Judge Donald F. Gaffney, Case Gold v. Baldi 2023-08-16 Tentative Ruling

Judge: Donald F. Gaffney, Case: Gold v. Baldi, Date: 2023-08-16 Tentative Ruling

TENTATIVE RULING:

Defendants Ashley Baldi, Michael Steiner and M.A.S. Investments, LP demur to the fourth, seventh, eighth, ninth, and tenth causes of action in the Second Amended Complaint (“SAC”). They also move to strike Plaintiff’s allegations relating to punitive damages. For the reasons set forth below, the demurrers are SUSTAINED with leave to amend as to the fourth, seventh, ninth, and tenth causes of action. The demurrers are OVERRULED as to the eighth cause of action. The Motion to strike is DENIED.

Legal Standard on Demurrer

A demurrer presents an issue of law regarding the sufficiency of the allegations set forth in the complaint. (Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1126.) The challenge is limited to the “four corners” of the pleading (which includes exhibits attached and incorporated therein) or from matters outside the pleading which are judicially noticeable under Evidence Code sections 451 or 452. On demurrer, a complaint must be liberally construed. (Code Civ. Proc., § 452; Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) All material facts properly pleaded, and reasonable inferences, must be accepted as true. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.)

Fourth Cause of Action for Breach of Covenant of Quiet Enjoyment

“An agreement to let upon hire binds the letter to secure to the hirer the quiet possession of the thing hired during the term of the hiring, against all persons lawfully claiming the same.”
(Cal. Civ. Code, § 1927.)

Defendants argue that Plaintiff cannot allege a cause of action for breach of the covenant of quiet enjoyment because Plaintiff was not a party to the rental agreement at issue. The agreement was allegedly between M.A.S. Investments, LP and Plaintiff’s co-tenant, Inayat Bergum. (See SAC, ¶¶ 9-11 & Ex. 1). Defendants rely on Marchese v. Standard Realty & Dev. Co. (1977) 74 Cal.App.3d 142 for the proposition that a sublessee cannot maintain a breach of the covenant of quiet enjoyment cause of action because there is no privity of contract. In Marchese, however, the court explained that there were circumstances under which a sublessee could maintain this cause of action.

Generally, a sublessee may not sue the lessor for breach of covenant in that, as between an original lessor and a sublessee, there is no privity of contract. (Id. at 147.) The sublessee is in privity only with his own sublessor. (Id.) (Handleman v. Pickerill (1927) 84 Cal. App. 214, 218-219.) “However, if the sublessee has assumed the covenants of the original lease, lessor is a third party beneficiary and has the right to go directly against the sublessee.” (Id.)

Similarly, “if a lessor has expressly agreed to a sublease, the sublessee is a third party beneficiary to the implied covenant of quiet enjoyment in the original lease and has the right to go directly against the lessor for its breach.” (Id.) “This conclusion rests upon the nature of the implied covenant of quiet enjoyment.” (Id.) “The promise implied from the lease is that the lessor will allow possession and quiet enjoyment of the premises during the term contracted for and will not by his own acts disturb the possession of the tenant.” (Id.) “If a lessor has agreed to a sublease, it can only be concluded that he intended to allow the sublessee to peacefully occupy the property.”

Plaintiff’s allegations are unclear whether or not he took possession as a sublessee to which Defendants agreed. Plaintiff alleges that he took possession in October 2017. (SAC, ¶ 10.) The 60-day notice to terminate tenancy that was attached to the SAC was addressed to Robert Gold, which implies that at least one of the landlords had knowledge of Gold’s tenancy and/or may have expressly agreed to the sublease. (See SAC, Ex. 2.) It also appears that from Steiner’s declaration in an unlawful detainer action, he testifies that he transferred the property from M.A.S Investment, LP into his own personal family trust.

Under these circumstances, the court finds that Plaintiff could have a viable cause of action against Steiner and M.A.S Investment, LP to the extent that Plaintiff can allege that Steiner/M.A.S. agreed to the sublease and/or both Steiner and M.A.S were the landlord at the relevant times that Plaintiff alleges the wrongful conduct occurred. As to Baldi, however, the facts do not establish that Baldi entered into any lease agreement with Plaintiff. Plaintiff’s allegations against Baldi allege that Baldi essentially conspired with the other Defendants to file false declarations to evict Plaintiff under the family exception doctrine, even though Plaintiff alleges that Baldi was not in fact Steiner’s daughter and did not intend to move into the property. There is no allegation that Plaintiff leased any property from Baldi.

