“The litigation privilege is ‘not without limit’, as the Action Apartment court took pains to point out. (Action Apartment, supra, 41 Cal.4th at p. 1242.) Because recognition of the privilege here would neuter section 1942.5 by removing eviction from the statutory remedy of retaliatory eviction, we view the clash between section 47, subdivision (b), on the one hand, and section 1942.5, subdivisions (d) and (h), on the other, as irreconcilable. To be consistent with the high court’s guidance that we give section 1942.5 a liberal construction designed to achieve the legislative purpose, we conclude that the litigation privilege must yield to it.”
In Winslett v. 1811 27th Avenue, LLC (2018), a former tenant filed a complaint against a landlord for retaliation and retaliatory eviction, under Section 1942.5 of the Civil Code, as well as violations of Oakland’s just cause for eviction ordinance. The trial court granted the landlord’s anti-SLAPP motion to strike. The tenant appealed the trial court’s ruling that the litigation privilege barred the retaliation claims and that her claims under the eviction control ordinance were based on protected activity under the anti-SLAPP statute. The Court of Appeal agreed and reversed.
Continue reading Division Four of First District Court of Appeal Harmonizes Litigation Privilege with Tenant Anti-Retaliation Statute in Winslett v. 1811 27th Avenue, LLC
The San Francisco Chronicle reports on a recent unpublished ruling from Division Five of the First District Court of Appeal, reversing a judgment in favor of an Ellis Act-invoking landlord, on the basis that the trial court improperly excluded evidence of a “sham transfer”.
The Ellis Act requires property owners to withdraw all “accommodations” (i.e., residential rental units) from the market and to terminate all such tenancies. A landlord may not terminate some accommodations and leave others. (This is a common sense rule that allows a landlord to “go out of business” but not to evade rent control by evicting low-paying tenants and keep the market rate ones.)
In Coyne v. De Leo, the owner (Coyne) invoked the Ellis Act on a four-unit building with a single “tenant”. Other units were occupied by family members and friends – including one friend, Maria Esclamado, who was a former tenant until Coyne made her an owner so that she could participate in the Ellis withdrawal and remain in her home.
The tenant (De Leo) wanted to introduce evidence about this “transfer of ownership” to the jury. He argued that the transfer – with seller financing, a monthly payment conspicuously similar to the former “rent” payment, and an eventual “quitclaim deed” back to Coyne when she moved – was suspicious.
The Chronicle quoted Coyne’s attorney, Justin Goodman, as saying that Esclamado “received title to the property and had all the benefits of title” while “Martin (Coyne) took all the risks”, predicting that Coyne would prevail at a retrial even with the evidence that was previously barred.
“By imposing a 10-year waiting period on alterations to non-conforming units where property owners have exercised their Ellis Act rights, the ordinance penalizes property owners who leave the rental market. The ordinance does not regulate the particulars of the remodeling of a nonconforming unit, but rather prohibits any such changes for a period of 10 years after the property owner exits the rental business. By imposing such a prohibition on property owners who have left the rental market, the ordinance challenged here improperly enters the field of substantive eviction controls over such property owners.”
In SPOSFI v. CCSF (2018), the Small Property Owners of San Francisco challenged San Francisco Ordinance 286-13. Prior to that ordinance, Section 181 of the Planning Code prohibited the “enlargement, alteration or reconstruction” of nonconforming units. (These are legally constructed units in buildings that were “down-zoned” after the fact. As this is essentially a “math” problem, a property owner would designate the particular unit in the property that gets the “nonconforming” designation.)
Ordinance 286-13, however, allowed such modifications within the existing building envelop, so long as residential use was principally permitted in the zoning district and the owner had not performed a non-fault eviction at the property. In that circumstance, the owner could not make any changes for a period of ten years.
