Procedural Posture

Appellant lessors sought review of a judgment of the Superior Court of Los Angeles County (California), which ruled in favor of appellee lessees in appellants’ breach of contract action.

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Overview

Appellant lessors argued that appellee lessees waived the contingencies contained in their commercial lease and, thus, obviated the lease’s termination date when possession of the premises was to be tendered to appellees. The court disagreed, ruling that the trial court correctly charged the jury that clear and convincing evidence was required before it could find that appellees waived their rights under a commercial lease, and noting that the verdict established no such waiver. However, the court stated, the trial court erred in not considering, even after the verdict in favor of appellees, appellants’ claim that appellees were estopped by their conduct and verbal representations from denying the enforceability of the lease agreement. The court noted that after the termination date, the parties proceeded with the restaurant/bar project as if the lease agreement was in full force and effect, and that a lease amendment was then executed. Error occurred when the trial court refused to consider the non-jury estoppel issue, because appellants were entitled to have a ruling on the merits of this separate and distinct claim that they had raised in their trial briefs.

Outcome

Judgment in favor of appellee lessees affirmed in appellant lessors’ breach of contract action, as jury properly applied “clear and convincing” evidence test to find that appellees had not waived contingencies contained in their commercial lease, but judgment reversed for trial only as to appellants’ timely claim that appellees were estopped by their conduct from denying lease’s enforceability in view of trial court’s failure to consider issue.