Multani v. Knight

Ornelas stated that at no time from 2010 to March 2012 was he made aware of any plumbing issues at the premises.

The excerpts of Salima's deposition testimony submitted in support of Knight's motion included her testimony that (1) she stopped working after undergoing knee surgery in July 2011; (2) she stopped paying rent in July 2011; (3) she was the only doctor who worked at the clinic, so the clinic closed when she stopped working; (4) she was renting the premises on a month-to-month basis; (5) she did nothing to retrieve her property from the premises after the clinic closed in July 2011, even though she had opportunities to do so; and (6) she did not attempt to sell her medical practice, and did not remember entering into a contract to sell the clinic.

b. Salima's Opposition

In opposition to Knight's motion, Salima argued that she was lawfully in possession of the premises, and retained all legal rights of possession up to the time she was dispossessed following the completion of the unlawful detainer process. With regard to the conversion claim, Salima argued that Knight's defense that Salima had abandoned her property was legally deficient because her claim was based upon environmental contamination, and that the act of conversion was completed when her medical equipment and supplies were contaminated as a result of the raw sewage spill. She also argued that the abandonment defense was factually deficient because Knight failed to show that she complied with statutory notice requirements that apply when premises are vacated. With regard to the breach of the covenant of quiet enjoyment claim, Salima agreed with Knight's assertion that this kind of claim does not apply to commercial properties, but argued that the allegations of the claim adequately pleaded a claim for constructive eviction; she asked the court to ignore the label of the claim and treat it as a claim for

Khaleel stated in his declaration that he was the administrator and manager for Family Health Services Medical Clinic from 1993 through 2012, with primary responsibility for the business aspects of the clinic; his brother Rahim assisted him. He declared that he did not regularly consult his mother regarding business aspects of the clinic, particularly toward the end of the clinic's operation, and therefore there were many business matters that took place of which she was not aware. He stated that there were physicians in addition to Salima who were employed by the clinic between 2007 and 2011, including Dr. Onubah. He also stated that in 2011, Salima entered into a contract (a copy of which was attached to his declaration) to sell the clinic to Onubah; Onubah agreed to purchase every item in the office, including the medical equipment and devices, office furniture and equipment, and patient files. Although Khaleel's declaration included a discussion about the alleged sewage backup incident, Knight's objections to that discussion were sustained, except for Khaleel's statement that after he and Rahim discovered the alleged sewage backup they attempted to contact Knight and left messages for her, telling her about the condition of the property.

that she was lawfully in possession of the premises at the time of the incident. Second, the court found there was no evidence that Knight knew or should have known that a sewer backup was likely; the court found that the evidence that there had been a clogged drain many years before was insufficient to establish that fact.

The court did not address the negligence/strict liability claim other than to state that it "think[s] you agree that summary adjudication should be granted on that."

The court granted summary adjudication of the section 17200 claim on the ground there was no evidence of fraud or unlawful behavior.

Finally, the court found there were factual issues precluding summary adjudication of the contract interference claim. Therefore, the court denied summary judgment, but granted summary adjudication on all claims except the contract interference claim.

2. The Trial

A jury trial on the contract interference claim was held before a different trial judge (Hon. Lawrence H. Cho). Our discussion of the evidence presented at trial is limited to evidence related to the issue on appeal, i.e., whether there was substantial evidence to support the jury's finding that no economic relationship existed between Salima and Onubah.

Salima did not testify at trial. Instead, the only evidence of the existence of an economic relationship between Salima and Onubah was the written contract dated May 26, 2011 that Salima and Onubah purportedly signed, and the testimony of Rahim, Onubah, and Khaleel.

Rahim testified that he, Khaleel, and their father "were controlling the business or operating the business." He explained that as Salima's health got worse in 2011 "a decision was made to find a buyer" for the clinic. He knew a doctor-Onubah-who had expressed an interest in acquiring the practice, and he brokered a deal with Onubah that resulted in a written agreement to sell the practice to him. Salima was not present when Onubah signed the agreement, although Rahim testified that Salima met with Onubah several times in 2011 and discussed her patients, her retirement, and the sale of her practice.

