Opinion
A158885
02-15-2022
KENNETH MORRIS, Plaintiff and Appellant, v. SILVERADO CONTRACTORS, INC, et al., Defendants and Respondents.
NOT TO BE PUBLISHED
(Alameda County Super. Ct. No. RG18897336)
Banke, J.
Plaintiff Kenneth Morris owns an industrial property in Oakland that he leases to several businesses, including defendant Silverado Contractors, Inc., a sizeable demolition contractor. Silverado's sister company, Argent Materials, Inc., operates an asphalt and concrete recycling facility on the leased premises, which includes part of a large warehouse. Except where noted, we collectively refer to the two companies as Silverado.
Several years after entering into the lease with Silverado, Morris leased the other part of the warehouse to a cannabis company at a significantly higher rent. Morris then pressured Silverado to pay more rent or vacate the warehouse area so he could lease it to the cannabis company. When Silverado stood on its lease, Morris embarked on a campaign to oust Silverado from the property. He claimed, for the first time, that Silverado's recycling operation, and particularly its use of the warehouse area, violated the terms of the lease. He also made more than a dozen complaints to government agencies claiming, for the first time, that the recycling facility was in violation of regulatory controls. Eventually, he filed the instant unlawful detainer action.
After a trial that spanned the course of six days, the court ruled against Morris and entered judgment for Silverado. Morris appeals, claiming the court erred in multiple respects. We affirm.
We recite here only a summary of the case and discuss specific provisions of the lease and other detailed facts in connection with our discussion of the issues raised on appeal.
In 2013, Morris contacted Silverado about leasing an industrial site he owns in Oakland, the lease of his prior tenant, which had been in the asphalt and concrete recycling business, having expired. Morris was referred to Silverado, a sizeable demolition contractor, by a mutual contact.
Among many other projects, Silverado did the demolition and dismantling work on the demolition of the Bay Bridge, and the demolition of Candlestick Park.
Morris met with William Crotinger, who would become the general manager of Argent, and they toured the property. They subsequently entered into discussions about a potential lease. While Crotinger preferred not to lease any part of the warehouse on the site, Morris insisted that the portion that had been included in the prior lease (40, 000 square feet of the 120, 000 square foot structure) be included in any lease with Silverado.
This was because a prior tenant had built a dividing wall in the warehouse that prevented access to the entire warehouse area from any one side.
In order to make economical use of the premises, Silverado was going to have to place some of the crushing and recycling operation, and the equipment necessary for such, inside the warehouse, and Crotinger communicated that to Morris before the lease was signed. Morris voiced no objection.
The parties executed a lease in August 2013. It provided for a five-year term, with two additional five-year options exercisable at Silverado's discretion, potentially extending the lease through August 2028. The lease also grants Silverado a right of first refusal to purchase the property.
Argent was formed after the lease was signed and has overlapping ownership with Silverado.
Silverado promptly began preparing plans to configure the use of the premises for the recycling operation. The plans showed the operational use of the warehouse area, including showing two 10-by-10 foot openings that would be made to accommodate conveyor belts to transport crushed materials in and out of the warehouse. These openings do not compromise the structural integrity of the warehouse.
The first, or primary, part of the recycling operation takes place in the outside yard and crushes material recovered from demolition sites to about softball size. The secondary part of the operation takes place inside the warehouse and further crushes the material into gravel and other aggregate products.
Prior tenants had made some 10 holes/openings in the sides of the warehouse in the area Silverado leases. One of them, by a prior tenant, was 36 by 18 feet in size.
Silverado employees talked with Morris many times about the plans for the site, which he saw, including use of the warehouse area. In fact, for the first few years, Morris visited the property at least monthly, and sometimes two or three times a month. He would walk around the entirety of the premises, including the warehouse area. He was fully aware of the work transforming the empty warehouse area into an operational part of the recycling operation. In fact, Crotinger asked Morris if he was okay with Silverado making the two openings in the wall of the warehouse, and he said, "[y]es." Morris was even onsite when equipment was being moved into the warehouse. After the facility was completely operational, he continued to visit the property and saw the entire operation, including the crushing and recycling activity in the warehouse area. At no time during these visits did he ever object to Silverado's crushing and recycling activities, the installation of the conveyor belts, or its use of the warehouse for operational purposes.
Silverado expended more than $3 million on improvements and installing state-of-the-art equipment on the property. It also engaged in outreach to the neighboring property owners and cleaned up accumulated junk and debris in the area, and continues to do both. All of this activity has eliminated junk-dumping and also helped to reduced drug activity in the area.
Three years after signing the lease with Silverado, Morris, in April 2016, leased the portion of the warehouse not occupied by Silverado to Cannaplex, a cannabis business that subleases space to other cannabis businesses. Morris leased the warehouse space to Cannaplex for 68 cents per square foot, or $78,000, per month.
At that point in time, Silverado was paying $36,500 per month for the entirety of the premises it leased, only a part of which was in the warehouse.
In June 2016, Silverado notified Morris it was exercising its option to continue the lease for another five years, until 2023.
The following month, Crotinger met with Morris and Leah Duncan, who Morris's counsel described as Morris's "helper." Crotinger thought the meeting was primarily to meet Duncan and to talk generally about the lease. It turned out Morris wanted a significant increase in rent or to have Silverado vacate the warehouse area so he could rent it to Cannaplex. Specifically, Morris wanted a lease rate of 60 cents per square foot, which would amount to a $21,000 increase in Silverado's monthly rent. He made no claim that Silverado's use of the site violated any terms of the lease or violated any local regulatory controls.
The parties had a second meeting several months later. Morris continued to press Silverado to pay the higher rent or to vacate the warehouse. He made no claim that Silverado's use of the site violated any terms of the lease or violated any local regulatory controls.
After the meeting, as Crotinger walked to the parking area with Morris, Morris asked if, "you think the guys are going to pay more," to which Crotinger replied, "I don't think so." At that point, Morris said, "Well, we're just going to have to get them out." When Crotinger pointed out there was 12 more years of the lease, Morris said, "There's more than one way to break a lease." Crotinger was shocked and took this as a threat.
Having spent millions to improve the property, including the warehouse, to create a feasible and thriving recycling facility, Silverado stood on its lease and refused to pay more rent than was called for by the lease or to vacate the warehouse area.
Morris then began making complaints to a variety of governmental agencies, claiming, for the first time, that Silverado was in violation of various regulatory provisions. In contrast to a single inspection that had been made of the premises in the preceding three and a half years, Silverado now found itself subject to 17 different inspections. Several inspectors told Crotinger they were there in response to complaints "by the property owner."
Following one of these complaints, a city inspector toured the recycling facility, including the operations inside the warehouse. His inspection detail stated:
"The activity was approved by Zoning on numerous occasions, the most recent is by Zoning Clearance ZC131567 dated 7/16/13 for []Legal Non-conforming Heavy Industrial (cement processing) based on documents establishing prior history at this site. The violation is not confirmed, complaint non actionable. . . ."
Thus, as the detail indicates, the most recent zoning clearance had been issued just a month before the parties entered into the lease. Crotinger described the clearance as an "existing variance that came with the site." In fact, Morris transferred the variance to Silverado.
The inspector also called Crotinger and told him, "[y]ou can do what you're doing, it's fine."
Morris also began claiming, for the first time, that Silverado's use of the warehouse for operational purposes violated the terms of the lease. And in mid-2017, he served Silverado with a three-day notice to quit and filed an unlawful detainer action, which was subsequently dismissed.
