Filed 4/30/09 Simper Investments v. Hodges CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

SIMPER INVESTMENTS, INC., Plaintiff and Appellant, v. BRIAN C. HODGES, et al., Defendants and Respondents.

H031907 & H032083 (Santa Clara County Super. Ct. No. CV062084)

Plaintiff appeals from summary judgments for the defendants in an action for damages for breach of contract and from an order denying its motion to vacate the judgments on the grounds of mistake, inadvertence, surprise, or excusable neglect (Code Civ. Proc.,[1] § 473, subd. (b)). Plaintiff and appellant Simper Investments, Inc. (Simper) sued respondents Brian Hodges, Lisa Hodges, and Honda Diagnostic and Service, Inc. (hereafter collectively the Diagnostic Defendants) and respondents Dan Cesena and Honda Hospital, Inc. (hereafter collectively the Hospital Defendants) for breach of a commercial lease. All defendants moved for summary judgment. A few weeks before Simper’s opposition to the summary judgment motions was due, the parties entered into negotiations for settlement of the case. Simper did not file opposition to the summary judgment motions. Subsequently, there were problems with the execution of the settlement agreement and the defendants went forward with their summary judgment motions, which were granted.[2] The court later denied Simper’s motion to vacate the judgments. We conclude that the court did not abuse its discretion when it denied the section 473 motion and that the court did not err in granting the summary judgment motions and affirm the judgments.

Facts

In March 2001, the Diagnostic Defendants entered into a lease agreement with Simper, the owner of a commercial property located at 1634 South Main Street in Milpitas, California (leased premises) where the Diagnostic Defendants operated Honda Diagnostic and Service, an automotive repair business. The Diagnostic Defendants had been in business since 1992, operating out of the leased premises. Their previous lease with Simper expired in late 2000.

The new lease covered the five-year period from January 1, 2001 until December 31, 2005. It provided for a base rent of $2,640 per month during the first year of occupancy and for annual increases in the base rent on January first of each successive year. The rent adjustments were to be based on the Consumer Price Index (CPI). But in no event were the adjustments to be less than five percent or more than eight percent of the previous year’s rent. In 2002, the rent increased by five percent to $2,772 per month. The lease also provided that the Diagnostic Defendants would pay their proportionate share of common area operating expenses, which were billed at $396 per month.

In late 2001, the Diagnostic Defendants were struggling financially. Lisa Hodges’s stepfather, Dan Cesena, owned Honda Hospital, an automotive repair business in San Mateo, California. On February 1, 2002, Honda Hospital purchased the tools, equipment, and goodwill of Honda Diagnostic and Service and took over the leased premises. Honda Hospital changed the signs from “Honda Diagnostic and Service” to “Honda Hospital.” Cesena was responsible for the day-to-day operation of Honda Hospital in Milpitas; his wife managed their shop in San Mateo. After the sale, Lisa Hodges worked for Honda Hospital as a manager; Brian Hodges did not work for Honda Hospital. None of the officers, directors or shareholders of the two businesses were the same.

According to Cesena, the asset purchase did not include an assignment of the existing lease and there was never any written or oral assignment of the lease. In May 2002, Cesena contacted Kenneth Simoncini of Simper[3] to inquire about an assignment of the lease. Simoncini told Cesena “that he would want more rent.” Cesena told Simoncini that Honda Hospital could not pay any more per month. There were no further discussions about assigning the lease.

Every month, Simper sent its tenants an invoice setting forth the amounts due for the rent and the common area charges. Simoncini’s legal secretary prepared the monthly invoices for Simper. In May 2002, Simper stopped sending the invoices to Honda Diagnostic and Service and started sending the invoices to Honda Hospital’s San Mateo address. Every month from May 2002 until January 2006, Simper sent Honda Hospital an invoice demanding $2,772 for the rent and $396 for the common area charges. During that time, Simper did not increase the amounts due for the rent or the common area charges. Honda Hospital paid the rent and other charges on time every month.

On January 26, 2006, Simper sent Honda Hospital an invoice demanding $4,813.39 for the February 2006 rent pursuant to a holdover provision in the lease.[4] The invoice also demanded $2,041.39 for the January 2006 rent (the new monthly rate ($4,813.39) less the $2,772 Honda Hospital had already paid for January 2006) and the payment of “CPI Charges” totaling $5,243.16. The “CPI Charges” were for back rent covering the three-year period from January 1, 2003 until December 31, 2005, based on the assumption that the rent would have increased by five percent each year. In other words, in 2006, Simper charged Honda Hospital for the difference between the increased rent it could have charged under the lease for the years 2003, 2004, and 2005 and the amounts it actually invoiced Honda Hospital for those years. There appear to be mathematical errors in Simper’s calculation of the “CPI Charges.”

According to Cesena, prior to January 26, 2006, Simper never told him that it intended to hold Honda Hospital to any obligations under the lease. Cesena stated that all Honda Hospital ever agreed to pay was $2,772 per month for rent and $396 per month for the common area charges. Honda Hospital paid rent and common areas charges at those rates through March 2006. It vacated the leased premises on March 31, 2006, after its efforts to negotiate a new lease with Simper failed.

Procedural History

I. Pleadings

In April 2006, Simper filed a complaint for breach of contract against the Hospital Defendants and the Diagnostic Defendants. The complaint alleged that Brian Hodges and Lisa Hodges had personally guaranteed the payments under the lease. It alleged that the defendants failed to pay rent, including the increased base rent due under the lease, late charges, and interest. It also alleged that the Diagnostic Defendants had assigned their interest in the lease to the Hospital Defendants without Simper’s consent and that in the event of breach, Simper was entitled to proceed against the Hospital Defendants.

The Hospital Defendants answered the complaint in June 2006. The record does not contain a copy of the Diagnostic Defendants’ answer.

II. Motions for Summary Judgment

The Hospital Defendants filed a motion for summary judgment on March 20, 2007. In the motion, they argued that they were not parties to the lease, that there was no assignment of Honda Diagnostic and Service’s obligations under the lease, and that they had not assumed any obligations under the lease. The Hospital Defendants asserted that their only obligation was to pay the amounts that were invoiced by Simper monthly and that any agreement between the parties arose from their course of conduct over a period of almost four years. They argued that, at best, their conduct gave rise to a month-to-month tenancy. They also argued that Simper had waived the lease provisions relating to the adjustments in the amount of rent by consistently ignoring those provisions of the lease.

