Opinion
C094978 C095651
03-22-2023
MICHAEL MCKEEN, Plaintiff and Respondent, v. PICK 6 TAHOE, LLC, Defendant and Appellant.
NOT TO BE PUBLISHED
Super. Ct. Nos. SCU20210016, SCU20200077
KRAUSE, J.
Defendant Pick 6 Tahoe, LLC (Tenant), entered into two commercial lease agreements with plaintiff Michael McKeen (Landlord) and operated two restaurants on the leased premises. Tenant habitually made late or partial rental payments, and as a consequence, Landlord filed multiple unlawful detainer actions. However, those actions ultimately were resolved through settlements, or because the trial court granted Tenant relief from forfeiture. When Tenant again failed to make timely rental payments in late 2020 and early 2021, Landlord reluctantly entered into a third settlement agreement with Tenant in March 2021, which Tenant also breached. Consistent with the terms of that settlement agreement, the trial court entered stipulated judgments in Landlord's favor, deemed the leases forfeited, and issued writs of possession. When Tenant sought relief from forfeiture for a fourth time, the trial court denied the request.
Tenant appeals, arguing the trial court erred by entering the stipulated judgments based on immaterial breaches of the settlement agreement. Tenant further contends the trial court abused its discretion by declining to grant relief from forfeiture despite evidence of hardship to Tenant. We find Tenant's claims lacking in merit and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. Tenant's history of breaches
Landlord owns two separate commercial units in South Lake Tahoe (hereafter, Unit 1 and Unit 2). In October 2016, Landlord and Tenant entered into a lease agreement for Unit 1, at which Tenant operates the restaurant, Pick 6 Sports Lounge. On the same day, Landlord entered into a commercial lease with an individual named Prakin ChaipanGamble for Unit 2. In August 2019, Chaipan-Gamble assigned Tenant her interest as lessee on the Unit 2 lease as part of a settlement to resolve Tenant's failure to pay a general contractor for improvements on Units 1 and 2. Tenant operates the restaurant, EJ's Morning Cafe, at Unit 2.
We grant Landlord's unopposed request for judicial notice of exhibits 1 and 3-12, which are court records of the previous unlawful detainer actions between the parties (Evid. Code, § 452, subd. (d)) relevant to Tenant's history of chronic breaches and Landlord's efforts to obtain relief. For the same reason, we also take judicial notice of exhibit 2, the mechanics lien recorded against the title of Units 1 and 2 after Tenant failed to pay the contractor. (Evid. Code, § 452, subd. (c).) However, we decline to take judicial notice of court records of the 2022 unlawful detainer action Landlord initiated against Tenant after Tenant filed this appeal (exhibits 13 & 14), as, unlike the prior court records, this information was not available to the trial court when it issued the rulings we address in this appeal. We also deny Landlord's motion to accept evidence. (Cal. Rules of Court, rule 8.252; Code Civ. Proc., § 909.) Landlord asks that we accept his declaration (exhibit 1), his attorney's legal assistant's declaration (exhibit 2), and the trial court's judgment and statement of decision entered in Landlord's 2022 unlawful detainer action against Tenant (exhibit 3), as evidence that Landlord will suffer prejudice if Tenant is permitted to continue his tenancy. We find the proffered evidence irrelevant to the resolution of this appeal.
In December 2019, Landlord filed two unlawful detainer complaints against Tenant alleging that Tenant failed to pay rent on both Units 1 and 2 for the months of October and November 2019. Tenant failed to respond, and the trial court entered default judgments against Tenant and issued writs of possession. Tenant hired counsel and applied for relief. To resolve the actions, the parties entered into a settlement agreement in January 2020, which required that Tenant make installment payments to Landlord totaling over $50,000 in exchange for dismissal. It further stated that Landlord could file new unlawful detainer complaints after February 1, 2020, if Tenant failed to timely make the agreed payments.
In February 2020, Tenant failed to make both February 2020 rental payments, and Landlord again filed two unlawful detainer complaints. In March 2020, the parties executed a second settlement agreement to resolve the action. The agreement again required installment payments from Tenant and provided that if Tenant failed to timely make payments, Landlord could enter stipulated judgments and the leases would be forfeited.
