayed by Landlord Delays.”

2       At trial, 530 Hewitt’s project manager explained a grease trap as follows: “[I]n the
city of L.A., you’re not allowed to put grease down into the main sewer line. . . . So when
you build out a restaurant, all of the sewer lines that come from the kitchen, they have to

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inserted into an amendment to the lease. By mid-September 2009, Primo had completed
only a portion of the necessary underground plumbing work on the premises, it had not
provided the requested milestone dates or a construction schedule, and the parties had not
signed a lease amendment. Primo had told its plumber to stop work. 530 Hewitt wanted
Primo to complete the underground plumbing work before it connected the grease trap to
the sewer line, installed a methane barrier, and put in the “slab on grade.”3 Although
some portions of required work were independent of each other, 530 Hewitt could not put
in the slab on grade until the underground plumbing was finished. The underground
plumbing work could be completed before the grease trap was connected to the sewer
line.
        In October 2009, 530 Hewitt sent Primo a letter asserting Primo was in breach of
its obligations under the lease, including by its failure to continuously use the property as
a café during the first full year after the rent commencement date, and by its
abandonment of the premises. The letter explained: “In an attempt to accommodate
Tenant, on July 27, Landlord’s representative emailed Mr. Rivera with an outline of a
proposed amendment to the Lease that would have, among other things, extended the
Rent Commencement Date until January 15, 2010. In this correspondence . . . Landlord
requested the schedule of construction of the Tenant Improvements, including certain
milestone dates, but Tenant has failed to respond to all such communication from
landlord. As a result, the Rent Commencement Date occurred on January 15, 2009.
Despite the minimal underground plumbing work performed by Tenant on the Premises
on or around August 2009, as of today, no work is being performed by Tenant at the
Premises and Tenant continues to be in default under the Lease for failure to timely open
and operate its business in the Premises.” The letter indicated that if Primo did not

go to this – basically it’s a large box that goes underground, and that box essentially
filters the grease out and then sends clean sewer into the sewer line.”

3      530 Hewitt eventually connected the grease trap to the sewer line in 2011. The
project manager described “slab on grade” as “actually the concrete slab that you step on.
That’s the floor basically.”

                                              4
provide a tenant improvement work schedule with milestone dates within 30 days, 530
Hewitt would pursue its remedies under the lease.
       In November 2009, Primo denied it was in default under the lease. In
correspondence with 530 Hewitt, Primo asserted it had completed its underground
plumbing work and could not move forward with construction because 530 Hewitt had
not paid the plumber to perform the sewer connection. Primo further contended the
sewer work had to be completed before it could proceed.
       In February 2010, 530 Hewitt filed suit against Primo, asserting claims for breach
of contract and breach of written guaranty. 530 Hewitt alleged Primo had breached the
lease by failing to complete construction on the property, or to return the construction
allowance; by failing to open or operate a restaurant on the premises; by abandoning the
premises; by failing to make any rent payments; and by “repudiating its obligation to
comply with these and other provisions of the lease.” 530 Hewitt sought over $3 million
in damages. Primo cross-complained against 530 Hewitt and related entities.
       Through pre-trial discovery 530 Hewitt uncovered discrepancies between the
supporting documentation Primo submitted to it in February 2009 to support the request
for the construction allowance and copies of the same documentation from other sources.
For example, Primo had submitted copies of checks to 530 Hewitt with no information
written on the memo line. However, when 530 Hewitt secured copies of the same checks
from the bank through third-party discovery, some had notations on the memo lines
suggesting the expenditures were for Primo’s other projects, not Primo Cucina.
       530 Hewitt amended its complaint to allege fraud. It also included the failure to
use the $250,000 in “tenant funds” solely for the design and construction of Primo
Cucina as an additional basis for the breach of contract claim. Primo eventually admitted
some of the documentation it gave 530 Hewitt in February 2009 was for expenditures on
other projects, or was otherwise inaccurate or misleading. However, Primo maintained it
spent well over $250,000 on Primo Cucina, even though some of the funds may have
come from different bank accounts. Primo claimed it submitted erroneous documentation
to 530 Hewitt due to careless accounting and recordkeeping.