Rahim also testified about entering the clinic on January 6, 2012 and discovering the alleged sewage spill. He had a meeting scheduled with

Onubah testified that while he was seeing patients for Salima after her health problems prevented her from working as often as she had, he spoke to Rahim and/or Khaleel about them having to transfer or sell the clinic. He told them that he was interested in the practice, and they reached an agreement for him to buy it. They entered into a written agreement; only Rahim was present when he signed it.

Onubah testified that his primary interest in buying the practice was the patient population. The equipment was important because it is necessary to serve the patients, but the precise location of the clinic was not, as long as the location was not too far from the present location of the clinic. He testified that it would have been worth it to him to pay $400,000 for the clinic even if he had to buy all new equipment. He stated that he would not have backed out of the contract if Rahim had told him about the damage to the clinic; he said that he would have asked to renegotiate the amount, "but if they insisted, I will still pay for it."

Khaleel testified on direct examination that Salima was not involved in the decision about what would be done with the clinic upon her retirement, and that she did not participate in any way with the sale of the clinic to Onubah. In fact, he did not even tell her about it. On cross-examination, Khaleel was asked, "Is it correct to say that your mother Salima Multani did not ever know that she was selling her practice to Boniface Onubah?" He responded, "We made all the business decisions on her behalf." When asked whether Salima ever knew that she was selling her practice to Onubah, Khaleel stated that as far as he knew, he did not think she knew, but "Rahim may have told

vis à vis the premises at the time of the alleged sewage spill. Although the trial court's finding on this issue was not entirely dispositive of all its summary adjudication rulings, it was an important factor in all of them.

Knight argues, and the trial court agreed, that Salima became a tenant at sufferance no later than when Knight filed the unlawful detainer action against her; therefore, she had only the right of "naked possession," i.e., the right not to be forcibly evicted without legal process. Salima argues that

correctly accepted Knight's argument that there can be no claim for breach of the covenant of quiet enjoyment in commercial tenancies, but she argues the trial court erred by granting summary adjudication because her complaint alleged, and she presented evidence to support, a constructive eviction claim. Although we note that her concession was misguided-every lease, including a commercial lease, includes an implied covenant of quiet enjoyment, although the covenant may be waived in commercial leases ( Civ. Code, § 1927 ; Avalon Pacific-Santa Ana, L.P. v. HD Supply Repair & Remodel, LLC (2011) 192 Cal.App.4th 1183 , 1191, 122 Cal.Rptr.3d 417 ; Lee v. Placer Title Co. (1994) 28 Cal.App.4th 503 , 512-513, 33 Cal.Rptr.2d 572 )-we conclude the trial court's grant of summary adjudication nevertheless was proper.

The trial court's error in finding that breach of the covenant of quiet enjoyment did not apply to commercial leases does not affect the correctness of its grant of summary adjudication because the breach that Salima asserted was that she was constructively evicted (see Erlach v. Sierra Asset Servicing, LLC (2014) 226 Cal.App.4th 1281 , 1299, 173 Cal.Rptr.3d 159 [the covenant of quiet enjoyment "is breached upon actual or constructive eviction of the tenant"] ), and the trial court properly rejected that assertion.

upon a private nuisance as that the term is known to the law may be maintained only by those whose property rights have been invaded; that while a [lawful] possessor of land is allowed to recover incidental damages for harms to his person or chattels in an action for private nuisance, the action is not available for the protection of those interests to a person who has no property rights or privileges in land." ( Neuber v. Royal Realty Co. (1948) 86 Cal.App.2d 596 , 624, 195 P.2d 501 , overruled in part by Porter v. Montgomery Ward & Co., Inc. (1957) 48 Cal.2d 846 , 313 P.2d 854 .)

In this case, the trial court found, based upon undisputed evidence, that Salima was not lawfully in possession of the premises when the alleged

determination as to whether there is any substantial evidence, contradicted or uncontradicted," to support the findings below. [Citation.]' [Citation.] 'In applying this standard of review, we "view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor ...." [Citation.]' [Citation.] ' "Substantial evidence" is evidence of ponderable legal significance, evidence that is reasonable, credible and of solid value.' [Citation.] We do not reweigh evidence or reassess the credibility of witnesses. [Citation.] We are 'not a second trier of fact.' [Citation.] A party 'raising a claim of insufficiency of the evidence assumes a "daunting burden." [Citation.]' [Citation.]" ( Pope v. Babick (2014) 229 Cal.App.4th 1238 , 1245-1246, 178 Cal.Rptr.3d 42 .)

