Hasson Investment V Sunset Blvd Properties Ca27

Filed 7/23/25 Hasson Investment v. Sunset Blvd. Properties CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

HASSON INVESTMENT, LLC, B330413

Plaintiff, Cross-defendant, and (Los Angeles County Super.
Appellant, Ct. No. 21STCV43251)

SUNSET BLVD. PROPERTIES, L.P.
et al.,

Defendants, Cross-
complainants, and Respondents.
________________________________

HASSON INVESTMENT, LLC, B331301

Plaintiff, Cross-defendant, and
Respondent,

SUNSET BLVD. PROPERTIES, L.P.
et al.,
Defendants, Cross-
complainants, and Appellants.

APPEALS from a judgment and a postjudgment order of
the Superior Court of Los Angeles County, Richard L. Fruin, Jr.,
Judge. Judgment is reversed with directions; appeal from
postjudgment order is dismissed as moot.
Law Office of Kenneth R. Morris and Kenneth R. Morris for
Plaintiff, Cross-defendant, Appellant, and Respondent.
Kilpatrick Townsend & Stockton and Emil W. Herich for
Defendants, Cross-complainants, Respondents, and Appellants.
______________________

This case concerns a dispute over a failed restaurant lease.
Hasson Investment, LLC leased the property from Sunset Blvd.
Properties, L.P., the owner, and Paramount Contractors &
Developers Inc., its agent (collectively, the landlord). After the
lease terminated, Hasson refused to return the liquor license for
the premises unless the landlord paid it $100,000. In response,
the landlord withheld $62,000 in deposits Hasson had paid. Both
sides sued. Following a bench trial, the trial court concluded the
landlord did not breach the lease by failing to return Hasson’s
deposits, but the landlord owed Hasson $42,000 under unjust
enrichment principles. The court found Hasson breached the
lease by failing to return the liquor license, causing the landlord
to suffer $25,000 in damages—the landlord’s cost to obtain a
replacement license. The result was a net recovery of $17,000 to
Hasson.

2
Hasson argues the court erred by reducing its unjust
enrichment award based on the landlord’s $25,000 cost to obtain
a new liquor license because the landlord would have had to pay
Hasson more than $25,000 for the transfer of the license, had
Hasson performed its obligation to return the license. We agree.
We further agree the court erred in concluding the landlord did
not breach the lease by failing to return some of Hasson’s
deposits. We reverse and remand for the court to award Hasson
$42,000 on its cause of action for unjust enrichment, to determine
Hasson’s costs, and to consider any request for attorney fees.
The landlord filed a cross-appeal challenging the denial of
its motion for attorney fees under Code of Civil Procedure
section 998 because it offered to settle for a sum larger than
Hasson’s ultimate $17,000 recovery.1 Because we conclude
Hasson was entitled to a larger unjust enrichment award as to
which the settlement offer was not greater, the cross-appeal is
moot. We therefore dismiss the landlord’s cross-appeal.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Lease, Its Termination, and the Parties’ Dispute
The parties do not challenge the following factual findings
and legal conclusions made by the trial court:
“Heloise Hasson is the owner and sole member of plaintiff
Hasson Investment, LLC.[2] [Heloise] is a French citizen; during

1 References to code provisions are to the Code of Civil
Procedure, unless otherwise stated.
2 We refer to the LLC as Hasson and to Heloise Hasson by
her first name for clarity.

3
the relevant period she was applying to obtain a V-2 (investment)
visa for U.S. residency.
“[Hasson] and Paramount entered into [a] lease under
which [Hasson] would open a restaurant in [the] ground floor
space of a commercial building [on Sunset Boulevard] . . . owned
by defendant Sunset Blvd. Properties, LLC. Defendant
Paramount Contractors & Developers, Inc. acted as the agent of
Sunset in the lease negotiations. Paramount and Sunset have
common ownership. . . .
“The parties signed a lease and the original addendum on
March 3, 2021. [Hasson] took possession and began to prepare
the premises for restaurant operations. The restaurant never
opened. A lease provision provided that the lease terminated on
August 31, 2021, unless [Heloise] had by that time acquired a V-2
visa. The visa process required, as its final step, that [Heloise] be
interviewed at the U.S. Embassy in Paris. However, due to
delays and restrictions caused by the pandemic, the Embassy
cancelled successive interviews it had scheduled with [Heloise].
[Hasson’s] lawyers notified Paramount . . . that [Hasson]
terminated the lease, relying on the provision that the lease had
terminated on August 31 because [Heloise] had not secured a V-2
visa. Other reasons may have contributed to [Hasson’s]
decision—delays and disputes about the remodeling, for
instance—but such considerations are not relevant to the parties’
contractual rights upon the lease termination.
“[Hasson’s] termination of the lease did not breach the
lease. [Hasson’s] conduct afterwards did breach the lease
agreement. [Hasson] under the lease had made three pre-
payments to the landlord: $30,000 as a security deposit; $12,000
as pre-paid rent; and $20,000 as a liquor license deposit (later

