Judge: H. Jay Ford, III, Case: 21SMCV00633, Date: 2022-07-26 Tentative Ruling

Case Number: 21SMCV00633    Hearing Date: July 26, 2022    Dept: O

Case Name:  Pemberton, et al. v. LA Apartment Rentals, Inc., et al.

SUBJECT:                DEMURRER TO SECOND AMENDED COMPLAINT

MOVING PARTY:   Defendants LA Apartment Rentals, Inc., Cheryl Williams, Shelley Lozdon and Jonathan Paul Orenshein

RESP. PARTY:         Plaintiff Jeremy Pemberton

TENTATIVE RULING

            Defendants LA Apartment Rentals, Inc., Cheryl Williams, Shelley Lozdon and Jonathan Paul Orenshein’s Demurrer to the SAC is

(1) OVERRULED as to the 1^st cause of action for breach of contract as to Defendant LA Apartment Rentals, Inc. and SUSTAINED WITHOUT LEAVE TO AMEND as to the 1^st cause for breach of contract as to Defendants Williams, Lozdon and Orenshein;

(2) OVERRULED as to the 2^nd cause of action for intentional misrepresentation, 5^th cause of action for conversion, 6^th cause of action for intrusion into private affairs/invasion of privacy, and 9^th cause of action for IIED;

(3) SUSTAINED WITHOUT LEAVE TO AMEND as to the 3^rd cause of action for conspiracy, 4^th cause of action for trespass to chattels, 7^th cause of action for negligence and 8^th cause of action for retaliatory actions.

            Defendants to answer in 10 days. 

I.  1^st cause of action for breach of contract—OVERRULE as to Defendant LA Apartment Rentals, Inc. and SUSTAIN WITHOUT LEAVE TO AMEND as to Defendants Cheryl Williams, Shelley Lozdon and Jonathan Orenshein (“Individual Defendants”)

            Defendants demur to the 1^st cause of action for breach of contract on grounds that the Lease does not provide for a fully furnished apartment.  Plaintiffs’ breach of contract cause of action is not based on the failure to provide a fully furnished apartment.  Plaintiffs’ breach of contract cause of action is based on Defendants’ attempts to unlawfully evict them through harassment and intimidation.  See SAC, ¶¶32-33.  There is no allegation that Defendants breached the agreement by failing to provide a “fully furnished apartment.” 

            The Lease Agreement also does not clearly contradict Plaintiffs’ allegation that Defendants “agreed to provide a furnished apartment rental with utilities provided and paid for by Defendants as described in the Lease Agreement.”  Id. at ¶32.  The Lease Agreement provides that only certain utilities will be provided by Defendant landlord, and it does not expressly agree or disclaim that furnishings will be provided.   See SAC, Ex. 4.  The attached Lease Agreement is therefore not grounds to demur to the 1^st cause of action. 

            Individual Defendants are not parties to the Lease Agreement.  See SAC, Ex. 4.  Plaintiffs also fail to allege any basis to hold Individual Defendants liable for breach of contract, e.g. alter ego. 

            Individual Defendants’ demurrer to the 1^st cause of action for breach of contract is SUSTAINED WITHOUT LEAVE TO AMEND.  Defendant LA Apartment Rentals, Inc.’s Demurrer to the 1^st cause of action is OVERRULED. 

II.  2^nd cause of action for intentional misrepresentation—OVERRULE

The elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages.  See Civil Code §1709.  Fraud actions are subject to strict requirements of particularity in pleading.  See Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 216.  A plaintiff must allege what was said, by whom, in what manner (i.e. oral or in writing), when, and, in the case of a corporate defendant, under what authority to bind the corporation.  See Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782. 

            Defendants demur to the 2^nd cause of action for intentional misrepresentation on grounds that the misrepresentation is not specifically alleged.  Plaintiffs sufficiently allege the misrepresentation with specificity. Plaintiffs allege Defendants falsely stated in an email sent on March 9, 2021 that they would be accessing the unit for “a mold inspection of the floors and furniture from the plumbing overflow” on March 10, 2021.  See SAC, ¶17.  Plaintiffs allege the email falsely misrepresented the purpose of Defendants’ accessing the apartment.  Id. at ¶¶38-40.  Defendants allegedly issued the email knowing that it falsely misrepresented the purpose of their accessing the unit.  Id.  Plaintiffs allege that the true purpose of Defendants’ accessing the unit was to forcibly move them from the property by removing all furniture, fixtures and furnishings from the entire apartment.  Id. at ¶¶21 and 25.

III.  3^rd cause of action for conspiracy—SUSTAIN WITHOUT LEAVE TO AMEND

            “Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy. In this way, a coconspirator incurs tort liability co-equal with the immediate tortfeasors.” Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510. “As long as two or more persons agree to perform a wrongful act, the law places civil liability for the resulting damages on all of them, regardless of whether they actually commit the tort themselves.” Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 784.