Morris continued to pursue his complaints with the city, and in early 2018, city staff issued a Notice of Violation (NOV) identifying two asserted violations: (1) that an opening in an exterior wall of the warehouse had been "created without the benefit of a Building Permit"; and (2) that Silverado's use of the premises constituted "Heavy/High Impact Manufacturing Activities" which was not an authorized use under the CIX-2 zoning applicable to the site. The NOV stated the asserted violations needed to be "correct[ed]," but also advised that an administrative appeal could be filed.
Accordingly, Silverado promptly applied for a building permit, submitting all required documentation and supporting materials. However, under city rules, the property owner must consent, and Morris has refused to do so. Silverado also filed an administrative appeal of the asserted permit requirement, which remains pending.
Silverado additionally filed for a zoning determination and also filed an administrative appeal of the asserted zoning violation. This appeal was pending at the time of trial and also when the court filed its decision and order, but has since been sustained in Silverado's favor by the planning commission, the final arbiter of the issue. Morris, in turn, has since filed a mandamus action challenging the planning commission's final decision.
We hereby grant Silverado's request for judicial notice of the planning commission's minutes reflecting its action sustaining Silverado's appeal. (Evid. Code, §§ 452, subd. (b), 459.)
We also grant Morris's request for judicial notice (filed Jan. 27, 2021) as to exhibits 2, 3 and 5, exhibit 5 being his writ petition challenging the planning commission's final determination upholding Silverado's appeal. (Evid. Code, §§ 452, subds. (b), (d), 459.) We deny the request as to all other exhibits.
In the meantime, after issuance of the NOV, Morris filed the instant unlawful detainer action. Following a bench trial that was held over the course of six days, and more than a year after the case was filed, the trial court issued a 17-page decision and order, ruling against Morris and in favor of Silverado. Morris filed motions to vacate and for a new trial. The court denied both.
For its part, Silverado filed a complaint for breach of contract and to quiet title. Morris cross-complained, asserting his own breach of contract claims and seeking cancellation of the lease on various grounds, including unconscionability. The trial court has since dismissed all of Morris's cross-claims on statute of limitations grounds, except his breach of contract claims. This litigation apparently remains pending.
DISCUSSION
Standard of Review
Our standard of review on appeal from a judgment following a bench trial is well-established. We review questions of law de novo (Cuiellette v. City of Los Angeles (2011) 194 Cal.App.4th 757, 765) and review factual findings under the substantial evidence standard. (Niko v. Foreman (2006) 144 Cal.App.4th 344, 364 (Foreman).) Under the latter deferential standard, factual findings are liberally construed to support the judgment, and we consider the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences in support of the findings. (Citizens Business Bank v. Gevorgian (2013) 218 Cal.App.4th 602, 613.) A single witness's testimony may constitute substantial evidence to support a finding (ibid.), and it is not our role as a reviewing court to reweigh the evidence or to assess witness credibility. (Foreman, at p. 365.)
"A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness." (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) Moreover, "[u]nder the doctrine of implied findings, the reviewing court must infer, following a bench trial, that the trial court impliedly made every factual finding necessary to support its decision." (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 48 (Fladeboe); see generally Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981 (Thompson).)
Morris has not directed our attention to any timely request that the court issue a statement of decision pursuant to Code of Civil Procedure section 634, or that he made any objections to a proposed statement of decision. Accordingly, the presumptions that otherwise adhere to a judgment following a bench trial remain unaffected. (See Thompson, supra, 6 Cal.App.5th at pp. 981-983.) That Morris made post-judgment motions to vacate and for a new trial does not substitute for timely and proper adherence to the procedures set forth in Code of Civil PRoceduer section 634. (Ibid.)
Unlawful Detainer
"The unlawful detainer act governs the procedure for landlords and tenants to resolve disputes about who has the right to possess real property." (Stancil v. Superior Court (2021) 11 Cal.5th 381, 394.)" '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.'" (Kwok v. Bergren (1982) 130 Cal.App.3d 596, 599.)
Thus, courts have aptly and consistently described the nature of unlawful detainer proceedings as statutorily prescribed and narrowly construed. "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 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; accord, Kruger v. Reyes (2014) 232 Cal.App.4th Supp. 10, 16 (Kruger); Underwood v. Corsino (2005) 133 Cal.App.4th 132, 135 (Underwood).)
Accordingly," '[i]t 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, supra, 133 Cal.App.4th at pp. 136-137.) "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.)
There are five grounds upon which a landlord may bring an unlawful detainer action, enumerated in subdivisions (1) through (5) of the unlawful detainer statute. (Code Civ. Proc., § 1161, subds. (1)-(5).) "A tenant is guilty of an unlawful detainer and may be properly evicted only when the landlord proves the tenant falls within at least one of the statutorily enumerated circumstances." (28 Cal. Jur.3d Ejectment and Related Remedies, § 96.)
The only statutory ground Morris identified in his three-day notice to quit was subdivision (4), which states:
"4. Any tenant, subtenant, or executor or administrator of that person's estate heretofore qualified and now acting, or hereafter to be qualified and act, assigning or subletting or committing waste upon the demised premises, contrary to the conditions or covenants of the lease, or maintaining, committing, or permitting the maintenance or commission of a nuisance upon the demised premises or using the premises for an unlawful purpose, thereby terminates the lease, and the landlord, or the landlord's successor in estate, shall upon service of three days' notice to quit upon the person or persons in possession, be entitled to restitution of possession of the demised premises under this chapter. For purposes of this subdivision, a person who commits or maintains a public nuisance as described in Section 3482.8 of the Civil Code, or who commits an offense described in subdivision (c) of Section 3485 of the Civil Code, or subdivision (c) of Section 3486 of the Civil Code, or uses the premises to further the purpose of that offense shall be deemed to have committed a nuisance upon the premises." (Code Civ. Proc., § 1161, subd. (4).)
Morris's form unlawful detainer complaint, in turn, included no independent substantive allegations but simply attached the three-day notice. Thus, as the trial court observed, the only "basis of plaintiff's action herein" is subdivision (4) of section 1161 of the Code of Civil Procedure.
In his opening statement, Morris's attorney told the court: "[W]e filed this unlawful detainer complaint in this case based upon the reason for filing there were violations of the lease agreement in terms of damages to the property to the warehouse. And then, in addition, to which is the main issue, there were violations of the City of Oakland's ordinances, Municipal Code. And those violations occurred on February 12, 2018. To my knowledge presently those are still violations. There's been no decisions rendered by Oakland to reverse those violations. [¶] So our case is based upon the 3-Day Notice to Quit, CCP 1161, and also the violations that were incurred by Silverado with the Oakland Municipal Code."
The Lease Terms Allow the Disputed Use
Although an unlawful detainer action is not a means by which a landlord can sue for breach of a lease and seek equitable relief and/or damages therefore (Kruger, supra, 232 Cal.App.4th Supp. at p. 16), whether or not a lease allows a disputed use is material, at a minimum, to whether the tenant has committed" 'waste upon the demised premises'" and is therefore subject to an unlawful detainer action. (Freeze v. Brinson (1991) 3 Cal.App.4th Supp. 1, 3 (Freeze) ["By the express terms of [Code of Civil Procedure] section 1161, subdivision 4, acts which legally constitute waste only amount to an unlawful detainer if such acts result in a breach of a condition or covenant of the lease."].) Since Morris pursued a claim of waste and the issue of whether Silverado's use of the premises, and specifically the warehouse area, was permissible under the terms of the lease was a principal issue at trial, we address this issue first.