4
described as key money). Under the lease agreements (four
addenda were signed) the landlord was required to provide a
liquor license so that the restaurant could sell alcoholic
beverages. The landlord in 2016 had procured a Type 47 liquor
license[3] limited to sales at the . . . Sunset [Boulevard] location,
and the landlord transferred that license to [Hasson]. [Hasson],
however, under the lease was required to pay $60,000 in three
installments once the restaurant opened to pay the landlord for
the use of the liquor license and to transfer it back to the landlord
when the lease terminated. The $20,000 deposit was an initial
payment by [Hasson] for use of the liquor license until the license
was returned to the landlord.[4] Under the limitations imposed by
a Type 47 liquor license[, the license] had to be used for alcoholic
beverage sales [on the Sunset Boulevard premises] for five years,
and two years were remaining on that requirement when the
landlord transferred the license to [Hasson], but once the five
year limitation was satisfied the license could be sold to any
qualified user and used at any qualifying location in Los Angeles
County. The liquor license, therefore, could increase in market
value after the five-year location restriction was satisfied.

3 According to the California Department of Alcoholic
Beverage Control (ABC), a Type 47 license “[a]uthorizes the sale
of beer, wine and distilled spirits for consumption on the licensed
premises.” (See California Department of Alcoholic Beverage
Control, License Types <https://www.abc.ca.gov/licensing/license-
types/> [as of July 15, 2025].)
4 Hasson also paid the landlord an additional $6,000 for the
license—the maximum that the landlord could charge under an
ABC restriction that prohibited resale of the license for more
than $6,000 until the license matured in September 2023.

5
“After terminating the lease, [Hasson] demanded the
landlord pay [it] $100,000 for return of the liquor license. This
was a breach of the lease terms that required [Hasson] to
transfer the license to the landlord when the lease was
terminated (for which the landlord was to reimburse to [Hasson]
a $6,000 ABC fee and another [approximately] $5,000
administrative fee). A different . . . addendum stated that the
parties would negotiate a price for the return of the liquor
license, but that provision, in the Court’s view, became
operational only after the restaurant opened for business (and it
never did).
“. . . [Hasson] expressed to the landlord that it had to pay
[Hasson] $100,000 before [Hasson] would return the liquor
license. This was a contract breach, and the landlord at that
point was required to mitigate its losses.
“The landlord needed to obtain a liquor license in order to
lease the premises to another tenant for restaurant use. The
landlord applied for and was fortunate to obtain by lottery
another liquor license in October 2021. [Hasson] still has the
liquor license the landlord transferred to [it] in September 2021.
The landlord now has no need for [Hasson] to transfer back that
liquor license, as it incurred the expense of obtaining another
liquor license. The landlord paid [approximately] $25,000 to
obtain the second liquor license. . . . [Hasson’s] breach of the
lease agreement by refusing to transfer the liquor license back to
the landlord, therefore, caused the landlord to suffer
[approximately] $25,000 in damage.”

6
B. The Lawsuit, Trial, and Post-trial Procedure
In November 2021, Hasson filed suit against the landlord,
asserting claims for breach of contract, bad faith retention of
lease deposits, conversion, and unjust enrichment. Hasson
sought $42,000 in compensatory damages, emotional distress
damages, and attorney fees and costs. It alleged the landlord was
required to return the $42,000 in deposits under the lease (the
$30,000 security deposit and $12,000 in prepaid rent) and that
retaining the funds would unjustly enrich the landlord. Hasson
did not seek to recover the separate $20,000 liquor license
deposit.
In September 2022, the landlord cross-complained against
Hasson, alleging fraud and concealment, negligent
misrepresentation, breach of contract, breach of the implied
covenant of good faith and fair dealing, and conversion. The
landlord claimed Heloise misrepresented her intent to operate
the restaurant, which induced the landlord to let Hasson occupy
the space rent-free and transfer the liquor license to Hasson. The
landlord sought $30,000 in lost rent and $100,000 for the
withheld liquor license, plus punitive damages.
A bench trial took place over three days in February 2023.
On the first day, the trial court explained that it typically issued
a tentative ruling before closing arguments. After the close of
evidence, on February 23, 2023, the court stated, “I am going to
make some tentative comments. I don’t know whether it’s a
tentative ruling at this point.” Several days later, on
February 27, the court issued a “Draft Statement of Tentative
Decision” (Tentative Decision), which it served on the parties by
email and mail the same day. It directed the parties to address

