Judge: Mark A. Young, Case: 23SMCV02521, Date: 2024-01-24 Tentative Ruling

Case Number: 23SMCV02521    Hearing Date: January 24, 2024    Dept: M

CASE NAME:           Avrech, et al., v. Delta Capital LLC

CASE NO.:                23SMCV02521

MOTION:                  Demurrer and Motion to Strike

HEARING DATE:   1/24/2024

Legal Standard

            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. 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 pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations omitted.)

            A special demurrer for uncertainty is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (CCP § 430.10(f); Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)

            Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (CCP § 435(b)(1); Cal. Rules of Court, Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (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. (CCP §§ 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

            “Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to show in what manner plaintiff can amend the complaint, and how that amendment will change the legal effect of the pleading. (Id.)

Analysis

Since this is a demurrer, the Court will not consider the extrinsic evidence presented by Defendants, including the declaration of Shahrokh Makhtarzadeh.

Lease Documents

Defendant demurs to each cause of action on the grounds that the causes fail to state sufficient facts and are subject to the applicable statute of limitations.  The Complaint alleges eight causes of action for 1) Breach of Implied Warranty of Habitability; 2) Tortious Breach of Implied Warranty of Habitability; 3) Negligence; 4) Intentional Infliction of Emotional Distress; 5) Private Nuisance; 6) Violation of California Civil Code Section 1942.4; 7) Violation of Unlawful Business Practices (Business & Professions Code Section 17200); and 8) Violation of Los Angeles Municipal Code Article 5.3.

Generally, claims sounding in a breach of a contractual right must plead the terms of the contract “set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) Here, Plaintiffs fail to fully allege the specific legal effect of the terms or attach a copy of the relevant contracts underlying each of the claims. The complaint is expressly based on two documents that give Plaintiffs’ their primary rights: the Lease and the Estoppel Certificate. The complaint alleges Plaintiffs Gary and Cynthia Avrech are tenants and occupants of certain residential property located at 903 S. Barrington Ave., or 1700 W. Dorothy St., Los Angeles, CA, 90049. (the Property). (Compl. ¶ 1.) On December 24, 2005, Gary Avrech executed a Lease with the owner of the Property at the time. (¶ 10.) On May 1, 2019, Plaintiffs executed an Estoppel Certificate for the Subject Property following Delta’s purchase of the Subject Property. (Id.) The Estoppel Certificate set Plaintiffs’ monthly rental rate at $1,467.75, and also noted that there was a “crack in the living room ceiling due to leaking that needs repair soon due to hazard,” and that the mechanism in the upstairs South-facing window in the South-facing bedroom needed to be repaired. (Id.)

Here, Plaintiffs have not attached a copy of the written lease or the estoppel certificate which form the basis of their tenancy with Defendants. These documents compose the contractual and lease rights underlying each cause of action. Therefore, Plaintiffs should at least attach such documents to the complaint. Accordingly, the demurrer is SUSTAINED with leave to amend.

Statute of Limitations and other grounds

Next, Defendant argues that “virtually all” of the defects or violations claimed here were in existence on May 1, 2019, or earlier. Defendant argues Plaintiffs should have therefore brought these claims within four years of that date. Unless a complaint affirmatively discloses on its face that the statute of limitations has run, demurrer must be overruled. (See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881 [“It must appear clearly and affirmatively that, upon the face of the complaint, the right of action is necessarily barred”]; see also Moseley v. Abrams (1985) 170 Cal.App.3d 355, 359 [“A demurrer on the ground of the bar of the statute of limitations will not lie where the action may be, but is not necessarily barred”].) “Generally, a cause of action accrues and the statute of limitation begins to run when a suit may be maintained. Ordinarily this is when the wrongful act is done and the obligation or the liability arises . . . . In other words, a cause of action accrues upon the occurrence of the last element essential to the cause of action. [Citation.]” (Cobb v. City of Stockton (2011) 192 Cal.App.4th 65, 72-73, alterations and internal quotation marks omitted.) 

Defendant fails to meet its initial burden of persuasion on this point, as they do not cite any applicable statute of limitation until their reply papers. The Court will not consider any newly raised statutes in reply. Defendant also does not explain why the certificate would trigger the statutory period for the entire claim. Furthermore, Defendant does not demonstrate that a four-year statute of limitations would apply to each cause of action. For example, nuisance causes of action have a unique statute of limitations analysis. (See Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 937 [discussing “continuing” violations].) Given this dearth of briefing and notice, the Court will not sustain a demurrer on this basis.  Finally, the Court does not find that the complaint is unintelligible.

Accordingly, the remainder of the demurrer is OVERRULED.

Motion to Strike Punitive Damages

Defendant also moves to strike punitive damages.  “In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff. [Citations.] In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth. [Citations.] In ruling on a motion to strike, courts do not read allegations in isolation. [Citation.]” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) “The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages. [Citation.] Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim. [Citation.]” (Grieves v. Superior Ct. (1984) 157 Cal.App.3d 159, 166, fn. omitted.) Specific facts must be pleaded in support of punitive damages. (Hillard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-92.) 