Two provisions of the lease are pertinent to the permissible use of the premises. One is a recital concerning the leased "premises," which states:
"B. Lessee desires to lease from Lessor the Land, Warehouse and Office and to construct or place upon the Land, Warehouse and Office certain improvements suitable for and consistent with the typical and customary improvements needed for Lessee's business operations, (collectively, the 'Improvements'). The Land, Warehouse, Office and Improvements are collectively referred to herein as the 'Premises')." The other is the section entitled "USE OF PREMISES" which states:
"Permitted Uses. Lessee shall use the Premises as a concrete and asphalt recycle facility with typical and customary related facilities and services and uses incidental thereto. In addition, the use of the Property, Warehouse or Office shall be in support of the primary permitted use unless sublet in whole or in part should Lessee decide other legal and allowed uses would benefit the Lessee greater. These 'other' uses may be temporary or permanent in nature at the discretion of the Lessee. A 15 foot easement the entire length of the alleyway that enters the site from 85th Avenue, (85th Avenue Alleyway), shall be made available to and used at the sole discretion of Lessee. At Premises boundary, the full width of the alleyway will be used at Lessee sole discretion."
Morris does not appear to dispute that the plain terms of the lease allow the "premises"-i.e., the land, warehouse and office-to be used for a concrete and asphalt recycling facility. Indeed, the language could hardly be any plainer-it clearly and unequivocally allows the "premises," which are expressly defined as including the land, warehouse and office, to be used for such a facility.
Morris nevertheless maintains the lease does not allow the warehouse to be used as an operational part of the recycling business. He first points to evidence that (a) the prior tenant, which was also in the rock and concrete crushing business, scarcely used the warehouse and, then, only for storage and (b) crushing and recycling operations are not typically done in an indoor area like the warehouse. Second, Morris points out that the "USE OF PREMISES" section of the lease includes the phrase" 'with typical and customary related facilities and services and uses incidental thereto'" (that is, incidental to "a concrete and asphalt recycle facility"). (Italics omitted.) Presumably, Morris is urging that the prior lessee's use of the warehouse and Silverado's supposedly atypical use of the warehouse, in light of this phrase, renders the pertinent terms of his lease with Silverado ambiguous, and given the evidence to which he has pointed, the lease should be construed as limiting use of the warehouse to storage.
Specifically, Morris points to testimony of one of Silverado's witnesses that it is "unusual that concrete recycling and asphalt recycling is done in an inside building." He disregards why this is so-because generally it is "very expensive to house that kind of machinery in a building." The witness also testified that regulatory agencies would love to see these kinds of operations inside a building to mitigate dust and noise. Crotinger testified that, in fact, one of Silverado's biggest competitors has placed its recycling operation indoors, and mines all over the world "typically" house their production units inside buildings.
At this juncture, we recap the basic rules of contract construction, ably summarized in Horath v. Hess (2014) 225 Cal.App.4th 456 (Horath)."' "A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful." [Citation.] "The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity." [Citation.] "When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible. . . ."' [Citation.] 'The mutual intention to which the courts give effect is determined by objective manifestations of the parties' intent, including the words used in the agreement, as well as extrinsic evidence of such objective matters as the surrounding circumstances under which the parties negotiated or entered into the contract; the object, nature and subject matter of the contract; and the subsequent conduct of the parties.' [Citation.]
" 'When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is "reasonably susceptible" to the interpretation urged by the party. If it is not, the case is over. [Citation.] If the court decides the language is reasonably susceptible to the interpretation urged, the court moves to the second question: what did the parties intend the language to mean? [Citation.] [¶] Whether the contract is reasonably susceptible to a party's interpretation can be determined from the language of the contract itself [citation] or from extrinsic evidence of the parties' intent [citation].' [Citation.] If a contract is susceptible to two different reasonable interpretations, the contract is ambiguous. [Citation.] A court must then construe that ambiguous contract language 'by applying the standard rules of interpretation in order to give effect to the mutual intention of the parties [citation].' [Citation.]
"On appeal, a 'trial court's ruling on the threshold determination of "ambiguity" (i.e., whether the proffered evidence is relevant to prove a meaning to which the language is reasonably susceptible) is a question of law, not of fact. [Citation.] Thus[, ] the threshold determination of ambiguity is subject to independent review.' [Citation.] If the contract language is determined to be ambiguous and conflicting extrinsic evidence was admitted on the meaning of that language, 'any reasonable construction will be upheld as long as it is supported by substantial evidence.' [Citation.] If, however, no extrinsic evidence was admitted or the extrinsic evidence is not conflicting, the construction of the ambiguous contract language is a question of law subject to our independent construction." (Horath, supra, 225 Cal.App.4th at pp. 463-464; accord, Oakland-Alameda County Coliseum Authority v. Golden State Warriors, LLC (2020) 53 Cal.App.5th 807, 816-819.)
As the trial court stated in its decision and order, "the lease specifically detailed 'Permitted Uses,' which included 'a concrete and asphalt recycle facility . . . and uses incidental thereto.'" While the court did not state expressly that this language is plain on its face, that is the clear import of its decision and order-that the language of the lease is not reasonably susceptible to the meaning Morris urges, namely that use of the warehouse is limited to storage and the structure cannot house any operational part of the crushing and recycling process.
In any case, on de novo review of whether the provisions of the lease pertaining to use of the premises are ambiguous (see Horath, supra, 225 Cal.App.4th at p. 464), we conclude the language of the lease is not reasonably susceptible to the constricted reading urged by Morris. The lease plainly states that the "Premises," which expressly includes the warehouse, may be used as "a concrete and asphalt recycle facility," along with "typical and customary related facilities and services and uses incidental thereto." The latter phrase, which Morris claims restricts the use of the warehouse, does no such thing. Rather, it allows for additional "typical and customary related facilities and services and uses incidental" to the expressly allowed use of the "Premises." Given the plain language, it is immaterial that the prior tenant chose to use the warehouse simply for storage or that Silverado's operational use of the warehouse is relatively unusual.
This would cover, for example, the truck scales and water storage tank Silverado installed.
Morris also points to the provision of the lease stating, "Lessee shall maintain and return to Lessor the Premises in a condition equal to a condition in which Premises were received by Lessee." It is unclear to what issue he maintains this language is pertinent-use of the premises or waste. With respect to use of the premises authorized by the lease, the provision does not even arguably suggest the warehouse cannot be used for operational recycling purposes.
In short, what Morris is asking the courts to do is insert limiting language into the use provisions of the lease, language that could have been included, but was not. The" 'office of the Judge, '" however," 'is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted.'" (Alameda County Flood Control & Water Conservation Dist. v. Department of Water Resources (2013) 213 Cal.App.4th 1163, 1180.)
Even if the terms of the lease were ambiguous as to the use of the warehouse, and they are not, substantial evidence supports the trial court's determination that the lease allows the use to which Silverado has put the premises, including the warehouse. (See Horath, supra, 225 Cal.App.4th at p. 464.) As the court recited, Crotinger testified that Silverado was initially reluctant to lease the warehouse area, but Morris insisted it be included in any lease. Crotinger also testified, as did one of Argent's equipment operators, Melvin Bensley, that Morris was fully aware of Silverado's intended use of the warehouse, including its intent to construct the two 10-foot square openings required to install the conveyor belts used in connection with the crushing and recycling activities housed in the warehouse. According to these witnesses, employees many times discussed with Morris locating operational equipment in the warehouse, and Morris visited the premises frequently, both before and after installation of the equipment . They further testified Morris never made any complaint about Silverado's use of any part of the premises until after he leased an adjacent portion of the warehouse to the cannabis growing operation at a higher rent than was provided for by the Silverado lease.
