Justia Landlord - Tenant Opinion Summaries

Articles Posted in California Courts of Appeal
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Appellant appealed the order denying his motion to vacate the judgment entered against him for $251,200.13 after he failed to pay $30,000 as required pursuant to a stipulation for entry of judgment. Appellant contends the trial court erred because the judgment is an unenforceable penalty and is therefore void.   The Second Appellate disagreed with Appellant and affirmed the order denying the motion to vacate the $251,200.13 judgment. Here, the $251,200.13 damage provision in the stipulation for entry of judgment is not arbitrarily drawn from thin air. It is the actual and stipulated amount of damages. This is not a penalty or a liquidated damage provision. The court explained it cannot delete the terms of the stipulated judgment calling for monthly payments and it cannot add a provision to the terms of the stipulated judgment allowing a seven-year moratorium on monthly payments. Money has value over time. Appellant has had the use of the money for seven years. Respondent has been deprived of the use of the money for seven years. Respondent’s “more than reasonable” settlement terms should not be used against it to show “liquidated damages” or a “penalty.” View "Creditors Adjustment Bureau v. Imani" on Justia Law

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Shao Yan Chen, Han Lin Liu, Zhi Hua Mo, Yuk Yee Cheng, Hui Zhen Hu, Ruizhao Wu, and Qi Di Wu (collectively, tenants) had a dispute with Valstock Ventures, LLC and 371 Broadway Street, LLC (together, Valstock) over which of two documents was the operative lease governing the tenants’ tenancies in two of Valstock’s apartment buildings. The tenants filed suit against Valstock seeking a declaratory judgment on this question, alleging a civil conspiracy, and stating claims for violations of the Fair Employment and Housing Act (FEHA), Unfair Competition Law (UCL), and section 37.10B of the San Francisco Rent Ordinance. The trial court awarded the tenants approximately $1.1 million in attorney’s fees under Civil Code section 1717 after granting their motion for summary adjudication of the sole cause of action on the contract in this case, before trial or disposition of the remaining non-contract causes of action. The defendants appealed, arguing the award of attorney’s fees was premature because the litigation as a whole had not yet ended. To this the Court of Appeal agreed and therefore reversed. View "Chen v. Valstock Ventures, LLC" on Justia Law

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The co-tenancy provision in the parties’ lease required a shopping center to have either: (1) three anchor tenants; or (2) 60 percent of the space leased, and, if it did not, Tenant-respondent JoAnn Stores, LLC was permitted to pay “Substitute Rent.” In 2018, Jo-Ann informed JJD it intended to start paying Substitute Rent effective July 1, 2018, because the co-tenancy provision was not met after two anchor tenants closed. Landlord-appellant JJD-HOV Elk Grove, LLC (JJD) responded that the co-tenancy provision was an unenforceable penalty under the holding in Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc., 232 Cal.App.4th 1332 (2015). Jo-Ann contended Grand Prospect was distinguishable and the co-tenancy provision was enforceable. JJD and Jo-Ann filed competing complaints for declaratory relief and cross-motions for summary judgment. The trial court found the co-tenancy provision was enforceable, and thus granted Jo- Ann’s motion, denied JJD’s, and entered judgment accordingly. JJD appealed. The Court of Appeal declined to follow the rule announced in Grand Prospect here, and instead held that this case was governed by the general rule that courts enforce contracts as written. The Court therefore agreed with the trial court’s conclusion that the co-tenancy provision at issue in this case was enforceable, and affirmed the judgment. View "JJD-HOV Elk Grove, LLC v. Jo-Ann Stores" on Justia Law