                                             5
       At a bench trial in November 2012, 530 Hewitt’s project manager testified that it
had been unable to find a new tenant for the property. Although one group was interested
in the property in the spring of 2011, the group did not lease the space because of
concerns about the litigation with Primo, including Primo’s demand for specific
performance of the lease.
       Following the trial, the court issued a written tentative.4 In the tentative, the trial
court concluded Primo materially breached the lease when it failed to spend the allotted
$250,000 on tenant improvements, as required in the lease, before the disbursement of the
first portion of 530 Hewitt’s construction allowance. The court found Primo’s failure to
deliver a construction schedule was not a material breach of the lease because it did not
significantly excuse or affect 530 Hewitt’s performance. The court also concluded Primo
neither abandoned the design and construction of the restaurant, nor breached the lease by
failing to open the restaurant because it was prevented from doing so by 530 Hewitt’s
delay in connecting the sewer line and in constructing the interior walls. The court
concluded 530 Hewitt did not materially breach the lease, and was thus entitled to
damages. It deemed the lease terminated effective November 6, 2009, 30 days after 530
Hewitt’s default letter to Primo. The court awarded 530 Hewitt $691,560 in damages;
this number reflected monthly base rent from November 6, 2009 to the date the court
took the case under submission (February 8, 2013), plus one year of additional rent
“in order to mitigate damages.” The court rejected all other damage claims and Primo’s
cross-claims. It found Primo had not engaged in fraud.

4       Before the trial began, the court informed the parties: “[I]f you want a statement of
decision, the way I generally do it is this. Once I issue a decision, I issue a tentative. I’ll
give you a written tentative. And then if somebody wants a statement of decision, I’ll
designate the prevailing party to prepare it. Usually my tentative will give you pretty
much everything you need to put in the statement of decision, but I’ll designate one of
you to –whoever wins is going to be designated to do it on the rules of court.” No party
in this case requested a statement of decision.

                                               6
       Primo filed objections to the tentative. Primo asserted its failure to spend the
$250,000 on tenant improvements to Primo Cucina could not be a breach because 530
Hewitt had never provided a notice of such default or opportunity to cure, as required
under the lease. Primo also challenged the trial court’s calculation of damages.
In response, 530 Hewitt argued Primo’s objections were untimely and procedurally
improper; 530 Hewitt could not have provided Primo with notice of the breach and
opportunity to cure because it did not discover the $250,000-related breach until litigation
and discovery were underway; notice was unnecessary in any event because Primo could
not cure the breach; and substantial evidence supported the award of damages. The trial
court overruled Primo’s objections and issued a final judgment. Primo timely appealed.
                                       DISCUSSION
I.     The Trial Court Did Not Err in Finding a Material Breach with Respect to
       the $250,000 in Tenant Improvement Funds
       Primo contends the trial court erred in finding it materially breached the lease in
connection with the $250,000 in tenant improvement funds. Primo asserts that under the
terms of the lease, there could be no tenant default unless 530 Hewitt gave notice of the
breach and 30 days to cure. Primo contends there was no evidence 530 Hewitt provided
such notice with respect to Primo’s failure to spend $250,000 from the joint account on
tenant improvements for the property. We find no error.
       A. The Trial Court Did Not Issue a Statement of Decision
       Initially, we note there was no statement of decision issued in this case. The
parties have essentially treated the written tentative as if it were a statement of decision,
but the court did not indicate the tentative was a proposed statement of decision, or that it
would become the statement of decision in the absence of a request for a statement of
decision.5 In general, a tentative order is not a substitute for a statement of decision.

