Filed 4/30/14 Cal-Murphy v. MG Restaurants CA21/5

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                  DIVISION FIVE


CAL-MURPHY, LLC ET AL.,
         Plaintiffs and Appellants,
                                                                     A136198, A136854
v.                                                                  (Consolidated)
MG RESTAURANTS, INC. ET AL.,
                                                                     (San Francisco County
         Defendants and Respondents.                                 Super. Ct. No. CGC-08-473750)




         In these consolidated appeals, Cal-Murphy, LLC, Najeeb Shihadeh, Mary
Christina Shihadeh, and George D. Omran appeal from judgments entered in this dispute
arising out of a commercial lease.
         Appellants contend the trial court erred by (1) granting summary adjudication on
their trespass claim (which they based on an exhaust duct installed in their leased
premises), on the grounds that their lease contained a consent to the installation of the
duct and odors cannot constitute a trespass as a matter of law; (2) denying their motion
for reconsideration of the summary adjudication order; (3) granting judgment on the
pleadings, without leave to amend, on their separate claim for trespass based on an
accumulation of oil and grease within the duct; (4) granting judgment on the pleadings on
their nuisance claim for damages, on the ground that the recovery of damages was


                                                             1
precluded by an exculpatory clause in the lease; (5) granting summary adjudication on
their cause of action for breach of the implied covenant of good faith and fair dealing,
which they based on their claim that respondents leased space to a purported competitor
restaurant; (6) granting summary adjudication on their implied covenant claim based on
respondents’ delayed installation of signage; (7) granting summary adjudication on their
implied covenant claim based on their limited opportunity to deploy a “sandwich board”
to advertise their restaurant; (8) sustaining a demurrer without leave to amend and
dismissing the action as to a purported successor of one of the defendants; (9) denying
their motion to set aside this dismissal order based on their attorney’s excusable or
inexcusable neglect; (10) denying leave to file a sixth amended complaint; and
(11) dismissing the individual plaintiffs on the ground they lack standing as real parties in
interest. We will affirm the judgments.
                       I. FACTS AND PROCEDURAL HISTORY
       Defendant-respondent NOP 560 Mission LLC (NOP) owned an office building at
560 Mission Street in San Francisco (Building). Defendant-respondent Hines Interests
Limited Partnership (Hines) managed the Building. For convenience, we will often adopt
appellants’ convention of referring to these respondents as NOP/Hines.
       Plaintiff-appellant Cal-Murphy, LLC (Cal-Murphy) operated a restaurant called
Murphy’s Deli pursuant to a lease of street-level space in the Building. Plaintiffs-
appellants Najeeb Shihadeh, Mary Christina Shihadeh, and George Omran (Individual
Plaintiffs) were members of Cal-Murphy.
       Cal-Murphy and the Individual Plaintiffs sued NOP/Hines and others for
numerous causes of action, contending they harmed Murphy’s Deli in various ways.
Through a series of motions, judgments were entered against Cal-Murphy and the
Individual Plaintiffs on all causes of action against respondents. While we will later
discuss in much greater detail the allegations, evidence, and procedural history relevant to
the issues on appeal, at this juncture we set forth only a brief overview for context.




                                              2
       A. The Lease
       By January 2004, Hines and Murphy’s Deli Franchising, Inc. (MDF) had
negotiated a lease for a restaurant to operate in a portion of the street-level retail space in
the Building (Lease). The Lease, between National Office Partners Limited Partnership
(assignor to NOP) as “Landlord” and MDF as “Tenant,” consists of nearly 50 pages.
Among the Lease provisions relevant to this appeal are (1) section 2.02, which confirms
the landlord’s discretionary authority over common areas and reserves the right to install
conduit in the leased premises without unreasonable interference with the tenant’s use;
(2) section 4.04, which governs signage; (3) section 3.03(c), which specified that the
tenant had no exclusive right to operate a restaurant in the Building; (4) section 5.07(j),
which noted the landlord’s right to lease space in the Building to any party; (5) section
7.04, which exonerated the landlord from liability for damages arising from acts or
omissions; and (6) section 7.14, which provides that the Lease cannot be amended except
in writing.
       In March 2004, MDF subleased the leased premises to the Individual Plaintiffs,
who assumed the rights and obligations of the Lease. By October 2004, the Individual
Plaintiffs formed Cal-Murphy and assigned the sublease to it. Murphy’s Deli opened for
business in April 2005.
       B. The Problems
       Appellants thereafter faced a host of problems, which they attribute to respondents
and others. We confine our summary to the matters at issue in this appeal.
              1. Limited Display of Sandwich Board
       In late 2004 or early 2005, Cal-Murphy’s on-site manager for Murphy’s Deli
(Steven Dudum) was advised by NOP/Hines’s building manager (Sandra Brownstone)
that Murphy’s Deli could display a “sandwich board” (a two-sided, A-shaped sign that
rests on the ground) outside the leased premises. Dudum had a sign made and showed it
to another building manager, who approved it for display from April 20 to May 26,
2005—but only for that period.


                                               3
       As discussed post, appellants contend NOP/Hines thereby breached the implied
covenant of good faith and fair dealing in the Lease. NOP/Hines contends there was no
breach because, essentially, the Lease gave it sole discretion to make the decision.
              2. Delayed Installation of Blade Sign
       Section 4.04 of the Lease granted Cal-Murphy a right to install, at its own expense
and with NOP/Hines’s approval, a sign on the exterior surface of the Building. In early
2006, Building property manager Brownstone told the operations manager for Murphy’s
Deli (Bajis Katwan) that NOP/Hines intended to install a “blade sign” (extending
horizontally from the exterior wall of the Building) for Murphy’s Deli at NOP/Hines’s
expense. In February 2007, NOP/Hines advised that this sign would be installed within
four to six weeks. It was not installed, however, until April 14, 2008.
       Appellants contend NOP/Hines breached the implied covenant of good faith and
fair dealing in the Lease by delaying the installation of the sign; for various reasons,
NOP/Hines disagrees.
              3. Lease to Competitor Mixt Greens
       In October 2007, NOP/Hines leased the space adjacent to Murphy’s Deli to a
restaurant called Mixt Greens, which appellants contend is a competitor of Murphy’s
Deli. Mixt Greens opened for business in April 2008.
       Appellants claim that, by leasing to Mixt Greens, NOP/Hines breached the implied
covenant of good faith and fair dealing; NOP/Hines counters that the Lease did not
require it to lease to a complementary rather than competitive restaurant.
              4. Mixt Greens’s Duct, Odors and Grease
       In January 2008, NOP/Hines’s assistant building manager informed Katwan that
NOP/Hines intended to run ducts through Murphy’s Deli to service Mixt Greens’s
cooking equipment. By February 8, 2008, Mixt Greens’s cooking equipment, including a
gas grill and a “Type II” cooking hood, was connected to ducts running from Mixt
Greens’s kitchen, across the ceiling of the adjacent space of Murphy’s Deli, and out to an
alley behind the Building.


                                              4
       After Mixt Greens opened in mid-April 2008, bad odors entered Murphy’s Deli,
and customers complained. Beginning in December 2009 (after appellants commenced
litigation against NOP/Hines, see post), a buildup of grease was found inside the ducts
that passed through Murphy’s Deli. Mixt Greens stopped cooking in approximately
January 2012. In March 2012, the ducts were removed.
       Appellants argue that the ducts, and particularly the odors emitted from the ducts
into Murphy’s Deli and the grease and oils accumulated within the ducts, constituted a
nuisance and a trespass by NOP/Hines into the leased premises. NOP/Hines counters
that, in light of certain provisions of the Lease, it has no liability as a matter of law.
       C. The Litigation
       Based on these and other events, appellants pursued this lawsuit.
              1. Appellants’ Complaint and Amended Complaints
       In March 2008, Cal-Murphy and the Individual Plaintiffs filed a complaint against
NOP/Hines, asserting causes of action for fraud, negligent misrepresentation, breach of
the implied covenant of good faith and fair dealing, breach of the Lease, and trespass.
       In April 2008, after Mixt Greens opened for business next to Murphy’s Deli, Cal-
Murphy and the Individual Plaintiffs filed a first amended complaint, adding Mixt Greens
as a defendant and causes of action for nuisance.
       Cal-Murphy and the Individual Plaintiffs thereafter filed a second amended
complaint, third amended complaint, fourth amended complaint, and first and second
amendments to the fourth amended complaint.
       The fifth amended complaint—the operative pleading at the time of the orders at
issue in this appeal—contained causes of action against NOP/Hines for, as relevant
here: breach of the implied covenant of good faith and fair dealing; trespass; nuisance;
and trespass based on the alleged accumulation of grease in the duct. As discussed
post, Mixt Greens’s purported successor, respondent MG Restaurants (MGR), was
eventually added as a defendant.




                                               5
       As mentioned, all of appellants’ claims against respondents were ultimately
dismissed. For clarity, we briefly set forth here the disposition of these claims according
to the parties involved, leaving a more precise chronology for later discussion.
              2. Judgment of Dismissal as to Claims Against NOP/Hines
       In April 2011, the court granted NOP/Hines’s motion for summary adjudication as
to Cal-Murphy’s third cause of action for breach of the implied covenant of good faith
and fair dealing, which had been based on the lease of space to Mixt Greens, delay in
installing a blade sign, and refusal to permit a sandwich board (as well as a purported
refusal to permit Murphy’s Deli to install a grill while allowing Mixt Greens to use one).
       By written order filed on March 5, 2012, the court next granted NOP/Hines’s
motion for summary adjudication as to the fifth cause of action for trespass based on the
ducts. Cal-Murphy filed a motion for reconsideration, asserting newly discovered
evidence of holes and openings in the ducts that permitted odors to enter Murphy’s Deli.
In April 2012, by written order entered on May 11, 2012, the court denied Cal-Murphy’s
motion for reconsideration.
       In April 2012, the court granted NOP/Hines’s motion for judgment on the
pleadings as to the ninth cause of action for trespass based on the accumulation of grease
within the ducts, but allowed Cal-Murphy to submit a proposed amendment to its
pleading.
       On May 18, 2012, by written order filed on June 18, 2012, the court denied Cal-
Murphy leave to file its proposed sixth amended complaint, thereby also denying its
request for leave to amend its pleading as to the ninth cause of action.
       Also by written order filed on June 18, 2012, the court granted NOP/Hines’s
motion for a case management order excluding all evidence of damages against it in
regard to the claims remaining in the case, on the ground that a damages award was
precluded by the exculpatory clause in the Lease. On that same date, the court granted
NOP/Hines’s motion for judgment on the pleadings with respect to the remaining sixth
cause of action for nuisance, in light of the case management order excluding evidence of
damages.