On March 23, 2007, the Diagnostic Defendants filed a motion for “summary judgment and/or summary adjudication.” They argued that Simper had waived the right to recover for breach of contract by sending out invoices requesting a specified amount of rent, which led the defendants to believe that they were paying the correct amount. They argued that the non-waiver clause in the lease was invalid because it was contradicted by the personal guaranty, which provided that the terms of the lease can be altered by the parties’ course of conduct. They argued that since the lease was drafted by Simper, any ambiguity in the lease must be interpreted against Simper. The Diagnostic Defendants also asserted that even if the non-waiver clause was valid, it should be deemed waived and Simper should be estopped from collecting back rent because Simper engaged in a course of conduct that led its tenants to believe they were paying an acceptable amount of rent. The Diagnostic Defendants argued that Simper waived its right to object to the alleged assignment of the lease by accepting the rent payments and that Simper waived its right to hold the Diagnostic Defendants responsible for Honda Hospital’s conduct. The Diagnostic Defendants also contended that they were not responsible for any rent due after the lease expired on December 31, 2005, since they no longer occupied the leased premises.

Both motions were set for hearing on June 7, 2007. Simper’s papers in opposition to the motions were due on May 24, 2007.[5] (§ 437c, subd. (b)(2) [opposition must be filed not less than 14 days before the hearing].) The June 7 hearing date was the last possible date for a summary judgment motion before the July 9 trial date.

III. Settlement Efforts

In late April and early May, Patrick Kerwin, counsel for the Hospital Defendants, and Paul McDonald of Simoncini and Associates, counsel for Simper, had several conversations regarding settlement. Kerwin, in turn, discussed Simper’s settlement demand and the defendants’ contributions toward the settlement with the attorneys representing the Diagnostic Defendants at the law firm Wade and Silverstein. The attorneys from that firm who worked on the case were Amiel Wade, Judi Silverstein, and Mikela Babayan. By May 10th the parties had agreed to settle the case for $15,000 in exchange for a mutual release and dismissal and the defendants had agreed on the amounts of their contributions to the $15,000 settlement.

During the course of the negotiations, McDonald told Kerwin that Simper wanted to settle the matter (1) to avoid preparing opposition to the summary judgment motions, (2) to avoid completing the deposition of Cesena, and (3) to avoid taking the deposition of Cesena’s wife. On May 9, McDonald told Kerwin the settlement was conditioned upon receiving the settlement proceeds within one week. Kerwin told him that was possible but stated that the settlement agreement had to be signed first. McDonald did not ask Kerwin to take the summary judgment motions off calendar.

According to Silverstein, McDonald called her on or about May 11 and asked whether her clients were willing to settle for the combined total of $15,000. Silverstein confirmed that her clients were willing to settle and told McDonald that her clients’ motion for summary judgment would remain on calendar until she received a signed release and settlement agreement. In his declaration, McDonald stated that he did not recall this conversation and that Silverstein never told him that her clients’ summary judgment motion would remain on calendar until the settlement agreement was signed.

The usual practice is for the defendants to prepare the release and counsel for the Diagnostic Defendants offered to prepare the release in this case. However, McDonald (counsel for plaintiff Simper) insisted upon preparing the release. On May 11, McDonald sent a letter to all counsel[6] confirming that the case had settled and that McDonald would prepare the release.

By May 15, the defendants still had not received a draft release from McDonald. Since McDonald had stated that Simper would only settle if payment was made within one week, Babayan called McDonald on May 15 and inquired about the status of the settlement agreement. In response, McDonald “made a sarcastic comment and stated, ‘The status is that I have to get it to you.’ ”

On May 17, Kerwin called McDonald to check on the status of the settlement agreement. McDonald was not available and Kerwin left a message. McDonald never called him back.

Babayan called McDonald on May 21, to inquire about the release. McDonald was at a deposition and Babayan left a message with his secretary. McDonald never called her back.

On May 23, Wade sent McDonald a letter in which he inquired regarding the status of the release. The letter stated in part: “Despite numerous calls to your office, you have failed to return our calls or provide the mutual release. We have no understanding as to why you have unilaterally delayed closure of this case. [¶] As you know, our motion for summary judgment is still on calendar. Until we receive a signed release from the plaintiff, we will not take the motion off calendar. Please provide the release immediately. If you are [too] busy to draft the release, please advise our office immediately and we will draft it. In any event, we would like to get this case resolved this week.” According to McDonald, this letter was the first notice he had that the summary judgment motions were not off calendar.

Wade received neither a response to his letter nor a release. He wrote a letter to McDonald dated May 29, which stated in part: “Despite numerous calls and letters to your office, you continue to refuse to return our calls and/or provide information concerning the [settlement agreement]. We continue to be baffled by your silence. As previously indicated, our clients’ motion will remain on calendar until we have received a signed release and settlement agreement from the Plaintiff.” Wade instructed his secretary to fax the letter to McDonald on May 30. McDonald denies receiving this letter.

On May 30, McDonald faxed a letter and a draft settlement agreement and mutual release (Agreement) to defense counsel. The Agreement provided for the release of “all claims . . . arising out of or in any way connected with or resulting from the lease of the premises . . . .” The release also contained a waiver of the provisions of Civil Code section 1542.[7]

Within 10 minutes of receiving the draft Agreement, Kerwin sent a letter to McDonald and Silverstein proposing a change to the Agreement to permit signature “by fax.” The following day, May 31, McDonald accepted the change and sent all counsel a revised Agreement. The Hospital Defendants and Kerwin signed the revised Agreement that day.

On June 1, Kerwin sent a letter to McDonald and Babayan with his clients’ executed signature page to the revised Agreement. Kerwin stated that he had received the Hospital Defendants’ check and that he would send it to McDonald as soon as he received “everyone’s signatures on the document.”

The Diagnostic Defendants signed the revised Agreement on May 31. However, their counsel did not fax the signature pages to McDonald at that time.

From the beginning, the Diagnostic Defendants’ attorneys were suspicious of Simper’s motives with regard to the settlement. In their opposition to Simper’s motion to vacate the order on the summary judgment motions, they told the court that they were concerned that “McDonald was likely to try something tricky with regard to the settlement.” Their suspicions were based on a “very adversarial,” contentious relationship with McDonald. Wade, Silverstein and Babayan told the court that McDonald “misrepresented [their] conversations with him to the Court whenever convenient” and accused McDonald of making frivolous objections and thwarting the discovery process. They “believed that there was a substantial likelihood that [Simper] did not want to settle the case at all” and that “McDonald was merely trying to get [them] . . . to be lulled into taking [their] clients’ summary judgment off calendar under the false belief that [Simper] was going to sign a release and settlement.” They therefore decided to make it “very clear to Mr. McDonald . . . that despite any settlement discussions, [their] client’s motion for Summary Judgment would remain on calendar until [they] received a sign[ed]” release from Simper. By May 23, they concluded that Simper did not want to settle and that McDonald “was merely acting as if his client wanted to settle” to get out of filing opposition to the motion for summary judgment. By May 30, based on the delay in preparing the release, they believed that Simper would not sign the release and had entered into the negotiations to thwart the summary judgment motions.

On June 1, McDonald sent a notice of settlement to the court by mail. On Monday, June 4, the court vacated the trial and settlement conference dates. The next day, it set the matter for hearing on the dismissal calendar. However, the court did not take the summary judgment motions off calendar.