7
the Tentative Decision in their closing arguments that had been
postponed.
In the Tentative Decision, the court concluded that, given
that Hasson breached the lease by not returning the liquor
license, the landlord “was entitled to a set off from the deposit
amounts that the landlord owed to [Hasson] once the lease was
lawfully terminated.” The court determined that because the
landlord reasonably exercised its right to offset damages, it did
not breach the lease by refusing to return the $30,000 security
deposit and the $12,000 in prepaid rent, totaling $42,000.
Although the court did not find for Hasson on its breach of
contract claim, it found in Hasson’s favor on its fifth cause of
action for unjust enrichment, concluding the landlord would be
unjustly enriched if allowed to retain the $42,000 in lease
deposits.5 The court stated Hasson was “entitled to the return of
the deposits that were not earned because the lease was
terminated without the restaurant opening for business, minus
the additional costs the landlord incurred due to [Hasson’s]
refusal to return the liquor license. [Hasson] is entitled to the
return of the $30,000 security deposit and the $12,000 in pre-paid
rent, minus the [approximately] $25,000 that the landlord paid to
obtain a second liquor license. [Hasson] is not entitled to recover
the $20,000 [it] deposited as the liquor license (key money)

5 Although “unjust enrichment” is not a standalone cause of
action under California law and Hasson appeared to have
adequate remedies under the lease (Sepanossian v. National
Ready Mixed Concrete Co. (2023) 97 Cal.App.5th 192, 206-207),
the landlord did not raise those arguments and does not
challenge Hasson’s award under the cause of action Hasson
alleged for unjust enrichment. The landlord therefore forfeited
any challenge to Hasson’s unjust enrichment award.

8
deposit because [it] did not transfer the original liquor license
back to the landlord.” Accordingly, Hasson was “entitled to a
return of $17,000 ($30,000 + $l2,000 - $25,000) from the
landlord . . . due to the lease termination.”
The court’s Tentative Decision rejected all remaining
claims and counterclaims, finding no other recoverable damages.
It instructed the landlord to prepare the judgment and stated,
“both parties to bear their own costs.”
On March 7, 2023, the court held closing arguments, which
were not transcribed.6 The court’s minute order states: “The
matter is called for hearing. The Court had previously issued a
Draft Statement of Decision which was emailed and sent via
USPS to counsel on 02/27/2022 [sic]. The Court hears closing
arguments this date. After closing arguments, the Court gives its
oral decision and directs counsel for defendant to submit the
proposed judgment for the Court to review and sign.”
The next day, on March 8, 2023, the landlord lodged a
proposed judgment with the court and served a copy on Hasson.
The proposed judgment stated, in relevant part: “After hearing
the evidence on February 27, 2023, the Court issued a Draft
Statement of Tentative Decision which following closing
arguments on March 7, 2023, became the Statement of Decision

6 Hasson later submitted a declaration from its counsel in
support of its motion to vacate the judgment with a summary of
its own closing arguments. Hasson’s “declaration supporting [its]
motion for new trial . . . is not a substitute for [a] reporter’s
transcript, or [a] settled statement on appeal, nor can it be relied
upon to establish what was said by anyone in the course of the
trial.” (Ward v. Litowsky (1970) 5 Cal.App.3d 437, 439-440; see
Cal. Rules of Court, rule 8.137(c).)

9
of the Court.” On March 9, the court modified this sentence as
follows: “After hearing close of the evidence on February 27,
2023, the Court issued a Draft Statement of Tentative Decision.
which following After closing arguments on March 7, 2023, the
Court issued its became the Statement of Decision of the Court.”
The court entered the modified version as its final judgment on
March 9, 2023. The final judgment stated Hasson was to “take
from [the landlord] the total sum of $17,000. Both sides are
ordered to bear their own costs.”
Hasson timely moved for a new trial and to vacate the
judgment and enter a new judgment. In its motion for a new
trial, Hasson argued the court prematurely cut off the time to
request a statement of decision and asked the court to issue one,
listing seven purported controverted issues but not raising any
objections to the findings in the Tentative Decision. The court
held a hearing on the motions in May 2023, again with no
reporter present. The minute order states, “The Motion for New
Trial is denied.”
Hasson timely appealed.
The landlord brought a motion for attorney fees, contending
it had served Hasson with an offer under section 998 to settle
Hasson’s claims for $21,000, and Hasson then recovered only
$17,000. The trial court denied the motion, concluding that
Hasson’s attorney fees that were recoverable under the fee
provision in the lease should be considered in determining the
total amount of Hasson’s recovery, not just the $17,000 award.
The court indicated Hasson “was the prevailing party” following
the trial of Hasson’s claims and the landlord’s cross-claims. It
stated its Tentative Decision “improvidently” stated each side

