Judge: Michael P. Linfield, Case: 21STCV42062, Date: 2022-07-28 Tentative Ruling
Case Number: 21STCV42062 Hearing Date: July 28, 2022 Dept: 34
SUBJECT: Plaintiff
Christopher W. Parker’s Motion for Summary Adjudication
Moving Party: Plaintiff
Christopher W. Parker (“Parker”)
Resp. Party: Defendants
Andy Watts and Courtney Watts (“Defendants”)
Plaintiff Christopher W. Parker’s Motion for Summary Adjudication as to
the First Cause of Action for Breach of Contract is GRANTED.
Plaintiff Christopher W. Parker’s Motion for Summary Adjudication as to
Prejudgment Interest is GRANTED in the amount of $12,585.29.
I.
BACKGROUND
On November 15, 2021, Plaintiff Christopher W. Parker filed a complaint
against Defendants Andy Watts and Courtney Watts alleging two breach of
contract causes of action.
On January 18, 2022, Parker filed a First Amended Complaint against
Defendants Andy Watts and Courtney Watts alleging three breach of contract
causes of action.
On May 11, 2022, Parker moved the Court for an order granting summary
adjudication against Defendants Andy Watts and Courtney Watts pursuant to CCP §
437c(f) on the grounds that there are no triable issues of material fact on
Parker’s First Cause of Action for Breach of Contract and his claim for
prejudgment interest. (Motion, p. 2:4-17.)
On July 14, 2022, Defendants opposed Parker’s motion for summary
judgment.
On July 22, 2022, Parker replied to Defendants’ opposition.
II.
ANALYSIS
A.
Request
for Judicial Notice
On May 11, 2022, Plaintiff Christopher W. Parker requested that the
Court take judicial notice of the following:
1.
Median
income for the county of Los Angeles as published by the Department of Housing
and Community Development in the Official State Income Limits for 2020 was
$77,300 as set forth in a Memorandum that can be found on the Department of
Housing and Community Development website at
https://www.hcd.ca.gov/grantsfunding/income-limits/state-and-federal-income-limits/docs/income-limits-2020.pdf.
(referred to herein at “Median Income”). Attached hereto as Exhibit 1 is a true
and correct copy of the memorandum pulled from this website on May 6, 2022.
The Court GRANTS Parker’s request for
judicial notice. (Evid. Code, § 452, subd. (b).)
On July 14, 2022, Defendants Andy Watts and
Courtney Watts requested that the Court take judicial notice of the following:
1.
Los
Angeles County expanded its protections for tenants impacted by COVID-19,
including multiple extensions of the protection period for tenants. A true and
correct copy of the Resolution of the Board of Supervisors of the County of Los
Angeles Further Amending and Restating the County of Los Angeles COVID-19
Tenant Protections Resolution Dated January 25, 2022 ("Resolution")
is attached hereto as Exhibit "2." Specifically, the Resolution outlines
the numerous extensions in the Recitals section.
2.
According
to the Resolution, Los Angeles County also extended the Moratorium Period until
December 31, 2022. See Exhibit "2", Section III.
3.
According
to the Resolution, a residential tenant who was unable to pay rent from March
2020 to September 2020 had until September 30, 2021 to repay the unpaid rent. A
residential tenant who was unable to pay rent from October 2020 to September
2021 was subject to the repayment period under California Assembly Bill 3088.
See Exhibit "2", Section VI(C).
4.
The
City of Los Angeles entered into a local emergency period on or about March 4,
2020. A true and correct copy of the Los Angeles City Ordinance No. 186585,
dated March 27, 2020 is attached hereto as Exhibit "3."
5.
The
City of Los Angeles also provides the following protections for its tenants
related to COVID-19: (1) Tenants will have up to twelve months following the
expiration of the local emergency to repay any back rent due; and (2) Landlords
may not charge interest or late fees on unpaid rent due to COVID-19. A true and
correct copy of the Los Angeles City Ordinance No. 186606 dated May 6, 2020 is
attached hereto as Exhibit "4", Section 49.99.2. A true and correct
copy of the COVID-19 Emergency Renter Protections overview found the Los
Angeles City's Housing Website is also attached hereto as Exhibit
"5". (Defendants’ Request for Judicial Notice, p. 1:25—2:21.)
The Court GRANTS Defendants’ requests for
judicial notice. (Evid. Code, § 452, subd. (b).)
On July 22, 2022, Parker requested that the Court take judicial notice
of the following:
1.