In short, the trial court credited the testimony of Silverado's witnesses and rejected that of Morris that he was not aware of Silverado's intended use of the warehouse and never authorized it. This was a credibility call the trial court was entitled to make as the finder of fact. (See Foreman, supra, 144 Cal.App.4th at p. 365.)
The trial court did not invoke any rules of construction to aide in its interpretation of the pertinent provisions of the lease. Nor did it need to. (See Shaw v. Regents of University of California (1997) 58 Cal.App.4th 44, 53 [where" 'contract language is clear and explicit and does not lead to absurd results, we ascertain intent from the written terms and go no further' "]; see also La Jolla Beach & Tennis Club, Inc. v. Industrial Indemnity Co. (1994) 9 Cal.4th 27, 37 [where asserted ambiguity is not eliminated by the language and context of the policy, courts may then invoke principle that ambiguities are generally construed against the party who caused the uncertainty to exist].)
We nevertheless observe that during the years immediately following the execution of the lease, the parties' conduct accorded with its plain language, and Morris began advancing his constricted reading of the lease only after Silverado stood on the terms of the lease and refused his demand to pay more rent or vacate the warehouse. One of the fundamental rules of construction is that acts of the parties, subsequent to the execution of the contract and before any controversy has arisen as to its effect, may be looked to in determining the meaning. (Employers Reinsurance Co. v Superior Court (2008) 161 Cal.App.4th 906, 921.) As the trial court found here, on the basis of substantial extrinsic evidence, the parties conducted themselves entirely in keeping with the plain language of the pertinent provisions of the lease until Morris demanded, and Silverado refused to pay, a higher rent for the warehouse area.
As we discuss, infra, Morris also contends the trial court erred in not allowing him to pursue a claim that his lease with Silverado is "unconscionable" and therefore unenforceable. In connection with that claim, he asserts the court erroneously excluded evidence that would have triggered the rule that" 'the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist." We address this assertion, infra, in connection with our discussion of his unconscionability claim.
In sum, there is no merit to Morris's claim that his lease with Silverado does not allow the use to which Silverado has put the warehouse.
No Unlawful Use Warranting Forfeiture
Regardless of what the plain terms of the lease may allow, Morris maintains Silverado has been "using the premises for an unlawful purpose" (Code Civ. Proc., § 1161, subd. (4)), entitling him to judgment.
"Illegal or unlawful activity may be made the basis of a termination of a leasehold by either statute (e.g., Code Civ. Proc., § 1161, subd. (4) . . .) or express covenant." (Deutsch v. Phillips Petroleum Co. (1976) 56 Cal.App.3d 586, 589 (Deutsch).) In either context, the contours of such prohibition are the same. (See Rowe v. Wells Fargo Realty Services, Inc. (1985) 166 Cal.App.3d 310, 316-319 (Rowe).)
In Deutsh, the Court of Appeal held allegations that the commercial lessee, which operated a gas station, had violated the antitrust laws, could not support an unlawful detainer action. A covenant of the lease provided the lessee would conduct its business" 'in conformity with all State or Federal Statutes and Municipal Ordinances applicable thereto.'" (Deutch, supra, 56 Cal.App.3d at p. 588.) The purpose of such a covenant, explained the court, "is to protect the lessor's interest in the demised premises by limiting the functional use of the property. Such a provision ensures that the lessee will harm neither the physical attributes nor the reputation of the property in question. In addition, it serves as an additional assurance to the lessor that the lessee will utilize the demised premises in a manner conducive to the lessor's interest so as to secure the continued payment of the rental obligations." (Id. at p. 591.)
The asserted antitrust violation did "not pertain to any of the aforementioned purposes. Such a violation [had] certainly failed to physically threaten the well-being of the property. Moreover, such a civil violation [was] not the type of unlawful criminal activity which attaches a stigma to the premises. Finally, plaintiffs ha[d] not alleged any facts demonstrating that this violation ha[d] so impaired defendant's use of the premises as to threaten plaintiffs' continued receipt of the monthly rental obligations." (Deutch, supra, 56 Cal.App.3d at p. 591.)
In so holding, the appellate court "adopt[ed] the view . . . expressed by the Missouri Court of Appeals in Sherwood Medical Industries v. Building Leasing Corp. (Mo.App.) 527 S.W.2d 407. There, the court was presented with the contention that an attempt to physically alter the demised premises without a city permit was a violation of a similar covenant mandating that the property be used only for a 'lawful purpose.' The court determined that such a limitation related only to the functional use of the premises, and that 'some ancillary legal violation' did not breach the covenant. (Id., at p. 410. . . .)" (Deutsch, supra, 56 Cal.App.3d at pp. 591-592.)
The Deutsch court also emphasized that the result it had reached was "in accord with the statutory doctrine that the law abhors forfeitures, and will strictly construe forfeiture provisions against the party in whose behalf they are invoked. (Civ. Code, § 1442.) . . . [F]orfeiture in the instant case," said the court, "would be unduly harsh." (Deutsch, supra, 56 Cal.App.3d at p. 592.)
In Rowe, the landlord claimed the commercial tenant was using the premises for an unlawful purpose because it repeatedly adjusted climate controls in a manner contrary to federal regulatory limits. The Court of Appeal held, relying on Deutsch, that this conduct, while sanctionable under applicable federal regulations, was not the type of "unlawful purpose" that can support an unlawful detainer action. (Rowe, supra, 166 Cal.App.3d at pp. 316-318.) The lessee's alleged violation of federal energy regulations did not threaten the physical safety of the property, it was not the type of criminal activity which would stigmatize the premises and the landlords had not alleged facts indicating their continued receipt of rent was in any way impaired. (Id. at p. 318.)
"Moreover, '[unless] the lease specifically limits the use of the property to a particular purpose, or that restriction is necessarily inferred from the language which is employed, the lease may not be forfeited on account of the mere use of the property for another purpose even though that be an illegal use prohibited by statute, for the reasons said forfeitures of leases are not favored by the law.'" (Rowe, supra, 166 Cal.App.3d at p. 318.) The lease at issue limited the use of the property to" 'general office purposes and data processing, '" which was "exactly the functional purpose" for which the property was used by the company. (Ibid.)
Accordingly, the Rowe court refused to construe "the words 'unlawful purpose' in subdivision 4 of section 1161 [of the Code of Civil Procedure], to encompass such a minor regulatory violation." (Rowe, supra, 166 Cal.App.3d at p. 319.)
Morris's three-day notice to quit, as did his form complaint, identified as a ground of unlawful detainer: "VIOLATIONS OF THE FOLLOWING OAKLAND MUNICIPAL CODES[, ] STATE BUILDING CODES[, ] AND CALIFORNIA HEATH AND SAFETY CODES: §8.24.010(D)(1)(6)(10); §15.04.1.115(C); §15.04.1.130(a); §15.08.040(A), § 15.08.050; Oakland Building Code § 105.1; Oakland Municipal Code §17.10.580; 1.135 [sic] California Health & Safety Code § 17920.3(a)(7)(b)(4)(5)(6)(c)(f)9[sic]k) Paragraph [sic]."
Health and Safety Code section 17920.3 defines what constitutes a "substandard building." Morris's notice specifically identified inadequate ventilation (id., subd. (a)(7)), structural hazards in walls and ceilings (id., subd. (b)(4)-(6)), nuisance (id., subd. (c)), unlawful mechanical equipment (id., subd. (f)), and unsafe building under the Uniform Building Code (id., subd. (k)).