10
was to bear its own costs, but Hasson could have filed a motion to
reconsider that “throw-away line” by the court.
The landlord timely appealed from the denial of the motion
for attorney fees under section 998.

DISCUSSION

A. Errors in the Statement of Decision Process Were Harmless
1. Applicable law and standard of review
Section 632 provides that following a bench trial of a
question of fact, upon the request of a party, “[t]he court shall
issue a statement of decision explaining the factual and legal
basis for its decision as to each of the principal controverted
issues at trial.” (§ 632; see F.P. v. Monier (2017) 3 Cal.5th 1099,
1102 (F.P.); Cal. Rules of Court, rule 3.1590(a).)7 A statement of
decision communicates the facts found by the court and the legal
bases for the court’s ruling, making a case easier to review on
appeal. (Alafi v. Cohen (2024) 106 Cal.App.5th 46, 61 (Alafi).) “A
statement of decision need not respond to ‘every point raised by a
party or make an express finding of fact on each contested factual
matter; it need only dispose of all basic issues and fairly disclose
the court’s determination as to ultimate facts and material issues
in the case.’ ” (Id. at p. 60; accord, Slone v. El Centro Regional
Med. Ctr. (2024) 106 Cal.App.5th 1160, 1171.)
The trial court first “must announce its tentative decision
by an oral statement, entered in the minutes, or by a written
statement filed with the clerk.” (Rule 3.1590(a).) For a trial that
lasts longer than one calendar day or eight hours over multiple

7 Undesignated references to rules are to the California
Rules of Court.

11
days, the parties have 10 days from the announcement or service
of the tentative decision, whichever is later, to request a written
statement of decision that addresses the controverted issues a
party wants the court to address. (§ 632; rule 3.1590(d); Alafi,
supra, 106 Cal.App.5th at pp. 60-61.)
After the court prepares the statement of decision and
proposed judgment, the parties may file objections.
(Rule 3.1590(g).) Only after the court and the parties have
followed this procedure, or the parties have waived their right to
request a statement of decision or make objections, may the court
enter judgment. (Rule 3.1590(h)-(l).)
“ ‘A judgment or order of a lower court is presumed to be
correct on appeal, and all intendments and presumptions are
indulged in favor of its correctness.’ ” (Kaushansky v. Stonecroft
Attorneys, APC (2025) 109 Cal.App.5th 788, 799.) Generally,
“[u]nder the doctrine of implied findings, the reviewing court
must infer, following a bench trial, that the trial court impliedly
made every factual finding necessary to support its decision.”
(Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th
42, 48.) But if a party requests a statement of decision and “the
statement of decision does not resolve a controverted issue or is
ambiguous, and the omission or ambiguity was brought to the
attention of the trial court, ‘it shall not be inferred on appeal . . .
that the trial court decided in favor of the prevailing party as to
those facts or on that issue.’ ” (Thompson v. Asimos (2016)
6 Cal.App.5th 970, 981; accord, Alafi, supra, 106 Cal.App.5th at
p. 70.)
Errors in the statement of decision process “are subject to
harmless error review.” (F.P., supra, 3 Cal.5th at p. 1116; see
Heaps v. Heaps (2004) 124 Cal.App.4th 286, 292 [“the premature

12
signing of a proposed statement of decision does not constitute
reversible error unless actual prejudice is shown”].) Where a trial
court’s failure to follow the correct procedures for issuing a
statement of decision “effectively shield[s] the trial court’s
judgment from adequate appellate review,” such a failure may
require reversal. (F.P., at p. 1116.) “ ‘[T]he more issues specified
in a request for a statement of decision and left unaddressed by a
court’s failure to issue one, the “more difficult, as a practical
matter, [it may be] to establish harmlessness.” ’ ” (Alafi, supra,
106 Cal.App.5th at p. 70.)
2. The trial court did not follow the proper process for
issuing a statement of decision
The trial court did not follow the statutory procedure for
issuing a statement of decision following a trial lasting longer
than eight hours over several days.8 On February 27, 2023, the
court served the Tentative Decision on the parties by email and
mail. Then a minute order from March 7 states that after
hearing closing arguments, the court “g[ave] its oral decision and
direct[ed] counsel for [the landlord] to submit the proposed
judgment for the Court to review and sign.” The court entered