Kerwin received the notice of settlement on June 4. In response, he called McDonald and asked about the release. Kerwin told McDonald that he would forward the settlement check as soon as he got Simper’s signature page. McDonald agreed to fax the signature page to him after the release was signed.

According to Babayan, she called McDonald on June 4 and told him that her clients had signed the revised Agreement, that they wanted Simper to fax over its signature page, and that they would then do the same. McDonald told Babayan that he did not work that way. He told her Simper wanted the defendants to send him the money first, along with their signatures, and then its representative would sign the agreement. Babayan told him she would never do such a thing. According to McDonald, during this conversation, Babayan told him her clients had not signed the revised Agreement and would not sign until Simper had signed.

On June 5, Silverstein drafted a letter to McDonald forwarding her clients’ signature pages to him. She told him she would send the check as soon as she received Simper’s signature on the revised Agreement. Because of a problem with her fax machine, the letter did not go out on June 5; Silverstein arranged for it to be faxed the following morning.

Late in the afternoon on June 5, McDonald sent all counsel a letter with a new settlement agreement and release (second revised Agreement). The second revised Agreement contained language that limited the nature of the claims being released. It also deleted the Civil Code section 1542 waiver. The defense attorneys did not see this letter until the following morning.

On June 6, after reviewing the second revised Agreement, Kerwin concluded that McDonald had “materially altered” the settlement agreement and that Simper “was reneging on [the] settlement or had never intended on settling in the first place.” That morning, Wade sent McDonald a letter expressing his “outrage” at this turn of events. He told McDonald that his clients would not sign the second revised Agreement and that if he did not have Simper’s signature on the revised Agreement by noon that day, he would rescind their settlement offer and go forward with the summary judgment motion.

Later that morning, McDonald sent a letter to defense counsel explaining his reasons for changing the release. He stated that Simper was not willing to release the Diagnostic Defendants “from their obligations under the lease that survived the … termination of the Lease” and referenced a section of the lease that required the tenants to indemnify the landlord for any claims involving hazardous substances that the tenants brought onto the premises. He also stated, “I am hopeful that we can come up with appropriate language for the benefit of both our clients.”

Kerwin spoke with McDonald by phone late in the afternoon on June 6 and “voiced [his] dismay at the last minute changes” to the release. He told McDonald that if Simper did not sign the revised Agreement, the defendants would go forward with their summary judgment motions the following day.

IV. Hearing on Motion for Summary Judgment

On June 7, Kerwin, Babayan, Silverstein, and Mona Fotoohi (one of Simoncini’s associates) appeared for the hearing on the motions for summary judgment. Fotoohi told the court that the case had settled, that the parties were in the process of revising the settlement agreement, and that the motions should not be heard. Babayan told the court the case had not settled, summarized what had transpired with the settlement agreement, and provided the court with copies of the parties’ correspondence since May 23. Kerwin summarized the events from his clients’ perspective and told the court “There is no settlement.” Fotoohi asked the court to vacate the summary judgment hearing so that her firm could “confer with [Simper] and with opposing counsel and see if we can come up with an agreement.”

The court granted both motions for summary judgment and directed defense counsel to prepare orders on their respective motions.

V. Motion for Relief Pursuant to Section 473

On June 13, Simper obtained an order shortening time to file a motion to vacate the order on the summary judgment motions. That day, McDonald told Babayan and Kerwin that Simper was willing to sign the “settlement agreement as initially drafted.”

On June 14, Simper filed a motion pursuant to section 473, subdivision (b) (hereafter 473(b)) to vacate the order granting the summary judgment motions. It requested relief under both the mandatory and the discretionary provisions of the statute. Alternatively, it argued the court had the inherent power to set aside its order on the motions. Simper argued it “did nothing wrong and should be allowed to have its day in court. It should not be penalized because its attorney, notwithstanding his good faith belief, failed to file opposition to the motions or because defense counsel changed the terms of the settlement . . . .” Simper asked the court to set aside the order on the summary judgment motions and to re-notice the hearing on the motions to allow Simper enough time to complete the depositions and file opposition to the motions.

In a declaration, McDonald told the court that he did not file opposition to the motions because the parties had settled the case in early May. McDonald stated that he understood the motions would be taken off calendar. He told the court that Wades’ letter of May 23 was the first indication he had that the Diagnostic Defendants would not take their motion off calendar until there was a signed release and that he did not see that letter until Tuesday, May 29 because he was out of the office at a hearing, a site inspection, and a mediation on Wednesday, May 23 and Thursday, May 24.[8] McDonald described his communications with defense counsel between May 23 and June 6. He stated that Wade’s June 6 letter stating that the summary judgment motions would be heard the next day was a “complete surprise” and that after May 23, none of the defense attorneys told him the motions were still on calendar.

The defendants opposed the motion and filed declarations setting forth the parties’ communications regarding the settlement as set forth above. They argued that the mandatory relief provision of section 473 does not apply to summary judgments and that Simper’s failure to file opposition to the summary judgment motions was not the result of mistake, surprise or excusable neglect. The Hospital Defendants argued that it was not the defendants’ refusal to take the summary judgment motions off calendar, but Simper’s demand to change the material terms of the settlement that put Simper in this position. They argued that Simper’s principal, Simoncini, decided to “roll the dice” and materially alter the settlement at the “11th hour,” knowing he was reneging on a reasonable settlement that his attorney (who was also his associate) relied on when he decided not to oppose the motion. Thus, they asserted that Simper was not an innocent client that had been harmed by its attorney’s conduct.

In its reply papers, Simper argued that it had a meritorious defense to the summary judgment motions, referencing Simper’s success in summary judgment in other litigation that was before the court involving Wade and Silverstein.

VI. Order on Section 473 Motion

The same judge that heard the summary judgment motion denied the motion to vacate. The court held that the mandatory provision of section 473 does not apply to summary judgments. The court denied Simper’s request for discretionary relief, explaining: “plaintiff’s predicament was not caused by plaintiff counsel’s reasonable but mistaken belief that the case had settled. Instead, it was caused by a combination of: (1) plaintiff counsel’s unreasonable and inexcusable failure to timely conduct discovery and prepare for trial; (2) plaintiff counsel’s unreasonable and inexcusable failure to timely prepare the release upon which the settlement was conditioned, and (3) plaintiff counsel’s unreasonable and inexcusable attempt to change the terms of the release after it had been signed by defendants. Furthermore, plaintiff’s motion is not accompanied by a copy of an opposition to the summary judgment motion or other paper necessary to show its good faith and readiness to proceed in the event that relief were to be granted.” Finally, the court “decline[d] plaintiff’s invitation to exercise its inherent power to vacate” the order.

