Judge: Daniel S. Murphy, Case: 23STCV06409, Date: 2023-10-27 Tentative Ruling

Case Number: 23STCV06409    Hearing Date: October 27, 2023    Dept: 32

BACKGROUND

            On March 22, 2023, Plaintiffs Alex Reed and Charlotte Zhang filed this action against Defendants Nathalie Dierickx, Byung Sun Choi, and Anna Choi. The complaint asserts causes of action arising from (1) negligence, (2) warranty of habitability, (3) implied covenant of quiet enjoyment, (4) negligent infliction of emotional distress, (5) excessive collection of rent, (6) tenant harassment, (7) retaliation, (8) collection of rent on untenable dwelling, (9) nuisance, and (10) intentional infliction of emotional distress.

            Plaintiffs are tenants of two different units at the subject property. (Compl. ¶¶ 1-2.) Defendants are the alleged owners, managers, or landlords of the property. (Id., ¶¶ 3-5.) The property is a mixed-use building with a commercial manufacturing designation for zoning purposes. (Id., ¶ 10.) While the first floor of the building contains a bodega and shops, the second floor consists of thirteen unpermitted studios and two bathrooms. (Ibid.) The certificate of occupancy for the property is for dance studios, but approximately half of the studios on the second floor have been used as residential units since 2013. (Id., ¶ 11.) Defendant Dierickx allegedly leases the second floor of the property from the Choi Defendants, and Plaintiffs subleased the individual units. (Id., ¶¶ 12-13.)

            Defendants did not register Plaintiffs’ tenancies as required by law but nonetheless collected rent. (Compl. ¶¶ 19-20.) Then, Defendants allegedly made Plaintiff Reed sign a bogus commercial lease agreement for her unit because they knew that the studios were not up to code and that there were no permits for residential units. (Id., ¶ 21.) Defendants were allegedly aware that Plaintiffs and other tenants resided at the property and used the units as live/work artist studios. (Id., ¶ 28.)  

            During their tenancies, Plaintiffs were subjected to numerous defective conditions, of which they informed Defendants. (Compl. ¶¶ 36-37.) Defendants allegedly failed to address the defects despite an order from LADBS. (Id., ¶¶ 44-45.) Instead, Defendant Dierickx allegedly began a campaign of attempting to force Plaintiffs to vacate the property in retaliation, and Defendants continued to unlawfully demand rent from Plaintiffs. (Id., ¶¶ 55-68.)

            On September 18 and 19, 2023, the Choi Defendants filed the instant demurrer and motion to strike. Plaintiffs filed their opposition on October 13, 2023. Defendants replied on October 19, 2023.

LEGAL STANDARD

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.)

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of that pleading. (Code Civ. Proc., § 435, subd. (b).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike (1) any irrelevant, false, or improper matter inserted in any pleading and (2) all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court notes that Defendants have complied with the meet and confer requirement. (See Cary Decl.)

DISCUSSION

I. Landlord-Tenant Relationship

            “[T]he general rule [is] that a sublessee may not sue the lessor for breach of covenant [because] as between an original lessor and a sublessee, there is no privity of contract.” (Marchese v. Standard Realty & Dev. Co. (1977) 74 Cal.App.3d 142, 147.) However, an exception exists where the lessor has expressly agreed to a sublease. (Ibid.)

            The Choi Defendants argue that they are not in privity with Plaintiffs because Plaintiffs subleased their units from Defendant Dierickx. The subleases attached to the complaint are signed by Dierickx and Plaintiffs only, not the Choi Defendants. However, the complaint alleges that the Defendants are agents of each other, that Dierickx acted at the behest of the Choi Defendants, and that the Choi Defendants knew how the property was being used. (Compl. ¶¶ 6, 26, 28, 32.) Therefore, it may be reasonably inferred that the Choi Defendants agreed to the subleases. The allegations in the complaint do not preclude this possibility, so the lack of privity is not a flaw that appears on the face of the complaint. Additionally, the complaint alleges that the Chois are the landlords of the building, which must be taken as true. (Id., ¶¶ 4-5.)

II. Duty of Care

            The Choi Defendants argue that they were not in any special relationship with Plaintiffs that warrants owing a duty of care for purposes of negligence. However, a landlord-tenant relationship is a special relationship. (Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 620.) As discussed above, the allegations support a reasonable inference that the Choi Defendants were Plaintiffs’ landlords.