In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code Section 3294. (Coll. Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ. Code § 3294 (a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (§ 3294(c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (§ 3294(c)(2).)  Despicable is a powerful term used to describe circumstances that are “base,” “vile,” or “contemptible.” (Coll. Hosp., supra, 8 Cal.4th at 726.)  A plaintiff may establish the defendant was aware of the probable dangerous consequences of his conduct and that he willfully and deliberately failed to avoid those consequences to support an award of punitive damages based on conscious disregard of the safety of others. (Penner v. Falk (1984) 153 Cal.App.3d 858, 867.)  

Here, the Complaint alleges sufficient facts to support the allegation of malicious and despicable conduct. The Complaint generally alleges that Defendants breached their duties of care by failing to provide a safe and habitable living environment for Plaintiffs and intentionally and/or negligently failing to repair and maintain the Property. (¶ 7.) Plaintiffs’ complaints and the complaints of other tenants at the Subject Property were repeatedly and intentionally ignored by Defendants until the city stepped in. (¶¶ 12-24.) Beginning in March of 2020, Plaintiffs continuously requested that Defendants repair the leak in the Subject Property that was noted on the Estoppel Certificate. (¶ 12.) Despite multiple assurances from Defendants that the leak would be repaired, repairs were not conducted until the Los Angeles Housing Department (“LAHD”) became involved with the Subject Property in early 2023. (Id.) As a result of Defendants’ failure to address this leak over a period of multiple years, water continued to collect within the structure of the Subject Property, leading to portions of the living room ceiling falling to the ground. (Id.)

On January 30, 2023, LAHD issued a Notice and Order to Comply, Case Number 843593, to Defendants following an inspection of the Subject Property, indicating the following violations: (1) Find and eliminate cause of water damaged area in living room; (2) Repair

or replace defective window crank assembly in second bedroom; (3) Repair or replace damaged or delaminated entry door; (4) Replace missing transition at doorway in hallway bathroom; (5) Paint and patch all water damaged areas to match existing in living room and stairway; (6) Resurface chipped/damaged tub surface in hallway bathroom; (7) Remove defective caulking and reapply at hallway bathroom; and (8) Exterior maintenance. (Compl., ¶ 16.)  Defendants delayed making repairs. Repairs did not commence until Defendants began to repair the Subject Property following LAHD’s March 8, 2023, reinspection and referral of the matter to a General Manager’s Hearing. (¶¶ 18-19.) Further, Plaintiffs allege the repairs were completed in a haphazard manner to simply appease LAHD, and did not include a full remediation of the Subject Property, which had been subject to a water leak for multiple years. (¶ 19.)

Plaintiffs also allege that Defendant retaliated against them. On March 24, 2023, Defendants contacted LAHD to file a complaint with respect to an enclosed storage area outside of the kitchen of the subject Property being built without permits. (Compl., ¶ 21.) Defendants essentially “told on themselves” in order for LAHD to come and inspect the area in question, which was built prior to Plaintiffs moving into the property. (Id.) Defendants made such a complaint for the sole reason of retaliating against Plaintiffs by reducing the square footage and storage space of the Subject Property and to harass and annoy Plaintiffs. (Id.) As a result, on April 7, 2023, LAHD issued a Notice and Order to Comply to Defendants for a violation of illegal construction for the unpermitted enclosure. Defendants were instructed to either obtain the proper permits or demolish the construction. Defendants chose to demolish the storage area, removing 80 sq. ft., which is nearly 10% of the square footage of Plaintiffs’ lease. (Id.)

Several of the causes of action pled could support a claim of punitive damages under such facts. Under California law, a landlord’s intentional failure to repair can support a claim for punitive damages depending on the severity of the facts. (Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 920.) For example, in Stoiber, the tenant pled sufficient facts supporting exemplary damages by alleging that the landlord had actual knowledge of defective conditions in the premises, including leaking sewage, deteriorated flooring, falling ceiling, leaking roof, broken windows, and other unsafe and dangerous conditions, and that the landlord failed to repair them. (Id.) Stoiber also noted that intentional nuisances or the intentional infliction of emotional distress may also provide a basis for punitive damages. (Id.)

From these facts, a reasonable fact finder could conclude that the above conduct was malicious and despicable. Plaintiffs’ complaints and the complaints of other tenants at the Subject Property were repeatedly and intentionally ignored by Defendants until the city stepped in. (¶¶ 12-16, 23-24.) Simply put, Plaintiffs allege intentional delay and retaliation for complaining of defects. Whether this could be considered despicable conduct would depend on factual circumstances outside of consideration at the pleading stage. (See Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 925 [“[w]hether to award punitive damages . . . and the amount of such an award are questions committed to the trier of fact. [Citation.]”].)

Accordingly, the motion to strike is DENIED.

Plaintiffs have ten days to file an amended complaint.