negotiated a 20-year term for the April Lease and agreed that Coyote, with proper notice,
could twice exercise a 15-year option (Option) to extend the lease. The April Lease
would terminate on April 4, 2020, unless Coyote exercised an Option.
The parties signed an amended lease on September 5, 2000, based on Coyote
being unable to take possession of the Property until that date (Amended Lease). The
new move-in date was September 5, 2000. The Amended Lease had the original
termination date of April 4, 2020. Several months after the Amended Lease was signed,
Coyote raised the issue with a City official that the Amended Lease should terminate on
September 5, 2020, in order to be a 20-year lease, but no written amendment to the
Amended Lease was ever executed by the parties. In June 2020, Coyote attempted to
exercise the Option to extend the Amended Lease by sending written notice to the City.
The City informed Coyote that it was too late and that the Amended Lease had
terminated on April 4, 2020. The City considered Coyote a holdover month-to-month
2
tenant under the terms of the Amended Lease. The City issued a 30-day notice to quit the
Property to Coyote.
Coyote filed an action against the City for breach of contract, specific
performance, breach of the implied covenant of good faith and fair dealing, declaratory
relief and promissory estoppel/detrimental reliance. 1 The trial court sustained the City’s
demurrer to the first amended complaint (FAC) in the action and entered judgment
against Coyote. When Coyote did not vacate the premises after the 30-day notice to quit,
the City filed an unlawful detainer action against Coyote. The trial court granted
summary judgment in favor of the City and ordered Coyote to vacate the Property.
In this appeal Coyote claims, as to the demurrer, that the trial court erred by
sustaining the City’s demurrer to the breach of contract claim based on the City breaching
the Amended Lease by refusing to extend the lease term and rejecting Coyote’s exercise
of the 15-year Option; the City is estopped from asserting that Coyote’s exercise of the
15-year Option was untimely as the City caused any failure by Coyote to timely exercise
the option; and the City waived any objection to Coyote’s exercise of the 15-year Option.
The trial court also erred by sustaining the City’s demurrer to the cause of action of the
implied covenant of good faith and fair dealing. Coyote also contends the trial court
erred by sustaining the demurrer on a reformation cause of action raised in the original
complaint based on it pleading sufficient facts to state a claim for reformation of the
1 The appeal in case No. E081591 relates to the grant of the demurrer. The appeal in case No. E083738 relates to the unlawful detainer action filed by the City. We have consolidated the two cases and this opinion will resolve both cases.
3
Amended Lease, the statute of limitations was tolled by the statements and conduct of the
City’s employees, and the City is estopped from raising the statute of limitations as a bar
to Coyote’s reformation cause of action.. Coyote further contends that it alleged
sufficient facts to state a claim for declaratory relief and promissory estoppel. Coyote
insists that it can amend the FAC to raise an equitable estoppel claim. Finally, Coyote
contends that if this court reverses the judgment, the award of attorney’s fees to the City
should be reversed.
Coyote further claims, as to the demurrer, that the City breached the Amended
Lease by preventing it from removing the improvements on the Property. Coyote
contends that it can allege facts to support a claim of unjust enrichment based on the City
taking control of the tenant improvements made by Coyote on the Property. As will be
discussed post, these issues are not properly raised on appeal as they were not decided by
the trial court and are part of another ongoing case.
With respect to the appeal of the grant of summary judgment for the unlawful
detainer, Coyote contends there are triable issues of fact as to whether the City should be
estopped from contending that Coyote’s exercise of the 15-year Option was untimely.
Coyote relied on the course of conduct and representations by the City that it would be
able to exercise the 15-year Option. Coyote also argues that the City’s attempt to deprive
Coyote of the 15-year Option is barred by promissory estoppel and that the City waived
any objection to Coyote’s exercise of the 15-year Option. Extrinsic evidence showed
ambiguity in the Amended Lease. Finally, there were triable issues of fact whether
4
Coyote gave proper notice of its intent to exercise the 15-year Option in December 2019
and January 2020.
FACTUAL AND PROCEDURAL HISTORY
A. FIRST COMPLAINT AND DEMURRER
Coyote filed its first complaint on February 8, 2022 (Complaint). In the
Complaint, Coyote alleged several causes of action including, breach of contract, specific
performance, breach of implied covenant of good faith and fair dealing and reformation.
Coyote alleged that in 1999, it approached the City in order to rent the Property to
construct a multi-hanger building. On April 4, 2000, Coyote and the City signed the
April Lease, which stated it was for a term of 20 years, with two successive 15-year
Options to extend the April Lease upon 45 days written notice to the City clerk. Due to
Coyote being unable to immediately occupy the Property, Coyote and the City agreed to
amend the April Lease.
The parties signed the Amended Lease and it was approved by the City council on
September 5, 2000. In place of the term of 20 years, the Amended Lease provided the
termination of the Amended Lease was on April 4, 2020, the same date as the April
Lease. The Amended Lease expressly rescinded the April Lease. Coyote alleged in the
Complaint that it first became aware that the Amended Lease was expiring on April 4,
2020, on November 30, 2000. Coyote contacted the City manager and Coyote alleged
that the City manager agreed to amend the Amended Lease to fix the error. The
termination date was never corrected by written amendment to the Amended Lease.
Coyote noted that the Amended Lease provided for the Property to be 36,000 square feet
5
but it had been increased to 53,658 square feet and Coyote was paying a higher rent than
was stated in the Amended Lease.
Coyote alleged, to its detriment, it relied on the termination date orally stated by
the City, which it considered to be September 5, 2020. In June 2020 Coyote was in
contact with the supervisor at the Redlands Airport, Bruce Shaffer (Shaffer), and the
City’s assistant director of facilities and services, Tim Sullivan (Sullivan), and they
discussed that Coyote was interested in exercising the 15-year Option. Both Shaffer and
Sullivan acknowledged that the termination date was April 4, 2020, but Coyote alleged
that they discussed that the Amended Lease should expire on September 5, 2020. The
City accepted rent on the Property past the April 4, 2020 date. On June 22, 2020, Coyote
sent written notice to the City—an email was sent to Shaffer—with an attachment
indicating it intended to exercise the first 15-year Option to extend the Amended Lease.
The City then notified Coyote that the Amended Lease had expired and that it could not
exercise the 15-year Option to extend. The City informed Coyote that it was a month-to-
month tenant.
Coyote provided additional information regarding extrinsic evidence that the City
and its staff all believed the Amended Lease was for the term of 20 years. This included
minutes from staff meetings, Airport Advisory Board meetings and statements from City
council members at the time the Amended Lease was approved. Coyote also alleged the
City was secretly calculating how much it could make off the Property if Coyote vacated
the Property. On March 16, 2021, the City council at a closed meeting voted to terminate
the Amended Lease. A termination letter was sent to Coyote on March 17, 2021. Further
6
negotiations were conducted between the City and Coyote regarding an extension of the
Amended Lease with a greatly increased rental amount but Coyote did not agree.
