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Zintel Holdings, LLC v. Lilo Mclean et al

September 18, 2012

ZINTEL HOLDINGS, LLC, PLAINTIFF AND RESPONDENT,
v.
LILO MCLEAN ET AL., DEFENDANTS AND APPELLANTS. LILO MCLEAN, CROSS-COMPLAINANT AND APPELLANT,
v.
ZINTEL HOLDINGS, LLC, CROSS-DEFENDANT AND RESPONDENT.



(Los Angeles County Super. Ct. No. SC108880) APPEALS from a judgment of the Superior Court of Los Angeles County, Jacqueline A. Connor, Judge.

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

CERTIFIED FOR PUBLICATION

Affirmed in part, reversed in part and remanded.

Zintel Holdings, LLC (Zintel) sued Lilo McLean and her son, Mark Huth, to invalidate or equitably reform their allegedly fraudulent residential apartment lease. McLean cross-complained for breach of the implied covenant of quiet enjoyment and several related torts. After the court denied relief on both the complaint and cross-complaint on motions for summary judgment, it entered judgment and awarded costs of approximately $2,500 to McLean and Huth pursuant to Code of Civil Procedure section 1032 (section 1032), but concluded there was no prevailing party under Civil Code section 1717 (section 1717) and declined to award them attorney fees. McLean and Huth appeal from the judgment only with respect to the denial of attorney fees. We affirm as to McLean, but reverse as to Huth and remand for a determination of the reasonable attorney fees to which he is entitled.

FACTUAL AND PROCEDURAL BACKGROUND

1. McLean and Huth's Lease Agreement with Zintel

McLean and Huth have lived in units G and H of an eight-unit apartment building at 325 North Palm Drive in Beverly Hills for more than 50 years. There is a doorway through a closet that connects the two units.

McLean and Huth have never paid more than a total of $200 per month for both units under local rent control ordinances. Robert Jonker-Fisher, who lived in New York, became the sole owner of the property in 1997. McLean served as building manager and signed leases on behalf of Fisher, who never traveled to Beverly Hills to visit the property.

The lease at issue in the litigation provided for the rental of units G and H for $200 per month from May 2007 to May 2012. McLean maintained she told Fisher about the lease and he responded, "Okay." McLean then signed as both landlord and tenant; Huth also signed as tenant. The lease agreement includes an attorney fee provision stating in part, "In the event action is brought by any party to enforce any term of this agreement or to recover possession of the premises, the prevailing party shall recover from the other party reasonable attorney fees." Fisher terminated McLean as building manager in July 2007; but she remained a tenant, and her rent was accepted without incident.

Fisher died in August 2008. In 2010, following extended probate proceedings, Fisher's widow took ownership of the property as the sole member of Zintel. Before that occurred, however, Zintel had instructed the new building manager to accept McLean's monthly rental payments. McLean's rent checks were consistently cashed through 2010.

From January 2009 to July 2010 Zintel served McLean with 16 inspection notices for her apartment. Additionally, the building manager and the property's management company sent McLean letters requesting she switch parking spots. McLean retained her original parking spot, and the matter was not pursued. On July 10, 2010 Zintel served McLean and Huth with a "60-day notice to quit" and a "60-day notice to cure covenants or quit" demanding the door connecting the two units be removed. Those notices were later withdrawn.

2. Zintel's Complaint and McLean's Cross-complaint

On July 23, 2010 Zintel sued McLean and Huth seeking declaratory relief and equitable reformation of the lease agreement. The complaint alleged the fair market monthly rental value of the units was approximately $2,500. As the basis for relief, Zintel alleged the lease violated the statute of frauds, was executed without Fisher's authorization and had been fraudulently backdated so it would appear to have been signed while McLean was still managing the property. Zintel also alleged McLean had no authority to combine units G and H. The complaint requested a declaration of the parties' respective rights under the lease and reformation of the lease, if not found to be void, to reflect a fair and equitable rental rate.

McLean cross-complained two months later, alleging causes of action for breach of the covenant of quiet enjoyment, elder abuse and intentional and negligent infliction of emotional distress. The cross-complaint alleged the inspections and 60-day notices constituted harassment and represented Zintel's attempts to ...


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