8 The landlord asserts there is no reliable record showing the
trial’s length was greater than eight hours over the three days of
trial because Hasson’s estimate of 10.5 hours does not account for
multiple recesses. (See § 632; rule 3.1590(n) [a party must
request a statement of decision before the matter is submitted for
decision when “a trial is completed within one day or in less than
eight hours over more than one day”].) However, we do not
subtract routine recesses from the time of trial. (See In re
Marriage of Gray (2002) 103 Cal.App.4th 974, 980 [the time of
trial includes “such routine recesses as occur during the day”].)
The record also supports Hasson’s calculation.

13
judgment on March 9. Whether the 10-day period in which to
request a statement of decision is measured from February 27 or
March 7, judgment was prematurely entered without allowing for
the request.9 (§ 632; rule 3.1590(d), (h)-(l).) The court entered its
judgment only two days after giving its oral decision, on March 9.
And assuming the service of the Tentative Decision on
February 27 triggered the 10-day period for requesting a
statement of decision, Hasson correctly argues that 10-day period
was extended by two court days because the court served the
Tentative Decision electronically. (See §§ 1010.6, subd. (a)(3)(B),
1013, subd. (g); Injectronics, Inc. v. Commodore Business
Machines, Inc. (1979) 100 Cal.App.3d 185, 188.) Twelve days
from February 27 was Saturday, March 11, and thus the deadline
was extended to Monday, March 13. (§ 12, subd. (a).)
3. The court’s failure to follow the proper process for
issuing a statement of decision does not impede
adequate appellate review of its decision
Although the trial court failed to allow the allotted time for
the parties to request a statement of decision, the error was
harmless. The lengthy Tentative Decision adequately explained
the court’s reasoning. (See Alafi, supra, 106 Cal.App.5th at p. 68

9 The landlord argues Hasson “waiv[ed] the requirement of a
statement of decision” by failing to request one within 10 days of
February 23, when the court “provided counsel with its tentative
comments concerning the case.” The court described its remarks
on that date as “tentative comments” and said, “I don’t know
whether it’s a tentative ruling at this point.” In any event, the
10-day deadline to request a statement of decision runs from
announcement or service of the tentative decision, whichever is
later. (Rule 3.1590(d).) The 10-day period thus ran from the date
of service of the Tentative Decision—February 27.

14
[“In certain circumstances, even without a statement of decision,
a judgment may nevertheless contain a satisfactory explanation
of the trial court’s reasoning.”].) Hasson acknowledges on appeal
that the Tentative Decision shows “the process used and the legal
principles applied by the trial court in determining the $17,000
judgment amount in Hasson’s favor.”
In its motion for a new trial, Hasson identified seven
controverted issues and asked the court to issue a statement of
decision on those points. But the Tentative Decision addressed
all save one of the issues.10 Hasson also did not raise objections
to any of the court’s factual findings. Hasson identifies no
specific prejudice from the court’s entry of judgment on March 9.
It has thus failed to carry its burden to show “ ‘ “ ‘exactly how the
error caused a miscarriage of justice.’ ” ’ ” (Parris J. v.
Christopher U. (2023) 96 Cal.App.5th 108, 134; see Heaps v.
Heaps, supra, 124 Cal.App.4th at p. 292 [procedural issues do
“not constitute reversible error unless actual prejudice is
shown”].)

B. The Court Erred in Reducing Hasson’s Unjust Enrichment
Award by $25,000 To Offset the Landlord’s Cost of a New
Liquor License, When the Landlord Saved More Than
$25,000 in License-related Costs as a Result of Hasson’s
Breach
Section 657, subdivision (5), authorizes a trial court to
grant a new trial where the damages are excessive or inadequate.
On appeal from an order denying a new trial for damages, we

10 The only issue the court failed to explain was its decision to
require the parties to bear their own costs. However, as we
discuss below, we reverse the ruling on costs.