Thus, as Morris's attorney told the court at the outset of trial (see fn. 12, supra), Morris's "unlawful purpose" claim embraced the asserted permit and zoning transgressions identified in the NOV. These were also the only two "illegal" acts Morris identified in his closing trial brief.
As noted, the three-day notice also identified "nuisance" (Health & Saf. Code, § 17920.3, subd. (c)), and as discussed above, Code of Civil Procedure section 1161, subdivision (4) lists "nuisance" as a ground for unlawful detainer. Accordingly, the trial court separately addressed this asserted ground of unlawful detainer (based on Morris's claim Silverado's activities in the warehouse generated hazardous levels of dust) in its decision and order. The only issue Morris raises on appeal as to the court's ruling on "nuisance," is that it erred in refusing to admit a proffered exhibit pertaining to a settlement of a civil penalty action by the Environmental Protection Agency (EPA) for alleged inadequate erosion and sedimental control. He also raises this asserted evidentiary error in connection with his claim the court erred in rejecting his claim of "waste," and we address it, infra, in connection with that claim. We deem any other claims of error as to the court's decision and order on "nuisance," including any issues pertaining to "dust," to have been waived. (See Nagel v. Westen (2021) 59 Cal.App.5th 740, 752 (Nagel), quoting Tisher v. California Horse Racing Bd. (1991) 231 Cal.App.3d 349, 361 [" 'plaintiffs' failure to raise an issue in their opening brief waives the issue on appeal' "].)
The trial court rejected his "unlawful purpose" claim for two reasons. It first ruled the asserted municipal violations do not constitute "using the premises for an unlawful purpose" (Code Civ. Proc., § 1161, subd. (4)) within the meaning of the unlawful detainer statute, concluding they are, at most," 'ancillary'" violations that do not violate the pertinent terms of the lease.
Citing to Deustch and Rowe, the court found neither asserted regulatory violation "impaired the physical attributes of the property," impugned Morris's "reputation," or compromised Morris's "ability to collect rent." The record amply supports the court's findings-indeed, there was no evidence of any uncurable injury to the property, no evidence of any stigma to Morris or the premises, and no evidence Morris was at any risk in collecting rent from Silverado.
Morris cites to Salazar v. Maradeaga (1992) 10 Cal.App.4th Supp. 1 (Salazar), in support of his claim that he was entitled to an unlawful detainer judgment on the basis of the asserted permit and zoning transgressions. The case is inapposite.
In Salazar, it was undisputed that the landlord had failed to pay relocation benefits required under the local rent control ordinance. The trial court therefore refused to compel the residential tenant to pay back rent but awarded possession to the landlord. (Salazar, supra, 10 Cal.App.4th Supp. at pp. 3-4.) The appellate division reversed.
The issue, said the appellate division, was "whether a tenant may remain in possession until relocation benefits are provided . . . when the occupancy itself is unlawful." (Salazar, supra, 10 Cal.App.4th Supp. at p. 4.) The court then recited that, "[g]enerally, if the object of a contract is unlawful, the entire contract is void. (Civ. Code, §§ 1550, 1598; see generally, 1 Witkin, Summary of Cal.Law (9th ed. 1987) Contracts, § 430, 441, pp. 386, 396.) A party who is not in pari delicto may be entitled to relief under certain circumstances, but the relief is limited to rescission and restitution; the party is not entitled to enforce the contract. (1 Witkin, supra, at § 450, p. 401.) This rule applies to the lease of real property." (Salazar, at p. 4.) The court continued, "[w]here, as here, an occupancy violates a zoning or building code enacted for the benefit of the general public, the use itself is illegal, and the defect is thus uncorrectable, the lease agreement is held to be void and unenforceable by either party. The landlord is not entitled to back rent, and the tenant is not entitled to possession." (Ibid., fn. omitted.)
The appellate division nevertheless concluded that displacing the tenant would be contrary to the purpose and intent of the local rent control ordinance requiring relocation assistance and therefore reversed the unlawful detainer judgment. (Salazar, supra, 10 Cal.App.4th Supp. at pp. 5-6.)
Significantly, the Salazar panel "contrasted" the case before it, involving living quarters that had been carved out of a garage, "with the situation where the occupancy itself is not illegal, but the units do not conform with certain housing or building codes and the defects are, by definition, correctable. Where such defects are substantial and breach the implied warranty of habitability, the tenant may, at his or her option, remain in possession and is relieved of the obligation to pay contract rent, but is liable for the reasonable value of the use and occupancy of the property in its defective condition." (Salazar, supra, 10 Cal.App.4th Supp. at p. 4, fn. 1, italics added.)
The facts here are not comparable to those in Salazar. Silverado's occupancy of the property is not, in and of itself, illegal. Moreover, the asserted zoning and permit issues are correctable.
Furthermore, in contrast to Deustch and Rowe, Salazar did not address "using the premises for an unlawful purpose" as that language has been interpreted and applied under the unlawful detainer statute as a ground for forfeiture of a commercial lease and summary ouster of a tenant in possession." 'It is axiomatic that cases are not authority for propositions not considered.' " (Howard Jarvis Taxpayers Assn. v. Newsom (2019) 39 Cal.App.5th 158, 169, quoting People v. Ault (2004) 33 Cal.4th 1250, 1268, fn. 10.) Indeed, as in Deutsch, given the circumstances here, "forfeiture in the instant case would be unduly harsh." (Deutsch, supra, 56 Cal.App.3d at p. 592.)
Chen v. Kraft (2016) 243 Cal.App.4th Supp. 13, which Morris also cites, is distinguishable for the same reasons. In that case, a new landlord brought a successful unlawful detainer action against an existing tenant who, contrary to the residential zoning and local rent ordinances, was using the one-bedroom/loft she was renting for a "bed-and-breakfast facility" and "transient" housing through Airbnb. (Id. at pp. 21-22.) The appellate division rejected the tenant's defense that the prior owner had approved the illegal use, stating any such agreement was "an illegal contract in violation of existing regulations, and was therefore void and unenforceable." (Id. at p. 22.) Baccouche v. Blankenship (2007) 154 Cal.App.4th 1551, which Morris additionally cites, was a quiet title action, not an unlawful detainer action based on Code of Civil Procedure section 1661, subdivision (4).
The trial court secondly ruled that Morris's "unlawful purpose" claim was, in any event, premature because, as of the time of trial (and as of the filing of the court's decision and order), Silverado's appeal of the NOV was pending as to both the asserted permit and zoning issues. Thus, "there [was] no final determination that any such violations [had], in fact occurred. This ruling turned out to be prescient, as the planning commission has since upheld Silverado's appeal as to the asserted zoning violation.
The trial asked for and received extensive briefing from the parties on this issue.
Morris insists the fact that Silverado's zoning appeal was ultimately successful is immaterial. He first complains the planning commission did not find Silverado was in compliance with the applicable zoning, but rather, "exercised its discretionary authority" to reclassify the" 'rock crushing operations'" as a" 'General Manufacturing Industrial Activity.'" This hair-splitting gets Morris nowhere. The planning commission's action to "[u]phold [Silverado's] appeal" ("as recommended by staff") demonstrates that the asserted zoning issue was not "incurable" and therefore was not the kind of use "for an unlawful purpose" that justifies forfeiture of a lease and summary displacement of a tenant. This is particularly so, given that the city had, by all appearances, confirmed that the use complied with local regulatory controls only a month prior to execution of the lease, and Silverado, in reliance thereon, as well as on the plain language of the lease, made extensive expenditures on improvements and state-of-the-art equipment.
Morris secondly points out that he has since filed a petition for writ of mandate challenging the planning commission's final action. This also gets him nowhere. If anything, it reinforces the trial court's conclusion that he has not yet proved any entitlement to an unlawful detainer judgment on the ground Silverado is "using the premises for an unlawful purpose."