VII. Orders on Summary Judgment

On July 13, the court filed two orders granting the defendants’ motions for summary judgment, which set forth the court’s reasons for granting the motions on the merits. The court did not grant the motions because they were unopposed. That same day, the court entered judgment in favor of the Diagnostic Defendants. On August 8, the court entered judgment in favor of the Hospital Defendants. Simper filed timely notices of appeal from both judgments.

Discussion

Simper contends the court abused its discretion when it denied its motion to vacate the orders on the motions for summary judgment under both the mandatory and discretionary provisions of section 473(b) and when it declined to use its inherent power to amend its orders to vacate the orders on the summary judgment motions. It also argues that the court erred in granting summary judgment.

I. Relief Under Section 473(b)

At issue here is the application of section 473(b), which empowers a court to grant relief from attorney error in appropriate cases. The statute contains both mandatory and discretionary provisions. (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1415 (Huh).) Simper contends that it is entitled to relief under both provisions.

A. Mandatory Relief

In certain cases of attorney fault, section 473(b) requires the trial court to grant relief. The mandatory provision states in relevant part: “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. . . . Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk …, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (§ 473(b).)

Procedurally, an application for mandatory relief “ ‘must be filed within six months of entry of judgment’ ” and must “ ‘be in proper form, and be accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect.’ ” (Huh, supra, 158 Cal.App.4th at p. 1414.) “Furthermore, the defaulting party must submit sufficient admissible evidence that the default was actually caused by the attorney’s error. [Citation.] ‘If the prerequisites for the application of the mandatory relief provision of section 473, subdivision (b) exist, the trial court does not have discretion to refuse relief.’ ” (Ibid.)

“ ‘The determination of whether the mandatory provision of section 473(b) applies to summary judgments is a task of statutory construction.’ [Citation.] Statutory interpretation is a question of law, which appellate courts review de novo. [Citation.] Where an appeal involves factual determinations that affect entitlement to mandatory relief, such as whether attorney fault caused the default, we examine the record for substantial evidence in support of the trial court’s exercise of discretion.” (Huh, supra, 158 Cal.App.4th at p. 1418.) Since the issue here turns on construction of the statute, our review is de novo.

In providing for mandatory relief in cases where the attorney files an affidavit of fault, “the Legislature created a narrow exception to the discretionary relief provision for default judgments and dismissals.” (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 257 (Zamora).) “By its express terms, the mandatory relief provision applies only to defaults, default judgments, and dismissals.” (Huh, supra, 158 Cal.App.4th at p. 1415.)

But some courts have construed the provision to reach other circumstances deemed to be procedural equivalents of defaults, default judgments, and dismissals. (See, e.g., In re Marriage of Hock & Gordon-Hock (2000) 80 Cal.App.4th 1438, 1443 [relief granted in dissolution case where neither the party nor her attorney appeared for trial]; Avila v. Chua (1997) 57 Cal.App.4th 860 (Avila) [summary judgment].) “ ‘The rationale of these cases is that, where there is no hearing on the merits, an attorney’s neglect should not prevent the party from having his or her day in court.’ ” (In re Marriage of Hock & Gordon-Hock, at p. 1443.) “Other courts have rejected that rationale, characterizing such decisions as ‘understandable, yet ultimately misguided quests to salvage cases lost by inept attorneys,’ which ‘have applied the mandatory provision far beyond the limited confines the Legislature intended.’ ” (Huh, supra, 158 Cal.App.4th at p. 1415, citing English v. IKON Business Solutions, Inc. (2001) 94 Cal.App.4th 130, 148 (English).)

“As more specifically relevant here, there is a split of authority on whether the mandatory provisions of section 473(b) ‘can provide relief from an order granting summary judgment.’ ” (Huh, supra, 158 Cal.App.4th at p. 1415; see also 8 Witkin, Cal. Procedure (2008) Attack on Judgment in Trial Court, § 197, pp. 803-805.) One case, Avila, supra, 57 Cal.App.4th at p. 868, allowed statutory relief in this context. Other cases have either distinguished or declined to follow Avila, thereby declining to extend the mandatory provisions of section 473(b) to the summary judgment context. (Huh, at p. 1415, citing Prieto v. Loyola Marymount University (2005) 132 Cal.App.4th 290, 294 (Prieto) [failure to oppose summary judgment motion]; Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 681 [defective opposition to summary judgment motion]; 8 Witkin, supra, at pp. 803-804, citing Wiz Technology v. Coopers & Lybrand (2003) 106 Cal.App.4th 1, 17 [failure to seek and present persuasive evidence and arguments against summary judgment], Ambrose v. Michelin North America (2005) 134 Cal.App.4th 1350, 1355 (Ambrose) [failure to include request for continuance in document opposing summary judgment motion], and English, supra, 94 Cal.App.4th at pp. 138-149.)

Simper acknowledges this split of authority and urges us to follow the reasoning in Avila, as it “better serve[s] the purpose and underlying policy embodied in the mandatory relief provision . . . .”

As this court explained in Huh, “English is among the cases refusing to extend the statute beyond its explicit terms.” (Huh, supra, 158 Cal.App.4th at p. 1415 citing English, supra, 94 Cal.App.4th at p. 149.) The plaintiff in English opposed a defense summary judgment motion based solely on a requested continuance to conduct discovery. (English, at pp. 133-134.) After refusing to continue the hearing, the trial court granted summary judgment. (Id. at p. 134.) The plaintiff sought relief under the mandatory relief provision of section 473(b) based on her attorney’s declaration of fault for failing to oppose summary judgment on the merits. (Ibid.)

The English court thoroughly reviewed the legislative history of the mandatory relief provision and the case law interpreting it and concluded that the mandatory relief provision does not apply to summary judgments. (English, supra, 94 Cal.App.4th at pp. 138-143.) The court reasoned that “a summary judgment is neither a ‘default,’ nor a ‘default judgment,’ nor a ‘dismissal.’ ” (Id. at p. 143.) The court explained that a summary judgment is not a default under the mandatory provision, because the statute refers only to “a ‘default’ entered by the clerk (or the court) when a defendant fails to answer a complaint, not to every ‘omission’ or ‘failure’ in the course of an action….” (Ibid., fn. omitted.) A summary judgment likewise is not a default judgment, which “is a judgment entered after the defendant has failed to answer the complaint and the defendant’s default has been entered.” (Ibid.) Finally, a summary judgment is not a dismissal, which is defined as “ ‘the withdrawal of an application for judicial relief by the party seeking such relief, or the removal of the application by a court.’ ” (Id. at p. 144.) A defense summary judgment cannot be considered a dismissal since it “does not constitute a removal of the plaintiff’s application for judicial relief, but rather an adjudication … based on the undisputed facts before the court.” (Id. at p. 149.)

