NATURE OF PROCEEDINGS: Hearing on Defendants’ Motion to Quash and Demurrer

 

Defendants’ Motion to Quash is denied. Defendants’ Demurrer is overruled.

 

BACKGROUND

Plaintiffs, current tenants of the Cohasset Luxury Apartments building, brought this habitability action against defendants, Cohasset Luxury Apartments LLC, Rapport Property Management LLC, Navid Yadegar, David Yadegar, Charles J. Price Jr. individually and as successor co-trustee of the Charles J. Price Family Trust Dated July 1, 2004; Marina Price Anduray, and as successor co-trustee of the Charles J. Price Family Trust Dated July 1, 2004, Charles Anduray, and doe defendants 1 to 20.

The causes of action are 1) Breach of Implied Warranty of Habitability; 2) Tortious Breach of Implied Warranty of Habitability; 3) Negligence; 4) Intentional Infliction of Emotional Distress; 5) Private Nuisance; 6) Violation of Civil Code Section 1942.4; 7) Violation of Business and Professions Code Section 17200; and 8) Violation of Los Angeles Municipal Code Tenant Anti-Harassment Act.

On 3/5/2024, Plaintiffs filed the Complaint.

On 5/2/2024, Plaintiffs filed a First Amended Complaint (“FAC”)

The motions now before the Court are specially appearing defendants Cohasset Luxury Apartments LLC, Rapport Property Management LLC, Navid Yadegar, and David Yadegar (collectively “Defendants”) Motion to Quash and Demurer to the FAC. Plaintiffs oppose.

 

LEGAL STANDARD

Under Code of Civil Procedure § 418.10, subdivision (a)(1), “[a] defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion to quash service of summons on the ground of lack of jurisdiction of the court over them.”

Without valid service of summons, the court never acquires jurisdiction over a defendant. See Kremerman v. White (2021) 71 Cal.App.5th 358, 371 (“[C]ompliance with the statutory procedures for service of process is essential to establish personal jurisdiction. Thus, a default judgment entered against a defendant who was not served with a summons in the manner prescribed by statute is void” [internal quotes and citation omitted]).

A defendant is under no duty to respond in any way to a defectively served summons. Kappel v. Bartlett (1988) 200 Cal.App.3d 1457, 1466. It makes no difference that the defendant had actual knowledge of the action. Such knowledge does not dispense with statutory requirements for service of summons. Ruttenberg v. Ruttenberg (1997) 53 CA4th 801, 808.

“When a defendant challenges the court’s personal jurisdiction on the ground of improper service of process, the burden is on the plaintiff to prove ... the facts requisite to an effective service.” Summers v. McClanahan (2006) 140 CA4th 403, 413.

 

MOTION TO QUASH

ANALYSIS

Defendants move to quash service on the grounds that Plaintiffs failed to issue or serve a new summons with the FAC. Motion at pp. 5:26-27, 6:1-16.

“Once jurisdiction over a defendant is obtained by service of a copy of the summons and a copy of the complaint, amendment of the complaint does not require either a new summons or a new service of summons upon him. The amended complaint alone is served, usually upon his attorney.” Judicial Council of Cal. com. to Code Civ. Proc., § 412.10 (citations omitted). “On its face the comment suggests that service of an amended summons is discretionary in the instance of amended pleadings involving original parties defendant….” Gillette v. Burbank Community Hosp. (1976) 56 Cal.App.3d 430, 433 (citing Judicial Council of Cal. com. to Code Civ. Proc., § 412.10.)

While W. H. Marston Co. v. Kochritz (1926) 80 Cal.App. 352, 361 (W.H.) “states in dictum, ‘[i]f any defendants have not appeared, a summons must be issued upon the amended complaint and served upon such defendants[,]’” that issue was not before the court. Gillette 56 Cal.App.3d at 433 (quoting W. H., supra, 80 Cal.App. at 361). In W.H., the amended complaint named an additional party, not merely an original party who had yet to appear. W. H., supra, 80 Cal.App. at p. 362; see People v. Scheid (1997) 16 Cal.4th 1, 17 (“Language used in any opinion is of course to be understood in the light of the facts and the issue then before the court, and an opinion is not authority for a proposition not therein considered.”) (citations omitted) (internal quotation marks omitted).