Coyote’s first cause of action in the Complaint was for breach of contract/specific
performance. The City breached the Amended Lease by refusing to honor Coyote’s
exercise of the first 15-year Option. Coyote sought specific performance of the 15-year
Option. The second cause of action was for breach of the covenant of good faith and fair
dealing. The City’s refusal to honor the 15-year Option was being done in order to
position itself to adjust the annual base rent without restriction.
The third cause of action in the Complaint was for common law reformation and
under Civil Code section 3399. The parties negotiated a 20-year lease and the Amended
Lease provided for a term of 19 years 7 months. The error was through inadvertence or
mutual mistake. Coyote was seeking reformation of the Amended Lease to the agreed
20-year term. Coyote’s fourth cause of action was for declaratory relief pursuant to Civil
Code of Procedure section 1060. Coyote sought a declaration that the Amended Lease
ended on September 5, 2020, and that the exercise by Coyote of the 15-year Option was
timely. The fifth cause of action was for promissory estoppel. Coyote detrimentally
relied on the fact that the Amended Lease was for 20 years and built structures. Coyote’s
business would suffer if the Amended Lease was terminated. The City, through its
actions and words, appeared to agree that the termination date was September 5, 2020.
The April Lease was included with the Complaint. It provided, “The term of this
Lease shall be for a period of twenty (20) years and shall commence on the date first
7
written above.” The April Lease was signed by the mayor of the City and Gil Brown on
behalf of Coyote on April 4, 2000.
Several other exhibits attached to the Complaint detailed the negotiations between
Coyote and the City on the Amended Lease. Coyote sent a letter to the City on April 17,
2000, seeking to postpone the start of the April Lease based on Coyote not being able to
immediately begin construction on the Property. The City public works director
responded to Coyote that it had agreed to amend the April Lease. The new lease would
be sent to Coyote for their approval of the changes and then it would be approved by the
City council. In the report to the City council for approval of the Amended Lease it was
stated that the City staff and Coyote agreed to “minor modifications” regarding the rental
terms.
The Amended Lease was signed on September 5, 2000, by the mayor of the City
and Brown for Coyote. It included language that Coyote and City had entered into a
prior lease for the Property but now “wish to rescind and enter into this new lease in its
place.” It described the Property as 36,000 square feet. As for the term, “This lease shall
remain in full force and effect until April 4, 2020 at which time it shall terminate, unless
extended as otherwise provided herein.” Coyote had two 15-year Options to extend
under paragraph 2.1 of the Amended Lease. Paragraph 2.1 provided, “Tenant shall have
two (2) successive options for extending the Term of this Lease for periods of fifteen (15)
additional years each. Provided Tenant is in compliance with all terms of the Lease,
Tenant may exercise such options by providing written notice to City forty-five (45) days
prior to the termination date of this Lease. Any extension of the Term of this Lease
8
pursuant to this section shall be on the same terms and conditions contained in this
Lease.”
The Amended Lease provided that rent for the Property was $5,724 and could be
increased every three years. Coyote also had the option of leasing additional square
footage from the City under the same terms of the Amended Lease. Upon termination of
the Amended Lease, Coyote was to remove all tenant improvements and deliver the
Property in the same condition as the time the Amended Lease was executed. The
Amended Lease further provided, “If Tenant, with City approval, remains in possession
of the Property without negotiating a new lease, the continued possession by Tenant shall
be deemed to be a month-to-month tenancy terminable on thirty (30) days written notice
given at any time by either party.” Paragraph 25 of the Amended Lease was entitled
Notices and stated, “Any notice required by this Lease shall, unless otherwise specified in
this Lease, be served by deposit in the United States mail with first-class postage prepaid,
addressed to the person and address listed below.” The address for the City was the City
clerk. The Amended Lease also had a waiver provision that stated, “No waiver by either
party of any breach of any condition or covenant of this Lease shall be deemed a waiver
of any subsequent breach of the same or any other condition or covenant.”
The Amended Lease additionally provided that “This Lease may not be amended
or modified except as expressly provided in this section. Any amendment, modification,
waiver, consent or acquiescence with respect to any provision of this Lease shall be set
forth in writing and duly executed by or on behalf of the party to be bound thereby.” It
further provided, “This Lease represents the entire and integrated agreement between the
9
parties hereto with respect to the subject matter hereof, and supersedes any and all prior
negotiations, representations, agreements and understandings, whether written or oral,
between the parties with respect to the subject matter contained herein.”
Coyote included several other exhibits with the Complaint setting forth extrinsic
evidence that the City and staff all believed that the Amended Lease was for a 20-year
term, and the actions taken by the City after the Amended Lease terminated on April 4,
2020.
Coyote also provided its request to renew the 15-year Option. It was dated June
23, 2020, and was addressed to Shaffer and Sullivan at the City of Redlands Municipal
Airport. Coyote included a letter from the City dated March 17, 2021, notifying Coyote
that the exercise of the 15-year Option was not timely and that it was occupying the
Property as a month-to-month tenant. The City offered Coyote a new lease with an
increased rent.
The City filed a demurrer to the Complaint. The City alleged Coyote had known
about the termination date in the Amended Lease for 20 years. Coyote failed to comply
with the terms of the Amended Lease by failing to timely exercise the 15-year Option.
There were no written amendments to the Amended Lease and the Amended Lease
provided for written amendments, not oral amendments. Further, the Amended Lease
contained an integration clause, which provided the only enforceable terms were within
the four corners of the Amended Lease. All prior agreements or leases were rescinded.
Coyote was seeking to avoid the express terms of the Amended Lease. Further, the
10
claims were time-barred as Coyote admitted knowing about the termination date in the
Amended Lease since November 2000.
On September 9, 2022, Coyote filed opposition. Coyote insisted it discovered the
termination date error in November 2000 and brought it to the attention of the City. At
the same time, the parties agreed to an increase of the size of the rental from 36,000
square feet to 53,658 square feet and Coyote paid a higher rent. Coyote conceded no
written amendment was made to the Amended Lease reflecting a different termination
date or the increase in square footage. Coyote insisted all of its causes of action were
viable based on all parties believing the Amended Lease expired on September 5, 2020.
The City filed a reply to the opposition.
The trial court issued a tentative ruling on October 12, 2022. For the first and
second causes of action—breach of contract and implied covenant of good faith and fair
dealing—the written Amended Lease provided that the termination date was April 4,
2020, and the 15-year Option would have to be exercised 45 days prior to that date.
Coyote did not exercise the 15-year Option until June 23, 2020. As such, Coyote’s
conclusory allegation that it performed its duties under the Amended Lease was not
supported and the breach of contract action failed. This equally applied to the second
cause of action of implied covenant of good faith and fair dealing as Coyote was required
to timely exercise the 15-year Option and it failed to do so. The City’s demurrer to the
first and second causes of action were sustained with leave to amend.