                                             6
        On June 18, 2012, judgment was entered in favor of NOP/Hines.
               3. Judgment of Dismissal as to Claims Against MGR
        Meanwhile, in February 2012, Cal-Murphy substituted MGR as Doe One in the
fifth amended complaint. MGR was an entity created by David Silverglide, a former
principal of Mixt Greens. MGR had acquired the principal assets of Mixt Greens in
California, including the equipment at 560 Mission Street.
        In March 2012, MGR filed a demurrer to the fifth amended complaint. Cal-
Murphy did not file an opposition to the demurrer. Instead, at the hearing on the
demurrer, Cal-Murphy’s attorney advised the court that he had filed a declaration with a
proposed sixth amended complaint and believed he could file an amended complaint
against MGR as of right.
        On May 7, 2012, the court sustained MGR’s demurrer without leave to amend.
On May 24, 2012, a judgment of dismissal was entered in favor of MGR.
        On June 18, 2012, and by written order filed on September 4, 2012, the court
denied Cal-Murphy’s motion for relief from the dismissal under Code of Civil Procedure
section 473.
               4. Judgment Dismissing Individual Plaintiffs
        In June 2011, and by written order dated July 29, 2011, the court sustained without
leave to amend a demurrer by NOP/Hines to the fifth amended complaint as to the
Individual Plaintiffs, on the ground they lacked standing.
        A judgment of dismissal was entered against the Individual Plaintiffs in August
2012.
               5. Appellants’ Appeals
        In July 2012, Cal-Murphy filed a notice of appeal from the judgment entered in
favor of NOP/Hines, the judgment dismissing MGR, and the order denying relief from
that dismissal. This became appeal number A136198.
        In October 2012, Cal-Murphy and the Individual Plaintiffs appealed from the
judgment of dismissal of the Individual Plaintiffs, as well as an amended judgment of
dismissal of MGR (amended in September 2012 to include the amount of costs awarded),

                                             7
the order denying relief from the dismissal (to the extent the previous notice of appeal
was inadequate), and a September 2012 order on Cal-Murphy’s motion to strike costs.
This became appeal number A136854.
       Appeals A136198 and A136854 were consolidated.1
                                    II. DISCUSSION
       We address appellants’ contentions in turn.
       A. Summary Adjudication of Fifth Cause of Action (Trespass by Duct)
       The fifth cause of action of Cal-Murphy’s fifth amended complaint asserted a
trespass based on the ducts that were installed through the leased premises of Murphy’s
Deli. The cause of action incorporated by reference paragraph 15 of the pleading,
alleging that “two permanent, galvanized metal ducts” were constructed by defendants
through Murphy’s Deli’s leased premises to enable Mixt Greens to operate a grill,
without Cal-Murphy’s consent, and there was “no provision in the Lease that would
permit such action.” It also incorporated paragraphs 16 and 27, alleging that odors had
been emitted into Murphy’s Deli and oils had accumulated inside the ducts as a result of
NOP/Hines’s failure to require Mixt Greens to install the “proper” equipment.




1
        Claims by Cal-Murphy against Mixt Greens, and a cross-action by NOP against
MDF and others, are pending in the San Francisco Superior Court. Also pending are
other appeals. In January 2013, Cal-Murphy and the Individual Plaintiffs appealed from
postjudgment orders relating to attorneys’ fees and costs imposed against the Individual
Plaintiffs (appeal number A137609). In February 2013, the trial court entered amended
judgments for NOP/Hines and against Cal-Murphy in the amount of $2,472,615 for
attorneys’ fees and costs, and an amended judgment for NOP/Hines and against the
Individual Plaintiffs in the amount of $1,468,743 for attorneys’ fees and costs, and Cal-
Murphy and the Individual Plaintiffs appealed (appeal number A137959). These
judgments have been superseded by “Corrected and Second Amended” judgments, which
reflect orders awarding supplemental attorney fees to NOP and eliminate an attorney fee
award in favor of Hines; these judgments are the subject of appeal number A139772. In
the interest of justice and judicial economy, we construe the notices of appeal broadly so
we may decide the issues briefed in appeals A136198 and A136854 notwithstanding the
amendments to the judgments, and we leave the issues raised by those amendments to
appeals A137959 and A139772.
                                             8
       NOP/Hines moved for summary adjudication, and the parties debated at length—
as they do here—the scope of the fifth cause of action. The claim plainly encompasses
the installation of the ducts within the premises of Murphy’s Deli. Cal-Murphy contends
it also asserts a trespass based on odors that entered Murphy’s Deli via the ducts, and the
allegedly improper construction or design of the ducts (which led to the odors in
Murphy’s Deli and the accumulation of grease).
       In this section of our opinion, we consider the installation of the ducts, as well as
Cal-Murphy’s evidence concerning the construction and the intrusion of odors into its
premises. We address Cal-Murphy’s contention of a trespass based on the accumulation
of grease post in the context of Cal-Murphy’s ninth cause of action, which asserted a
trespass based specifically on the grease.
              1. Law
       We conduct an independent review to determine whether there is a triable issue of
material fact and the moving party is entitled to summary adjudication as a matter of law.
(Code Civ. Proc., § 437c, subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th
826, 860.) We construe the moving party’s evidence strictly, and the non-moving party’s
evidence liberally, in determining whether there is a triable issue. (See D’Amico v. Board
of Medical Examiners (1974) 11 Cal.3d 1, 20; Alex R. Thomas & Co. v. Mutual Service
Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72 (Thomas).)
       A defendant seeking summary adjudication must show that at least one element of
the plaintiff’s cause of action cannot be established, or that there is a complete defense to
the cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).) The burden then shifts to the
plaintiff to show there is a triable issue of material fact on that issue. (See Code Civ.
Proc., § 437c, subd. (p)(2); Thomas, supra, 98 Cal.App.4th at p. 72.)
              2. NOP/Hines Met Its Initial Burden
       “The essence of the cause of action for trespass is an ‘unauthorized entry’ onto
the land of another.” (Spinks v. Equity Residential Briarwood Apartments (2009) 171
Cal.App.4th 1004, 1042-1043 (Spinks).) If the entry has been by consent, the element of
unauthorized entry is not established, and there has been no trespass. (Civic Western

                                              9
Corp. v. Zila Industries, Inc. (1977) 66 Cal.App.3d 1, 16-17.) Consent may be provided
by prior agreement. (Williams v. General Elec. Credit Corp. (1958) 159 Cal.App.2d
527, 532.)
       NOP/Hines sought summary adjudication on the ground that the alleged entry
into Cal-Murphy’s leasehold—the installation of the duct—was the subject of a prior
consent set forth in section 2.02 of the Lease.
       Section 2.02, entitled “Landlord’s Reserved Rights,” provides in part: “Landlord
reserves from the leasehold estate hereunder, in addition to all other rights reserved by
Landlord under this Lease: (i) all exterior walls and windows bounding the Leased
Premises, and all space located within the Leased Premises for Major Vertical
Penetrations, conduits, electric and other utilities, air-conditioning, sinks or other
Building facilities that do not constitute Tenant Extra Improvements, the use thereof and
access thereto through the Leased Premises for operation, maintenance, repair or
replacement thereof, and (ii) the right from time to time, without unreasonable
interference with Tenant’s use, to install, remove or relocate any of the foregoing for
service to any part of the Building to locations that will not materially interfere with
Tenant’s use of the Leased Premises . . . .” (Italics added.)
       In essence, section 2.02 permits NOP/Hines to install a “conduit[ ]” in any part of
the Building, as long as the installation does not unreasonably interfere with the
Tenant’s use, at a location that will not materially interfere with the Tenant’s use.
       NOP/Hines contended that the duct is a “conduit” or air conditioning within the
meaning of section 2.02, and presented evidence that the installation of this conduit did
not interfere with Cal-Murphy’s use of the premises: NOP/Hines arranged for the
installation of the duct on a schedule “acceptable to Murphy’s Deli”; the duct was
installed along the ceiling of the leased premises, 25 feet from the floor, and was not in
the way of Murphy’s Deli’s activities or the operation of the restaurant; and Amad
Qureshi, a manager of Murphy’s Deli, testified to the effect that the duct (itself) did not
preclude Murphy’s Deli from making sandwiches or its employees from doing their


                                             10
jobs.2 From this evidence, a reasonable trier of fact could conclude that the installation
of the duct, at the location at which it was installed, did not unreasonably or materially
interfere with Cal-Murphy’s use of the leased premises. As such, section 2.02 provided
consent to the duct, and its installation would not constitute a trespass.
       The burden shifted to Cal-Murphy to establish a triable issue of material fact.
              3. Cal-Murphy Failed to Show a Triable Issue of Material Fact
       Cal-Murphy did not submit evidence to establish a triable issue with respect to an
unreasonable interference with its premises based on the duct’s installation. Instead, it
presented evidence that (1) its leasehold was unreasonably interfered with by the odors
from Mixt Greens, which entered its premises via the duct; (2) NOP/Hines’s conduct
exceeded the consent set forth in section 2.02; and (3) Cal-Murphy withdrew its consent.
                     a. Unreasonable Interference Based on Odors
       Cal-Murphy argues there is a triable issue as to whether the installation of the duct
unreasonably interfered with Cal-Murphy’s tenancy because of the resulting odors,
particularly due to the odors’ impact on customers and potential customers. It points to
testimony by Qureshi that “[t]here is smells somewhere from there [the duct] or from
next door or from outside, I don’t know,” which began after Mixt Greens started
business. A declaration from Bajis Katwan, the operations manager, references odors but
does not describe any interference by the duct itself. On-site manager Osama Sweiti’s
declaration asserted daily receipt of complaints from customers about the odors (not the
duct itself). The declaration of Dana Zumot, another on-site manager, averred that the
odors stopped when the “ducts inside Mixt Greens” were removed. Cal-Murphy also
points to evidence that sales increased by over 30 percent for the first four months after




2
        When asked about whether the duct interfered with the operations of Murphy’s
Deli, Qureshi replied: “I don’t understand why you’re asking this question. I mean this
light, this light, are stopping us while talking with me or you? No, right? It’s there. The
duct is there.”
                                              11
the odors stopped.3 The inference from this evidence is that Murphy’s Deli was affected
by the odors, not the duct itself, particularly since Murphy’s Deli saw an uptick in sales
after Mixt Greens stopped cooking in January 2012, while the duct remained in place
until March 2012.
       However, evidence that the odors interfered with the operations of Murphy’s Deli
did not create a disputed issue of fact material to the trespass cause of action.
       In the first place, as a matter of law, odors do not create a trespass. (See Wilson v.
Interlake Steel Co. (1982) 32 Cal.3d 229, 232-233 (Wilson) [like other intangible
intrusions such as odor or light, noise from an adjacent property does not constitute
trespass unless it causes physical damage]; San Diego Gas & Electric Co. v. Superior
Court (1996) 13 Cal.4th 893, 935-937 (San Diego Gas) [intentional emission of
electromagnetic radiation onto plaintiffs’ property does not constitute trespass].)
       Cal-Murphy’s attempt to distinguish Wilson and San Diego Gas is unavailing. It
is true that the plaintiffs in those cases claimed a trespass based on intangible intrusions
into their premises from another property, as opposed to Cal-Murphy’s claim of a
trespass based on odors emitted from the duct passing through and outside its premises.
However, this distinction is immaterial. The point is that intangible phenomena that do
not cause physical damage to the plaintiff’s property cannot be the basis of a trespass.
(San Diego Gas, supra, 13 Cal.4th at pp. 936-937 [allegation that electromagnetic fields
made the property unsafe and uninhabitable was insufficient, because it asserted only a
risk of personal harm, not harm to property].) In the matter before us, there was no
evidence that the odors from Mixt Greens’s kitchen, however they made their way into
Murphy’s Deli, caused physical damage to Cal-Murphy’s property.




