Court of Appeal, Second District,
Division 8.
MR. S. LIQUOR MARTS, INC., Plaintiff and Appellant,
v.
JNJ INVESTMENTS, LLC, Defendant and Respondent.
No. B222600.
(Los Angeles County Super. Ct. No. BC 374021).
June 8, 2011.
APPEAL from a judgment of the Superior Court of Los Angeles County, David L. Minning, Judge. Affirmed.
Sheppard Mullin Richter & Hampton, Gregory A. Long, Sascha Henry and Paul L. Seeley for Plaintiff and Appellant.
Ecoff, Blut & Salomons, Lawrence C. Ecoff and Philip H.R. Nevinny for Defendant and Respondent.
FLIER, J.
Appellant Mr. S. Liquor Marts, Inc. (Mr. S.) appeals from a judgment and award of attorney fees in favor of respondent JNJ Investments, LLC (JNJ). Mr. S. contends that the trial court erred in (1) failing to issue a statement of decision, (2) granting JNJ’s motion for judgment on all causes of action, and (3) awarding attorney fees to JNJ. We disagree and affirm.
FACTUAL BACKGROUND
Mr. S. owned and operated several liquor stores in Southern California. Louis Smaldino was the president of Mr. S. The Mr. S. store that was once located in a shopping center on the corner of Rosecrans and Normandie Avenues in Gardena is the subject of this lawsuit. Mr. S. entered into the original lease for the Gardena store in 1963 when it was doing business as Gaytime Liquors. It exercised options to extend the lease until 1999, at which time the lease converted to a month-to-month agreement.
1. Efforts to Negotiate a New Lease
In 2001, JNJ bought the shopping center in which Mr. S. was operating. Mr. S. requested a lease from JNJ, rather than remain a month-to-month tenant. Around the same time that JNJ purchased the property, Mr. S. began thinking about selling the store. Mr. S. was pushing for a lease because it had potential buyers interested in the store and the buyers would want a lease in place.
On two occasions, the parties attempted to negotiate a lease. The first time was around early 2002. JNJ sent Mr. S. a draft lease, and Mr. S. responded with a number of comments and proposed revisions. Mr. S. and JNJ could not agree on the terms of a new lease, and Mr. S. continued to occupy the property on a month-to-month basis. The second attempt to negotiate a lease occurred in 2004. Again, JNJ sent Mr. S. a draft lease, and Mr. S. responded with a number of comments and proposed changes. Once again, the parties did not agree on the terms of a new lease, and Mr. S. continued on a month-to-month basis.
Sometime around the summer of 2005 or 2006, Smaldino and some other tenants of the shopping center testified at a city hearing regarding the opening of a grocery store in the center. At trial, Smaldino testified that JNJ agreed to give Mr. S. a lease that was substantially similar to its original lease if Smaldino testified at the hearing. JNJ categorically denied entering into such an agreement.
2. Assessment of Common Area Maintenance Charges
Mr. S.’s lease provided for it to pay a proportionate share of common area maintenance (CAM) charges. In early 2002, just after JNJ took over the property, it raised Mr. S.’s rent and assessed increased CAM charges. In 2006, JNJ again increased the CAM charges. In January 2006, Mr. S. requested JNJ’s budget for 2006 so that it could evaluate the increased CAM charges. JNJ sent Mr. S. an accounting of 2005 CAM charges in September 2006. Mr. S. responded that it wanted an accounting for all years since JNJ had taken over the property. It also objected to the charges on a number of grounds, including that JNJ had overcharged for real property taxes and that JNJ had improperly assessed “management fees.” JNJ made some adjustments to the CAM charges based on other objections by Mr. S., but it did not agree that it had overcharged Mr. S. for property taxes or management fees. JNJ eventually provided Mr. S. with the requested accountings for each year during which it owned the property. Some of the accountings were provided after Mr. S. vacated the property in 2007.
3. Mr. S.’s Liquor Store Sign
Mr. S. used a standard logo sign for its liquor stores since roughly 1971. It had hired a company to design the logo for it. The logo was used on house products, such as Mr. S. Liquor Mart house vodka, in addition to the signs. Mr. S. would reuse the signs when possible, so when one location closed, the sign could be moved to another, new location.