The trial court further found that the third cause of action for reformation had to be
raised within three years from the date the mistake was discovered. Coyote alleged it
11
became aware of the mistake in November 2000. There was no evidence Coyote pursued
a remedy within three years of the discovery and it was time-barred. The demurrer to the
third cause of action was sustained without leave to amend. The demurrer to the fourth
cause of action for declaratory relief was also sustained with leave to amend based on the
substantive causes of action failing. The fifth cause of action for promissory estoppel
was sustained with leave to amend based on Coyote failing to allege a clear promise
made by the City to amend the termination date. The trial court adopted the tentative
ruling at a hearing on October 12, 2022, except it allowed for amendment to the third
cause of action.
B. FIRST AMENDED COMPLAINT
Coyote filed the FAC on November 4, 2022. Coyote alleged essentially the same
facts that were provided in the Complaint omitting several allegations regarding
statements by City council members at the time the Amended Lease was approved.
Coyote contacted the City about the termination date on or about December 4, 2000.
Coyote alleged that staff from the City made “a clear and substantive promise” that the
City would honor the full 20-year term making the expiration date September 5, 2020.
Although the Amended Lease was never amended in writing, Coyote relied on the
December 2000 promise that the City would honor the full 20-year term. Coyote also
alleged for the first time that it provided other notice to exercise the 15-year Option in
December 2019 and January 2020. Coyote emphasized that the Amended Lease used the
language that Coyote “may” exercise such options by providing written notice to City
forty-five (45) days prior to the termination of the Lease. Coyote interpreted “may” as
12
allowing other notice. It provided such notice in December 2019 and January 2020 by
taxes and getting business licenses through the end of 2020. Further, Coyote advised the
staff of the Redlands Municipal Airport of its intention to extend the Amended Lease.
Coyote’s first cause of action in the FAC was for breach of contract. It alleged it
had fully performed its duties under the Amended Lease. Coyote provided notice to the
City of its decision to exercise the 15-year Option. The City breached the Amended
Lease by failing to honor that Coyote exercised the 15-year Option. The second cause of
action was for specific performance. Coyote complied with the requirements in the
Amended Lease to exercise the 15-year Option, and in the alternative, the Amended
Lease was ambiguous and must be construed against the City. Further, Coyote’s failure
to provide written notice before February 19, 2020, must be excused due to the City’s
clear promise that the City would disregard the express deadline and that Coyote could
exercise the 15-year Option anytime prior to July 22, 2020. Specific performance was
the only adequate remedy.
The third cause of action in the FAC was for breach of implied covenant of good
faith and fair dealing. Coyote exercised the 15-year Option prior to the February 19,
2020, deadline by advising officials by email that it intended to exercise the option.
Alternatively, no written notice was required based on the clear promise by the City that
it would disregard the express deadline. The City’s refusal to honor the 15-year Option
was done in bad faith in order to interfere with Coyote receiving the benefits of the
Amended Lease, and to raise the rent. The fourth cause of action was for declaratory
13
relief. Coyote sought a declaration that the 15-year Option was timely exercised under
the terms of the Amended Lease. In the alternative, a declaration that the notice
provision for the 15-year Option was ambiguous and unenforceable. Coyote insisted the
word “may” in the option clause referred to the requirement of written notice. The fifth
cause of action was for promissory estoppel/detrimental reliance. The City promised that
it would honor the full 20-year term and therefore Coyote could exercise the 15-year
Option prior to July 22, 2020. Coyote relied on the promise by making significant
improvements to the Property and paying rent on 53,658 square feet of leased space.
Coyote included many of the same exhibits with the FAC as were included with
the Complaint. It did not include much of the extrinsic evidence of former City council
members and what they recalled from when the Amended Lease was executed.
C. CITY’S DEMURRER
On December 14, 2022, the City filed a demurrer to the FAC. The City insisted
that Coyote was required under the express terms of the Amended Lease to provide
written notice to the City to exercise its 15-year Option. Coyote failed to provide the
required written notice. Its claims of breach of contract were not viable as Coyote did not
perform its duty as required under the Amended Lease. Further, the use of the term
“may” in the clause pertaining to notice to exercise the 15-year Option referred to the fact
that Coyote could exercise the 15-year Option but was not required to exercise the option.
Accordingly, the first and second causes of action were not viable. As for the third cause
of action, no implied covenant could require conduct that contradicted the express
Amended Lease provisions. The fourth cause of action for declaratory relief was not
14
viable as it was derivative of the substantive claims that should be rejected. Finally, the
fifth cause of action for promissory estoppel was not viable. In the Complaint, Coyote
alleged that the City only stated that it “could” amend the termination date in the
Amended Lease which was not a clear and ambiguous promise. Further, the Amended
Lease required all amendments be in writing and there had been no pleading of a clear
and definite promise by the City to honor the 20-year term. Finally, Redlands Municipal
Code section 3.04.010 required all contracts be written, and approved by the City council
and the mayor of the City.
Coyote filed opposition to the City’s demurrer to the FAC. It insisted that it could
give notice other than written notice of its decision to exercise of the 15-year Option, and
it did so by advising staff at the Redlands airport it wanted to extend; tendering lease
payments; renewing insurance, obtaining new gate access cards and permits through the
entirety of 2020. Coyote insisted it delivered notice of exercising its 15-year Option in
December 2019 and January 2020. As such, the City breached the contract by not
accepting the request. The use of the term “may” allowed for several ways to provide
notice that it was exercising the 15-year Option. Further, there was waiver when
representatives of the City accepted the 15-year Option in June 2020. Specific
performance was the proper remedy. There was a viable claim for promissory estoppel
based on the City making a definite promise to honor the 20-year term.
Attached to the opposition were many of the same exhibits attached to the FAC.
The FAC and tentative ruling on the Complaint were included as exhibits. The CEO of
Coyote, Gil Brown, provided a declaration in support of the FAC. He provided a
15
background on the case similar to the facts in the FAC. He attested that he contacted the
City on December 4, 2000, when he noticed the termination date on the Amended Lease
was April 4, 2020. He declared that a representative of the City made “a clear and
definite promise” that the City would honor the full 20-year term ending on September 5,
2020, and would increase the square footage from 36,000 square feet to 53,658 square
feet. Brown insisted he relied on the promise and began paying increased rent for the
53,658 square feet in May 2001. Brown admitted the parties never corrected the
Amended Lease in writing but the City accepted the higher rent amount. During
December 2019 and January 2020, he sent numerous notifications to the City making it
“abundantly clear” that Coyote was exercising the 15-year Option. The City filed a reply
to the opposition to the demurrer to the FAC.