Continue reading Small Property Owners of San Francisco v. City and County of San Francisco (2018) – Cities May Not Impose Land Use Penalties on Property Owners Who Have Invoked the Ellis Act
Thus, under Birkenfeld, municipalities may by ordinance limit the substantive grounds for eviction by specifying that a landlord may gain possession of a rental unit only on certain limited grounds. But they may not procedurally impair the summary eviction scheme set forth in the unlawful detainer statutes. The Property Owners argue the Ordinance is procedural because it governs the timing of notices of eviction: ‘The Ordinance does not limit the allowable justifications for evicting tenants; it only delays certain evictions.’ Such questions of timing, they contend, are purely procedural. The City argues the Ordinance is substantive because timing is merely a component of the substantive defense to eviction: ‘When the household to be evicted includes a child under the age of 18 or an ‘educator’ within the terms of the Ordinance, ‘good cause’ for a landlord to undertake any of the specified types of no-fault evictions does not exist unless the eviction is to take effect during the summer months.’ As this case illustrates, the distinction between procedure and substantive law can be shadowy and difficult to draw in practice.
In SFAA v. CCSF, Division Five of the First District Court of Appeal overturned the SF Housing Court’s order mandating that the City not enforce a 2016 amendment to the Rent Ordinance (Ordinance 55-16) that created a substantive defense to certain non-fault evictions for “educators”.
Continue reading SFAA v. CCSF (2018): City’s “Educator” Eviction Defense Upheld as “Substantive” Rather Than “Procedural”
“Accordingly, we hold that an unlawful detainer judgment awarding back-due rent does not preclude a lessor from seeking additional back-due rent in an ordinary civil action. However, the lessor is precluded from recovering back-due rent associated with a particular time period in the subsequent civil action if such a claim was actually determined on the merits in the unlawful detainer action. Thus, the lessor is not only precluded from recovering twice for the same items of damages but also may not renew a claim for back-due rent associated with a particular time period if that periodic claim was denied on the merits in the unlawful detainer action.”
Hong Sang Market, Inc. v. Peng (2018) tracks multiple years and multiple lawsuits, with a building owner, master tenant and subtenant battling over money judgments, unpaid rent, unlawful detainer damages and various awards of attorneys’ fees. For landlord-tenant practitioners, it provides a crucial analysis of the doctrine of res judicata, in the context of unlawful detainers based on the non-payment of rent, contract damages for non-payment of rent, and the holdover damages incidental to unlawful detainers.
Hong Sang is the owner of a commercial building. It leased to Ming Kee Game Birds, Inc., which then subleased to Vivien Peng. Ming Kee sued Peng for breach of the sublease, but Peng cross-complained against Ming Kee, obtaining a money judgment that she began to collect in the form of offsets to her rental payment obligation. However, Ming Kee and Hong Sang agreed to terminate the master lease, and a new tenant – Ming’s Poultry, LLC – assumed the master lease and began operating Ming Kee’s former business.
Continue reading First District Court of Appeal Analyzes Claim Splitting in the Context of Unlawful Detainer Rent Demand and Damages versus Past-Due Contract Rent in Hong Sang Market, Inc. v. Peng (2018)
“Sayta subsequently brought a motion to enforce the settlement pursuant to section 664.6, alleging breach of a confidentiality provision and seeking liquidated damages. The trial court denied the motion on the merits and Sayta appeals Because the parties failed to request, before dismissal, that the trial court retain jurisdiction to enforce the settlement, or alternatively seek to set aside the dismissals, we find the court lacked jurisdiction to entertain the motion. We therefore reverse on that basis and do not reach the merits.”
Sayta v. Chu represents the importance of understanding civil procedure in crafting effective and enforceable settlement agreements.
Very few cases actually go to trial. Through all the posturing, law and motion, discovery and settlement discussions, attorneys are generally able to anticipate likely outcomes to obtain “good enough” results, without their clients paying for an answer to the question “who was right?”. (Or, put another way, settlement allows the parties to determine the outcome, while trial gives control over the outcome to the judge and jury.)
