Del Taco, Inc. v. University Real Estate Partnership V

3 Cal. Rptr. 3d 311, 111 Cal. App. 4th 16, 2003 Cal. Daily Op. Serv. 7082, 2003 Cal. App. LEXIS 1208
CourtCalifornia Court of Appeal
DecidedAugust 8, 2003
DocketD039853
StatusPublished
Cited by3 cases

This text of 3 Cal. Rptr. 3d 311 (Del Taco, Inc. v. University Real Estate Partnership V) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Del Taco, Inc. v. University Real Estate Partnership V, 3 Cal. Rptr. 3d 311, 111 Cal. App. 4th 16, 2003 Cal. Daily Op. Serv. 7082, 2003 Cal. App. LEXIS 1208 (Cal. Ct. App. 2003).

Opinion

*19 Opinion

HUFFMAN, Acting P. J.

After a major sewer line repair was required for its business that was operated on leased premises, plaintiff and appellant Del Taco, Inc. (Del Taco), sued its former landlord, defendant and respondent University Real Estate Partnership V, a limited partnership (University). Del Taco sought declaratory relief concerning its rights under the original ground lease agreement and the obligations to pay for the repairs. Del Taco also sued its current landlord, 1033 Third Street Corporation (Third Street), which is not a party to this appeal. The underlying action is still pending against Third Street.

University brought a motion for summary judgment, contending there were no triable issues of material fact and it was entitled to judgment as a matter of law. (Code Civ. Proc., § 437c.) The motion was granted and Del Taco appeals, contending the trial court erred in finding that as to University, there was no potential liability nor any triable issues of fact under either the express or implied covenants in the lease agreement. These arguments lack merit and we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In 1996, Del Taco entered into a ground lease agreement with University, providing that Del Taco would construct and operate a fast food restaurant within a shopping center. Exhibit B to the lease provided a map of the premises. Exhibit D to the lease required University to provide certain utilities to Del Taco’s designated points of connection, “with capacities sufficient for Del Taco’s intended use.” Specifically, Exhibit D required University to provide a four-inch sanitary sewer lateral line. Del Taco’s new sewer connection tied into a lateral fine that had been used by a previous restaurant tenant at the site. The lease required the landlord to maintain and repair the common areas during the term of the lease, and defined common areas as including those parking areas and walkways that were subject to the rights of all tenants of the shopping center.

The restaurant was constructed and began operations in 1997. In March 1998, approximately one and one-half years after Del Taco began its operations at the site, a sewage blockage occurred and was repaired through the removal of congealed grease. The grease trap had not been cleaned out as part of Del Taco’s maintenance of its premises. University’s property manager sent the $350 bill to Del Taco, which paid it. At her deposition, she identified the 260 foot sewer line as running under a common area parking lot. Only Del Taco was using that line.

In May 1998, University sold the shopping center, including these leased premises, to Third Street.

*20 In June 2000, the sewer line serving Del Taco failed and had to be repaired. The job logs for the repair reported that the stoppage was due to faulty construction in installation, including improper grading, separations in the line, improper assembly, and foreign material on top of the line. Del Taco paid over $80,000 for this repair.

In February 2001, Del Taco filed this action for declaratory relief against University and Third Street, seeking to hold them responsible for the costs of the repair under the terms of the leases.

In October 2001, University brought a motion for summary judgment, contending there were no express or implied warranties about the sewer line which would place it under a duty to maintain or repair it, and that to the extent there were any express warranties regarding the construction of the line, they only extended to its four-inch size, and there was no dispute that the proper size was installed.

In opposition to the summary judgment, Del Taco argued there were triable issues of fact about University’s breach of the lease, particularly with reference to the implied covenant of good faith and fair dealing with regard to the provision of the sewer line under the lease. Del Taco took the position that the sewer line was improperly constructed and therefore it could not have expressly or impliedly accepted die condition of the property as conveyed to it through the lease.

After the trial court took the motion under submission, it issued a ruling first stating that unless there is an express covenant set forth in a lease, “a landlord is not bound to prepare nonresidential premises for the tenant’s use, or to keep them in repair, except to the extent to which he retains control over an area used in common by the public or other tenants. [Citation.]” This ruling analyzed the duty of a transferor of an interest in leased property, as follows: If, immediately before the transfer, the transferor was under an obligation to perform an express promise contained in a lease that touches and concerns the transferred interest, that transferor will continue to be obligated after the transfer, if the obligation rests on privity of contract, and the transferor will not be relieved of the obligation by the person entitled to enforce it.

In applying these rules, the trial court’s ruling further noted that at oral argument, Del Taco had conceded University was not expressly obligated to maintain and repair the sewer line, but was alternatively contending University breached the lease contract by not providing an “adequate” sewer line. This alternative contention was rejected, as follows: “The lease required University to provide a 4" sanitary sewer lateral. There is no dispute that such *21 a sewer line was installed. Further, the line did not have to be replaced for more than a year after University sold the property. To the extent plaintiff argues University was required to do more than provide a 4" sewer fine, the plaintiff would be implying conditions that are not expressed in the lease. As noted above, University cannot be liable for implied obligations after it is no longer in privity with the plaintiff.”

Thereafter, Del Taco brought a motion for reconsideration, new trial, or to set aside the ruling. This motion was denied. The court reasoned as follows: “Exhibit D to the lease required University to provide certain utilities ‘with capacities sufficient for Del Taco’s intended use.’ Plaintiff contends the sewer line ‘was defective, was not installed or constructed properly, and, therefore, was not sufficient for Del Taco’s intended use.’ It appears plaintiff is focusing on ‘sufficient’ to the exclusion of ‘capacity.’ For example, Exhibit D also calls for ‘600 amp capacity’ and ‘natural gas capacity of minimum 2100 CFH.’ Thus, capacities sufficient for Del Taco’s intended use in this context calls for University to provide a 4" sewer line as specified in the lease.”

Summary judgment was entered for University in accordance with the order granting the motion. Del Taco appeals.

DISCUSSION

I

INTRODUCTION AND SUMMARY JUDGMENT STANDARDS

Del Taco relies on both express and implied lease covenants to support its declaratory relief request to hold University responsible for payment of the repair costs for the sewer line. It contends that triable issues of fact exist concerning such a continuing duty, to the extent that the sewer line ran under the common area parking lot, and the landlord was responsible under the lease for maintaining the common areas.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Weinstock Porter Dev. v. Teixeira Farms CA2/6
California Court of Appeal, 2016
SCO Group, Inc. v. Novell, Inc.
439 F. App'x 688 (Tenth Circuit, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
3 Cal. Rptr. 3d 311, 111 Cal. App. 4th 16, 2003 Cal. Daily Op. Serv. 7082, 2003 Cal. App. LEXIS 1208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/del-taco-inc-v-university-real-estate-partnership-v-calctapp-2003.