5       Under California Rules of Court, rule 3.1590, subdivision (c)(1), the court in a
tentative decision may state that the tentative is the court’s proposed statement of
decision, subject to a party’s objection under subdivision (g). Under subdivision (c)(4),
the court may “[d]irect that the tentative decision will become the statement of decision

                                               7
(Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 268 (Shaw).) Further, in the
absence of a statement of decision, “an appellate court will presume that the trial court
made all factual findings necessary to support the judgment for which substantial
evidence exists in the record. In other words, the necessary findings of ultimate facts will
be implied and the only issue on appeal is whether the implied findings are supported by
substantial evidence.” (Id. at p. 267.)
       Accordingly, while a tentative “may be valuable in illustrating the trial judge’s
theory,” it will not “be used to impeach the order or judgment on appeal. [Citation.]
This is because a trial court retains inherent authority to change its decision, its findings
of fact, or its conclusions of law at any time before entry of judgment and then the
judgment supersedes any memorandum or tentative decision or any oral comments from
the bench. [Citations.] . . . . In the absence of a statement of decision, a reviewing court
looks only to the judgment to determine error. [Citation.] Absent contrary indication in
the final judgment or statement of decision, the appellate court will assume that, during
the period before rendition of judgment, the trial court realized any error and corrected
it.” (Shaw, supra, at p. 268.)
       Here, there was no statement of decision, but the trial court signed a judgment that
attached the tentative and incorporated it by reference, without expressly adopting the
tentative or its reasoning as a final order or statement of decision. Although we will use
the court’s tentative factual findings and conclusions of law as a guide in our review of
the judgment, we will not construe the tentative so as to impeach the judgment.
“A failure to request a statement of decision results in a waiver of findings and
conclusions necessary to support the judgment and we will accordingly infer such
conclusions. [¶] Moreover, we will affirm a judgment correct on any legal basis, even if
that basis was not invoked by the trial court. [Citation.] There can be no prejudicial error

unless, within 10 days after announcement or service of the tentative decision, a party
specifies those principal controverted issues as to which the party is requesting a
statement of decision or makes proposals not included in the tentative decision.”

                                               8
from erroneous logic or reasoning if the decision itself is correct.” (Shaw, supra, 170
Cal.App.4th at p. 269.)
       B. Substantial Evidence Supported a Finding that 530 Hewitt Provided
Notice as Required By the Lease
       Primo asserts the trial court erred in identifying the following as breaches: “All of
the $250,000 deposited in the Joint Bank Account was not used for the [Primo Cucina]
restaurant” and “All tenant improvements made to the [Primo Cucina] restaurant were not
paid from Joint Bank Account.”6 Primo contends this was error because the lease
required 530 Hewitt to provide notice of any alleged breach and an opportunity to cure,
and there was no evidence that it provided such notice with respect to the $250,000-
related breaches. We disagree. First, we reject Primo’s characterization of the breaches
relating to the $250,000 as nothing more than accounting failures that merely caused it to
spend money out of the wrong bank account. Substantial evidence supported a far more
broad interpretation of the breach regarding the tenant improvement expenditures.
Second, we conclude substantial evidence supported the trial court’s implied finding that
the October 2009 letter provided sufficient notice of this breach.
       Defaults Under the Lease and Notice
       Section 21.1 of the lease defines tenant defaults, in relevant part, as follows:
“The occurrence of any of the following shall constitute a ‘Tenant Default’
hereunder . . . Tenant fails to perform any other obligation or observe any other
provision hereunder within thirty (30) days following written notice, or any material
breach of a representation or warranty of Tenant herein remains uncured on the thirtieth
(30th) day following written notice; provided that, if such default is curable but cure
cannot reasonably be effected within such thirty (30) day period, such default shall not be

6       Primo also contends the trial court erred in concluding Primo’s failure to deliver a
construction schedule was a breach, albeit an immaterial one. We need not consider this
issue in light of our conclusion that substantial evidence supported a trial court finding
that Primo’s failure with respect to the $250,000 in tenant improvements was a material
breach, of which 530 Hewitt provided sufficient notice under the lease.