Salima did not meet her burden here. In her opening brief, she sets forth the evidence presented at trial to show there was an economic relationship: the written contract; Rahim's testimony about finding a buyer for Salima's practice and contracting with Onubah; Onubah's testimony confirming the agreement; and Khaleel's testimony that the practice was sold.

What Salima does not acknowledge in her briefs on appeal is the evidence, and reasonable inferences that could be drawn from the evidence, that Salima was unaware of the alleged sale. Although Rahim testified that Salima discussed the sale with Onubah and knew there was a signed agreement, Onubah testified that he spoke only with Rahim and/or Khaleel about the sale. More important, Khaleel testified that Salima was not involved in the decision to sell the clinic to Onubah, that he never told her about it, and that at most, Rahim "may have told her in passing."

Khaleel explained Salima's lack of knowledge of the agreement Rahim negotiated by stating that he and Rahim "made all the business decisions on her behalf." But the facts that Rahim and Khaleel took care of business matters for Salima, and that Rahim reached an agreement to sell the clinic to Onubah do not assist Salima here. The cause of action was brought by Salima, as an individual doing business as Family Health Services Medical Clinic. The business was not a legal entity separate from Salima as an individual. (See Providence Washington Ins. Co. v. Valley Forge Ins. Co. (1996) 42 Cal.App.4th 1194 , 1200, 50 Cal.Rptr.2d 192 [" 'The designation "d/b/a" means "doing business as" but is merely descriptive of the person or corporation who does business under some other name. Doing business under another name does not create an entity distinct from the person operating the business.' [Citation.] The business name is a fiction, and so too is any implication that the business is a legal entity separate from its owner"].) That

know what it was that she was signing (and therefore she herself did not reach any agreement with Onubah). In short, we find that substantial evidence supports the jury's verdict.

DISPOSITION

The judgment is affirmed. Knight shall recover her costs on appeal.

We concur:

MANELLA, J.

COLLINS, J.

The primary question presented in this case is: Can a landlord be held liable to a commercial tenant for damage to the tenant's property resulting from an alleged sewer backup when the tenant (who had a month-to-month tenancy in the premises after her lease expired) had stopped paying rent, had been served (but failed to comply) with a three-day notice to pay rent or quit, and had been named in an unlawful detainer action filed before the alleged sewer backup occurred? We find that the month-to-month tenancy was terminated by the tenant's failure to pay rent coupled with the landlord's filing of the wrongful detainer action. Therefore, as of the filing of the wrongful detainer action,

exist for commercial property as a matter of law; (3) the nuisance claim failed because Salima's occupancy of the premises was illegal and there was no evidence of a legally sufficient nuisance; (4) the negligence/strict liability claim failed because Salima's occupancy of the premises was illegal, there was no strict liability as a matter of law, and Knight was not negligent; (5) the contract

In his declaration, Ornelas also described the March 2012 incident. He stated that he went to the premises at Knight's request. When he arrived, neither Salima nor anyone from the clinic was there. He had to cut the locks on the security gates to gain access because neither he nor Knight had a key. He went through all of the rooms on the premises, and found that all of the sinks except one were clogged with dirty water. He observed that water had come from the faucets into the sinks, and the sinks had overflowed onto the floors and carpet and out the front door. It appeared to him that the dirty water and dirty carpet had been there for some time, which caused a stench inside. He did not observe any sewage damage or leak of any kind, and noted that none of the medical equipment or furniture on the premises was damaged by the water leak. Finally,

Rahim stated in his declaration that he negotiated the original lease for the premises in 1993, and arranged (along with Salima) to purchase the office furniture and equipment, the medical equipment, and the medical supplies. He noted that over the years, Salima's medical practice became very successful, and she hired additional physicians and medical staff, and upgraded the clinic's equipment. By 2011, the clinic had approximately 4,000 active patients and the latest advanced technological medical equipment. Rahim declared that he arranged for Onubah to purchase the practice. He stated that he spoke to Knight, explained that Salima would be winding down her treatment of patients, and that he had arranged for Onubah to take over the practice, although it would take Onubah between three to six months to get the accreditation in various health plans and staff privileges in nearby hospitals that were necessary for him to take over the practice. Rahim stated that Knight agreed to assign the lease for the premises to a new tenant physician, and that Onubah's ownership was to be complete by January 2012.

