Judge: Michael D. Washington, Case: 37-2021-00033311-CU-OR-NC, Date: 2024-04-26 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - April 25, 2024

04/26/2024  01:30:00 PM  N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael D Washington

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Civil - Unlimited  Other Real Property Demurrer / Motion to Strike 37-2021-00033311-CU-OR-NC RAMIREZ VS THOMPSON [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 02/20/2024

There are three demurrers presently on-calendar in this matter. One is brought by the alleged homeowners, Christopher and Angela Thompson (collectively, the Neighbors or the Plaintiffs). The other two are brought by the property management company, Sentry Residential Inc. (Sentry), and its alleged owner, Michael Chisel (Mr. Chisel), respectively. Given their apparently-aligned interests, shared representation, and similar arguments, the demurrers of Sentry and Mr. Chisel will be addressed together in the rulings below, and Sentry and Mr. Chisel will be referenced jointly as 'Sentry/Chisel' and/or the 'Property Managers.' Accordingly, the rulings below will itemize the pending motions and first address the demurrer brought by the Neighbors, and then, separately, will address the two demurrers brought by Sentry/Chisel.

RULING ON DEMURRER BY HOMEOWNERS Disposition The Demurrer to Fourth Amended Complaint brought by defendants/cross-complainants Christopher and Angela Thompson is SUSTAINED with leave to amend. The time to amend shall be as set forth in California Rules of Court, rule 3.1320.

Request for Judicial Notice The Request for Judicial Notice brought by the Neighbors is GRANTED pursuant to Evidence Code § 451, et seq.

Factual Background This is a dispute about one property within a neighborhood being used as a short-term rental. It is alleged that this use is resulting in disturbances to certain neighbors and is in violation of the Covenants, Conditions, and Restrictions (CC&Rs) that govern the homes in the neighborhood.

The owners of the home that is allegedly being rented out are Oscar Ramirez and Mariah Vass (collectively, the Landlords). The property the Landlords own is located at 1696 Gil Way in Vista, California 92084 (the Subject Property). It appears that the Subject Property is one of five properties that were bound by the CC&Rs that were recorded on September 23, 1987. The CC&Rs contained a provision limiting the land use as follows, which will be referenced herein as 'Paragraph 1': 1. No lot shall be used except for residential purposes. No building shall be erected, altered, placed or permitted to remain on any Lot other than one (1) detached single family dwelling not to exceed two (2) stories in height and a private attached garage for not less than two (2) cars, but no more than three (3) Calendar No.: Event ID:  TENTATIVE RULINGS

3093031 CASE NUMBER: CASE TITLE:  RAMIREZ VS THOMPSON [IMAGED]  37-2021-00033311-CU-OR-NC cars. (ROA 298, Ex. A, ¶ 1.) The CC&Rs contain a paragraph identifying how they can be amended, and it reads as follows: 21. These Restrictions may be amended at any time, and from time to time, by an instrument in writing signed by all of the then owners of record of said Lots 1, 2, 3, 4, and 5, which said written instrument shall become effective upon its recording in the office of the County Recorder of San Diego County, State of California. (ROA 298, Ex. A, ¶ 21 (emphasis added).) It appears that the CC&Rs were amended on October 17, 1991 (the 1991 Amendment). What makes the 1991 Amendment interesting is that it was not adopted unanimously. Instead, it was adopted by the owners of four of the five lots that are governed by the CC&Rs.

Relevant Procedural History The Neighbors are now suing the Landlords asserting several causes of action, but one of those includes a cause of action for breach of restrictive covenant. The Landlords demur on grounds that the restrictive covenant has since been extinguished via that 1991 Amendment.

Merits of Motion The Landlords rely almost entirely on the case of Costa Serena Owners Coalition v. Costa Serena Architectural Committee (2009) 175 Cal.App.4th 1175. The two major takeaways from that case that are applicable here would be: (1) there is a distinction to be made when it comes to recorded covenants with regard to whether they are void or voidable, and (2) if voidable, there is a four-year statute of limitations to challenge them (i.e. to have a court declare them voided) from the time they are recorded. Applying just those principles to the instant case, the Landlords appear to have quite a strong argument.