The SAC, as alleged, is confusing as to whether or not Gold was a sublessee and whether or not there was any agreement to allow Gold to live on the premises by Steiner/M.A.S. As such, the demurrer is sustained with leave to amend as against Steiner/M.A.S. on this cause of action. As to Baldi, however, the court finds that any further amendment would be futile and/or be a sham pleading. The demurrer as to Baldi is sustained without leave to amend as to this cause of action.

Seventh Cause of Action for Abuse of Civil Process

Defendants argue that Plaintiff’s abuse of process cause of action fails because the statute of limitations has run and because it is barred by the litigation privilege.

In order to state a cause of action for abuse of process, a party must adequately plead two fundamental elements: “‘[F]irst, an ulterior purpose, and second, a willful act in the use of the process not proper in the regular conduct of the proceeding.”’ (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 884–885.” “Because abuse of process is an injury to the person, the statute of limitations applicable to Cantu's claim for abuse of process is one year.” (Id. at 886-887.) “The limitations period begins to run when the abuse of process occurs.” (Id.) “If the injury to the plaintiff does not occur at the time the abuse of process occurs, then the limitations period begins to run when the injury occurs.” (Id.)

First, the court agrees that Plaintiff has not sufficiently pled facts to establish that the statute of limitations has not run on the abuse of process cause of action. The SAC is unclear as to when the “injury” occurs. Plaintiff alleges that the parties entered into a stipulated judgment on or around October 13, 2021, under which Plaintiff agreed to vacate the premises in exchange for preserving Plaintiff’s rights to pursue legal claims against Defendants. (SAC, ¶¶ 29-29.) It is, however, unclear when Plaintiff actually vacated the premises—which a jury could arguably find was when the “injury” occurred. Further, to the extent that the statute of limitations did not yet run, while Plaintiff may have an abuse of process claim against Steiner, it is unclear how Baldi or M.A.S abused any process, as they did not initiate any action against him.

Second, as to Defendants’ argument that the Plaintiff’s abuse of process claim is absolutely barred by the litigation privilege, the court finds that Defendants have failed to meet their burden of so establishing. Courts have found that “‘[p]rocess,’ as used in the tort of ‘abuse of process,’ has never been limited to the strict sense of the term, but instead has been interpreted broadly to encompass the entire range of ‘procedures' incident to litigation.” (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 104 at n.4.) As such, courts have held that an eviction that is done in bad faith with the intent to circumvent the rules constitutes an abuse of process. (Tranchina v. Arcinas (1947) 78 Cal.App.2d 522, 525.) That is exactly what Plaintiff alleges here against Defendants. Plaintiff alleges that Defendants wrongfully evicted Plaintiff under the guise of the “family exception” to circumvent the Covid-19 moratorium laws, when a family member did not actually intend to move into the premises. If true, that could constitute an abuse of process.

The demurrer is sustained with leave to amend for Plaintiff to clarify the alleged abuses of process that each Defendant allegedly was involved in and when Plaintiff vacated the premises and/or when Plaintiff suffered the “injury” from the alleged abuse of process.

Eighth Cause of Action for Intentional Infliction of Emotional Distress

The elements of an IIED cause of action are: “(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 suffered severe emotional distress; and (3) the defendant's extreme and outrageous conduct was the actual and proximate cause of the severe emotional distress. [Citation.]” (Crouch v. Trinity Christian Center of Santa Ana, Inc. (2019) 39 Cal.App.5th 995, 1007.) “A defendant's conduct is ‘outrageous’ when it is so ‘extreme as to exceed all bounds of that usually tolerated in a civilized community.’” [Citation.] And the defendant's conduct must be “‘intended to inflict injury or engaged in with the realization that injury will result.’” [Citation.]” (Hughes v. Pair (2009 46 Cal.4th 1035, 1050-1051.) As to the emotional distress suffered, “‘[s]evere emotional distress means ‘emotional distress of such substantial quality or enduring quality that no reasonable [person] in civilized society should be expected to endure it.’” [Citation.]” (Id., at p. 1051.)