The
State of California keeps a Tenant Protection Information webpage relating to
COVID-19 protections. Attached hereto as Exhibit 2 is a true and correct copy
of a printout pulled from the website at:
https://housing.ca.gov/tenant/protection_guidelines.html, last visited on July
21, 2022.
2.
A power
point presentation located on the County of Los Angeles’ website entitled
“COVID-19 Rental Debt What you need to know.” Attached hereto as Exhibit 3 is a
true and correct copy of a printout pulled from the website at:
https://dcba.lacounty.gov/wp-content/uploads/2021/10/2021.10.21-Covid-19-Rental-Debt-what-you-need-to-know-slides_FINAL-1.pdf,
last visited on July 21, 2022.
The Court GRANTS Parker’s request for
judicial notice. (Evid. Code, § 452, subd. (h).)
No party objected to the other party’s Requests
for Judicial Notice.
B.
Legal
Standard
The purpose of a motion for summary judgment or
summary adjudication “is to provide courts with 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.) “Code of Civil Procedure section
437c, subdivision (c), requires the trial judge to grant summary judgment if
all the evidence submitted, and ‘all inferences reasonably deducible from the
evidence’ and uncontradicted by other inferences or evidence, show that there
is no triable issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp.
(1992) 7 Cal.App.4th 1110, 1119.)
“On a motion for summary judgment, the initial
burden is always on the moving party to make a prima facie showing that there
are no triable issues of material fact.” (Scalf v. D. B. Log Homes, Inc.
(2005) 128 Cal.App.4th 1510, 1519.) When a plaintiff seeks summary judgment or
adjudication, the plaintiff must produce admissible evidence on each element of
each cause of action on which judgment is sought. (CCP § 437c(p)(1).) The
opposing party on a motion for summary judgment is under no evidentiary burden
to produce rebuttal evidence until the moving party meets his or her initial
movant’s burden. (Binder v. Aetna Life Insurance Company (1999) 75
Cal.App.4th 832.) Once the initial movant’s burden is met, then the burden
shifts to the opposing party to show, with admissible evidence, that there is a
triable issue requiring the weighing procedures of trial. (CCP § 437c(p).)
"A party may move for summary
adjudication as to one or more causes of action within an action, one or more
affirmative defenses, one or more claims for damages, or one or more issues of
duty, if the party contends that the cause of action has no merit, that there
is no affirmative defense to the cause of action, that there is no merit to an
affirmative defense as to any cause of action, that there is no merit to a
claim for damages, as specified in Section 3294 of the Civil Code, or that one
or more defendants either owed or did not owe a duty to the plaintiff or
plaintiffs. A motion for summary adjudication shall be granted only if it
completely disposes of a cause of action, an affirmative defense, a claim for
damages, or an issue of duty." (CCP § 437c(f)(1).)
“When deciding whether to grant summary
judgment, the court must consider all of the evidence set forth in the papers
(except evidence to which the court has sustained an objection), as well as all
reasonable inferences that may be drawn from that evidence, in the light most
favorable to the party opposing summary judgment.” (Avivi v. Centro Medico
Urgente Medical Center (2008) 159 Cal.App.4th 463, 467; CCP § 437c(c).)
“Declarations must show the declarant's
personal knowledge and competency to testify, state facts and not just
conclusions, and not include inadmissible hearsay or opinion. The declarations
in support of a motion for summary judgment should be strictly construed, while
the opposing declarations should be liberally construed.” (Fernandez v.
Alexander (2019) 31 Cal.App.5th 770, 779, quoting Bozzi v. Nordstrom,
Inc. (2010) 186 Cal.App.4th 755, 761; see also CCP § 437c(d).)
In analyzing motions for summary judgment,
courts must apply 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 Ctr. (2005) 135 Cal.App.4th 289, 294.)
“A motion for summary adjudication shall be
granted only if it completely disposes of a cause of action, an affirmative
defense, a claim for damages, or an issue of duty.” (CCP § 437c(f)(1).) “If a
cause of action is not shown to be barred in its entirety, no order for summary
judgment — or adjudication — can be entered.”
(McCaskey v. California State Automobile Assn. (2010) 189
Cal.App.4th 947, 975; Snatchko v. Westfield LLC (2010) 187 Cal.App.4th
469, 476; Dunn v. County of Santa Barbara (2006) 135 Cal.App.4th 1281,
1290.) “The purpose of the enactment of¿Code of Civil Procedure section 437c,
subdivision (f)¿was to stop the practice of piecemeal adjudication of facts
that did not completely dispose of a substantive area.” (Catalano v.
