Category Archives: Unlawful Detainers

Dr. Leevil, LLC v. Westlake Health Care Ctr. (2018): Title Must Be “Duly Perfected” Before Service of Unlawful Detainer Three-Day Notice, Despite Retroactive Perfection of Title Under Nonjudicial Foreclosure Statutes

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In Dr. Leevil, LLC v. Westlake Health Care Ctr., a property owner leased its property to a skilled nursing facility and later obtained a secured loan. It defaulted. Dr. Leevil, LLC purchased the defaulted loan and initiated a nonjudicial foreclosure sale, ultimately buying the property at the trustee’s sale. Dr. Leevil, LLC served a three day notice to quit the next day, but did not record title for five more days.

Serving the notice before becoming “record owner” seems counterintuitive. However the nonjudicial foreclosure statutes arguably condoned the practice. Cal. Civ. Code § 2924h(c) states, “the trustee’s sale shall be deemed final upon the acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 15 calendar days after the sale, or the next business day following the 15th day if the county recorder in which the property is located is closed on the 15th day.”

The unlawful detainer statutes refer to the nonjudicial foreclosure statutes, in setting forth cases of post-foreclosure evictions. Applicable here, “a person who holds over and continues in possession of . . . real property after a three-day written notice to quit the property has been served . . . may be removed therefrom . . . Where the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust executed by such person, or a person under whom such person claims, and the title under the sale has been duly perfected.” Cal. Code Civ. Proc., §1161a(b)(3).

In other words, Dr. Leevil, LLC believed it could serve the notice to quit first, because it was already the owner, and title could be (and ultimately was) retroactively perfected as of the actual purchase date. The Court of Appeal adopted this interpretation.
Continue reading Dr. Leevil, LLC v. Westlake Health Care Ctr. (2018): Title Must Be “Duly Perfected” Before Service of Unlawful Detainer Three-Day Notice, Despite Retroactive Perfection of Title Under Nonjudicial Foreclosure Statutes

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DLI Properties, LLC v. Hill (2018): Post-Foreclosure Tenant Protection Statute Inapplicable To Successor Owners Who Create New Leases with Existing Tenants

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In DLI Properties, LLC v. Hill, the Appellate Division of the Superior Court of Los Angeles parsed a state statute requiring certain notifications by new landlords to their tenants, affirming an unlawful detainer judgment for the landlord.

DLI Properties, LLC acquired a property in foreclosure that was tenant occupied. Generally, foreclosing on an earlier interest (like a deed of trust) will eliminate interests that are later in time (like a lease). But California has specific statutory protections for tenants facing foreclosures. California also requires successor owners to notify existing tenants of information how they can pay rent and how they may serve notices relating to the tenancy and civil process. These requirements (found in Civil Code §1961, et seq.) are somewhat self-policing for successor owners, who cannot serve a rent demand notice to initiate an unlawful detainer, based on rent owed during any period of non-compliance.

DLI Properties, LLC purchased the subject property in foreclosure. It hired Strategic Property Management, Inc. to manage the property, and Strategic entered into a new lease agreement with the tenant (Hill) on the date of sale. Hill had become delinquent in the payment of rent, and DLI served a three-day notice to pay rent or quit, and then filed an unlawful detainer action. Before the jury returned a verdict in favor of DLI (finding that it complied with the unlawful detainer procedures and that Hill was not entitled to offsets for habitability issues), Hill moved for nonsuit, then directed verdict, then JNOV on a single issue: failure to comply with Section 1962, et seq.

Section 1962(c) provides: “The information required by this section shall be kept current and this section shall extend to and be enforceable against any successor owner or manager, who shall comply with this section within 15 days of succeeding the previous owner or manager. A successor owner or manager shall not serve a notice pursuant to paragraph (2) of Section 1161 of the Code of Civil Procedure or otherwise evict a tenant for nonpayment of rent that accrued during the period of noncompliance by a successor owner or manager with this subdivision. Nothing in this subdivision shall relieve the tenant of any liability for unpaid rent.”

The Appellate Division upheld the trial court ruling, noting the distinction between “owners” and “successor owners” under the statute. The California Legislature was understandably concerned about the treatment of existing tenants who do not necessarily know who succeeds to their lease contracts following foreclosure. (In fact, this concern guided the California Supreme Court’s recent analysis of post-foreclosure eviction notices in Dr. Leevil, LLC v. Westlake Health Care Center.)

While DLI purchased at foreclosure, its property manager executed a new lease, and this rendered them “owner” under the statute: “This disparate treatment of owner and successor owner/manager for the same dereliction of their statutory duty indicates the prohibition is meant to specifically target successor owners and their managers to address a danger posed by the change in ownership. There is a greater likelihood a tenant would not be aware of relevant information concerning a successor owner/manager rather than an owner with which he enters into a lease agreement. Therefore, the prohibition against evictions encourages and incentivizes a successor owner/manager to disclose such information.”

Ultimately, where the owner (via its property manager) entered a new lease with an existing tenant, it created a direct relationship with the tenant, which did not resemble any of the Legislature’s concerns in enacting the statute.

