Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County. Joseph R. Kalin, Judge. No. BC376817.
Reed Smith, Margaret M. Grignon, Zareh A. Jaltorossian; Law Office of Mark Rabinovich and Anthony P. Malecki for Defendants and Appellants.
Jones, Bell, Abbott, Fleming & Fitzgerald, Kevin K. Fitzgerald and Usman S. Mohammed for Plaintiff and Respondent.
CHANEY, J.
In this unlawful detainer action, plaintiff Kompany, LLC (“Landlord”) sued defendants Mikayel Israyelyan and Divine Dining, Inc. (“Tenants”) for possession of the commercial premises Tenants had leased from Landlord and for related damages. The trial court ruled in Landlord’s favor, awarding Landlord possession of the premises, past-due rent, damages based on fair rental value and attorneys’ fees.
On appeal, Tenants argue the five unlawful detainer notices on which the judgment is based were deficient as a matter of law and, therefore, could not support the judgment. Tenants also argue the past-due rent award and daily rental damages award are unsupported by the evidence. Finally, Tenants challenge the award of attorneys’ fees.
As discussed below, we conclude four of the five unlawful detainer notices were insufficient. As to the sufficient notice, we conclude Landlord failed to prove the alleged breaches at trial. Finally, we conclude the daily rental damages award is unsupported and the award of attorneys’ fees must be reversed.
Background
1. The Lease
Landlord is the ground lessee of commercial premises located on the corner of La Cienega Boulevard and Melrose Place. Mr. Khosro Illulian is the manager of Landlord.
In 1999, Landlord entered into a commercial lease with defendant Mikayel Israyelyan and another individual (who later was replaced by Oasis Investment, Inc. as a lessee), under which the lessees would use the premises for a restaurant, bar and entertainment venue (the “1999 lease”). After a fire destroyed the restaurant in 2001, the parties entered into a First Amendment to Lease (the “First Amendment”), allowing the lessees to rebuild without paying rent for a period of time. In 2005, at Mr. Israyelyan’s request, Landlord agreed to substitute defendant Divine Dining, Inc. as lessee for Oasis Investment, Inc. Thus, in 2005, Landlord entered into a commercial lease with Tenants for the same premises (the “2005 lease”), which the parties agreed was “a continuation of the [1999] lease.” That same day, Landlord and Tenants also executed a Second Amendment to Lease (“Second Amendment”), explaining the substitution of Divine Dining, Inc. for Oasis Investment, Inc. and stating “[a]ll other terms of the lease and addendums remain unchanged.” We refer to all four documents—the 1999 lease, the First Amendment, the 2005 lease and the Second Amendment—as the “Lease.”
The Lease provides for an escalating monthly base rent as well as for a percentage rent based on a percentage of Tenants’ gross revenues. As to percentage rent, Tenants would provide Landlord with monthly revenue reports, from which Landlord would calculate percentage rent.
2. Unlawful Detainer Notices and Lawsuit
In 2006, Landlord and Tenants began disputing the amount of percentage rent due under the Lease. Landlord claimed Tenants were underreporting gross revenues and, therefore, underpaying their rent. Tenants complained Landlord was miscalculating and overcharging percentage rent. Eventually, Landlord ordered an audit of Tenants’ books and records. An outside auditor conducted the audit and concluded, in part, that Tenants had underreported revenue from private events held on the premises. Because the auditor was unable to obtain adequate records, however, he was unable to quantify the unreported revenue from private events.
In July 2007, Landlord began serving Tenants with unlawful detainer notices. In each notice, Landlord claimed Tenants had breached, or were in default under, the Lease. Between July 2007 and January 2008, Landlord served Tenants with nine such notices. Only five are relevant here, each of which we discuss in detail below.
Based on its unlawful detainer notices, Landlord sued Tenants on August 30, 2007. The second amended complaint (“complaint”) is the operable complaint and attaches a copy of the Lease as well as all nine unlawful detainer notices.