3
        NOP/Hines argues that the assertion of a 30 percent increase in sales is not
supported by admissible evidence, and Cal-Murphy’s record citations are to evidence the
trial court ruled inadmissible, Cal-Murphy’s briefs, or the proposed (but unfiled) sixth
amended complaint. Zumot’s declaration avers that sales increased.
                                             12
       Thus, while the installation of the duct was a physical intrusion, it was not a
trespass because of the consent under section 2.02; and the intrusion by the odors was not
a trespass because it did not constitute a physical intrusion or cause physical damage.
       That the odors did not in themselves constitute a trespass does not totally resolve
the matter, however. Cal-Murphy’s argument is not so much that the odors constituted a
trespass, but that the odors meant the duct eventually interfered unreasonably with Cal-
Murphy’s use of the premises, and therefore the duct’s installation would not fall within
the consent set forth in section 2.02. NOP/Hines does little to rebut this point, but again
we must disagree.
       The consent provided by section 2.02 is subject to the condition that the
installation of the duct not interfere with the leased premises. The language that
NOP/Hines has the “right from time to time, without unreasonable interference with
Tenant’s use, to install, remove or relocate [conduit]” squarely points to an interference
arising from the act of the installation itself, at the time of the installation (italics added).
Here, the evidence is that Mixt Greens’s odors arose months after the installation, and no
evidence was presented that the initial installation itself unreasonably interfered with Cal-
Murphy’s use of the leased premises.4 Accordingly, whether or not the evidence of the
odors could give rise to some other cause of action, Cal-Murphy has not demonstrated a
triable issue of fact material to whether the consent in section 2.02 precluded Cal-
Murphy’s trespass claim.
                      b. Conduct Exceeding Consent
       Cal-Murphy next contends there was a triable issue of material fact as to whether
NOP/Hines’s conduct exceeded the consent reflected in section 2.02. (Citing Rest.2d
Torts, § 892A, subds. (2)(b) & (4); see Dwyer v. Carroll (1890) 86 Cal. 298, 302-303
[landlord trespassed where it constructed a new story on the building and dug a cellar,


4
       Cal-Murphy presents no substantial argument as to the other condition of the
consent set forth in section 2.02: that the conduit be installed at a location “that will not
materially interfere with Tenant’s use of the Leased Premises.” In any event, this
condition also refers to the duct’s installation.
                                               13
depriving tenant of the use of its leased premises, because tenant agreed landlord could
enter only to make repairs to a first-story floor]; Williams v. General Elec. Credit Corp.
(1958) 159 Cal.App.2d 527, 533 [although seller had an implied right to enter into
buyer’s premises to repossess items upon the buyer’s default, its entry into other parts of
the buyer’s residence could constitute a trespass].) Specifically, Cal-Murphy refers us to
evidence that, it claims, shows the lack of a proper building permit for the duct, the
wrong type of duct, violations of the California Mechanical Code, and the emission of
odors and creation of a fire hazard.
       Cal-Murphy’s argument is unavailing. A trespass requires physical entry.
NOP/Hines’s physical entry into the leased premises was only to install the duct (covered
by section 2.02), and none of the evidence Cal-Murphy cites shows a physical entry into
its premises beyond the installation. Nor is there evidence NOP/Hines physically
intruded any distance or manner unnecessary for the duct’s installation, or that it
constructed more than the duct. And even if Mixt Greens’s later emission of odors into
the leased premises could be attributed to NOP/Hines, it did not constitute a physical
intrusion. Accordingly, Cal-Murphy failed to demonstrate a material triable issue as to
whether NOP/Hines exceeded the consent set forth in section 2.02.
                     c. Withdrawal of Consent
       In a footnote in its opening brief in this appeal, Cal-Murphy contends there was a
triable issue as to whether Murphy’s Deli had effectively withdrawn the consent provided
by section 2.02, since Cal-Murphy filed its lawsuit and its manager (Katwan) twice raised
an objection with the Building’s assistant manager, first claiming the installation of the
ducts was a trespass and, after viewing the duct outside, asserting that odors would likely
enter Murphy’s Deli.
       Cal-Murphy’s argument has no merit. A party cannot unilaterally withdraw from
the terms of its contract by merely objecting to the other party’s exercise of its
contractual right or claiming in a pleading that the right does not exist.




                                             14
       In sum, Cal-Murphy did not establish a triable issue of material fact, and the court
did not err in granting summary adjudication on the fifth cause of action for trespass.5
              4. Motion for Reconsideration
       Ten days after notice of the entry of the order granting summary adjudication on
the fifth cause of action, Cal-Murphy filed a motion for reconsideration based on newly
discovered evidence. (Code Civ. Proc., § 1008.) According to the motion, the duct that
ran through Murphy’s Deli was removed after the summary adjudication hearing, and
Cal-Murphy’s expert observed holes and openings in the duct. Cal-Murphy offered
evidence that odors could have or would have entered Murphy’s Deli through these holes
and openings, which purportedly had been caused by improper welding of the duct
sections.
       The court denied Cal-Murphy’s motion but took its prior ruling under
reconsideration for another reason. As explained in the court’s written order: “The
motions for reconsideration are denied. The Court on its own motion reconsidered the
question of whether an allegedly defectively-constructed duct can constitute a trespass
because of its impact on Plaintiff’s business due to alleged release of odors into the
business from the duct. Intrusion into Plaintiff’s business by odors does not constitute a
trespass as a matter of law. The claim that defects in the construction of the duct caused
the odors to enter the business does not change that.”
       Cal-Murphy contends the court erred. We disagree. For the reasons stated ante,
the installation of the duct did not constitute a trespass because it was authorized by
section 2.02; the emission of the odors did not constitute a trespass because odors are
intangible and there was no evidence they caused physical damage; and, even considering
Cal-Murphy’s newly discovered evidence, the fact that the duct was one of the means by

5
       In another footnote in its opening brief, Cal-Murphy argues that section 2.02
should not be interpreted to confer consent for the installation of the duct, because the
provision did not purport to cover a leasehold improvement installed for the benefit of
another tenant (a competing business) and the ducts were “Tenant Extra Improvements”
excluded under section 2.02. Because Cal-Murphy does not explain or support this
argument in its opening brief, it is both waived and unpersuasive.
                                             15
which Mixt Greens’s odors may have entered Murphy’s Deli does not render the duct an
intrusion outside the scope of the consent of section 2.02.
       Cal-Murphy fails to establish error as to the fifth cause of action for trespass.
       B. Judgment on the Pleadings on Ninth Cause of Action (Trespass by Grease)
       The title of Cal-Murphy’s ninth “and separate” cause of action targeted a “trespass
caused by the deposit of animal and vegetable oils into plaintiffs’ leased premises.” The
pleading incorporated allegations from paragraph 27, that the ducts were not properly
constructed, did not contain access doors or cleanouts at proper intervals, were not
properly sloped, and that due to the type of hood NOP/Hines installed and the absence of
a “precipitator,” “a film of animal and vegetable oils and grease has accumulated within
the ducts that originate in Mixt Greens’s space and travel through Murphy’s Deli’s
space.” It was further alleged that this accumulation of grease created a fire hazard.
       The trial court granted NOP/Hines’s motion for judgment on the pleadings as to
this cause of action, and it ultimately denied Cal-Murphy leave to amend by declining its
request to file a sixth amended complaint. Cal-Murphy contends the court erred in both
respects.
              1. Judgment on the Pleadings
       In our review of an order granting judgment on the pleadings, we assume the truth
of the well-pleaded allegations and review de novo whether those allegations state a
cause of action. (Bettencourt v. Hennessy Industries, Inc. (2012) 205 Cal.App.4th 1103,
1111 (Bettencourt).)
       To state a cause of action for trespass, a plaintiff must allege an unauthorized and
tangible entry onto the land of another, which interfered with the plaintiff’s exclusive
possessory rights. (Capogeannis v. Superior Court (1993) 12 Cal.App.4th 668, 674;
Wilson, supra, 32 Cal.3d at p. 233; Spinks, supra, 171 Cal.App.4th at pp. 1042-1043.)
       Cal-Murphy failed to state a trespass cause of action, because it did not allege
facts showing that the accumulated grease interfered with its exclusive possessory rights.
The grease was alleged to have “accumulated within the ducts.” (Italics added.) Cal-
Murphy had no exclusive possessory right to that area. Rather, the duct was installed for

                                             16
Mixt Greens to vent its kitchen, and upon the duct’s installation (long before any grease
began to accumulate) it was expressly excluded from Cal-Murphy’s leasehold pursuant to
section 2.02 of the Lease. The court did not err in granting NOP/Hines’s motion for
judgment on the pleadings.
                 2. Denial of Leave to Amend
       In its written opposition to NOP/Hines’s motion for judgment on the pleadings and
at the hearing on the motion, Cal-Murphy sought leave to amend the ninth cause of action
if the motion was granted. Cal-Murphy did not, however, explain at the time how the
pleading could be further amended to state a viable trespass claim. Nonetheless, the court
gave Cal-Murphy the opportunity to present a proposed amendment, and the issue of
whether leave to amend would be granted was not resolved until Cal-Murphy had
submitted two proposed sixth amended complaints, which purported to amend its
pleading not only in regard to the ninth cause of action for trespass, but in other respects
as well. For clarity, we address here the court’s denial of leave to file the proposed sixth
amended complaint to the extent it sought to amend the ninth cause of action for trespass;
we address the court’s denial of leave to file the sixth amended complaint in other
respects post.
       We review the denial of leave to amend for an abuse of discretion. (Bettencourt,
supra, 205 Cal.App.4th at p. 1111.) “The trial court abuses its discretion if it denies
leave to amend when there is a reasonable possibility the defect in the pleading could be
cured by amendment.” (Ibid.)
       Cal-Murphy contends it should have been allowed to allege new facts to
“amplif[y] and augment[ ] the allegations relating to the trespass cause of action,” facts it
discovered after filing the fifth amended complaint, and “the return of David Silverglide,
the principal of both Mixt Greens and MGR, and the arrival on the scene of MGR.” It
also urges that it should have been allowed to allege multiple violations of the
Mechanical Code in the installation and maintenance of the ducts, and that NOP/Hines
“knew with substantial certainty” that its conduct was wrongful or would injure Cal-
Murphy.

                                               17
       Cal-Murphy fails to demonstrate how these allegations would cure the
deficiencies in its pleading as to the trespass claim—particularly the defect that the
allegations did not show interference with its exclusive possessory rights. Cal-
Murphy’s revised proposed sixth amended complaint did not allege a physical
interference with Cal-Murphy’s right to its leased premises (other than the allegation
of the intrusion by the duct itself, which we discuss ante).6 The court did not abuse its
discretion in denying leave to amend.
       Cal-Murphy contends it was misled by the trial court’s earlier order overruling
NOP/Hines’s demurrer to the trespass claim. (See Higgins v. Del Faro (1981) 123
Cal.App.3d 558, 565.) Under the circumstances of this case, the court’s prior order did
not undermine the propriety of the court’s grant of judgment on the pleadings and denial
of leave to amend.7
       C. Denial of Leave to File Sixth Amended Complaint
       We next turn to the court’s order denying Cal-Murphy leave to file its revised
proposed sixth amended complaint with respect to allegations other than the ninth cause
of action for trespass, such as its proposed claims for injunctive relief based on nuisance,
breach of the covenant of quiet enjoyment, violations of the Mechanical Code and, as to
MGR, liability as Mixt Greens’s successor. We begin with some additional background.
              1. Background
       By the time Cal-Murphy first submitted a proposed sixth amended complaint in
April 2012, four years had elapsed since the original complaint and a March 2012 trial

6
       Cal-Murphy’s proposed pleading did allege that holes and openings in the exhaust
duct permitted grease (as well as odors) to enter Murphy’s Deli. But there is no
allegation of physical damage caused by the grease (as required for trespass) or monetary
damages incurred as a result of the grease specifically (as required for a damages claim).
The grease buildup inside the duct was alleged to be a fire hazard.
7
       Cal-Murphy repeatedly asserts that the trial court should have considered the
grease aspect of its trespass claims in the context of NOP/Hines’s summary
adjudication motion. However, Cal-Murphy fails to show prejudice from disposing of
the cause of action by judgment on the pleadings instead of by summary adjudication,
particularly since Cal-Murphy is not entitled to relief as a matter of law, whether
based on Cal-Murphy’s allegations or based on its evidence.
                                             18
date had already passed. At a hearing in May 2012, the court advised that Cal-Murphy’s
proposed pleading did not appear sufficient; however, it gave Cal-Murphy another
chance.
       On May 18, 2012, Cal-Murphy submitted a “Revised Proposed Sixth Amended
Complaint.” After a hearing, the trial court denied Cal-Murphy leave to file its revised
proposed sixth amended complaint, on the ground that the new pleading would cause
undue delay, inefficiencies, and prejudice.
       The trial court stated: “The proposed sixth amended complaint is replete with
problems, and while the standard for allowing for the filing of amended pleadings is
somewhat liberal, that liberality wanes as the case proceeds, and the Court is supposed to
take a closer and closer look at what is sought to be injected into the case as the length of
the case increases and as you are close to trial. [¶] I believe that there are so many things
wrong with the revised sixth amended complaint that it would result in undue delay in the
efficient administration of the remaining portion of this case, and would cause prejudice
to NOP Hines at least, perhaps to Mixt Greens. [¶] . . . [¶] [B]oth those parties have a
right to have this case packaged up and resolved, be it through trial or something else.
And it is clear that the sixth amended complaint, the revised sixth amended complaint,
prejudices those parties’ right to do so. It will result in inordinate delay and expense in
resolving the issues here.”
       The court proceeded to support this conclusion: “By way of example, the sixth
amended complaint seeks to inject claims which this Court has already eliminated from
this case. The trespass claims were eliminated by my order of March 5, 2012, in the
summary adjudication of the fifth cause of action and the motion for judgment on the
pleadings, which was granted by an April 11, 2012 order, and the claim in the sixth
amended complaint regarding a supposed duty on the part of the plaintiff [sic], which I
resolved on the—in a December 12, 2011 order. . . . [¶] There’s a claim for successor
liability on the part of MG Restaurants, which I have already ruled has no place here.
[¶] There’s a big problem with the claimed injunction action, in light of what I believe
has been represented by all parties to me, that the action which is the subject of the

