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Jeffrey Kavin, Inc v. Harold Frye et al

March 5, 2012

JEFFREY KAVIN, INC., PLAINTIFF AND APPELLANT,
v.
HAROLD FRYE ET AL., DEFENDANTS AND RESPONDENTS.



(Los Angeles County Super. Ct. No. BC426079) APPEAL from a judgment of the Superior Court of Los Angeles County, Richard Fruin, Judge. Affirmed.

The opinion of the court was delivered by: Turner, P. J.

CERTIFIED FOR PUBLICATION

INTRODUCTION

One of four lessees, who was not a defendant in the action below, signed and delivered to the lessor, with lessor's approval, a writing exercising an option to extend a lease after the expiration of the period to exercise that option. We hold that defendants, the three other colessees, were not bound by that purported exercise of the option. We also hold that the increased rental provision for holding over did not apply when one lessee did so with the consent of the lessor. We therefore affirm the judgment.

BACKGROUND*fn1

A. The Lease

On February 17, 2004, lessor Jeffrey Kavin, Inc. (lessor)*fn2 entered into a written sublease agreement (referred to as the "Lease") with Andrea Frye*fn3 and defendants and respondents Harold Frye, William Morgan, and Sescie Karabuykov (referred to as "Sessi") (defendants), as lessees (lessees). In the lease, lessees, as "Parties" to the lease, are collectively referred to as "Lessee." Harold is Andrea's father,*fn4 and Morgan is Karabuykov's stepfather. The initial term of the lease was for three years, ending on April 30, 2007.

The lease contained the following relevant provisions: "Surrender/Restoration. Lessee shall surrender the Premises by the end of the last day of the Lease term . . . . [¶]

No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration . . . of this Lease. In the event that Lessee holds over in violation of this Paragraph . . . then the Base Rent payable from and after the time of the expiration . . . of this Lease shall be increased to two hundred percent (200%) of the Base Rent applicable during the month immediately preceding such expiration . . . . Nothing contained herein shall be construed as a consent by Lessor to any holding over by Lessee; [¶] Option to extend: Lessor herby grants Lessee the option to extend the term of this lease for 1 additional 36 month period commencing when the initial term expires upon each and all of the following terms and conditions: [¶] (i) Lessee give to Lessor, and Lessor actually receives on a date which is prior to the date that the option period would commence (if exercised) by at least 6 months, a written notice of the exercise of the option to extend th[i]s Lease for said additional term, time being of [the] essence. If said notice of the exercise of the option is not so given and received, the option shall automatically expire. . . . [¶] Multiple Parties. . . . [I]f more than one person . . . is named herein as . . . Lessee, the obligations of such multiple parties shall be the joint and several responsibility of all persons . . . named herein as such . . . Lessee. . . . [¶] Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or any other term, covenant or condition hereof. . . . Regardless of Lessor's knowledge of Default or Breach at the time of accepting rent, the acceptance of rent by Lessor shall not be a waiver of any Default or Breach by Lessee of any provision hereof. Any payment given Lessor by Lessee may be accepted by Lessor on account of moneys or damages due Lessor . . . ."

B. Operative Facts

1. Kavin's Testimony

Lessor entered into a lease with Andrea and defendants, the original term of which ended on April 30, 2007. Prior to the parties entering in to the lease, Kavin was concerned that if Andrea and Karabuykov were the only lessees and they defaulted on the lease, they would have no assets for lessor to pursue to satisfy the default. Kavin therefore required that Harold and Morgan also execute the lease as lessees.

As quoted above, the lease provided for the ability of lessees to exercise an option to extend the lease for 36 months by a written notice six months before the expiration of the lease term, and if lessees did not give the notice, the option automatically expired. Kavin inserted into the lease this automatic expiration language clause because he believed that it was for lessor's benefit.

At the leased premises, Andrea and Karabuykov opened a dress shop called Brunette Boutique. Kavin went to the leased premises one to two weeks after the option period had expired and told Andrea that they were late in exercising the option to extend the term of the lease; he therefore asked Andrea whether "they" were going to exercise the option. Andrea told Kavin that "we want to do that," and "we want to exercise the option." Andrea inquired of Kavin what she should write, and Kavin told her what to write. Kavin believed he told Andrea not to date the document. Andrea wrote in part, "We hereby exercise our option to extend our lease for another 36 month lease."

Andrea, Morgan, and Harold did not request the return of their security deposit until lessor filed this lawsuit. Harold paid the rent on one occasion after the original term of the lease had expired.

2. Andrea's Testimony

Andrea and Karabuykov were partners in a business called Brunette Boutique at the leased premises. In approximately 2005, Karabuykov had a baby, and thereafter Karabuykov "pretty much gave [Andrea] the store." Thus, Andrea considered Brunette Boutique to be her business from and after that time.

Kavin went to the store and told Andrea that he needed to get a piece of paper extending the term of the lease, and he dictated "word for word" what Andrea needed to write down. Andrea did not create any of the words on her own. Andrea believed that the option to extend the lease belonged only to her and Brunette Boutique, her business, and that she exercised the option. Andrea called Karabuykov immediately after the former executed the notice, and said to Karabuykov, "Oh my God, [Kavin] came in and [he] made me sign this piece of paper." At the time Andrea signed the written notice purporting to exercise the option, she never had a discussion with Harold, Morgan, or Karabuykov in which they authorized Andrea to sign any document that would extend the lease.

3. Karabuykov's Testimony

Karabuykov and Andrea did not have a written agreement regarding Brunette Boutique. From November 18, 2005, through January 2006, Karabuykov left the business and was on maternity leave. She thereafter continued to work at the store until approximately November 2006, when she gave all of her interest in Brunette Boutique to Andrea because Karabuykov decided she could no longer work at the store in view of her responsibilities as a parent. Because Andrea was Karabuykov's friend, however, Karabuykov remained involved in the business, including remaining on the joint bank account for Brunette Boutique, going on buying trips, performing some bookkeeping tasks, and "look[ing] into . . . some rent issues." Prior to November 2006, Karabuykov did not authorize anyone to sign an extension of the ...


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