The English court decried other courts’ “expansive interpretation of the statute under which the dispositive test, largely detached from the language of the statute itself, is whether the ruling from which relief is sought was ‘in the nature of a default’ and whether the party seeking relief ‘had her day in court.’ ” (English, supra, 94 Cal.App.4th at pp. 147-148.) English deferred to the express dictates of the mandatory provision, saying no “court is at liberty to substitute its judgment for that of the Legislature in determining how far the statute should reach, no matter what good intentions may urge such an action.” (Id. at p. 148.)

In Huh, this court agreed with “the cogent analysis in English, which is faithful to legislative intent and consistent with established principles of statutory construction” and concluded that the mandatory provision in section 473(b) “ ‘applies only to relief sought in response to defaults, default judgments or dismissals’ ” and that summary judgments are not within the purview of the mandatory provision.[9] (Huh, supra, 158 Cal.App.4th at pp. 1417, 1418; accord, Prieto, supra, 132 Cal.App.4th at p. 294.)

Since Simper sought to set aside a summary judgment, its case offers no basis for mandatory statutory relief and the trial court did not err in refusing it. That brings us to Simper’s alternative argument that discretionary relief should have been granted.

B. Discretionary Relief

“The first portion of … section 473, providing that the court ‘may’ relieve a party from a dismissal, vests the trial court with the discretion to vacate a dismissal based on a party’s or attorney’s excusable neglect.” (Todd v. Thrifty Corp. (1995) 34 Cal.App.4th 986, 991.) The statute states in pertinent part: “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (§ 473(b).)

In contrast to the mandatory provision in section 473(b), “discretionary relief under the statute is not limited to defaults, default judgments, and dismissals. . . .” (English, supra, 94 Cal.App.4th at p. 149.) As the California Supreme Court observed in Zamora: “The discretionary relief provision of section 473, subdivision (b) applies to any ‘judgment, dismissal, order, or other proceeding.’ ” (Zamora, supra, 28 Cal.4th at p. 254.) Thus, for example, “the failure of counsel to meet a procedural deadline” is “a proper subject for section 473 relief.” (Lee v. Wells Fargo Bank (2001) 88 Cal.App.4th 1187, 1193.) So, too, is “failure to timely respond to [a] request for admissions.” (Elston v. City of Turlock (1985) 38 Cal.3d 227, 234 (Elston) superseded by statute on other grounds as stated in Tackett v. City of Huntington Beach (1994) 22 Cal.App.4th 60, 64-65.)

To qualify for discretionary relief under section 473(b), the party seeking relief must show “that there is a proper ground for relief, and that the party has raised that ground in a procedurally proper manner, within any applicable time limits.” (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495.)

Generally speaking, the trial court’s ruling on a discretionary motion for relief is reviewed for an abuse of discretion. (Zamora, supra, 28 Cal.4th at p. 257.) But “because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default [citations].” (Elston, supra, 38 Cal.3d at p. 233; see also Zamora, at p. 256.) For that reason, “a trial court order denying relief is scrutinized more carefully than an order permitting trial on the merits.” (Elston, at p. 233.)

We begin by noting that Simper’s brief does not cite or discuss a single case in support of its argument that the court abused its discretion when it denied relief under the discretionary provision in section 473(b). Simper does argue that the court erred when it concluded that its attorney’s neglect in failing to oppose the motion for summary judgment was inexcusable. We therefore review case law authority related to claims for relief based on an attorney’s excusable neglect.

“A party seeking relief under section 473 on the grounds of excusable neglect bears the burden of demonstrating that the neglect was excusable in order to secure relief.” (Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1128.) Moreover, a party seeking discretionary relief on the ground of attorney error must demonstrate that the error was excusable, since the attorney’s negligence is imputed to the client. (Zamora, supra, 28 Cal.4th at p. 258.) “ ‘Excusable neglect’ ” is generally defined as an error that a reasonably prudent person might have made under the same or similar circumstances. (Ambrose, supra, 134 Cal.App.4th at p. 1354, citing Zamora, at p. 258.) Thus, “[c]onduct falling below the professional standard of care, such as failure to timely object to or properly advance an argument, is not therefore excusable.” (Garcia v. Hejmadi, supra, 58 Cal.App.4th at p. 682.) “The inexcusable neglect of an attorney is usually not a proper basis for granting the client’s motion under section 473.” (Elston, supra, 38 Cal.3d at p. 236, fn. 6.)

As we noted previously, in denying Simper’s request for discretionary relief, the trial court held that Simper’s “predicament was not caused by [McDonald]’s reasonable but mistaken belief that the case had settled. Instead, it was caused by a combination of: (1) [McDonald]’s unreasonable and inexcusable failure to timely conduct discovery and prepare for trial; (2) [McDonald]’s unreasonable and inexcusable failure to timely prepare the release upon which the settlement was conditioned, and (3) [McDonald]’s unreasonable and inexcusable attempt to change the terms of the release after it had been signed by defendants.” The court also observed that Simper’s motion was “not accompanied by a copy of an opposition to the summary judgment motion or other paper necessary to show its good faith and readiness to proceed in the event that relief were to be granted.”

On appeal, Simper argues that McDonald “was faced with an untenable position by being caught in a trap regarding the motions for summary judgment.” Simper does not address the court’s first reason (failure to timely conduct discovery). The record reveals that at the time of settlement, the outstanding discovery included: (1) the continued deposition of Dan Cesena and the deposition of Cesena’s wife, which had been set for April 23 and taken off calendar because the witnesses were ill and had not been rescheduled before May 10, the day the parties agreed to the basic terms of the settlement; (2) standard pretrial requests for supplemental answers to interrogatories and supplemental responses to requests for production of documents; (3) further responses to form interrogatories by unspecified defendants pursuant to the court’s May 8 order on a motion to compel; and (4) expert discovery.

With regard to the delay in providing the settlement documents, Simper argues that “a two and one-half week period of time in which to provide a settlement document for review is not excessive” and that although there initially had been a “time-of-the-essence issue,” it was Simper’s issue and that the defendants had waived any prejudice related to the delay by signing the revised Agreement and providing the settlement funds to their counsel.

In our view, the court did not abuse its discretion when it concluded that the delay in preparing the release was unreasonable and inexcusable under the circumstances of this case. The Agreement that McDonald drafted was a standard form release; there was nothing complex or unusual about the release. There was evidence that time was of the essence for all of the parties. The matter was set for trial on July 9 and the deadline for expert witness disclosure and the discovery cut-off were looming. On May 11, Silverstein told McDonald her clients were willing to settle on the proposed terms but that her clients’ summary judgment motion, which was set for June 7, would remain on calendar until she received a signed release. One of Simper’s original settlement terms was that the settlement proceeds be paid within one week. The defendants agreed to this short time frame as long as they had a signed release within that time. The record does not explain why Simper subsequently changed its mind and impliedly waived the requirement that the settlement proceeds be paid in one week. Counsel for the Diagnostic Defendants started inquiring about the status of the release as early as May 15, five days after the parties orally agreed to settle the case. Defense counsel continued to inquire about the release on May 17, May 21, and May 23, without response from McDonald. McDonald told the trial court that Wades’ letter of May 23 was his first indication that the Diagnostic Defendants would not take their motion off calendar until there was a signed release and that he did not see that letter until May 29 because he was out of the office at a hearing, a site inspection, and a mediation on May 23 and May 24. However, McDonald’s declaration was contradicted by Silverstein’s declaration that she told McDonald on May 11 that her firm would not take the motion off calendar until it had a signed release and it was up to the trial court to resolve this factual issue.