                                              19
injunction has ceased. What that will precipitate will be substantial discovery and that’s
part of what I think they want to—plaintiff wants to take Mr. Silverglide’s deposition
about, is why was the action terminated and will it resume again. That will take a long
time to sort out. The “why” is probably irrelevant, but the “will it resume again” could
conceivably find its place somewhere, at least in motion practice. Again, undue delay.
[¶] And the bottom line is that this revised sixth amended complaint appears to render
this case what it is that has been advocated by the defendants for some time to me, is the
never-ending story. But we don’t have a never-ending story. [¶] . . . [¶] In addition, it is
not up to me to parse out the portions of the revised sixth amended complaint that may be
viewed differently than other portions. The motion before me is a motion to file the
proposed revised sixth amended complaint. And that is denied. Do not read what I just
said as an invitation to cut out little pieces of it and try it again. [¶] There is no question
in my mind that what we have reached in this case is the stage where undue prejudice
will befall the defendant if we continue to have a moving target for what this case is
about. The defendant is entitled to a resolution of the claims here, and that’s what is
going to happen next.” (Italics added.)
              2. The Court Did Not Abuse Its Discretion
       Denial of leave to amend is proper where the proposed amendment is untimely or
would cause prejudice in delaying the trial, increasing discovery or other litigation
activity. (Yee v. Mobilehome Park Rental Review Bd. (1998) 62 Cal.App.4th 1409, 1428;
P&D Consultants, Inc. v. City of Carlsbad (2010) 190 Cal.App.4th 1332, 1345.)
       The record contains ample support for the conclusion that the proposed sixth
amended complaint would have further and unduly delayed the trial in a case that had
been pending for over four years. The claims against MGR would have caused more
litigation activity, as would the attempted resurrection of claims on which the court had
already ruled. Furthermore, the revised proposed sixth amended complaint would have
resulted in another round of demurrers, since it arguably failed to allege facts that would




                                               20
have cured the defects in the trespass claims and failed to state a claim for injunction or
breach of the covenant of quiet enjoyment.8
       Cal-Murphy contends the trial court was wrong to deny leave to file the sixth
amended complaint based on its timing, particularly as to the cause of action for trespass
and its new claim for breach of the covenant of quiet enjoyment, because (1) it had
previously mentioned its intention to bring additional claims; (2) no additional discovery
would be required with respect to the quiet enjoyment claim; and (3) in the absence of
prejudice, amended pleadings should be permitted notwithstanding delay. (Citing
Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) Cal-Murphy
also argues that its successor liability theory was different than what it had previously
proposed to the court and, if that claim posed prejudice or delay, the claim could be
severed.
       The question, however, is not whether there was an argument in favor of allowing
the revised proposed sixth amended complaint, but whether the denial of leave was so
irrational and arbitrary as to constitute a prejudicial abuse of discretion. For our reasons
stated ante, it was not.




8
        As to curing the defects in the trespass claims, NOP/Hines asserts that the
proposed pleading did not allege facts sufficient to avoid enforcement of the exculpatory
clause, or any unauthorized entry that the court had not already rejected as a trespass. As
to the new causes of action, NOP/Hines asserts that Cal-Murphy’s claim for injunctive
relief based on a nuisance had no merit, because Mixt Greens had already stopped
cooking in its space and the subject equipment had been removed. NOP/Hines also
contends Cal-Murphy’s claim for breach of the covenant of quiet enjoyment was
defective because there was no allegation of conduct that rendered the premises unfit for
its contemplated purposes or substantially affected Cal-Murphy’s enjoyment of a material
part of the premises (Civ. Code, § 1927). Further, the parties debate the effectiveness of
the new allegations concerning the violations of the Mechanical Code. NOP/Hines urges
that the code sections cited in the revised proposed sixth amended complaint apply to a
“Type I hood” rather than the “Type II hood” installed in Mixt Greens’s space, while Cal-
Murphy counters that it alleged that a Type I hood should have been installed. In
addition, MGR disputes the sufficiency of the allegations as to its liability as successor of
Mixt Greens.
                                              21
       Cal-Murphy has failed to demonstrate error in the denial of leave to file its revised
proposed sixth amended complaint.
       D. Judgment on the Pleadings on Sixth Cause of Action (Nuisance)
       Cal-Murphy’s sixth cause of action asserted a nuisance claim. Cal-Murphy
alleged, on information and belief, that NOP/Hines and other defendants knew or should
have known that, as designed, the grill and cooking equipment used by Mixt Greens, as
vented through the ducts, would emit offensive odors into Murphy’s Deli and result in the
accumulation of animal and vegetable oils in the ducts, and that there was technology
available to alleviate the odors and accumulation of oils. Cal-Murphy sought damages,
alleging interference with Cal-Murphy’s use and enjoyment of the Murphy’s Deli space.
       NOP/Hines filed a motion for a case management order that would preclude Cal-
Murphy from offering evidence of damages as to the claims remaining in the case
(including this nuisance claim), on the ground that NOP/Hines’s liability for those
damages was precluded as a matter of law by an exoneration clause in section 7.04 of the
Lease. The court granted NOP/Hines’s motion by an amended case management order
on June 18, 2012. On that same date, the court granted NOP/Hines’s motion for
judgment on the pleadings with respect to the nuisance cause of action.
       Cal-Murphy contends the court’s rulings were erroneous, because there were
triable factual issues which, if resolved in Cal-Murphy’s favor, would preclude
enforcement of the exoneration clause. We first consider the scope of the clause, and
then its enforceability.
              1. Scope of the Lease Exoneration Clause (Section 7.04)
       Section 7.04 of the Lease, entitled “Indemnity and Exoneration,” provides in
subsection (a): “Landlord shall not be liable for any loss, injury or damage to person or
property of Tenant . . . which may arise through repair, alteration or maintenance of any
part of the Project or failure to make any such repair or from any other cause whatsoever
except as expressly otherwise provided in Section 7.06 [referring to condemnation].
Landlord shall not be liable for any loss, injury or damage arising from any act or
omission of any other tenant or occupant of the Project, nor shall Landlord be liable

                                            22
under any circumstances (including Landlord’s negligence) for damage or inconvenience
to Tenant’s business or for any loss of income or profit therefrom.” (The “Project” was
defined in the Lease as the Building, the real property on which it is located, and
improvements or facilities.)
       By its terms, then, section 7.04(a) precludes liability to Cal-Murphy for damages
arising from “repair, alteration or maintenance,” from “any other cause whatsoever”
(except condemnation), from “any act or omission of any other tenant” such as Mixt
Greens, or “under any circumstances (including Landlord’s negligence) for damage or
inconvenience to Tenant’s business or for any loss of income profit therefrom.” (Italics
added.) Its scope plainly included the damages Cal-Murphy sought from NOP/Hines in
the nuisance claim alleged in the fifth amended complaint.
              2. Enforceability of Section 7.04(a) (Civil Code Section 1668)
       Cal-Murphy contends that section 7.04(a) is unenforceable under Civil Code
section 1668 (section 1668), which provides: “All contracts which have for their object,
directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful
injury to the person or property of another, or violation of law, whether willful or
negligent, are against the policy of the law.” (Italics added.)
       Under section 1668, an exculpatory provision like section 7.04 may be enforced to
preclude liability for negligence, where, as here, the contract does not involve the public
interest. (Tunkl v. Regents of University of California (1963) 60 Cal.2d 92, 96; McCarn
v. Pacific Bell Directory (1992) 3 Cal.App.4th 173, 178-179, 182; Cregg v. Ministor
Ventures (1983) 148 Cal.App.3d 1107, 1111.) An exoneration clause is not enforceable,
however, to preclude liability for an intentional wrong, gross negligence, or a violation of
a statute or regulatory law, whether or not the contract itself affects the public interest.
(Health Net of California, Inc. v. Department of Health Services (2003) 113 Cal.App.4th
224, 234-235; see Hanna v. Lederman (1963) 223 Cal.App.2d 786, 792 (Hanna)
[tenant’s negligence claim based on violation of municipal code regarding fire sprinkler
systems was not precluded by landlord’s exculpatory clause if the violation was the
proximate cause of the tenant’s loss]; Halliday v. Greene (1966) 244 Cal.App.2d 482,

                                              23
488-490 [exculpatory clause did not preclude tenant’s recovery against sublessor and
builder, who knew or should have known he built a staircase in violation of safety order];
Capri v. L.A. Fitness International, LLC (2006) 136 Cal.App.4th 1078, 1084 [no public
interest requirement for contract purporting to avoid liability for violation of law].)
       Cal-Murphy urges that it presented evidence raising a factual question as to
whether (1) NOP/Hines’s conduct violated the Mechanical Code, and (2) NOP/Hines
committed a willful injury. We begin with the standard of review.
                     a. Standard of Review
       As mentioned, the court’s decision to exclude evidence of damages in light of
section 7.04(a) was made in the context of NOP/Hines’s requests for case management
orders, which the court found akin to a motion in limine. Cal-Murphy urges that this
procedural context dictates our standard of review, such that we must accept as true not
only the allegations of the operative fifth amended complaint (as we would on a motion
for judgment on the pleadings), but also the allegations of the revised proposed sixth
amended complaint (which was never filed) and declarations submitted with respect to
other motions (which were not discussed at the case management hearing).
       For this proposition, Cal-Murphy provides the following quotation from
Dillingham-Ray Wilson v. City of Los Angeles (2010) 182 Cal.App.4th 1396, 1402-1403
(Dillingham): “When all evidence on a particular claim is excluded based on a motion in
limine, the ruling is subject to independent review as though the trial court had granted a
motion for judgment on the pleadings or, if evidence was offered, a motion for nonsuit.
[Citations.] We must disregard adverse conflicting evidence, view the record in the light
most favorable to the plaintiff and determine whether the evidence and inferences were
sufficient to support a judgment in the plaintiff’s favor. [Citation.] If any issues were
decided during an in limine proceeding without evidence, we will accept as true the
evidence referenced in the plaintiff’s arguments and offers of proof.” (Italics added.)
       Dillingham is distinguishable from the matter at hand. It is true that, at the hearing
on the requested case management orders, the court likened NOP/Hines’s set of requests
to an in limine motion. But throughout the hearing, the court and the parties treated this

                                             24
particular portion of NOP/Hines’s requests as a motion for judgment on the pleadings,
debating whether the allegations of the fifth amended complaint could be read to assert
intentional or grossly negligent conduct so as to preclude application of section 7.04(a).
Indeed, when NOP/Hines’s attorney and the court insisted that the question was what was
alleged in the fifth amended complaint, and when the court ruled that the fifth amended
complaint did not contain sufficient allegations of intentional or grossly negligent
conduct to preclude enforcement of section 7.04(a), Cal-Murphy did not contend the
court was applying the wrong standard.
       At any rate, even if Dillingham compelled us to accept as true the evidence
referenced in arguments and offers of proof at the hearing, Cal-Murphy did not make any
adequate offer of proof with specific evidence at the case management hearing.9 (See
Evid. Code, § 354.) And, to the extent Cal-Murphy now tries to rely on allegations cited
from its revised proposed sixth amended complaint, Cal-Murphy never obtained leave to
file that pleading and those allegations are not part of the case.
       We therefore review the court’s order based on the allegations of the operative
fifth amended complaint.
                     b. Violations of the Mechanical Code
       Cal-Murphy contends section 7.04(a) could not be enforced because NOP/Hines
violated provisions of the Mechanical Code. Its argument is unpersuasive.
       In the first place, Cal-Murphy did not argue that violations of the Mechanical
Code by NOP/Hines rendered section 7.04(a) unenforceable in its written opposition to
the case management order. Nor did it raise this argument at the May 11, 2012, hearing
on NOP/Hines’s motion for the case management order. Instead, Cal-Murphy’s theory
was that section 7.04(a) did not apply because NOP/Hines’s conduct was intentional or

