Jacob Zalusky, et al. v. Donald Messer, et al.

Such failure impairs the Court’s review of proffered evidence. Tenant filed its opposition, four declarations, and its exhibits as a single 302-page document with no bookmarks or hyperlinks, making review of the documents challenging.

I. LEGAL STANDARD

Summary judgment is proper when there are no triable issues of material fact and the moving party is entitled to a judgment as a matter of law. (§ 437c(c).) Landlord has the initial burden to show Tenant’s causes of action have no merit by either showing that one or more elements of a cause of action cannot be established or there is a complete defense to the cause of action. (Code Civ. Proc. § 437c(p)(2); see also Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849-850.) If that burden is met, the burden shifts to Tenant to show that a triable issue of material fact exists as to the element or defense at issue. (Ibid.)

The party opposing summary judgment need only raise a triable issue of material fact to defeat the motion. Further, the Court must consider all inferences reasonably drawn from all evidence and must view the evidence in the light most favorable to the opposing party. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at 843.) However, “those inferences must be reasonably deducible from the evidence, and not such as are derived from speculation, conjecture, imagination, or guesswork. [Citation.]” (Joshi v. Fitness International, LLC (2022) 80 Cal.App.5th 814, 823 [citation omitted].)

II. DISCUSSION

Landlord relies on the following two provisions of the Lease as precluding Tenant’s claims:

15. LIABILITY INSURANCE. Lessee shall, at Lessee’s expense, obtain and keep in force during the term of this Lease a policy of full and unlimited Worker’s Compensation and General Liability Aggregate of $500,000, motor Vehicle Liability, Personal and Advertising Injury-each occurrence of $500,000, liability and Medical Payments of $5,000 and Fire Legal Liability per Fire/Explosion of $100,000, insuring Lessor and Lessee against any liability arising out of the ownership, use, occupancy or maintenance of the premises and all areas appurtenant thereto including but not limited to damage or injury to property or persons (including death) arising directly or indirectly from any act or omission of Lessee, its employees, agents, representatives, assigns or licensees.

Lessee shall deliver to Lessor the certificate of each insurance carrier as to each such insurance policy prior to commencement of the term hereof and thereafter at least thirty (30) days prior to the expiration of any such policy. The limits of all such insurance carried by Lessee hereunder may be increased, at Lessor’s option, if in Lessor’s sole discretion, Lessee’s potential liability has increased in dimension or scope. In the event that Lessee fails at any time during the term of this Lease to obtain insurance required to be carried by Lessee hereunder or to provide to Lessor evidence thereof, Lessor may, but shall not be required, in addition to all other rights and remedies of Lessor hereunder, procure such insurance, in which event Lessee shall pay to Lessor, upon demand, the cost and expense thereof, together with interest thereon at the maximum rate permitted by law.

All insurance carried by Lessee shall be issued as a primary policy by an insurance company authorized

to do business in the State of California, with a financial rating of at least an A+ AAA status as rated in the most recent edition of Best’s Insurance Reports or as otherwise approved by Lessor.

17. INDEMNITY. Lessee shall indemnify and hold harmless Lessor from and against any and all claims arising from Lessee’s use of the premises or from the conduct of Lessee’s business or any activity, work or things done, permitted or suffered by Lessee in or about the premises or elsewhere and shall further indemnify and hold harmless Lessor from and against any and all claims arising from any breach or default in the performance of any obligation on lessee’s part to be performed under the terms of this Lease, or arising from any negligence of the Lessee, or any of the Lessee’s agents, contractors, or employees, and from and against all costs, attorneys fees, expenses and liabilities incurred in the defense of any such claims or action or proceeding brought therefor; and in any case any action or proceeding be brought against Lessor, by reason of such claims, Lessee upon notice from Lessor shall defend the same at Lessee’s expense by counsel satisfactory to Lessor.

Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property or injuries to person in or upon the premises arising from any cause and Lessee hereby waives all claims in respect thereof against Lessor.

(Motion for Summary Judgment (MSJ), p. 10, ln. 6-p. 12, ln. 2 [emphasis added].)

A. Indemnity Clause

Landlord cites Frittelli, Inc. v. 350 North Canon Drive, LP (2011) 202 Cal.App.4th 35 (Frittelli) in support of its motion. The court in Frittelli held that parties to a commercial lease may exempt the lessor from liability for breach of lease and ordinary negligence but not gross negligence or negligence in violation of public policy. (Id. at 45.) Whether an exculpatory clause is enforceable relies on contract interpretation based on the intent of the parties and depends on the circumstances of the damage and the language of the contract. (Id. at 44.)

