There are several legal doctrines to examine to determine if a commercial tenant’s lease obligations are excused.  The start is Civil Code §1511 and Civil Code §1514  This post examines  the doctrine of “frustration of purpose” which is close to the related “impossibility of performance” doctrine, but frustration more properly relates to the consideration for performance.  (Autry v. Republic Productions (1947) 30 Cal.2d 144)

Frustration of purpose requires  supervening events, unknown at the time a contract is made, so that without fault, a basic assumption on which the contract is made, cannot be performed.  (FPI Development, Inc. v. Nakashima, 231 Cal. App. 3d 367 (3d Dist. 1991)
If the debtor’s performance is excused by these causes, the debtor may owe part of the consideration according to the benefit which the creditor receives from the actual performance. (Civil Code, § 1514)

Saleen cars look awesome!  Too bad the one in this case (not as pictured) only drove for 50 miles than died.  Civil Code §1717 has a mutuality component.  The defendant was added as an alter ego of a debtor under a Riverside Superior Court judgment, but was found to NOT be the alter ego.  Therefore, he was entitled to an award of attorney fees although he was not a party to the contract sued upon in the former action which contained an attorney-fee provision.  The case is hereMSY Trading Inc. v. Saleen Automotive, Inc  The logic is if the person sued as an alter ego had been found to be the alter ego, he  would be liable for attorney fees under the contract so, if the person is found not to be an alter ego it’s only fair to grant fees in favor of that defendant.

The appellant MSY Trading Inc. imports and exports vehicles. It obtained a stipulated judgment in Riverside against SMS Retail Corona and SMS Signature Cars, Inc. regarding its purchase of a defective Saleen brand automobile.  Unable to collect on the judgment, MSY filed with the Riverside Court to add the famous business executive and former race car driver Steve Saleen and Saleen Automotive as judgment debtors, arguing that they are alter egos of the defendants. The court declined to add Steve Saleen, however, it added Saleen Signature Cars as a judgment debtor.  (The lesson is don’t through around alter ego without sufficient facts).

The reason Saleen Automotive was added is because a stipulated judgment was agreed to including Saleen Automotive.  The Court stated that whether by inadvertence or otherwise, Saleen Automotive was not a signatory to the settlement agreement.   So that was a pretty easy call for the courts to add the entity.

I find it amazing how lawyers make false arguments.  1st, the appellate court pointed out that the respondent MSY argued that Saleen was late filing his notice of appeal.  The Court pointed out that “Somewhat ironically, if plaintiffs are correct, their own appeal (filed December 3, 2018) is untimely too.”

2nd, the Saleen defendant opposed the award of fees against the Saleen entity.  The court pointed out the glaring floaw.  Saleen Signature Cars was added to a judgment that contains an award of contractual attorney fees. The amended judgment did not eliminate the prior judgment, it simply added a party. Thus Code of Civil Procedure section 685.040 applied which allows post judgment fees for enforcing a judgment!  Moral, sometimes you do not want what you ask for!  Or maybe what is good for the goose is good for the gander.  Or pay your debts!  I also think for the size of the judgment, both sides spent more on attorney’s fees than the ultimate judgment so don’t waste judicial resources.

 

 

I see this case more as a discovery matter and a lesson for lawyers and clients not to lie.  But it also stands for malicious prosecution, a favorable termination requires more than a dismissal of the underlying action.  The person wrongfully sued who has prevailed must show a favorable termination on the merits that reflects on his innocence of the alleged wrongful conduct to support a subsequent action for malicious prosecution.  This matter turned on a discovery issue, and Rams Gate hiding information in discovery.

This case involved the purchase of a Sonoma County winery by the defendant (Rams Gate Winery).  For me, I especially liked the 1894 law pointed out by the Court stating: “…under Wittenbrock v. Parker (1894) 102 Cal. 93 (Wittenbrock), Ram’s Gate must be constructively charged with information in the hands of its transactional counsel,…”  I love this because the transactional lawyer in the underlying purchase and sale transaction had possession of the information his client asserted it did not have.  It is critical that lawyers send all documents and convey all facts about a transaction to their client!  Roche v. Hyde – filed June 30, 2020, First District, Div. Four
Cite as 2020 S.O.S. 3283  Full text click here >

Further, this hotly litigated case had a unique issue  involving Rams Gate winning a summary adjudication motion.  While only part of the case was decided, Rams Gate only won due to its withholding of discovery.  Therefore, the exception to the interim adverse judgment rule recognized in Carpenter v. Sibley (1908) 153 Cal. 215 (Carpenter) applied for judgments procured by fraud or perjury applies.

The Court held that “As a matter of first impression, we hold that egregious discovery misconduct—here, the withholding of a critical piece of evidence in willful violation of multiple court orders, including a sanctions order, where the suppressed evidence likely would have resulted in a summary judgment victory for Roche—may provide a basis for applying the fraud or perjury exception under Carpenter.”

I am continually amazed how lawyers and their clients lie and withhold information in discovery.  Courts are not idiots, and when they discovery a lie in discovery, they tend to not believe anything the party (or their lawyer) say and the case is lost.

P.S.  The initial transaction was in 2005, this case is still not over and its 2020!  However, the prior owners of the winery have both passed away.  The opinion n is 95 pages long, but has a nice discussion of the facts and law.