In March 2020, Tenant breached the second settlement agreement by failing to make payments, and the trial court entered the stipulated judgments pursuant to the terms of the agreement. Tenant moved to set aside the stipulated judgments, which the trial court granted, and set trial for June 2020. In June 2020, the trial court entered judgment in Landlord's favor due to Tenant's nonpayment of rent on the units, and ordered forfeiture of the leases and issued writs of possession. Tenant again applied for relief from forfeiture, which the trial court granted, conditioned on Tenant paying Landlord $91,630 for Unit 1, and $31,142 for Unit 2. It further ordered Tenant to pay Landlord $26,220 in attorney fees and $1,548 in costs.
In December 2020, Landlord filed a new unlawful detainer complaint, alleging Tenant failed to pay rent for Unit 1 in November and December 2020. Although the parties requested a trial, all civil jury trials were suspended due to COVID-19. Consequently, the trial court ordered a mandatory settlement conference overseen by a judge pro tem. In February 2021, prior to the settlement conference, Tenant failed to make February rent payments on Unit 2, and Landlord filed an unlawful detainer complaint for Unit 2.
B. The March 2021 settlement agreement
The parties and their counsel met with the judge pro tem for their settlement conference and negotiated a third settlement agreement, which they entered into on March 8, 2021 (the Settlement Agreement). The Settlement Agreement required, among other things that (1) Tenant make a series of payments by cashier's check to Landlord's attorney's office by 5:00 p.m. on specified due dates to pay off back rent, attorney fees, and as regular rental payments; (2) Tenant pay snow removal bills by a date specified; (3) Tenant pay utility bills by their due date; and (4) Tenant install flooring for Unit 3-a storage area that Tenant occupied but which was not part of the leases-and obtain a certificate of occupancy for Unit 3 by May 1, 2021.
It further provided: "If Tenant breaches any term of this Agreement, including without limitation failure to make a payment, failure to pay a snow removal or [utility] bill, or failure to complete the Unit 3 flooring and obtain an occupancy certificate by May 1, 2021, Tenant agrees it shall immediately vacate Units 1 and 2, forfeit the Leases, and return the Leased Premises to Landlord. [¶] Tenant further agrees that if it breaches any term of this Agreement, Landlord shall be entitled to immediate relief by filing the Stipulated Judgments with the Court, which the Court shall issue, writs of possession in relation to the Unlawful Detainer Cases and Leased Premises shall be issued by the Court, and Landlord shall be placed in immediate possession of Units 1 and 2." (Original underscoring.)
The Settlement Agreement provided for "no grace periods with respect to the deadlines referenced herein," and stated that "failure to satisfy any deadline referenced herein constitutes a material breach of this Agreement and will result in immediate forfeiture of the Leases and Tenant's removal from the Leased premises."
It further contained waiver language, stating that Tenant "specifically agrees not to oppose the Stipulated Judgments, writs of possession, or the Sheriff's Department's removal action for any reason, including without limitation seeking relief from forfeiture of the Leases or challenging the Stipulated Judgments or writs of possession based on any legal or equitable ground." Similarly, it provided that "Tenant specifically agrees to waive and hereby does waive, any defense it may have regarding its failure to satisfy any term of this Agreement ...." (Underscoring omitted.)
Finally, it provided: "If Tenant satisfies each and every term of this Agreement, this Agreement shall expire on August 31, 2021, and Tenant's obligations with respect to the Leases and Leased Premises shall resume pursuant to the terms of the Leases and January 2020 Amendment, except as modified herein .... During the period of this Agreement, all terms of the Leases and January 2020 Amendment shall remain in effect, unless otherwise modified herein." (Original underscoring.) The trial court retained jurisdiction over the unlawful detainer actions pursuant to Code of Civil Procedure section 664.6 until Tenant satisfied all the terms of the Settlement Agreement or the leases were forfeited.
Undesignated statutory references are to the Code of Civil Procedure.
C. Tenant's initial breaches of the settlement agreement
Shortly after entering into the Settlement Agreement, Tenant breached the agreement in the following ways:
The Settlement Agreement required Tenant to pay $7,000 for Unit 1 (and attorney fees) by cashier's check to Landlord's attorney's office every Tuesday by 5:00 p.m. over a five-month period. On Tuesday, May 4, 2021, Tenant did not deliver the requisite check by 5:00 p.m., but instead placed it in the mail slot after 5:00 p.m., such that Landlord's attorney received it the following morning.