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The Costa Hawkins Rental Housing Act, Civil Code section 1954.50, generally exempts newly constructed residential units, single-family homes, and condominiums from local rent increase limitations. The San Francisco Rent Ordinance acknowledges these exemptions in sections 37.3(d) and (g). Costa Hawkins expressly preserves local authority to “regulate or monitor the grounds for eviction” on all residential rental properties, including properties exempt from local rent control.Landlords challenged a measure that amended the city’s rent ordinance to make it unlawful for a landlord to seek to recover possession of a rental unit that is exempt from rent control by means of a rental increase that is imposed in bad faith to coerce the tenant to vacate the unit in circumvention of the city’s eviction laws, claiming that the amendment is preempted by Costa Hawkins because it seeks to regulate the rent a landlord may charge on exempt properties. The trial court and court of appeal rejected the challenge. The amendment is a valid exercise of the city’s authority to regulate evictions and is designed to deter landlords from attempting to avoid local eviction rules by imposing artificially high rents in bad faith. View "San Francisco Apartment Association v. City & County of San Francisco" on Justia Law

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J&A, a tenant of real party in interest, TTP, filed suit alleging that TTP failed to honor its right of first refusal when TTP entered an agreement to sell property to a third party, Adventure Church. J&A initiated legal action in the Fresno County Superior Court and filed a notice of pendency of action, commonly known as a lis pendens, to provide notice to interested parties of the litigation; TTP moved to expunge the lis pendens; and the trial court granted the motion. J&A then petitioned for writ of mandate challenging the trial court's ruling.The Court of Appeal granted the writ of mandate, concluding that the order expunging the lis pendens was flawed in several respects. The court found that the trial court's ruling expunging the lis pendens was based on erroneous legal rulings and factual findings not supported by substantial evidence. In this case, J&A has shown the probable validity of its real property claims and is entitled to the continued recordation of the lis pendens pending the outcome of litigation. The court ordered and entered a new order denying the motion to expunge the lis pendens. The court also concluded that J&A, as the prevailing party on the motion to expunge and in the writ proceeding, is entitled to recover its reasonable attorney’s fees and costs pursuant to Code of Civil Procedure section 405.38. The court also directed the trial court to hold further proceedings to calculate and award those attorney's fees and costs. View "J&A Mash & Barrel, LLC v. Superior Court of Fresno County" on Justia Law

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Kremerman sued his former tenant, White. After a registered process server filed three non-service reports, Kremerman unsuccessfully sought to accomplish service by publication. In the subsequent proof of service, the process server stated that he left a copy of the summons and complaint with “a competent member of the household (at least 18 years of age) at the dwelling house or usual place of abode of the party” and identified said person as Plowden, an “authorized employee” at the Postal Annex where White maintained a private mailbox. The process server “thereafter mailed (by first-class, postage prepaid) copies of the documents” to the “authorized employee at ‘Postal Annex’.” The trial court entered a default judgment against White. White unsuccessfully moved to vacate the default judgment, alleging she was never effectively served with the summons and complaint.The court of appeal reversed. Under Code of Civil Procedure section 473 (d), and section 473.5, the trial court never acquired personal jurisdiction over White because service of summons was defective. Kremerman did not undertake diligent efforts to serve White. With respect to substituted service, the Postal Annex is not White’s household or usual place of abode, nor was Plowden a competent member of White’s household. Kremerman was aware that White had another address, as he included that address on the security deposit itemization. View "Kremerman v. White" on Justia Law

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Union Square owns the San Francisco building where Saks has operated a store since 1991. The lease's initial 25-year term was followed by successive options to renew; it mandates arbitration to determine Fair Market Rent for renewals. Section 3.1(c)(iv) states that “[e]ach party shall share equally the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel for the respective parties and of witnesses shall be paid by the respective party engaging such counsel or calling such witnesses.” Section 23.10 permits a prevailing party to recover costs, expenses, and reasonable attorneys’ fees, “Should either party institute any action or proceeding to enforce this Lease ... or for damages by reason of any alleged breach ... or for a declaration of rights hereunder,The parties arbitrated a rent dispute in 2017. The trial court vacated the First Award, in favor of Union Square. To avoid re-arbitration, Union Square sought mandamus relief, which was summarily denied. While discussions concerning another arbitration were pending, Union Square filed a superior court motion to appoint the second arbitrator. The court-appointed arbitrator ruled in favor of Saks.The court of appeal affirmed the orders vacating the First Award and confirming the Second Award. Saks sought $1 million in attorneys’ fees for “litigation proceedings arising out of the arbitration,” not for the arbitrations themselves, citing Section 23.10. The court of appeal affirmed the denial of the motion. Each party agreed to bear its own attorneys’ fees for all proceedings related to settling any disagreement around Fair Market Rent under Section 3.1(c). View "California Union Square L.P. v. Saks & Company LLC" on Justia Law