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Legislative Update: AB 2343 (2018): Amendment to Unlawful Detainer Statutes To Extend Breach Cure Period and Tenants’ Time To Respond to Complaint

Assemblymember Chiu’s AB 2343 is signed into law, extending three important deadlines in the unlawful detainer statutes by excluding “Saturdays, Sundays and judicial holidays”. Effective September 1, 2019, both three day notices to pay rent or quit and three day notices to cure breach or quit will no longer include these “off days” in calculating their deadlines.

Under current law, a notice served on a Wednesday would count Thursday (day 1) and Friday (day 2), however, they cannot expire on a holiday/weekend, so the “third” day would be Monday. At least with payment of rent, this rule makes sense, because a tenant may need to go to a bank to obtain funds. (Still, this calendaring has arguably led to confusion and harsh results for some.)

The amended unlawful detainer statutes will also exclude these off days when counting the response date to the unlawful detainer five-day summons.

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Multani v. Knight (2018): Second District Court of Appeal Takes Expansive Approach To Discharging Landlord’s Obligations Following Expiration of Rent Demand Notice

Knight argues, and the trial court agreed, that Salima became a tenant at sufferance no later than when Knight filed the unlawful detainer action against her; therefore, she had only the right of “naked possession,” i.e., the right not to be forcibly evicted without legal process. Salima argues that despite her nonpayment of rent, she retained all legal rights as a month-to-month tenant until she was dispossessed following the conclusion of the unlawful detainer action.

In Multani v. Knight, a commercial tenant (Multani) leased a commercial space from Knight, to use as a medical clinic. As she was winding down her practice, her sons contracted to sell to another physician. However, because of medical issues, Multani stopped maintaining the business. Landlord Knight served a three-day rent demand notice, filed an unlawful detainer when it went uncured, and took possession by default.

In the meantime, plumbing problems lead to water damage to the personal property/medical equipment in the clinic. After the default judgment for possession, Multani sued for conversion of the personal property/fixtures, breach of the covenant of quiet enjoyment (later re-characterized as “constructive eviction” from a commercial tenancy), interference with contract, and a handful of other claims. Knight cross-complained for the unpaid rent.

Knight filed for summary judgment, arguing that Multani, “could not prevail on any of her claims because she was unlawfully on the premises at all times after July 1, 2011, and was illegally on the premises after December 9, 2011”. This argument, adopted by the trial court, became the architecture for an aggressive published appellate opinion about when the law discharges a landlord’s obligations to a defaulting tenant.
Continue reading Multani v. Knight (2018): Second District Court of Appeal Takes Expansive Approach To Discharging Landlord’s Obligations Following Expiration of Rent Demand Notice

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Aron v. WIB Holdings (2018): Tenant’s Premature Filing of “Malicious Prosecution” Action Justifies Affirming Anti-SLAPP Motion Following Remittitur in Underlying Action

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“Defendants argue that the appellate division’s remittitur affirming the underlying unlawful detainer judgment, issued after the trial court’s order granting the anti-SLAPP motion and dismissing tenant’s complaint in the instant case, is not newly discovered evidence and cannot be the basis for a new trial because it did not exist at the time of the anti-SLAPP hearing. We agree.”

In Aron v. WIB Holdings, a tenant prevailed in an unlawful detainer lawsuit for breach of lease. The landlord appealed, and while the appeal was pending, the tenant sued his landlord for damages. The landlord filed an anti-SLAPP motion, arguing that the tenant’s complaint for damages, based on Santa Monica’s tenant harassment ordinance, arose from the landlord’s unsuccessful prosecution of the unlawful detainer – conduct that is protected activity. It also found that the tenant couldn’t prevail on the merits, because the unlawful detainer judgment was not final; the tenant’s lawsuit was premature. Tenant appealed.

Then, when remittitur issued (i.e., when the baton was passed from the reviewing court back down to the trial court), the tenant moved for a new trial in his own lawsuit. He argued that the remittitur was newly discovered evidence justifying a new “trial” (in this case, a new hearing on the anti-SLAPP motion). The trial court agreed, granting the motion, and the landlord appealed.
Continue reading Aron v. WIB Holdings (2018): Tenant’s Premature Filing of “Malicious Prosecution” Action Justifies Affirming Anti-SLAPP Motion Following Remittitur in Underlying Action

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Hsieh v. Pederson (2018): Three Day Rent Demand Notice Need Not Allow for Personal Payment of Rent, Nor Does Personal Acceptance Extend the Notice Period

“Where an unlawful detainer proceeding is based on the tenant’s breach, the cause of action does not arise until the expiration of the notice period without the default being cured by the tenant. (§ 1161, subd. 2; Downing v. Cutting Packing Co. (1920) 183 Cal. 91, 95-96.) The complaint cannot be filed until the full notice period has expired, since the tenant is not guilty of unlawful detainer until the full three days — or in the instant matter, 14 days – have expired. (Nicolaysen v. Pacific Home (1944) 65 Cal.App.2d 769, 773 [‘tenancy is not terminated upon the giving of the notice but upon the expiration of the period therein specified’]”

In Hsieh v. Pederson (2018), a landlord appealed from a judgment for a tenant on the procedural basis that the entire action was untimely. A cause of action for unlawful detainer is (commonly) created by the service and expiration of an uncured notice. The tenant moved for judgment on the pleadings, and the trial court granted it on the basis that the notice – which allowed as an alternative cure that the tenant may pay personally during weekdays – could only count those weekdays as part of the “cure period”. Excluding weekends, the action was filed before the expiration of the notice; the Appellate Division of the Los Angeles Superior Court reversed.