According to Tenants’ opening brief on appeal, Tenants sued Landlord on August 20, 2007, alleging breach of contract, interference with economic relations, prospective economic advantage, and other claims. Tenants represent that case has been stayed pending resolution of this appeal. We do not address those claims.
In January 2008, after filing suit against Tenants, but before filing its second amended complaint, Landlord discovered a document Tenants had prepared and sent to a third party real estate development company (the Ratkovich Company) in an unsuccessful attempt to obtain a lease at a location owned by that company. That document (the “Ratkovich document”) reflected Tenants’ 2006 revenues were more than $3 million higher than the 2006 revenues Tenants reported to Landlord.
3. Trial Court’s Ruling and Judgment
The case was tried to the court over the course of 11 days. The trial court held that the Lease comprised the 1999 lease, the First Amendment, the 2005 lease and the Second Amendment. The court also found the Ratkovich document credible and concluded that Tenants submitted to Landlord false financial statements, which underreported revenue by $3 million to $4 million dollars. Thus, the court held Tenants failed to pay appropriate rent.
The trial court also found that the Lease expired on May 31, 2009 and that Tenants had forged Mr. Illulian’s signature on a document purporting to extend the lease into 2015. The court found Mr. Israyelyan’s testimony untrustworthy. Defendants do not challenge these findings on appeal.
The trial court also concluded Tenants had violated the Lease by (i) violating the Los Angeles Municipal Code, (ii) failing to comply with the premises Conditional use permit, (iii) not maintaining 25 on-site parking spaces at the premises, (iv) building a permanent structure around the parking lot, (v) extending walls around the parking lot, (vi) installing a dance floor over the parking lot, and (vii) failing to obtain permits for special events.
The court entered judgment in favor of Landlord, holding Landlord was entitled to possession of the premises and that Tenants owed Landlord $107,636.00 in past-due rent, plus damages in the amount of $497,979.87 (which amount purportedly was based on the premise’s fair rental value from the date of Landlord’s complaint through judgment). The court also awarded Landlord $506,056.95 in attorneys’ fees. Tenants appealed the judgment and order awarding attorneys’ fees.
Tenants’ September 10, 2009 application for permission to transmit additional trial exhibits is granted.
Discussion
1. Standards of Review
The sufficiency of Landlord’s unlawful detainer notices is a question of law, which we review de novo. (See ASP Properties Group v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266.) Similarly, we independently interpret the Lease. (Id. at pp. 1266, 1268, fn. 4.) If extrinsic evidence was introduced to interpret a lease, we review the lease and the extrinsic evidence de novo if there is no conflict in the evidence. (Id. at pp. 1266-1267.) But, if the extrinsic evidence is conflicting or credibility determinations are involved, we review the trial court’s findings for substantial evidence. (Ibid.)
2. The Law of Unlawful Detainer
Unlawful detainer actions are governed by the Code of Civil Procedure, section 1161 (“section 1161”) and related code provisions. “‘An unlawful detainer action is a summary proceeding, the primary purpose of which is to obtain the possession of real property in the situations specified by statute.’” (Underwood v. Corsino (2005) 133 Cal.App.4th 132, 135.) “An unlawful detainer action is founded upon unlawful occupation and the principal relief sought is early possession of the property; damages and rent are incidental thereto and are recoverable only because the statute so provides.” (Vasey v. California Dance Co. (1977) 70 Cal.App.3d 742, 748.)
Courts have aptly and consistently described the nature of unlawful detainer proceedings as statutorily prescribed and narrowly construed. “‘It has long been recognized that the unlawful detainer statutes are to be strictly construed and that relief not statutorily authorized may not be given due to the summary nature of the proceedings.’” (Underwood v. Corsino, supra, 133 Cal.App.4th at pp. 136-137; see also Kwok v. Bergren (1982) 130 Cal.App.3d 596, 599-600.) “In order for a person to avail himself of the summary remedy of unlawful detainer, he must bring himself within the terms of the statute establishing such relief.” (Hinman v. Wagnon (1959) 172 Cal.App.2d 24, 27.) “‘The statutory procedure must be strictly followed.’” (Underwood v. Corsino, supra, 133 Cal.App.4th at p. 135.) “Unlawful detainer is a highly specialized form of litigation. Highly summary in nature, the code requirements must be followed strictly, otherwise a landlord’s remedy is an ordinary suit for breach of contract with all the delays that that remedy normally involves and without restitution of the demised property.” (Cal-American Income Property Fund IV v. Ho (1984) 161 Cal.App.3d 583, 585.)