15
make all presumptions in favor of the trial court’s ruling,
“ ‘ “ ‘which is entitled to great deference because the trial judge,
having been present at trial, necessarily is more familiar with the
evidence and is bound by the more demanding test of weighing
conflicting evidence rather than our standard of review under the
substantial evidence rule. . . . [W]e consider the evidence in the
light most favorable to the judgment, accepting every reasonable
inference and resolving all conflicts in its favor.’ ” ’ ” (Atkins v.
City of Los Angeles (2017) 8 Cal.App.5th 696, 737-738.)
“[A]n individual may be required to make restitution if he
is unjustly enriched at the expense of another. [Citation.] A
person is enriched if he receives a benefit at another’s expense.
[Citation.] The term ‘benefit’ ‘denotes any form of advantage.’
[Citation.] Thus, a benefit is conferred not only when one adds to
the property of another, but also when one saves the other from
expense or loss.” (Ghirardo v. Antonioli (1996) 14 Cal.4th 39, 51.)
“ ‘A saved expenditure or a discharged obligation is no less
beneficial to the recipient than a direct transfer.’ ” (Professional
Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018)
29 Cal.App.5th 230, 238.)
We review for abuse of discretion a trial court’s decision to
grant or deny an equitable award based on unjust enrichment
principles. (See Branscomb v. JPMorgan Chase Bank, N.A.
(2014) 223 Cal.App.4th 801, 806; Hirshfield v. Schwartz (2001)
91 Cal.App.4th 749,771.) “ ‘ “Whether a plaintiff ‘is entitled to a
particular measure of damages is a question of law subject to de
novo review.’ ” ’ ” (Atkins v. City of Los Angeles, supra,
8 Cal.App.5th at p. 738.) “To the extent the court determined
questions of law or applied the law to undisputed facts, we review
those determinations de novo.” (Branscomb, at p. 806.)

16
The trial court here concluded that the landlord did not
breach any provision of the lease, but it determined the landlord
would be unjustly enriched if allowed to retain Hasson’s $30,000
security deposit and the $12,000 in prepaid rent. However, the
court determined that this total of $42,000 that the landlord
owed to Hasson should be offset by the $25,000 in damages that
the landlord incurred due to Hasson’s breach, because the
landlord had to obtain a replacement liquor license for $25,000
after Hasson refused to return the original license as Hasson was
required to do at the termination of the lease. (See Sutter v.
Madrin (1969) 269 Cal.App.2d 161, 168 [“A valid off-set is a
detriment ‘proximately suffered . . . as a result of’ the breach.”].)
The court thus awarded Hasson $17,000 ($42,000 minus
$25,000).
Hasson does not challenge the court’s findings that Hasson
breached the lease by failing to return the liquor license, or that
the landlord incurred $25,000 to buy a replacement license.
Instead, Hasson argues it was error to reduce Hasson’s unjust
enrichment award by $25,000 without accounting for the
landlord’s $31,000 in saved costs as a result of Hasson’s breach—
the $20,000 liquor license deposit and the $11,000 license
acquisition costs the landlord no longer needed to pay back to
Hasson—which more than covered the landlord’s expenses in
obtaining a replacement liquor license.
We agree with Hasson. The court found Hasson was not
entitled to recover the $20,000 liquor license deposit because it
failed to return the license. It also determined the landlord
would have owed Hasson $11,000—the $6,000 ABC transfer fee
and an additional $5,000 administrative fee—had Hasson
performed under the contract. The landlord acknowledges on

17
appeal it was $31,000 richer as a result of not having to return
the $20,000 liquor license deposit and reimburse Hasson’s license
acquisition costs of $11,000. However, when determining that
Hasson owed the landlord $25,000 for the replacement cost of a
new license, the court failed to take into account that had Hasson
returned the original license, the landlord would have had to
reimburse Hasson $31,000. Accordingly, the court failed to
consider the landlord’s “discharged obligation” to reimburse
Hasson $31,000 that resulted from Hasson’s breach in failing to
return the original license. (Ghirardo v. Antonioli, supra,
14 Cal.4th at p. 51.) That $31,000 in savings covered the $25,000
the landlord paid for the replacement license.
The landlord responds that its actual damages were closer
to $100,000—the market cost of a liquor license not won in a
lottery—and that even accounting for the $31,000 in deposits it
retained, it still suffered a net loss of $69,000, even if it was lucky
enough to win the lottery and purchase a new license for only
$25,000. But the trial court rejected that theory. It found
Hasson’s “breach of the lease agreement by refusing to transfer
the liquor license back to the landlord, therefore, caused the
landlord to suffer [approximately] $25,000 in damage.” (See
Majestic Asset Management LLC v. The Colony at California
Oaks Homeowners Assn. (2024) 107 Cal.App.5th 413, 426 [“ ‘A
recognized measure of damages for the breach of contract to
render service is the reasonable cost of securing performance by
other means.’ ”].)
Nor are we persuaded by the landlord’s argument that
Hasson benefitted from its breach by retaining a liquor license
“now potentially worth $140,000-150,000.” The trial court made
no such finding, and uncontroverted evidence established the

18
original liquor license could not be sold on the open market at the
time and needed an operating restaurant on the Sunset
Boulevard premises to remain valid.
In sum, the trial court failed to account for the $31,000 in
the landlord’s avoided expenses in calculating that the landlord
suffered $25,000 in damages. Accordingly, the court erroneously
reduced Hasson’s unjust enrichment award by $25,000.