D. TRIAL COURT RULING ON DEMURRER TO THE FAC
The trial court issued a tentative ruling on February 2, 2023. The trial court
reviewed the provisions in the April Lease. It then noted the language in the Amended
Lease that the parties intended to rescind the April Lease and enter into a new lease in its
place. It quoted the language in the Amended Lease as to the term, notices and the 15-
year Options. The trial court noted that the two leases were “clearly different.” The
Amended Lease was not ambiguous as to notice on the 15-year Option; City must be
given 45 days prior to April 4, 2020. The trial court noted that Coyote’s argument for
breach of contract was based on its allegation that it had fully performed its duties and
obligations under the Amended Lease. However, Coyote’s own allegations and exhibits
demonstrated that it failed to timely exercise the 15-year Option under the terms of the
16
Amended Lease. The trial court sustained the City’s demurrer to the first cause of action.
Given that it was finding that there was no claim for breach of contract, the second cause
of action on specific performance also failed.
The third cause of action, breach of implied covenant of good faith and fair
dealing, required proof that the City unfairly interfered with Coyote’s right to receive the
benefit of the contract. The Amended Lease provided a termination date and deadline by
which Coyote had to deliver written notice of its intent to exercise the 15-year Option,
which Coyote failed to timely deliver. Under the doctrine of implied covenant, the
implied covenant could not contradict the express terms of the contract. Under the
express terms of the Amended Lease, Coyote had to timely exercise the 15-year Option
and failed to do so. The declaratory relief claim in the fourth cause of action was part of
the substantive claim and would also be denied. Finally, the fifth cause of action for
promissory estoppel, the trial court found the claim was that Coyote relied on the promise
made on December 5, 2000, by a City official, that City acknowledged the termination
date error and made a clear promise to honor the full 20-year term to September 5, 2020.
The trial court cited to cases holding that promissory estoppel could not be asserted
against a public entity to bypass rules that required contracts to be in writing. Pursuant to
Government Code section 40602, a mayor shall sign all written contracts. Redlands
Municipal Code section 3.04.010 only authorized contracts approved by the City council
and mayor. There was no promise that was reduced to writing, approved by the City
council and signed by the City’s mayor. The trial court sustained the demurrer to the
17
fifth cause of action. The trial court would consider arguments at a hearing on the
demurrer whether leave to amend should be granted.
The hearing was held on February 2, 2023. At the hearing on the demurrer,
Coyote argued as to promissory estoppel that it could amend to allege extraordinary
circumstances that would allow a City to be liable under the theory. Coyote also sought
to amend to claim it had been overpaying rent and a claim regarding the tenant
improvements. The City argued there was no amendment to the FAC that could be made
based on the unambiguous language in the Amended Lease. Further, it would be
inappropriate to add new causes of action. The trial court took the matter under
submission and agreed to consider the arguments on leave to amend.
The trial court on February 8, 2023, issued its ruling that the demurrer to the FAC
was sustained without leave to amend. An order entering judgment was filed on April
28, 2023, sustaining the demurrer to the FAC in its entirety and without leave to amend.
The City was named the prevailing party. Coyote filed a notice of appeal on June 23,
2023.
The City filed a motion for attorney fees on June 27, 2023. The trial court granted
the request for attorney fees in the amount of $38,499. On September 8, 2023, Coyote
filed a notice of appeal from the grant of attorney fees.
E. UNLAWFUL DETAINER PROCEEDINGS
On December 28, 2021, the City served Coyote with a 30-day notice to vacate the
premises. It required that Coyote remove all equipment and structures. Coyote did not
vacate the premises.
18
The City filed its Unlawful Detainer Complaint against Coyote on February 14,
2022. The City contended that the Amended Lease had expired on April 4, 2020, and
pursuant to its terms, continued on a month-to-month basis. Coyote filed an answer on
March 17, 2022.
The City filed a motion for summary judgment contending that Coyote failed to
timely exercise the 15-year Option to extend the Amended Lease. The Amended Lease
had expired, and the City was entitled to possession of the Property. The Amended Lease
was the entire agreement between the parties and superseded any prior agreements.
Coyote was served with a 30-day notice to vacate the Property but was still occupying the
Property. The City alleged it was entitled to attorney fees and costs, and unpaid rent.
The City requested that the trial court take judicial notice of the tentative ruling and
judgment in the case involving the grant of the demurrer to the FAC.
Coyote filed a response to the motion for summary judgment. Coyote contended,
as it did in opposing the demurrer to the FAC, that it had given timely notice to the City
that it was exercising the 15-year Option in December 2019 and January 2020; that
through the City’s authorized agents, the City had waived any objection to the timeliness
of Coyote’s exercise of the 15-year Option; and the City was estopped from contending
the exercise of the 15-year Option was untimely. The City filed a response. The ruling
on the demurrer had been made by the trial court in the breach of contract case. The City
requested that the trial court in the unlawful detainer action find the same way as the trial
court in the demurrer case. It should find that written notice was required in order to
exercise the 15-year Option and that Coyote failed to timely provide written notice.
19
Further, the trial court should similarly find that there were no grounds for promissory
estoppel and waiver as officials from the City stated that the Amended Lease “could” be
amended but no written amendment was ever executed.
The trial court issued a tentative ruling on February 2, 2023, granting the City’s
motion for summary judgment. 2 A hearing was conducted on February 3, 2023. Coyote
insisted that the term “may” indicated that Coyote could notify in writing or other means.
The parties used “shall” numerous times in the Amended Lease and knew the difference.
The trial court felt that based on the totality of the language in the Amended Lease, notice
had to be in writing. Coyote argued that the Amended Lease was approved by the City
council and no further approval was required under the rules of the municipal code or
general law to extend the lease under the 15-year Option. The trial court allowed the
parties to provide supplemental briefing.
On February 17, 2023, Coyote filed a supplemental brief. Coyote argued the City
accepted Coyote’s June 23, 2020, written notice, waiving the required February 19, 2020,
notice. Coyote additionally argued that assuming the Amended Lease terminated on
April 4, 2020, and the City accepted Coyote as a month-to-month holdover tenant, it was
under the same terms and conditions, including having the right to exercise the 15-year
Option up until at least September 2020. Further, there was a triable issue of fact as to
promissory estoppel. Coyote insisted the Government Code and Municipal Code only
2 The trial court issued a final written ruling. The tentative ruling is not necessary to the issues on appeal.
20
applied to “new agreements.” The 15-year Option was part of the Amended Lease that
was approved in writing.
The City filed a response to Coyote’s supplemental briefing. It insisted there was
no evidence presented to support their claims. Coyote had provided no admissible
testimony on the authority of the City staff to bind the City to the 15-year Option.
Moreover, the holdover tenancy did not include the 15-year Option. Coyote filed a reply.
Another hearing was held on March 10, 2023. The trial court clarified Coyote’s
argument that the holdover month-to-month tenancy included the right to exercise the 15-
year Option. Coyote insisted that the exercise of the 15-year Option did not require
approval by the City council and be signed by the City’s mayor. The City argued it made
no sense that Coyote could exercise a 45-day notice option when it was a month-to-
month tenant. Further, notice had to be given in writing to the City clerk; no other notice
was sufficient.