Rahim declared that Salima and her staff closed the clinic for the New Year's holiday in December 2011 and reopened it on January 6, 2012. When they went to reopen it, he and Khaleel discovered that "raw human sewage exploded from each of the sinks of the clinic spilling sewage onto and over everything in the clinic," and that the medical equipment, supplies, drug samples, and patient files were all contaminated with sewage and permanently ruined. He stated that he and Khaleel both tried to contact Knight, and left detailed messages on her voicemail describing the condition of the premises, but she ignored their requests to address the situation. He declared that as a result of the sewage spill, the sale of the practice to Onubah could not be completed, and Salima lost the $400,000 purchase price. Finally, Rahim declared that the December 2011/January 2012 incident was not the first plumbing problem at the premises. He stated that in 2009, water backed up from a drain in one of the sinks and filled the sink with foul-smelling water, which, Rahim declared, "suggested a problem with the main line of the building." He noted that Knight promptly remediated the problem (although not with a licensed plumber) but did not address the "more systemic problem."

not establish a nuisance claim for two reasons. First, the court found that Salima could not establish

her in passing." Following his testimony, the court asked him several questions from jurors, including the following: "Did you or Rahim then or now have your mother's legal power of attorney?" Khaleel responded that Rahim had legal power of attorney. The juror followed up, asking, "As of what date?" The reporter's transcript does not indicate Khaleel's response. The trial court then asked, "You're not sure?" Khaleel responded, "He has the power of attorney."

After the case was sent to the jury, the jury submitted two more questions. The first asked, "From what date to what date did Rahim Multani have power of attorney over Salima Multani? Additionally, what areas did the power of attorney cover?" The second question asked for a read back of testimony from Rahim and Khaleel regarding whether Salima knew or was informed of the contract with Onubah or of the sale in general. In response to the first question, the court (after consultation with counsel) told the jury: "We have located the only reference to power of attorney in the trial transcript and will have the reporter read you that one and only passage. No power of attorney has been admitted into evidence." In response to the second question, the court told the jury: "We have found no reference available in Rahim's testimony."

Shortly thereafter, the jury reached its verdict in favor of Knight, answering "No" to the first question on the special verdict form, which read: "Were Salima Multani and Boniface Onubah in an economic relationship including without limitation a contract that probably would have resulted in a future economic benefit to Salima Multani?"

The trial court entered judgment in favor of Knight, from which Salima now appeals.

DISCUSSION

A. Rights of a Non-Rent-Paying Month-to-Month Tenant

The most significant issue in this case centers on what rights Salima possessed

despite her nonpayment of rent, she retained all legal rights as a month-to-month tenant until she was dispossessed following the conclusion of the unlawful detainer action.

None of the cases either party cites in support of her argument addresses the precise issue presented here: the rights of a month-to-month tenant (and the obligations owed to the tenant by the landlord) after she has stopped paying rent and the landlord has initiated an unlawful detainer action. Our research has not uncovered any such cases. But applying basic landlord-tenant and contract principles, we conclude that Knight has the better argument.

In this case Salima started out as a tenant under a written lease. When, after Salima's second lease expired, she continued to pay rent and Knight accepted those payments, her tenancy became a month-to-month tenancy under the same terms as the expired lease. ( Civ. Code, § 1945 ["If a lessee of real property remains in possession thereof after the expiration of the hiring, and the lessor accepts rent from him, the parties are presumed to have renewed the hiring on the same terms and for the same time, not exceeding one month when the rent is payable monthly, nor in any case one year"].) Thus, during that tenancy, Salima retained all the rights as a tenant that she possessed under the written lease.