In Cyrus v. Haveson (1976) 65 Cal.App.3d 306, 315 (Cyrus), the court held that “[a]mendment of the complaint after service of summons does not require either a new summons or a new service on an existing party defendant. Once jurisdiction of such a party is obtained by service of the summons and original complaint, the amended pleading alone is served.” (Citations omitted) (internal quotation marks omitted). In Cyrus, the defendants had been initially served with a summons and unverified complaint but were subsequently served with a verified complaint and a second copy of the summons. Id. at. p 312-313. The defendants, seeking to set aside a default judgment, argued that filing a verification to the complaint after it had been filed amended the pleading and required that a new summons be issued on an amended complaint and served with it. Id. at. p 315-316. The court rejected this argument because it concluded no new summons was required. Ibid.

It is uncontested that Plaintiffs properly served the original summons and complaint. See Reply at p. 5:9-16; Opposition at p. 8. As provided in their Motion, Defendants’ only grounds to quash is that no new summons on the FAC has been filed or served. Defendants’ Motion at p. 6:1-16; Declaration of Kari L. Probst (Probst Decl., ¶ 5).

Here, as in Cyrus, Defendants were served with an original summons and complaint and subsequently served with an amended complaint before they appeared in the case. See Cyrus, supra, 65 Cal.App.3d at p. 313. Because Defendants were properly served with the original summons and complaint, Plaintiffs were not required to serve a new summons on Defendants with the FAC. See id. at p. 315.

In their reply, Defendants, for the first time, raised the issue of whether service of the FAC, and not only an amended summons, was proper. Reply at p. 5:17-27. Because Defendants fail to explain why this was not raised in their motion, the Court declines to consider this argument. See In re Tiffany Y. (1990) 223 Cal.App.3d 298, 302 (“The general rule is that points raised in a reply brief for the first time will not be considered unless good cause is shown for the failure to present them before.” [Citations omitted] [internal quotation marks omitted]).

Because Defendants’ sole grounds for the motion to quash was Plaintiffs’ failure to issue and serve a new summons with the FAC, and no such summons was required, Plaintiffs have met their burden of establishing jurisdiction by properly serving the original complaint and summons and the FAC.

Accordingly, Defendant’s Motion to Quash is denied.

 

DEMURRER

LEGAL STANDARD

When considering demurrers, courts read the allegations liberally and in context. Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994. “A demurrer tests the pleading alone, and not on the evidence or facts alleged.” E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315. As such, courts assume the truth of the complaint’s properly pleaded or implied factual allegations. Ibid. However, it does not accept as true deductions, contentions, or conclusions of law or fact. Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.

 

ANALYSIS

I. Privity

First, Defendants argue that they have no liability for breach of implied warranty of habitability or other contract-based causes of action because Defendants did not sign leases with any of the Plaintiffs. Defendant notes that some of the leases were not attached to the FAC.

“After a property is sold or transferred, the transferee takes subject to the existing lease; this new owner steps into the landlord’s shoes and becomes the successor landlord, assuming the terms and conditions of the lease the tenant had with the prior owner.” DLI Properties, LLC v. Hill (2018) 29 Cal.App.5th Supp. 1, 8 (citations omitted). “Absent a contrary agreement of the parties, a sale by a lessor of real property during an unexpired term does not of itself abrogate the lease…. The grantee then becomes the landlord by operation of law….” Kirk Corp. v. First Am. Title Co. (1990) 220 Cal.App.3d 785, 809 (citations omitted) (internal quotation marks omitted).

In an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language. Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.

In support of their argument, Defendants cite the basic proposition that a party cannot be charged upon a contract to which it is not a party. However, Defendants offer no authority refuting a purchaser of property’s assumption of existing leases. As the purchaser, Cohasset stands in the shoes of the original landlord who signed the leases. Whether the other Defendants have any liability under the leases depends on whether Plaintiffs can successfully pierce the corporate veil of defendant entities.

While some Plaintiffs did not attach copies of their leases to the FAC, they adequately pleaded their legal effect. See FAC ¶¶ 30, 32. Defendant further argues that there is no evidence that all of the Plaintiffs have leases and suggests that some of the Plaintiffs are squatters. Reply at p. 3. This is a factual question that is not appropriate for resolution on demurrer.