            The Choi Defendants argue that they had relinquished control to Dierickx and therefore their duty to Plaintiffs was more attenuated. However, the complaint does not reveal on its face that the Chois relinquished control to Dierickx. Instead, as discussed above, Dierickx allegedly acted as agent for the Chois and at the behest of the Chois. Additionally, even where the landlord relinquishes control, the landlord would still be liable if “the landlord had actual knowledge of the dangerous condition in question, plus the right and ability to cure the condition.” (Mata v. Mata (2003) 105 Cal.App.4th 1121, 1132.) Here, the complaint alleges that the Chois knew that the property was being used for residential purposes and knew about the uninhabitable conditions. (Compl. ¶¶ 28, 37, 44.) As the building owners, the Chois presumably had the ability to cure the defective conditions. Therefore, the complaint alleges sufficient facts to infer a duty of care. The negligence claim and associated NIED claim are adequately pled.

III. Excessive Collection of Rent

            The Choi Defendants first argue that there are no allegations they collected rent. However, the complaint alleges that “Defendants, and each of them, collected, demanded, and retained rent from Plaintiffs.” (Compl. ¶ 49.) This includes the Chois.

            Defendants next argue that the rent stabilization ordinance (LARSO) does not apply to the subject property because LARSO defines a dwelling unit to be “a group of two or more rooms, one of which is a kitchen, designed for occupancy by one family for living and sleeping purposes.” (Carter v. Cohen (2010) 188 Cal.App.4th 1038, 1047.) Defendants contend that the complaint’s description of the second floor as containing art studios and two bathrooms (Compl. ¶ 10) does not satisfy this definition. However, the LARSO broadly covers “[a]ll dwelling units, efficiency dwelling units, guest rooms, and suites, as defined in Section 12.03 of this Code, and all housing accommodations as defined in Government Code Section 12927, and duplexes and condominiums in the City of Los Angeles, rented or offered for rent for living or dwelling purposes, the land and buildings appurtenant thereto, and all housing services, privileges, furnishings and facilities supplied in connection with the use or occupancy thereof, including garage and parking facilities.” (LAMC § 151.02.) The studios as described in the complaint fall under this definition.

            Defendants argue that the complaint does not specify the RSO rent limit or by how much the rent collected exceeds this amount. However, for pleading purposes, the complaint sufficiently alleges that Plaintiffs made “excessive rental payments.” (Compl. ¶ 125.) The precise amounts can be ascertained in discovery.

IV. Commercial Use

            The Choi Defendants argue that because the property was zoned for commercial use and Dierickx was the one who subleased the units for residential use, Dierickx is liable, not the Chois. However, as discussed above, the allegations sufficiently demonstrate that the Chois were aware of how the property was being used and that Dierickx acted as the agent for and at the behest of the Chois.

The Chois cite no authority for the proposition that a defendant may use commercial zoning to escape liability for uninhabitable conditions where, as here, the defendant knows and approves of the building’s usage for residential purposes. The law actually suggests the opposite. For example, the implied warranty of habitability in a rental agreement is enforceable despite the rental agreement being otherwise void for lacking a certificate of occupancy. (Erlach v. Sierra Asset Servicing, LLC (2014) 226 Cal.App.4th 1281, 1295-96.) Enforcement is warranted “where the defendant is the one guilty of the greatest moral fault” and to prevent “the defendant [from being] unjustly enriched at the expense of the plaintiff.” (Id. at p. 1296.) As applied to the instant case, Defendants should not escape liability for subjecting tenants to uninhabitable conditions where Defendants knowingly leased the units for residential purposes.

 Therefore, the breach of warranty, breach of quiet enjoyment, and improper rent collection claims apply to the Chois.

V. Tenant Harassment and Retaliation

            The Chois argue that there are no allegations that they harassed or retaliated against Plaintiffs because the allegations only reference actions by Dierickx. However, a “landlord” for purposes of the tenant harassment law is defined as “any owner, lessor, sublessor, manager, and/or person, including any firm, corporation, partnership, or other entity, having any legal or equitable right of ownership or possession or the right to lease or receive rent for the use and occupancy of a rental unit, and whether acting as principal or through an agent or representative or successor of any of the foregoing.” (LAMC § 45.32.) As discussed above, Dierickx allegedly acted as agent and at the behest of the Chois. The Chois fall under the definition of landlord as owners and lessors who acted through an agent or representative.