“[A]ctual knowledge of the planned tort, without more, is insufficient to serve as the basis for a conspiracy claim. Knowledge of the planned tort must be combined with intent to aid in its commission…This rule derives from the principle that a person is generally under no duty to take affirmative action to aid or protect others.” Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1582.

Plaintiffs allege conspiracy as a cause of action.  Conspiracy is not a cause of action.  See Applied Equipment Corp., supra, 7 Cal.4^th at 510. 

Plaintiffs also allege a conspiracy between the Individual Defendants and Defendant LA Apartment Rentals.  Plaintiffs allege that Individual Defendants were the agents/employees of Defendant LA Apartment Rentals.  See SAC, ¶¶1-6.  Under the “agent's immunity rule,” agents and employees of a corporation cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage.  See Black v. Bank of America (1994) 30 Cal.App.4th 1, 4.  Plaintiffs fail to allege any facts supporting an exception to the agent’s immunity rule, e.g. Individual Defendants acted outside of their official capacity for their own advantage, Individual Defendants conspired with one another, not Defendant LA Apartment Rentals. 

Plaintiffs also include breach of contract in the conspiracy claim.  However, conspiracy is reserved for torts, not contract.  See Applied Equipment Corp., supra, 7 Cal.4th at 510 (conspiracy imposes “tort” liability on persons such that co-conspirator “adopts as his or her own the torts of other coconspirators”). 

Plaintiffs have the burden of establishing that they can reasonably cure this defect with leave to amend.  See Hendy v. Losse (1991) 54 Cal.3d 723, 742.  Plaintiffs argue discovery will reveal that the Individual Defendants acted outside their official capacities and for their own individual interests.  Plaintiffs fail to establish that, at this time, they can allege Defendants acted outside their official capacities.  Demurrer is therefore SUSTAINED WITHOUT LEAVE TO AMEND as to the 3^rd cause of action for conspiracy. 

IV.  4^th cause of action for trespass to chattels—SUSTAIN WITHOUT LEAVE TO AMEND

            “Where the act in question does not amount to a dispossession, as in the case of conversion, but of intermeddling with or use of or damage to the property, the normal action will be for trespass. The plaintiff recovers the actual damages suffered by impairment of the property or loss of its use.”  5 Witkin, Summary (11^th ed. 2022), Torts §832. 

            “Dubbed by Prosser the ‘little brother of conversion,’ the tort of trespass to chattels allows recovery for interferences with possession of personal property not sufficiently important to be classed as conversion, and so to compel the defendant to pay the full value of the thing with which he has interfered.  Though not amounting to conversion, the defendant's interference must, to be actionable, have caused some injury to the chattel or to the plaintiff's rights in it. Under California law, trespass to chattels lies where an intentional interference with the possession of personal property has proximately caused injury.  In cases of interference with possession of personal property not amounting to conversion, the owner has a cause of action for trespass or case, and may recover only the actual damages suffered by reason of the impairment of the property or the loss of its use.  In modern American law generally, trespass remains as an occasional remedy for minor interferences, resulting in some damage, but not sufficiently serious or sufficiently important to amount to the greater tort” of conversion.”  Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1350–1351. 

            Plaintiffs allege that their personal property was stolen from them by Defendants, which would not qualify as a temporary or minor interference.  See FAC, ¶¶ 21-23, 64.  Plaintiffs base their conversion cause of action on the identical facts as those alleged in the trespass to chattel claim.  Plaintiffs only ask for leave to amend on the trespass to chattels cause of action if demurrer is sustained as to the conversion cause of action.  Plaintiffs’ allegations support a claim for conversion, not trespass to chattels. 

            Moreover, Plaintiffs cannot state a claim for trespass to chattels based on the apartment itself, which is real property.  Trespass to chattels is for interferences with personal property.  See Intel Corp., supra, 30 Cal.4^th at 1350 (trespass to chattels lies for interference with “personal property”). 

            Demurrer to the 4^th cause of action for trespass to chattels is SUSTAINED WITHOUT LEAVE TO AMEND. 

V.  5^th conversion—OVERRULE

            Conversion is the wrongful exercise of dominion over the property of another.  See Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451 (Zerin ).  The elements of a claim for conversion are (1) the plaintiff's ownership or right to possession of the property at the time of the conversion, (2) the defendant's conversion by a wrongful act or disposition of property rights, and (3) damages.  Id.  It is not necessary that there be a manual taking of the property, only an assumption of control or ownership over the property, or that the alleged converter has applied the property to his or her own use.  Id. at pp. 451–452. A mere contractual right of payment, without more, is insufficient.  Id. at p. 451.  “A cause of action for conversion of money can be stated only where a defendant interferes with the plaintiff's possessory interest in a specific, identifiable sum, such as when a trustee or agent misappropriates the money entrusted to him.” Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 284. 