After the hearing, on April 18, 2023, the trial court filed a memorandum opinion
and order granting the City’s motion for summary judgment on the complaint for
unlawful detainer. It considered the written arguments submitted prior to the February 3
and March 10, 2023 hearings, and the argument at the hearings.
The trial court reviewed the facts of the case derived from the factual summary
from the parties’ separate statements of material facts, declarations, attached exhibits and
requests for judicial notice. It found the Amended Lease was clear that notice of
exercising the options required written notice 45 days prior to the termination date of the
Amended Lease. Any other interpretation violated the statutory rules of construction by
21
inviting ambiguity rather than resolving it. Further, paragraph 25 of the Amended Lease
provided that all notices must be mailed and in writing to the specific address listed in the
Amended Lease. The trial court found that it could not interpret the Amended Lease to
create conflicts between its provisions. The trial court further rejected the month-to-
month tenancy that continued the Amended Lease under the same terms and conditions,
necessarily meant that it included the 15-year Options.
The trial court found that the City had met its initial burden of production of
material facts to support the unlawful detainer. Coyote failed to meet its burden of
showing a material issue of fact existed. First, the termination date of the Amended
Lease was clear and there was no need to consider parol evidence under Code of Civil
Procedure section 1856. Coyote’s argument ignored that there was an agreed upon
integration clause in the Amended Lease. As a matter of law, the termination date of the
Amended Lease was April 4, 2020. The terms of the Amended Lease required 45 days
written notice prior to the termination date. Further, there was no waiver by the City of
the requirement to provide written notice.
As for promissory estoppel, it was a closer question. The rule of estoppel only
applied against a public agency in those special cases where the interests of justice
required it. The trial court relied on Government Code section 40602, subdivision (b),
and Redlands Municipal Code section 3.04.010 that the City staff did not have authority
to enter into and approve contracts.
22
A hearing on the proposed judgment was held on May 19, 2023. The parties
discussed the resolution of the tenant improvements on the Property. Coyote argued that
the issue of the hangers on the Property had to be resolved by further litigation. The City
agreed that the unlawful detainer only applied to the possession of the Property and did
not adjudicate the tenant improvements. The trial court agreed the judgment on holdover
damages and title to the tenant improvements would be determined in a separate
proceeding.
Judgment on the unlawful detainer was entered on July 17, 2023. 3 The judgment
stated that it only granted possession of the Property to the City. It further provided,
“This Judgment is not an adjudication of any of the defendants’ ownership interests in the
alterations, improvements, fixtures, or units that exist on the Property. This Judgment
grants possession to the City only, and in no way forecloses or otherwise precludes any
defendant in this action from commencing a separate civil action to determine its
ownership interests, if any, in the structures, alterations, improvement, fixtures or units
that exist on the Property.”
Coyote filed a notice of appeal on August 10, 2023, in the appellate division of the
San Bernardino Superior Court. On March 29, 2024, Coyote filed its opening brief in the
San Bernardino County Superior Court’s appellate division. The appeal was transferred
to this court to be decided with the ruling on the demurrer to the FAC.
3 On February 29, 2024, Coyote requested that this court take judicial notice of the unlawful detainer judgment. Since it is part of the record on appeal, we deny the request.
23
DISCUSSION
A. DEMURRER CAUSES OF ACTION GRANTED
1. DEMURRER
“On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, the standard of review is well settled. We give the complaint a
reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]
Further, we treat the demurrer as admitting all material facts properly pleaded, but do not
assume the truth of contentions, deductions or conclusions of law. [Citations.] When a
demurrer is sustained, we determine whether the complaint states facts sufficient to
constitute a cause of action. [Citation.] And when it is sustained without leave to amend,
we decide whether there is a reasonable possibility that the defect can be cured by
amendment: if it can be, the trial court has abused its discretion and we reverse.” (City
of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.)
2. BREACH OF CONTRACT
Coyote claims the trial court erred by sustaining the demurrer to the first cause of
action for breach of contract and the second cause of action for specific performance
based on the City’s breach of the contract by refusing to extend the Amended Lease term
and rejecting Coyote’s exercise of the 15-year Option. Coyote insists that both the
language in the Amended Lease and the extrinsic evidence surrounding the formation of
the Amended Lease showed the terms were ambiguous. The extrinsic evidence—
including the April Lease—clearly showed that the intent of the parties was that the
Amended Lease would be for a 20-year term. Moreover, City officials throughout the
24
term of the Amended Lease stated that the actual termination date of the Amended Lease
was September 5, 2020. Coyote further refers to the increase in square footage to 53,658
of which Coyote believed was an amendment to the Amended Lease that was corrected
along with the termination date. Further, the trial court erred by relying on the
Government Code and Redlands Municipal Code, which applied only to new contracts.
Staff throughout the years stated that the Amended Lease was for a 20-year term and
there was no requirement of a new lease that had to be in writing.
“[T]he elements of a cause of action for breach of contract are (1) the existence of
the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s
breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v.
Goldman (2011) 51 Cal.4th 811, 821.) Coyote insists that it sufficiently pleaded that it
had performed its obligations under the Amended Lease to exercise the 15-year Option
and that the City breached its duty under the Amended Lease by refusing to honor the 15-
year Option. Coyote relies on extrinsic evidence, which included the agreement by the
parties that the lease term was 20 years, and that City officials promised that the
Amended Lease expired on September 5, 2020.
“ ‘The language of a contract is to govern its interpretation, if the language is clear
and explicit, and does not involve an absurdity.’ ” (Thrifty Payless, Inc. v. Mariners Mile
used to contradict the contract’s terms unless the language is ‘reasonably susceptible’ to
the proposed interpretation. [Citation.] Indeed, unless the language is ‘reasonably
25
susceptible’ to the proposed meaning, extrinsic evidence cannot even be considered to
explain or otherwise shed light upon the parties’ intent.” (Id. at p. 1061.)
Moreover, under the parol evidence rule, when a contract is integrated, extrinsic
evidence cannot be used to vary or contradict the instrument’s express terms. (Code Civ.
Proc., § 1856 [“(a) Terms set forth in a writing intended by the parties as a final
expression of their agreement with respect to the terms included therein may not be
contradicted by evidence of a prior agreement or of a contemporaneous oral agreement”].
“ ‘Under the parol evidence rule, extrinsic evidence is not admissible to contradict
express terms in a written contract or to explain what the agreement was. [Citation.] The
agreement is the writing itself. [Citation.] . . . Parol evidence cannot . . . be admitted to
show intention independent of an unambiguous written instrument.” (Cerritos Valley
Bank v. Stirling (2000) 81 Cal.App.4th 1108, 1115-1116.)
There are no grounds for the consideration of extrinsic evidence in this case.
