Judge Kerry Bensinger, Case Number: 23STCV18956, Date: 2024-10-22 Tentative Ruling

MOVING PARTY: Defendants 667 S. Carondelet St. LLC, and Statewide Enterprises, Inc.

This case arises from habitability issues at the property located at 667 S. Carondelet, Los Angeles, CA 90057 (the Subject Property). Leticia Trejo, Hector Mendoza, Hector Octavio Mendoza, Soraya Chimil-Mendoza, Aylin Mendoza, Matilde Esperanza, Ordonez Tzorin, Marleny Ramos, and Mario Fernando Ramos-Ordonez (collectively, Plaintiffs) are low-income tenants of the Subject Property. The Subject Property is owned by 667 S. Carondelet St. LLC and managed by Statewide Enterprises, Inc (collectively, Defendants). Defendants have owned and managed the Subject Property since February 14, 2017, to present. Plaintiffs were tenants in the Subject Property prior to Defendants’ ownership and management of the Subject Property.

Plaintiffs allege various breaches of habitability, including cockroach and bed bug infestations, and mold issues, among others. Despite receiving numerous complaints from Plaintiffs about these issues, Defendants failed to take appropriate steps to remedy the problems.

On August 9, 2023, Plaintiffs commenced this action against Defendants. The operative pleading is the Second Amended Complaint (SAC). In the SAC, Plaintiffs allege causes of action against Defendants for:

Defendants demur to the first, second, fourth, sixth, seventh, and eighth causes of action and seek an order striking punitive damages from the SAC.

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, accepting the alleged facts as true. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.) “Because a demurrer challenges defects on the face of the complaint, it can only refer to matters outside the pleading that are subject to judicial notice.” (Arce ex rel. Arce v. Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 556.)

Defendants demur to the first, second, fourth, sixth, seventh, and eighth causes of action. As a threshold matter, Plaintiffs concede that the first, second and fourth causes of action are deficiently pleaded. Accordingly, the demurrer to the first, second, and fourth causes of action is SUSTAINED. Leave to amend is GRANTED. The court proceeds to consider Defendants arguments to the remaining causes of action.[1]

The seventh cause of action is based on the following allegations: “The conduct of Defendants and/or its agents and employees was extreme and outrageous. As landlord and manager of the property, Defendants were in a position of authority and power which it consistently and systematically abused by, among other things: failing to maintain the property and rental units in a habitable condition; refusing to abate numerous disgusting and dangerous hazards; blatantly ignoring, not only Plaintiffs’ repair requests and complaints, but County and City agency orders to comply with building, health, and safety codes.” (SAC, ¶ 108.) Those dangerous hazards included cockroach and bed bug infestations, mold, and plumbing issues. (SAC, ¶¶ 44-63.) Further, Defendants prioritized maximizing profits head of all other considerations, including Plaintiffs’ safety and health. (SAC, ¶ 110.)

The elements of an intention infliction of emotional distress (IIED) claim are: (1) that defendant’s conduct was outrageous; (2) that defendant intended to cause plaintiff emotional distress, or that defendant acted with reckless disregard of the probability that plaintiff would suffer emotional distress, knowing that plaintiff was present when the conduct occurred; (3) that plaintiff suffered severe emotional distress, and (4) that defendant’s conduct was a substantial factor in causing plaintiff’s severe emotional distress.¿ (CACI No. 1600; Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-51.)¿ “It is not enough that the conduct be intentional and outrageous.¿ It must be conduct directed at the plaintiff, or occur in the presence of a plaintiff of whom the defendant is aware.”¿ (Christensen v. Superior Court (1991) 54 Cal.3d 868, 903-904.)¿

Defendants attack the first and third elements. First, Defendants argue Plaintiffs have not sufficiently alleged outrageous conduct. In support, Defendants point to allegations showing Defendants made multiple attempts to remediate the situation. In this way, Defendants contend the allegations amount to nothing more than negligence.