The Settlement Agreement required Tenant to make $5,070 in rental payments for Unit 2, also by cashier's check, and delivered to the office of Landlord's attorney no later than 5:00 p.m. by the fifth day of each month. On May 5, 2021, after 5:00 p.m., Tenant placed a $2,000 cashier's check in the Landlord's attorney's mail slot. On May 6, Tenant delivered a check for $1,500 to Landlord's attorney, and on May 7, Tenant delivered the remaining $1,570 to Landlord's attorney, plus a $250 late fee.
The Settlement Agreement required Tenant to obtain a certificate of occupancy for Unit 3 by May 1, 2021. Tenant understood that it needed to install new flooring in Unit 3 to obtain a certificate of occupancy. Correspondence dated January 22, 2020, from the El Dorado County Environmental Management Department (the Health Department) to Tenant, referenced an October 2019 e-mail stating that because Unit 3 was used for food storage, Tenant must install a specified type of flooring in Unit 3 to pass inspection and obtain a certificate of occupancy. The correspondence further stated that "Rubber Topset" flooring was "not approved." As Tenant did not intend to store food or beverage items in Unit 3, Tenant chose to install the cheaper, rubber topset flooring.
Tenant had the installation of rubber topset floors completed in Unit 3 on April 29, 2021, and on that same day, Unit 3 passed inspection by the building department. However, Unit 3 did not pass the Health Department's inspection the following day, as food was observed stored in Unit 3, and the flooring was not consistent with the November 2018 and October 2019 approved plans, which had required the more expensive flooring in an area where food would be stored. Thus, Tenant did not obtain a certificate of occupancy by May 1, 2021.
D. Tenant's relief from forfeiture
As a consequence of Tenant's breaches, Landlord filed the stipulations for entry of judgment and moved for writs of possession. In response, Tenant filed a motion under section 473, subdivision (b), arguing excusable neglect, and asserting that it expected to have a certificate of occupancy by May 11, 2021. The trial court denied Landlord's request for stipulated judgment and granted Tenant's request for relief, finding that although Tenant breached the Settlement Agreement in three ways, the breaches were not substantial or material. In doing so, it noted that it was "troubled" by Tenant's history of chronic delinquency in payment of rent and other obligations, and cautioned: "This [order granting relief from forfeiture] does not mean that [Tenant] has a free pass to pay whatever amount whenever he wants rather than the agreed amounts on the agreed due dates, nor does it mean that if [Tenant] continues his history of delinquent payments that such delinquency will not be found to be material and to justify forfeiture in the future."
E. Tenant's subsequent breaches of the settlement agreement and the forfeiture agreement
Thereafter, Tenant breached the Settlement Agreement in the following ways: (1) Tenant failed to pay Landlord $360 for snow removal on or before July 1, 2021; (2) Tenant failed to timely pay the second quarter utility bill, due June 30, 2021; and (3) Tenant still had not obtained a certificate of occupancy for Unit 3.
On July 23, 2021, Landlord again sought entry of the stipulated judgments and writs of possession for Units 1 and 2 based on Tenant's breaches. The trial court set the matter for hearing, but continued the hearing because Tenant's limited liability company status had been suspended for failure to pay taxes, and Tenant needed time to obtain a certificate of revivor. In the interim, Tenant attempted to make a payment of $7,000 on August 9, 2021, with a personal check instead of a cashier's check, as required by the Settlement Agreement. The check was refused by Landlord's attorney. On August 17, the trial court ordered Tenant to make the $7,000 payment to Landlord via cashier's check, which it did.
Tenant also made the snow removal payment on July 27, 2021, which had been due on July 1, and paid the utility bill on July 30, 2021, one month late.
Also on August 17, the Caldor Fire began to spread toward South Lake Tahoe, and the matter was transferred for hearing to the Cameron Park courthouse. As a result of the fire and evacuations, Tenant's restaurant, Pick 6, closed from August 28 to September 7. Tenant did not make its required rental payment on September 1.
