Hadian v. Schwartz

On April 14, 1984, Edward Schwartz (defendant) leased commercial property from Rose Hadian (plaintiff). The term of the lease was for three years at $650 per month, with the option to renew for five more years at $800 per month. The parties used a form lease with pre-printed provisions. They struck out certain provisions, including a warranty that the property did not violate building codes, regulations or ordinances, as well as a warranty regarding the plumbing, lighting, and heating conditions. Furthermore, the parties struck out a provision requiring the lessee to pay property taxes. Instead, the parties arranged for Hadian to pay the property taxes while Schwartz was to pay any increase in property taxes during the term of his lease. The lease also contained provisions requiring Schwartz to comply with any applicable statutes, ordinances, and other requirements regulating his use of the property. Additionally, Hadian was relieved of any obligation to repair or maintain the property. After the three-year term expired, Schwartz exercised his option to renew for another five years. About five months later, the City of Los Angeles informed Hadian that the building was susceptible to earthquake damage. In order to comply with the city’s earthquake hazard reduction program, enacted a few years prior to the signing of the lease, the building required seismic reconstruction. Hadian paid $34,450.26 to reconstruct the building’s frame and to replace the roof and requested that Schwartz indemnify her for the cost. When Schwartz refused, Hadian brought a breach of contract suit against Schwartz to recover the cost. The trial court found in Hadian’s favor. The Court of Appeal affirmed.