Articles Posted in California Courts of Appeal

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The Court of Appeal affirmed the trial court's judgment in favor of defendants in an action involving proceeds awarded to its tenants as part of an eminent domain proceeding. The court rejected plaintiff's contention that the lease condemnation clause gave it the exclusive right to recover all moneys from any condemnation of the property and held that neither the language in the form lease nor plaintiff's arguments gave the court reason to read the lease language more expansively or as counter to Code of Civil Procedure section 1263.510. The court also held that the trial court did not err by applying the doctrine of collateral estoppel to plaintiff's claims to moneys awarded to tenants in LAUSD's eminent domain proceeding. View "Thee Aguila, Inc. v. Century Law Group" on Justia Law

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The case arose from a landlord’s repeated refusal to consent to the proposed assignment of a ground lease for the anchor space in a shopping center. The plaintiffs were the entities that wished to assign the leasehold interest and the entities that agreed to take the assignment; the defendants were the landlord and its parent company. In their original and first amended complaints, plaintiffs alleged the landlord unreasonably withheld consent to the plaintiffs’ lease assignment request. While the litigation was pending, plaintiffs made an amended lease assignment request, which the landlord similarly rejected. In their second amended complaint, plaintiffs asserted the same five causes of action as before, but added allegations about the landlord’s refusal to consent to their amended assignment request. The landlord filed an anti-SLAPP motion to strike the second amended complaint, contending plaintiffs’ amended assignment request and the landlord’s response to that request were settlement communications and statements made in litigation, and therefore constituted protected activity. The trial court denied the motion, finding the landlord’s rejection of the amended assignment request was not a settlement communication or litigation-related conduct, but rather an ordinary business decision. The Court of Appeal agreed and affirmed the order denying the anti-SLAPP motion. View "ValueRock TN Prop. v. PK II Larwin Square" on Justia Law

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Orozco opened Pauly’s Famous Franks N Fries at San Jose's "The Plant" shopping center. Before signing a 10-year lease, he asked the leasing manager whether restaurants with competing concepts or products were being considered for the remaining space. The manager told him no, even as she was negotiating with Al’s Beef, a national franchise selling hot beef sandwiches, hot dogs, and french fries. Orozco signed the lease without knowledge that the Plant had leased space to Al’s and personally guaranteed rent payments. The lease, which Orozco did not fully read, contained statement that the landlord had not made any promises about products offered by other tenants or future tenants. Pauly’s had a successful debut, with steadily increasing revenue. Approximately six months after Pauly’s opened, Al’s opened two doors down. Pauly’s business declined and, within six months of the debut of Al’s, Pauly’s closed. A jury found intentional misrepresentation and concealment and awarded compensatory damages, primarily for Pauly’s lost profits. The court ruled that Orozco was not entitled to rescission of the guaranty. The court of appeal affirmed in part. Substantial evidence supports the finding of intentional misrepresentation and the award of lost profits. Orozco was entitled to rescission of the guaranty. Because Orozco prevailed in obtaining rescission of the guaranty, he is entitled to attorney’s fees under the lease. View "Orozco v. WPV San Jose, LLC" on Justia Law

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This appeal stemmed from a civil action brought by United Grand to recover overdue rent from Malibu Hillbillies and its guarantor. After a default judgment, United Grand sought almost $2 million in attorney fees for its efforts to enforce the judgment against the guarantor. The trial court subsequently found that United Grand had engaged in extensive misconduct throughout the duration of the action and imposed a terminating sanction striking from the complaint United Grand's prayer for attorney fees. However, the trial court also entered judgment in favor of United Grand and against the guarantor in the amount of the unpaid rent and accrued interest she had already paid. The Court of Appeal affirmed the judgment of dismissal, the order dissolving the injunction and the order denying attorney fees on appeal. The court held that many of United Grand's claims were forfeited and the few cognizable claims of error were meritless. Finally, the court dismissed the appeal from the sanctions orders. View "United Grand Corp. v. Malibu Hillbillies, LLC" on Justia Law