Though the Neighbors oppose the Demurrer to Fourth Amended Complaint on this issue, their opposition almost entirely fails to engage with the legal issue raised by the Landlords. Instead, the opposition primarily frames the demurrer argument a 'simply a conclusion.' This is unhelpful.

While binding precedent, the Costa Serena case appears as though it might possibly be distinguishable from the instant case because it appears that the Costa Serena case involved a common interest development and that the instant case does not.

Amendment requires owners' consent. As a general rule, restrictions on land cannot be created without the consent of all the owners of the land affected,[ftnt] and they may be modified or amended by the execution of a mutual agreement, signed by all of the property owners of property subject to the restrictions.[ftnt] When the document creating the restrictions authorizes amendment or modification by less than all of the owners of the land affected, the successive owners are deemed to accept ownership subject to the terms of the restrictions including the provisions for amendments, and the restrictions can be amended by the number of landowners specified if the procedures and voting requirements of the original restrictions are satisfied.[ftnt] Amendment of restrictions in common interest developments. The procedure for amendment to the Declaration of covenants, conditions, and restrictions in a common interest development is different.

In a common interest development, an amendment adopted pursuant to the provision of the Declaration prescribing the required vote or approval for an amendment of the restrictions and the required approval and voting procedure is valid and effective even though it is not actually executed by each owner, provided that the required approval of a percentage of owners has been given, that this fact has been certified in a writing executed and acknowledge by the officer designated in the Declaration or by the association for that purpose (or if no one is designated by the president of the association), and that the document setting forth the certificate is recorded in each county in which a portion of the common interest development is located.[ftnt] The Declaration may be amended at any time, unless specifically restricted by its terms, but if there are no provisions in the Declaration concerning amendment, then an amendment requires the approval of 50 percent or more of the separate interests in the common interest Calendar No.: Event ID:  TENTATIVE RULINGS

3093031 CASE NUMBER: CASE TITLE:  RAMIREZ VS THOMPSON [IMAGED]  37-2021-00033311-CU-OR-NC development.[ftnt] This must be certified and recorded, and a copy of any amendment must be delivered by first class mail to the owners of separate interests immediately after recordation.[ftnt] Miller and Starr, 4 California Real Estate (4th ed. 2023) § 16:42 (some emphasis added). The first words of the Costa Serena decision read: 'Costa Serena is a planned development...' and the decision itself refers to an 'Architectural Committee' within the planned development. The instant case involves five lots and does not appear to be a 'common interest development.' Understandably, common interest developments are treated differently because changes to the CC&Rs can often be done by vote of management of the association or by some percentage of homeowners. The instant case required unanimity. Moreover, the Costa Serena case appears to have addressed the void or voidable issue by addressing 'fail[ures] to conform to the requirements of the provision that outlined how the DoR's/UDoR could be amended.' Costa Serena, supra, 175 Cal.App.4th at 1193. How the restrictions can be amended is procedural in nature. In the instant case, it is unclear whether the Neighbor's issue with the 1991 Amendment is procedural in nature.

Then again, that is significantly due to the fact that the Neighbor's largely failed to engage with the legal issue that has been raised by the demurrer.

In ultimately ruling on the instant motion, the Court is mindful of two different principles – each of which counsels in favor of a different outcome. On the one hand, where a party fails to make or raise certain arguments, it is not for the Court to raise them on its own. On the other, in the context of a demurrer, sustaining without leave to amend is generally disfavored as California law generally favors reaching trial on the merits. Even though the instant demurrer is to a fourth amended complaint, this Court has not generally addressed the legal issues raised in any prior demurrers. As such, leave to amend appears appropriate in order to avoid a potential miscarriage of justice.