9
        Cal-Murphy’s attorney said that he had “experts on top of experts that will testify
that you’ve got to know that you can’t do what they did” and “I’ve got evidence, I’ve
experts that are going to come in here and say that anybody who is knowledgeable about
this stuff, that they knew that this was going to happen.” But counsel did not refer by
name or specific substance to the declarations that Cal-Murphy now contends establish a
triable factual issue.
                                              25
grossly negligent (discussed post). Because Cal-Murphy did not assert the argument, it is
unavailing here.
       Furthermore, the allegations in the nuisance cause of action in the fifth amended
complaint did not actually base liability on a violation of the Mechanical Code. Instead,
the pleading asserted that NOP/Hines created a nuisance because it knew or should have
known that Mixt Greens’s equipment would emit odors and grease. Since no code
violation is alleged as the proximate cause of Cal-Murphy’s damages, section 1668 does
not bar enforcement of the exoneration clause.10 (Hanna, supra, 223 Cal.App.2d at pp.
788, 792.)
       Cal-Murphy’s resort to allegations in its revised proposed sixth amended
complaint and an argument it made to the court in seeking leave to file that pleading, is
also unavailing. The sections of the Mechanical Code cited by Cal-Murphy do not apply
to the Type II duct NOP/Hines allowed Mixt Greens to install, but to Type I hoods. And
while Cal-Murphy retorts that a Type I hood should have been installed, it also alleged
that the city approved the installation. At any rate, as discussed ante, Cal-Murphy’s
allegations in its proposed pleading are immaterial, since they are not part of the case.
                     c. Willful Injury
       Cal-Murphy next contends section 7.04(a) is unenforceable under section 1668
because NOP/Hines inflicted “willful injury to the person or property of another.”
(§ 1668.) The contention has no merit.
       In paragraph 47 of its fifth amended complaint, Cal-Murphy alleged in its
nuisance claim that NOP/Hines “knew or reasonably should have known” that Mixt

10
       The fifth amended complaint did generally mention purported violations of
ordinances and laws, not for the purpose of establishing liability, but so the emissions
might be described as a public type of nuisance. It also vaguely alleged elsewhere that
NOP/Hines knew or should have known that a different hood was required by
“applicable Codes of the City and County of San Francisco” notwithstanding the city’s
approval of the duct installation. In light of the city’s alleged approval, the pleading
alleges a determination of compliance with applicable codes, not a violation. In any
event, the nuisance cause of action was not predicated on a violation of the Mechanical
Code.
                                             26
Greens’s cooking equipment would vent offensive odors through the ducts and
accumulate oil in the ducts. Elsewhere the fifth amended complaint alleged that
NOP/Hines “knew, or reasonably should have known,” that different equipment was
required than what the city had approved. These are allegations of negligence, however,
not “willful injury” to the person or property of another for purposes of section 1668.
They do not give rise to an inference of intentional acts or gross negligence in inflicting
injury, but mere negligence in allowing Mixt Greens to install certain equipment. Nor is
there any allegation that NOP/Hines had an intent to injure or knowledge that injury was
substantially likely to occur.
       Accordingly, the court did not err in issuing its case management order that
evidence of damages should be excluded at trial or in granting NOP/Hines’s motion for
judgment on the pleadings on Cal-Murphy’s nuisance cause of action.11
       E. Summary Adjudication of Third Cause of Action (Good Faith Covenant)
       In its third cause of action, Cal-Murphy alleged numerous breaches of the
covenant of good faith and fair dealing implied in the Lease. NOP/Hines moved for
summary adjudication, which the trial court granted. Cal-Murphy now contends the court
erred as to three alleged breaches by NOP/Hines: (1) leasing space to Mixt Greens,




11
       Cal-Murphy further contends the court erred because it decided the section 7.04
issue in the context of NOP/Hines’s requests for case management orders, claiming the
use of in limine motions in lieu of other dispositive motions has been criticized. (Citing
R & B Auto Center, Inc. v. Farmers Group, Inc. (2006) 140 Cal.App.4th 327, 371 (conc.
opn. of Rylaarsdam, Act. P.J.); Amtower v. Photon Dynamics, Inc. (2008) 158
Cal.App.4th 1582, 1593-1594.) The court’s case management order was within its
authority to manage complex litigation matters. (See Code Civ. Proc., §§ 128, 187; Govt.
Code, § 68607; Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 966-967;
Hernandez v. Superior Court (2003) 112 Cal.App.4th 285, 295; Cottle v. Superior Court
(1992) 3 Cal.App.4th 1367, 1381.)
                                             27
(2) delaying installation of a blade sign for Murphy’s Deli, and (3) rejecting Murphy’s
Deli’s request to display a sandwich board.12
       The implied covenant of good faith and fair dealing is intended to assure that the
parties receive the benefit of the bargain they reached in their written agreement. It is
therefore “limited to assuring compliance with the express terms of the contract,” and it
“cannot be extended to create obligations not contemplated in the contract.” (Racine &
Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026,
1032.) Nor can the covenant be used to prohibit conduct that the written agreement
expressly permits. (Carma Developers (Cal.), Inc. v. Marathon Development
California, Inc. (1992) 2 Cal.4th 342, 374, 376 (Carma); Wolf v. Walt Disney Pictures
& Television (2008) 162 Cal.App.4th 1107, 1120 (Wolf).) With these principles in
mind, we turn to Cal-Murphy’s claims.
              1. Lease to Mixt Greens
       Cal-Murphy alleged that NOP/Hines breached the implied covenant of good faith
by leasing adjacent space in the Building to Mixt Greens, which Cal-Murphy
characterized as a competing restaurant.
       In its summary adjudication motion, NOP/Hines contended it was allowed to lease
to Mixt Greens under the terms of the Lease. NOP/Hines pointed to Lease section
3.03(c), entitled “No Exclusivity; Menu,” which stated that Cal-Murphy had no exclusive
right to operate a restaurant in the Building: “Tenant acknowledges that Tenant does not
have the exclusive right to operate a restaurant or a sundry retail establishment in the
Project or the exclusive right to sell any item which Tenant is permitted to sell
hereunder.”
       In addition, NOP/Hines pointed to sections in the Lease stating that NOP/Hines
could lease space to any tenant it wanted. Section 5.07(j) of the Lease read: “Without

12
        NOP/Hines moved for summary adjudication based on Cal-Murphy’s fourth
amended complaint. While the summary adjudication motion was pending, Cal-Murphy
filed its fifth amended complaint. The court concluded it could still rule on the summary
adjudication motion, because the fifth amended complaint did not change the relevant
allegations in the fourth amended complaint. No error is asserted in this regard.
                                             28
liability to Tenant, Landlord shall have the right to offer and to lease space in the
Building, or in any other property, to any party, including without limitation to any party
with whom Tenant desires to negotiate, concerning assignment or subletting the Leased
Premises, or any portion thereof.” (Italics added.) And section 1.27 referenced
NOP/Hines’s right to lease to any tenant of its choice with the phrase “without Limiting
Landlord’s right to lease any portion of the Building to a tenant of Landlord’s choice.”
(Italics added.)
       Cal-Murphy opposed the summary adjudication motion, contending the Lease
could be construed to bar NOP/Hines from leasing to a competitor in light of extrinsic
evidence considered under the parol evidence rule and the doctrine of practical
construction. Specifically, Cal-Murphy offered evidence of statements made on behalf of
NOP/Hines, during the negotiation of the Lease, that NOP/Hines did not intend to install
a competitive operation and did not grant an exclusivity clause because it wanted to be
able to install a complementary restaurant. In addition, Cal-Murphy offered evidence of
NOP/Hines’s conduct after the execution of the Lease, contending it reflected an
understanding that NOP/Hines could lease only to complementary restaurants: Karen
Hoke, the broker attempting to find a tenant for the space next to Mixt Greens, had
targeted a sushi restaurant as a complementary operation and turned down a couple of
prospective tenants because their menu overlapped with Murphy’s Deli; and there was an
inquiry within NOP/Hines as to the potential for installing a sandwich and coffee
operation next to Murphy’s Deli.
       The trial court provisionally considered the extrinsic evidence, but ultimately
concluded the Lease was not reasonably susceptible to the interpretation Cal-Murphy
asserted. Accordingly, it granted summary adjudication on Cal-Murphy’s claim for
breach of the good faith covenant in leasing to Mixt Greens.
       The court did not err. As we shall explain, the Lease did not forbid NOP/Hines
from leasing to a competitor of Murphy’s Deli, the evidence of statements concerning
NOP/Hines’s intent to lease to a complementary restaurant did not render the provisions


                                             29
of the Lease ambiguous, and attempts to lease to a complementary restaurant did not
reflect an understanding that NOP/Hines could only lease to a complementary restaurant.
                     a. The Lease to Mixt Greens Was Permitted by the Lease
       Sections 3.03(c) and 5.07(j) of the Lease are express and unambiguous. Cal-
Murphy had no right to operate the only restaurant in the Building, and NOP/Hines
could lease space to any tenant it wanted (as confirmed under the assignment and
subletting provisions of section 5.07). At the very least, no provision of the Lease
precluded NOP/Hines from leasing to a competitor of Murphy’s Deli or required
NOP/Hines to lease only to a complementary restaurant. Because the implied covenant
of good faith cannot create an obligation not contemplated by the contract, or prohibit
conduct the written agreement permits, Cal-Murphy has no cause of action for breach of
the covenant based on leasing space to Mixt Greens. (See Carma, supra, 2 Cal.4th at
p. 374; Stockton Dry Goods Co. v. Girsh (1951) 36 Cal.2d 677, 680-681 [a covenant
restricting a lessor’s use of retained property must be shown by clearly stated intention].)
                     b. Parol Evidence Did Not Support a Contrary Interpretation
       When parties offer two plausible interpretations of the contractual language, the
language is ambiguous and parol evidence is admissible to aid in its interpretation. (Casa
Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 343.) In some instances, parol evidence
may render an ostensibly unambiguous contract ambiguous. (Abers v. Rounsavell (2010)
189 Cal.App.4th 348, 356-357 [ambiguity exists only “when contractual language
reasonably may be susceptible to more than one interpretation based upon the offered
evidence regarding the material facts”].) If the parol evidence is in conflict, there is a
question of fact that precludes summary judgment. (WYDA Associates v. Merner (1996)
42 Cal.App.4th 1702, 1710.)
       Here, the extrinsic evidence proffered by Cal-Murphy did not make the Lease
ambiguous. The evidence that NOP/Hines expressed an intent to lease to a
complementary establishment, and not to a competitor of Murphy’s Deli, was simply a
statement of what NOP/Hines intended to do, not what the Lease required it to do.
There was no evidence that NOP/Hines made the statements based on its understanding