Although Simper does not expressly argue the point, this evidence also suggests that the press of other business prevented McDonald from preparing the release sooner. In Ambrose, the court concluded that “the ‘stresses of a busy law practice,’ the ‘hurry to meet the deadline [for filing opposition to a motion for summary judgment],’ and ‘several concurrent obligations due to other pending litigation’ ” did not constitute excusable neglect under the reasonable person standard where the attorney failed to include an essential request for a continuance to obtain additional evidence and an accompanying affidavit in its opposition to a summary judgment motion. (Ambrose, supra, 134 Cal.App.4th at pp. 1354-1355.) Moreover, McDonald did not explain why he did not see Wade’s fax letter on Friday, May 25. (Monday, May 28, was the Memorial Day Holiday.)

With regard to the court’s finding that McDonald’s attempt to change the terms of the release after it had been signed by defendants was unreasonable and inexcusable, Simper argues only that McDonald told the defendants that Simper would sign the revised Agreement on June 13 (after the motions for summary judgment were granted). In our view, the trial court was correct when it concluded that McDonald’s attempt to change material terms of the settlement relating to the scope of the release and the Civil Code section 1542 waiver was unreasonable and inexcusable. McDonald drafted the original Agreement and waited until after the defendants had signed the revised Agreement to raise these issues. At that point (late in the afternoon on June 5, less than two days before the hearing on the motions for summary judgment), McDonald knew the defendants intended to go forward with their dispositive motions if they did not have Simper’s signature on the release. At that point, the settlement was still viable and all Simper had to do was sign the release that it had drafted. That Simper changed its mind and decided to sign the revised Agreement after the summary judgment motions were granted is not persuasive since by then it had already lost the case. Moreover, despite McDonald’s representation that Simper was willing to sign the revised Agreement on June 13, Simper did not at any time tender its executed signature page of the revised Agreement to the defendants. In addition, there was evidence that the attorneys for the Diagnostic Defendants were suspicious of Simper’s motives and believed that McDonald was using the settlement negotiations as a tactic to avoid having to respond to the summary judgment motions. The last minute demand for a change in significant material terms tends to confirm their suspicions. We note also that Simper did not attach a copy of the proposed opposition to the summary judgment motion to its 473 motion as required for relief under section 473(b).

For all these reasons, we cannot say that the court abused its discretion when it concluded that McDonald’s conduct was inexcusable and did not merit relief under section 473(b).

II. Relief Under Section 128, subdivision (a)(8), and the Court’s Inherent Authority to Change Its Interim Orders

Simper argues that pursuant to section 128, subdivision (a)(8), and the court’s inherent authority to change its decision at any time prior to entry of judgment, the trial court should have set aside its orders granting summary judgment. Section 128, subdivision (a)(8), provides in relevant part: “(a) Every court shall have the power to do all of the following: [¶] . . . [¶] (8) To amend and control its process and orders so as to make them conform to law and justice.”

Simper’s argument that the court had inherent power to grant the motion is not well-developed. The only authority it cites states that “trial court retains the inherent authority to change its decision at any time prior to the entry of judgment,” that the court may, “on its own motion, review and change its interim rulings” and that “the only requirement of the court is that it exercise ‘due consideration’ before modifying, amending, or revoking its prior orders.” (Darling, Hall & Rae v. Kritt (1999) 75 Cal.App.4th 1148, 1156-1157.) In Darling, after denying the plaintiff’s motions for summary judgment, the trial court reconsidered the motions sua sponte and granted summary judgment for the plaintiffs. The appellate court concluded that the court had exercised due consideration when it changed its interim order and found no error on this ground. (Ibid.) In our view, this case is factually distinguishable, since the court here did not change an interim order on its own motion.

Simper does not discuss the standard of review (although Simper argues that the court abused its discretion), the factual differences between this case and Darling, the case law interpreting section 128, subdivision (a)(8), or cases in which a court declined to exercise its inherent authority to change an interim order. On appeal, the appellant has the burden to provide reasoned argument and authority on every point raised. If none is furnished on a particular point, this court may treat it as forfeited and pass it without consideration. (People v. Stanley (1995) 10 Cal.4th 764, 793.) As this court stated in Tate v. Saratoga Savings & Loan Assn. (1989) 216 Cal.App.3d 843, “Appellate courts are not obliged to develop arguments which are merely suggested.” (Id. at pp. 855-856, disagreed with on a different point in Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362.) We hold that Simper has not met its burden to provide reasoned argument and authority regarding this issue and has therefore forfeited any claim of error on this theory.

Even if we were to consider the argument, in light of our discussion of Simper’s claim for relief under section 473(b), we cannot say the court abused its discretion when it declined to use its inherent power to change an interim order to vacate the summary judgment orders in this case.

III. Propriety of Granting Summary Judgment

Simper argues that the summary judgment motions should not have been granted because the defendants did not meet their initial burdens of persuasion and production on summary judgment.

A. Standard of Review

We review an order granting summary judgment de novo, considering all the evidence set forth in the moving and opposition papers, except that to which objections have been made and sustained. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860 (Aguilar); Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) The trial court’s ruling on a motion for summary adjudication, like that on a motion for summary judgment, is subject to this court’s independent review. (Certain Underwriters at Lloyd’s of London v. Superior Court (2001) 24 Cal.4th 945, 972.)

In undertaking our independent review, we apply the same three-step analysis used by the trial court. First, we identify the issues framed by the pleadings. Second, we determine whether the moving party has established facts justifying judgment in its favor. Finally, in most cases, if the moving party has carried its initial burden, we decide whether the opposing party has demonstrated the existence of a triable issue of material fact. (Varni Bros. Corp. v. Wine World, Inc. (1995) 35 Cal.App.4th 880, 886-887.) In ruling on the motion, we must consider the evidence and inferences reasonably drawn from the evidence in the light most favorable to the party opposing the motion. (Aguilar, supra, 25 Cal.4th at p. 843.)

B. Requirements

The purpose of a summary judgment motion is “to identify those cases in which there is no factual issue which warrants the time and cost of factfinding by trial.” (Martin v. Lockheed Missiles & Space Co. (1994) 29 Cal.App.4th 1718, 1735 (Martin).) The object of the motion is “to cut through the parties’ pleadings” to determine whether trial is necessary to resolve their dispute. (Aguilar, supra, 25 Cal.4th at p. 843.)