However, in granting leave to amend the Court expressly warns the Neighbors (i.e. plaintiffs) that failure to adequately engage with and argue the legal issues in any subsequent dispositive motions (demurrers, motions to strike, motions for judgment on the pleadings, or motions for summary judgment/adjudication) may result in the dismissal of the case without leave to amend.

As such, the Neighbors are cautioned to put forth both their best allegations and their strongest arguments if they choose to utilize the leave to amend that is being granted.

Finally, the Court also notes an argument by the Neighbors that the Landlords have filed a cross complaint that alleges that the Neighbors, too, have breached the CC&Rs. This argument is unpersuasive at this juncture for two reasons. First, parties are allowed to plead 'in the alternative' (i.e.

the Landlords can take the position that the CC&Rs are invalid, and also take the position that if the CC&Rs are found to be valid in court, then the Landlords can take advantage and enforce them). While this inconsistency might, eventually, give rise to a judicial estoppel argument that would preclude the Landlords from taking one of these two positions, the Landlords would have to first win on an argument that takes one of these two positions in order for judicial estoppel to apply. Second, the Landlords appear to only be arguing that the 1991 Amendment invalidated 'Paragraph 1' of the original CC&Rs – not the entirety of the original CC&Rs. As such, if the Landlords seek to maintain a claim predicated on some other provision of the CC&Rs their positions would not be inconsistent.

RULING ON DEMURRER BY PROPERTY MANAGERS Disposition The Demurrer to Fourth Amended Complaint brought by the defendants Sentry and Chisel (the Property Managers) is disposed as follows: --Second Cause of Action (Private Nuisance) – OVERRULED --Third Cause of Action (Trespass) – SUSTAINED with leave to amend --Fourth Cause of Action (Aiding and Abetting Private Nuisance and Trespass) - SUSTAINED with Calendar No.: Event ID:  TENTATIVE RULINGS

3093031 CASE NUMBER: CASE TITLE:  RAMIREZ VS THOMPSON [IMAGED]  37-2021-00033311-CU-OR-NC leave to amend --Seventh Cause of Action (Negligence) - OVERRULED The time to amend shall be as set forth in California Rules of Court, rule 3.1320.

Factual Background It is alleged that the Landlords are renting the Subject Property out as a short-term rental using website services like AirBnB, VRBo, and Apartments.com. It is further alleged that said rentals are for large-scale events like weddings, family gatherings, birthday parties and the like, with a maximum capacity of 60 people and a maximum overnight capacity of 19 people. These rentals allegedly result in frequent noise violations, speeding and traffic in the neighborhood, blocking of neighbors' driveways, trespassing by short-term tenants, smoking and drug use by short-term tenants, dumping of wastewater from camping trailers, physical and verbal hostility from short-term tenants, and leaving garbage cans piled up for weeks at a time resulting in rat problems. (ROA 274, ¶ 16.) Relevant Procedural History Though the Subject Property is allegedly owned by the Landlords (Mr. and Mrs. Thompson), it is allegedly being managed by the Property Managers (Sentry and Chisel). As such, the Neighbor-Plaintiffs are suing the Property Managers for causes of action that relate to the above issues (noise, sewage, hostility, rats, etc.), including: (2) private nuisance (3) trespass (4) aiding and abetting private nuisance and trespass (7) negligence The Property Managers now demur to those four causes of action on grounds that the facts alleged do not support such causes of action and on grounds that the factual allegations are vague and uncertain.

Legal Issue – Nuisance and Negligence The Property Managers argue that '[t]here can be no separate claim for nuisance, when the claim relies on the same facts of lack of due care to support a negligence claim.' (Demurrer, p. 4:23-25, citing Melton v. Boustred (2010) 183 Cal.App.4th 521, 542, also citing El Escorial Owners' Assn. v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337.) While the Court is largely in agreement, the Court does not necessarily reach the same conclusion that the Property Managers do – i.e. that the nuisance claims must therefore be automatically dismissed. Rather, following the general rule that any valid cause of action overcomes demurrer 'if the essential facts of some valid cause of action are alleged....,' the Court will instead address the two causes of action together and both will rise or fall together. (Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2023) ¶ 7:41 (citations omitted) (emphasis in original).) Merits of Motion – Nuisance and Negligence The Property Managers contend that the Neighbors have not alleged facts demonstrating conduct that was 'substantial and unreasonable' with regard to causing a nuisance. The Court disagrees. The allegations refer to noise, traffic, congestion, drugs, smoke, wastewater, hostility, garbage, and rat problems. These are sufficient to describe 'substantial and unreasonable' interference with the Neighbors' use and enjoyment of their property.