As for the pending permit issue, Morris suggests it is impossible to predict what conditions the city may require for issuance of a building permit for the 10-by-10-foot openings.
To begin with, lack of a permit for the two 10-by 10-foot openings does not constitute use of the premises "for an unlawful purpose" for purposes of unlawful detainer. (See Rowe, supra, 166 Cal.App.3d at pp. 318-319; Deutsch, supra, 56 Cal.App.3d at pp. 591-592.) And, in any case, that Morris must resort to speculation as to permit conditions further reinforces that he has not yet proved any use "for an unlawful purpose" entitling him to summary ejectment of Silverado from the premises.
No Proof of "Waste"
As we have noted, Morris also claims the trial court erred in rejecting his claim that he is entitled to an unlawful detainer judgment on the ground of "waste."
"Subdivision 4 is a codification of the common law rule that a tenant must use leased property in such a way as to avoid waste. (Civ. Code, § 818; Rest.2d Property, § 12.2 subd. (1).)" (Rowe, supra, 166 Cal.App.3d at p. 319; accord, Freeze, supra, 3 Cal.App.4th Supp. at p. 3.)
"By the express terms of [Code of Civil Procedure] section 1161, subdivision 4, acts which legally constitute waste only amount to an unlawful detainer if such acts result in a breach of a condition or covenant of the lease." (Freeze, supra, 3 Cal.App.4th Supp. at p. 3.)
However, breach, alone, is insufficient to prove waste. "Where the alleged unlawful detainer is based upon a claim of waste of the premises," the landlord must also "establishe[] a prima facie case by producing '" 'evidence of acts which injuriously affect the market value of the property.'" '" (Freeze, supra, 3 Cal.App.4th Supp. at p. 3.) Moreover," '[s]uch evidence must show that the market value is substantially or permanently diminished or depreciated. (Smith v. Cap Concrete, Inc. (1982) 133 Cal.App.3d 769, 776- 777. . . .)'" (Freeze, at p. 4, italics omitted, quoting Rowe, supra, 166 Cal.App.3d at p. 319.) "Thus, proof of the amount of damage to the premises is merely a starting point. A landlord must then present evidence that this damage caused a substantial or permanent diminution in the market value of the premises." (Freeze, at p. 4, italics omitted; id., at p. 4 & fn. 3 [while lessor proved that tenant's dog damaged interior of property, he failed to prove waste; he "offered no evidence at all of the change, if any, in the market value of the premises" caused by the damage]; see Rowe, at p. 320 [misuse of climate controls and installation of light fixtures without lessor's authorization did "not cause depreciation of the premises nor a substantial decrease in its market value"].)
"[T]he ambiguous concept of 'waste'" must also be construed "in order to avoid a forfeiture of the lease, if at all possible." (Rowe, supra, 166 Cal.App.3d at p. 320; accord, Freeze, supra, 3 Cal.App.4th Supp. at p. 4.)
Morris predicated his claim of waste on the two 10-by-10-foot openings Silverado made in the side of the warehouse to install the conveyor belts. Crediting the testimony of Silverado's witnesses, including that of Ronald Hamburger, a structural engineer, the trial court found the openings "had not caused structural damage to the property or compromised it in any way." Hamburger "testified that support for the structure was tied to wall columns and their relationship to the roof, none of which was altered by any of [Silverado's] modifications."
Morris, by contrast, presented no expert structural testimony. The one lay witness he called on the issue, Shomari Block, an "investigative assistant," simply toured the premises and took photographs of the warehouse. He admitted he had no expertise in structural integrity. Moreover, while some of the photographs he took showed cracking in some of walls, he had no idea when, or why, the cracks had occurred. Thus, as court found, Block's testimony did not establish that the two 10-by-10-foot openings impaired the structural integrity of the warehouse walls in any way.
All Morris offers in response to the trial court's adverse findings is rambling speculation that some sort of incurable deficiencies may yet come to light. That does not suffice to carry his burden to demonstrate error on appeal.
The trial court further found there was "no evidence to support any decline in market value of the property resulting from [Silverado's] modifications, or, to demonstrate that [Silverado] could not return the premises to their initial condition (filling in the two 10 foot x 10 foot openings) when [it] gives up lawful possession of the premises."
Morris first complains the court "failed to determine whether Silverado breached its obligation to maintain the warehouse in a condition equal to the condition it received it." (Capitalization omitted.) However, it is apparent from the court's decision and order that the court was fully aware of such obligation, as it expressly found there was "no evidence" "to demonstrate that [Silverado] could not return the premises to their initial condition (filling in the two 10 foot x 10 foot openings)." In any case, Morris cites to no place in the record where he asked for a finding on this particular issue, and we must infer that the trial court made all requisite findings in support of its judgment. (See Thompson, supra, 6 Cal.App.5th at p. 981; Fladeboe, supra, 150 Cal.App.4th at p. 48.)
Crotinger testified Silverado was well-aware of this obligation and there would be no difficulty in returning the site in as good as condition as received.
Morris's assertion that using the warehouse for operational aspects of the recycling operation was "not typical or customary," does not advance his claim the court erred in rejecting his claim of waste. The pertinent issue as to waste is whether there was evidence the two openings" '" 'injuriously affect the market value of the property.'" '" (Freeze, supra, 3 Cal.App.4th Supp. at p. 3.) The trial court found there was no such evidence, and that finding is supported by the record.
Morris also suggests he did not need to prove that the conduct assertedly causing waste has" 'substantially or permanently diminished or depreciated'" the premises (see Freeze, supra, 3 Cal.App.4th Supp. at p. 4, italics omitted), pointing out he has sued for unlawful detainer, not for breach of contract and damages. However, as the unlawful detainer case law establishes, to prove waste under Code of Civil Procedure section 1661, subdivision (4), the landlord must show both breach of the lease agreement and damage to the property that "substantially or permanently diminished or depreciated" it value. (Rowe, supra, 166 Cal.App.3d at pp. 319-320; Freeze, at p. 4.)
Finally, Morris contends the trial court committed prejudicial error in refusing to admit a proffered exhibit, Exhibit I, which he asserts would have established waste. Exhibit I is a copy of a document that was apparently posted on an EPA Web site and entitled "Public Notice: Argent Materials Inc.; Proposed Settlement of Clean Water Act Class I Administrative Penalty." (Boldface omitted.) The "Summary" notice describes a "Consent Agreement and Proposed Final Order" to resolve a civil administrative penalty proceeding that required Argent to pay a $27,000 penalty. It describes the alleged violation as follows: "During a March 2017 stormwater inspection, EPA found that [Argent] had failed to implement adequate minimum stormwater best management practices at its Facility and had also failed to comply with its Stormwater Pollution Prevention Plan. EPA inspectors observed inadequate erosion and sediment controls, unsatisfactory material handling and waste management practices, and uncontained raw material stockpiles throughout the facility. The inspectors also found accumulated evidence at the Facility's entrance and evidence of a release of sediment from the Facility onto Baldwin Street that flows to a drain inlet managed by the City of Oakland's MS4. These deficiencies likely resulted in sediment polluting the San Leandro Bay, a tributary to the San Francisco Bay, which flows directly to the Pacific Ocean."