At the Gardena location, Mr. S. paid over $5,000 to install its sign in the 1980’s. Mr. S.’s sign was displayed on a pole with signs of the other shopping center tenants. The lease provided that “Lessee shall install, at his own cost and expense … signs,” and any signs “so installed shall remain the property of Lessee and Lessee may remove the same at any time during the term of this lease….” Around August 2006, a truck hit Mr. S.’s sign and the other shopping center signs on the same pole. Mr. S.’s sign was damaged beyond repair. JNJ made a claim to the trucker’s insurance company and the company investigated the damage to the signs. JNJ received around $5,000 from the insurer and used it to hire a company to replace the damaged signs, including Mr. S.’s. JNJ consulted Mr. S. in the creation of the new sign. Mr. S. objected that its name appeared too small, and JNJ told it that the name would be made larger. The sign company that JNJ hired removed and disposed of Mr. S.’s damaged sign. None of the insurance proceeds were given to Mr. S. because nothing remained from the insurance payment after replacing the sign—the replacement sign cost more than the $5,000 insurance payment.
4. The Parking Easement
The shopping center in which Mr. S. was located was actually comprised of two separate parcels with two separate owners. JNJ’s predecessor and the adjacent land owner had entered into a reciprocal easement in 1962 for parking purposes. In this manner, the parking facilities of each parcel could be used for the common benefit of the whole shopping center. At some point in 2004 or 2005, the adjacent parcel owner erected a metal fence around its portion of the shopping center parking lot.
The lease provided that Mr. S. had the right to use and enjoy “common areas” of the shopping center, including “parking areas.” Mr. S. notified JNJ that its use of the parking areas was being restricted by the metal fence barricade. JNJ forced the adjacent land owner to take down the metal fence, though once the adjacent owner did that, it erected a traffic cone barricade around its property. JNJ had a number of discussions with the City of Gardena and the adjacent land owner in an attempt to get the traffic cones removed. The cones were eventually removed in January 2007.
On November 27, 2006, Mr. S. gave notice that it intended to vacate the property effective January 1, 2007.
PROCEDURAL BACKGROUND
Mr. S. filed this lawsuit on July 10, 2007. The second amended complaint alleged that JNJ assessed improper CAM charges, failed to provide an accounting of CAM charges, failed to negotiate a new lease, improperly disposed of the Mr. S. sign, and failed to take legal action to enforce the parking easement. Based on these actions, the complaint alleged causes of action for (1) breach of the implied covenant of good faith and fair dealing, (2) intentional and negligent interference with prospective economic advantage, (3) fraud, (4) conversion, and (5) accounting. Mr. S. voluntarily dismissed the fraud cause of action.
The bench trial commenced on November 2, 2009. Mr. S. called Smaldino and three JNJ witnesses: (1) JNJ’s property manager, Rodney Rivani; (2) JNJ principal, Joseph Rivani; and (3) the second JNJ principal, Joseph Ramani. After the conclusion of Mr. S.’s case-in-chief, on November 4, 2009, JNJ moved for judgment. At oral argument on the motion, Mr. S. made a motion to amend its complaint to conform to proof. First, it wanted to amend to add a breach of contract cause of action. Second, it wanted to add certain facts in support of breach of the implied covenant of good faith and fair dealing. The trial court denied the motion.
The court issued a minute order granting JNJ’s motion for judgment on November 16, 2009. On December 8, 2009, the court adopted and entered a proposed order granting the motion. The court entered judgment in favor of JNJ on December 29, 2009. JNJ then filed a motion for attorney fees, and on February 26, 2010, the court granted the motion and awarded attorney fees of $125,000 to JNJ.
Mr. S. timely filed a notice of appeal on February 26, 2010.
DISCUSSION
1. The Trial Court Did Not Err in Failing to Issue a Statement of Decision
As a preliminary matter, Mr. S. contends that the trial court committed reversible error when it failed to issue a statement of decision. We disagree.
A statement of decision is not required unless timely requested by one of the parties. (Code Civ. Proc., § 632 [“In superior courts, upon the trial of a question of fact by the court, written findings of fact and conclusions of law shall not be required. The court shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial” (italics added) ]; Agri–Systems, Inc. v. Foster Poultry Farms (2008) 168 Cal.App.4th 1128, 1134[“[T]he superior court has no obligation to prepare a statement of decision unless a party requests one”].) It is undisputed that Mr. S. did not request a statement of decision from the trial court. Instead, Mr. S. relies on JNJ’s request for a statement of decision to support its argument.