Ordinarily, a month-to-month tenancy is terminated only upon the giving of 30 days notice. ( Civ. Code, § 1946.) In this case, neither party gave the other a specific notice of termination. However, Salima gave an implied (albeit untimely) notice by failing to pay rent in July 2011 and for several months after. Put another way, because Salima failed to tender rent, Knight could not accept it, and therefore the statutory presumption that the parties "have renewed the hiring on the same terms" ( Civ. Code, § 1945 ) no longer applied. Thus, the implied month-to-month lease terminated when Salima failed to pay rent.

Further, even if Salima's failure to pay rent, in itself, did not terminate the statutorily-implied lease, it nevertheless constituted a material breach of the lease. And, when one party to a contract breaches a material term of the contract, the other party has the option to terminate the contract for cause. (See, e.g., B. L. Metcalf General Contractor, Inc. v. Earl Erne, Inc. (1963) 212 Cal.App.2d 689 , 693, 28 Cal.Rptr. 382 ; see also Wood, Curtis & Co. v. Scurich (1907) 5 Cal.App. 252 , 254, 90 P. 51 ["the refusal of one party to a contract to make payment as called for by the terms of a contract excuses the other party from further performance on his part"].) Here, Knight's service of a three-day notice to pay rent or quit and her initiation of an unlawful detainer action when Salima failed to comply with the notice

indisputably establishes Knight's election to terminate the implied lease. Thus, even if Salima's initial failure to pay rent did not terminate her month-to-month tenancy, her failure to comply with the three-day notice to pay rent or quit, followed by Knight's filing of an unlawful detainer action,

We begin our discussion by noting that the basis for Salima's conversion claim changed from the complaint to the summary adjudication motion. In her complaint, she alleged a generic conversion claim-i.e., that Knight wrongfully took possession of Salima's property. The allegations of the claim did not mention environmental contamination. At the hearing on the motion for summary adjudication, however, Salima's counsel stated: "[T]he conversion that's defended in the summary judgment motion is a particular and unusual kind of conversion, conversion caused by an environmental contaminant. It's not like the landlord went in and took the property. We're not claiming conversion based on a post-lockout failure to inventory and return the items after the unlawful detainer ." (Italics added.)

In light of counsel's statement, which expressly waived any claim for conversion based upon Knight's alleged retention of the property, we confine our discussion to the propriety of summary adjudication of the conversion claim based

[Citations.] Because the act must be knowingly done, 'neither negligence, active or passive, nor a breach of contract, even though it result in injury to, or loss of, specific property, constitutes a conversion.' " ( Taylor v. Forte Hotels International (1991) 235 Cal.App.3d 1119 , 1124, 1 Cal.Rptr.2d 189 .) As the Supreme Court explained in finding no conversion in a case in which the plaintiff's household furnishings and effects were destroyed in a fire while in the possession of the defendant, if return of the property to the plaintiff is impossible "because the goods have been lost or destroyed, either without fault on the part of the bailee or merely because of his negligence, there is no conversion. Negligence in caring for the goods is not an act of dominion over them such as is necessary to make the bailee liable as a converter." ( George v. Bekins Van & Storage Co. (1949) 33 Cal.2d 834 , 838, 205 P.2d 1037 .)

In this case, there was no evidence presented at the summary adjudication stage to indicate that Knight caused the alleged sewage spill. In fact, as discussed in section B.4., post , the evidence presented at the summary adjudication stage was undisputed that Knight was not negligent in failing to prevent the spill. Accordingly, she cannot be held liable for conversion based upon the alleged environmental contamination, and summary adjudication was properly granted.

2. Breach of the Covenant of Quiet Enjoyment

In her appellant's opening brief, Salima concedes that the trial court

The covenant of quiet enjoyment, as codified in Civil Code section 1927, arises from a lease: "An agreement to let upon hire binds the letter to secure to the hirer the quiet possession of the thing hired during the term of the hiring." ( Civ. Code, § 1927.) "Under this section, there is an implied covenant on the part of a landlord that a tenant shall have quiet enjoyment and possession of the premises during the continuation of the term ." ( Lee v. Placer Title Co. , supra , 28 Cal.App.4th at p. 512, 33 Cal.Rptr.2d 572 , italics added.) In this case, the trial court found-based upon the undisputed facts that Salima stopped paying rent and failed to comply with Knight's three-day notice to pay rent or quit-that at the time of the alleged constructive eviction (i.e., when the purported sewage spill occurred in January 2012) there was no lease, and Salima was not lawfully in possession of the premises. As discussed in section A., ante , these findings were correct in light of the undisputed facts before the court. Therefore, the court properly granted summary adjudication in favor of Knight on Salima's breach of the covenant of quiet enjoyment claim.