When Morris sought to admit this exhibit, Silverado objected on authentication/foundational grounds. The court sustained the objection, stating "I'm going to sustain that, Mr. Jones. I don't know what the-I don't have a copy of the document, but perhaps after the session is over counsel can talk about the document, but right now there is lack of foundation, particularly as it relates to authentication." Morris makes no claim on appeal that the trial court abused its discretion in sustaining this objection. (See Pannu v. Land Rover North America, Inc. (2011) 191 Cal.App.4th 1298, 1317 [trial court rulings on the admission or exclusion of evidence "are generally reviewed for abuse of discretion"].) He has therefore waived any claim of error as to this evidentiary ruling. (See Nagel, supra, 59 Cal.App.5th at p. 752.)
Rather, Morris asserts the exhibit was brought to the court's attention on the last day of trial, at which point the court stated it would "consider that." However, it was nothing on Morris's part that brought the exhibit to the attention of the court. Rather, counsel for Silverado had raised "some housekeeping items with regard to Defendant's exhibit list," and the court was "looking at the listings submitted by Defendants which talks to Plaintiff's trial exhibits and also Defendant's trial exhibits."
What the court said was, "looking at this list outstanding are still for Defendant's Exhibits-G now has been admitted for non-hearsay purpose[s]. Still unresolved is . . . Plaintiff's I and J, and the court will consider that. And, also, L. Otherwise, everything has been admitted." The court then stated, these exhibits were "contested," to which Morris's attorney responded, "yes." There was no substantive discussion on the record as to the admissibility of Exhibit I, including as to whether Morris had attempted to lay a foundation for its admission. Nor did the court make any ruling on any exhibit.
Morris made no mention of Exhibit I in his closing trial brief.
In his memorandum in support of his posttrial motions to vacate or for new trial, Morris referenced Exhibit I as though it had been admitted into evidence. Silverado objected, pointing out the exhibit had not been admitted. In his response, Morris maintained the copy of the notice was a "public record" and therefore came within an exception to the hearsay rule and was admissible. He did not, however, point to any evidence in the record laying a foundation for and authenticating the copy of the document he had proffered to the court. Nor did he do so at the hearing on his posttrial motions. In fact, he did not even mention Exhibit I at the hearing.
Thus, what the record also shows is that Morris never made the requisite foundational showing for Exhibit I, nor did he ever obtain a definitive ruling on its admission. He therefore has not preserved for appeal any claim that the court abused its discretion in excluding the exhibit."' "[W]here the court, through inadvertence or neglect, neither rules nor reserves its ruling . . . the party who objected must make some effort to have the court actually rule. If the point is not pressed and is forgotten, [the party] may be deemed to have waived or abandoned it, just as if he had failed to make the objection in the first place." '" (People v. Braxton (2004) 34 Cal.4th 798, 813, italics omitted; see People v. Cunningham (2001) 25 Cal.4th 926, 984 ["Even if defendant did not so intend, his failure to press for a ruling waives the issue on appeal."].)
But even if the trial court actually ruled on and excluded Exhibit I, the trial court did not abuse its discretion in doing so.
To begin with, the court's initial ruling, sustaining Silverado's foundational objection-which Morris has not challenged on appeal-suffices to affirm the court's refusal to admit the exhibit.
Further, the three-day notice to quit did not identify the EPA violation as among the bases for Morris's claims that Silverado was using the premises for "an unlawful purpose" or that its use constituted a "nuisance," let alone constituted waste on the premises. Accordingly, the EPA violation was immaterial to the unlawful detainer grounds of which Morris gave notice and which he alleged in his complaint.
In addition, Exhibit I does not begin to establish that Silverado committed waste. It does not establish that the premises were damaged, let alone, establish damage to the property that "substantially or permanently diminished or depreciated" its value. (Rowe, supra, 166 Cal.App.3d at p. 319; Freeze, supra, 3 Cal.App.4th Supp. at p. 4.)
We note that the exhibit also does not begin to establish that Silverado was "using the premises for an unlawful purpose." It does not evidence uncurable injury to the property, or stigma to Morris or the premises, or that Morris is at any risk in collecting rent from Silverado. (See Rowe, supra, 166 Cal.App.3d at p. 318 ; Deutch, supra, 56 Cal.App.3d at p. 591.)
Finally, even if we assume the trial court ruled on and excluded the exhibit, and further assume it abused its discretion in doing so, there was no conceivable prejudice to Morris. (See Ajaxo, Inc. v. E*Trade Financial Corp. (2020) 48 Cal.App.5th 129, 185 ["A judgment of the trial court may not be reversed for the erroneous admission or exclusion of evidence unless the error was prejudicial, resulting in a miscarriage of justice."].) As he acknowledges, he elicited testimony from Crotinger about the EPA regulatory action. Accordingly, the trial court was aware of the action, and there is no reasonable probability the two-page public notice "Summary" from the EPA Web site would have affected the court's understanding of that action or its decision.
Thus, for a multitude of reasons, there is no merit to Morris's assertion that the trial court prejudicially erred in refusing to admit Exhibit I.
The In Limine Rulings
Silverado made three in limine motions. Morris challenges the court's ruling on two of them.
"Unconscionability"
The first motion sought to exclude "any evidence and testimony relating to . . . allegation[s] that the subject lease is unconscionable." The trial court granted the motion.
Morris maintains the court erred as a matter of law. He reasons that if the lease is unconscionable, it is unenforceable, which, in turn, means Silverado has no legal right to remain on the property and he is entitled to immediate possession of it. Morris additionally maintains that, having refused to allow him to pursue his unconscionability claim, the court thereby excluded evidence that is highly relevant to interpreting the lease and would have compelled the court to conclude, in accordance with Civil Code section 1654, that Silverado's use of the premises, and particularly the warehouse, is not allowable under the terms of the lease.
Civil Code section 1654 provides: "In cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist."
Morris asserts, for example, "that there is a reasonable probability that if evidence of unconscionability and the negotiations was admitted, establishing that Silverado drafted the lease, that Morris, in his 80[']s, with poor hearing and an elementary education, signed the Lease relying solely on Silverado, led Morris to believe that what he was signing was 'just like' [the prior tenant's], which did not crush rock inside the warehouse, the interpretation of the lease applying Civil Code section 1654 would mean that Silverado is in substantial breach of its agreement."
To begin with, Morris failed to preserve his objection to the court's ruling. Following the conference on in limine motions, the court ruled, as to this motion, as follows:
"We had a very constructive meeting in chambers regarding the in limine motions. Three motions have been filed. One dealt with unconscionability. The second with the Parole Evidence Rule, and the third was a general motion to exclude evidence that had not been produced timely with regard to interrogatories.
"And let me just put on the record the rulings with regard to all three of those very briefly.
"Number one, with regard to unconscionability, evidence of unconscionability will be excluded. That was to be the court's ruling, but I think it's fair to say the agreement of the parties. The reason for that is that this is an unusual case where the plaintiff, lessor, is raising the unconscionability argument. If that argument is accepted, and I don't know whether it would be or not, it would mean that the contract would be void. If the contract is void there is no lease agreement. If there is no lease agreement there is no unlawful detainer action.
"Now there is another action pending, which was the subject of a demurrer early on in this case that deals with other causes of action; including cancellation and other requests for damages, where the unconscionable argument is appropriate.
"So the court rules, and as defense counsel correctly noted, that possession and forfeiture of the lease is what is at stake here. Mr. Jones [(Morris's attorney)] has just said that this is an unlawful detainer case, and so for that reason the evidence of unconscionability will not be admitted."
If Morris, in fact, did not agree in chambers with this disposition of the motion, it was incumbent on him to say so to preserve his objection for appeal. His failure to take issue with the court's recitation of the disposition of the motion forfeited the asserted error about which he now complains. (See People v. Romero (2008) 44 Cal.4th 386, 410-411 [failure to object to unreported exchanges between interpreters and witnesses forfeited challenge on appeal].)
