Vu v. Hung-Chih Yang

1

HANNAH VU, Plaintiff and Respondent, v. HUNG-CHIH YANG, Defendant and Appellant.

B317516

California Court of Appeals, Second District, Fourth Division

May 10, 2023

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County No. BC620507, Stephen I. Goorvitch, Judge. Affirmed.

Peter C. Chen, for Defendant and Appellant.

Stuart Kane, Donald J. Hamman, and Eve A. Brackmann, for Plaintiff and Respondent.

DAUM J. ^[*]

INTRODUCTION

Respondent Hannah Vu leased an office property in the City of El Monte from appellant Hung-Chih Yang. The parties signed a written lease. Under the lease, Yang, the landlord, was responsible for making "[a]ny alterations required by Law," except those that were "a result of Tenant's use." According to the lease, the property had recently passed "final inspection."

Shortly after Vu took possession of the property, city officials declared that the property did not comport with the city's zoning code and that Vu could not occupy it. Vu left the premises, and Vu and Yang sued each other. A bench trial followed.

The trial court found that the property's zoning issues predated the lease, meaning that they were inherent to the property itself and not a result of Vu's use of the property. It found that bringing the building into compliance with the city's rules was Yang's responsibility. It found that the property had not passed final inspection. It thus found Yang had breached the lease. It also found for Vu on other claims, including negligent misrepresentation.

Yang contends on appeal that the trial court erred by: (a) misinterpreting the El Monte Municipal Code; (b) not crediting evidence favorable to Yang; (c) finding him in breach based on incompetent evidence, a misinterpretation of the contract, and improper reliance on a specific paragraph in the contract; and (d) failing to apply judicial estoppel. For the reasons explained below, we reject these contentions. We affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND^[1]

A. The Lease

On May 16, 2013, Vu and Yang executed a lease of real property in the City of El Monte as tenant and landlord, respectively. The property was to be used for a medical office.

Paragraph 19 of the lease reads as follows: "GOVERNMENT IMPOSED ALTERATIONS: Any alterations required by Law as a result of Tenant's use shall be Tenant's responsibility. Landlord shall be responsible for any other alterations required by Law." "Law" is defined in the lease as "all local, state and federal laws, regulations and ordinances."

According to Paragraph 41.6 of the lease, "This office is completely new/built and recently passed all final inspection on 04-09-2013. This office lease for PREMISES CONDITION is base on as its. All changes for tenant uses are at tenant expenses including the requirement by Law &/or City."^[2]

B. Code Compliance Problems Prior to the Lease

The parties disputed whether the building had, prior to the lease, received necessary certificates of occupancy from the City of El Monte. At trial, Steve Willkomm, who managed the Code Enforcement division for the city in 2013 and was involved with the city's determinations involving the property, described the city's permitting regime.

First the city required a "Certificate of Occupancy" certifying compliance with the state Building Code. According to Willkomm, this certificate would ordinarily issue when a "building is either brand new, you change the occupancy from one building occupancy to the other and/or you make significant improvements to a property."

Second, the city had another kind of occupancy permit, which required a building owner to demonstrate compliance with the city's zoning code and other rules. Willkomm explained that this kind of certificate of occupancy "is provided for in section 17.16.010 of the El Monte Municipal Code." Willkomm testified that the city also referred to this second kind of certificate of occupancy as a "business occupancy permit."

According to Willkomm, the property had received the first kind of occupancy permit before the lease was signed but had not received the second. The city issued a certificate of occupancy for the property with a "[f]inal date" of December 29, 2011. But this permit, according to Willkomm, was the first kind of certificate of occupancy; the permit's text identifies it as "issued pursuant to the requirements of Section 110 of the California Building Code" and "certifying . . . substantial compliance with the various ordinances of the City regulating building construction". Nothing in the record demonstrated that the second kind of permit, i.e., the business occupancy permit, ever issued. Rather, the record reveals unresolved zoning violations, which Yang knew about before signing the lease but failed to correct.