F. The trial court's rulings
On September 13, 2021, the trial court heard the matter and granted Landlord's request for entry of the stipulated judgments, ordered the leases forfeited, and issued writs of possession. In doing so, it found that Tenant's continued failure to obtain a certificate of occupancy was a substantial material breach of the Settlement Agreement. It further noted that Tenant's August payment was delinquent, and Tenant had still not made its payment for September 1, nor had Tenant sought to coordinate payment with Landlord given the complications raised by the fire evacuation.
Tenant sought ex parte relief from forfeiture. Tenant argued that it would experience great hardship if the leases were forfeited, because its principal would be forced into bankruptcy, and it would lose the nearly one million dollars of investments it made on the properties. Tenant also submitted a certificate indicating that it had revived its corporate status. Landlord opposed the motion, explaining this was Tenant's fourth request for relief from entry of judgment based on Tenant's failure to pay, and arguing that Tenant had a pattern of failing to perform its written obligations and then acquiescing once Landlord was forced to seek compliance in court, causing Landlord to suffer lost time, expense, and frustration.
On September 24, 2021, following an evidentiary hearing, and after staying the writs of possession and taking the matter under submission, the trial court denied Tenant's request for relief, ordered the leases forfeited, and lifted the stay on the writs of possession. Specifically, it cited to the applicable statute for relief from forfeiture (§ 1179), but found that Tenant had waived its right to challenge forfeiture of the leases under the express terms of the Settlement Agreement. When considering whether the waiver was enforceable, the trial court found it significant that the parties executed the underlying Settlement Agreement while represented by experienced real estate attorneys, and with a judge pro tem experienced in real estate law. It found that Tenant voluntarily and knowingly signed the agreement while understanding the "relevant circumstances," aware that forfeiture of the leases and Landlord's possession of the premises was the consequence of any breach, and that it had waived its right to challenge those remedies.
After concluding that Tenant waived its right to challenge forfeiture, the trial court then reviewed Tenant's multiple breaches of the Settlement Agreement and found that they were all material, except for Tenant's May 4 payment, as it was delivered only 10 minutes late. As Tenant breached various terms of the Settlement Agreement, and the Settlement Agreement provided that those specific breaches were material and would result in forfeiture and Landlord's repossession of the premises, the trial court granted Landlord relief consistent with its terms.
On September 27, 2021, Tenant filed another ex parte application for relief from forfeiture of the leases or, in the alternative, for an order staying execution of the judgments and writs of possession pending the outcome of Tenant's appeal. The trial court denied Tenant's ex parte application for relief.
Tenant appealed. Thereafter, we denied Tenant's writ of supersedeas requesting a temporary stay of Landlord's judgments and enforcement of Landlord's writs of possession pending the outcome of this appeal.
DISCUSSION
I
Materiality
Tenant contends that the trial court erred when it entered the stipulated judgments and granted forfeiture based on breaches of the Settlement Agreement that it argues were de minimis or nonmaterial. Relying primarily on Boston LLC v. Juarez (2016) 245 Cal.App.4th 75 (Juarez), Tenant argues that a tenant's breach must be material to justify forfeiture of a lease. It asserts that the materiality requirement applies, even if the language of the Settlement Agreement permits forfeiture and entry of judgment based on any breach, including de minimis breaches. Landlord counters that Juarez is distinguishable, and that the materiality of Tenant's breaches is irrelevant given the Settlement Agreement's express terms, the circumstances giving rise to the agreement, and Tenant's admitted breaches. Regardless, Landlord argues that Tenant's breaches were material. We conclude that Tenant is bound by the terms of the Settlement Agreement, which requires entry of the stipulated judgments, forfeiture, and repossession where, as here, Tenant commits any of the "material breaches" specified in the agreement.
Whether we must impose a materiality requirement to justify forfeiture, regardless of the Settlement Agreement's express contractual terms, is a question of law that we review de novo. (Juarez, supra, 245 Cal.App.4th at p. 80.)