Even if Morris preserved the issue, the trial court did not err in refusing to allow him to try his belatedly proffered unconscionability claim.
The three-day notice did not identify unconscionability as a ground to quit the premises. Rather, the notice identified three provisions of the lease and a string of local building and use regulations, and one state statute, Silverado was supposedly violating. The notice does not remotely intimate Silverado was required to vacate the premises because its lease was unconscionable and therefore invalid. Morris's unlawful detainer complaint, in turn, was based solely on the grounds set forth in the three-day notice. Indeed, it was a form complaint with no independent substantive allegations, which attached the three-day notice and lease.
By way of explanation, immediately below the enumerated regulatory provisions, the three-day notice stated: "Silverado Contractors Inc[.], and their agents have made illegal modifications to the properties without permits, including causing major damage to the interior of the buildings, cutting openings in the exterior walls, damage to footings in the building, and allowing dust to flow throughout the community, which presents danger to the community, and employees of Silverado Contractors, Inc."
As we have discussed, the scope of an unlawful detainer action is bounded by the grounds identified in the statute and, in turn, identified in the notice to quit and the follow-on unlawful detainer complaint. Here, neither the statute, Morris's three-day notice to quit, nor his unlawful detainer complaint identifies unconscionability as a ground of unlawful detainer. For this reason, alone, the trial court did not err in refusing to allow Morris to advance his unconscionability claim.
Further, Morris's belatedly advanced unconscionability claim was wholly inconsistent with the unlawful detainer case he put before the court. On the one hand, his three-day notice to quit, stated, and his unlawful detainer complaint alleged, as the first ground of unlawful detainer, that Silverado was in violation of various provisions of the lease-a claim necessarily premised on the existence of a valid and enforceable lease. On the other hand, Morris's eleventh-hour unconscionability claim sought to invalidate the lease. Thus, as the trial court pointed out, that meant, if Morris prevailed on his unconscionability claim, he would defeat his own case.
Morris insists this is not so, positing that while the lease would be nonexistent if he succeeded on his unconscionability claim, Silverado's tenancy would become one at will, which Morris could still seek to terminate for asserted regulatory transgressions. What Morris fails to appreciate is that that is not the unlawful detainer action he brought: he did not identify unconscionability in the three-day notice to quit nor did he allege unconscionability as a ground of unlawful detainer in his complaint. Morris cites no authority remotely suggesting that a landlord who sues for unlawful detainer can abandon the grounds specified in the notice to vacate and the allegations of the complaint and oust a tenant from possession on the basis of a claim raised for the first time at trial.
Morris's citation to Orozco v Casimiro (2004) 121 Cal.App.4th Supp. 7, which is the only unlawful detainer case he cites in support of his unconscionability claim, does not advance his cause. In that case, a residential tenant defended against an unlawful detainer action based on failure to pay a late fee on a number of grounds. (Id. at pp. 8-9.) On appeal, the tenant claimed the $50 per day late fee was a liquidated damages provision that was statutorily prohibited except in unusual circumstances that did not exist in the case at hand. (Id. at pp. 10-11.) The appellate division agreed and concluded the landlord, having failed to plead or prove that damages were impractical or extremely difficult to fix, had failed to carry his burden of proof to recover the late fee. (Id. at p. 12.) "Thus, under the evidence in this case, the late fee was void." (Ibid.) In short, not only did Orozco deal with a tenant's defense, it did not even deal with the doctrine of unconscionability.
Morris also cites to an unpublished opinion which he claims not to be citing as authority but to "simply point[] out for this Court's information (and will concurrently seek judicial notice of the) existence of the unpublished decision in The Irvine Company v. KST Enterprises (Docket No. G038039 filed May 20, 2008) rendered by the Fourth Appellate district." To say this is a disingenuous effort to cite the case as precedent is an understatement; the citation is patently improper. We also note that in that case, it was a tenant that defended against an unlawful detainer action on the ground the pertinent provision of the lease was unconscionable.
Finally, there is no merit to Morris's assertion that the trial court's ruling on his unconscionability claim prevented him from proving Silverado's use of the premises violated the terms of the lease. The trial court allowed both parties to put on extensive evidence as to the lease negotiations and the meaning of its terms. There is no reasonable probability that "unconscionability" evidence he complains was excluded would have resulted in a different outcome.
Parole Evidence
The second motion in limine sought to exclude "any evidence that contradicts the explicit and unambiguous language of the subject lease." The trial court deferred ruling on this motion until the issue arose at trial.
When Morris complained in posttrial motions about the court's handling of parole evidence, the court ruled he had not "identifie[d] . . . evidence regarding contract formation that was proffered and rejected, to his detriment, at trial."
On appeal, he maintains he did proffer such evidence during the following portion of his direct testimony:
"Q. What's the highest grade you completed in school, Mr. Morris?
"A. What grade I completed?
"Q. Yes.
"A. 9th grade.
"Q. 9th grade. Mr. Morris, do you have difficulty reading?
"A. What?
"A. Do you have problems with reading?
"A. Reading?
"Q. Yes.
"A. Yes.
"Q. Do you have problems with writing?
"A. Excuse me?
"Q. Do you have problems with writing?
"A. Writing? Some, yes.
"Q. On some of the real estate transactions that you have been involved in, have you had someone help you with those transactions?
"[Silverado's Counsel:] Objection, Your Honor. This is getting into the subject that was the motion in limine.
"[Morris's Counsel:] I don't think the motion covered that, Your Honor. It covered unconscionability. Right now I'm just asking him to testify as to whether or not he can read, write and understand. . . .
"[Court:] And you-I think you've already asked him that and he's answered those questions. [¶] So the objection to the last question will be sustained."
Thus, during this exchange, the court sustained an objection to a single question-whether Morris had been assisted in other real estate transactions. Moreover, this question did not seek to elicit parole evidence directly contradicting the terms of the lease. Accordingly, this passage does not show any error in the trial court's recitation that Morris had not proffered such evidence.
Morris also cites to the following portion of his cross-examination of Crotinger:
"Q. Can you explain to us, prior to Mr. Morris entering into the lease agreement with Silverado, did you indicate to Mr. Morris that you would assist him in negotiating a lease with Silverado?
"[Silverado's Counsel:] Objection, Your Honor. I think this line of questioning is going into the subject of our in limine motion regarding the formation of the lease, which is not at issue in this case.
"[Court:] What's the relevance of this, Mr. Jones [(Morris's counsel)]?
"[Morris's Counsel:] Well, I believe he indicated that Mr. Morris did the negotiations on the lease and Mr. Morris was in agreement with the warehouse being used for concrete recycling. And I asked him earlier if he was involved with Mr. Morris in discussing the modifications of the lease. So I'm asking just a general question in terms of did he participate in negotiations of the lease. That's all.
"[Court:] All right. As to that specific question, the objection is sustained."
Again, the single question to which an objection was sustained did not seek to elicit parole evidence directly contradicting the terms of the lease. Accordingly, it also does not show any error in the trial court's recitation that Morris proffered no such evidence.
In short, Morris did not in the trial court, nor does he on appeal, cite to any place in the record where he sought to introduce parole evidence contradicting the terms of the lease, let alone evidence that was rejected. Accordingly, he has no basis to complain about the trial court's decision to defer ruling on any such evidence until the issue arose at trial.
DISPOSITION
The judgment is AFFIRMED. Costs on appeal to respondent.
We concur: Humes, P.J., East, J. [*]
[*]Judge of the San Francisco Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.