VI. Intentional Infliction of Emotional Distress

To state a cause of action for intentional infliction of emotional distress, a plaintiff must establish: (1) outrageous conduct by the defendant; (2) the defendant’s intention of causing, or reckless disregard of the probability of causing, emotional distress; (3) the plaintiff’s suffering severe or extreme emotional distress; and (4) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct. (Vasquez v. Franklin Management Real Estate Fund, Inc. (2013) 222 Cal.App.4th 819, 832.) “For conduct to be outrageous, it must be so extreme as to exceed all bounds of that usually tolerated by a civilized community.” (Faunce v. Cate (2013) 222 Cal.App.4th 166, 172.)

The Chois argue that the complaint does not allege any outrageous conduct attributable to them. However, the complaint alleges that all Defendants, including the Chois, were on notice of the uninhabitable conditions and failed to address them. (Compl. ¶¶ 36-37, 44-45.) Knowingly subjecting tenants to uninhabitable conditions is sufficiently outrageous for purposes of IIED.  

VII. Nuisance

“Anything which is injurious to health . . . or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property . . . is a nuisance.” (Civ. Code, § 3479.) “It is settled that where conduct which violates a duty owed to another also interferes with that party's free use and enjoyment of his property, nuisance liability arises.” (Cutujian v. Benedict Hills Estates Assn. (1996) 41 Cal.App.4th 1379, 1390.)

Relying on El Escorial Owners' Assn. v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337, the Choi Defendants argue that the nuisance claim is duplicative of the negligence claim and should therefore be stricken. “Where negligence and nuisance causes of action rely on the same facts about lack of due care, the nuisance claim is a negligence claim.” (Id. at p. 1349.) The court in El Escorial based its holding on a concern that the definition of nuisance “is so broad that it could be applied indiscriminately to everything.” (Id. at p. 1348.) The court therefore held that the toxic mold contamination claim in that case “involves a traditional tort that should not be litigated under the guise of a nuisance action.” (Ibid.) At the same time, “whether a [nuisance] cause of action is viable depends on the facts of each case.” (Ibid.) For example, “courts have allowed plaintiffs to litigate nuisance causes of action in cases involving housing conditions.” (Ibid.)  

            In Stoiber, the court held that “[a] nuisance may be either a negligent or an intentional tort.” (Stoiber, supra, 101 Cal.App.3d at p. 920.) “The fact that the defendants' alleged misconduct consists of omission rather than affirmative actions does not preclude nuisance liability.” (Ibid.) The plaintiff in Stoiber managed to demonstrate intentional conduct by alleging that the landlord had actual knowledge of uninhabitable conditions and “acted with full knowledge of the consequences thereof and the damage being caused to plaintiff, and their conduct was willful, oppressive and malicious.” (Ibid.)

As discussed above, the complaint here also alleges that Defendants intentionally ignored dilapidated conditions and continued extracting rent. Like Stoiber, the complaint also alleges that Defendants’ conduct was “despicable, malicious, willful, knowing, cruel, unjust and oppressive, and shows extreme indifference to Plaintiffs’ rights, health, and safety.” (Compl. ¶ 163.) Therefore, the nuisance claim has been adequately pled.    

VIII. Punitive Damages

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id., subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id., subd. (c)(2).) Fraud is “intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Id., subd. (c)(3).)

As discussed above, the allegations sufficiently demonstrate that the Chois were Plaintiffs’ landlords with the capability and responsibility to address the uninhabitable conditions. Knowingly subjecting tenants to uninhabitable conditions is sufficiently malicious and oppressive for purposes of punitive damages.

IX. Attorneys’ Fees and Statutory Damages

            “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . .” (Code Civ. Proc., § 1021.)   

            Here, Plaintiffs have asserted multiple statutory claims that support attorneys’ fees and statutory damages. As discussed above, these claims have been adequately pled against the Choi Defendants. Therefore, the complaint properly pleads a basis for attorneys’ fees and statutory damages.

CONCLUSION

            The Choi Defendants’ demurrer is OVERRULED. The motion to strike is DENIED.