                                              9
a Tenant Default so long as Tenant promptly commences cure (in any event, within such
thirty (30) day period) and thereafter diligently prosecutes such cure to completion[.]”
Section 21.2 of the lease provides that upon the occurrence of a tenant default, the
landlord has the right to pursue one or more identified remedies, including, but not
limited to, terminating the lease by written notice, taking possession of the premises,
removing the tenant, and recovering damages from the tenant; or continuing the lease and
pursing other rights and remedies permitted by law.
       We thus agree that, in general, the lease required notice and a period to cure before
the tenant could be deemed to have defaulted under the terms of the lease. (See Silverado
Modjeska Recreation & Park Dist. v. County of Orange (2011) 197 Cal.App.4th 282,
312-313 [where agreement indicated a party would be in breach only upon failure to
perform obligation after receipt of notice, there could be no breach if notice was not
provided].) The court concluded Primo’s failure to comply with the parties’ agreement
with respect to tenant improvements and the use of the “tenant funds,” was a material
breach of the lease. We imply that the trial court also found there was sufficient notice of
this breach under the lease. This conclusion was supported by substantial evidence.
       The Breach in this Case and Notice of Defaults
       Although at trial much of the parties’ evidence of the dispute regarding the tenant
funds related to the documentation of expenditures, the trial court could properly
understand the $250,000 breach as first, Primo’s failure to make an agreed-upon
investment in the project, and second, Primo’s failure to make agreed-upon progress in
the project, as measured by $250,000 worth of work on the property. The breach
involving the $250,000 was multi-faceted. The failure to spend $250,000 out of the joint
account on tenant improvements for the Primo Cucina project was a problem because it
was an indication that Primo was not, in fact, pursuing the project as the parties had
agreed. As the court concluded, Primo may have spent the money, but it was not all
spent on designing or constructing Primo Cucina.

                                             10
       The evidence supported a conclusion that this aspect of the breach was
encompassed in the October 2009 letter alleging Primo had defaulted under the lease.
The letter specifically noted Primo’s failure to open and operate a restaurant, and it
alleged Primo had abandoned the property. But the letter also asserted Primo failed to
provide requested milestone dates for construction, and complained of Primo’s failure to
perform any work at the premises since August 2009. Although the letter did not
explicitly reference the $250,000, it provided notice that 530 Hewitt was claiming Primo
was in breach of the lease by not making significant progress on the project, progress the
$250,000 and construction allowance were intended to fund and facilitate.
       Thus, we understand the trial court’s analysis that Primo “breached the lease
agreement because all of the tenant improvements were not paid from the East West bank
account,” “Primo admitted some of the $250,000 in the East West bank account was not
spent on the Tenant Improvements,” “Primo used the East West bank account to fund
expenditures on other Primo restaurants,” and “Primo further breached the lease
agreement because all of the $250,000 deposited into the East West Bank account by
Primo was not expended on Tenant Improvements prior to the release of 50% of the
Construction Allowance by Hewitt to Primo,” as findings regarding Primo’s failure to
make agreed-upon improvements to the property within the time frames contemplated by
the lease. As such, the court could also conclude this breach was adequately raised in the
October 2009 notice of default.
       The cases Primo relies upon to support its argument do not mandate a different
result because they concern the three-day statutory notice to quit required before a
landlord may proceed with an unlawful detainer action and recover possession of a
property. (See e.g., Julien v. Gossner (1951) 103 Cal.App.2d 338, 344 [default had to be
specifically identified for it to form basis of notice to quit under Code Civ. Proc. § 1161
(2); “The evident purpose of that section is to specifically point out breaches complained
of in order that they may be remedied within the time allowed by the statute.”]; Horton-
Howard v. Payton (1919) 44 Cal.App.108.) The summary remedy of unlawful detainer
requires strict compliance with Code of Civil Procedure section 1161, which sets forth