Superior Court (2000) 82 Cal.App.4th 91, 97.)
C.
Discussion
1.
First
Cause of Action for Breach of Contract
“To prevail on a cause of action for breach of contract, the plaintiff
must prove (1) the contract, (2) the plaintiff's performance of the contract or
excuse for nonperformance, (3) the defendant's breach, and (4) the resulting
damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th
1182, 1186.) Defendants do not contest the existence of a valid contract
between the parties but suggest that triable issues of material fact exist as
to the remaining elements of a breach of contract claim. (Opposition, p.
5:24-25.)
Defendants do not dispute that their Lease required payment of
$8,350.00 per month in rent from March 1, 2020 through February 28, 2021;
Defendants dispute that they were obligated during that time period given the
ongoing COVID-19 pandemic and related state and local government orders.
(Defendants’ Separate Statement (“DSS”), Nos. 7, 8.) The COVID-19 Tenant Relief
Act was designed to address housing insecurity imposed on renter by the
COVID-19 pandemic.
Tenants were allowed to pay only 25% of their total rent from March 1,
2020 through September 30, 2021 if the tenant signed a declaration attesting to
COVID-19-related financial distress and delivered this declaration to the
landlord. (CCP § 1179.03(g).) Unpaid rent, or COVID-19 rental debt, was still
owed to plaintiffs. (CCP § 1179.02(c).) “High income tenants” are tenants with
an annual household income of 130 percent of the median income, as published by
the Department of Housing and Community Development in the Official State
limits for 2020, for the county in which the residential rental property is
located. (CCP 1179.02.5(a)(1)(A). “A landlord may require a high-income tenant
that is served a notice pursuant to subdivision (b) or (c) of Section 1179.03
to submit, in addition to and together with a declaration of COVID-19-related
financial distress, documentation supporting the claim that the tenant has
suffered COVID-19-related financial distress.” (CCP § 1179.02.5(c).) A
high-income tenant who failed to submit a signed COVID Declaration and “any
form of objectively verifiable documentation that demonstrates the
COVID-19-related financial distress the tenant experienced is sufficient to
satisfy requirements, “including the proof of income, as defined in
subparagraphs (A) to (G), inclusive, of paragraph (2) of subdivision (a), a
letter from an employer, or an unemployment insurance record” would not benefit
from the reduced rent protections of CCP § 1179.03(g). (CCP § 1179.02.5(c, e).)
Actions to recover COVID-19 rental debt, as defined in Section 1179.02 shall
not be commenced before November 1, 2021. (CCP § 871.10(c).)
Plaintiff Parker notes the following:
·
On March
29, 2021, Parker informed Defendants of their rights under the COVID-19 Tenant
Relief Act, including the provision where a landlord has proof on file that a
tenant’s income is at least 130 percent of the median income for the county
where the rental property is located, the landlord may require a tenant to
provide documentation to show the tenant has experienced an income decrease or
expense increase due to the COVID-19 pandemic. (Plaintiff’s Separate Statement
(“PSS”), No. 12.)
·
On
September 8 and 21, 2021, Parker informed Defendants that they were considered
high income under the COVID-19 rental relief statutes and were required to
provide Parker with proof of their inability to pay their full rent amount and
requested such proof. (PSS Nos. 14-15.)
·
On
September 22, 2021 Defendant Andy Watts “indicated that he would provide financial
information, but to date has never provided this requested information.” (PSS
No. 16.)
·
Defendants
paid $61,412.50 in rent from March 1, 2020 to September 30, 2021. (PSS No. 17.)
Defendants reported an income of $40,000 per month ($480,000 per year) on their
rental application for the Property. (PSS No. 22.)
Defendants do not dispute any of the above facts. (DSS Nos. 12, 14-17,
22.)
Parker states that Defendants’ failure to pay their full rent caused
damages in the amount of $100,737.50. (PSS No. 19.) Parker notes further that
Defendants vacated the Property on October 4, 2021 at 5:00 PM, before the end
of the Lease term. (PSS No. 20.) Parker argues that since Defendants never
provided the required documentation and would be considered high income under
the statute, Defendants did not benefit from protection under the Act and their
missed rental payments are not considered COVID-19 rental debt. (Motion, MPA.,
p. 9:12-16; CCP § 1179.02.5(c, e).) Parker considers Defendants’ failure to pay
the outstanding $100,737.50 breach of their Lease. (Motion, MPA, p. 10:3-21.)