As a general matter, California courts typically permit termination of a contract "only if the breach can be classified as 'material,' 'substantial,' or 'total.'" (Superior Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal.App.3d 1032, 1051.) In the context of unlawful detainers, courts also have held that a breach of a lease must be material to justify forfeiture. (Keating v. Preston (1940) 42 Cal.App.2d 110, 118 ["a lease may be terminated only for a substantial breach thereof, and not for a mere technical or trivial violation"]; see also NIVO 1 LLC v. Antunez (2013) 217 Cal.App.4th Supp. 1, 5 ["[w]hether a particular breach will give a plaintiff landlord the right to declare a forfeiture is based on whether the breach is material"].) And at least one appellate court has held that a material breach is required to permit forfeiture of a residential lease, even where the lease allows the landlord to terminate the lease for" 'any'" breach. (Juarez, supra, 245 Cal.App.4th at pp. 78, 79.)
Relying on this line of cases and, specifically, Juarezt Tenant argues that Landlord may not obtain forfeiture and entry of judgment under the Settlement Agreement unless Tenant's breaches are truly substantial, urging us to override the express language of the Settlement Agreement defining a material breach. However, the materiality requirement articulated in Juarez stems from a factual scenario and policy considerations not present here. Thus, as we explain, we decline to override the clear text of the Settlement Agreement by imposing a materiality requirement here, where the situation is not at all comparable, as we next explain.
In Juarez, the tenant entered into a residential lease agreement with a landlord for an apartment under the Rent Stabilization Ordinance of the City of Los Angeles (LARSO) (L.A. Mun. Code, § 151.00 et seq.), which helps provide affordable housing for low-income individuals in Los Angeles. (Juarez, supra, 245 Cal.App.4th at pp. 78, 84.) The lease provided that" 'any failure of compliance or performance by Renter shall allow Owner to forfeit this agreement and terminate Renter's right to possession.'" (Id. at p. 78.) When the tenant failed to obtain insurance coverage consistent with the lease requirements, the landlord served the tenant with a three-day notice to perform or quit, and the tenant obtained insurance shortly after the three-day period expired. (Ibid.) The landlord successfully sued the tenant for unlawful detainer. (Ibid.) On appeal, the appellate court held that a tenant's breach of a residential LARSO rental contract must be material to justify forfeiture, even if the lease provides otherwise, because the parties had "unequal bargaining power," given that the tenant was a low-income tenant likely in a difficult position to bargain with the landlord. (Id. at p. 85.) It explained that "[p]ermitting landlords [] with superior bargaining power to forfeit leases based on minor or trivial breaches would allow them to strategically circumvent LARSO's 'good cause' eviction requirements and disguise pretext evictions under the cloak of contract provisions." (Id. at p. 85.) It further noted that the provision breached by the tenant was intended to protect the tenant's interests, and therefore the tenant's breach did not harm the landlord. (Id. at p. 79.)
Thus, Juarez's analysis relied on the uniquely imbalanced relationship between landlords and urban residential tenants, and the policy concerns raised if landlords could simply contract around LARSO's requirements to evict their low-income tenants. Under those facts, the appellate court found it appropriate to override the parties' freedom to contract in favor of a more equitable outcome. Indeed, our Supreme Court has held that "the severe shortage of low and moderate cost housing has left [urban residential] tenants with little bargaining power through which they might gain express warranties of habitability from landlords, and thus the mechanism of the 'free market' no longer serves as a viable means for fairly allocating the duty to repair leased premises between landlord and tenant." (Green v. Superior Court (1974) 10 Cal.3d 616, 625, fn. omitted.)
In this case, however, the considerations driving the Juarez analysis are not implicated. Tenant and Landlord, two sophisticated parties, entered into commercial (rather than residential) leases. From the outset, Tenant had a troubled tenancy, as it continually failed to make complete, timely payments consistent with its contractual obligations. Tenant's delinquencies repeatedly forced Landlord to seek judicial relief by filing multiple unlawful detainer complaints. In each case, once faced with the threat of forfeiture and eviction, Tenant would cure its breaches and obtain relief, only to later breach the leases or settlement agreements. While each of Tenant's breaches was relatively minor, the consistency of Tenant's breaches trapped Landlord in a cycle requiring constant court intervention to obtain Tenant's compliance.
