244 Cal. Rptr. 3d 854
Cal. Super. Ct.2019Background
- Landlord J.S. Bawa served a three-day notice (June 12, 2017) alleging rent due $507.61 (base $504 + $3.61 SCEP fee).\
- Tenant David Terhune mailed a personal check for $507.60 (one cent short); the landlord's agent returned the check to tenant uncashed on June 7 with a letter stating the amount was incorrect.\
- Landlord posted and mailed the three-day notice after returning the check; tenant later sent two checks dated June 20 and June 25, which were not deposited.\
- At trial the jury answered a special verdict question that tenant did not fail to make a rental payment, and the court entered judgment for tenant; the jury did not reach questions about the validity of the three-day notice or waiver.\
- Plaintiff appealed, arguing the returned (refused) tender did not excuse tenant from re-tendering after service of the notice; tenant asserted landlord acted in bad faith by refusing de minimis payment.\
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does returning a check one cent short prior to service of a three-day notice bar tenant from asserting a defense in unlawful detainer? | Returning a valid tender before the notice is not a defense to an unlawful detainer based on a later notice demanding that previously refused amount; tenant must re-tender after notice. | Landlord acted in bad faith by refusing a de minimis tender; unjustified refusal to accept rent is an equitable defense to forfeiture. | A tenant may assert landlord bad faith for refusing a de minimis tender; refusal to accept a check can prevent a finding of default. |
| Effect of an uncertified check on the obligation to pay rent | Not directly argued as separate claim; plaintiff relied on historical cases saying rejected tenders do not extinguish debt absent bank deposit. | Tenant relied on UCC § 3310 principles: taking an uncertified check suspends obligation only if accepted; rejection means obligation not suspended and acceptance never occurred. | Under Cal. UCC principles, a noncertified check suspends the obligation only if accepted; here the check was not accepted/negotiated, so debt was not suspended. |
| Whether jury verdict that tenant paid rent was supported by evidence | Landlord argued jury's verdict was supported by evidence and indicated landlord prevented payment. | Tenant argued there was tender (checks) and landlord's refusal showed prevention of payment. | Jury finding that tenant paid was unsupported; because tender was rejected, substantial evidence did not support that finding. |
| Appropriate remedy when jury fails to decide all elements (e.g., notice validity, waiver) | Landlord sought judgment or affirmation of trial outcome. | Tenant sought to uphold judgment in his favor. | Reversed and remanded for new trial so both parties may litigate all elements; neither side entitled to judgment on remand. |
Key Cases Cited
- Webb v. Jones, 88 Cal.App. 20 (Court of Appeal) (rejected tender by check did not extinguish debt where deposit-to-bank procedure was not used)
- Occidental Real Estate Co. v. Gantner & Mattern, 7 Cal.App. 727 (Court of Appeal) (repeated rejected monthly checks did not extinguish rent obligation where statutory deposit procedures not followed)
- Strom v. Union Oil Co., 88 Cal.App.2d 78 (Court of Appeal) (equity disfavors forfeiture; lessor must not hinder tenant's payment)
- Boston LLC v. Juarez, 245 Cal.App.4th 75 (Court of Appeal) (de minimis breaches do not justify lease termination; strict interpretation against forfeiture)
- Dr. Leevil, LLC v. Westlake Health Care Center, 6 Cal.5th 474 (California Supreme Court) (statutory requirements for unlawful detainer are strictly construed)
- United Riggers & Erectors, Inc. v. Coast Iron & Steel Co., 4 Cal.5th 1082 (California Supreme Court) (statutory interpretation principles)