Judge: Kevin C. Brazile, Case: 22STCV22928, Date: 2023-03-21 Tentative Ruling

Hearing Date: March 21, 2023

Case Name: Cooper v. The Luxury Escape Design, LLC, et al.

Case No.: 20STCV44079 

Matter: Motion for Summary Adjudication

Moving Party: Plaintiff Emrhys Cooper

Responding Party: Defendant The Luxury Escape Design, LLC

Notice: OK

Ruling: The Motion for Summary Adjudication is granted, but the Court will 

not award any equitable relief.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On November 16, 2020, Emrhys Cooper filed the operative Complaint against Defendants The Luxury Escape Design, LLC and Dominique Bossavy for (1) violations of the UCL, (2) trespass, (3) breach of warranty of quiet enjoyment, and (4) negligence.

Plaintiff now moves for summary adjudication as to his first cause of action, contending that Defendant The Luxury Escape Design, LLC violated the law when it rented property to Plaintiff and collected rent money, despite not owning the property or having a broker’s license. 

Defendant argues that there is no violation of the law to the extent it never collected commissions and the subject property was owned by Defendant’s sole member and officer, Defendant Bossavy.  Defendant further argues that there are triable issues as to the entitlement and amount of restitution.

The law of summary judgment provides courts “a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)  In reviewing a motion for summary judgment or adjudication, courts employ a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)  The moving party bears the initial burden of production to make a prima facie showing of the nonexistence of any triable issue, in which case the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue.  (Code Civ. Proc. § 437c(p)(2).)  To show a triable issue of material fact exists, the opposing party may not rely on the mere allegations or denials of the pleadings, but instead must set forth the specific facts showing that a triable issue exists as to that cause of action or a defense thereto.  (Aguilar, at p. 849.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

“The UCL defines ‘unfair competition’ as ‘any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.’ (Bus. & Prof. Code, § 17200)”  (Yanting Zhang v. Superior Court (2013) 57 Cal.4th 364, 370.)  A UCL action “ ‘is not an all-purpose substitute for a tort or contract action.’ [Citation.] Instead, the act provides an equitable means through which both public prosecutors and private individuals can bring suit to prevent unfair business practices and restore money or property to victims of these practices.... [T]he ‘overarching legislative concern [was] to provide a streamlined procedure for prevention of ongoing or threatened acts of unfair competition.’ ” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150.)  “As a result, the remedies available to private individuals for violation of the UCL are limited to restitution and injunctive relief; damages cannot be recovered.” (Graham v. Bank of Am., N.A. (2014) 226 Cal. App. 4th 594, 610.)

Because the statute “is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.”  (Cel–Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)  “By proscribing ‘any unlawful’ business act or practice [citation], the UCL ‘ “borrows” ’ rules set out in other laws and makes violations of those rules independently actionable. [Citation]”  (Yanting Zhang v. Superior Court (2013) 57 Cal. 4th 364, 370.)  A “violation of another law is a predicate for stating a cause of action under the UCL's unlawful prong.”  (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1554.)  

“There are no provisions in the Business and Professions (B&P) Code which authorize a limited liability company (LLC) to become licensed as a real estate broker.”  (https://www.dre.ca.gov/files/pdf/forms/re218.pdf.)  However, it does not seem lawful to have an LLC, regardless, act as a broker.  Typically, when an LLC rents property, it is the property owner. 

Bus. & Prof. Code § 10131 provides in relevant part, 

A real estate broker within the meaning of this part is a person who, for a compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others: . . .

(b) Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities.”

Here, it is undisputed that Defendant rented the subject property and collected money despite not being the owner.  It does not matter that Defendant did not obtain commissions, because the expectation of payment is “regardless of the form or time of payment . . . .”  (Bus. & Prof. Code § 10131.)  The Court concludes that there was a violation of the law because a non-owner of the property rented the property without a broker’s license and without being able to obtain such a license.  This is unlawful conduct within the meaning of the UCL.  (Bus. & Prof. Code § 17200, et seq.)

Plaintiff claims that he “was damaged by Luxury Escape’s conduct, as he paid rent for the Property totaling $45,000.00. (UMF No. 5.)”

“The general equitable principles underlying § 17535 (and presumably also § 17203) as well as its express language arm the trial court with the cleansing power to order restitution to effect complete justice.”  (Fletcher v. Security Pac. Nat'l Bank (1979) 23 Cal.3d 442, 449.)

“Awarding restitution is not mandatory. Thus, said the Court, even if a ‘borrowed’ statute creates strict liability, ‘it does not follow that equitable considerations may not guide the court's discretion in fashioning the equitable remedies authorized by section 17203.’ As the Cortez Court put it, the court's discretion is very broad. Section 17203 does not mandate restitutionary or injunctive relief where an unfair business practice has been shown. Rather, it provides that the court ‘may make such orders.’ [Cortez v. Purolator Air Filtration Prods., Inc., supra, 23 C4th at 180, 96 CR2d at 530 (emphasis in original)]”.  (Relief Available Under §§ 17200 and 17500, Bus. & Prof.C. 17200 Ch. 8-A.)

Here, it is not apparent that Plaintiff should be awarded $45,000 in rent restitution simply because Bossavy rented the property through an LLC.  “Although it is illegal to pay compensation to an unlicensed person for services requiring a license, once the payment is made, the law will leave the parties where they are, and the person who made the payment cannot recover a return of the payment. The entitlement of the recipient to keep the monies paid does not protect the unlicensed person from prosecution by the Real Estate Commissioner, however.”  (2 Cal. Real Est. § 5:2 (4th ed.).)  

There being no evidence that the rent collected was wrongful outside the fact that Defendant was not licensed, the Court declines to award any equitable relief.

In sum, the Motion for Summary Adjudication is substantively granted, but the Court will not award any equitable relief.  The objections are overruled.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.