                                             11
specific requirements for a notice to quit. (Culver Center Partners East #1, L.P. v. Baja
Fresh Westlake Village, Inc. (2010) 185 Cal.App.4th 744, 749-750.) However, “[i]n
commercial leases the landlord and commercial tenant may lawfully agree to notice
procedures that differ from those provided in the statutory provisions governing unlawful
detainer.” (Id. at p. 750.)
       This was not an unlawful detainer case. 530 Hewitt did not pursue a summary
remedy to recover possession of the property. Code of Civil Procedure section 1161, the
legal basis for the analysis in the cases Primo relies upon, did not govern whether 530
Hewitt’s notice of default was sufficient to meet the requirements of the parties’ lease.
Although the lease contemplates the tenant may be in default after receiving “written
notice” from the landlord, it does not set forth any specific requirements for that notice.
In any event, 530 Hewitt’s October 2009 letter to Primo clearly and unambiguously
asserted Primo had breached its obligations under the lease by failing to perform work on
the project.
       Materiality
       Substantial evidence also supported a trial court finding that this breach was
material. “Normally the question of whether a breach of an obligation is a material
breach, so as to excuse performance by the other party, is a question of fact. . . . Whether
a partial breach of a contract is material depends on ‘the importance or seriousness
thereof and the probability of the injured party getting substantial performance.’
[Citations.] ‘A material breach of one aspect of a contract generally constitutes a
material breach of the whole contract.’ [Citation.]” (Brown v. Grimes (2011) 192
Cal.App.4th 265, 277-278.) In this case there was evidence that Primo had not used the
$250,000 to make contemplated tenant improvements on the property, and instead had
diverted some of the funds to other uses unrelated to Primo Cucina. In fact, there was
substantial evidence that aside from incomplete underground plumbing, Primo engaged
in no other construction work on the premises, nearly two years after it took possession of
the property, and at least six months after a building and safety permit was issued.
The court could reasonably construe the lack of spending on building out the property as

                                             12
evidence of a material breach of the contract, because it was merely a proxy for the lack
of actual work or progress on the project as a whole.
       Primo asserts a breach of the lease provision regarding the $250,000 was not a
material breach because that lease term has no bearing on “what or how improvements
will be made and does not affect [Primo’s] obligation to pay rent.” While the term
regarding the tenant improvement funds did not explicitly concern how tenant
improvements would be made, it was integrally related to Primo’s obligation to actually
build out the premises. Further, contrary to Primo’s argument on appeal, the benefit 530
Hewitt sought to receive from the lease was not limited to rent payments. 530 Hewitt
also wanted an operational restaurant and gourmet market to fit into its larger
development, and to service residents and other customers at neighboring or adjacent
properties. Accordingly, in addition to obligating Primo to pay rent, the lease required
that Primo use the leased premises “in a manner consistent with a first-class street level
retail area in a project that contains residential uses . . . .” The lease required Primo to be
open during certain hours, and allowed for penalties should it fail to do so for specified
minimum periods. Similarly, the lease required Primo to “at all times employ its best
skills, efforts and abilities to operate the Permitted Use in the Premises in order to
produce the highest possible Gross Sales, and to enhance the customer traffic in, and
reputation and attractiveness of, the Project.”7 The failure to spend the $250,000 on
tenant improvements frustrated that purpose, and justified 530 Hewitt’s belief that
Primo’s performance was unlikely. (Asso. Lathing Etc. Co. v. Louis C. Dunn, Inc. (1955)
135 Cal.App.2d 40, 49-51 [partial breach prior to or at outset of performance may be a
material breach; injured party not required to speculate about breaching party’s future
performance where breaching party has already indicated it intends to delay, hedge, and
refuse to cooperate, even absent repudiation].)

7     The project was defined in the lease as the entire development, of which Primo
Cucina was to be only one part.

                                              13
       Substantial evidence also supported a trial court finding that 530 Hewitt did not
materially breach the lease. There was evidence that Primo had not completed the
underground plumbing which was necessary for other work to proceed, including work
530 Hewitt was obligated to perform. Further, there was evidence that although 530
Hewitt had not connected the grease trap to the sewer line, the connection was not
necessary for Primo to finish the underground plumbing. Similarly, there was evidence
that even if 530 Hewitt was responsible under the lease for building interior walls, the
time for its performance never came because of Primo’s failure to move forward with
other aspects of the construction. There was evidence that interior walls could not be
constructed until the slab on grade was completed, and the slab could not be put in until
all of the underground plumbing was finished. Substantial evidence supported the trial
court’s finding that 530 Hewitt did not materially breach the lease.
II.    The Trial Court Did Not Err in Calculating Damages
       Primo contends the trial court’s award of damages was improper because there
was insufficient evidence of mitigation. Primo further asserts the trial court incorrectly
assessed damages as if Primo abandoned the property, and the damages were excessive
and unreasonable. We find no error.
       A. Sufficient Evidence of Mitigation
       “It is settled that a lessor, injured by breach of a contract must mitigate his
damages. [Citation.] However, the burden is on the lessee to prove that the lessor failed
to mitigate. [Citations.]” (Polster, Inc. v. Swing (1985) 164 Cal.App.3d 427, 433.)
Here there was evidence that 530 Hewitt attempted to re-lease the property. It retained a
large real estate brokerage firm, came close to securing a deal with a new tenant, and
even offered to indemnify a new potential tenant to overcome its hesitation due to the
ongoing litigation with Primo. Primo did not offer any contrary evidence showing 530
Hewitt failed to mitigate. The evidence was sufficient to show 530 Hewitt engaged in
reasonable efforts to mitigate its damages. (Millikan v. American Spectrum Real Estate
Services Cal., Inc. (2004) 117 Cal.App.4th 1094, 1101-1102.)