Los Angeles County now accepts online notarization.  LA County Recorder Accepts Electronic Notarization

Essentially you Facetime the notary, provide your ID and they email you the notarization certificate and document notarized.  It is the absolute best way to notarize.  I’m sure its only a matter of time for the fraudsters to exploit it.

I have used www.notarize.com.  They have an app, it costs $25 and is simply amazing!  I believe Virginia, Texas, Minnesota and others directly allow for electronic notarization.  See also here:States allowing online notarization

LOS ANGELES (Updated April 24): “All civil trials scheduled to begin for the period March 17 through June 17 have been or will be continued by General Order. Because civil jury and non-jury trials are not included in the enumerated time-sensitive essential functions set out in these General Orders, they will be continued, or advanced and vacated and a trial setting conference will be scheduled. The parties will receive individual minute orders issued by the trial judge to whom the case is assigned continuing these trials to a date after June 17 or advancing and vacating the trial dates and scheduling a trial setting conference on or after June 22. The length of the continuance will be determined by reference to a number of factors, including most critically, the ongoing need to protect the public, potential jurors, attorneys, witnesses, court staff and judicial officers through the use of social distancing. Many courtrooms, jury boxes, jury deliberation rooms, audience seating and size and counsel table locations may not be well-suited to maintain the social distancing measures that we assume will continue even after our court moves into hearing non-emergency matters. Thus, our total available supply of jury trial-ready civil courtrooms may remain constrained for some period of time. The length of the continuance will also be influenced by the ability of our criminal courts to summons and secure a sufficient number of jurors to enable them to meet all constitutional speedy-trial requirements. Given that any pool of potential jurors must first be allocated to those criminal matters with constitutionally mandated trial dates, civil jury pools will be restricted for the foreseeable future. Further, limiting the ability of civil courts to resume civil jury trials immediately upon reopening of the courts to non-essential matters is the need to comply — to the greatest extent possible — with the statutory preference schemes articulated in CCP section 36, and the statutory mandates for unlawful detainer trials. The same considerations requiring the court to continue civil jury trials for the period from now until June 17 apply to those trials currently scheduled to begin on or after June 22. While the continuance orders may not be immediately issued, counsel should be prepared for the possibility that courts will find good cause for further continuances of non-preference civil jury trials throughout the summer. Because our courtrooms and courthouses are very likely still to be operating under social distancing requirements when we resume operations, counsel are strongly encouraged to appear telephonically for all calendar matters. In fact, our ability to resume calendars of any substantial size, is wholly dependent on counsel’s willingness to appear telephonically. The electronic filing system for non-complex civil matters continues to accept filings. Motions for Complex courts can be filed using drop boxes. Civil law and motion matters are not enumerated as time-sensitive essential proceedings under the Court’s existing and future General Orders. The Court at this time must direct its resources to ensuring that the constitutionally and statutorily mandated time-sensitive essential matters in criminal, dependency, delinquency, mental health, probate and family law can be timely heard and decided. Also, please keep in mind that more than 75% of the court staff is away from the courthouses during this emergency period. The court simply cannot process civil law and motion matters at this time.” More “All courtrooms will remain closed for judicial business through May 12, except time-sensitive, essential functions. All other matters will be continued by the Court. Access to all Los Angeles County courthouses remains restricted at all times to judges, commissioners, court staff, co-lessees, Judicial Council staff and vendors, and authorized persons.” More “Los Angeles Superior Court Presiding Judge Kevin C. Brazile, in a webinar on Friday…speculated that civil trials will start up again in August or September, and said civil trials now scheduled for late June will probably be continued.” More “Effective March 23 and until further notice, the Superior Court of Los Angeles County will close the Clerk’s Offices at all 38 courthouses.” More

 

California’s new statewide residential rent and eviction control laws change almost 150 years of legal precedent.  The new rent control rules are contained in Civil Code section 1946.2 concerning termination of tenancies which now require “just cause” and Civil Code section 1947.12 concerning limitations on rent increases. Landlords must also be cognizant of additional new laws including, but not limited to, changing the content of leases, counting business days, not calendar days, for expiration of notices to pay or to perform or quit, and not inadvertently creating a rent-controlled property out of a rent-control exempt property.  One of the best attorney’s I know wrote an article on these laws.  Check it out: Simkin 2021 Rent Control Article CLA

CC&R’s cannot impose restrictions on the addition of ADU’s, including Junior ADU’s. Civil Code §4751 states that CC&R’s can impose “reasonable restrictions” so long as they do not interfere with Sections 65852.2 or 65852.22 of the Government Code. This probably means submitting plans for approval to their design approval board and paying a small fee for that review.

The legislature has passed several bills promoting additional housing loosening up restrictions on building Accessory Dwelling Units (ADU’s). Until 2025, new for January 2020, Senate Bill 13 adds Government Code §65852.2, and removes Health and Safety Code 17980.12 restrictions as to land use. The new law now allows ADU’s up to 1,200 sq. feet to be built where previously prohibited for both single-family or multifamily dwellings. You can add junior units and effectively create a triplex out of a single-family house! They can be attached to, or located within, an attached garage, storage area, or other structure. Maybe even in a large storage room!
The setback requirements are loosened for an existing garage conversion to only require five feet from the side and rear lot lines for an ADU constructed above a garage.
While a parking space must be provided, you do not need to replace parking spaces if a garage, carport, or covered parking is demolished to construct an ADU. There cannot be additional parking restrictions if the ADU is located within one-half mile walking distance of public transit.