Aljabban v. Fontana Indoor Swap Meet, Inc. (2020)

Citation: Aljabban v. Fontana Indoor Swap Meet, Inc. (2020)
Parent Document: Aljabban v. Fontana Indoor Swap Meet, Inc. (2020)
Jurisdiction: California (state)
Effective Date: 2020-09-10
Original Source: https://www.courtlistener.com/opinion/4784084/aljabban-v-fontana-indoor-swap-... ↗

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16     Aljabban made this argument in his written closing argument after
trial, but the trial court did not address the issue in its statement of decision.
Aljabban raised the argument again in his motion to vacate the judgment. At
the hearing on that motion, the trial court commented, “I think those
paragraphs provide for retention of the security deposit for the reasons that
are specified. But . . . I’m not sure I read it to limit retention to only those
grounds.”
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“Vendor’s security deposit is not to be used as Vendor’s final month’s rent
unless approved by Management. Management reserves the sole right to
apply Vendor’s security deposit toward any monies owed for the free rent or
rental concession period.” Because the vendor’s permit does not specify that
the security deposit can be used to cover FISM’s expenses in repairing the
premises, Aljabban contends that, pursuant to the “specific purposes”
language of Civil Code section 1950.7, subdivision (c), FISM was not
authorized to keep $680.00 of the security deposit to cover the cost of repairs.
      In our view, the plain language of the statute supports Aljabban’s
argument. On its face, Civil Code section 1950.7, subdivision (c) allows a
landlord in a commercial lease to apply the security deposit to the payment of
defaulted rent, to the repair of the premises, or to the expense of cleaning the
premises only “if the payment or deposit is made for any or all of those
specific purposes.” That language appears to set up a requirement that, for
the landlord to use the security deposit for a specific purpose, the rental
agreement must specify that purpose. Although we are not aware of any case
law interpreting the relevant statutory language, a leading treatise agrees
with our interpretation of the language. “The landlord of nonresidential
premises is only entitled to deduct from the deposit those amounts that are
authorized by the terms of the lease.” (10 Miller & Starr, Cal. Real Estate (4th
ed.) § 34:85, italics added.)
      We draw further support for our reading of the statutory language
when we compare the statutory provision that governs how security deposits
may be applied in residential leases. Civil Code section 1950.5,
subdivision (e) states that a security deposit in a residential lease may be
applied by the landlord for “only those amounts as are reasonably necessary”
for the following purposes, specified in subdivision (b): “(1) The compensation

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