Lawyers use that phrase to tell the opposition: There was no blood. So there could be no foul. Therefore, your honor and members of the jury, my client is not guilty. Or isn’t responsible to pay damages. Or the rough equivalent in whatever makes sense at the time.
This is that case; that is this case. Or maybe it’s not. Keep reading.
J.S. Bawa is a residential landlord in Los Angeles and was owed rent by David Terhune. When Terhune did not pay, Bawa served a three-day notice to pay or vacate. Bawa stated in his notice that if Terhune did not comply with the notice, Bawa would pursue an eviction claim.
Bawa’s resident manager testified at trial that Terhune had received a check for rent, but returned it because it was not in the correct amount. The PM further testified that after expiration of the three-day notice period, Terhune delivered two checks. One was for the correct amount of rental and the other was intended serve as rental for the next month, which rental was not yet due.
Bawa and his PM did not deposit the checks and instead filed an eviction lawsuit.
The case was tried to a jury. The jury determined the facts: $507.61 owed in rent. Terhune furnished a check for $507.60. The differential – one penny – convinced the jury that Terhune had indeed paid full rent owing and did not default.
Let me state that again. This landlord asserted an eviction claim against his tenant because the rent check was one cent short.
One. Penny. Short. You can’t make this up.
The Landlord, clearly a person of deep conviction, appealed.
The Court of Appeals, using Uniform Commercial Code laws, determined that a non-certified check is a conditional payment. A conditional payment suspends the obligation until dishonor of the check or until it is paid or certified.
Typically, reasons the Appellate Court, a debtor is not in default for paying with an uncertified check. Once the tendered check is successfully negotiated, the obligation is discharged.
But all of this is premised upon the creditor’s willingness to accept the conditional payment offered in the form of a non-certified check. Following this thread further, if a landlord does not accept an uncertified check, the duty to pay rent is not suspended and the tenant is in default.
Then, the Appellate Court evaluated whether or not the landlord’s refusal to accept an uncertified check which is one penny less than the required amount is equitable. Or not. Because, you see, Courts have the ability to apply the theory of “de minimis non curat lex.” The point is to conserve valuable and overburdened judicial resources and not waste the time of the Judge, Justices, bailiffs, sheriffs, constables, clerks, marshals, deputies, jury members, court personnel, and pay outrageous amounts to attorneys when parties are squabbling over something trivial.
Easy out for the Appellate Court, right? Regardless of certified or non-certified funds, conditional acceptance vs. conditional delivery, apply ye olde DMNCL and we’re done. Case concluded, go home and next time focus on something significant.
But no. Rather than trust the jury to correctly determine the facts – that is after all the jury’s one and only job – no, the Appellate Court finds that Tenant Terhune failed to pay rental. And, after making that finding the Court rules for the Landlord Bawa and case over, yes?
No. The Appellate Court kicked the case back to where it came from. For a new trial. So that we can start all over again and litigate this one penny case. From which one might suspect there will be further appeals.
Which will give me the ability to write about this case again in 2021. But that’s a digression.
The judgment rendered by the trial court was reversed for a new trial where presumably the jury will be instructed that a one-penny-short rent payment is a default. See J.S. Bawa v. David Terhune; Appellate Division of the Superior Court, State of California, County of Los Angeles, Case No. BV 032618; January 30, 2019: https://www.courts.ca.gov/opinions/documents/JAD19-01.PDF.
Lessons Learned / Questions Asked:
1. Sweet suffering Buddha. Why does this case exist; why were / are the parties arguing over one penny. Yes that’s rhetorical. One might presume rent control . . . Section 8 . . . a personal vendetta . . . who knows.
2. Ok disregarding #1 for the moment, why didn’t the Appellate Court use the DMNCL theory and drop-kick this to hades? Yeah, that’s also rhetorical. Because here we are. With a 10-page appellate decision.
3. Look for further appeals. Sadly.
* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law,
Texas Board of Legal Specialization
Licensed in the States of Texas and New York
Higier Allen & Lautin, PC
2711 N. Haskell Avenue, Suite 2400
Dallas Texas 75204
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