Kwuan v. NorCal Research Development CA1/5

Filed 3/28/22 Kwuan v. NorCal Research Development CA1/5 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

EDWARD KWUAN, Plaintiff and Appellant, A161330 v. NORCAL RESEARCH (Alameda County DEVELOPMENT, LLC, Super. Ct. No. RG-19-018877) Defendant and Respondent.

Plaintiff and appellant Edward Kwuan (appellant) appeals from the trial court’s judgment in favor of defendant and respondent NorCal Research Development, LLC (respondent) in appellant’s commercial unlawful detainer action. Appellant alleges respondent violated the parties’ lease agreement for a warehouse by growing marijuana without the required permits from the City of Oakland. Following a bench trial, the trial court found that respondent was unable to obtain the permits because there was no fire sprinkler system in the warehouse, and that appellant could not evict respondent because the lease agreement obligated appellant to provide a functioning sprinkler system. We conclude the court erred in interpreting the lease and reverse.

1

BACKGROUND Appellant is the owner of a warehouse on 5th Street in Oakland (Property). The parties entered into a five-year lease agreement, beginning in September 2017 (Lease). Respondent uses the Property as an indoor cannabis cultivation facility. On May 7, 2019, appellant served respondent with a “Three Day Notice to Cure or Quit” (Notice). The Notice alleged, in relevant part, that respondent breached the Lease by failing to obtain the required permits for its business (the grow operation). The Notice required respondent to cure the alleged breach by completing the work required to obtain the permits (installing fire sprinklers) and obtaining the permits, or to deliver possession of the Property to appellant. On May 14, 2019, appellant filed the present unlawful detainer action. In its trial briefs, respondent admitted it had operated without the required permits, but it explained it could not obtain the permits because the Property lacked a fire sprinkler system and argued it was appellant’s obligation to provide the system under the Lease. Following a bench trial, the trial court concluded the “plain language of the Lease obligated [appellant] to provide and maintain the fire sprinkler system at the Property.” The court found that appellant’s “failure to provide a working fire sprinkler system prevented [respondent] from completing the work necessary to obtain the permits required to legally operate.” The court held that, “[b]ecause the only cure options [appellant] would accept . . . required [respondent] to obtain the necessary permits and complete the work on the fire sprinkler system,” appellant’s “responsibility for and failure to provide a working fire sprinkler system at the start of the Lease is a defense to this action.”