“‘[T]he law does not look with favor upon attempts to avoid liability or secure exemption for one’s own negligence, and such provisions are strictly construed against the person relying upon them. [Citations.]’ (Basin Oil Co. of Cal. v. Baash–Ross Tool Co. (1954) 125 Cal.App.2d 578, 594, 271 P.2d 122.) The general rule is as follows: ‘For an agreement to be construed as precluding liability for ‘active’ or ‘affirmative’ negligence, there must be express and unequivocal language in the agreement which precludes such liability.’” (Burnett v. Chimney Sweep (2004) 123 Cal. App. 4th 1057, 1066.)

In Frittelli the lease included an “Exemption of Lessor and its Agents from Liability” that expressly stated “Notwithstanding the negligence or breach of this lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee ..., whether such

damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, ... or (iii) injury to Lessee’s business or for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.” (Id. at 45 [emphasis added].)

Here, the exculpatory clause in the indemnity provision is much less clear. The clause states that Tenant assumes the risk of damage arising from “any cause” but does not state that Landlord is not liable for its own negligence or breach of lease. Indeed, the focus of Indemnity section of the Lease, in which the clause “any cause” appears, is not on the Landlord’s obligations but on the possible consequences flowing from the Lessee’s use of the building to operate its business. That there is a separate provision (¶ 16) relating to the Landlord’s obligations to maintain insurance on the building underscores that the language in ¶ 17 is not a clear expression of an intent to exculpate the Landlord from the consequences of its own negligence.

The clause specifies that Tenant is liable for “claims arising from any breach or default in the performance of any obligation on Lessee’s part to be performed under the terms of this Lease, or arising from any negligence of the Lessee, or any of Lessee’s agents, ...” but does not provide such specificity as to claims arising from Landlord’s misconduct. The Lease was signed in 2006 and by Tenant’s signatory, Kathleen E. Zalusky, who is deceased and Landlords’ signatory, Donald Messer, who suffered a stroke in 2023 and has dementia. (FAC, ¶ 22; Williams Dec., Exh. 7, p. 16, lns. 20-25; p. 18, lns. 9-11.)

The Court finds that the language of the indemnity clause does not clearly show that the parties intended to absolve Landlord of liability for its own negligence and breaches of the Lease. Even if that was not the case, the indemnity clause is not a basis for barring the intentional misconduct and constructive eviction. (Stoiber v. Honeychuck (1980) 101 Cal. App. 3d 903, 920 [nuisance may be either a negligent or an intentional tort]; Pierce v. Nash (1954) 126 Cal.App.2d 606, 613 [“where the acts of the landlord effectively deprive the tenant of the use and enjoyment of the premises, the intent to evict is implied from the character of the acts done”].)

B. Insurance Clause

The insurance clause of the Lease is broad enough to require Tenant to maintain insurance covering damage arising from Landlord’s misconduct, but Landlord cites no authority nor does the Court find authority that a tenant’s failure to provide such insurance bars a tenant’s claims. Landlord points to no language in the Lease that maintaining insurance was a condition precedent to Landlord’s maintenance obligations. (See, Fireman's Fund Ins. Co. v. Sizzler USA Real Property, Inc. (2008) 169 Cal.App.4th 415, 421; Barroso v. Ocwen Loan Servicing, LLC (2012) 208 Cal.App.4th 1001, 1010.) Further, there is evidence Landlord had not required Tenant to provide insurance for several years. (Williams Dec., Exh. 9, pp. 34-36.)

The Lease provides that Landlord is “responsible for the air conditioning and heating equipment and the maintenance thereof and that of the exterior landscaping and the maintenance thereof, the parking lot, including resealing when necessary and striping, and all other repairs, alterations and maintenance to the exterior of the property including the roof and external painting of the building, excepting any damage to the roof or exterior of building caused by alterations or operations of Lessee’s business, ...” ((Williams Dec., Exh. 1, § 8.)

There is evidence that the metal roof of the building was prone to water leaks and evidence the building experienced flooding from heavy rain from January through July of 2023. (Williams Dec., Exh. 7, pp. 80-82, pp. 90-91.) There is also evidence that for four months water continued to pool on the floor of the building from an unknown source which caused damage and mold to the floors and walls. (Williams Dec., Exh. 7, pp. 105-108; Exh. 9, pp. 42-48.) This evidence is sufficient to raise triable issues of material fact as to Landlord’s failure to comply with its maintenance obligations. Landlord’s submission of invoices for remediation work merely raises a triable issue of material fact as to whether Landlord complied with its maintenance duties. It does not prove the flooding, water damage, and mold was sufficiently eradicated as a matter of law.