Mr. S.’s argument fails. Although JNJ requested a statement of decision, JNJ withdrew that request, and Mr. S. did not object or make a request of its own. JNJ requested a statement of decision at the end of the first day of trial testimony, on November 2, 2009. Mr. S. could have joined in the request for a statement of decision, but it did not. After the court granted JNJ’s motion for judgment, on November 24, 2009, JNJ submitted a proposed order granting the motion stating, “The Trial having lasted less than eight hours over more than one day, no Statement of Decision is required to be issued, pursuant to California Code of Civil Procedure § 632.” The proposed order put Mr. S. on notice that JNJ no longer sought a statement of decision. On December 1, 2009, Mr. S. filed written objections to the proposed order. Mr. S.’s objections said nothing about JNJ’s withdrawing its request for a statement of decision, nor did Mr. S. request one in the objections or elsewhere.
Moreover, even assuming Mr. S. could rely on JNJ’s withdrawn request, the request failed from the beginning for lack of specificity. The Code of Civil Procedure is unmistakably clear that the “request for a statement of decision shall specify those controverted issues as to which the party is requesting a statement of decision.” (Code Civ. Proc., § 632.) “A party is not entitled to a statement of decision based on a ‘general inquisition’ that ‘unfairly burdens the trial judge in that he must not only speculate which questions embrace ultimate as distinguished from evidentiary facts, but also search his recollection of the record without the assistance of a suggestion from counsel.’ “ ( Conservatorship of Hume (2006) 140 Cal.App.4th 1385, 1394 [trial court was not required to issue a statement of decision when the appellant made a general request for a statement “upon each of the principal controverted issues at trial” (id. at p. 1394, fn. 15) ], quoting McAdams v. McElroy (1976) 62 Cal.App.3d 985, 993.) Thus, a “general, nonspecific request for a statement of decision does not operate to compel a statement of decision as to all material, controverted issues.” ( City of Coachella v. Riverside County Airport Land Use Com. (1989) 210 Cal.App.3d 1277, 1292–1293 .)
Here, JNJ’s request consisted entirely of the following statement, made at the end of the first day of trial testimony: “One thing for the record I didn’t say this morning, housekeeping matter, defendants request statement of decision, and I did request that under the Code of Civil Procedure.” JNJ’s request for a statement of decision was not specific in any sense of the word, and as such, it was insufficient to trigger the trial court’s duty to provide such a statement. Mr. S. could have cured this by proposing specific issues to be included in the statement, but again, it did not make any request whatsoever. (Code Civ. Proc., § 632 [“After a party has requested the statement, any party may make proposals as to the content of the statement of decision”].)
The trial court was not presented with a proper request for a statement of decision. Accordingly, it did not err in failing to provide one.
2. The Trial Court Did Not Err in Granting the Motion for Judgment
“The standard of review of a judgment and its underlying findings entered pursuant to [Code of Civil Procedure] section 631.8 is the same as a judgment granted after a trial in which evidence was produced by both sides. In other words, the findings supporting such a judgment ‘are entitled to the same respect on appeal as are any other findings of a trial court, and are not erroneous if supported by substantial evidence.’ “ ( San Diego Metropolitan Transit Development Bd. v. Handlery Hotel, Inc. (1999) 73 Cal.App.4th 517, 528, quoting Charles C. Chapman Building Co. v. California Mart (1969) 2 Cal.App.3d 846, 853.) When, as here, the trial court has not issued a statement of decision, the doctrine of implied findings applies. ( County of Orange v. Barratt American, Inc. (2007) 150 Cal.App.4th 420, 438.) The doctrine holds that “the reviewing court presumes that the trial court made all factual findings necessary to support the judgment and reviews those implied findings under the substantial evidence rule.” ( In re Marriage of Fong (2011) 193 Cal.App.4th 278, 293.) Further, “[e]very substantial conflict in the testimony is, under the rule which has always prevailed in this court, to be resolved in favor of the finding.” ( Bancroft–Whitney Co. v. McHugh (1913) 166 Cal. 140, 142.) Applying these standards, we hold that the trial court did not err in granting JNJ’s motion for judgment.
a. Accounting
An accounting cause of action is appropriate when “an action is for an amount which is unliquidated and unascertained and which cannot be determined without an accounting.” ( St. James Church of Christ Holiness v. Superior Court (1955) 135 Cal.App.2d 352, 359.) A suit for an accounting will not lie when it appears that none is necessary or that there is an adequate remedy at law. (Ibid.) An accounting will not be accorded with respect to a sum certain that a plaintiff seeks to recover. (Ibid.)
