Judge: Helen Zukin, Case: 22SMCV00519, Date: 2022-10-17 Tentative Ruling
Case Number: 22SMCV00519 Hearing Date: October 17, 2022 Dept: 207
Background
Plaintiff Larry Moore (“Plaintiff”) brings this action
against Defendant 2444 Fourth Street, LLC (“Defendant”) seeking to purchase
Unit 5 of a 10-unit condominium building owned by Defendant and located at 2444
4th Street in Santa Monica, California. Plaintiff’s operative Complaint, filed
April 11, 2022, asserts two causes of action for breach of contract against
Defendant. Defendant brings this demurrer to both causes of action pursuant to
Code Civ. Proc. § 430.10(e), arguing Plaintiff cannot state claims against
Defendant for purchase of the subject condominium unit for several reasons.
Plaintiff opposes Defendant’s demurrer.
Request for Judicial Notice
Defendant requests the Court take judicial notice of various
pleadings filed in this and other actions filed in the Los Angeles Superior
Court. (Exs. 1-7.) Plaintiff similarly requests the Court take judicial notice
of prior pleadings in this and other actions. (Exs. 2, 3, 5.) Courts can take
judicial notice of the existence of Court records. (Arce ex rel. Arce v.
Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 483; Schmidlin
v. City of Palo Alto (2007) 157 Cal.App.4th 728, 790 n.10.) This includes
the records of any Court of record in the United States. (Salazar v. Upland
Police Dept.¿(2004) 116 Cal.App.4th 934, 946.) These requests are unopposed
and are GRANTED.
Plaintiff and Defendant both request the Court take judicial
notice of a Final Subdivision Public Report issued by the Department of Real
Estate in 1993 and renewed in 2009. These requests are GRANTED. Plaintiff also
requests the Court take judicial notice of a Final Subdivision Public Report
issued by the Department of Real Estate in 2022. Defendant objects, arguing the
report is irrelevant to the demurrer. The Court GRANTS Plaintiff’s request.
Defendant also requests the Court take judicial notice of
materials on the California Department of Real Estate website as well as a
guide issued by the Department of Real Estate. (Exs. 9-10.) Evidence Code §
452(h) allows the Court to take judicial notice of “[f]acts and propositions
that are not reasonably subject to dispute and are capable of immediate and
accurate determination by resort to sources of reasonably indisputable
accuracy.” The Court GRANTS Defendant’s request and will take judicial notice
of the existence of these materials, however the Court will not take judicial
notice of the truth of the statements therein as such information is not
capable of immediate and accurate determination by resort to sources of
reasonably indisputable accuracy.
Demurrer 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,
the court assumes the truth of the complaint’s properly pleaded or implied
factual allegations. (Id.) 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
1. Meet and
Confer Requirement
Before filing a
demurrer, the demurring party is required to “meet and confer in person or by
telephone” with the party who filed the pleading demurred to for the purposes
of determining whether an agreement can be reached through a filing of an
amended pleading to resolve the objections to be raised in the demurrer.
(C.C.P. §§ 430.41.) Defendant has satisfied this meet and confer requirement. (Lorman
Decl.)
2. Issue
Preclusion
Plaintiff asserts
two causes of action against Defendant for breach of contract. Each of these causes
of action are premised on the same underlying facts concerning Plaintiff’s
attempt to purchase Unit 5 pursuant to Santa Monica’s Tenant Ownership Rights
Charter Amendment (“TORCA”). TORCA extended protections to tenants from owner-occupancy
evictions by apartment owners who sought to convert their apartment buildings
to condominiums. “Under TORCA, a conversion could be accomplished without a
removal permit if the tenants were offered an opportunity to purchase their
units, and two-thirds of the tenants supported the conversion application.
TORCA also granted a protection against owner-occupancy evictions to all
tenants in the building at the time of the conversion who chose not to
purchase. With respect to the tenants who rented after the conversion, TORCA
gave no protection….” (Bohbot v. Santa Monica Rent Control Bd. (2005) 133
Cal.App.4th 456, 460.) “TORCA protects ‘participating tenants’ from owner-occupancy
evictions, but gives no additional protections to ‘nonparticipating tenants.’” (Id.
at 464.)
Accordingly,
Plaintiff is only entitled to TORCA protections if he is deemed a
“participating tenant” under TORCA. Plaintiff’s Complaint asserts both that
Plaintiff is himself a participating tenant under the TORCA scheme, and also
was assigned the rights of a participating tenant by third party Vicangelo and
Deborah Bulluck (“the Bullucks”). (Complaint at ¶¶ 20-21.) Defendant argues the
doctrine of issue preclusion bars Plaintiff from litigating these assertions in
this action as a Court already adjudicated these issues adversely to Plaintiff
in prior litigation. The Court agrees.
Plaintiff filed two
previous actions against Defendant in 2013 (LASC Case No. SC121224)
and 2018 (LASC Case No. SC128726). These cases were eventually consolidated. On
September 13, 2019, the Court in the consolidated action issued a statement of
decision on certain issues, finding:
While TORCA does not bar a subtenant in
possession of a subject unit from being a Participating Tenant, TORCA sections
2001(b), (e) and (j) collectively require that a subtenant must be in
possession for at least six months as of the filing of the TPCA to be eligible
for Participating Tenant status. Since Moore was not in possession of Unit 5
for six months as of January 13, 1992, the date Edwards filed the TPCA, Moore
is ineligible for status as Unit 5’s Participating Tenant based on his
subtenancy.
