HOLLENHORST, Acting P. J.
This case arises from a claim by cross-complainant and appellant William G. Morschauser that cross-defendant and respondent Hi-Tech Collision & Glass Centers, Inc. (Hi-Tech) was in breach of a commercial lease entered into between the parties. Morschauser sued Hi-Tech for holdover rent and damages resulting from the alleged breach of the lease and fraudulent acts. Hi-Tech moved for summary judgment, which the trial court granted. Morschauser appeals, contending the trial court erred in granting the motion since there were triable issues of fact as to Hi-Tech's "continuing liability under the Lease for property damage and holdover rent." He further challenges the denial of his request for leave to file a second amended cross-complaint.
We conclude Morschauser failed to cite any evidence raising a triable issue of fact, and therefore, the trial court properly granted Hi-Tech's motion for summary judgment. We further conclude the trial court correctly denied the request for leave to amend.
The well-known principles generally governing appellate review of an order granting a motion for summary judgment are as follows: "A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. [Citation.] We review the trial court's decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.] In the trial court, once a moving defendant has `shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established,' the burden shifts to the plaintiff to show the existence of a triable issue; to meet that burden, the plaintiff `may not rely upon the mere allegations or denials of its pleadings . . . but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action . . . .' [Citations.]" (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476-477.)
In April and May 2004, William Lawrence was negotiating a lease of personal and real property located at 2376 Main Street in the City of Riverside (the Property) from Morschauser. Lawrence explained that the business to be established at the site of the Property was yet undecided because he was concurrently negotiating with Hi-Tech to merge "this yet to be established business and two other collision businesses into the Hi-Tech chain of eight collision repair facilities. On May 12, 2004, Morschauser entered into a lease with Hi-Tech for the Property (the Lease). Hi-Tech was listed as the lessee because Morschauser stated that the lease "could change . . . to reflect the lessee as whichever corporation ultimately owned the business at the Property as long as [Lawrence] was the guarantor." The Property includes a facility used as a paint and body shop for automobile repairs. The term of the Lease was for three years commencing on June 1, 2004, and ending on May 31, 2007, with an option to extend for two additional three-year periods. The Lease was signed and personally guaranteed by Lawrence, "the expansion officer" for Hi-Tech.
Later on, Riverside Collision Center, Inc. (RCC)
Towards the end of the Lease, Joseph Maestas, the chief executive officer, member of board of directors, and manager for RCC, withheld rent payments without Lawrence's knowledge. In March 2007, when Lawrence noticed that the rent checks had not cleared the bank, he attempted to contact Morschauser. At the same time, Lawrence learned Maestas had started a competing business in Moreno Valley and was actively soliciting business from RCC's customers. Thus, on March 27, 2007, Lawrence had his attorneys send a letter to Morschauser including a check in the amount of $20,155.75, for the estimated rents that were due and owing, along with a supplemental check in the amount of $2,500 in case the estimate was incorrect. The letter noted that Morschauser was aware that RCC, not Hi-Tech, had been paying the monthly rent for almost two years. The letter advised of Lawrence's desire to exercise the option to extend the Lease.
Between March and September 2007, Lawrence
On April 27, 2007, RCC sued Maestas and Morschauser, claiming that from January through March 2007, they "did secretly meet and conspire to deprive [RCC] of [its] lease at [the Property], in order to financially benefit" by having Morschauser open his own auto collision center using referrals from Maestas. Nonetheless, from the end of May into June, letters were exchanged between Morschauser and Lawrence's attorneys (mostly Lawrence's attorneys) in an effort to negotiate acceptable terms for RCC's lease of the Property. Morschauser failed to respond to Lawrence's attempts to negotiate a new lease. Thus, Lawrence looked for alternative plans in order to have a location for his business. Ultimately, in October 2007, RCC relocated approximately 1000 yards down the street, spending more than $300,000 on the move. Also, on October 15, 2007, RCC vacated the Property and tendered payment for each month it had been in possession. Morschauser did not cash the checks, returning some of them.