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       B. No Error in Calculation of the Award
       We likewise find no error in the trial court’s calculation of the award.
The purpose of a damage award in a contract case is to put the prevailing party “ ‘in as
good a position as [it] would have been had performance been rendered as promised.’
[Citation.] Because this goal can never be exactly attained, the rules governing recovery
of contract damages are flexible and ‘ “leav[e] much to the individual feeling of the court
created by the special circumstances of the particular case.” [Citation.]’ [Citation.]
Damages cannot be calculated with absolute certainty, and California law ‘requires only
that some reasonable basis of computation . . . be used, and the damages may be
computed even if the result reached is an approximation.’ [Citation.]” (SCI California
Funeral Services, Inc. v. Five Bridges Foundation (2012) 203 Cal.App.4th 549, 570.)
“The selection of which measure of damages to apply is within the sound discretion of
the trier of fact.” (GHK Associates v. Mayer Group, Inc. (1990) 224 Cal.App.3d 856,
874.) The trial court’s measure of damages in this case was reasonable.
       The court deemed the lease terminated as of November 2009, 30 days after 530
Hewitt notified Primo of the alleged breaches of the lease. The court awarded 530 Hewitt
lost rent from that “termination” date until the date the case was submitted. This was
consistent with the parties’ lease, which allowed that in the event of a tenant default, the
landlord would have the right to terminate the lease and recover “[t]he worth at the time
of the award of the amount by which the unpaid rent which would have been earned
following termination and until the time of the award exceeds the amount of such rental
loss that Tenant proves could reasonably have been avoided.”8 In addition, the trial court
allowed for one year of future rent, which was consistent with a lease provision allowing
the landlord “the worth at the time of the award of the amount by which the unpaid rent

8      Although the parties agreed rent would be abated for the first 24 months after the
“rent commencement date,” section 27.23 of the lease also provides that in the event the
tenant’s right of possession is terminated due to a default, certain amounts would
immediately be payable to the landlord, including the value of any abated rent.

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for the balance of the term after the time of the award exceeds the amount of such rental
loss that Tenant proves could reasonably have been avoided.”
         These measures of damages were also consistent with general contract principles,
which indicate contract damages should seek to restore the prevailing party to the
position it would have been in had the breach not occurred. (See Civ. Code, § 3300;
Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515.) Due to
Primo’s breach of the lease in its failure to make at least $250,000 worth of tenant
improvements, the project had not moved forward, there was no operational restaurant,
530 Hewitt had not received rent, and it had been unable to lease the property to another
tenant. Using the monthly base rent as a guide, awarding damages from the
“termination” date to the case submission date, and allowing one year of additional rent,
was reasonable under the circumstances. Primo has failed to establish any reversible
error in the trial court’s award of damages.
         In light of our decision affirming the trial court judgment, we reject Primo’s
contention that the court erred in awarding attorney fees to 530 Hewitt as the prevailing
party.
                                       DISPOSITION
         The trial court judgment is affirmed. Respondent shall recover its costs on appeal.

                                                          BIGELOW, P.J.

We concur:

                       RUBIN, J.

                       GRIMES, J.

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