An insufficient notice cannot support an unlawful detainer action. (E.g., WDT-Winchester v. Nilsson (1994) 27 Cal.App.4th 516, 534; Bevill v. Zoura (1994) 27 Cal.App.4th 694, 698; Hinman v. Wagnon, supra, 172 Cal.App.2d at p. 28; see also Bevill, supra, 27 Cal.App.4th at p. 697 [“A valid three-day pay rent or quit notice is a prerequisite to an unlawful detainer action.”].) “[A] lessor’s action to recover possession of real property is not one for unlawful detainer where he does not comply with the statutory notice requirements.” (Kwok v. Bergren, supra, 130 Cal.App.3d at pp. 599-600.) An unlawful detainer action is not a bar to a subsequent action for damages. (Vasey, supra, 70 Cal.App.3d at p. 748, fn. 2.)
We must also keep in mind the principle that: “the law abhors forfeitures, and will strictly construe forfeiture provisions against the party in whose behalf they are invoked. (Civ. Code, § 1442.)” (Deutsch v. Phillips Petroleum Co. (1976) 56 Cal.App.3d 586, 592. See also Feder v. Wreden Packing Etc. Co. Inc. (1928) 89 Cal.App. 665, 672-673 (Feder) [that the law abhors forfeitures is “axiomatic”].)
3. Exhibit 4: July 6, 2007 Notice to Perform or Quit
In July 2007, Landlord served Tenants with a 10-day notice to perform conditions or covenants or quit, asserting Tenants had violated various paragraphs of the Lease (“Exhibit 4”). In particular, Landlord asserted Tenants had violated paragraph 6.3 of the Lease by failing to comply with all “Applicable Requirements” under the Lease. Attached to Exhibit 4, Landlord included an Order to Comply from the City of Los Angeles Department of Building and Safety listing various Municipal Code violations at the premises.
Because there are many unlawful detainer notices at issue in this appeal, and their titles are similar (and in some instances the same), we refer to each notice by its trial exhibit number. We consider them in chronological order.
Exhibit 4 also alleged various other violations of the Lease not relevant here.
Exhibit 4 required Tenants to document for Landlord their compliance with the Municipal Code within 10 days of service of the notice. Within that timeframe, the City issued a “case clearance report” indicating that Tenants had cured the violations identified by the City and that the case was closed. In other words, Tenants cured the breaches alleged in Exhibit 4. Accordingly, the trial court erred to the extent it entered judgment based on Exhibit 4.
4. Exhibit 10: September 7, 2007 Notice to Perform or Quit
Less than two months after the City issued the “case clearance report” with respect to the Municipal Code violations identified in Exhibit 4, Landlord served Tenants with a 30-day notice to perform conditions or covenants or quit (“Exhibit 10”). In Exhibit 10, Landlord claimed Tenants had violated paragraph 6.3 of the Lease by failing to maintain 25 on-site parking spaces. Paragraph 6.3 of the Lease mandated Tenants to comply with all “Applicable Requirements” under the Lease.
Exhibit 10 alleged an additional violation of the Lease not relevant here.
Exhibit 10 stated Tenants had improperly built a structure around the parking lot and had installed flooring over the parking lot. These alterations to the premises prevented parking in the lot, which was required by (a) the Lease, (b) the premises conditional use permit and (c) the Los Angeles Municipal Code. The notice required Tenants to remove the structure and flooring from the parking lot. Tenants failed to comply with Exhibit 10. The trial court concluded Exhibit 10 was a valid unlawful detainer notice supporting judgment against Tenants.