However, the Property Managers also argue that, being property managers, they are not liable for actions taken by tenants who rent the Subject Property, though they concede that this rule only applies where 'the nuisance is attributable solely to the tenant's improper acts...' (Demurrer, p. 4:16-18 (emphasis added) (citations omitted). For this proposition, the Property Managers cite Meloy v. City of Santa Monica (1932) 124 Cal.App. 622, 627 and Resolution Trust Corp. v. Rossmoor Corp. (1995) 34 Cal.App.4th 93, 100. The cited authorities technically apply as between a landlord and its tenants, and, here, the Property Managers are not the landlord. Nonetheless, the Property Managers appear to stand Calendar No.: Event ID:  TENTATIVE RULINGS

3093031 CASE NUMBER: CASE TITLE:  RAMIREZ VS THOMPSON [IMAGED]  37-2021-00033311-CU-OR-NC in the shoes of the Landlords when it comes to managing the rental of the Subject Property such that the principles set forth in Meloy and Resolution Trust apply to them as well.

What is less clear here is whether the nuisance in question is attributable solely to the actions of the tenants. In other words, where there is notice to the landlord and/or property management company that there is an ongoing nuisance problem because of the way the Subject Property is being rented-out, can it be said that 'the nuisance is attributable solely to the tenant's improper acts'? Or, can it be said that the landlord or property managers could be taking steps (such as vetting certain prospective tenants, placing restrictions on the use by the tenants, hiring clean-up crews after events to make sure trash is disposed, or, as managers, coming around after an event to look around and make sure the tenants have cleaned-up after themselves)? While actions by the landlord and/or property management company may not be able to alleviate all of the myriad of nuisance problems that are alleged (since cleaning up after an event can be enforced more easily with something like a cleaning deposit, while keeping noise levels down may require a more in-the-moment monitoring of the use of the Subject Property), for purposes of demurrer it cannot be said that none of the nuisances can be alleviated by actions of the landlord and/or property manager, and thus, when indulging the allegations in a light most favorable to the complaining party (as the Court must on demurrer), it cannot be said that the nuisance at issue is attributable solely to the tenant's improper acts – which is the standard that the Property Managers themselves put forth.

As such, the demurrer as to the Second Cause of Action for Private Nuisance and the Seventh Cause of Action for Negligence is overruled.

Merits of Motion – Trespass and Aiding and Abetting Private Nuisance and Trespass The Property Managers challenge the trespass cause of action by focusing on the fact that the allegations do not suggest that either Sentry (or its agents) or Mr. Chisel personally entered onto the Neighbors' property. To be clear, the Neighbors' allegations as to Mr. Chisel in particular are fairly sparse when it comes to naming him individually. Instead, the entirety of the Neighbors' allegations as to Mr. Chisel appear to lump him in jointly as one of the 'Defendants' – plural – in an effort to avoid having to precisely attribute which Defendants took which actions. There are, however, clear acts of trespass alleged in the form of wastewater being dumped onto the Neighbors' property.

