Zhao v. 3 Eleven Investment LLC, et al.

CASE NUMBER: 25STCV11776 NOTICE: OK PROCEEDINGS: MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION MOVING PARTY: Plaintiff Vicky Zhao RESP. PARTY: Defendants 3 Eleven Investment LLC MOTION FOR SUMMARY JUDGMENT OR SUMMARY ADJUDICATION (CCP Sec. 437c) TENTATIVE RULING: The Court DENIES Zhao's motion for summary judgment. The Court GRANTS Zhao's motion for summary adjudication of the first, second, third, and fourth causes of action, and DENIES it as to the sixth and seventh causes of action. Zhao is to give notice. SERVICE: [X] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[X] Correct Address (CCP Sec.Sec. 1013, 1013a) OK [X] 16/21 Court Days Lapsed (CCP Sec.Sec. 12c, 1005(b)) OK OPPOSITION: Filed August 5, 2026 [] Late [] None REPLY: Filed August 14, 2026 [] Late [] None ANALYSIS: Vicky Zhao leased commercial space in a shopping center from 3 Eleven Investment LLC. Zhao presented evidence that 3 Eleven demanded rent in excess of what the parties agreed, and that she ultimately paid it almost $20,000 under protest. This is an action to recover that money.

Zhao now moves for summary judgment, or in the alternative for summary adjudication of her causes of action for (1) breach of the lease, (2) breach of the covenant of good faith and fair dealing, (3) violation of Business and Professions Code section 17200 et seq., (4) conversion, (6) unjust enrichment, and (7) declaratory relief. (She dismissed her fifth cause of action.) The Court DENIES Zhao summary judgment in form, but GRANTS it (effectively) in substance: She is entitled to summary adjudication of nearly every cause of action for which she has sought it.

Summary judgment is proper "if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law." (Code Civ. Proc. Sec. 437c, subd. (c).) A party can seek summary adjudication of "one or more causes of action within an action" if there are no triable issues of fact as to that cause of action. (Code Civ. Proc., Sec. 437c, subd. (f).) The moving party "bears the burden of persuasion that there is no triable issue of material fact." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A plaintiff moving for summary judgment must prove each element of the causes of action and show no affirmative defense has merit. (Code Civ. Proc. Sec. 437c, subd. (p)(1).) Once plaintiff meets their burden, it shifts to defendant to show a triable issue of one or more material facts exists. (Ibid.)

Zhao's first cause of action is for breach of contract. The elements of a cause of action for breach of contract are (1) a contract, (2) the plaintiff's performance of the contract, (3) the defendant's breach of the contract, and (4) damages to the plaintiff resulting from that breach. (Coyote Aviation Corp. v. City of Redlands (2025) 111 Cal.App.5th 955, 973.)

Zhao's initial lease was set to expire on April 30, 2023, with an option for a five-year extension at Zhao's election (by written notice to the landlord at least 90 days before the lease's expiration). There is no evidence that Zhao gave that notice, but 3 Eleven sent Zhao documents on March 10 and April 3, 2023, titled "Addendum." The April 3 document was attached to an email with the subject line, "New Lease." It provided for a $2,813.77 base rent, with other fees increasing the total monthly rent to $3,824.51 with a three percent annual increase for a five-year term.

It specified that "[a]ll other terms remain the same." Zhao signed and returned the document. 3 Eleven never signed, but it subsequently invoiced Zhao $3,824.51 per month. Zhao paid each of those invoices in full and on time. And when 3 Eleven prepared tenant estoppel certificates to refinance the shopping center, it asked for Zhao's signature on a document reflecting the terms contained in the addendum Zhao had signed. She provided that certificate in November 2023.

In May 2024, however, 3 Eleven told Zhao her rent "was actually $5,884.24 a month." Zhao refused to pay that rent, and stood on the lease addendum that she signed. She continued to pay rent pursuant to the lease until March 2025. At that point, 3 Eleven sent her a three-day notice to quit, demanding $19,798.20 in rent that in claimed it was owed from June 2024 through March 2025. Zhao paid it with a cashier's check that indicated clearly the amount was being paid in protest. She then demanded its return. Failing that, she brought this action.

If the April 2023 lease addendum amounted to a contract, then on Zhao's performance, 3 Eleven's breach, and Zhao's damages--in the form of her $19,798.20 overpayment--cannot be disputed. 3 Eleven's failure to sign the addendum presents an obvious statute of frauds problem--it's a contract for a lease longer than one year (Civ. Code, Sec. 1624, subd. (a)(3))--even though 3 Eleven's disjointed opposition hardly mentions the statute of frauds. (Indeed, it doesn't raise it in the context of the addendum at all.)

Why wouldn't 3 Eleven argue the statute of frauds defense that it pleaded in its answer? Probably because Zhao established several exceptions to the statute of frauds that 3 Eleven cannot seriously dispute. Perhaps the most straightforward is that Zhao performed for over a year pursuant to the addendum's terms--terms that 3 Eleven had Zhao confirm in an estoppel certificate that 3 Eleven intended to use for a loan. 3 Eleven cannot very well deny the existence of a lease agreement under which Zhao made payments, pursuant to 3 Eleven's own invoices, for over a year. (Sutton v.