On December 28, 2007, with a subsequent amended version on January 7, 2008, Morschauser filed a cross-complaint against Lawrence, RCC, Maestas, and Hi-Tech,
On September 4, 2008, Hi-Tech moved for summary judgment on Morschauser's amended cross-complaint on the grounds that all rents due and owing under the terms of the Lease had been paid and that Hi-Tech had not made any representations regarding an extension of the Lease; rather, Hi-Tech specifically disavowed any desire to extend the Lease. In support of its motion, Hi-Tech submitted various declarations, correspondence, and the relevant contracts. On November 19, 2008, Morschauser filed his opposition to the Hi-Tech's motion. He simply argued that triable issues of fact exist as to when Hi-Tech "vacated the property, whether rent, including late charges and holdover rent were paid and the amount due to [Morschauser]." In support of his opposition, Morschauser offered his declaration, the Lease, a summary of the rents and payments thereof, and a stipulation/judgment in a separate matter involving parties other than Hi-Tech.
According to his declaration, Morschauser acknowledged that the Lease was guaranteed by Lawrence; however, he claimed that he had never been informed the tenant was any entity other than Hi-Tech. Morschauser agreed that Lawrence rented an adjacent lot for $500 per month, but claimed that he had never been informed that the tenant was any entity other than Hi-Tech. Morschauser noted that the rent from November 2006 through February 2007 was late, and that on February 22, 2007, Maestas was removed as manager of Hi-Tech. Morschauser acknowledged that any rent checks that had been sent by RCC/Lawrence were returned. He further claimed the Lease could not be extended because Hi-Tech refused to be a continuing guarantor. However, according to the Lease, Lawrence was the guarantor. Later, when Lawrence attempted to negotiate a new lease with Morschauser, Morschauser claims he had no knowledge that the relationship between Lawrence and Maestas had been terminated. Morschauser refused to enter into a new lease for the Property.
On November 25, 2008, Morschauser sought leave to file a second amended cross-complaint on the grounds that the proposed amendment may facilitate settlement.
In reply to Morschauser's opposition to the motion for summary judgment, Hi-Tech argued it was not contesting Morschauser's claims, merely that it was not in breach or guilty of any fraudulent acts. Hi-Tech further challenged Morschauser's opposition as being defective because it had "no citation to exhibit title, page, and line numbers as required by the California Rules of Court . . . ." Hi-Tech noted that Morschauser agreed he had received a letter informing him that Hi-Tech had no interest in renewing the Lease, and that for the last two years, Hi-Tech had had nothing to do with the Property. Morschauser did not claim that Hi-Tech was a holdover tenant, but rather acknowledged that all rent through May 31, 2007, had been paid. Finally, Morschauser did not dispute that the alleged misrepresentations took place after Hi-Tech had severed any connection with the Property. Regarding the misrepresentations concerning an injunction issued by the Superior Court of Orange County, such injunction did not apply to Lawrence. Thus, because Morschauser failed to produce any facts showing that Hi-Tech remained in possession of the Property after May 31, 2007, that the rent through May 31, 2007, had not been paid, or that Hi-Tech engaged in any fraudulent acts, Hi-Tech argued it was entitled to summary judgment.
At the hearing on February 27, 2009, the trial court granted the motion on the grounds that, as to the first and second causes of action, there was no "triable issue of any obligation by Hi Tech regarding the lease after May 31, 2007, the date that the lease was terminated, or that Hi Tech caused any damages after May 31, 2007." The court referred to the Lease, the April 5, 2007, letter from Morschauser to Hi-Tech, the October 22, 2007, letter from Morschauser's attorney to Hi-Tech/Lawrence's attorney, and the May 22, 2007, letter from Hi-Tech to Morschauser. As to the third cause of action, the court found "no triable issue that Hi Tech was not represented by Lawrence, that Hi Tech informed [Morschauser] that [it] was not interested in any lease extension negating both representation and reliance, and that Hi Tech was not in violation of any injunction arising from the Orange County Caliber action."
On April 23, 2009, the order granting summary judgment in favor of Hi-Tech was filed. Judgment was entered on September 28, 2009, and Hi-Tech was awarded costs in the amount of $1,330.22 and attorney fees in the amount of $65,731.00.