Assuming Exhibit 10 was sufficient as a matter of law, we nonetheless conclude Exhibit 10 does not support the judgment because Landlord failed to prove at trial that Tenants committed the breaches asserted in Exhibit 10. “In an unlawful detainer action, the burden of proving the tenant committed acts amounting to an unlawful detainer is upon the landlord.” (Freeze v. Brinson (1991) 3 Cal.App.4th Supp. 1, 4.) While, for example, the City’s Order to Comply evidenced the breaches asserted in Exhibit 4, the record reveals no evidence of the breaches that allegedly occurred between July 23, 2007 (when the City issued the case clearance report with respect to Exhibit 4) and September 7, 2007 (when Landlord issued Exhibit 10).
Landlord’s reliance on its expert’s testimony is unavailing. Landlord’s expert stated that, in April and May 2008, the parking lot on the premises was not being used for the required 25 parking spaces and that Tenants had not obtained the required permits. That testimony relates, however, to events occurring well after Landlord served Tenants with Exhibit 10. Accordingly, the expert’s testimony does not support the alleged July to September 2007 breaches asserted in Exhibit 10. At oral argument, counsel for Landlord stated that, in addition to Landlord’s expert, Mr. Illulian testified he had visited the premises in mid-2007 and took pictures of the property reflecting the breaches asserted in Exhibit 10. Our review of the record does not reveal any such testimony. In fact, Mr. Illulian testified that, after Tenants cured the breaches asserted in Exhibit 4 in mid-2007, he did not visit the property. In addition, the record reflects no photographs were admitted into evidence depicting the premises after Tenants complied with the City’s Order to Comply in July 2007 and before Landlord served Exhibit 10 in September 2007.
Finally, Mr. Israyelyan said he believed he could cover the parking lot at any time without a permit because Tenants provided over 350 off-site parking spaces. Although, based on this testimony, one might speculate Tenants committed the breaches alleged in Exhibit 10, we conclude such speculation is insufficient to satisfy Landlord’s burden of proof.
Thus, even assuming Exhibit 10 was sufficient as a matter of law, Landlord failed to carry its burden of proving Tenants committed the breaches asserted in that September 2007 notice. Accordingly, Exhibit 10 cannot support the judgment.
5. Exhibit 12: January 16, 2008 Notice to Pay Rent or Quit
In January 2008, after discovering the Ratkovich document, Landlord served Tenants with a three-day notice to pay rent or quit (“Exhibit 12”). Subdivision 2 of section 1161 requires that a notice to pay rent or quit “be served at any time within one year after the rent becomes due.” Rent is “due and payable upon the date fixed for payment” in the lease. (Harabedian v. Parnell (1950) 96 Cal.App.2d 358, 359.) Under the Lease here, rent is due monthly.
Citing this subdivision, Tenants argue Exhibit 12 is invalid because it sought rent due in 2006—i.e., over a year before Landlord served the notice. According to Landlord, however, that rent did not become due until January 2008, when Landlord first discovered the Ratkovich document and Tenants’ alleged underpayment. In the alternative, Landlord claims the one-year time frame for serving a notice to pay rent or quit was tolled until discovery of the unpaid rent.
Exhibit 12 addressed rent due in 2006. The notice stated Tenants “underpaid Percentage Rent in 2006” and requests payment of that unpaid rent as well as interest on the “underpayment of 2006 Percentage Rent.” Accordingly, we reject Landlord’s position that the rent was due in January 2008, when Landlord first discovered the underpayment. The date Landlord discovered the alleged underpayment is not the same as the date the rent was due. Of course, by seeking interest on the 2006 rent, Landlord defeats its own position. Accordingly, we reject Landlord’s argument that Exhibit 12 concerns rent due in January 2008.
Similarly, we reject Landlord’s argument that the one-year time frame for serving the notice did not begin to run until Landlord discovered the unpaid rent. Landlord cites a breach of contract case for the proposition that the discovery rule tolls the one-year period for serving Exhibit 12. But this is not a breach of contract action. In fact, unlawful detainer actions differ in important respects from breach of contract actions. (See Kwok v. Bergren, supra, 130 Cal.App.3d at p. 599 [“‘An unlawful detainer action is not based upon contract...; it is a statutory proceeding and is governed solely by the provisions of the statute creating it.’”].) And, Landlord cites no authority for application of the discovery rule in an unlawful detainer action generally or to a section 1161, subdivision 2 notice specifically.