A “settlement agreement” is essentially a contract and is generally interpreted and enforced like a contract. This could create a problem of regression: settling a claim (like one for “breach of contract”) results in a “settlement contract”. The settlement contract could also be breached and enforced with a lawsuit, which can be settled with a settlement contract, which can be breached, etc., etc. Lawsuits could never be settled because the claim would only be deferred to the next lawsuit.
Continue reading Sayta v. Chu (2017) – Parties Must Obtain Court Order To Retain Jurisdiction To Enforce After Dismissal
“The Rent Board contends the “sold separately” exception does apply under our facts because plaintiff “admits that it has control of and owns the entire building at 840 55th Street, Oakland, California.” The Rent Board also notes the building’s four units are all connected within the structure, there are no units in the building that were not converted to condominiums, plaintiff negotiated to purchase all the units together, none of the units were sold to new occupants, and the complaining tenants continued to reside in their units just as they had prior to the conversion. Essentially, the Rent Board asserts plaintiff did not meet the “sold separately” requirement because it purchased the entire apartment building, regardless of how the transaction was structured. Plaintiff counters that the “sold separately” exception “applies rent control only to condominium subdividers [like Kolevzon], not to subsequent purchasers like Golden State.” Plaintiff is correct.”
In Golden State Ventures, LLC v. City of Oakland Rent Board, a landlord purchased four out of four of the condominium units in a single building in Oakland, and then increased the tenants’ rents by 125%. Apparently quite proud of this purchase, “In a blog posting discussing the acquisition of the building, plaintiff’s principal, Arlen Chou, stated: ‘The best part of the property is that as they are condominiums, they are EXEMPT from rent control! I will soon own a little island of rent control free property in a rising neighborhood in Oakland. Who said there are no deals in the Bay Area???’.”
However, while Costa-Hawkins decontrols “separately alienable” units (like single family homes) from rent control, a 2002 amendment “closed the loophole” where condominium subdividers obtained final map approval for sale, but then kept entire buildings – formerly apartments – as rent-control-exempt property, exalting form over function. As noted by the court in Golden State Ventures, LLC, “Such conduct was entirely legal at that time”, until the 2002 amendment required that the units be “sold separately to a bona fide purchaser” before decontrol applied.
Continue reading Golden State Ventures, LLC v. City of Oakland Rent Board – (Unpublished) Clarity on the “Sold Separately” Requirement for Condominium Decontrol under Costa-Hawkins
“Rosemary Court’s allegations that Parsi moved out of the premises and lived elsewhere for a time do not constitute termination under the lease or any law that we are aware of and, therefore, do not support Rosemary Court’s legal conclusion that Parsi terminated her leasehold interest. Rosemary Court relied on Walker’s purportedly unauthorized assignment of the lease to Parsi for its unlawful detainer cause of action, but regardless of any such assignment, by Rosemary Court’s own allegations, including the terms of the lease incorporated into the complaint by reference, Parsi was a colessee of a month-to-month tenancy who had moved out of the premises for a time, which remained occupied by Walker, and then moved back into the premises around the time that Walker moved out. These allegations establish only that Parsi was a colessee of the premises with an ongoing right to a month-to-month tenancy. Therefore, Rosemary Court did not state an unlawful detainer cause of action against Parsi.”
In Rosemary Court Properties, LLC v. Walker (unpublished), the First District Court of Appeal reversed the appellate division of the superior court decision upholding a default judgment in an unlawful detainer case against a co-lessee (Parsi) who, while temporarily out of occupancy, had resumed occupancy prior to the attempted termination of the tenancy. In so doing, the Court determined that the “gatekeeper duty” of the trial court required that it not enter a default judgment where the complaint is insufficient to state a cause of action.
Continue reading Rosemary Court Properties, LLC v. Walker (Unpublished) – “Gatekeeper Duty” Justifies Reversal of Unlawful Detainer Judgment upon Failure To State Cause of Action