A summary judgment motion “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (§ 437c, subd. (c).) To be entitled to judgment as a matter of law, the moving party must show by admissible evidence that the “action has no merit or that there is no defense” thereto. (Id., subd. (a).) A defendant moving for summary judgment meets this burden by presenting evidence demonstrating that one or more elements of the cause of action cannot be established or that there is a complete defense to the action. (Id., subd. (o)(2); Aguilar, supra, 25 Cal.4th at pp. 849-850, 853-854.)

“[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that [it] is entitled to judgment as a matter of law.” (Aguilar, supra, 25 Cal.4th at p. 850.) Defendants moving for summary judgment bear the burden of persuasion “that ‘one or more elements of’ the ‘cause of action’ in question ‘cannot be established,’ or that ‘there is a complete defense’ thereto.” (Ibid., citing § 437c, subd. (o)(2).) Under the first approach, “all that the defendant need do is to show that the plaintiff cannot establish at least one element of the cause of action.” (Id. at p. 853.)

The moving party also bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar, supra, 25 Cal.4th at p. 850.) “[T]he defendant must ‘support[]’ the ‘motion’ with evidence including “affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice’ must or may ‘be taken.’ (. . . § 437c, subd. (b).) The defendant may, but need not, present evidence that conclusively negates an element of the plaintiff’ cause of action. The defendant may also present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence—as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.” (Aguilar, at p. 855.)

If the moving party carries this burden, it causes a shift, and the opposing party, plaintiff Simper in this case, is subject to its own burden of production to make a prima facie showing that a triable issue of material fact exists. (Aguilar, supra, 25 Cal.4th at p. 850.) “A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.] No more is called for.” (Id. at p. 851.)

In a case such as this, where a party fails to oppose the motion, the court may not grant summary judgment unless it first determines that the moving party has met its initial burden of proof. (Thatcher v. Lucky Stores, Inc. (2000) 79 Cal.App.4th 1081, 1085-1086.)

C. Contentions and Analysis

Simper recognizes the parties’ shifting burdens on summary judgment and argues broadly that the defendants, as moving parties, have not met their initial burden on summary judgment. While this is a reasonable approach in the situation presented here, when it comes to the details, Simper’s arguments do not support its broad assertion. Instead of discussing deficiencies in the defendants’ showing, Simper argues that there are triable issues of fact that defeat the Diagnostic Defendants’ summary judgment motion. Specifically, in its argument headings, Simper argues that the Diagnostic Defendants’ moving papers raised triable issues (1) whether Simper waived any right to object to the assignment and (2) whether acceptance of the lower rent constituted a waiver. Under its discussion of these points, Simper argues that whether Simper waived any rights contained in the lease or the lease’s nonwaiver clause “is by its very definition a factual issue” and that the question whether Simper’s acceptance of a lower rent constituted a waiver of its right to assert the lease’s rent adjustment provisions “involves inherent factual issues.”

Similarly, Simper argues there are triable issues of fact that defeat the Hospital Defendants’ summary judgment motion. In its argument headings, Simper argues that the Hospital Defendants’ moving papers raised triable issues (1) whether the Hospital Defendants assumed lease obligations; (2) whether the Hospital Defendants’ obligation to pay rent ceased when they vacated the property; and (3) whether Simper waived the rent adjustment provision in the lease. Under its discussion of these points, Simper argues that “a factual issue remains whether the conduct of the parties amounted to a waiver of the assignment consent provision in the lease” and that the issue whether the Hospital Defendants “assumed the obligations in the lease . . . is undeniably a question of fact.” Without citation to the record or specifying the statements and conduct at issue, Simper argues that “Cesena repeatedly affirmed by statements and conduct” that the Hospital Defendants “had undertaken to fulfill the [Hodges’s] obligations.” Simper also asserts that the Hospital Defendants’ conduct created a material factual dispute regarding whether the Hospital Defendants had assumed any obligations under the lease. However, Simper does not tell us what the factual dispute is. Simper argues that the question whether the Hospital Defendants “ ‘impliedly assumed’ the lease rent increase provision rests on a question of fact, because it involves analysis of the actions of the parties.” Finally, Simper argues that the Hospital Defendants’ motion “requires a weighing of facts regarding the conduct of the parties over the four year period in order to determine if the conduct amount to a waiver.” While arguing that all of these issues are factual in nature, Simper does not point to any factual disputes in any of the defendants’ evidence.

That an issue is inherently factual, as opposed to legal, does not preclude summary judgment. In any given case, even though the issues are factual in nature, the evidence may disclose that the material facts are undisputed. As we noted above, the purpose of a summary judgment motion is “to identify those cases in which there is no factual issue which warrants the time and cost of factfinding by trial.” (Martin, supra, 29 Cal.App.4th at p. 1735.) The trial court’s role on a motion for summary judgment motion is issue-finding, not issue-determination. (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839.) Although contradictions in the moving party’s evidence may create triable issues of fact resulting in the denial of summary judgment (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) ¶ 10:272.12, p. 10-111, citing Preis v. American Indemnity Co. (1990) 220 Cal.App.3d 752, 760), Simper does not point to any contradictions or factual disputes in the defendants’ evidence. It merely argues that the issues are factual in nature. This is not enough to avoid summary judgment.

Simper also attempts to distinguish some of the cases that the defendants relied on in their motions below. In doing so, it does not point to any factual disputes in the record or other deficiencies in the defendants’ showing that would preclude summary judgment.

In their motion for summary judgment, the Hospital Defendants argued that they were not parties to the lease, that there was no assignment of Honda Diagnostic’s obligations under the lease, and that the Hospital Defendants had not assumed any obligations under the lease. They asserted that their only obligation was to pay the amounts that were invoiced by Simper monthly, that any agreement between the parties arose from their course of conduct over a period of almost four years and that, at best, their conduct gave rise to a month-to-month tenancy. They also argued that Simper had waived the lease provisions relating to the adjustments in the amount of rent by consistently ignoring those provisions of the lease.

The evidence in support of the motion included Cesena’s declaration that Honda Hospital and Honda Diagnostic were not financially related, that the asset purchase did not include an assignment of the lease, that Cesena contacted Simoncini about assigning the lease in May 2002, that Simoncini said he wanted more rent and did not pursue the matter further when Cesena told him he could not pay any more. Cesena also told that court that at his request, beginning in June 2002, Simper billed Honda Hospital directly and sent the invoices to Honda Hospital’s office in San Mateo. The evidence included a copy of the lease, which was not signed by Honda Hospital, copies of all but two of the rent invoices covering the period April 2002 through February 2006, copies of a few rent checks and copies of letters from Honda Hospital to Simper. Cesena stated that Honda Hospital always paid the rent and common area charges on time. The Hospital Defendants relied on a provision in the lease guaranty which provided that the terms of the lease “may be modified by agreement between the Lessor and Lessees, or by a course of conduct.” They also relied on Kelly v. Tri-Cities Broadcasting, Inc. (1983) 147 Cal.App.3d 666, 675 where the court held that “taking possession, without more, does not constitute sufficient evidence to support the finding of an assumption of the lease. Occupation gives rise to an obligation for ‘covenants which run with the land.” In our view, the Hospital Defendants’ argument and evidence was sufficient to meet their initial burden on summary judgment.