Given both the precise statutory requirements of an unlawful detainer action and the law’s dislike of forfeitures, we decline to apply the discovery rule here. “Subdivision 2 of section 1161 of the Code of Civil Procedure limits actions under that subdivision, which deals with default in ‘rent’ to actions served ‘within one year after the rent became due.’ If a landlord waits over one year to sue for unpaid rent he is relegated to an ordinary breach of contract action, which results only in a money judgment without restitution of the demised property.” (Cal-American Income Property Fund IV v. Ho, supra, 161 Cal.App.3d at p. 585.) “A valid three-day pay rent or quit notice is a prerequisite to an unlawful detainer action.” (Bevill v. Zoura, supra, 27 Cal.App.4th at p. 697.)
Accordingly, Exhibit 12 was insufficient to support an unlawful detainer action. As a result, the judgment of past due rent ($107,636) is invalid and is reversed. (Hudec v. Robertson (1989) 210 Cal.App.3d 1156, 1163 [“An award of rent is only allowable if the unlawful detainer is based on the nonpayment of rent.”].) In light of our conclusion that Exhibit 12 was untimely, we need not and do not address the remaining arguments with respect to that notice.
This conclusion does not bar Landlord from suing Tenant for breach of contract. (See Vella v. Hudgins (1977) 20 Cal.3d 251, 255; Cal-American Income Property Fund IV v. Ho, supra, 161 Cal.App.3d at p. 585.)
6. Exhibit 14: January 16, 2008 Notice to Quit
In January 2008, Landlord also served Tenants with a Three-Day Notice to Quit, asserting Tenants had violated paragraphs 13.1(f) and 54.5 of the Lease by providing Landlord with a materially false financial statement and underreporting gross sales by more than 5% (“Exhibit 14”). Exhibit 14 stated that, as a result of the alleged breaches, Landlord would terminate the Lease three days after service of the notice.
a. Opportunity to perform or to cure
Tenants argue Exhibit 14 was invalid because it did not provide Tenants with an opportunity to perform or to cure the alleged breaches. Landlord counters that Tenants could not have cured the alleged breaches and, therefore, Landlord was not required to offer an opportunity to cure. We agree with Tenants.
Subdivision 3 of section 1161 provides that “[w]ithin three days after the service of the notice, the tenant... may perform the conditions or covenants of the lease or pay the stipulated rent, as the case may be, and thereby save the lease from forfeiture; provided, if the conditions and covenants of the lease, violated by the lessee, cannot afterward be performed, then no notice, as last prescribed herein, need be given to the lessee or his or her subtenant, demanding the performance of the violated conditions or covenants of the lease.”
Under the applicable Lease provisions, Tenants were entitled to an opportunity to perform or to cure the alleged breaches. Paragraph 13.2 of the Lease provides that if Tenants failed to perform an affirmative obligation under the Lease, Tenants would have 10 days after written notice to perform. If Tenants failed to perform after 10 days, Landlord could elect to perform the obligation on behalf of Tenants. Under paragraphs 54.1 and 54.4 of the Lease, Tenants were obligated to provide accurate financial information to Landlord. Thus, to the extent Tenants failed to comply with that affirmative obligation, paragraph 13.2 entitled Tenants to a 10-day notice period to perform.
Paragraph 13.2(a) of the Lease requires that, in the event of a breach (as defined in paragraph 13.1 of the Lease), Tenants shall have the longer of either the grace period provided by the unlawful detainer statute or the grace period provided by the Lease to cure the breach. Under paragraph 13.1(f) of the Lease, a “breach” would occur if Tenants provided Landlord with a materially false financial statement and failed to cure that default “within any applicable grace period.” But paragraph 13.1(f) does not specify a grace period for curing false or inaccurate financial statements. Thus, under paragraph 13.2(a), to the extent Tenants violated paragraph 13.1(f) of the Lease, the three-day grace period in section 1161, subdivision 3 would control.