Mr. S. sought an accounting of the CAM charges for the years 2001 through 2006. The evidence is undisputed that Mr. S. eventually received an accounting for each of these years. JNJ provided some accountings after Mr. S. vacated the property in 2007, but still long before this action was tried. At the time of trial, Mr. S. knew the sum certain it was seeking in CAM charges. An accounting was no longer necessary. Thus, the court’s ruling on this claim was not in error.
b. Conversion
Mr. S. contends that the trial court erred because it presented undisputed evidence showing the conversion of its sign by JNJ. We disagree.
“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” ( Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066.) Conversion is a strict liability tort. ( Moore v. Regents of University of California (1990) 51 Cal.3d 120, 144.) “The foundation of the action rests neither in the knowledge nor the intent of the defendant…. Therefore, questions of the defendant’s good faith, lack of knowledge, and motive are ordinarily immaterial.” (Burlesci v. Petersen, supra, at p. 1066.)
Under the lease, Mr. S. clearly owned its sign. Still, there was sufficient evidence that Mr. S. failed to prove its claim. JNJ testified through its manager, Rodney Rivani, that the truck accident had damaged Mr. S.’s sign to the point that it could not be repaired, there was no use for it, and it was considered a “total loss.” Similarly, one of the JNJ principals, Joseph Rivani, testified that Mr. S.’s sign had been damaged when the truck hit it, and that JNJ had received a letter from Mr. S. stating that the sign was broken. This constituted substantial evidence that Mr. S.’s sign was damaged beyond repair by the truck accident. Thus, the truck driver caused Mr. S. to lose the sign, not JNJ. An essential element of the claim—the defendant’s conversion by a wrongful act or disposition of property rights—is absent here.
Mr. S. contends that JNJ should be liable because the sign was removed and destroyed by JNJ’s agents (the company hired to replace the signs). Assuming arguendo that the sign company was an agent of JNJ, disposal of the damaged sign was not a conversion. As noted above, damages are an essential element of conversion. Damages for conversion are presumed to be (1) the value of the property at the time of conversion, plus interest, or (2) an amount sufficient to indemnify the plaintiff “for the loss which is the natural, reasonable and proximate result of the wrongful act complained of.” (Civ.Code, § 3336.) Here, the sign company disposed of a useless sign that was beyond repair and, therefore, Mr. S. suffered no damage. Stated another way, disposing of what was essentially garbage cannot be said to be “a wrongful act or disposition of property rights.” ( Burlesci v. Petersen, supra, 68 Cal.App.4th at p. 1066.)
To the extent Mr. S. is arguing that the property subject to conversion was some or all of the insurance proceeds, this argument is also unavailing. JNJ used a portion of the insurance proceeds to replace Mr. S.’s sign—a remedy in which Mr. S. participated by providing input on the new sign when consulted. The insurance proceeds were not converted for JNJ’s use, but were used to purchase new property for Mr. S. There is no evidence that Mr. S. requested that JNJ hand over the new sign or that JNJ refused to provide it. Because “a demand by plaintiff before suit and a refusal by defendant are necessary to the maintenance of an action for conversion,” this argument cannot prevail. ( Gardena Valley Airport, Inc. v. All American Sports Enterprises, Inc. (1964) 230 Cal.App.2d 478, 482.)
In sum, the trial court did not err in failing to find a conversion here.
c. Intentional and Negligent Interference with Prospective Economic Relations
Mr. S. does not explain why the trial court erred in granting judgment for JNJ on the claim for negligent interference with prospective economic relations. “[B]ecause it is not our role to construct theories or arguments that would undermine the judgment, we consider only those issues advanced in the appellant’s briefs.” ( Jibilian v. Franchise Tax Bd. (2006) 136 Cal.App.4th 862, 867, fn. 3.) “When an issue is unsupported by pertinent or cognizable legal argument it may be deemed abandoned and discussion by the reviewing court is unnecessary.” ( Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 699–700.) As such, we deem any issue with respect to this claim abandoned.