C. Tort Claim

Landlord argues that Tenant’s intentional nuisance claim arises from the breach of lease claim and is therefore barred. “[T]ort recovery for breach of a contract duty is generally barred ... unless two conditions are satisfied. A plaintiff must first demonstrate the defendant’s injury-causing conduct violated a duty that is independent of the duties and rights assumed by the parties when they entered the contract. Second, the defendant’s conduct must have caused injury to persons or property that was not reasonably contemplated by the parties when the contract was formed.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20-21.)

Tenant provides no evidence that Landlord violated a duty independent of the Lease or that Tenant’s damages were not reasonably contemplated when the contract was formed. The tort claim is barred.

D. Constructive Eviction

Landlord argues that the constructive eviction cause of action fails because Tenant did not vacate the premises within a reasonable time after the building was allegedly unfit for operating Tenant’s business. However, the record includes evidence that Landlord was continuing to remediate the problem when Tenant vacated. (Declaration of Jacob Zalusky ¶¶ 32-34; Declaration of Jerry Zalusky, ¶¶ 15-17; Tenant’s Additional Material Facts (AMF) 26, 30.) Tenant also presents evidence that it continued to operate as best it could despite disruption from the flooding, water damage, and mold while finding a new location and planning the move. (AMF 27, 28, 29.) The Court agrees with Tenant that evidence of Tenant’s sales during flooding to the building does not establish as a matter of law that Tenants could continue to operate from the building.

“If, in the case of an interference with the tenant's beneficial enjoyment of the premises, the tenant does not surrender the premises within a reasonable time after the date of the interference, he is deemed to have waived his right to abandon; what constitutes a reasonable period of time is a question of fact to be determined by the trier of fact after considering all of the circumstances.” (Petroleum Collections Inc. v. Swords (1975) 48 Cal. App. 3d 841, 847–48.) Here, there is an issue of material fact as to whether Tenant vacated within a reasonable time.

E. Damages for Termination of Tenancy

Landlord argues that the unlawful detainer judgment bars Tenant from recovering damages resulting from termination of tenancy. Landlord presents no evidence that it obtained a writ of possession or took any other action to obtain possession of the building by enforcing the unlawful detainer judgment. 4 There is no evidence showing Tenant vacated as a result of the unlawful detainer judgment rather than due to the unfit condition of the building. In fact, judgment was not entered in the UD Action until January 2024, which was long after Tenant vacated. Landlord has not shown that Tenant is barred from recovering damages arising from constructive eviction.

III. EVIDENTIARY OBJECTIONS

A. Landlord’s Objections

Objection 1: Overruled (secondary evidence) Objection 2: Overruled (not expert opinion) Objection 3: Overruled (not expert opinion) Objection 4: Overruled (admission) Objection 5: Overruled (admission) Objection 6: Overruled (admission) Objection 7: Overruled (admission) Objection 8: Sustained as to first two sentences; Overruled as to last sentence Objection 9: Overruled Objection 10: Overruled Objection 11: Sustained as to first sentence; Overruled as to second sentence Objection 12: Overruled Objection 13: Overruled (non-hearsay purpose) Objection 14: Sustained (lack of relevance) Objection 15: Sustained (lack of relevance) Objection 16: Overruled Objection 17: Sustained (lack of relevance) Objection 18: Sustained (lack of relevance) Objection 19: Sustained (lack of relevance) Objection 20: Overruled

4 Landlord obtained a writ of execution for money judgment and levied against Tenant bank accounts.

Objection 21: Overruled Objection 22: Overruled Objection 23: Overruled Objection 24: Overruled Objection 25: Overruled Objection 26: Overruled Objection 27: Overruled 5 Objection 28: Sustained as to first two sentences; Overruled as to last sentence Objection 29: Sustained as to first two sentences; Overruled as to last sentence Objection 30: Overruled Objection 31: Overruled Objection 32: Overruled Objection 33: Overruled

B. Tenant’s Objections

Objection 1: Overruled Objection 2: Overruled Objection 3: Overruled Objection 4: Overruled Objection 5: Overruled Objection 6: Overruled Objection 7: Overruled Objection 8: Overruled Objection 9: Overruled

IV. RULING

Landlord’s motion for summary judgment is denied. Landlord’s motion for summary adjudication is granted as to the Fourth Cause of Action for Intentional Nuisance and is otherwise denied.

5 There are discrepancies regarding the objection numbers within each objection from this point to the end of Landlord’s objections. The Court refers only to the objection number in capital letters and in the center of the page in making its rulings.

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