On February 21, 2012, Minh Thai, the city's Assistant Economic Development Director, sent a letter to Yang identifying a "Final Inspection Correction List." Thai, on behalf of the city, stated that "[i]n order for the Planning Division to approve the construction and final occupancy for the building and site development as approved under Design Review No. 06-08, the following issue[s] must be resolved." The email identifies various structural concerns the city had regarding the property. For example, it noted that the "elevation design, finish and material were not completed in accordance to the approved design," that a "retaining wall" "was not approved," and that there were issues regarding the striping of the parking lot, the trash enclosure, and the "[u]ndergrounding" of "wired utilities."

On March 7, 2012, Yang responded to the city's letter. He did not agree to many of the required changes. For example, some of Yang's answers were "[t]he general consensus from the public is that it looks fine," "[w]e will do our best," and "[w]e can't do it."

Yang did obtain some additional approvals. The record contains a "Final Completion Form," the significance of which the parties disputed. The form has signature lines, and provides that "After all signatures have been obtained, return this document to your Building Inspector. A Final Inspection can now be accomplished." The form shows certain signatures, including one from the "Planning Department," dated April 9, 2013. However, Yang admitted that no final inspection of the property ever took place. He claimed that after visiting the city's building department, he was told that no final inspection was needed. According to Yang, he believed that the original permit he had received (dated 2011) was the governing certificate of occupancy.

Joseph Lambert, who signed the "Final Completion Form," was called as a witness by Yang. At the time of the lease, Lambert was a non-employee contractor working in the city's planning department. Lambert testified that his signature on the Final Completion Form meant that the "planning department" had approved the premises. He testified that he believed that the 2011 "Certificate of Occupancy" likely meant that the property had satisfactorily complied with a zoning inspection in 2013, with the form backdated. But Lambert conceded that he did not remember "for sure" whether the distinction Willkomm drew between the different kinds of permits was correct, or whether there was a valid certificate of occupancy in 2013. Ultimately, the trial court did not credit Lambert's testimony. Instead, noting that "Lambert gave the impression that he was not familiar with the certificate of occupancy process," the court found that Lambert had a "limited role in the inspection process" and that his job was not to "resolve" issues.

C. The City Refuses to Let Vu Occupy the Property Because of the Code Compliance Problems

Yang and Vu signed the lease on May 16, 2013. On May 31, 2013, Vu went to the city to apply for a business license to operate her medical practice. But she was told she could not obtain a license from the city to operate her business, because the building had not been certified for occupancy.

On June 4 or 5, 2013, Vu met with Willkomm, who told her that she could not occupy the property due to zoning issues. She was shown deficiencies, including issues with a wall, a fallen fence, a parking lot post lamp, and the garbage bin on the property. When she asked if she herself could make the required alterations, she was told that "these changes can only be performed by the owner because the owner would have to take out the permits to make these changes. A tenant can't take out the permits to make these changes."

At trial, Willkomm confirmed that the city did not, and would not, issue a permit allowing Vu to operate her business from the property because of the lack of compliance with the city's zoning code. Willkomm confirmed that the zoning code violations had to be remedied by the property owner, not the tenant. And, he confirmed that the zoning violations at issue were not due to a particular use by Vu for the property-Willkomm agreed that there would not have been "any permissible use of the building without the certificate of occupancy."

On June 4, 2013, the city issued an administrative citation against the property. The citation, issued to Yang, explained that "A certificate of occupancy is required to occupy the building. Contact the City of El Monte to complete this requirement." On June 5, 2013, the City of El Monte Code Enforcement Division sent a letter to Yang stating that "The above referenced property has been inspected on several occasions; these inspections have disclosed the existence of conditions that violate the El Monte Municipal Code." It noted that "A Certificate of Occupancy has not been issued for this facility (EMMC 17.16.010)." Willkomm explained that this letter issued because of...