With respect to the claim for intentional interference with prospective economic relations, Mr. S. contends that (1) the trial court erred when it denied leave to amend to conform to proof, and (2) it proved the elements of this claim at trial. We hold otherwise on both counts.
“While under section 473 of the Code of Civil Procedure and the case authorities pertaining thereto the trial court has wide discretion in allowing the amendment of any pleading [citations], as a matter of policy the ruling of the trial court in such matters will be upheld unless a manifest or gross abuse of discretion is shown [citations].” ( Bedolla v. Logan & Frazer (1975) 52 Cal.App.3d 118, 135.) “[I]n evaluating whether the trial court has properly exercise[d] its discretion, a number of factors must be considered, including the conduct of the moving party and the belated presentation of the amendment.” (Id. at p. 136.) “The law is well settled that a long deferred presentation of the 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.” (Ibid. [holding that denial of leave to amend to conform to proof was not abuse of discretion when the motion was made on the fourth day of trial with no excuse for tardiness].)
In this case, the trial court did not abuse its discretion in denying Mr. S. leave to amend. Mr. S.’s second amended complaint relied on JNJ’s alleged interference with store customers, but the evidence at trial related to purported interference with potential offers to buy the store. Mr. S. testified that it had offers to buy the store in as early as 2004 and that the sales did not happen because it did not have a lease. The record demonstrates that Mr. S. knew of these failed offers years before it initiated this lawsuit in 2007. Yet Mr. S. moved to amend its pleading only after it closed its case and the parties were arguing JNJ’s motion for judgment. Mr. S. did not attempt to excuse or explain the delay. The trial court was well within its discretion to deny leave to amend.
Even if the trial court erred here, that error was harmless. As explained below, Mr. S. would not have prevailed, had the complaint been amended. ( Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 570[“[T]he error was harmless, because it is not reasonably probable defendant would have obtained a more favorable result in its absence”]; Code Civ. Proc., § 475.)
“The elements of the tort of intentional interference with prospective economic advantage are: (1) an economic relationship between the plaintiff and some third person containing the probability of future economic benefit to the plaintiff; (2) knowledge by the defendant of the existence of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) damages to the plaintiff proximately caused by the acts of the defendant.” ( Blank v. Kirwan (1985) 39 Cal.3d 311, 330.) In addition, the plaintiff has the burden of proving that the defendant’s act was independently wrongful “ ‘by some measure beyond the fact of the interference itself.’ “ ( Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393, quoting Top Serv. Body Shop, Inc. v. Allstate Ins. Co. (1978) 283 Or. 201, 209.) “An act is not independently wrongful merely because defendant acted with an improper motive.” ( Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158.) Rather, “an act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Id. at p. 1159.)
Mr. S. failed to provide evidence of an independently wrongful act. JNJ had no obligation to enter into a new lease with Mr. S. The month-to-month lease under which the parties were operating did not provide for such an obligation. Mr. S. maintains that JNJ gave Mr. S. its word that it would enter into a new lease substantially similar to the old one in exchange for Mr. S.’s testimony at a city council hearing. But the record discloses sufficient evidence that JNJ made no such promise. JNJ testified that it “was not the case at all” that Mr. S. was to be given a lease in exchange for attending the hearing. The trial court did not err in granting judgment for JNJ on this claim.
d. Breach of the Implied Covenant of Good Faith and Fair Dealing
Mr. S. contends that the trial court erred because JNJ breached the lease by overcharging Mr. S. for CAM charges and property taxes and failing to enforce the parking easement on the property. We do not agree that the trial court erred in failing to find a breach of the implied covenant of good faith and fair dealing.
“ ‘Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.’ “ ( Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 683, quoting Rest.2d Contracts, § 205.) Our Supreme Court has recognized that the covenant of good faith and fair dealing “is not susceptible to firm definition but must be examined on a case-by-case basis. Instead of defining what is consistent with good faith and fair dealing, it is more meaningful to concentrate on what is prohibited.” ( Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 372 (Carma Developers ).)