                                              30
of the Lease, believed or represented it was precluded by the Lease from leasing to
whomever it wanted, or thought the Lease language really meant that NOP/Hines could
lease only to a complementary operation. Simply put, despite the evidence Cal-Murphy
presented, the Lease is not susceptible of the meaning Cal-Murphy asserts.
                       c. The Practical Construction Doctrine Does Not Apply
         Under the practical construction doctrine, the parties’ acts after signing the
contract, but before a controversy has arisen, may be considered in discerning their
understanding of the contract language. (Warner Constr. Corp. v. City of Los Angeles
(1970) 2 Cal.3d 285, 296-297.)
         Here, the practical construction doctrine does not assist Cal-Murphy. In the first
place, the doctrine cannot be invoked where the contract is unambiguous and the
proffered evidence does not support an interpretation to which the contract is reasonably
susceptible. (See Crestview Cemetery Assn. v. Dieden (1960) 54 Cal.2d 744, 754.)
         Moreover, Cal-Murphy’s evidence does not show the parties’ construction of the
Lease. Although NOP/Hines was looking for a tenant with a menu complementary to the
menu of Murphy’s Deli, there is no evidence it did so based on an interpretation of the
Lease, or that NOP/Hines believed it was required under the Lease to find a
complementary restaurant. Brownstone said, “[W]e had hoped to find a food service that
would . . . [¶] . . . complement the food service that Murphy’s provided, so that the
tenants would have a variety of food to choose from.” (Italics added.) And while broker
Hoke sought a complementary restaurant for the space adjacent to Murphy’s Deli, there is
no evidence she felt constrained to do so by her understanding of the Lease terms.
         The court did not err in granting summary adjudication as to the Mixt Greens
lease.
                2. Blade Sign
         Cal-Murphy also alleged that NOP/Hines breached the implied covenant of good
faith by delaying the installation of a blade sign that advertised Murphy’s Deli.
Specifically, it alleged that in January or February 2006, NOP/Hines’s building manager
(Brownstone) advised Cal-Murphy’s operations manager (Katwan) that NOP/Hines

                                               31
would install a blade sign at its own cost. This statement, Cal-Murphy alleged, modified
Lease section 4.04 (which gave the tenant a right to a sign on the exterior of the Building,
subject to the Landlord’s approval, at the tenant’s cost), by an “executed oral agreement.”
Cal-Murphy further alleged that NOP/Hines obtained artwork from Cal-Murphy, granted
approval, and notified Cal-Murphy in February 2007 that the sign would be installed
within four weeks, but did not install the sign until April 2008. The sign was installed at
NOP/Hines’s expense.
       In its motion for summary adjudication, NOP/Hines argued there was no breach of
the covenant of good faith implied in the Lease, since section 4.04 pertained to signs
installed by Cal-Murphy, not NOP/Hines. Furthermore, pursuant to section 7.14, the
Lease could not be modified orally, and in any event the Lease was not modified by an
executed oral agreement.
       In opposition to the summary adjudication motion, Cal-Murphy argued there was a
triable issue whether the delay in installing the blade sign deprived Cal-Murphy of its
right to a sign under section 4.04, and NOP/Hines waived or was estopped to rely on the
condition that Cal-Murphy pay for the sign or provide the design. Cal-Murphy presented
evidence to support the facts alleged in its pleading, as well as a declaration from Katwan
that NOP/Hines declined installation of the sign in 2007 unless Cal-Murphy paid for it,
but relented later that year.
       The court determined that Cal-Murphy’s evidence of waiver and estoppel was
insufficient to modify section 4.04, and Cal-Murphy had no claim for breach of the
implied covenant based on a delay in installing the blade sign.
       The grant of summary adjudication was not erroneous. As we discuss next, the
Lease did not require NOP/Hines to install any sign for Cal-Murphy at NOP/Hines’s
expense, the Lease permitted modification only in writing, and Cal-Murphy’s evidence




                                            32
did not create a triable issue of material fact that it could recover under the Lease for
NOP/Hines’s delay in installing a sign at NOP/Hines’s expense.13
                     a. The Lease Did Not Compel NOP/Hines to Install a Blade Sign
       Section 4.04 of the Lease, entitled “Graphics and Signage,” gave Cal-Murphy a
right to install an exterior sign, at its own expense, subject to NOP/Hines’s approval.
Section 4.04 provided in relevant part: “Tenant shall have the right to install, at Tenant’s
sole cost and expense, a sign on the exterior surface of the front entry of the Leased
Premises with Tenant’s trade name of such design, size and color, and in such location on
the Leased Premises as approved by Landlord in advance.” (Italics added.) Section 4.04
does not provide that NOP/Hines would design a blade sign for Cal-Murphy, install it, or
pay for it.
       Because the Lease does not require NOP/Hines to install a sign for Cal-
Murphy at its own expense, and the implied covenant of good faith can neither create
an obligation not contemplated by the Lease or prohibit conduct the Lease permits,
Cal-Murphy has no cause of action for breach of the implied covenant based on
NOP/Hines’s installation of its own designed sign for Cal-Murphy.
                     b. Cal-Murphy’s Reliance on Civil Code Section 1698 is Misplaced
       Cal-Murphy contends that, even though section 7.14 precluded an oral
modification of the Lease, Civil Code section 1698 (section 1698) permits an oral
modification by waiver or estoppel, and Cal-Murphy presented sufficient evidence to
create a “triable issue that NOP/Hines waived or are estopped to rely on the provisions in
the Lease that Cal-Murphy must pay for any sign.”
       At the outset, we point out that section 1698 does not assist Cal-Murphy. Section
1698 provides that a contract in writing may be modified by a contract in writing, an
13
        Cal-Murphy does not allege or contend that NOP/Hines breached a separate oral
agreement to install a blade sign for Cal-Murphy, at NOP/Hines’s expense, in a timely
manner, independent from the provisions of the Lease. Instead, it contends that NOP/Hines
is precluded by waiver or estoppel from asserting rights under the Lease, which thereby
modifies the Lease, such that NOP/Hines’s delay in installing the sign breached the implied
covenant under the Lease (as opposed to any express term of the Lease), resulting in a loss of
customers.
                                             33
executed oral agreement, or an oral agreement supported by new consideration (unless
the written contract provides otherwise). (§ 1698, subds. (a)-(c).) None of those
provisions applies here.14 Instead, Cal-Murphy relies on subdivision (d) of the statute,
which reads: “Nothing in this section precludes in an appropriate case the application of
rules of law concerning estoppel . . . [or] waiver of a provision of a written contract, or
oral independent collateral contracts.” (Italics added.) In other words, although section
1698 may not bar the application of waiver and estoppel in an otherwise appropriate
situation, it does nothing on its own to establish the waiver and estoppel Cal-Murphy
asserts. We therefore turn to Cal-Murphy’s evidence.
                     c. Evidence of Waiver
       Waiver is the voluntary relinquishment of a known right. (See, e.g., Utility
Audit Co., Inc. v. City of Los Angeles (2003) 112 Cal.App.4th 950, 959 [“Waiver
requires an existing right, benefit, or advantage, actual or constructive knowledge of
the right’s existence, and either an actual intention to relinquish it or conduct so
inconsistent with any intent to enforce the right as to induce a reasonable belief that it
has been relinquished”].)
       Here, Cal-Murphy presented no evidence from which a reasonable trier of fact
could conclude that NOP/Hines intended to waive its rights under section 4.04 of the
Lease. In offering to install a sign for Cal-Murphy at its own cost, NOP/Hines created
a separate arrangement for signage; there is no evidence that it was intending to waive
its right under section 4.04 not to pay for a sign that Cal-Murphy would seek to install.
       Furthermore, even if NOP/Hines had waived its right under section 4.04 to
require Cal-Murphy to pay for a sign that Cal-Murphy sought to install, Cal-Murphy



14
       Cal-Murphy did not pursue its argument in the fourth amended complaint that the
Lease was modified by an executed oral agreement. The fifth amended complaint
alleged that NOP/Hines either waived section 4.04 insofar as it required Cal-Murphy to
pay for, design, or obtain approval for the blade signs, or was estopped to deny that the
Lease was modified to eliminate any requirement that Cal-Murphy pay for, design, or
obtain approval for the sign.
                                              34
never sought to install one of its own signs. Instead, it opted to wait until NOP/Hines
installed the blade sign at NOP/Hines’s own expense.
       Lastly, even if NOP/Hines had waived its right under section 4.04 to require
Cal-Murphy to pay for any Murphy’s Deli sign—whether installed by Cal-Murphy or
installed by NOP/Hines—NOP/Hines, not Cal-Murphy, paid for the sign. In short, any
factual issue over a possible waiver does not support Cal-Murphy’s claim for breach of
the implied covenant of good faith.
                     d. Evidence of Estoppel
       Similarly, Cal-Murphy’s estoppel evidence does not establish a triable issue of
material fact. Even if NOP/Hines was estopped from asserting its right under section
4.04 of the Lease not to pay for a sign, section 4.04 only pertained to signage that Cal-
Murphy might choose to install, and Cal-Murphy never attempted to install a sign.
And even if Cal-Murphy’s evidence was sufficient to estop NOP/Hines from claiming
it did not have to pay for the installation of any sign—including the blade sign that
NOP/Hines was making—it is undisputed that NOP/Hines did pay for the blade sign.
       Nor is there any basis for concluding, under a slightly different approach, that
NOP/Hines should be estopped from denying that the Lease was modified to eliminate
the requirement that Cal-Murphy pay for, design, or obtain approval for the sign.
There is no evidence that NOP/Hines acted in a manner that would justifiably lead
Cal-Murphy to believe that the Lease was being modified in that regard.
       The court did not err in granting summary adjudication as to the blade sign.
       3. Sandwich Board
       Cal-Murphy alleged that NOP/Hines breached the implied covenant of good faith
and fair dealing by permitting it to display a sandwich board for only five weeks or so in
April and May 2005, while later allowing Mixt Greens to display one for a longer period.
       In its motion for summary adjudication, NOP/Hines denied liability based on
Lease provisions that gave it discretion to allow such a sign or not. Specifically,
NOP/Hines pointed to a part of section 4.04, which read: “Tenant shall not, without the
prior written consent of Landlord (which may be given or withheld in the sole discretion

                                             35
of Landlord), place or permit to be placed, . . . any sign, advertising material or lettering
upon the exterior of the Leased Premises.” (Italics added.) In addition, section 2.02 of
the Lease provided that, subject to certain exceptions, “Landlord shall have the sole and
exclusive right to possession and control of the Common Areas and all other areas of the
Project outside the Leased Premises.” Given this discretion, NOP/Hines argued, Cal-
Murphy could not state a claim based on a breach of the implied covenant of good faith
as a matter of law.
       In opposing summary adjudication, Cal-Murphy urged that NOP/Hines’s
discretion under section 4.04 applied only to signs on the exterior or interior surfaces of
the Building (not to a sandwich board on the sidewalk), and section 2.02 allowed
NOP/Hines to approve the sandwich board. Cal-Murphy also presented the following
evidence: building manager Brownstone told the on-site manager for Murphy’s Deli
(Dudum) that Murphy’s Deli could use a sandwich board; Dudum had a sandwich board
made and showed it to another building manager, who allowed Cal-Murphy to display the
sign for roughly five weeks in April and May 2005; and in or after April 2008 Mixt
Greens used a sandwich board for a longer period.
       The court granted summary adjudication on the ground that, in light of section
7.14 requiring Lease modifications to be in writing, extrinsic evidence did not create a
material triable issue concerning the signage provisions.
                      a. No Breach of the Implied Covenant in the Lease
       Where a contract expressly grants a party sole discretion over a decision, the
exercise of that discretion is not limited by the implied covenant of good faith. (Thrifty
Payless, Inc. v. Mariners Mile Gateway, LLC (2010) 185 Cal.App.4th 1050, 1062
[“[T]he implied covenant cannot be used to limit or restrict an express grant of
discretion to one of the contracting parties”]; Third Story Music, Inc. v. Waits (1995) 41
Cal.App.4th 798, 808 [“[C]ourts are not at liberty to imply a covenant directly at odds
with a contract’s express grant of discretionary power”]; Wolf, supra, 162 Cal.App.4th
at pp. 1120-1123 [party’s right to license franchise as it “ ‘saw fit’ ” is not limited by
implied covenant, because implied covenant cannot limit unfettered discretion granted

                                              36
by contract]; cf. Carma, supra, 2 Cal.4th at p. 372 [noting that party must exercise
discretionary power in “good faith”; that is, a good faith pursuit of its rights and
objectives under the contract].)
       Here, the Lease granted NOP/Hines sole discretion to decide whether, and to what
extent, the likes of a sandwich board would be allowed on the premises: section 4.04
granted NOP/Hines authority to approve or reject, within its “sole discretion,” any sign
“upon the exterior of the Leased Premises”; and section 2.02 gave NOP/Hines the “sole
and exclusive right” to control common areas and areas “outside” the leased premises.
Cal-Murphy asked NOP/Hines’s permission to display a sandwich board and
NOP/Hines decided to grant permission for about five weeks. The implied covenant
cannot be invoked to limit NOP/Hines’s discretionary choice under these facts.
                     b. No Triable Issue of Material Fact
       Cal-Murphy tries to create a triable issue by contending section 4.04 was modified
by the parties’ oral agreement, NOP/Hines is estopped from denying that it approved the
installation of a sandwich board, and NOP/Hines waived the Lease provisions relevant to
sandwich boards.
       Cal-Murphy’s arguments lack merit. In the first place, akin to our analysis ante
regarding the blade sign, we find no triable issue concerning a modification of section
4.04 or a waiver or estoppel precluding reliance on its terms: there is no evidence that
NOP/Hines intended to relinquish its discretionary authority under the Lease with
respect to Cal-Murphy’s proposed sandwich board. Moreover, even if NOP/Hines’s
statements to Dudum meant NOP/Hines was precluded by waiver or estoppel from
withholding approval of the sandwich board, the result would simply be that NOP/Hines
was entitled to display the sandwich board consistent with NOP/Hines’s statements: that
is, in April to May 2005. And that was precisely what Cal-Murphy was allowed to do.
       Accordingly, the court did not err in granting summary adjudication on Cal-
Murphy’s third cause of action for breach of the implied covenant of good faith and fair
dealing. As this exhausts Cal-Murphy’s attacks on the judgment entered in favor of
NOP/Hines, the judgment will be affirmed.