As noted in our discussion of the procedural history, the Diagnostic Defendants made a number of arguments in their motion for summary judgment, many of which relied on the defenses of waiver or estoppel. They argued that Simper waived the right to recover for breach of contract by sending out invoices requesting a specified amount, which led the defendants to believe that they were paying the correct amount. They also relied on the fact that during the lease term, Simper never indicated that the defendants had paid the wrong amount. They argued that the lease’s non-waiver clause was invalid and that since the lease was drafted by Simper, any ambiguity must be interpreted against Simper. Citing Karbelnig v. Brothwell (1966) 244 Cal.App.2d 333, 341 (Karbelnig), they asserted that even if the non-waiver clause was valid, Simper should be estopped from collecting back rent because, in addition to accepting a lower amount in rent, Simper engaged in a course of conduct that led the defendants to believe they were paying an acceptable amount. The Diagnostic Defendants argued that Simper waived its rights to object to the alleged assignment of the lease and its rights to hold them responsible for Honda Hospital’s conduct. They also contended that they were not responsible for any amounts due after the lease expired, since they no longer occupied the premises.

The evidence in support of the Diagnostic Defendants’ motion included the lease and the guaranty; the declarations of Lisa Hodges, Brian Hodges, and Cesena; Simper’s invoices; letters between Honda Hospital and Simper; and excerpts from Simoncini’s deposition.

For the purpose of our analysis, we shall focus on the Diagnostic Defendants’ argument that Simper should be estopped from collecting back rent based on its conduct during the lease term. In Karbelnig, defendants Lester and Ruth Brothwell sold 49 percent of their business to defendants Holmes and Urbach, who took over the operation of the business. The Brothwells transferred their lease to Holmes and Urbach and asked the plaintiff lessor to consent to an assignment of the lease. The lessor refused. (Karbelnig, supra, 244 Cal.App.2d at pp. 334-337.) Holmes paid the rent for a year. Each month, the lessor sent a letter to the Brothwells stating that its “acceptance of [the] rental payment is in no way to be construed as an acceptance or waiver to an assignment or transfer of sub-leasing of the lease . . . .” (Id. at p. 337.) In the lessor’s declaratory relief action, the trial court found that the Brothwells had breached the lease when they assigned the lease without the lessor’s consent, but that the lessor’s acceptance of the rent constituted a waiver of such breach.” (Id. at p. 339.) The appellate court reversed. The Karbelnig court explained “ ‘the violation by the lessee of a covenant against assignment of a lease does not ipso facto terminate the lease or render it void. The lessor has the option to declare a forfeiture of the lease or, ignoring the breach, to treat it as subsisting.’ ” (Id. at p. 341.) The court observed that the “assignment is not void, but only voidable; the leasehold passes to the assignee, subject only to forfeiture by the lessor.” (Ibid.) The lease in Karbelnig contained a nonwaiver clause, which provided “that the acceptance of rent by the lessor after knowledge of a breach of covenant shall not be deemed a waiver of such breach.” (Id. at p. 341.) The court held that “[t]he express agreement on the part of the lessees, which was binding upon their assignees, to the effect that the acceptance of rent by the lessor after knowledge of the breach of a covenant should not be deemed a waiver of such breach, is tantamount to a relinquishment of the right of the lessees and their assignees, to assert a waiver of estoppel, unless there has been an express waiver on the part of the lessor of the right reserved, or there has been conduct on the part of the lessor, other than the acceptance of rent, upon which the lessees or their assignees could lawfully assert an estoppel to declare a forfeiture.” (Id. at pp. 342-343.) The court concluded that the record was “barren as to either an express waiver on the part of the lessor or conduct on its part, other than the acceptance of rent, upon which an estoppel could be asserted.” (Id. at p. 343.)

The Diagnostic Defendants argue that although there is a nonwaiver clause in their lease,[10] unlike Karbelnig, there is evidence of conduct on the part of Simper, other than the acceptance of rent, upon which the Diagnostic Defendants and Hospital Defendants could lawfully assert an estoppel to declare a forfeiture. Simper invoiced Honda Hospital monthly for a specified amount of rent and common area charges. This occurred after Cesena told Simoncini that Honda Hospital could not afford to pay any more rent than what it was paying in 2002 and continued for almost four years. Unlike the lessor in Karbelnig, Simper did not reserve its rights or advise the defendants that its acceptance of the rent would not be construed as a waiver of any rights it had under the lease. In addition, Simper did not increase the rent during the entire lease term. In our view, this was sufficient to meet the Diagnostic Defendants’ burden on the summary judgment motion.

We reach the same conclusion applying the elements of estoppel. “ ‘The doctrine of equitable estoppel is founded on concepts of equity and fair dealing. It provides that a person may not deny the existence of a state of facts if he intentionally led another to believe a particular circumstance to be true and to rely upon such belief to his detriment. The elements of the doctrine are that (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel has a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.’ ” (City of Goleta v. Superior Court (2006) 40 Cal.4th 270, 279.) In this case, Simper drafted the lease and thus had knowledge of its terms. Both Lisa Hodges and Cesena advised Simper that Honda Hospital would be taking over the premises. Simper never objected to the transfer and, shortly after Honda Hospital moved in, started invoicing Honda Hospital for the rent. When Simper invoiced Honda Hospital for a specific amount of rent, the defendants had a right to believe that Simper intended that Honda Hospital pay the amount billed. Simper accepted the amount it billed each month and never told the Diagnostic Defendants or the Hospital Defendants that Honda Hospital was not paying enough or that it intended to hold the defendants responsible for increases in the rent as set forth in the lease. Thus the defendants were ignorant of the true state of facts. For almost four years, the Diagnostic Defendants relied on the facts that Honda Hospital was paying the rent and that Simper was accepting rent payments in the amounts it specifically invoiced. During that time, the Diagnostic Defendants did not make any payments toward the rent or seek to make other arrangements with Simper regarding their obligations under the lease. Lisa Hodges told the court that she relied on the invoices Simper sent “as being the true and total amount of rent that was due” and that she used funds that she could have used to pay rent for other purposes.

In our view, the Diagnostic Defendants met their initial burden on summary judgment of presenting evidence and argument that supported their defenses and indicted that they were entitled to judgment as a matter of law.

For all these reasons, we conclude the court did not err when it granted the summary judgment motions.

Disposition

The judgments are affirmed.

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McAdams, J.

WE CONCUR:

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Elia, Acting P.J.

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Mihara, J.