8451 Melrose Property, LLC v. Akhtarzad (May 28, 2020, B288963) 2020 WL 2765575

Plaintiff sued Defendant for breach of a commercial lease.  Defendant argued the lease was unenforceable because it required he occupy an unlawful building and use it for an illegal purpose.  His defense was premised on a theory that a portion of the building’s second story was illegally constructed. Following a 10-day trial in front of a referee, the trial court entered judgment for Plaintiff and awarded it more than $10 million in damages.  On appeal, Defendant contended the court erroneously rejected his illegality defense and awarded Plaintiff excessive damages.

The Court of Appeal affirmed.  It concluded that the referee’s finding that Defendants failed to prove when the second story was built precluded him from demonstrating the Building fell outside the grandfather provision.

Court of Appeal Opinion – View Document