            Plaintiffs allege that Defendants took possession of Plaintiffs’ personal property and prevented Plaintiffs from accessing that property.  See SAC, ¶64.  Plaintiffs identify the property allegedly converted by Defendants in ¶¶21-23 of the SAC.  Id. at ¶¶21-23, 64.  Plaintiffs allege Defendants did not have their permission or consent to take the property, and Defendants have refused to return the property.  Id. at ¶65.  Plaintiffs state a cause of action for conversion.  Defendants’ Demurrer to the 5^th cause of action is OVERRULED.

VI.  6^th cause of action for intrusion into private affairs—OVERRULE

            “The common law tort of invasion of privacy by intrusion has two elements: (1) intrusion into a private place, conversation, or matter, (2) in a manner highly offensive to a reasonable person.”  Belen v. Ryan Seacrest Productions, LLC (2021) 65 Cal.App.5th 1145, 1163.  A plaintiff must demonstrate that the defendant “penetrated some zone of physical or sensory privacy surrounding” the plaintiff and that plaintiff had an objectively reasonable expectation of privacy.  Id. 

            Plaintiffs allege that Defendants entered their apartment under the false pretext of a mold inspection.  Plaintiffs allege Defendants intruded into Plaintiffs’ bedroom when they orchestrated approximately 10 moves to remove all items identified in ¶¶23, 26 and 29 of the SAC.  Defendants and movers intruded into Plaintiffs’ bedroom under this false pretext, “forcibly required Plaintiffs to remove intimate undergarments under incredible pressure, with humiliation, and in view of approximately 10 adult men that were complete strangers to Plaintiffs.”  Id. at ¶72. 

            Plaintiffs sufficiently allege intrusion of a private place, their bedrooms.  Accepting Plaintiffs’ allegations as true, reasonable persons could also find the intrusion was done in a manner that would be highly offensive.  Defendants allegedly entered their bedrooms under the false pretext of a mold inspection.  Defendants also forcibly required Plaintiffs to remove intimate undergarments in front of 10 strangers who were there under that false pretext. 

            Defendants’ Demurrer to the 6^th cause of action for invasion of privacy is OVERRULED. 

VII.  7^th cause of action for negligence—SUSTAIN WITHOUT LEAVE TO AMEND

            Plaintiffs allege that Defendant LA Apartment Rentals was their landlord.  Plaintiffs allege that Individual Defendants held the following positions with Defendant LA Apartment Rentals:  (1) Defendant Cheryl Williams was the director, (2) Defendant Lozdon was the manager and partner, and (3) Defendant Orenshein was the CEO and CFO.  See SAC, ¶¶3-6. 

            “Directors and officers of a corporation are liable for torts committed by them on its behalf…However, directors or officers do not incur personal liability for corporate torts merely because of their official position unless they participate in the wrong or authorize or direct that it be done.”  5 Witkin, Summary (11^th ed. 2022), Torts §37. 

            Plaintiffs allege Individual Defendants were personally negligent and their negligence harmed Plaintiffs.  See SAC, ¶¶77-88.  Plaintiffs allege Defendant LA Apartment is vicariously liable for the torts of its employees and directly liable as the landlord and employer for failure to maintain the property in reasonable condition and negligent supervision.  Id. at ¶¶89-91. 

            However, Plaintiffs fail to identify the negligent conduct.  Plaintiffs merely allege in a conclusory manner that they were damaged by Individual Defendants’ “negligence.”  Id. at ¶¶77-88. 

            Plaintiffs do not identify any negligent act in their opposition. Instead, they argue that they have cited sufficient case law to support a negligence claim against the Defendants.  Plaintiffs fail to demonstrate that their defective negligence claim is reasonably capable of cure with leave to amend. 

            Defendants’ Demurrer is SUSTAINED WITHOUT LEAVE TO AMEND. 

VIII.  8^th cause of action for retaliatory acts—SUSTAIN WITHOUT LEAVE TO AMEND

            Under Civil Code §1942.5(a):  “If the lessor retaliates against the lessee because of the exercise by the lessee of the lessee's rights under this chapter or because of the lessee's complaint to an appropriate agency as to tenantability of a dwelling, and if the lessee of a dwelling is not in default as to the payment of rent, the lessor may not recover possession of a dwelling in any action or proceeding, cause the lessee to quit involuntarily, increase the rent, or decrease any services within 180 days of any of the following:

(1) After the date upon which the lessee, in good faith, has given notice pursuant to Section 1942, has provided notice of a suspected bed bug infestation, or has made an oral complaint to the lessor regarding tenantability.