                                             37
        F. Dismissal of Action Against MGR
        The trial court sustained MGR’s demurrer to the fifth amended complaint on the
ground that no viable cause of action was alleged against it, and denied leave to amend.
The court subsequently denied Cal-Murphy’s motion for relief from that order. Cal-
Murphy contends the court erred, both in denying leave to amend and in denying relief.
              1. Sustaining Demurrer Without Leave to Amend
                      a. Background
        In February 2012, four years after commencing this action, Cal-Murphy
substituted MGR for Doe One as to the fifth, sixth, seventh and ninth causes of action in
the fifth amended complaint as successor to Mixt Greens.
        On March 28, 2012, MGR filed a demurrer to the causes of action asserted against
it in the fifth amended complaint. A hearing was set for May 7, 2012. Cal-Murphy did
not file any opposition to the demurrer.
        Meanwhile—as we have described ante—in April 2012 the court granted
NOP/Hines’s motion for judgment on the pleadings as to the ninth cause of action
(trespass by grease) and advised that it would consider Cal-Murphy’s amendment of that
cause of action on May 7, 2012. On April 23, 2012, Cal-Murphy filed a declaration by
its attorney, entitled “Declaration of Herbert W. Yanowitz In Connection With Proposed
Sixth Amended Complaint,” attaching a proposed sixth amended complaint that
contained not just an amendment to the trespass claim, but new allegations as to MGR as
well.
        On April 30, 2012, MGR filed a reply brief asserting that its demurrer should be
sustained in light of Cal-Murphy’s failure to file any opposition. MGR also argued that
leave to amend should not be granted, in light of deficiencies in the proposed sixth
amended complaint, its novel allegations, its failure to allege any viable cause of action,
and the burden and prejudice it would cause in the case.
        At the hearing on MGR’s demurrer on May 7, 2012, the court announced its
tentative ruling: “In light of failure to file an opposition, the demurrers to the Fifth
Amended Complaint are all sustained without leave to amend.”

                                              38
       Cal-Murphy’s attorney, Herbert Yanowitz, argued that he did not file an
opposition to the demurrer because (1) he thought Cal-Murphy could file an amendment
as a matter of right; (2) filing an amended complaint would be preferable to filing an
opposition to the demurrer because it “saves a step and saves paper”; and (3) the
proposed sixth amended complaint was in the record, submitted in connection with the
proceedings on the ninth cause of action for trespass. Yanowitz also asserted his mistake
should be excused.
       The court pointed out that Cal-Murphy was not entitled to amend the fifth
amended complaint as of right, and in any event Yanowitz did not file any amendment to
the claims against MGR (and could not have because he needed leave to file a sixth
amended complaint). The court further noted that Yanowitz did not make a mistake in
this regard, but a “strategic volitional decision based on saving paper or whatever it was,”
which did not justify the failure to file a response to the demurrer. The court then
discussed the interests of justice: “All of the parties have a right to justice in this
courtroom. And all of the parties have a right to an efficient articulation of what the
claims are against them and a reasonable progress towards the resolution of those, free of
undue expense and . . . time.” The court added: “As a matter of fact, we have discussed
on the record my concerns that many of the claims that you might have against [MGR]
don’t belong in this case. And also my concern that this case is going to go to trial soon
or some other disposition soon, and that we will not have the never ending story of your
continuing claims against these people.” Yanowitz proceeded to describe the new facts
in the proposed sixth amended complaint, but he did not demonstrate how they would
establish a viable claim against MGR.
       The court ruled that the demurrers would be sustained without leave to amend and
issued a written order that same day. The court thereafter entered a dismissal of MGR.
                      b. No Abuse of Discretion
       Cal-Murphy does not dispute that the fifth amended complaint failed to state a
cause of action against MGR. Instead, it contends the court erred in not granting Cal-
Murphy leave to amend the pleading as to MGR.

                                               39
       We review a denial of leave to amend for an abuse of discretion. (Debro v.
Los Angeles Raiders (2001) 92 Cal.App.4th 940, 946.) To prevail on appeal, an appellant
must usually demonstrate a reasonable possibility that the defects in the complaint can be
cured by amendment. (E.g., Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074,
1081.) Thus, Cal-Murphy must show how the amended complaint could further be
amended and how, as so amended, the pleading would state a cause of action. (Buller v.
Sutter Health (2008) 160 Cal.App.4th 981, 985-986.)
       The court did not abuse its discretion in denying leave to amend. In the first place,
Cal-Murphy did not demonstrate that it could allege a viable claim against MGR. There
was no filing in the demurrer proceeding setting forth a basis for its new allegations; and
even after MGR argued in its reply papers that leave to amend should not be granted due
to the substantive deficiencies of the proposed sixth amended complaint and its
prejudicial impact on the proceedings, Cal-Murphy did not explain at the demurrer
hearing how its proposed sixth amended complaint stated a cause of action against MGR.
       Furthermore, it became apparent at the demurrer hearing that Cal-Murphy’s
proposed amendment of the fifth amended complaint as to MGR would be a sixth
amended complaint affecting multiple parties. As such, granting leave to amend as to
MGR would not have been akin to the initial amendment liberally permitted early in a
lawsuit. Instead, it implicated concerns for other parties and the case overall. As
discussed ante, it was not an abuse of discretion to conclude that the timing of the
proposed amendment was unduly prejudicial.
       Cal-Murphy contends the court sustained the demurrer without leave to amend
solely because Cal-Murphy had not filed an opposition, and did not consider the
allegations in the proposed sixth amended complaint or whether Cal-Murphy could cure
the deficiencies in its fifth amended complaint. Not so. Given the court’s comments at
the hearing as a whole, the better interpretation is that the court declined to grant leave to
amend because, due to the absence of any opposition being filed, no argument had been
made in the demurrer proceeding as to the propriety of any proposed amendment, and the


                                              40
court’s concerns had not been addressed.15 In any event, we may uphold the court’s
decision on any valid ground, whether the court expressly relied on it or not. (D’Amico,
supra, 11 Cal.3d at pp. 18-19.)
       Lastly, Cal-Murphy argues that the trial court did not correctly address the
question of prejudice: it claims NOP/Hines was “effectively out of the case” and the only
new discovery would be related to “successor liability.” While Cal-Murphy may have
had such an argument for granting leave to amend, it does not establish that the trial court
abused its discretion in ruling otherwise.
              2. Denial of Motion for Relief
       Cal-Murphy sought relief from the order sustaining MGR’s demurrer without
leave to amend (and the dismissal of MGR) under subdivision (b) of Code of Civil
Procedure section 473 (section 473). That statute gives the court discretion to provide
relief from an order in certain circumstances, and mandates relief in others.
                     a. Background
       After sustaining MGR’s demurrer but before receiving Cal-Murphy’s section 473
motion, the court held a continued hearing on Cal-Murphy’s request to file its proposed
sixth amended complaint. The court remarked that the proposed pleading appeared
inappropriate, but gave Cal-Murphy another chance. On May 15, 2012, Cal-Murphy
filed a declaration of its attorney, Herbert Yanowitz, attaching a revised proposed
pleading. As discussed ante, the court denied Cal-Murphy’s motion to file the revised
proposed sixth amended complaint on May 18.

15
        At the outset of the demurrer hearing, the court indicated the tentative ruling was
“in light of [the] failure to file an opposition,” and at the end of the hearing it announced
that the tentative ruling would stand. But during the demurrer hearing, the court also
spoke at length regarding the interests of justice and the court’s substantive concerns
about Cal-Murphy’s claims. Similarly, at the hearing on the ensuing motion for relief
under Code of Civil Procedure section 473, the court suggested the demurrer had been
sustained without leave to amend due to Cal-Murphy’s inappropriate claims, but later at
the hearing indicated it was “for failure to file a response.” These statements are not in
conflict, but signal that the demurrer was sustained without leave to amend because there
was no opposition filed and therefore no demonstration of why leave to amend should be
granted.
                                             41
       On May 24, 2012, Cal-Murphy filed its section 473 motion for relief from the
order sustaining MGR’s demurrer to the fifth amended complaint without leave to amend
(and the judgment of dismissal), claiming they were taken due to mistake, inadvertence,
surprise or excusable or inexcusable neglect. In a declaration, attorney Yanowitz averred
that he thought he could amend the fifth amended complaint as to MGR without court
permission pursuant to Code of Civil Procedure section 472, elected not to file an
opposition to the demurrer, but filed a “Declaration . . . in Connection With Proposed
Sixth Amended Complaint,” which attached the proposed pleading with claims against all
parties.16
       The hearing on Cal-Murphy’s section 473 motion took place on June 18, 2012.
The court noted its earlier determination that the proposed sixth amended complaint was
not appropriate to file: it contained many matters the court had already decided; other
claims were inappropriate to add to the case, at least so late in the proceedings; and the
claims against MGR went beyond merely adding a successor entity as a Doe defendant.
In light of this history, the court found, it was not a mistake or inadvertence that caused
the demurrer to the fifth amended complaint to be sustained, but the attempt to add MGR
into the case with inappropriate claims and to file a sixth amended complaint that did not
properly reflect prior court orders.
       Cal-Murphy insisted that the demurrer had actually been sustained without leave
to amend because no opposition was filed, and there was no discussion at the demurrer
hearing of the impropriety of the claims in the proposed sixth amended complaint. The
court noted that Cal-Murphy had not attached a new proposed pleading to its request for
section 473 relief, but declarations attaching the revised proposed sixth amended
complaint that the court had already found inappropriate. Cal-Murphy confirmed it was
standing pat on this rejected pleading.