Five months after Tenant's June 2020 relief from forfeiture, Tenant again breached the leases by failing to make rental payments. The parties, represented by experienced counsel of their choice and guided by a professional mediator, drafted the Settlement Agreement to both (1) address Tenant's chronic breaches by providing Landlord with strict provisions requiring a speedy, final remedy in the event of any further breach; and (2) permit Tenant to continue operating its restaurants and avoid eviction despite its admitted breaches. In view of the foregoing, Tenant knowingly assented to the terms in the Settlement Agreement, including its rigid definition of a "material violation" and the consequences of any such violation: forfeiture, repossession, and entry of judgment.
The Settlement Agreement provides that in entering the agreement, it was Tenant's intent to remain in possession of the units and Landlord's intent that Tenant "cure its failure-to-pay breaches of the Leases and associated attorney's fees and costs" related to prior litigation and "ensure timely payment of rent due for Unit 1 and Unit 2 each month through August 31, 2021, or have Tenant immediately removed from Units 1 and 2 without opposition from Tenant."
Thus, in contrast to Juarez, which involved a residential lease with a low-income tenant who committed one minor breach of a term meant to benefit the tenant, here, Tenant and Landlord entered into a settlement agreement, represented by counsel, under the guidance of a judge pro tem, to redress Tenant's chronic breaches of commercial leases. Accordingly, Juarez does not govern here. Indeed, Juarez implicitly distinguished its holding from a situation involving commercial leases, noting that "tenants in urban residential leases are treated more favorably by courts than lessees in commercial leases where the 'parties are more likely to have equal bargaining power.'" (Juarez, supra, 245 Cal.App.4th at p. 84.)
Tenant's reliance on NIVO 1 LLC v Antunez, supra, 217 Cal.App.4th Supp. 1 and Bawa v. Terhune (2019) 33 Cal.App.5th Supp. 1 is equally misplaced, as these cases also address the forfeiture of a residential lease based on truly de minimis breaches: a tenant's failure to maintain personal property insurance (NIVO 1 LLC), and a tenant's rental payment that was one cent short (Bawa).
We see no basis for overriding the plain text of the Settlement Agreement, which specifies the grounds for repossession and forfeiture (i.e., termination) of the leases. (See Civ. Code, § 1951.2, subd. (a) [if a lessee breaches the lease and the landlord terminates his right to possession, "the lease terminates"].) A written agreement must be interpreted to give effect to the parties' ascertainable and lawful mutual intent as it existed at the time. (Civ. Code, § 1636; Ticor Title Ins. Co. v. Rancho Santa Fe Assn. (1986) 177 Cal.App.3d 726, 730.) "A contract may contain a valid provision giving one or the other party an option to terminate it on specified conditions." (Call v. Alcan Pacific Co. (1967) 251 Cal.App.2d 442, 447, fn. omitted; Mad River Lumber Sales, Inc. v. Willburn (1962) 205 Cal.App.2d 321, 324 [" 'A power may be reserved to one party to terminate the contract if the other party fails to render specified performances or to produce certain results' "].) A termination provision in a commercial lease can be enforced even where a party later finds it unreasonably severe. (See Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC (2010) 185 Cal.App.4th 1050, 1064 [commercial lease provision allowing parties to terminate the lease if it did not begin" 'for any reason'" by a date certain "must be given effect, and we cannot read it out of the lease simply because one party feels its operation was harsh or unfair"].)
The Settlement Agreement allows "no grace periods" and defines "material breach" as the "failure to satisfy any deadline referenced herein," resulting in forfeiture of the leases and loss of the premises. It even includes a nonexhaustive list of material breaches, all of which Tenant admits to: "failure to make a payment, failure to pay a snow removal or [utility] bill, or failure to complete the Unit 3 flooring and obtain an occupancy certificate by May 1, 2021." And, any breach entitles Landlord to file the stipulated judgments and immediately obtain forfeiture of the leases and writs of possession, without opposition. In effect, these remedies terminate the leases. Thus, as Tenant indisputably committed multiple material breaches of the Settlement Agreement, as defined, the trial court properly entered the stipulated judgments and granted Landlord's requested relief.
II
Forfeiture
Tenant next contends that the trial court abused its discretion by declining to grant its request for relief from forfeiture under section 1179. Tenant insists that the trial court never substantively addressed its request, and that under the applicable balancing test, it was clearly entitled to relief. We again find no error.
