Queen Mania, Inc. v. Total Commercial Real Estate, Inc., et al.

(Stanley Mosk Courthouse: Dept. 735) August 25, 2026 DEPARTMENT 735 LAW AND MOTION RULINGS

Commercial Real Estate, Inc., et al. Defendant Stanford Capital, LLC's Demurrer to First Amended Complaint BACKGROUND On December 16, 2025, Plaintiff Queen Mania, Inc. filed the operative first amended complaint against Defendant Stanford Capital, LLC, asserting causes of action for breach of written contract and negligence. Plaintiff, a commercial tenant, alleges that Defendant landlord Stanford Capital hired a contractor who negligently replaced the rooftop HVAC system of the leased building, compromising the roof, causing profuse water intrusion and mold, and destroying Plaintiff's inventory.

DISCUSSION Defendant demurs to the entire complaint on the ground that the lease contains an exculpation clause. Paragraph 8.8 of the Lease states: 8.8 Exemption of Lessor and its Agents from Liability. 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, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, 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, or from other sources or places, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, 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. (Exh. A to FAC.) Defendant also cites Paragraph 58 of the Lease Addendum which states that Plaintiff, as tenant, is required to maintain the HVAC system. Defendant argues that because the exculpation clause exempts Defendant from liability for "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...," Plaintiff cannot maintain the causes of action for negligence and breach of contract against Defendant.

Plaintiff notes that the exculpation clause nevertheless does not relieve Defendant of liability because exculpation clauses cannot apply to a Defendant's "active" rather than "passive" negligence. The exculpation clause exempts claims for Defendant's own negligence or breach of contract by beginning with the phrase "[n]otwithstanding the negligence or breach of this Lease by Lessor or its agents..." Here, Plaintiff alleges that Defendant breached the lease by failing to provide functioning HVAC and that Defendant negligently hired incompetent contractors to install the HVAC. Those allegations are sufficient to state claims for breach of contract and negligence. CONCLUSION The Court overrules Defendant's demurrer. Defendant to file and serve an answer to the first amended complaint within 10 days. Defendant to give notice. | Home -->)" -->