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Duncan moved into a San Francisco apartment in 1994. Duncan’s wife moved into the unit in 2010, and they lived together with their daughter. Duncan never missed a rent payment and was never late with his rent. Duncan’s unit was subject to San Francisco’s rent-control ordinance. During his tenancy, the maximum that stabilized rent could be increased was a total of 31 percent, whereas the market rent for a two-bedroom unit in San Francisco increased by 254 percent. In 2014, the building was sold. For the next 14 months, until Duncan was forced to rent a new apartment, the landlords took away various benefits, ignored or delayed responding to maintenance issues, were uncommunicative, and became increasingly hostile in imposing new rules. Duncan contacted the building department. Violations were noted. At different times, the water and power were turned off for nonpayment. Duncan and other residents formed a tenants union.Duncan filed a notice with the Rent Board. The next day, Duncan was served with a 60-day notice of termination of tenancy as an owner move-in. Duncan filed suit under San Francisco’s Residential Rent Stabilization and Arbitration Ordinance. The city also sued the landlords. Jurors found that the landlords engaged in a wrongful eviction and tenant harassment. After damages were trebled, Duncan's recovery was $2.7 million. The court of appeal affirmed, rejecting challenges to evidentiary rulings and the sufficiency of the evidence. The trial court did not abuse its discretion by admitting evidence of the landlords’ conduct at other properties. View "Duncan v. Kihagi" on Justia Law

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An individual bought a condominium, which she consistently rented for short terms. Sixteen years after her purchase, the owner’s association amended its governing documents to prohibit renting properties for less than 30 days. The Court of Appeal agreed with the owner that she was exempt from this prohibition under Civil Code section 4740 (a), which provided that an owner of a property in a common interest development “shall not be subject to a provision in a governing document or an amendment to a governing document that prohibits the rental or leasing of” the owner’s property unless that document or amendment “was effective prior to the date the owner acquired title” to the property. The trial court held that she was not exempt, so judgment was reversed. View "Brown v. Montage at Mission Hills, Inc." on Justia Law

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Hom rented a San Francisco building to Entertainment for a restaurant. The lease allowed Entertainment to encumber its leasehold in favor of its lenders. A lender with an encumbrance could do anything required of Entertainment under the lease, foreclose on the leasehold, receive copies of notices, cure any breach by Entertainment, and enter into a new lease following any default by Entertainment; the parties were not allowed to modify or cancel the lease without the lender's consent. The lease stated that the prevailing party in any dispute is entitled to reasonable attorneys’ fees. Entertainment later signed promissory notes with Lenders and pledged all of its assets as security. A dispute arose between Entertainment and Hom that resulted in litigation. Entertainment sued for breach of contract. Hom’s cross-complaint alleged that Lenders interfered with Hom’s ability to collect rent and evict Entertainment, that the loans were a sham.The court enforced a settlement between Hom and Entertainment, dismissing the cross-complaint with prejudice. Lenders sought attorney’s fees based on the lease. The court of appeal affirmed the award of approximately $150,000 in fees. Because the lease goes into such detail regarding lenders’ rights, it was reasonably foreseeable that disputes involving lenders would arise over those rights. It is natural to conclude that the landlord and tenant intended to give lenders the same rights to attorney’s fees as the direct parties. View "Hom v. Petrou" on Justia Law