Judge Mark A. Young, Case Number: 24SMCV01711, Date: 2024-06-10 Tentative Ruling

Judge: Mark A. Young, Case: 24SMCV01711, Date: 2024-06-10 Tentative Ruling

Case Number: 24SMCV01711 Hearing Date: June 10, 2024 Dept: M

CASE NAME: Moonraker LLC, v. Mullis

CASE NO.: 24SMCV01711

MOTION: Demurrer to the Complaint

HEARING DATE: 6/10/2024

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.)

“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

Defendant Benjamin Mullis demurs to the unlawful detainer complaint of Plaintiff Moonraker LLC.

The basic elements of unlawful detainer are (1) the tenant is in possession of the premises; (2) that possession is without permission; (3) the tenant is in default under the rental agreement; (4) the tenant has been properly served with a written three-day notice; and (5) the default continues after the notice of termination period has elapsed. (Kruger v. Reyes (2014) 232 Cal.App.4th Supp. 10, 16.) The unlawful detainer statutes are strictly construed and require strict compliance. (Feder v. Wreden Packing & Provision Co. (1928) 89 Cal.App.665, 670.)

Any tenant… [i] assigning or subletting or committing waste upon the demised premises, contrary to the conditions or covenants of the lease, or [ii] maintaining, committing, or permitting the maintenance or commission of a nuisance upon the demised premises or [iii] using the premises for an unlawful purpose, thereby terminates the lease, and the landlord, or the landlord's successor in estate, shall upon service of three days' notice to quit upon the person or persons in possession, be entitled to restitution of possession of the demised premises under this chapter…

(CCP § 1161(4).)

An illegal use breaches the lease, giving the landlord an immediate right to serve an unconditional three-day notice to quit. (CCP § 1161(4) see Brown v. Ferdon (1936) 5 Cal.2d 226, 231 [all laws in effect at the time the lease is executed are incorporated into and become a part of the lease].) That said, tenants may generally use the rented premises for any lawful purpose, not materially different from that for which the premises are normally used or for which they were adapted or constructed. (Davidson v. Goldstein (1943) 58 Cal.App.2d Supp. 909, 910.) California law generally abhors forfeitures. (Civ. Code § 1442.) Accordingly, some conduct which may be unlawful in and of itself will not constitute a violation of a lease provision prohibiting illegal conduct which justifies termination of lease. (Rowe v. Wells Fargo Realty Servs., Inc., (1985) 166 Cal. App. 3d 310, 317.) A tenant's violation of a statute or ordinance in using the property is an “unlawful purpose” only if the usage threatens physical safety, will stigmatize the premises, or impairs the landlord's continued receipt of rent. (Rowe, supra., at 317-318.) On the other hand, if the conduct amounts only to an “ancillary” legal violation, not tied to the functional use of the property, it is not the sort of “unlawful” usage that will support an eviction. (Ibid.; see Deutsch v. Phillips Petroleum Co. (1976) 56 Cal.App.3d 586, 591 [pled antitrust violation was an “ancillary legal violation” based on the conduct of defendants' business, rather than one relating to the physical premises, and thus did not constitute a breach of the lease].)

For instance, in Rowe, the unlawful detainer complaint failed to state a claim under subsection (4) where the defendant, Wells Fargo, reset temperature controls on the premises in violation of Department of Energy regulations. (Rowe, supra, at 318.) The three-day notice was invalid because Wells Fargo's alleged violation of the regulation did not “threaten the physical safety of the property, nor is it the type of unlawful criminal activity which would stigmatize the premises. Further, appellants have not alleged facts to indicate their continued receipt of rent was in any way impaired merely because Wells Fargo reset the temperature on the premises.” (Id.) As a matter of law, such a “minor violation” would not warrant forfeiture of a lease. (Id., at 319.)

Plaintiff Moonraker, LLC is the owner of a residential property located at 6611 Portshead Rd., Malibu, CA 90265. The property consists of a main house, a guesthouse, and a tennis court. (Compl, ¶ 17.1.) The main house had burned down in November 2018. (¶ 17.2.) Plaintiff, a developer, intends to rebuild the fire-damaged house. Plaintiff received approval to begin construction and demolition work on the property (¶ 17.3.) During construction, Plaintiff thought it would be “a good idea” to rent out the guesthouse. (¶ 17.4.) Plaintiff found Defendant, and the Parties executed the written lease on January 29, 2024. (¶ 17.5, Ex. 1.) The term was to begin on March 11, 2024 and end on September 10, 2025. At some point prior to the move-in date, Plaintiff notified Defendant that “the Lease Agreement would have to be canceled and rescinded as the City of Malibu’s Building Department had “forbidden” any individual to live in the Property.” (¶¶ 17.7, 17.16.) Plaintiff offered to refund Defendant’s rent payment, security deposit, and other payments. (¶¶ 17.7, 17.11.) Defendant did not accept this offer. Defendant took possession without Plaintiff’s permission, including the guest house and tennis court. (¶¶ 17.14-17.15.) The complaint alleges that there is a considerable health, safety, and welfare concern caused by Defendant’s use of propane tanks at the unhabitable guest house. (¶¶ 17.19.)

Plaintiff therefore served a three day notice to quit (NTQ) on April 1, 2024. The NTQ, citing Code of Civil Procedure section 1161(4), states:

“On or about March 18, 2024, [Mullis] illegally and without permission broke into the wrongfully taking possession and occupancy of the subject property described as 6611 Portshead Rd, Malibu, CA 90265 [Guest House]. This break in and unlawful entry was witnessed by Mr. Braulio Flores. As such, you are not an authorized occupant or tenant, and ownership is hereby requesting that you vacate immediately, but in no event longer than three (3) days from the date this Notice is served on you.

Due to your illegal conduct, you and all other occupants must vacate the premises prior to the expiration of this notice and turn over possession of the premises to ownership. As you well know, it is illegal, as per the City of Malibu Building Department, to live at the Subject Guest House. This fact can be confirmed with Mr. Ryan Cerny (City Inspector).”

Defendant argues the complaint fails to state a claim because the Lease is still valid. Defendant asserts that Plaintiff’s unreasonable or neglectful mistake of fact would not constitute a proper rescission. Defendant reasons that his use is not unlawful because occupying the guest house with an enforceable lease would be lawful. Defendant contends that Plaintiff simply does not want to cease construction in favor of Defendant’s valid lease.

Liberally construed, the above factual allegations show an unlawful use of the premises, justifying termination of the lease. Plaintiff alleges, as a matter of fact, that he rescinded the agreement due to mutual or unilateral mistake of fact. (Compl., ¶ 17.11; see Civ. Code § 1577.) Plaintiff alleges that the Malibu Building Department has declared the guest house uninhabitable. The parties did not know that the premises was uninhabitable at the time they executed the lease. While Defendant believe this was unreasonable or neglectful, and therefore not a complete rescission, these are issues of fact that must be considered outside of the pleading stage. Furthermore, Plaintiff alleges that Defendant’s use of the premises threatens safety due to the condition of the premises. This allegation would defeat Defendant’s reliance on Rowe at the pleading stage, as violations that threaten “physical safety” are the type of unlawful activity that may be grounds for forfeiture of a lease.

Accordingly, the demurrer is OVERRULED. Defendant to file an answer within 5 days.