The court disagrees. The SAC alleges two instances of Defendants attempting to remedy an issue. With respect to rodent infestations in Unit 1, Plaintiffs allege the treatments were ineffective because Defendants utilized localized treatments for a problem which was pervasive throughout the Property. (SAC, ¶ 50.) The other instance is painting over moldy walls which only visibly addressed the mold issue. (SAC, ¶ 55.) Contrary to Defendants’ position, the court finds these allegations, accepted as true, easily rise to the level of outrageous conduct, especially when considered in the context of the pleading as a whole: Defendants were aware of these conditions for years and failed to take adequate remedial issues. (SAC, ¶¶ 44-63.) The SAC adequately alleges outrageous conduct.

Second, Defendants argue Plaintiffs have pled conclusory and boilerplate language rather than facts sufficient to show any of them suffered from “severe” emotional distress. In support, Defendants cite Pitman v. City of Oakland (1988) 197 Cal.App.3d 1037, 1047 for the proposition that “the mere allegation that the plaintiffs suffered severe emotional distress, without facts indicating the nature or extent of any mental suffering incurred as a result of the defendant's alleged outrageous conduct, failed to state a cause of action for intentional infliction of emotional distress.”

Pitman is easily distinguishable. The nature of the IIED claims in Pitman and this case are vastly different. In Pitman, Pitman based his IIED claim on his dismissal by the City of Oakland from employment as a police communications dispatcher after being cited and arrested by the California Highway Patrol. Pitman alleged in conclusory fashion that he suffered shame, humiliation, embarrassment, and loss of his employment. The trial court sustained the demurrer. The Court of Appeal affirmed, opining “[b]eing dismissed from a job is not an uncommon occurrence in modern society. The allegation that plaintiff suffered shame, humiliation and embarrassment without further factual explanation does not meet the requirement of specificity called for in Bogard. Moreover, whatever shame, humiliation and embarrassment plaintiff may have suffered was the product of his own unlawful conduct.” (Pitman, at pp. 1047-48.)

By contrast, this is a habitability case with allegations that suggest Plaintiffs endured deplorable conditions over several years because of Defendants failure to adequately remedy the issues. Plaintiffs’ alleged severe distress, which also includes “extreme suffering, anguish, depression, fearfulness, anxiety, nightmares, difficulty sleeping, embarrassment, and shame” are made in the context of minor plaintiffs suffering physical harm from the rodent infestations. The factual allegations here are not mere boilerplate.

The sixth cause of action is based on the following allegations: “[T]he rental of the Property constitutes a ‘business practice.’ Plaintiffs are informed and believe and thereon allege that Defendants engaged in the illegal and unfair business practice of owning and/or renting substandard, untenantable, uninhabitable, dangerous, unhealthy and unsanitary housing. Defendants’ illegal and unfair business practices include, but are not limited to, Defendants’ acts and omissions described herein as well as the ongoing violation of the statutes, regulations and/or ordinances described in this complaint. Plaintiffs are informed and believe that Defendants’ illegal and wrongful conduct as described in this complaint has been adopted and implemented by Defendants as a means of conducting business” and “for the purpose of maximizing their net income and profits from such properties.” (SAC, ¶¶ 102-102.)

The Unfair Competition Law (UCL) is codified at Business and Professions Code section 17200 et seq.¿ Section 17204 of the UCL provides that a private person “who has suffered injury in fact and has lost money or property as a result of the unfair competition” may bring a 17200 action.¿ (Bus. & Prof. Code, § 17204.)¿ “To bring a UCL claim, a plaintiff must show either an (1) unlawful, unfair, or fraudulent business act or practice, or (2) unfair, deceptive, untrue or misleading advertising. [Citation.]¿ Because the UCL is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.”¿ (Adhav v. Midway Rent A Car, Inc. (2019) 37 Cal.App.5th 954, 970, citations and quotations omitted.)¿

Defendants argue the sixth cause of action fails because there are no allegations “(1) establishing the specific unfair/deceptive advertising or statements allegedly made defendants, (2) establishing the Plaintiffs suffered an actual economic injury, (3) establishing the economic injury was the result of the unfair business practices or false advertising engaged in by defendants, and (4) establishing Plaintiffs actually relied upon any unfair business practice and/or false advertising allegedly engaged in by defendants.”