Coyote signed the Amended Lease. The Amended Lease provided for a termination date
of April 4, 2020, and all notices must be in writing and sent to the City clerk 45 days
prior to the termination of the Amended Lease. It provided that any amendment to the
Amended Lease was to be in writing. It also included an integration clause, which
provided that the Amended Lease superseded all prior written and oral agreements, and
was the entire agreement between the parties. We further note that the termination date
in the April Lease and the Amended Lease are the same date.
26
It is clear that Coyote never provided written notice to the City clerk 45 days prior
to April 4, 2020. The City did not have to accept any other type of notice, including any
email notices to Shaffer and/or Sullivan that were made in December 2019 and January
2020. The terms of the Amended Lease were clear that if Coyote was in good standing
under the Amended Lease, it “may” exercise the 15-year Option. The Amended Lease
simply cannot be interpreted that the term “may” referred to the ability to provide any
type of notice. This would contradict the express provision in paragraph 25 that all
notices must be in writing. Coyote simply cannot prove it performed its duty under the
Amended Lease to provide proper written notice of its decision to exercise the 15-year
Option. As such, the breach of contract and specific performance causes of action fail.
Coyote makes several claims that this court must consider the extrinsic evidence
because such evidence must first be considered prior to consideration of the language of
the Amended Lease; that the integration clause in the Amended Lease does not bar the
introduction of extrinsic evidence; and there was mistake and imperfection in the
Amended Lease that was put in issue in the pleadings. We have reviewed the cases and
arguments by Coyote and they do not support that the Amended Lease, which included
an explicit integration clause, was ambiguous and required that the trial court consider
extrinsic evidence. Extrinsic evidence is not admissible to “ ‘vary, alter or add to the
terms of an integrated written agreement.’ ” (Casa Herrera, Inc. v. Beydoun (2004) 32
Cal.4th 336, 343.) “The parol evidence rule . . . establishes that the terms contained in an
integrated written agreement may not be contradicted by prior or contemporaneous
agreements . . . the rule necessarily bars consideration of extrinsic evidence of prior or
27
contemporaneous negotiations or agreements at variance with the written agreement.”
(Id. at p. 344.) There was no ambiguity that needed to be resolved by extrinsic evidence.
The termination date in the Amended Lease was April 4, 2020, amendments had to be in
writing, and the exercise of the 15-year Option was required to be made 45 days prior to
termination of the Amended Lease and had to be in writing. Coyote is not contending the
“meaning” of the terms in the Amended Lease must be interpreted to mean something
other than what the written agreement stated, but rather seeks to alter the terms of the
integrated agreement to change the termination date. This is not a proper use of parol
evidence.
Coyote argues that the terms of the Amended Lease must be construed against the
City because it drafted the Amended Lease. This argument assumes that the Amended
Lease is ambiguous, which it is not. Further, Coyote claims the termination date in the
Amended Lease was never disclosed, but Coyote signed the Amended Lease, which
contained the term. Coyote also claims that after the Amended Lease was signed,
officials from the City “lulled Coyote into believing that the City had corrected the April
4 date in the Lease to September 5.” However, the Amended Lease specifically required
all amendments to be in writing. There is no evidence that there was a written
amendment to the Amended Lease. Coyote cannot raise a viable claim that the Amended
Lease had been changed by oral agreement by City officials. Finally, Coyote points to
the fact that it was paying rent on 53,658 square feet but the Amended Lease only stated
that it was using 36,000 feet. The Amended Lease provided that Coyote could request
28
more square footage. This fact has no impact on the termination date of the Amended
Lease.
Coyote requests leave to amend in order to raise a claim that there was a breach of
contract related to the tenant improvements. This was not part of the FAC, as, at the
time, Coyote was still in possession of the Property. At the hearing on February 2, 2023,
Coyote raised the issue of the requirement to remove the improvements and wanted the
trial court to provide a “declaration” of how the process should take place and the time
frame for removal of the improvements. The trial court issued its order sustaining the
demurrer without leave to amend to address the tenant improvements. In its appellants’
reply brief, Coyote claims that it could have raised the claim at the time of the FAC.
However, Coyote was still in possession of the Property and there had been no action
taken on the tenant improvements. Coyote acknowledges that “an appeal reviews the
correctness of a judgment as of the time of its rendition, upon a record of matters which
were before the trial court for its consideration.” (In re Zeth S. (2003) 31 Cal.4th 396,
405.) The decision on the unlawful detainer was still pending at the time of the ruling on
the demurrer and Coyote still was in possession of the Property. No decision was made
on the tenant improvements and the trial court was not required to give an advisory
opinion on what had to be done with the tenant improvements. Further, as noted by the
City in its brief, and acknowledged by Coyote, such issues are being separately litigated. 4
4 We grant the City’s July 2, 2024, request to take judicial notice of the complaint in Coyote Aviation Corporation, et al. v. City of Redlands, et al., San Bernardino County Superior Court case No. CIVSB2418252, for the sole purpose that the issue of tenant [footnote continued on next page]
29
We see no reason to allow Coyote to amend the FAC to include the tenant improvement
issue when it is being separately litigated and was not an issue at the time of the ruling on
the demurrer. We deny any request by Coyote to amend to include this issue.
3. WAIVER
Coyote further contends the City should be estopped from contending that Coyote
did not timely exercise the 15-year Option and that the Amended Lease expired on April
4, 2020, as its actions showed that it believed it expired on September 5, 2020. The City
contributed to and caused any failure of Coyote to timely exercise the 15-year Option.
Coyote insists that Government Code section 40602 and Redlands Municipal Code
section 3.04.010 did not apply to the exercise of the 15-year Option as it was not a new
contract that had been approved by the City council and signed by the Mayor. Further,
all the actions by Shaffer and/or Sullivan, such as advising Coyote that it would meet
with Coyote in July 2020 to discuss the extension of the lease, showed that Coyote
believed the Amended Lease expired on September 5, 2020.
There was no waiver of the termination date. As previously stated, the Amended
Lease provided that all amendments had to be in writing. There is no evidence that the
Amended Lease was ever amended to include the termination date of September 5, 2020.
Even if City officials stated orally that the expiration date was September 5, 2020, the
improvements is being separately litigated. We deny Coyote’s September 6, 2024, conditional request to take judicial notice of further documents filed in the case, as they are unnecessary to resolve the appeal and have not been decided by the trial court.
30
only way to change the date was to execute a written amendment. Any oral promises did
not constitute waiver of the termination date.