An unlawful eviction, even if not accompanied with threats, violence or abusive language, may still give rise to an intentional infliction of emotional distress claim and the lack of outrageousness cannot be established as a matter of law. “Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1045.”

Here, Plaintiff has alleged a fraud cause of action, a conspiracy to wrongfully evict cause of action, and a retaliatory eviction cause of action, all of which Defendants did not challenge by their demurrer. If true that Plaintiff was wrongfully evicted under a false pretense and/or was retaliated against and constructively evicted, the court cannot find that there was a lack of outrageousness as a matter of law. The demurrer to this cause of action is overruled.

Ninth Cause of Action for Negligent Infliction of Emotional Distress

A cause of action for negligent infliction of emotional distress is not an independent tort.  (Christensen v. Superior Court (1991) 54 Cal.3d 868.) “The tort of negligent infliction of emotional distress is a variation of the tort of negligence. The traditional elements of duty, breach of duty, causation and damages apply.” (Slaughter vs. Legal Process & Courier Serv. (1984) 162 Cal.App.3d 1236, 1249; see also CACI 162 (To establish negligent infliction of emotional distress, a plaintiff must show (1) that the defendant was negligent; (2) that the plaintiff suffered serious emotional distress; and (3) that the defendant’s negligence was a substantial factor in causing the plaintiff’s emotional distress.))

As this is not a standalone cause of action, the demurrer is sustained as to this cause of action. However, Plaintiff is granted leave to amend to state a cause of action for negligence for which negligent infliction of emotional distress damages may be available.

Tenth Cause of Action for Malicious Prosecution

A plaintiff must plead and prove three elements to establish the tort of malicious prosecution: a lawsuit “(1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice.” (Nunez v. Pennisi (2015) 241 Cal.App.4th 861, 872–873.)

A lawsuit's termination is favorable to the plaintiff, for purposes of a malicious prosecution action, where it ‘“reflect[s] the merits of the action and the plaintiff's innocence of the misconduct alleged in the lawsuit.”’ (Siebel v. Mittlesteadt (2007) 41 Cal.4th 735, 741.) “A technical or procedural termination—such as a dismissal on statute of limitations grounds, pursuant to a settlement, or on the grounds of laches—is not favorable for purposes of a malicious prosecution claim.” (Nunez, supra, 241 Cal. App. 4^th at 874.)

Defendants argue that, as for the first unlawful detainer action that Steiner filed, Plaintiff cannot establish that the action was brought without probable cause. Defendants then argue the legal basis of why Steiner initiated that action. However, that argument goes to the merits of Steiner’s defense—not the sufficiency of Plaintiff’s allegations. The court finds that, as against Steiner, a malicious prosecution cause of action may lie as it relates to the first unlawful detainer action.

As to the second unlawful detainer action, Defendants argue that Plaintiff cannot allege a termination that was favorable to Plaintiff. The court agrees. Plaintiff alleges that the second unlawful detainer action was settled through a stipulated judgment. That is not a termination on the merits.

Further, Defendants argue that M.A.S. and Baldi did not initiate any actions against Plaintiff for a malicious prosecution action to lie. The court agrees.

The demurrer is sustained with leave to amend to narrow any malicious prosecution claim to the first unlawful detainer action as against Steiner only. To the extent that Plaintiff alleges that other actions were prosecuted against Plaintiff by M.A.S. or Baldi, leave to amend is granted to identify those actions.

Motion to Strike

Defendants move to strike Plaintiff’s allegations seeking punitive damages. However, punitive damages are recoverable for retaliatory eviction and for the infliction of emotional distress. (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1055.) Because Plaintiff’s SAC contains a cause of action for retaliatory eviction and infliction of emotional distress, punitive damages are available to Plaintiff. The motion is denied.

Should Plaintiff desire to file an amended complaint that addresses the issues in this ruling, Plaintiff shall file and serve the amended complaint within 30 days of service of the notice of ruling.

Defendants to give notice.