“[T]he scope of the conduct prohibited by the covenant is circumscribed by the purposes and express terms of the contract.” ( Carma Developers, supra, 2 Cal.4th at p. 373.) The covenant does not protect some general public policy interest. (Ibid.) Rather, it is read into contracts to protect the express covenants and terms of the contracts. (Ibid.) “It cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.” ( Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 349–350.) Moreover, the covenant may not be interpreted to prohibit a party from doing that which the contract expressly permits. ( Carma Developers, supra, 2 Cal.4th at p. 374.) Because the covenant is an implied contract term, damages for its breach are almost always limited to contract rather than tort remedies. ( Foley v. Interactive Data Corp., supra, 47 Cal.3d at p. 684.)
The covenant of good faith and fair dealing “has been consistently applied in this state to commercial leases,” such as the contract at issue here. ( Carma Developers, supra, 2 Cal.4th at p. 372.) The covenant is an implied promise “that neither party will do anything which injures the right of the other to receive the benefits of the agreement.” ( Brown v. Superior Court (1949) 34 Cal.2d 559, 564.) “This covenant not only imposes upon each contracting party the duty to refrain from doing anything which would render performance of the contract impossible by any act of his own, but also the duty to do everything that the contract presupposes that he will do to accomplish its purpose.” ( Harm v. Frasher (1960) 181 Cal.App.2d 405, 417.) “A party violates the covenant if it subjectively lacks belief in the validity of its act or if its conduct is objectively unreasonable,” regardless of the party’s motive. ( Carma Developers, supra, 2 Cal.4th at pp. 372–373.)
i. Charges for Management Fees
Mr. S. contends that the assessment of “management fees” as part of the CAM charges breached the lease because “management fees” are not enumerated among the CAM charges in the lease. Specifically, the lease states: “Lessee will pay monthly that portion of the expenses of maintaining the common areas (including taxes, insurance, and the cost of policing and controlling the areas, cleaning, lighting, repairing, line painting, depreciation on machinery and equipment used in connection with the foregoing) which the area of the demised premises bears to the total rented area of the Shopping Center.”
Notably, the lease does not state that the parenthetical clause contains an exclusive list of all possible CAM charges. It is reasonable to interpret the parenthetical as a list of the types of expenses that might be incurred. That CAM charges may include the enumerated examples does not prohibit other charges for “maintaining the common areas,” in the absence of express language otherwise. Moreover, Mr. S. has advanced no argument that fees paid to the individual who managed the shopping center property are not “expenses of maintaining the common areas.” The lease expressly provides that Mr. S. will pay its share of these expenses. Accordingly, the implied covenant of good faith and fair dealing cannot prohibit JNJ from charging these expenses to Mr. S. ( Carma Developers, supra, 2 Cal.4th at p. 374 [covenant may not be interpreted to prohibit a party from doing that which the contract expressly permits].)
ii. Charges for Property Taxes
Mr. S. next maintains that JNJ overcharged for property taxes in breach of the lease. According to Mr. S., the lease purportedly provides that Mr. S. would pay only that portion of the property taxes attributable to the land, and not that portion attributable to the improvements on the land. The lease provides: “Lessor will pay in the first instance all real property taxes which may be levied or assessed by any lawful authority against the land and improvements in the Shopping Center. If the amount of such taxes attributable to the demised premises (computed on a square foot basis) shall in any lease year exceed the amount of such taxes during the first full tax year, the Lessee shall pay as additional rent all of such excess. The term ‘first full tax year’ shall mean the lease year in which the building of which the leased premises form a part shall have been first assessed as a completed building….” (Italics added.) The lease further provides, as noted above, that Mr. S.’s portion of the CAM expenses may include “taxes.”
The lease does not support Mr. S.’s interpretation. The lease provides that the landlord shall pay the property taxes on the land and improvements “in the first instance”—this implies that at another, later instance, the landlord may assess property taxes against the tenant to recoup some or all of that expense. Indeed, the section regarding CAM charges demonstrates that the parties contemplated exactly that by permitting CAM charges against Mr. S. to include taxes. We see nothing in these sections or any other section of the lease that limits Mr. S.’s share to taxes for the land portion, as distinct from taxes for the improvements portion. Nor do Mr. S.’s briefs explain, with reference to lease provisions, how Mr. S. arrived at the conclusion that the lease required it to pay only that portion of taxes relating to the land.