Moreover, Shaffer and/or Sullivan could not agree to accept the exercise of the 15-
year Option. Government Code section 40602, subdivision (b) provides, “The mayor
shall sign: . . . [¶] (b) All written contracts and conveyances made or entered into by the
city.” Redlands Municipal Code section 3.04.010 is entitled “CONTRACT SIGNING
AND ATTESTATION” and provides, “All contracts authorized or awarded by the city
council shall be signed by the mayor, and attested by the city clerk for and on behalf of
the city, unless otherwise provided by law or by the council.” 5
There is no dispute that the 15-year Option had to be submitted in writing to the
City clerk 45 days prior to the termination date of the Amended Lease. Coyote posits
Shaffer and Sullivan began discussing the lease expiration with Coyote in January 2020
and they were to meet in July. Coyote provided no evidence that City officials advised
Coyote that it did not need to provide the written notice to exercise the 15-year Option as
required by the Amended Lease. Coyote sent a written notice of exercising the 15-year
Option to Shaffer and Sullivan on June 23, 2020, which they accepted, even though under
the Amended Lease notice was required to be sent to the City clerk. However, Shaffer
and Sullivan could not accept the 15-year Option, as the Amended Lease had already
expired. In order to extend the Amended Lease, the parties would have to reach a new
agreement, which would have to be approved by the City council and mayor under
5 https://codelibrary.amlegal.com/codes/redlandsca/latest/redlands_ca/0-0-0-1599, as of June 3, 2025.
31
Government Code section 40602 and Redlands Municipal Code section 3.04.010. The
trial court properly sustained the demurrer to the first and second causes of action.
4. BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR
DEALING
Coyote contends the trial court erred by sustaining the demurrer for the third cause
of action of breach of implied covenant of good faith and fair dealing. Coyote argues the
City misled Coyote as to the termination date of the Amended Lease so that it could
regain possession and control of the tenant improvements without paying for them.
Coyote was denied possession of the Property for the next thirty years.
“ ‘ “Every contract imposes upon each party a duty of good faith and fair dealing
in its performance and its enforcement.” ’ ” (Carma Developers (Cal.), Inc. v. Marathon
Development California, Inc. (1992) 2 Cal.4th 342, 371.) “It is well settled that ‘an
implied covenant of good faith and fair dealing cannot contradict the express terms of a
are aware of no reported case in which a court has held the covenant of good faith may be
read to prohibit a party from doing that which is expressly permitted by an agreement.
On the contrary, as a general matter, implied terms should never be read to vary express
terms.” (Carma, at p. 374.) In Bevis, the court held that the defendants could not be
“held liable for breach of the implied covenant of good faith and fair dealing by
implementing rent increases that the parties’ written lease agreements expressly
authorized.” (Bevis, at p. 253.)
32
Here, Coyote seeks to contradict the express terms of the Amended Lease by
claiming the City misled it to believe that the Amended Lease expired on September 5,
2020. The express term of the Amended Lease stated that it expired on April 4, 2020.
Moreover, the City did nothing to stop or mislead Coyote from sending the proper 45-day
written notice exercising the 15-year Option. If Coyote had sent the notice under the
express terms of the Amended Lease, there is nothing in the evidence that supports the
City would not have accepted it in order to obtain the tenant improvements. The trial
court properly sustained the demurrer as to the third cause of action.
5. REFORMATION
Coyote also contends the trial court erred by sustaining the demurrer to Coyote’s
reformation cause of action. Coyote argued in the Complaint that the City officials
agreed in 2000 that the Amended Lease should expire on September 5, 2020. Coyote
insists that despite having knowledge of the expiration date in the Amended Lease in
2000, the claim was not time-barred as the statute of limitations was tolled and the City is
equitably estopped from asserting the statute of limitations. Coyote raised this claim in
the Complaint and the trial court sustained the demurrer to the Complaint. Coyote did
not raise a reformation cause of action in the FAC. The trial court originally ruled that it
could not amend the reformation claim because it was time-barred but changed its ruling
at the hearing on the demurrer to the Complaint. It allowed Coyote to amend the
reformation claim in the FAC. The FAC raised no cause of action for reformation. As
such, the claim cannot be reviewed on appeal. (See Leibert v. Transworld Systems, Inc.
33
(1995) 32 Cal.App.4th 1693, 1698 [“By electing to amend his complaint, appellant
waived any error in the ruling sustaining the demurrer” to the first complaint].)
6. PROMISSORY ESTOPPEL
Coyote insists it stated a claim for promissory estoppel. “ ‘Promissory estoppel is
described as: “ ‘A promise which the promisor should reasonably expect to induce action
or forbearance of a definite and substantial character on the part of the promisee and
which does induce such action or forbearance is binding if injustice can be avoided only
by enforcement of the promise.’ ” ’ ” (Los Angeles Equestrian Center, Inc. v. City of Los
Angeles (1993) 17 Cal.App.4th 432, 448.) “The elements of promissory estoppel are (1)
a clear promise, (2) reliance, (3) substantial detriment, and (4) damages ‘measured by the
extent of the obligation assumed and not performed.’ ” (Toscano v. Greene Music (2004)
124 Cal.App.4th 685, 692.)
“As a general rule, a public entity cannot be sued on an implied-in-law or quasi-
contract theory, because such a theory is based on quantum meruit or restitution
considerations which are outweighed by the need to protect and limit a public entity’s
contractual obligations.” (Los Angeles Equestrian Center, Inc. v. City of Los Angeles,
supra, 17 Cal.App.4th at p. 449.) “Further, the general rule is that a city may not be
estopped by the conduct of its officers or employees. [Citation.] ‘There are occasions for
departure from the general rule that a city may not be estopped by the conduct of its
officers or employees. [Citation.] But such departure is justified only when the facts
clearly establish that a grave injustice would be done if an equitable estoppel were not
34
applied.’ ” (Lundeen Coatings Corp. v. Department of Water & Power (1991) 232
Cal.App.3d 816, 830.)
As previously stated, the Amended Lease provided that the termination date was
April 4, 2020. In order to amend the Amended Lease to provide that it would expire on
September 5, 2020, it would require a written amendment and a change to the term
length. This written contract would have to be approved by the City council and signed
by the mayor as it obligated the City to a longer lease term. (See G.L. Mezzetta v. City of
American Canyon (2000) 78 Cal.App.4th 1087, 1093.) Further, as for Shaffer and
Sullivan accepting the 15-year Option in June 2020, the Amended Lease had expired. No
written notice under the terms of the Amended Lease was sent by Coyote prior to the
termination date of the Amended Lease. These City officials could not bind the City to
the 15-year Option based on their oral agreement to accept the exercise of the option.
Moreover, since the Amended Lease had expired prior to the exercise of the 15-year
Option, the determination that Coyote could lease the Property for an additional 15 years
was a new agreement that had to be approved by the City council and signed by the
City’s mayor under both the Government Code and Redlands Municipal Code. The trial
court properly determined that the promissory estoppel claim failed based on the City
employees not having the authority to bind the City to an amendment to the Amended
Lease or to extend the Amended Lease after its expiration.
Finally, Coyote brought a cause of action for declaratory relief. However, this
claim was based on the substantive claims of breach of contract and promissory estoppel
which have been rejected.