On appeal, Morschauser contends Hi-Tech failed to establish that no triable issues of fact exist because it never successfully removed its name from the Lease, it never was relieved of its obligations, and it remained liable under the Lease for the actions of RCC and Lawrence. We disagree.
Regarding Hi-Tech's responsibility for rent, including holdover rent, as Hi-Tech points out, RCC was never an assignee or subtenant under the Lease. Rather, after May 31, 2007, RCC was the tenant and the original complaint filed by RCC sought reformation of the Lease to correct the name of the tenant to RCC to allow RCC to exercise its option for a three-year extension. In support of this position, Hi-Tech referenced the correspondence between the parties and the declaration of Lawrence. Lawrence explains that when negotiating the Lease, Hi-Tech was listed as the lessee because Morschauser stated that the Lease "could change . . . to reflect the lessee as whichever corporation ultimately owned the business at the Property as long as [Lawrence] was the guarantor." Although there was no change in the Lease to reflect that Hi-Tech was not the ultimate business at the Property, Morschauser knew there had been a change, because his declaration states that except for the first monthly rent check, "all rent checks thereafter came from, RAB Group, Inc., Collision Center of Riverside and [RCC], all these checks had the address 2376 Main Street, Riverside, C[A] 92501 embossed on them."
As the trial court correctly noted, the Lease, the April 5, 2007, letter from Morschauser to Hi-Tech, the October 22, 2007, letter from Morschauser's attorney to Hi-Tech/Lawrence's attorney, and the May 22, 2007, letter from Hi-Tech to Morschauser, all support the fact that Hi-Tech's obligations, if any, to Morschauser ended on May 31, 2007. Further support is found in Morschauser's declarations. In March 2006, after talking with Maestas and Lawrence, Morschauser orally rented
Regarding damage to the Property, the evidence shows there is no triable issue of fact. Morschauser acknowledges Hi-Tech's notice that it was no longer using the Property and that it had no desire to extend the Lease. He further acknowledges that a new lease was prepared for the Property for Lawrence's use. Morschauser was aware that an entity other than Hi-Tech was in possession of the Property both prior to and after May 31, 2007. Specifically, he stated: "I received the 1st monthly rent check from the Hi-Tech main office, all rent checks thereafter came from, RAB Group, Inc., Collision Center of Riverside and Riverside Collision Center, Inc., all these checks had the address 2376 Main Street, Riverside, C[A] 92501 embossed on them." In two of his declarations, Morschauser acknowledged that Lawrence, not Hi-Tech, was in possession of and had caused damage to the Property. If Morschauser believed that Hi-Tech had damaged the Property, he failed to mention it in his attorney's letter dated October 22, 2007, acknowledging payment of all rent owed through May 2007.
Moreover, Morschauser's attempts to hold Hi-Tech liable as an assignor under the Lease fail because there was no assignment. If Morschauser was confused about the situation, he should have contacted Hi-Tech immediately upon receiving payment of the rent under the name of RCC. According to Section 12.1(a) of the Lease, "Lessee shall not voluntarily . . . assign . . . all or any part of Lessee's interest in this Lease or in the [Property] without Lessor's prior written consent." Although Morschauser knew there was a change in the business being operated on the Property, he claims that he was led to believe it was still Hi-Tech. The documents and Lawrence say otherwise. In March 2006, Morschauser orally agreed to lease additional real property located between the existing Property and Morschauser's house for RCC's use. Again, this would have provided an opportunity to clarify the situation, but Morschauser failed to do so. He had the Lease that identified Hi-Tech and Lawrence who remained the guarantor on the Lease regardless of the entity identified as the lessee. Considering the documents before this court, Lawrence's declaration contains a more credible narrative of what happened.
Given the evidence before the trial court, summary judgment in favor of Hi-Tech on Morschauser's amended cross-complaint was proper.
On November 25, 2008, after Hi-Tech had filed its motion for summary judgment, and Morschauser had filed his opposition, he filed a motion seeking leave to file a second amended cross-complaint. Morschauser contends the trial court abused its discretion in denying this motion. We disagree.