Defendants arguments lack merit. First, the UCL is written in the disjunctive. (Adhav, at p. 970.) It can be based on misleading advertising, or, as is alleged here, an unfair business practice. Second, Plaintiffs alleged having suffered an economic injury. Specifically, Plaintiffs paid rent for dwellings with uninhabitable conditions. In other words, Plaintiffs overpaid for rent. (See, e.g., Peviani v. Arbors at California Oaks Property Owner, LLC (2021) 62 Cal.App.5th 874, 893 [stating the “methods of measuring damages for a landlord’s breach of the warranty of habitability include (1) the difference between the rent paid and the amount of rent that would have been reasonable given the defect; (2) the difference between the fair rental value of the premises had they been in the condition warranted and their fair rental value with the uninhabitable condition [citation;] and ([3]) the rent paid by the tenant multiplied by the percentage of the premises rendered unusable due to the uninhabitable condition.”].) Third, Plaintiffs sufficiently allege their economic injury was the result of Defendants’ illegal conduct. (See SAC, ¶¶ 104-105.) Fourth, the element of reliance is required for a UCL claim when it is based on fraud. However, as discussed, Plaintiffs do not base their UCL claim on fraud. Defendants need not look further than the authority they cite, In re Tobacco II Cases (2009) 46 Cal.4th 298, 328 which states, “a plaintiff must plead and prove actual reliance to satisfy the standing requirement of section 17204 but, consistent with the principles set forth above, is not required to necessarily plead and prove individualized reliance on specific misrepresentations or false statements where, as here, those misrepresentations and false statements were part of an extensive and long-term advertising campaign.”

The eighth cause of action is based on Defendants’ failure to perform and timely complete repairs and maintenance required by federal, state, county, or local housing, health, or safety laws; and other repeated acts or omissions of such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet of a tenant and that cause, or likely to cause, or are committed with the objective to cause a tenant to surrender or waive any rights in relation to such tenancy. (SAC, ¶ 114.)

Los Angeles Municipal Code section 45.30 “provides an aggrieved tenant with a private right of action and affirmative defense in eviction, ejectment, and other actions.” (Demurrer, p. 15:15-17.) The ordinance went into effect on August 6, 2021.

Defendants argue the eighth cause of action fails because the ordinance is not retroactive and thus cannot apply to enumerated offenses that occurred prior to the effective date of the legislation. The argument lacks merit. Defendants’ alleged misconduct falls outside and within the applicable period. (SAC, ¶¶ 45-46.) The claim does not fail simply because only some of the alleged offenses are not actionable.

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322(b).) On a motion to strike, the court may: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

“The grounds for a motion to strike are limited to matters appearing on the face of the challenged pleading or matters which must or may be judicially noticed. (§ 437, subd. (a); Evid. Code, §§ 451, 452.).” (Garcia v. Sterling (1985) 176 Cal.App.3d 17, 20.)

Plaintiffs seek punitive damages against Defendant Simone only in connection with the fourth and sixth causes of action. (See SAC ¶¶ 87, 95, 97, 98, and Prayer for Relief no. 3.)

Defendants move to strike the allegations supporting and request for 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).) “An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.” (Civ. Code, § 3294, subd. (b).)

Here, the court finds Defendants are entitled to an order striking punitive damages from the SAC, but not for a reasons Defendants identify. Defendants are corporate entities. However, the SAC does not allege that any officer director, or managing agent of Defendants “had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.”

The demurrer to the first, second, and fourth causes of action is Sustained. The demurrer to the sixth, seventh, and eighth causes of action is Overruled.

Plaintiffs are ordered to serve and file their Third Amended Complaint within 15 days of the date of this order.

Kerry Bensinger

Judge of the Superior Court

[1] The court addresses the causes of action as presented in the demurrer.