Because Tenants could have cured any inaccurate financial reports or statements, Exhibit 14 should have given them the option to do so. “It is well settled that the notice required under [section 1161] subdivisions 2 and 3 (where the condition or covenant assertedly violated is capable of being performed) must be framed in the alternative, viz., pay the rent or quit, perform the covenant or quit, and a notice which merely directs the tenant to quit is insufficient to render such tenant guilty of unlawful detainer upon his continued possession.” (Hinman v. Wagnon, supra, 172 Cal.App.2d at p. 27.) “Where the condition or covenant allegedly violated is capable of being performed, the notice must give the tenant the alternative of performing or quitting possession.” (Delta Imports, Inc. v. Municipal Court (1983) 146 Cal.App.3d 1033, 1036; see also Feder, supra, 89 Cal.App. at p. 672 [unlawful detainer notice was defective because it did not give tenant the opportunity to cure allegedly inaccurate invoices, which were used to calculate rent].) Thus, Exhibit 14 was defective because it did not give Tenants the option to cure the alleged breaches.
b. Amount of rent due
Tenants also argue Exhibit 14 is invalid because it failed to specify the amount of rent allegedly due. Landlord argues that, because Exhibit 14 alleged breaches of covenants, and not unpaid rent, an amount due was not required. Again, we agree with Tenants.
Exhibit 14 alleged Tenants submitted inaccurate financial information, which was used to calculate rent under the Lease. Thus, inaccurate financial reporting would result in inaccurate rent calculations. As such, the notice concerns allegedly unpaid rent and, therefore, was required to set forth an amount of rent due. (Code Civ. Proc., §§ 1161, subd. 2, 1161.1; Feder, supra, 89 Cal.App. at p. 672.) Indeed, the notice itself reveals that it concerns unpaid rent, as it states: “Your failure to pay the Rent described in this Notice constitutes a separate breach from any other breach described in any other notice....” While, in other notices dealing with breaches of Lease covenants (as opposed to unpaid rent), Landlord used different language, stating instead “Your failure to perform the conditions or covenants described in this Notice constitutes a separate breach from any other breach described in any other notice....”
Exhibit 14 is similar to the unlawful detainer notice this court found insufficient in Feder, supra, 89 Cal.App. 665. There, the landlord plaintiffs served the tenant defendant with a notice alleging the defendant had violated the lease by submitting inaccurate invoices, which were used to calculate rent. (Id., at pp. 668-669.) The notice did not specify an amount of rent due, nor did it provide the defendant with an opportunity to perform. (Id., at pp. 670-671.) This division held the notice insufficient because it failed to comply with section 1161, and reversed the judgment in favor of the landlord plaintiffs. (Id., at pp. 671, 672-673.)
The court explained that the notice “simply demands immediate possession of the premises, and bases this demand upon the claim that the defendant had violated certain provisions of the lease regarding [invoicing]. There is no claim made in the notice that by reason of the alleged violation of these provisions that the plaintiffs had not received the full rental they were entitled to under the lease or that there were any rentals remaining unpaid from the defendant to the plaintiffs by reason of the [inaccurate invoices].... Clearly, the provisions in the lease for bookkeeping and the invoicing of merchandise were of no importance to the defendant, except in so far as these methods of conducting the business would the better enable the computation of the profit for the purpose of determining the monthly rental to be paid.” (Id., at pp. 670-671.) Further, the court explained that, because the inaccurate invoices could be fixed, the defendant “was clearly entitled to a demand in the alternative as provided in section 1161..., before respondent would have the right to declare a forfeiture. To hold otherwise would do violence to a principle of law that has long been accepted as axiomatic—the law abhors forfeitures.” (Id., at pp. 672-673.) We conclude the same reasoning applies to Exhibit 14 here.