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Landlord filed an unlawful detainer action against tenants. At issue was whether the property fell within the single-family dwelling exemption to the Rent Stabilization Ordinance of the City of Los Angeles. The Court of Appeal held that, regardless of the original design and use of the property, its current configuration (nine bedrooms, two bathrooms, and one kitchen) and current use for occupancy (four individual bedrooms rented to separate households who share the kitchen and bathrooms, but who alone have exclusive access to and use of their rooms) does not qualify for the single–family dwelling exemption from the Ordinance, because it is not a "detached dwelling containing only one dwelling unit" within the meaning of Municipal Code section 12.03. Accordingly, the court reversed the judgment of the appellate division. View "Chun v. Del Cid" on Justia Law

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Sixty-nine current and former residents of mobilehome park Terrace View Mobile Home Estates filed a lawsuit against the park's owners, Terrace View Partners, LP, Thomas Tatum, Jeffrey Kaplan, and management company, Mobile Community Management Company (collectively, defendants). The operative first amended complaint, styled as a class action, included 12 causes of action based on allegations that defendants' failure to maintain the park in "good working order and condition" created a nuisance that, along with unreasonably high space rent increases, made it difficult or impossible for park residents to sell their mobilehomes. After the court denied plaintiffs' motion for class certification, the parties and the court agreed to try the case in phases, with the first phase involving 16 residents living in 10 spaces in Terrace View. A first-phase jury returned a special verdict finding defendants liable and awarded the individual plaintiffs economic and noneconomic damages for: intentional interference with property rights, breach of the covenant of good faith and fair dealing, nuisance (based on substantially failing to enforce the park's rules and regulations), breach of contract/breach of the covenant of quiet enjoyment, and negligence/negligence per se. The jury found defendants were not liable for nuisance based on failing to provide and maintain the park's common facilities and physical improvements in good working order and condition, and were not liable for elder financial abuse against five plaintiffs. After the jury was discharged, the court issued an order on plaintiffs' cause of action alleging defendants violated Business and Professions Code section 17200 et seq., the "unfair competition law" (UCL). The court ruled that a "catch-up" provision in defendants' long-term leases that could greatly increase rent at the end of a lease term was unfair in violation of the UCL. The judgment also reflected the court's rulings at the beginning of trial that certain other provisions in the parties' lease agreements violated California's Mobilehome Residency Law or were otherwise unlawful. Defendants appealed. The Court of Appeal concluded the jury's award of compensatory damages and punitive damages had to be reversed. Although the jury's award of economic damages may have included unspecified amounts that could be upheld on appeal if the special verdict form had segregated them, "it is clear from the record that the vast majority of the economic damages awarded represented reimbursement for overpayment of rent and diminution in value of homes caused by high rent. Because the award of such damages cannot be sustained under any of the theories of liability presented to the jury and it is impossible to sever any properly awarded damages from improperly awarded damages." The Court therefore reversed the entire award of compensatory damages and the attendant awards of punitive damages and attorney fees and costs to plaintiffs. View "Bevis v. Terrace View Partners, LP" on Justia Law

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Pro se plaintiff Elena Dogan appeals after the trial court granted a motion for nonsuit brought by her landlord, defendant Comanche Hills Apartments, Inc., and related individuals and entities at the close of her case. Dogan alleged she was injured when some concrete stairs at the apartment complex broke under her foot, causing her to fall. She claimed defendants were responsible for her injuries based on their control of the premises. Shortly after the filing of her initial complaint, the superior court granted Dogan a fee waiver. The case ultimately went to trial on a negligence theory. Several months before trial, Dogan filed a request to waive additional court fees and specifically asked for a waiver of court reporter fees. The request was denied with the stamped notation, "The Court does not provide Court Reporter Services." As a result, there was no court reporter at trial and no reporter's transcript on appeal. Dogan sought to challenge the trial court's decision to grant a nonsuit in defendants' favor. Defendants argued in response that Dogan could not establish error due to the absence of a reporter's transcript. After initial briefing in this case was complete, the California Supreme Court issued its decision in Jameson v. Desta, 5 Cal.5th 594 (2018), holding that the San Diego Superior Court's policy on providing court reporters "is invalid as applied to plaintiff and other fee waiver recipients, and that an official court reporter, or other valid means to create an official verbatim record for purposes of appeal, must generally be made available to in forma pauperis litigants upon request." As defendants appropriately conceded in their post-Jameson supplemental brief, Jameson applied retroactively to all cases, including this one, not yet final on appeal. Because there was no way to now provide a reporter for a trial that has already occurred, the Court of Appeal determined it had no choice but to reverse and remand for a new trial at which an official court reporter would be furnished. View "Dogan v. Comanche Hills Apartments" on Justia Law

