A protracted legal battle between a commercial property owner and a skin care spa operator has culminated in significant sanctions and a favorable judgment for the defendant. Elite Financial Realty, LLC filed the complaint in the Superior Court of Los Angeles County on December 2017 against Pellequr LLC, alleging breach of lease among other claims.
The case revolves around a five-year lease agreement signed in June 2017 between Elite Financial Realty, LLC (Elite) and Pellequr LLC (Pellequr). Elite owns commercial property in Beverly Hills, while Pellequr operates skin care spas. According to the lease terms, Elite warranted that the property’s existing improvements were compliant with building codes and other regulations. However, issues arose when Pellequr discovered non-compliance with handicap parking requirements and other defects such as a malfunctioning air conditioning system and toxic mold within the unit. Despite repeated requests from Pellequr, Elite failed to address these issues promptly.
In December 2017, after several months of unaddressed complaints about defective conditions including leaking pipes and structural problems, Pellequr terminated the lease citing breaches by Elite. By this time, Pellequr had already paid several months' rent but claimed it was not liable for additional fees under the lease terms.
Elite responded by suing Pellequr for declaratory relief, unpaid rent, rental damages, and damages to leased premises. In turn, Pellequr filed a cross-complaint against Elite and its manager Ron Mavaddat for breach of lease, breach of covenant of good faith and fair dealing, fraud, and negligent misrepresentation.
The discovery phase was contentious. In March 2018, Pellequr served interrogatories and document requests which Elite failed to adequately respond to. After multiple motions to compel compliance with discovery requests went unheeded by Elite despite court orders in April 2019 and September 2020 imposing monetary sanctions totaling $14,000 initially followed by an additional $10,000 later on due to continued non-compliance.
By April 2022, the court found that Elite's responses remained deficient despite prior orders compelling compliance. The court imposed further sanctions including issue sanctions that significantly weakened Elite's position in litigation. Specifically, it ruled that Elite breached the lease as alleged by Pellequr's cross-complaint.
In June 2022, leveraging these issue sanctions which left no material facts in dispute regarding key aspects of their claims, Pellequr moved for summary judgment on all causes of action asserted by Elite and sought summary adjudication on their own breach of contract claim. With no opposition from Elite to this motion given their compromised position due to prior rulings on discovery misconducts—the court granted summary judgment entirely in favor of Pellequr awarding them $219,614.54 inclusive of damages plus interest from December 2017 when they terminated the lease.
The attorneys involved were Morton Minikes representing plaintiff/cross-defendant/appellant (Elite), while Albert J Tumpson represented defendants/cross-complainants/respondents (Pellequar). The presiding judge was Helen Zukin with appellate judges Viramontes J., Stratton P.J., Wiley J., concurring on affirming both April 2022 sanction order & September 2022 judgment under Case IDs B321172 & B324200 respectively.