3. Nuisance

Salima alleged that the sewage spill constituted a nuisance, which is defined by statute as "[a]nything which is injurious to health ... or is indecent or offensive to the senses ... so as to interfere with the comfortable enjoyment of life or property." ( Civ. Code, § 3479.) She contends the trial court erred in granting summary adjudication of her claim because she presented evidence that the sewage spill constituted a nuisance, and none of Knight's defenses-including her defense that Salima's occupation of the premises was illegal-has any application. She is incorrect.

Section 731 of the Code of Civil Procedure governs who may bring an action for nuisance. It provides: "An action may be brought by any person whose property is injuriously affected, or whose personal enjoyment is lessened by a nuisance, as defined in Section 3479 of the Civil Code, and by the judgment in that action the nuisance may be enjoined or abated as well as damages recovered therefor." ( Code Civ. Proc., § 731.) It is long established that "an action based

sewage spill occurred. As discussed in section A., ante , that finding was correct. Therefore, Salima did not have standing to bring a nuisance claim, and the court's summary adjudication of that claim in favor of Knight was proper.

4. Negligence/Strict Liability

Salima contends the trial court erred in granting summary adjudication of her negligence/strict liability claim because there was a disputed issue of fact regarding whether Knight knew or should have known there were plumbing issues causing sewage to back up. We disagree.

In her appellant's opening brief, Salima states that "[t]hroughout the terms of [Salima's] tenancy of 18 years, there were several problems with plumbing issues, all of which resulted in [Knight] arranging inspections and some type of inadequate repairs by her brother and/or an unlicensed handyman." While it is true that there was evidence presented at trial of multiple plumbing issues over the years, as the trial court pointed out in ruling on the summary adjudication motion, the only evidence before it on that motion regarding prior plumbing issues was evidence of an incident in 2009 involving a backed-up drain in a single sink, which filled the sink with foul-smelling water, and which Knight promptly remediated. The court found that this single incident was not sufficient to show that Knight knew or had reason to know there was a significant plumbing problem that would result in a major sewage back-up three years later, and therefore Knight was not negligent in failing to repair it before the alleged spill. We agree with the trial court's assessment. (See, e.g., Mora v. Baker Commodities, Inc. (1989) 210 Cal.App.3d 771 , 782, 258 Cal.Rptr. 669 ["The landlord's obligation is only to do what is reasonable under the circumstances. The landlord need not take extraordinary measures or make unreasonable expenditures of time and money in trying to discover hazards unless the circumstances so warrant"].) Accordingly, we conclude the court properly granted summary adjudication of the negligence/strict liability claim.

C. Substantial Evidence Supports the Jury's Verdict on the Contract Interference Claim

As noted, the jury in the trial of Salima's contract interference claim reached a verdict in favor of Knight, finding there was no economic relationship between Salima and Onubah. On appeal, Salima argues that the verdict was not supported by substantial evidence because there was such overwhelming evidence of a sales agreement between Salima and Onubah that no rational trier of fact could conclude there was no economic relationship between them that contained a reasonably probable future economic benefit or advantage.

"[W]hen the 'findings of fact are challenged in a civil appeal, we are bound by the familiar principle that "the power of the appellate court begins and ends with a

Rahim may have told Salima about the sale does not show that she reached an agreement to sell. Unless Rahim had Salima's personal power of attorney to act on her behalf in selling her practice or the clinic, evidence of his agreement with Onubah is irrelevant. Indeed, the jury apparently recognized this issue and sought evidence of such a power of attorney, first asking Khaleel whether one existed, and then asking during deliberations for additional information about it (information that had not been presented, and therefore was unavailable to the jury).

In light of Onubah's testimony that he spoke only to Rahim and Khaleel about the sale, and Khaleel's testimony that Salima did not participate in the decision to sell the clinic, the jurors reasonably could have viewed the written contract before them with skepticism, either believing that she did not sign it herself (despite the notarization), or that she signed it but did not