Zintel Holdings v. McLean

209 Cal. App. 4th 431, 147 Cal. Rptr. 3d 157, 2012 WL 4077509, 2012 Cal. App. LEXIS 986
CourtCalifornia Court of Appeal
DecidedSeptember 18, 2012
DocketNo. B236139
StatusPublished
Cited by54 cases

This text of 209 Cal. App. 4th 431 (Zintel Holdings v. McLean) 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
Zintel Holdings v. McLean, 209 Cal. App. 4th 431, 147 Cal. Rptr. 3d 157, 2012 WL 4077509, 2012 Cal. App. LEXIS 986 (Cal. Ct. App. 2012).

Opinion

Opinion

PERLUSS, P. J.

Zintel Holdings, LLC (Zintel), sued Lilo McLean and her son, Mark Huth, to invalidate or equitably reform their allegedly fraudulent [434]*434residential apartment lease. McLean cross-complained for breach of the implied covenant of quiet enjoyment and several related torts. After the court denied relief on both the complaint and cross-complaint on motions for summary judgment, it entered judgment and awarded costs of approximately $2,500 to McLean and Huth pursuant to Code of Civil Procedure section 1032 (section 1032), but concluded there was no prevailing party under Civil Code section 1717 (section 1717) and declined to award them attorney fees. McLean and Huth appeal from the judgment only with respect to the denial of attorney fees. We affirm as to McLean, but reverse as to Huth and remand for a determination of the reasonable attorney fees to which he is entitled.

FACTUAL AND PROCEDURAL BACKGROUND

1. McLean and Huth’s Lease Agreement with Zintel

McLean and Huth have lived in units G and H of an eight-unit apartment building at 325 North Palm Drive in Beverly Hills for more than 50 years. There is a doorway through a closet that connects the two units.

McLean and Huth have never paid more than a total of $200 per month for both units under local rent control ordinances. Robert Jonker-Fisher, who lived in New York, became the sole owner of the property in 1997. McLean served as building manager and signed leases on behalf of Fisher, who never traveled to Beverly Hills to visit the property.

The lease at issue in the litigation provided for the rental of units G and H for $200 per month from May 2007 to May 2012. McLean maintained she told Fisher about the lease and he responded, “Okay.” McLean then signed as both landlord and tenant; Huth also signed as tenant. The lease agreement includes an attorney fee provision stating in part, “In the event action is brought by any party to enforce any term of this agreement or to recover possession of the premises, the prevailing party shall recover from the other party reasonable attorney fees.” Fisher terminated McLean as building manager in July 2007, but she remained a tenant, and her rent was accepted without incident.

Fisher died in August 2008. In 2010, following extended probate proceedings, Fisher’s widow took ownership of the property as the sole member of Zintel. Before that occurred, however, Zintel had instructed the new building manager to accept McLean’s monthly rental payments. McLean’s rent checks were consistently cashed through 2010.

From January 2009 to July 2010 Zintel served McLean with 16 inspection notices for her apartment. Additionally, the building manager and the property’s management company sent McLean letters requesting she switch parking [435]*435spots. McLean retained her original parking spot, and the matter was not pursued. On July 10, 2010 Zintel served McLean and Huth with a “60-day notice to quit” and a “60-day notice to cure covenants or quit” demanding the door connecting the two units be removed. Those notices were later withdrawn.

2. Zintel’s Complaint and McLean’s Cross-complaint

On July 23, 2010 Zintel sued McLean and Huth seeking declaratory relief and equitable reformation of the lease agreement. The complaint alleged the fair market monthly rental value of the units was approximately $2,500. As the basis for relief, Zintel alleged the lease violated the statute of frauds, was executed without Fisher’s authorization and had been fraudulently backdated so it would appear to have been signed while McLean was still managing the property. Zintel also alleged McLean had no authority to combine units G and H. The complaint requested a declaration of the parties’ respective rights under the lease and reformation of the lease, if not found to be void, to reflect a fair and equitable rental rate.

McLean cross-complained two months later, alleging causes of action for breach of the covenant of quiet enjoyment, elder abuse and intentional and negligent infliction of emotional distress. The cross-complaint alleged the inspections and 60-day notices constituted harassment and represented Zintel’s attempts to force McLean to move out. McLean sought monetary damages on all causes of action.

3. The Trial Court’s Orders Granting Summary Judgment in Favor of McLean and Huth on the Complaint and Zintel on the Cross-complaint

On February 17, 2011 McLean and Huth moved for summary judgment on Zintel’s complaint. Citing Zintel’s admission it had accepted $200 per month for the two units pursuant to the lease agreement for three years, McLean and Huth argued Zintel was estopped from asserting the lease agreement was void.

The following week Zintel moved for summary judgment on McLean’s cross-complaint. Zintel argued the notices it had sent were either minor inconveniences or had been withdrawn before any action was necessary and, therefore, not a basis for liability under any of the theories alleged. Zintel further contended any communications to McLean requesting she change parking spaces did not rise to a level of actionable harassment; in addition, the matter was subsequently abandoned.

After the filing of opposition and reply memoranda, the parties stipulated to adopt the court’s tentative ruling in its entirety granting both McLean and [436]*436Huth’s motion for summary judgment on the complaint and Zintel’s motion for summary judgment as to McLean’s cross-complaint. Accordingly, no hearing was held on the motions.

With respect to McLean and Huth’s motion, the court ruled, even if the lease violated the statute of frauds, the doctrines of equitable estoppel and part performance precluded a finding it was void because Zintel had known of the lease and accepted rent for both units from 2007 to 2010. The court also concluded invalidating the lease would lead to an unconscionable result for McLean and Huth while only marginally benefitting Zintel since there was only one year remaining on the lease term.

With respect to the cross-complaint, the court ruled there was no evidence of constructive or actual eviction to support a cause of action for breach of the implied covenant of quiet enjoyment. The court further concluded there was no evidence McLean had been denied a property right qualifying as elder abuse or subjected to outrageous behavior constituting intentional infliction of emotional distress because Zintel’s actions were within its statutory and contractual rights as a landlord. The court also found no evidence of a breach of duty to support a claim for negligent infliction of emotional distress.

4. The Trial Court’s Orders and Judgment Awarding McLean and Huth Costs as Prevailing Parties but Denying Their Motion for Attorney Fees

After filing the stipulation to adopt the court’s tentative rulings on the summary judgment motions, counsel for McLean and Huth submitted a proposed judgment that included provisions for an award to them of costs and recovery of their reasonable attorney fees. Zintel objected to these two portions of the proposed judgment, noting it was the prevailing party on the cross-complaint. Accordingly, Zintel argued McLean and Huth were entitled only to an award of costs under section 1032 with respect to the complaint; Zintel was entitled to costs relating to the cross-complaint.

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Cite This Page — Counsel Stack

Bluebook (online)
209 Cal. App. 4th 431, 147 Cal. Rptr. 3d 157, 2012 WL 4077509, 2012 Cal. App. LEXIS 986, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zintel-holdings-v-mclean-calctapp-2012.