Section 1161(2) of the Code of Civil Procedure describes a notice to pay rent or quit. (This is probably the quintessential “eviction notice”, described by statute as a “three day notice”, although for some reason unclear from the record, this case involved a “fourteen day notice”.)

A notice to pay rent or quit must state the essentials – the rent due and the name, number and address of the person who can receive the “cure”. The notice may also allow payment by personal delivery, in which case, it must also state the usual days/hours the personal delivery can be made.

The court held that, “Under the clear language of the [unlawful detainer] statute, the decision to allow personal payment of the rent, in addition to allowing payment by mail by the tenant, is up to the landlord.”

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California Legislative Update (2017) – AB 291 Prohibits Landlord Threats and Actions Based on Immigration Status

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AB 291 now imposes broad restrictions against threats by landlords (and attorneys) relating to immigration status. In addition to now making it lawful to “Threaten to disclose information regarding or relating to the immigration or citizenship status of a tenant, occupant, or other person known to the landlord to be associated with a tenant or occupant”, the new law also provides for defenses to unlawful detainer actions where the tenant can establish that the landlord filed the action because of the tenants immigration status.

In fact, a tenant may establish this by showing that the action is based on any of the following:

(A) The failure at any time of a previously approved tenant or occupant to provide a valid social security number.
(B) The failure at any time of a previously approved tenant or occupant to provide information required to obtain a consumer credit report under Section 1785.11 of the Civil Code.
(C) The failure at any time of a previously approved tenant or occupant to provide a form of identification deemed acceptable by the landlord.

As some of these may innocuously relate to the landlord’s ability to verify the creditworthiness of their renters, both property managers and practitioners will want to be cautious in crafting three day notices as unlawful detainer complaints.

The full text of AB 291 is available here.

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Rosemary Court Properties, LLC v. Walker (Unpublished) – “Gatekeeper Duty” Justifies Reversal of Unlawful Detainer Judgment upon Failure To State Cause of Action

“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

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City of West Hollywood v. Kihagi (Unpublished) – Application of Ellis Act Constraints in the Context of Settlement Agreements

[UPDATE: This case was certified for publication on 10/26/17.]

Infamous landlord Anne Kihagi tested the limits of Ellis Act re-rental constraints, as illustrated in the latest appellate decision chronicling her exploits, City of West Hollywood v. Kihagi. While withdrawing an 8-unit, rent controlled property in West Hollywood from the rental market, Kihagi harassed one of the tenants, prompting the City of West Hollywood to prosecute, leading to a settlement agreement governing the application of the Ellis Act.

For purposes of the Ellis Act, the property featured several “classes” of rental units: four were unoccupied, four were occupied, and one of the occupied units claimed an extension of the withdrawal date (as tenants who are disabled or at least 62 are entitled to do). The Ellis Act uses a floating definition for the “date of withdrawal”, which could be as early as the landlord files the notice of intent or as late as the extended termination of tenancy. Further, while the Ellis Act imposes vacancy control constraints for five years and requires a “first right of refusal” for ten, these restrictions do not appear to apply to rental units that are unoccupied at the time of withdrawal. (For those, arguably only a two year re-rental restriction applies – or perhaps even no restrictions at all.)

Despite entering a settlement agreement with potentially more restrictive terms, Kihagi re-rented units after the five-year vacancy control restrictions would have expired under the Ellis Act. The Court of Appeal first noted that landlords’ agreements to waive rights under the Ellis Act are void, citing Embassy LLC v. City of Santa Monica (2010) 185 Cal.App.4th 771, 777, but ultimately determined that Kihagi had re-rented outside of the Ellis Act constraints.

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Ayala v. Dawson – First District Court of Appeal Finds Would-Be Buyer Collaterally Estopped To Claim Interest in Property Following Unsuccessful Eviction Defense

“Ayala could have moved to consolidate the unlawful detainer proceeding with this action, thus requiring the court to determine whether the issues presented were so complex and so intertwined with the issue of title that ‘the entire case [should be] treated as an ordinary civil action, not as a summary proceeding’ (Martin-Bragg v. Moore (2013) 219 Cal.App.4th 367, 387), but he did not do so. Instead, he ‘acceded to the summary and expedited procedures of unlawful detainer with respect to’ his claim to equitable title.”

In Ayala v. Dawson, the First District Court of Appeal navigated the collateral estoppel created by an unlawful detainer defendant’s litigation of his ownership of the property while simultaneously seeking to litigate his own breach of contract claims.
Continue reading Ayala v. Dawson – First District Court of Appeal Finds Would-Be Buyer Collaterally Estopped To Claim Interest in Property Following Unsuccessful Eviction Defense

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