Generally, a motion for leave to amend a complaint may be made at any time before judgment. (See Kirby v. Albert D. Seeno Construction Co. (1992) 11 Cal.App.4th 1059, 1068-1069; Code Civ. Proc., § 473, subd. (a)(1).) The trial court has broad discretion to deny a motion for leave to amend a pleading, however, particularly where the proposed amended pleading fails to state facts which could not have been pleaded earlier and fails to demonstrate a reasonable excuse for the delay. (Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1097.) We review a trial court's denial of a motion for leave to file an amended pleading for an abuse of discretion. (Ibid.) And, "`The law is well settled that a long deferred presentation of [a] proposed amendment without a showing of excuse for the delay is itself a significant factor to uphold the trial court's denial of the amendment. [Citation.]'" (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 613.)
Here, Morschauser's motion for leave to amend failed to include the proposed amended pleading, and the supporting declaration failed to explain the effect of the amendment, why the amendment was necessary, when the facts giving rise to the amendment were discovered, and why the request was not made earlier. Thus, on December 3, 2008, four days after filing the motion for leave to amend, Morschauser filed an ex-parte application to continue the hearing on the summary judgment motion so that the court could consider the request for leave to amend. The application was granted, and the hearing on the summary judgment motion was continued to February 27, 2009, to enable a hearing on the motion to amend on January 7, 2009. On January 6, 2009, Morschauser's attorney filed a declaration which explained that at the mediation on September 23, 2008, Morschauser was informed that if a conversion claim was added, "more sums would be available to settle this matter . . . ."
On February 17, 2009, an amended notice of motion for leave to amend was filed, and the proposed second amended cross-complaint was provided. The proposed amended pleading contained four new causes of action, namely, negligent conversion, intentional conversion, waste, and trespass. Hi-Tech opposed granting leave to amend on the grounds that Morschauser "unreasonably delayed in moving for leave to amend," and "no new or different facts are alleged for the additional causes of action." On February 27, 2009, the trial court denied the request for leave to amend without prejudice.
Here, regardless of the alleged defects in Morschauser's initial motion for leave to amend, we note the primary reason given for the amendment was that, following the mediation in September 2008, Morschauser was told that "more sums would be available to settle this matter" with the addition of a conversion claim. Morschauser's declaration filed on February 17, 2009, notes that RCC vacated the Property on October 31, 2007, and that Morschauser inspected it, making note of any damages. Despite Morschauser's repeated refusal to enter into an extension of the Lease with RCC, or agree to a new lease, Morschauser claims he allowed the Property to sit dormant until October 31, 2008, one year after RCC had vacated the Property, to take any action to prepare the Property for re-lease. On December 20, 2008, he learned the conditional use permit for the Property had been withdrawn because "no collision repair business ha[d] operated on [it] for over six (6) months . . . ."
Considering the record before this court, Morschauser failed to explain how the relevant facts that existed at the time he filed the first amended cross-complaint had changed to necessitate the filing of a second amended cross-complaint with new causes of action. Other than the claim that the addition of a conversion cause of action would make more settlement money available, the facts of the situation remained the same. Further, he failed to explain why he waited until the eve of the hearing on the motion for summary judgment to present the proposed second amended cross-complaint. For this reason, the trial court did not abuse its discretion in refusing to grant Morschauser leave to amend. (Leader v. Health Industries of America, Inc., supra, 89 Cal.App.4th at p. 613.)
Furthermore, leave to amend a complaint should only be granted when it will not prejudice the adverse party. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.) Here, Hi-Tech would have been prejudiced by allowing Morschauser leave to amend his second amended cross-complaint. Hi-Tech was not in possession of the Property after May 31, 2007. Hi-Tech informed Morschauser that it had no desire to extend the Lease past May 31, 2007. And Hi-Tech had no association with the Property or Lawrence, the guarantor on the Lease, shortly after the Lease began. Morschauser failed to show that he could not have made the proposed allegations much earlier, or before Hi-Tech filed its motion for summary judgment.
The judgment is affirmed. Hi-Tech shall recover its costs on appeal.
KING, J. and CODRINGTON, J., concurs.