Section 1179 applies to unlawful detainer actions, and vests the court with broad, equitable discretion to relieve a tenant from forfeiture and restore him or her to his or her former estate or tenancy if the tenant makes full payment of rent due. (§ 1179; Gill Petrolium, Inc. v. Hayer (2006) 137 Cal.App.4th 826, 832-833.)" 'Under section 1179, the court in balancing the equities should take into consideration the circumstances of the case, the hardship, if any, to the lessee from the forfeiture, the hardship, if any, to the lessor from relieving the lessee from the forfeiture, the willful or other character of the breach, and then use its best discretion in determining whether relief will be granted.'" (Thrifty Oil Co. v. Batarse (1985) 174 Cal.App.3d 770, 777.)
Initially, we disagree with Tenant's contention that the trial court failed to address its request for relief from forfeiture because it declined to balance the equities. In its ruling, the trial court cited to section 1179 but found by clear and convincing evidence that Tenant was bound by the waiver in the Settlement Agreement, in which it waived its right to seek relief from forfeiture where, as here, it breached the agreement. In making this finding, it considered the circumstances of the agreement, including Tenant's admitted breaches, representation of counsel, mandatory settlement conference, and Tenant's knowing and voluntary acceptance of those terms.
In view of the substance of the trial court's ruling, which clearly addressed Tenant's request for relief from forfeiture, it appears that the trial court simply mislabeled its ruling as "Ruling on [Tenant's] Motion for Denying Entry of Judgment of Possession."
We find no error in the trial court's waiver analysis. Although appellate courts ordinarily review rulings under section 1179 for abuse of discretion (Superior Motels, Inc. v. Rinn Motor Hotels, Inc., supra, 195 Cal.App.3d at p. 1064), here we review the trial court's finding of waiver, which is a question of contract interpretation subject to de novo review. (Golden West Baseball Co. v. City of Anaheim (1994) 25 Cal.App.4th 11, 22.)
A waiver generally means the intentional relinquishment of a known right after knowledge of the facts. (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 31.) It "requires a voluntary act, knowingly done, with sufficient awareness of the relevant circumstances and likely consequences." (In re Marriage of Moore (1980) 113 Cal.App.3d 22, 27.) To be enforceable, a waiver contained in an agreement must be clear, unambiguous, and explicit in expressing the parties' intent. (Lund v. Bally's Aerobic Plus, Inc. (2000) 78 Cal.App.4th 733, 738.) A party may waive any statutory benefit unless the waiver would be against public policy. (Bloom v. Bender (1957) 48 Cal.2d 793, 804.) A waiver must be proven by the party claiming waiver by clear and convincing evidence. (Waller, supra, 11 Cal.4th at p. 31.)
Here, as discussed, Tenant knowingly and with the guidance of counsel entered into the Settlement Agreement. And, the waiver language in the Settlement Agreement is clear, unambiguous, and plainly expressed the parties' intent. It specifically provides that if Tenant breached the agreement, Landlord is entitled to forfeiture and repossession, and Tenant "specifically agrees not to . . . seek[] relief from forfeiture of the Leases or challeng[e] the Stipulated Judgments or writs of possession based on any legal or equitable grounds," and that Tenant "waive[s] any defense it may have regarding the nature or substance of this Agreement, the Stipulated Judgments, or writs of possession," and also waives "any defense it may have regarding its failure to satisfy any terms of this Agreement." (Underscoring omitted.)
Tenant ignores this inconvenient fact and fails to explain why the trial court's refusal to set aside its binding waiver was erroneous. Instead, Tenant focuses on the hardship it will suffer if the leases are forfeited. While forfeiture will undoubtedly cause financial difficulty for Tenant, Tenant still must abide by the agreement, which expressly provides that Landlord is entitled to forfeiture and possession in view of Tenant's specified breaches, without opposition from Tenant. Accordingly, Tenant has not shown the trial court erred by declining to relieve it from forfeiture, which would contradict the plain language of the agreement and the intent of the parties.
DISPOSITION
The judgment is affirmed. Landlord shall recover his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).)
We concur: DUARTE, Acting P. J., EARL, J.