The issue here is one of vicarious responsibility and/or agency – i.e. whether the Property Managers are responsible for the trespasses committed by tenants. As such, the Court reviews the cause of action for trespass alongside the allegation of aiding and abetting the trespass. Again, 'if the essential facts of some valid cause of action are alleged....' a complaint survives general demurrer even if that cause of action is not the one labeled. (Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2023) ¶ 7:41 (citations omitted) (emphasis in original).) The Property Managers attack the 'aiding and abetting' claim on grounds that the Property Managers did not have 'actual knowledge' of the wrong in question and did not 'agree[] to join the wrongful conduct.' (Demurrer, p. 5:26-27, citing Stueve Bros. Farms, LLC v. Berger Kahn (2013) 222 Cal.App.4th 303, 324.) The elements required for civil aiding and abetting include: (1) knowledge of the wrongful act, (2) substantial assistance or encouragement of the wrongful act, and (3) conduct that was a substantial factor in causing the harm. (CACI No. 3610.) While is may be true that the Property Managers did not know, precisely, just how messy or loud the use by the various tenants might be, it appears that the Property Managers were aware that there was an ongoing problem. Moreover, indulging the facts in favor of the Neighbors as is appropriate on demurrer, to the extent that the Property Managers were renting the Subject Property to various short term tenant and requiring certain information from those tenants when the booked the Subject Property, it appears within the scope of the allegations that the Property Managers had at least a modicum of knowledge of the uses to which various tenants intended to put the Subject Property. Moreover, to the extent that they provided the keys and encouraged use of the Subject Property for large-scale events, the facts can be indulged as alleging substantial assistance or encouragement for what ultimately became alleged trespass and nuisance. Finally, the leasing of the Subject Property in a short-term manner appears to be a 'substantial factor' in the recurring trespass Calendar No.: Event ID:  TENTATIVE RULINGS

3093031 CASE NUMBER: CASE TITLE:  RAMIREZ VS THOMPSON [IMAGED]  37-2021-00033311-CU-OR-NC and nuisance that the Neighbor-Plaintiffs were allegedly suffering.

The Property Managers also argue that the 'agent-immunity' rule bars the 'aiding and abetting' claim against them. Essentially, the argument is that even if the Landlords might be liable for aiding and abetting in the trespass or nuisance, the Property Managers are merely acting as agents of the Landlord and thus it is only the Landlord that can be held liable for 'aiding and abetting' – not the Property Managers. For this proposition, the Property Managers cite Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1326, in which the California Court of Appeal stated: 'An employee cannot aid or abet his or her corporate employer.' (Id. at 1326.) 'Similarly, under the agent's immunity rule, an agent is not liable for conspiring with the principal when the agent is acting in an official capacity on behalf of the principal.' (Id., citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 512, fn. 4 (emphasis added).) It does not appear here that the allegation is that the Property Managers were conspiring 'with the Landlords' (which would be their 'principal' in this fact pattern), but rather with the various tenants to which they were leasing the Subject Property.

The aiding and abetting claim is ultimately not clear enough for the Court to discern at this juncture.

Mindful of the fact that '{m}ere knowledge that [a/an] [e.g., {trespass or nuisance}] was [being/going to be] committed and the failure to prevent it do not constitute aiding and abetting' (CACI No. 3610), the Court concludes that the Property Managers' demurrer on grounds of uncertainty is well-taken. It is not alleged clearly enough (and, as mentioned above, the opposition briefing does not shed sufficient light or bring much clarity) to the nature of what is being claimed and how it fits the legal elements of aiding and abetting. As such, with regard to both the claims for trespass and for aiding and abetting, the Court sustains the demurrer but grants the Neighbor-Plaintiffs leave to amend to attempt to state, more clearly, the nature of the trespass and aiding and abetting that occurred.

Again, as with the demurrer brought by the Landlords, the Court cautions the Neighbor-Plaintiffs to bring their strongest allegations and to fully engage with and address any arguments in subsequent dispositive motions, as the instant demurrers are addressing a Fourth Amended Complaint and, if future motions are heard they will pertain to a Fifth Amended Complaint or beyond.

While the Court presently defers to the strong policy favoring liberal granting of leave to amend, after four prior amendments and a relatively sparse opposition argument, in the interest of judicial efficiency, the Court is not inclined to entertain serial demurrers and amendments where a party fails to put forth adequate argument regarding the issues raised – particularly when bound by the principles of neutrality which prevent the Court from raising or researching legal issues that the parties do not fully address on their own.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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