Judge: Lawrence Cho, Case: BC685351, Date: 2022-11-01 Tentative Ruling

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Case Number: BC685351    Hearing Date: November 1, 2022    Dept: K

CASE NAME:           LEHRER-GRAIWER, et al v. SHOKRIAN

CASE NUMBER:                             BC685351                              

HEARING DATE:                                                   11/1/22

JURY TRIAL DATES:  9/7/22 to 9/15/22  

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                                                          TENTATIVE RULING

 

  1. PLAINTIFF’S MOTION FOR RESCISSION:                                                             DENIED

  2. PLAINTIFF’S MOTION FOR ATTORNEY’S FEES:                      DENIED

 

                                               

INTRODUCTION

 

           This was a fraud in the inducement cause of action whereby Plaintiffs (“P’s”) sued Defendant (“D”) for monetary damages stemming from a lease agreement whereby D had agreed to stay in the leased apartment for only 1 year.  The lease agreement was unenforceable as against public policy as it attempted to have D waive tenant protections under the Los Angeles Rent Stabilization Ordinance (“LARSO”).  In spite of this, P’s theory was that D defrauded them when she promised she would move out after a year knowing that she had no intention of doing so.  After the year’s lease expired, D did not vacate. 

 

           After a 7 day jury trial, the jury found for P and awarded monetary damages of $150,904.75. 

 

            P now brings (i) a motion for a granting of rescission of the lease agreement; and (ii) an award of $103,960 in attorney’s fees stemming from an attorney’s fees provision in the lease agreement.  D filed late oppositions on 10/25/22 which should have been due by 10/19/22 (9 court days prior to hearing), which defense counsel is specifically admonished against in the future.  Should P require additional time in the light of the late filing, the Court will accommodate such a request. 

 

 

                                                                    ANALYSIS

 

  1. P’s Motion for rescission of lease agreement

     

                P asserts that since the jury has found that there was fraud in the inducement to enter into the lease agreement, then the lease agreement is voidable and should be voided by this Court.  Accordingly, P now asks for the remedy of rescission – particularly the restoring of possession of the premises back to P (requesting Court to “order that [Defendant] vacate the property” and “place her out of possession,” P’s Brief at 2).  This request must be denied for several reasons.

     

                First, this was an unlimited civil action for fraud which requested only monetary damages.  “Rescission and damages are alternative remedies . . . the election of one remedy bars recovery under the other.”  Wong v. Stoler (2015) 237 Cal.App.4th 1375, 1384.  Moreover, the remedy of rescission may not be granted as it has never been requested; rescission has never been pled by P’s as a specific remedy sought and therefore cannot be granted upon judgment.  Indeed, as D’s brief points out, P were given a specific opportunity to amend their complaint to add rescission as a requested remedy as late as Sept. 1, 2022 (merely 6 days prior to trial) and declined to do so.  Most importantly, the actual relief P seeks in requesting rescission, i.e., evicting D, simply cannot be awarded in this action for damages.  This action is neither an unlawful detainer nor an action in ejectment, which are – to this Court’s knowledge and experience --  the only two causes of action in which the remedy of an eviction may be granted. 

     

                Second, any right to rescission P once may have had, had been waived by P’s having accepted rent after learning of the breach of the illegal contract, i.e., failure to move out after the year had passed as D had promised.  Neet v. Holmes (1944) 25 Cal.2d 447, 458 (“Waiver of a right to rescind will be presumed against a party who, having full knowledge of the circumstances which would warrant him in rescinding, nevertheless accepts and retains benefits accruing to him under the contract”).  Here, the one year period agreed upon expired in Sept. 2017 and there is no dispute that P kept accepting rental payments from D until Oct. 2019 and even a payment in Feb. 2022.  As such, the remedy of rescission has long been waived.

     

                Even if the prior findings and reasoning were not fatal P’s request, this Court would question whether or not P ought to be estopped from requesting such relief.  The undisputed facts were that P boldly attempted to get around the protections of LARSO by drafting an illegal lease agreement purporting to have tenant waive those protections.  Even if P was not an attorney by training, such an attempt to do so is patently void as against public policy.  The fact that at least  P Jonathan was an attorney by training merely heightens how egregious this attempt was.  To further exacerbate this conduct, P’s reduction of rental services after D failed to honor her word would have further convinced this Court to exercise its equitable powers in denying the relief sought.

     

                For all the reasons above, P’s motion for rescission is DENIED.

     

     


  2. p’s motion for attorney’s fees


                Although there is an attorney’s fees clause in the Settlement and Release Agreement executed by the parties, this Court has already found that this agreement in void as against public policy.  Just as P could not enforce the LARSO waiver provisions of this purported agreement against D, neither can P enforce the attorney’s fee clause therein.  Motion for attorney’s fees is DENIED.