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Tenant filed suit against landlord and others after landlord rejected tenant's offer to purchase the building tenant rented for his audio recording business. Landlord ultimately sold the building to a third party because the offer was for considerably more money. The Court of Appeal affirmed the dismissal of the action and held that a right of first refusal is not an essential term that carries forward into a holdover tenancy unless the parties so indicate. In this case, there was no such indication and tenant's alternative theories for enforcing the right to first refusal lacked merit. View "Smyth v. Berman" on Justia Law

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Lloyd Copenbarger, as Trustee of the Hazel I. Maag Trust (the Maag Trust), sued Morris Cerullo World Evangelism, Inc. (MCWE) for declaratory relief and breach of a settlement agreement made to resolve various disputes, including an unlawful detainer action. MCWE was the lessee of a 50-year ground lease (the Ground Lease) of real property (the Property) in Newport Beach. The Property was improved with an office building and marina (the Improvements). The Ground Lease was set to terminate on December 1, 2018. In 2004, MCWE subleased the Property and sold all of the Improvements to NHOM (the Sublease). Starting in 2009, NHOM experienced cash flow problems due to “a shortage of rents.” In June 2011, MCWE commenced an unlawful detainer action against NHOM based on allegations NHOM failed to maintain and undertake required repairs to the Improvements. Six months later, the Maag Trust intervened in the UD Action as a party defendant under the theory that if NHOM were evicted and the Sublease terminated, then the Maag Trust’s security interest created by the Maag Deed of Trust would be destroyed. In August 2012, MCWE, Plaza del Sol, and the Maag Trust entered into a settlement agreement (the Settlement Agreement). The Maag Trust alleged MCWE breached the settlement agreement by failing to dismiss with prejudice the unlawful detainer action and sought, as damages, attorney fees incurred in that action from the date of the settlement agreement to the date on which MCWE did dismiss the action. Following a bench trial, the trial court found MCWE had breached the settlement agreement by not timely dismissing with prejudice the unlawful detainer action. As damages, the court awarded the Maag Trust attorney fees it claimed to have incurred during the relevant time period. On appeal, MCWE did not challenge the finding that its failure to dismiss the unlawful detainer action constituted a breach of the settlement agreement. Instead, MCWE made a number of arguments challenging the damages awarded. After review, the Court of Appeal reversed the judgment against MCWE because there was a wholesale failure of proof of the amount of damages on the part of the Maag Trust. Therefore, the Court reversed with directions to enter judgment in favor of MCWE on the Maag Trust’s complaint. View "Copenbarger v. Morris Cerullo World Evangelism, Inc." on Justia Law

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Coyne's San Francisco property includes a building with three apartments and a free-standing, three-bedroom cottage. De Leo, age 81, had resided in the cottage since 1989. In 2012, Coyne decided to move into the cottage. Martin asked De Leo to move to the lower unit for a reduced rent. De Leo initially agreed. Martin paid that tenant $10,000 to vacate and painted the lower unit. De Leo’s son expressed concerns that no caregiver would have a place to stay if De Leo moved to the lower unit. Martin explained that he could invoke the Ellis Act to evict the tenants. De Leo refused to vacate. Martin transferred ownership to trusts, executed a tenancy in common agreement, and filed a “Notice of Intent to Withdraw Residential Units from the Rental Market” with the Residential Rent Stabilization and Arbitration Board, listing himself as the occupant of the upper unit, although he did not then reside there. Esclamado, a Coyne employee, was listed as the lower unit occupant, but no rent was listed; lower and upper units the as “owner-occupied.” After extensions, the Board recorded notices that the units would be withdrawn from the rental market (Gov. Code, 7060.2). Ultimately, Coyne obtained a judgment of possession. The court of appeal reversed. The trial court abused its discretion excluding De Leo’s evidence on the key factual issue of whether Martin had a bona fide intent to withdraw the Property from the residential rental market--evidence that Martin sold Esclamado a sham ownership interest. View "Coyne v. De Leo" on Justia Law