C. The Court Erred in Determining the Landlord Did Not
Breach the Lease by Retaining Hasson’s Prepaid Rent
Although the court found the landlord would be unjustly
enriched if permitted to retain the $30,000 security deposit and
$12,000 in prepaid rent, Hasson contends the trial court should
have concluded the landlord breached the lease by refusing to
return those deposits.11 The court concluded that because
Hasson breached the lease, “the landlord was entitled to a setoff
from the deposit amounts that the landlord owed to [Hasson]
once the lease was lawfully terminated,” and that the landlord
did not breach the lease by withholding these deposits because it
“reasonably exercised its set off rights.” Hasson argues the lease
required the return of both deposits and that the landlord had no
“allowable deductions or set-offs.”
We review de novo questions of contract interpretation
(Brown v. Goldstein (2019) 34 Cal.App.5th 418, 432) and the
application of law to undisputed facts, including those involving
statutory interpretation (Niedermeier v. FCA US LLC (2024)

11 We reach this issue because a determination that the
landlord breached the lease could affect the issue of attorney fees
and costs on remand.

19
15 Cal.5th 792, 804; Boling v. Public Employment Relations Bd.
(2018) 5 Cal.5th 898, 912). The landlord did not breach the lease
by failing to return the $30,000 security deposit, but it did
commit breach by failing to return the $12,000 in prepaid rent.
Both security deposits and prepaid rent may fall within the
scope of Civil Code section 1950.7, which addresses a commercial
landlord’s ability to withhold such deposits and payments. (Civ.
Code, § 1950.7, subd. (a) [“Any payment or deposit of money the
primary function of which is to secure the performance of a rental
agreement . . . shall be governed by the provisions of this
section.”]; see Aljabban v. Fontana Indoor Swap Meet, Inc. (2020)
54 Cal.App.5th 482 [§ 1950.7 “governs security deposits for
nonresidential leases”].) Civil Code section 1950.7 provides that
a landlord “may claim of the payment or deposit only those
amounts as are reasonably necessary to remedy tenant defaults
in the payment of rent, to repair damages to the premises caused
by the tenant, or to clean the premises upon termination of the
tenancy, if the payment or deposit is made for any or all of those
specific purposes.” (Civ. Code, § 1950.7, subd. (c).) Civil Code
section 1950.7 thus delineates the circumstances justifying a
landlord to withhold a security deposit or prepayment of rent.
The enumerated circumstances do not include Hasson’s breach of
failing to return the liquor license.
However, “a tenant under a commercial lease may
effectively agree to waive the protections of section 1950.7.”
(250 L.L.C. v. PhotoPoint Corp. (2005) 131 Cal.App.4th 703, 718.)
The lease provision with respect to the $30,000 security deposit
specifies that “Lessee waives the protections of Ca. Civil Code
Sec. 1950.7.” Further, the provision states that the security
deposit of $30,000 will only be refunded “in the event that all of

20
the terms of this Lease have been fully executed by [Hasson]
during the existence of this Lease.” The lease also explicitly
authorizes the landlord to apply the $30,000 security deposit to
sums owed as a result of Hasson’s breach of any of the terms of
the lease. Thus, because the parties waived application of Civil
Code section 1950.7 to the $30,000 security deposit, and because
the lease terms permitted the landlord to withhold the security
deposit if Hasson breached the lease in any way, the landlord did
not breach the lease by withholding the $30,000 deposit when
Hasson failed to meet its obligation to return the liquor license.
The $12,000 in prepaid rent is another story. Unlike the
security deposit provision, the prepaid rent provision does not
include a waiver of Civil Code section 1950.7. In any event, the
lease provisions do not give the landlord the right to withhold the
$12,000 in prepaid rent based on Hasson’s breach after the lawful
termination of the lease. Rather, both the original lease and the
May 19 addendum provide that “if this lease terminates before
the expiration date for reasons other than [Hasson’s] default,” the
landlord “shall repay” such prepaid but unearned rent within
30 days. At trial, the landlord admitted it never earned the
$12,000 in rent because the restaurant never opened. And the
lease terminated due to Heloise’s inability to secure a visa, not
due to Hasson’s “default” of the lease terms. Accordingly, the
lease expressly required the Landlord to return the $12,000
within 30 days of Hasson’s demand for it, and the Landlord
breached the lease by refusing to return that amount purportedly
based on Hasson’s failure to return the liquor license. (See
Aljabban v. Fontana Indoor Swap Meet, Inc., supra,
54 Cal.App.5th at pp. 508-509 [because lease did not allow
landlord to use security deposit for repairs, landlord breached the