Warner (1993) 12 Cal.App.4th 415, 422.) Anyway, as a practical matter, 3 Eleven has basically admitted the contract's existence: It doesn't deny transmitting the addendum to Zhao, and it doesn't deny that she signed and returned it. The most it offers in opposition to summary judgment is its contention that it made a mistake offering Zhao the rent that it did.

Whatever the merits of mistake as an affirmative defense to Zhao's claim, 3 Eleven didn't raise it in its answer and "[a] party may not oppose a summary judgment motion based on a claim, theory, or defense that is not alleged in the pleadings." (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 637, fn. 3.) Nor is 3 Eleven relieved of its obligations under the April 3 addendum by its contention that Zhao orally agreed in June 2024 to pay it an increased rate of rent going forward, in exchange for its forgiveness of back rent that Zhao purportedly owed it. (That is, that Zhao owed it on the dubious assumption that it was entitled to $5,884.24 going all the way back to the renewal of the lease.)

Even granting 3 Eleven the benefit of its evidence that Zhao made such an agreement, that agreement would be barred by the statute of frauds. (Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411, 416.) And unlike the April 3 addendum, there is no evidence of an applicable exception to the statute of frauds. Nor can 3 Eleven contend that Zhao paid it the $19,798.20 as part of some kind of accord and satisfaction. In addition to the fact that it didn't plead accord and satisfaction in its answer, there is the straightforward fact that Zhao's payment under protest is no evidence of any "accord" at all.

The bottom line is that Zhao provided evidence that she had a contract with 3 Eleven, and 3 Eleven breached it. 3 Eleven, in turn, provided no evidence creating a triable dispute of any material fact as to that cause of action. Zhao is entitled to have it summarily adjudicated in her favor.

Zhao's second cause of action is breach of the implied covenant of good faith and fair dealing. The elements of a breach of the implied covenant of good faith and fair dealing cause of action are (1) the existence of a contractual relationship, (2) implied duty, (3) breach, and (4) causation of damages. (Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 49.) The implied covenant of good faith and fair dealing is in every contract, and dictates that neither party will do anything to injure the right of the other to receive the benefits of the agreement. (Comunale v.

Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658.) Given that the April 3 lease addendum was a binding contract, Zhao's evidence demonstrates that 3 Eleven improperly repudiated that addendum, demanded payment for arrearages that it wasn't owed, and issued a notice threatening forfeiture. That notice caused Zhao to pay $19,798.20 under protest, and 3 Eleven has not returned the payment. 3 Eleven's conduct frustrated Zhao's contractual right to rent the subject premises at the addendum rate.

Thus, Zhao has made her summary-adjudication showing. 3 Eleven, on the other hand, offers nothing but what it provided on Zhao's breach of contract claim. Once more, Zhao is entitled to summary adjudication.

Zhao's third cause of action is for violation of Business and Professions Code section 17200 et seq. That portion of the Business and Professions Code, the Unfair Competition Law, prohibits any unlawful, unfair, or fraudulent business act or practice. (Bus. & Prof. Code, Sec. 17200.) Zhao carried her burden in showing 3 Eleven's conduct was unfair. It wrongfully attempted to change the terms of the addendum, threatened eviction unless payment was made, and then took from Zhao (and retained) $19,798.20 to which it had no right. Again, 3 Eleven offers no particular argument or evidence to challenge Zhao's entitlement to judgment on this cause of action. The Court summarily adjudicates it in Zhao's favor.

Zhao's fourth cause of action is for conversion. The elements of a conversion cause of action are (1) plaintiff's ownership or right to possession of personal property, (2) defendant's wrongful exercise of dominion, and (3) resulting damages. (Foster v. Sexton (2021) 61 Cal.App.5th 998, 1020-1021.) It is undisputed that 3 Eleven still has the $19,798.20 that Zhao paid under protest. It has no right to it. Zhao demanded its return. That is enough to establish conversion. 3 Eleven has offered no evidence, beyond that previously discussed, to call this into question. Again, Zhao is entitled to summary adjudication.

Zhao's sixth cause of action is for unjust enrichment. The elements of an unjust enrichment cause of action are (1) the defendant's receipt of a benefit, (2) that it unjustly or wrongfully retains, (3) at the plaintiff's expense. (Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726.) Restitution based on unjust enrichment may be awarded in lieu of contract damages if a contract has been rendered ineffective or unenforceable for some reason. (McBride v. Boughton (2004) 123 Cal.App.4th 379, 388.) Given that the Court found the addendum to be an enforceable contract, there is no need for a quasi-contract theory of recovery. The Court denies Zhao's motion on those grounds.

Zhao's seventh and final cause of action is for declaratory relief. Declaratory relief requires (1) a person interested under a written instrument or a contract, or (2) a person who desires a declaration of their rights or duties with respect to another or regarding property, and (3) an actual controversy. (Code Civ. Proc., Sec. 1060.) Among other things, however, granting that relief is generally outside of this Court's jurisdiction. (Code Civ. Proc., Sec. 86.) So the Court denies it.

In sum, the Court DENIES Zhao summary judgment, but grants her summary adjudication as to her first, second, third, and fourth causes of action. Zhao is to give notice.

Case Number: 26STLC03781 Hearing Date: August 25, 2026 Dept: 25 HEARING DATE: Tues., August 25, 2026 JUDGE /DEPT: Eisenman/25 CASE NAME: Le, et al. v. Thurston COMPL. FILED: 06-05-26