 

II. Alter Ego

Next, Defendants argue that Plaintiffs’ causes of action for breach of implied warranty of habitability, tortious breach of implied warranty of habitability, failure to abate, unlawful business practice, and violation of the Tenant Act fail against Rappaport, Navid Yadegar, and David Yadegar because only the owner of the property is the landlord. Defendants argue that of the moving defendants, only Cohasset, as the property owner, has any liability for breach of lease or related statutory violations. Demurrer at pp. 7:21-10:16. Plaintiffs argue that Defendants fail to address the alter ego theory presented in the complaint. Opposition at p. 4:7-28, 5: 1-8; FAC ¶ 18.

“The alter ego doctrine arises when a plaintiff comes into court claiming that an opposing party is using the corporate form unjustly and in derogation of the plaintiff’s interests.” Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.) “There is no litmus test to determine when the corporate veil will be pierced; rather the result will depend on the circumstances of each particular case. There are, nevertheless, two general requirements: ‘(1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.’” Ibid. (quoting Automotriz etc. de California v. Resnick (1957) 47 Cal.2d 792, 796).

On demurrer, the Court does not consider whether the plaintiff will be able to prove the allegations but only whether the complaint sets forth sufficient facts to put the defendant on notice. Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 610. “It is not even essential, apparently, that … the alter ego doctrine always be specifically pleaded in the complaint in order for it to be applied in appropriate circumstances.” First Western Bank & Trust Co. v. Bookasta (1968) 267 Cal.App.2d 910, 915. Plaintiffs need only allege “ultimate rather than evidentiary facts” to support alter ego theory. Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 236 (“Rutherford Holdings”) (citations omitted) (internal quotation marks omitted). “The distinction between conclusions of law and ultimate facts is not at all clear and involves at most a matter of degree.” Burks v. Poppy Const. Co. (1962) 57 Cal.2d 463, 473. “What is important is that the complaint as a whole contain sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief.” Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.

Plaintiffs allege in the FAC that in October of 2023, Cohasset Luxury Apartments LLC (“Cohasset”) purchased the apartment at issue. FAC ¶¶ 10,11. Since then, the property has been managed by Rapport Property Management LLC (“Rapport”). FAC ¶ 11. Plaintiffs allege both companies are owned by Defendants Navid Yadegar and David Yadegar (“the Yadegars”), the only members and managers of each LLC. FAC ¶¶ 12. Plaintiffs allege that each of the named defendants is the alter ego of one or more of the other defendants. FAC ¶18. Plaintiffs seek to pierce the veil of the various entity defendants based on Defendants’ failure to properly structure, operate, capitalize, and manage the entities and Defendants’ use of entity funds for improper purposes. Ibid.

Defendants argue that Plaintiffs’ alter ego is simply a conclusion and is insufficient to permit Plaintiffs to proceed beyond the pleadings stage. Reply at p. 4:3.

The Court finds that these alter ego allegations are sufficient. The alter ego allegations contained in Paragraph 18 of the FAC include factual allegations, not only legal conclusions. Defendants cite to no authority that alter ego allegations need to be pled with more specificity. In fact, Plaintiffs were required to allege only “ultimate rather than evidentiary facts” necessary to support alter ego theory. See Rutherford Holdings, supra, 223 Cal.App.4th at 236.

 

III. Intentional Infliction of Emotional Distress (IIED).

Defendants argue Plaintiffs have failed to allege sufficient facts to sustain an IIED claim because Plaintiffs do not specifically identify which Defendants committed specific acts against specific Plaintiffs. Demurrer at p. 11:20-23.

To state an IIED claim, a plaintiff must allege facts showing: “(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.” Christensen v. Superior Court (1991) 54 Cal.3d 868, 903 (citations omitted) (internal quotation marks omitted).

“Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” Id. at p. 903. “Behavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiff’s interest; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress.” Smith v. BP Lubricants USA Inc. (2021) 64 Cal.App.5th 138, 147 (citations omitted) (internal quotation marks omitted). “[W]hether conduct is outrageous is ‘“usually” a question of fact.’” Id. at p.148. Barker v. Fox & Associates (2015) 240 Cal.App.4th 333, 356.

In Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 912 (“Stoiber”), the court reversed a demurrer sustained by the trial court, where the plaintiff alleged that the landlord knowingly failed to address inhospitable and dangerous conditions. The alleged conditions included a heavy cockroach infestation, broken interior walls, broken flooring, falling ceiling, deteriorated electrical wiring, lack of proper plumbing connection to the sewage system, sewage under the bathroom floor, leaking roof, broken windows, and fire hazards. Id. at p. 912. The court held that whether the landlord’s failure to address these issues constituted extreme and outrageous conduct was a factual question. Id. at. p. 922.