(2) After the date upon which the lessee, in good faith, has filed a written complaint, or an oral complaint which is registered or otherwise recorded in writing, with an appropriate agency, of which the lessor has notice, for the purpose of obtaining correction of a condition relating to tenantability.

(3) After the date of an inspection or issuance of a citation, resulting from a complaint described in paragraph (2) of which the lessor did not have notice.

(4) After the filing of appropriate documents commencing a judicial or arbitration proceeding involving the issue of tenantability.

(5) After entry of judgment or the signing of an arbitration award, if any, when in the judicial proceeding or arbitration the issue of tenantability is determined adversely to the lessor.

            Plaintiffs fail to allege that they exercised any right under Division 3, Part 4, Title 5, Chapter 2 of the Civil Code.  Plaintiffs also fail to allege that they field a complaint to an appropriate agency as to tenantability of the dwelling.  Finally, Plaintiffs fail to allege they were not in default on the rent.  Plaintiffs fail to state a claim for retaliation under Civil Code §1942.5. 

            Plaintiffs fail to address these defects in their opposition. Plaintiffs only maintain that they were exercising their rights under the COVID Tenant Relief Act.  Plaintiffs’ opposition fails to explain how they can reasonably cure the defects of the 8^th cause of action for retaliation under CC §1942.5 with leave to amend.  Defendants’ Demurrer to the 8^th cause of action for retaliation is SUSTAINED WITHOUT LEAVE TO AMEND. 

IX.  9^th cause of action for IIED—OVERRULE

            To state an IIED claim, the 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.  See Smith v. BP Lubricants USA Inc. (2021) 64 Cal.App.5th 138, 147 (plaintiff alleged outrageous conduct based on three racially offensive statements made by defendant’s employee before 50 of plaintiff’s coworkers and 3 of his supervisors); Berkley v. Dowds (2007) 152 Cal.App.4th 518, 534 (affirming order sustaining demurrer to IIED cause of action without leave to amend based on failure to allege outrageous conduct).

            Whether conduct is outrageous is usually a question of fact but can be determined as an issue of law.  See Smith, supra, 64 Cal.App.5th at 147.  “Mere insulting language, without more, ordinarily would not constitute extreme outrage unless it is combined with aggravated circumstances.  But 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.”  Id. at 147.

            Reasonable minds could find that Defendants’ conduct was extreme and outrageous.  Defendants were Plaintiffs’ landlords, which placed them in a position to damage Plaintiffs’ interests.  See e.g. Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 921-922 (tenant stated cause of action for IIED against landlord for landlord’s “knowing, intentional, and willful” failure to correct defective conditions of the premises).  Defendants allegedly entered Plaintiffs’ premises under the false pretext of performing mold inspection and remediation, an abuse of their rights as landlords.  See SAC, ¶¶16-25.  Defendants allegedly stripped the premises of furnishings and fixtures to force Plaintiffs’ to vacate the premises.  Id.  Plaintiffs allege that Defendants’ true intention was to retaliate against Plaintiffs for attempting to exercise their rights under the COVID Tenant Relief Act.  Id.

            Defendants’ Demurrer to the 9^th cause of action for IIED is OVERRULED. 

X. Plaintiffs allege that Individual Defendants directly participated in the alleged tortious conduct

            An agent is liable to third parties for the agent’s own wrongful acts.  See Civ. Code §2343 (“One who assumes to act as an agent is responsible to third persons as a principal for his acts in the course of his agency, in any of the following cases, and in no others:…3.  When his acts are wrongful in nature.”); 3 Witkin, Summary of California Law (11^th ed. 2022), §210 (“An agent or employee is always liable for his or her own torts, whether the principal is liable or not, and in spite of the fact that the agent acts in accordance with the principal's directions.”).  Thus, even if Individual Defendants were carrying out the alleged wrongful acts as directors or officers of Defendant LA Apartment Rentals, “directors and officers of a corporation are liable for torts committed by them on its behalf.”  5 Witkin, Summary of California Law (11^th ed. 2022), §37.

            Plaintiffs allege that the Individual Defendants personally participated in the misrepresentation, conversion, invasion of privacy and extreme and outrageous conduct.  Plaintiffs allege that “Defendants” carried out these wrongful acts, which would include Individual Defendants.  In addition, Plaintiffs’ 2^nd cause of action for intentional misrepresentation is based on an email from the email address of Defendant LA Apartment Rentals and with the names of Cheryl Williams and Shelley Lozdon at the bottom of the email.  See SAC, Ex. D.  Plaintiffs plead sufficient facts to state the remaining tort causes of action against Individual Defendants.