Additionally, the City’s initial
determination in July 1992 that the Bullucks were Unit 5’s proper Participating
Tenant was correct….
(Sept. 13, 2019,
Order at 2.) The Court also noted that whether the Bullucks’ right to purchase
Unit 5 under TORCA had expired prior to the Bullucks’ assignment of their TORCA
rights to Plaintiff was a question to be determined at trial. (Id.)
Accordingly, the consolidated action proceeded to a trial before the Court. At
the conclusion of trial, the Court issued an order finding the Bullucks’ right
to purchase the Unit under TORCA had expired prior to their assignment of
rights to Plaintiff:
The court finds defendant delivered a
TORCA-compliant purchase option for Unit 5 to the Bullucks in or about January
2009 such that the Bullucks’ right to purchase the unit for $170,000 as a
participating tenant under TORCA expired prior to their assignment of their TORCA
rights to plaintiff in September 2017.
(Oct. 30, 2019,
Order at 1.) The Court thus entered judgment against Plaintiff on July 24,
2020.
The doctrine of
collateral estoppel, or issue preclusion, bars a party from relitigating any
issues necessarily included in a prior, final judgment. (Malkoskie v. Option
One Mortgage Corp. (2010) 188 Cal.App.4th 968, 973, fn. 4.) Issue
preclusion applies where “‘…(1) A claim or issue raised in the present action
is identical to a claim or issue litigated in a prior proceeding; (2) the prior
proceeding resulted in a final judgment on the merits; and (3) the party
against whom the doctrine is being asserted was a party or in privity with a
party to the prior proceeding.’” (People v. Barragan¿(2004) 32 Cal.4th
236, 253 [quoting Brinton v. Bankers Pension Services, Inc. (1999) 76
Cal.App.4th 550, 556].) A “judgment or final order in an action or special
proceeding” is conclusive as to “the matter directly adjudged.” (C.C.P. §
1908(a)(2).)
The Court finds
these elements are established here. As set forth above, Plaintiff’s Complaint
asserts rights under TORCA which are identical to those asserted in the prior
consolidated action. Those issues were directly adjudicated by the Court and
resulted in a final judgment on the merits on Defendant’s behalf, and the
parties in the consolidated action are the same parties before the Court in
this action.
Plaintiff does not claim
these issues were litigated in the prior action, rather, Plaintiff asserts the
prior judgment is void because both prior actions were moot. Plaintiff argues
the prior consolidated action concerned Plaintiff’s right to purchase the unit
under TORCA pursuant to a Final Subdivision Public Report issued on January 7,
2009. Plaintiff argues the 2009 Public Report expired by its own terms on
January 6, 2014, rendering the Court’s 2020 judgment in the consolidated action
as “overripe, non-justiciable, and moot.” (Opp. at 2.) The Court disagrees.
First, Plaintiff’s
argument is belied by his own actions. If Plaintiff truly believed the issue of
his status as a participating tenant under TORCA was mooted by the expiration
of the 2009 Public Report, he would not have filed a second action in 2018
seeking to force Defendant to sell him the unit at the TORCA purchase price. (See
Complaint in Case No. SC128726.) Furthermore, as Defendant
points out, in his January 25, 2016, Verified Second Amended Complaint (“SAC”)
in Case No. SC121224, Plaintiff stated under penalty of perjury that “An actual
controversy exists” regarding Plaintiff’s right to purchase the unit under
TORCA. (SAC at ¶ 50.) Indeed, Plaintiff specifically sought a “a judicial determination that he alone has
the right to buy the Unit at the TORCA Purchase Price” as well as a “judicial
determination of the parties rights and obligations under TORCA.” (Id.
at ¶¶ 51-52.) Having specifically sought a judicial determination of its rights
to purchase under TORCA after the expiration of the 2009 Public Report,
Plaintiff cannot now show his request was moot by the expiration of that
report.
Plaintiff has also
not demonstrated the expiration of the 2009 Public Report had any bearing on
his status as a TORCA participating tenant, either by virtue of his subtenancy
or assignment of the Bullucks’ TORCA rights. Plaintiff does not establish the
Court’s prior analysis under TORCA in any way depended on the 2009 Public
Report. There appears to be no dispute that the 2009 Public Report was a
prerequisite to conducting a sale of the unit, and thus the unit could not be
sold to Plaintiff at the TORCA purchase price without such a report. However,
Plaintiff’s prior consolidated action did not simply seek to force a sale of
the property, it sought a judicial determination of the respective rights of
the parties under TORCA. As set forth above, the Court’s rejection of Plaintiff’s
TORCA claims in the prior consolidated action did not rely or depend at all on
the status of the 2009 Public Report.
Accordingly, the
Court finds Plaintiff’s claims for breach of contract are barred by the
doctrine of issue preclusion as both claims seek to establish rights under
TORCA which have previously been adjudicated between the parties in prior
litigation. As this defect is central to Plaintiff’s claims, the Court finds
granting Plaintiff leave to amend would be futile and SUSTAINS Defendant’s
demurrer without leave to amend. As the Court has sustained Defendant’s
demurrer without leave to amend on this basis, it need not reach the other
grounds for demurrer asserted by Defendant and declines to do so.
Conclusion
Defendant’s demurrer to Plaintiff’s Complaint is SUSTAINED
without leave to amend.