16
       The opposition to the demurrer was due on April 24; Yanowitz filed his
declaration and proposed sixth amended complaint on April 23, but that was because he
had 10 days from the ruling on the ninth cause of action to file it.
                                             42
       The court ruled: “The motion for relief under CCP Section 473 is denied. The
claimed mistake, inadvertence, surprise or excusable neglect did not cause the entry of
the order. What caused it was the failure to have, despite repeated attempts to do so, and
my repeated willingness to give you an opportunity to provide a viable mechanism [for
going] forward. That would be a Sixth Amended Complaint. [¶] In addition, the
attachment of what I had previously stated was not sufficient to your declaration filed in
connection with this motion, filed on May 23rd, 2012. That is your present declaration
attaching your prior declaration, does not satisfy the requirements of CCP Section 473 to
attach a copy of what it is you want to have filed.”
                     b. No Error in Denying Discretionary Relief
       The discretionary portion of section 473 reads: “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 . . . .”
(§ 473, subd. (b), italics added.) “Excusable neglect” arises if “ ‘a reasonably prudent
person under the same or similar circumstances’ might have made the same error.”
(Solv-All v. Superior Court (2005) 131 Cal.App.4th 1003, 1007 (Solv-All).)
       The court acted within its broad discretion in declining relief based on the
purported mistake or excusable neglect of Cal-Murphy’s attorney. Cal-Murphy’s
argument, essentially, was that the demurrer was sustained without leave to amend due to
Yanowitz’s failure to file an opposition, and the opposition was not filed because
Yanowitz thought an amended complaint as to MGR could be filed as of right pursuant to
Code of Civil Procedure section 472 (section 472). For several reasons, this argument
was meritless.
       First, Yanowitz’s reliance on section 472 did not constitute excusable neglect or
mistake. Section 472 provides: “Any pleading may be amended once by the party of
course, and without costs, at any time before the answer or demurrer is filed, or after
demurrer and before the trial of the issue of law thereon, by filing the same as amended

                                             43
and serving a copy on the adverse party.” But Cal-Murphy did not file any amendment
by the time of the hearing on MGR’s demurrer—and, as Yanowitz knew, he could not
have filed (and did not file) the proposed sixth amended complaint because he needed
leave of court. Section 472, therefore, had no possible application. Furthermore, nothing
in section 472 or the Rutter Group text Yanowitz purportedly reviewed indicates that a
sixth amended complaint can be filed without leave of court after the hearing on a
demurrer, and no reasonable attorney would reach that conclusion.17
       Second, Yanowitz’s view of section 472 did not cause Cal-Murphy’s failure to file
an opposition to the demurrer. To the contrary, Yanowitz averred in his declaration that
he opted not to file an opposition based on his concerns of efficiency: “In view of the
absence of charging allegations in the Fifth Amended Complaint, I believed that there
was no legitimate basis for the Plaintiff to oppose MGR’s demurrer. I believed that it
would be more efficient merely to file the [Proposed] Sixth Amended Complaint against
MGR, NOP/Hines, and Mixt Greens, rather than to file one pleading entitled ‘Opposition
to Demurrer,’ to which I would file a separate proposed further amended complaint that
applied to MGR only, and a separate pleading with the proposed amendments vis-à-vis
NOP/Hines and Mixt Greens. [¶] Accordingly, I did not file any opposition to the
demurrer.” (Italics added; paragraph numbers omitted.)
       Third, Yanowitz’s view of section 472 did not justify failing to file an opposition
to the demurrer—or at least some written request for leave to amend and explanation of
the propriety of the amendment—in the specific context of the demurrer hearing.

17
       The Rutter Group passage notes: “[I]t has been argued that, where a demurrer has
been sustained with leave to amend and plaintiff files an amended complaint, the
amended complaint may also be amended once without leave of court before defendant
answers or demurs. [¶] However, there is no known case permitting this. In addition, the
statutory wording—‘Any pleading may be amended once’—may be interpreted to
preclude an amendment to an amended pleading.” (Weil & Brown, Cal. Practice Guide:
Civil Procedure Before Trial (The Rutter Group 2013), § 6.610.5, p. 6-156, italics in
original.) Besides the obvious cautionary language in this passage, a competent reading
discloses that even this broad interpretation of section 472 had absolutely nothing to do
with the situation confronting Yanowitz, since it discusses amending the pleading “before
defendant answers or demurs.” (Italics added.) MGR had already filed its demurrer.
                                            44
Regardless of his take on section 472, there was no reason not to file a specific document
with a title that would lead the court to consider it along with the demurrer.
       Finally, as discussed ante, it was ultimately not Cal-Murphy’s failure to file an
opposition, but the broader failure to establish any right or good cause to amend, that
resulted in the demurrer being sustained without leave to amend. The court was well
within its discretion to deny relief under section 473.
                      c. No Error in Denying Relief Under Mandatory Provisions
       The mandatory relief provision in section 473 reads as follows: “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
against his or her client, and which will result in entry of a default judgment, 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.” (Italics added.) Unlike the discretionary provision in
the statute, the neglect referred to in this mandatory provision need not be excusable.
(§ 473, subd. (b).)
       Cal-Murphy argues it was entitled to relief because its attorney declared that the
failure to file an opposition to the demurrer occurred as a result of his neglect, without
Cal-Murphy’s knowing participation, and the demurrer was sustained without leave to
amend as a result.
       Assuming, without deciding, that the mandatory provisions of section 473 might
theoretically afford relief from a dismissal obtained after a demurrer is sustained without




                                             45
leave to amend,18 we agree with the trial court that the dismissal entered against Cal-
Murphy “was not in fact caused by [its] attorney’s mistake, inadvertence, surprise, or
neglect.” (§ 473, subd. (b).) As mentioned ante, the dismissal was not due to counsel’s
erroneous view of section 472, but due to the failure to show by written opposition any
viable basis for amendment; and the failure to file a written opposition reflected a tactical
decision.19 (See Jerry’s Shell, supra, 134 Cal.App.4th at pp. 1069-1074; Pagarigan v.
Aetna U.S. Healthcare of California, Inc. (2007) 158 Cal.App.4th 38, 46.)
       In any event, Cal-Murphy confirmed at the section 473 hearing that its proposed
amendment to the fifth amended complaint as to MGR was its revised proposed sixth
amended complaint—which the court had already ruled to be inappropriate—thus making
it patently clear that granting relief under section 473 would lead only to the futility of a
sixth amended complaint the court had already rejected. Accordingly, there was no basis
for granting relief. (See Page v. Insurance Co. of North America (1969) 3 Cal.App.3d
121, 130; Bethlahmy v. Customcraft Industries, Inc. (1961) 192 Cal.App.2d 308, 310.)




18
        The parties dispute this point, citing cases they contend lead to contrary
conclusions. (E.g., Jerry’s Shell v. Equilon Enterprises, LLC (2005) 134 Cal.App.4th
1058, 1069-1074 (Jerry’s Shell); English v. IKON Business Solutions, Inc. (2001) 94
Cal.App.4th 130, 148; Avila v. Chua (1997) 57 Cal.App.4th 860, 868.) But it cannot be
said that the order sustaining the demurrer without leave to amend in this case was
tantamount to a default: Cal-Murphy’s counsel appeared at the demurrer hearing and had
the opportunity to argue the merits of whether leave to amend should be granted.
19
        The cases on which Cal-Murphy relies are distinguishable in this regard. (SJP
Limited Partnership v. City of Los Angeles (2006) 136 Cal.App.4th 511, 516-517
[reversing dismissal after party failed to appear because its attorney had advised that no
appearance was necessary and a dismissal could not be entered]; Solv-All, supra, 131
Cal.App.4th 1003, 1009 [reversing entry of default against a defendant due to the
attorney’s mistaken belief that the parties were on the verge of a settlement and the
plaintiff did not expect a response].)
                                              46
       Cal-Murphy fails to establish a prejudicial abuse of discretion.20
       G. Demurrer and Dismissal as to Individual Plaintiffs
       The trial court sustained NOP/Hines’s demurrer as to the Individual Plaintiffs on
the ground they were not real parties in interest. Appellants contend this was error.
       “Every action must be prosecuted in the name of the real party in interest, except
as otherwise provided by statute.” (Code Civ. Proc., § 367.) A real party in interest is
one who possesses the right sued upon. (Buckland v. Threshold Enterprises, Ltd. (2007)
155 Cal.App.4th 798, 813, disapproved on another ground in Kwikset Corp. v. Superior
Court (2011) 51 Cal.4th 310, 337; see Chao Fu, Inc. v. Chen (2012) 206 Cal.App.4th
48, 57 [“ ‘real party in interest is one who has “an actual and substantial interest in the
subject matter of the action and who would be benefited or injured by the judgment in
the action” ’ ”].) “Where the complaint shows the plaintiff does not possess the
substantive right or standing to prosecute the action, ‘it is vulnerable to a general
demurrer on the ground that it fails to state a cause of action.’ ” (Schauer v. Mandarin
Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 955.)
       The pleadings established that the Individual Plaintiffs were not the real parties in
interest. The fifth amended complaint alleged that they subleased the premises from
MDF in March 2004, helped to form Cal-Murphy in October 2004, and then “transferred
and assigned the Sublease to [ ] Cal-Murphy,” such that they no longer had any rights to


20
       In explaining its ruling at the section 473 hearing, the court also stated that Cal-
Murphy had not satisfied the statutory requirement of attaching a copy of what Cal-
Murphy “wanted to have filed.” Cal-Murphy protests that Yanowitz filed a declaration in
support of the section 473 motion, that this declaration attached his prior declarations,
and that these prior declarations in turn attached Cal-Murphy’s two proposed sixth
amended complaints. However, in light of the entirety of the court’s remarks at the
hearing, the point was that Cal-Murphy had not attached a viable pleading as the
amendment it wanted to have filed, particularly since earlier in the hearing the court had
asked counsel to confirm that Cal-Murphy was relying on the proposed sixth amended
complaint that the court had already rejected. At any rate, whether or not the court was
correct about Cal-Murphy’s failure to comply with the statutory requisite of filing a
proposed pleading, the court did not abuse its discretion in denying the section 473
motion for the reasons stated in the text.
                                              47
enforce the Lease. Moreover, the Individual Plaintiffs’ attorney, in a declaration
accompanying the opposition to the demurrer, admitted they “are not seeking any relief in
this case” and “have not contended that they have an interest in any relief sought,” but
were named in the lawsuit because they were in the chain of title and “may become
parties.” They further admit in their appellate briefing that they would benefit only
“indirectly from any recovery of monetary damages by Cal-Murphy or the abatement of
the nuisances and trespass to the extent that Cal-Murphy’s property rights or its
profitability would be enhanced.”
       Individuals who claim an indirect benefit as members of a limited liability
corporation do not have standing as real parties in interest. (PacLink Communications
Internat., Inc. v. Superior Court (2001) 90 Cal.App.4th 958, 964-966 [member of LLC
lacks standing where “injury was essentially a diminution in the value of [plaintiffs’]
membership interest in the LLC occasioned by the loss of the company’s assets”].)
       Appellants argue that it makes no difference whether the Individual Plaintiffs are
real parties in interest, because California has a broad permissive joinder statute which,
they urge, does not require all plaintiffs to have a claim or right to relief against a
defendant. (Code Civ. Proc., § 378, subd. (a).) That statute provides that “[a]ll persons
may join in one action as plaintiffs if . . . [¶] . . . [t]hey have a[n] . . . interest adverse to
the defendant in the . . . controversy which is the subject of the action.”
       However, Code of Civil Procedure section 378 is a joinder statute, which
presupposes that the individuals have standing as real parties in interest. It does not
permit joinder of a party who has no legal or property interest. (Gartler v. First Nat. Bk.
of San Pedro (1928) 88 Cal.App. 411, 413 (Gartler).)
       Appellants argue that Gartler is distinguishable because it involved an earlier
version of the statute, which permitted joinder by persons having “an interest in the
subject of the action, and in obtaining the relief demanded,” as compared to the present
statute that permits joinder by persons having an “interest adverse to the defendant in
the . . . controversy which is the subject of the action.” (Gartler, supra, at p. 413;
Code Civ. Proc., § 378.) But this distinction makes no difference in this case, since the

                                                 48
Individual Plaintiffs do not have a legal interest in the subject of the action, in obtaining
the relief demanded, or in the controversy.
       Appellants present no legal authority for their argument that Code of Civil
Procedure section 378 permits a court to dispense with basic standing requirements.
They fail to establish error.21
                                     III. DISPOSITION
       The judgment is affirmed.




                                                   NEEDHAM, J.



We concur.




SIMONS, Acting P.J.




BRUINIERS, J.




21
      In addition, Cal-Murphy’s requests for judicial notice, filed on October 31, 2013,
and April 1, 2014, are denied.
                                              49