35
B. POTENTIAL AMENDMENT CLAIMS
“When the court has sustained a demurrer without leave to amend, the burden is
on the plaintiff to demonstrate how he can amend his complaint, and how that
amendment will change the legal effect of his pleading.” (Community Cause v.
Boatwright (1981) 124 Cal.App.3d 888, 902.)
1. EQUITABLE ESTOPPEL
Coyote insists it should be granted leave to amend to raise a claim of equitable
estoppel. Coyote appears to claim that it can amend the reformation claim to prove that
the City was estopped from raising the claim that it was time-barred based on statements
or conduct of the City’s official. He insists that promises were made in 2000 by a City
official that the Amended Lease did not expire until September 5, 2020, and the
Amended Lease would be amended. Coyote relied on the representation and did not file
suit at the time. The City cannot raise the time bar.
“ In appropriate cases, a defendant may be equitably estopped from asserting a
statutory limitations period. [Citation.] ‘ “ ‘Generally speaking, four elements must be
present in order to apply the doctrine of equitable estoppel: (1) the party to be estopped
must be apprised of the facts; (2) he [or she] must intend that his [or her] conduct shall be
acted upon, or must so act that the party asserting the estoppel had a right to believe it
was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he
[or she] must rely upon the conduct to his [or her] injury.’ ” ’ [Citations.] [¶] In the
statute of limitations context, equitable estoppel may be appropriate where the
defendant’s act or omission actually and reasonably induced the plaintiff to refrain from
36
filing a timely suit. [Citation.] The requisite act or omission must involve a
misrepresentation or nondisclosure of a material fact bearing on the necessity of bringing
a timely suit. [¶] Notably, however, even a defendant who is ignorant or mistaken as to
the real facts may be equitably estopped if the defendant was ‘ “ ‘in such a position that
he [or she] ought to have known’ ” ’ the true facts.” (Doe v. Marten (2020) 49
Cal.App.5th 1022, 1028.) “ ‘When the evidence is not in conflict and is susceptible of
only one reasonable inference, the existence of an estoppel is a question of law.’ ” (Id. at
p. 1029.)
Here, Coyote insists that it can allege equitable estoppel to show that it relied on
the City to amend the Amended Lease to change the termination date. However, Coyote
was aware that a written amendment to the Amended Lease was never executed. Coyote
was not ignorant of this fact and could not rely on the oral promise when it was aware the
Amended Lease was never amended in writing as required by the terms of the Amended
Lease. In fact, even if Coyote’s allegation in the reply brief is accepted as true that it did
not become aware that the Amended Lease was never changed to reflect the September 5,
2020, termination date until January 2020, this was still before it had to send notice to
exercise the 15-year Option. This did not prohibit Coyote from giving the proper written
notice to exercise its 15-year Option 45 days prior to the termination date of April 4,
2020, despite the oral promise. Coyote was not ignorant of the fact that the Amended
Lease expired on April 4, 2020, and that it was required to provide written notice 45 days
prior to the expiration date in order to extend the Amended Lease. Coyote cannot amend
the FAC to raise a viable claim of equitable estoppel.
37
2. UNJUST ENRICHMENT
Coyote also seeks leave to amend in order to raise a claim of unjust enrichment
based on the City taking possession of the tenant improvements. The City insists that
leave to amend should not be granted because the resolution of this issue is part of a
separate action.
Initially, Coyote’s claim is not entirely clear. Coyote makes some argument that
the unlawful detainer action awarding the Property and tenant improvements to the City
without a full and fair hearing raises a claim under the Fourth, Fifth and Fourteenth
Amendments. However, Coyote also admits that the issue of ownership of the tenant
improvements was not decided in the unlawful detainer action. However, Coyote insists
that if the City were to be awarded these tenant improvements, it would be unjust
enrichment to the City. As discussed, ante, there was no resolution of the tenant
improvements at the time that the demurrer was sustained and the time of the unlawful
detainer. Such claims are being resolved in a separate action. The instant case does not
warrant leave to amend to resolve these claims in this action.
Coyote does not allege any further amendments could be made to the FAC. There
are no grounds for reversing the trial court’s order denying leave to amend the FAC.6
6 Coyote further contends that if this court reverses the ruling of the trial court, the attorney fee award should be reversed. Since we uphold the trial court’s ruling sustaining the demurrer, we need not address this claim.
38
C. UNLAWFUL DETAINER
Coyote contends that the trial court erred by granting summary judgment on the
unlawful detainer action based on there being triable issues of fact whether (1) the City
should be estopped from contending that the Coyote’s exercise of the 15-year Option was
untimely; (2) the City waived any objection to the Coyote’s exercise of the 15-year
Option; (3) extrinsic evidence showed an ambiguity in the Amended Lease that had to be
adjudicated; and (4) Coyote gave the City notice that it was exercising the 15-year Option
in December 2019 and January 2020.
Coyote acknowledges that these are the same arguments raised on appeal in the
demurrer action. We have already rejected these claims and find that they equally apply
to the unlawful detainer action.
Coyote concludes in the reply brief that equitable relief should be granted in this
case to prevent a significant injustice to Coyote through the loss of its multi-million
dollar investment in tenant improvements. However, Coyote agreed in the Amended
Lease that upon termination of the Amended Lease, it would have to remove all
improvements. It was aware of the risk. Further, the issue of the tenant improvements is
not properly considered in this appeal and has not been resolved. Moreover, nothing
stopped Coyote from reading the Amended Lease and complying with its provisions; it
was keenly aware that the Amended Lease was never amended in writing. The City did
nothing to prohibit Coyote from giving the 45-day notice. Coyote had the right to send
written notice that it was exercising the 15-year Option but failed to do so. The trial court
39
properly sustained the demurrer to the FAC and granted summary judgment on the
unlawful detainer action.
DISPOSITION
The judgment is affirmed in full. The City is awarded costs on appeal as the
prevailing party.
CERTIFIED FOR PUBLICATION
MILLER J.
We concur:
RAMIREZ P. J.
McKINSTER J.
40
AI Brief
AI-generated · verify before citing
Holding. The court held that the trial court properly sustained the City's demurrer and granted summary judgment in the unlawful detainer action because the tenant failed to timely exercise the lease extension option in accordance with the express written terms of the Amended Lease. The court further held that the tenant's claims for breach of contract, promissory estoppel, and other equitable relief were barred by the lease's integration clause, the requirement for written amendments, and the failure to timely perform contractual obligations.
Issues
Whether the trial court erred in sustaining the City's demurrer to the breach of contract, specific performance, and promissory estoppel claims.
Whether the trial court erred in granting summary judgment in the City's unlawful detainer action.
Whether the Amended Lease's notice provision for exercising an option was ambiguous or satisfied by the tenant's conduct.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“The Amended Lease was not ambiguous as to notice on the 15-year Option; City must be given 45 days prior to April 4, 2020.”
“Under the doctrine of implied covenant, the implied covenant could not contradict the express terms of the contract.”