Here, as alleged in the FAC, Defendants have known that the apartment units have been and continue to be invested with cockroaches and rodents (rats, mice, or both), that the units are subject to chronic water leaks and excessive mold growth, and that the units have physical defects rendering them uninhabitable. FAC ¶ 21. Plaintiffs further allege that Defendants intentionally failed to repair and maintain the apartments, with reckless disregard for the probability of causing Plaintiff’s severe emotional distress. FAC ¶ 58.

The Court finds the allegations sufficient for a reasonable jury to conclude Defendant’s conduct is outrageous. See Stoiber, supra, Cal.App.3d at p. 922.

IV. Negligence

Defendants argue that Plaintiffs negligence claims fail against Rapport and the Yadegars because they owed no legal duty to the Plaintiffs as tenants; insufficient facts are alleged showing a duty owed by these defendants or a breach of that duty. Defendants further argue that the negligence cause of action is duplicative of the implied warranty of habitability and Civil Code Section 1942.4 claims.

The elements of a cause of action for negligence are duty, breach, causation, and damages. Johnson v. Prasad (2014) 224 Cal.App.4th 74, 78.

First, a landlord owes its tenants a duty to maintain the property in a reasonably safe condition. Vasquez v. Residential Investments, Inc. (2004) 118 Cal.App.4th 269, 280. As explained above, whether Rapport and the Yadegars are liable as landlords depends on whether Plaintiffs can prove their alter ego theory. Therefore, the FAC alleges sufficient facts to show Defendants owed a duty.

Second, the FAC alleges that Defendants breached that duty by failing to maintain the property adequately. FAC ¶ 21.

Finally, the Court finds that the negligence claim is not wholly redundant to other claims alleged in the FAC. Accordingly, the demurrer to the third cause of action is overruled.

V. Nuisance

Defendants argue that the nuisance claim fails to state a claim because it is duplicative of the negligence claim.

To prevail on a claim for private nuisance, “a plaintiff must first prove an interference with the plaintiff’s use and enjoyment of his or her property. Second, the invasion of the plaintiff’s interest in the use and enjoyment of the land must be substantial, i.e., that it causes the plaintiff to suffer substantial actual damage. Third, the interference with the protected interest must not only be substantial, but it must also be unreasonable, i.e., it must be of such a nature, duration or amount as to constitute unreasonable interference with the use and enjoyment of the land.” Chase v. Wizmann (2021) 71 Cal.App.5th 244, 253 (Chase) (cleaned up).

 In El Escorial Owners’ Assn. v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337, 1349 (El Escorial), the court held “[w]here negligence and nuisance causes of action rely on the same facts about lack of due care, the nuisance claim is a negligence claim.” There, the nuisance cause of action consisted of five one-sentence paragraphs that incorporated the allegations from the negligence cause of action and cited the broad statutory definition of nuisance. Id. at. p 1349.

The Court of Appeal recently criticized El Escorial in Lynch v. Peter & Associates etc. (Aug. 20, 2024, No. G063021) ___Cal.App.5th___ 2024 Cal. App. https://www.courts.ca.gov/cms/opinions.htm?Courts=Y, (Lynch), which reversed a trial court’s grant of summary judgment. The Court held, “[n]uisance is an entirely separate cause of action from negligence, and the analysis should focus on whether the plaintiff has alleged all necessary elements of the claim…. Even if the nuisance claim relies on the same facts about lack of due care supporting the negligence claim, it does not mean the claims are identical or duplicative. Indeed, many pleadings allege numerous causes of action based on the same facts. This does not mean the causes of action are all the same.” Ibid.

While Plaintiffs’ nuisance and negligence claims are based on the same facts, the nuisance claim does not simply repeat the negligence allegations. Plaintiffs specifically allege that the infestations, water damage, and other physical defects common to all of their claims substantially and unreasonably interfered with their use and enjoyment of their property. FAC ¶¶ 64, 65, 67. Accordingly, the Court finds that the nuisance claim is not wholly redundant of the negligence claim and overrules the demurrer to the fifth cause of action.

 

CONCLUSION

Defendants’ Motion to Quash is Denied. Defendants’ Demurrer is overruled. Defendants have twenty days to answer.