Accordingly, we decline to interpret the implied covenant of good faith and fair dealing to prohibit JNJ’s assessment of property taxes. As the court stated in Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1153: “In essence, the covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party’s rights to the benefits of the contract.” Mr. S. did not show that the charges for property taxes either transgressed an express covenant of the lease or frustrated its rights to the benefits of the lease.
iii. Parking Easement
Mr. S. next argues that JNJ’s failure to take legal action against the adjacent property owner to enforce the parking easement was a breach of the lease. As to parking, the lease “include[d] the non-exclusive right to Lessee and his agents, servants, successors, assigns, licensees, invitees, customers, suppliers and patrons to use and enjoy throughout the term of this lease the ‘common areas’ of the Shopping Center,” including “parking areas.” Neither this provision nor any other provision of the lease expressly requires JNJ to take legal action to enforce the parking easement granted by the adjacent property owner. JNJ’s failure to take legal action is not a breach of the express terms of the lease. The question is whether JNJ’s failure to take legal action was a breach of the implied covenant of good faith and fair dealing. We think not.
The evidence showed that when the adjacent property owner erected a metal fence between its property and JNJ’s property in 2004 or 2005, JNJ immediately informed the City of Gardena authorities, and the adjacent owner was compelled to remove the fence. The adjacent property owner then erected a traffic cone barrier between its property and JNJ’s property. JNJ discussed the cones with the adjacent owner and learned that the owner had erected the barrier to prevent truckers from parking on his side of the lot overnight. The adjacent owner was having issues with the city’s code enforcement officials because of the overnight parking. The cone barricade was his remedy for the unauthorized overnight parking. JNJ had a number of discussions with the city and the adjacent property owner in an attempt to get the traffic cones removed. The cones were eventually removed shortly after Mr. S. vacated the property in January 2007.
JNJ’s conduct in this situation was not “objectively unreasonable,” nor was there any evidence that it “subjectively lack[ed] belief in the validity” of its conduct. ( Carma Developers, supra, 2 Cal.4th at p. 372 [“A party violates the covenant if it subjectively lacks belief in the validity of its act or if its conduct is objectively unreasonable”].) JNJ was, in fact, pursuing enforcement of the parking easement for Mr. S.’s benefit. We reject Mr. S.’s invitation to hold that, because JNJ failed to resort to formal legal action, it breached the implied covenant.
iv. Denial of Leave to Amend
At argument on JNJ’s motion for judgment, Mr. S. stated that it was seeking contract damages for breach of the implied covenant. In response, the trial court stated that “[b]reach of covenant of good faith and fair dealing is a tort cause of action. It is not a contract cause of action.” Mr. S. then said it would move to amend the complaint to add a contract cause of action. As discussed previously, the trial court denied the motion to amend the pleadings. Mr. S. contends that this was error because it had “clearly stated a cause of action for breach of the lease under the heading Breach of the Covenant of Good Faith and Fair Dealing.” We do not agree that the trial court erred.
Our analysis of the court’s denial of the motion to amend the claim for intentional interference with prospective economic relations applies with equal force here. The trial court had the discretion to deny the motion for a long-deferred presentation of the amendment. ( Bedolla v. Logan & Frazer, supra, 52 Cal.App.3d at p. 136.) Moreover, even if the court erred in denying the motion, the error was harmless, because it was not reasonably probable Mr. S. would have obtained a more favorable result had the motion been granted. ( Soule v. General Motors Corp., supra, 8 Cal.4th at p. 570.) We have explained in the foregoing parts that none of the challenged acts (CAM charges for management fees, charges for real estate taxes, and failure to take legal action to enforce the parking easement) breached the express provisions of the lease.
3. The Trial Court Did Not Err in Granting JNJ’s Motion for Attorney Fees
Finally, Mr. S. contends that the trial court erred in awarding attorney fees to JNJ because it is “uncontradicted” that Mr. S. should have prevailed on its breach of the implied covenant good faith and fair dealing claim. Because we hold that the trial court did not err in granting judgment against Mr. S. on all claims, Mr. S .’s argument fails. JNJ remains the prevailing party in the action, and the lease expressly provides that the prevailing party in an action to enforce the terms of the lease shall be entitled to reasonable attorney fees and costs. (See also Civ.Code, § 1717.) The court did not err in awarding attorney fees to JNJ.
DISPOSITION
The judgment is affirmed. JNJ is to recover costs on appeal.
WE CONCUR: BIGELOW, P.J., and GRIMES, J.