21
lease by withholding the deposit for that reason].)

D. The Court Must Award Costs to Hasson and Consider
Attorney Fees Requests on Remand
Hasson challenges the trial court’s decision that each party
should bear its own costs. In the trial court, the landlord argued
section 1033 gave the trial court discretion to deny Hasson’s
request for costs because Hasson’s $17,000 recovery could have
been sought in a limited civil case. (See Gramajo v. Joe’s Pizza
on Sunset, Inc. (2024) 100 Cal.App.5th 1094, 1102 [“section 1033,
subdivision (a), gives the trial court discretion to deny litigation
costs altogether when it finds the plaintiff failed to take
advantage of the efficiency of a limited civil proceeding as
evidenced by the plaintiff’s recovery of less than the jurisdictional
threshold”].) However, we have now determined Hasson is
entitled to $42,000, an amount that exceeds the $35,000
threshold for recovery in a limited civil case. (§ 85, subd. (a).)
Section 1032 provides that a prevailing party is entitled as a
matter of right to recover costs in an action. (§ 1032, subd. (b).)
“ ‘ “Prevailing party” ’ is defined to include ‘the party with a net
monetary recovery. . . .’ (§ 1032, subd. (a)(4).) ‘In competing
money claims, where one claim offsets the other, the prevailing
party [entitled to costs] is the one in whose favor the net amount
is found to be due under the judgment.’ [Citation.] Here,
[Hasson] undisputably is the prevailing party for purposes of
section 1032 as [it] has a net monetary recovery.” (Public
Employees’ Ret. Sys. v. Winston (1989) 209 Cal.App.3d 205, 212.)
On remand, the trial court is directed to assess costs in favor of
Hasson.

22
Hasson also argues it is entitled to attorney fees on appeal
as the prevailing party under section 1032, subdivision (b), and
pursuant to Civil Code section 1717, subdivision (a), which
authorizes the trial court to award reasonable attorney fees and
costs to the prevailing party in a contract action if the contract
provides for such an award.
“[T]he identification of the party entitled to a fee award
[under Civil Code section 1717] must be determined by the final
result of the litigation, i.e., after conclusion of the appeal if an
appeal is taken.” (Butler-Rupp v. Lourdeaux (2007)
154 Cal.App.4th 918, 928.) “ ‘ “Although this court has the power
to fix attorney fees on appeal, the better practice is to have the
trial court determine such fees.” ’ [Citation.] That is appropriate
here, where the trial court has not yet addressed fee entitlement,
[the cross-appellant] did not prevail in [its] cross-appeal, and we
are remanding” for reconsideration of the cost award. (Coziahr v.
Otay Water Dist. (2024) 103 Cal.App.5th 785, 833-834.) We
therefore need not address Hasson’s contention that it is entitled
to attorney fees on appeal, as it may move for attorney fees upon
remand of the case to the trial court. We express no opinion on
whether Hasson is entitled to an attorney fee award.

E. The Landlord’s Cross-appeal Is Moot
The landlord’s cross-appeal challenging the denial of its
motion for attorney fees under section 998 is now moot. The
section 998 settlement offer of $21,500 no longer exceeds the
amount recovered by Hasson because we are reversing the trial
court’s order awarding Hasson only $17,000 and instead are
directing it to enter an award for $42,000.

23
DISPOSITION

We reverse the judgment and remand with the following
directions. Hasson shall be awarded $42,000 on its cause of
action for unjust enrichment. The court shall assess costs in
favor of Hasson and consider any timely motions for attorney fees
by the parties (case No. B330413).
The appeal from the postjudgment order denying the
landlord’s motion for attorney fees under section 998 is dismissed
as moot (case No. B331301).
Hasson is entitled to its costs on appeal.

STONE, J.
We concur:

MARTINEZ, P. J.

FEUER, J.