Court Opinion

ID: 4677459
Source: CourtListenerOpinion
Date Created: 2021-04-14 23:02:36.045494+00
Date Added: 2024-06-11T08:03:38.419537
License: Public Domain

Filed 4/14/21 Hawthorne Investment, LLC v. Lam 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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

 HAWTHORNE INVESTMENT,                                            B303786
 LLC,
                                                                 (Los Angeles County
           Plaintiff and Respondent,                             Super. Ct. No. 19TRCV00994)

           v.

 QUAN THIET LAM,

           Defendant and Appellant.

     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.
                     ____________________
       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.

                                 2
       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

                                3
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.)

                                 4
       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

                                5
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-or-
leave-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

                                6
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.

                                7
                        DISPOSITION
      We affirm the judgment and award costs to Hawthorne
Investment, LLC.

                                       WILEY, J.

     We concur:

                  BIGELOW, P. J.

                  STRATTON, J.

                              8