Notably, in its respondent’s brief, Landlord does not mention, let alone distinguish, the many cases Tenants cite supporting their position. (E.g., Feder, supra, 89 Cal.App. 665; Delta Imports, Inc. v. Municipal Court, supra, 146 Cal.App.3d 1033; Hinman v. Wagnon, supra, 172 Cal.App.2d 24.)
Because Exhibit 14 was insufficient, it could not support an unlawful detainer action. (See Hinman v. Wagnon, supra, 172 Cal.App.2d at p. 28.) In light of our conclusion that Exhibit 14 was insufficient because it failed to give Tenants an opportunity to cure and did not include an amount of rent due, we need not and do not address Tenants’ remaining arguments with respect to that notice.
7. Exhibit 16: January 16, 2008 Notice to Quit
Landlord served Tenants with a second Three-Day Notice to Quit in January 2008. In that notice, Landlord asserted Tenants had violated paragraphs 2.1 and 6.1 of the Lease by “asserting a false lease” and fraudulently concealing revenues (“Exhibit 16”). Paragraph 2.1 of the Lease provides the basic information that Tenants leased the premises for the term set forth in the Lease: “Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease.” Paragraph 6.1 of the Lease prohibits Tenants from using the premises “in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties.”
Like Exhibit 14, Exhibit 16 did not specify rent due and did not give Tenants an opportunity to cure or perform. Rather, Exhibit 16 stated that, as a result of the alleged breaches, Landlord would terminate the Lease three days after service of the notice.
a. Concealed revenue allegation
With respect to Exhibit 16’s allegation that Tenants fraudulently concealed revenues, we apply the same analysis applied to Exhibit 14. First, to the extent Exhibit 16 alleged Tenants failed to comply with their obligations to report revenues under the Lease, the notice should have provided Tenants an opportunity to cure any such breach. Second, by alleging Tenants concealed revenues, Exhibit 16 concerns allegedly unpaid rent, as revenues are used to calculate rent due under the Lease. Accordingly, the notice should have specified an amount of rent due. (See part 6 above.) Thus, to the extent Exhibit 16 failed to satisfy these statutory requirements, it was insufficient.
b. “False lease” allegation
Exhibit 16 also alleged Tenants asserted a false lease in violation of paragraph 2.1 of the Lease. This alleged breach refers to statements Tenants made to a third party bank, in which Tenants represented both that the Lease expired in 2015, instead of in 2009, and carried a lower rent than that actually required under the Lease. Assuming Tenants could not have cured this alleged breach of the Lease, and, therefore, Landlord was not required to offer Tenants an opportunity to cure (Code Civ. Proc., § 1161, subd. 3), the alleged false lease does not support an unlawful detainer action. Simply put, misrepresenting Lease terms to a third party (even if done willfully) is not a breach of the Lease. Rather, it is simply an inaccurate description of the Lease. Landlord’s argument to the contrary is without merit. Accordingly, to the extent Exhibit 16 alleged a breach of the Lease based on Tenants’ misrepresentation of Lease terms to a third party, the notice was deficient and could not support an unlawful detainer action.
Because Exhibit 16 was insufficient, it could not support an unlawful detainer action. In light of our conclusion that Exhibit 16 was insufficient because it failed to give Tenants an opportunity to cure, did not include an amount of rent due, and did not state a breach based on a false lease, we need not and do not address Tenants’ remaining arguments with respect to that notice.
Thus, because Exhibit 10 was unsupported by the evidence and Landlord’s remaining unlawful detainer notices were insufficient, we conclude the trial court erred in entering judgment in favor of Landlord. In light of our conclusion that the judgment must be reversed, we need not address Tenants’ arguments with respect to damages.
8. Attorneys’ Fees
After entry of judgment, Landlord filed an unopposed motion for attorneys’ fees. Defendant did not appear at the hearing on the motion and the trial court awarded Landlord the amount of fees requested, namely $506,056.95. Tenants appealed that order.
Because we conclude the judgment must be reversed the award of attorneys’ fees must also be reversed.
Disposition
The judgment is reversed. The order awarding attorneys’ fees is reversed. Tenants are awarded their costs on appeal.
We concur: MALLANO, P. J., ROTHSCHILD, J.