Defendants claim that triable issues of material fact exist in the
present case for three reasons. First, Parker retained Defendants’ entire
security deposit, complicating in Defendants’ view Parker’s full performance
under the Lease. (Opposition, p. 6:3-18, Defendants’ Material Facts (“DMF”)
Nos. 2-5.) Second, Los Angeles County “expanded its protections for tenants
impacted by COVID-19, including multiple extensions of the protection period
for tenants” through December 31, 2022 and city protections that allowed
tenants up to twelve months following the expiration of the local emergency to
repay back rent, and a moratorium on interest or late fees charged by landlords
on unpaid rent. (DMF Nos. 10-14.) Further, Defendant notes that the Los Angeles
City Protections are still in effect. (DMF No. 15.) Defendants do not dispute
their partial rent payments to Parker; they only dispute the time period with which they
may pay Parker their outstanding rent. (Opposition, p. 7:13-16; DMF No. 9.)
Third, Defendants argue that Parker has not reimbursed Defendants for
improvements to the Property they made, allowing an offset defense.
(Opposition, p. 7:17—8:6; DMF Nos. 2-8.)
If “the parties’ obligations are independent, the breach by one party
does not excuse the other party's performance. Instead, the nonbreaching party
still must perform and its remedy is to seek damages from the other party based
on its breach of the contract.” (Colaco v. Cavotec SA (2018) 25
Cal.App.5th 1172, 1183.) “The law is
settled that where covenants of a contract are to be performed at different
times, they are independent, and the breach by one party of his covenant does
not excuse the performance by the other party of his covenant or relieve him of
liability for damages for a breach thereof.” (Hall v. Dekker (1941) 45
Cal.App.2d 783, 788.) Parker notes that the two obligations occur at different
times because “the mechanism for the return of the security deposit occurs
after Defendants move out and are no longer obligated to pay rent. (Reply, p.
4:22-25.)
The Court finds the payment of rent an independent obligation from the
retention of Defendants’ security deposit. Further, the Lease allows Parker to
retain all or part of Defendants’ security deposit to “cure Tenant’s default in
payment of Rent (which includes Late Charges, NSF fees or other sums due).”
(FAC, Ex. A p. 1, ¶ 4(B)(i).) The Court finds further that “a setoff defense
does not negate or change the plaintiff’s damages. (Los Angeles Unified
School District v. Torres Construction Corp. (2020) 57 Cal.App.5th 480,
500; Reply, p. 3:1-7.)
Parker argues that the City Protections cited by Defendants apply to a
moratorium on evictions, not repayment. (Reply, p. 5:20-21.) Parker summarizes
the law as follows: “starting on November 1, 2021, landlords can sue tenants
for back rent incurred from March 1, 2020 to September 30, 2021, but in certain
places, landlords still cannot evict a tenant from the property for failing to
pay that back rent.” (Reply, p. 5:23-26; citing CCP §§ 871.10 and 1179.02; the
State of California COVID-19 website, https://housing.ca.gov/tenant/protection_guidelines.html
the January 25, 2022
Resolution by Los Angeles County; the Los Angeles County COVID-19 Rental Debt
Presentation; City of Los Angeles Ordinances Nos. 186585 and 186606; and
Actions to Recover COVID-19 Rental Debt, Cal. Prac. Guide Landlord-Tenant Ch.
4-E.)
The Court finds that the January 25, 2022 Resolution by Los Angeles
County’s reference to Assembly Bill 3088, later the COVID-19 Tenant Relief Act,
expresses Los Angeles County’s reluctance to set repayment of COVID-19 rental
debt for a later date than those chosen by the State of California.
(Defendants’ Request for Judicial Notice, Ex. 2, § VI.C.1(a-b).) The Court
finds no triable issues of material fact to suggest that unpaid rent during the
Protected Time Period may be paid later than September 30, 2021. Further, the
Court finds no triable issues of material fact to suggest that unpaid rent
during the Transition Protection Period (or the time period from October 1,
2020 through September 30, 2021) may be repaid later than dates pursuant to AB
3088, codified into law as the COVID-19 Tenant Relief Act. An action for breach
of contract related to rental debt incurred during the COVID-19 pandemic may
proceed starting November 1, 2021.
2.
Prejudgment
Interest
Parker requests the Court grant prejudgment interest at 10% per annum
starting on the first day of each month for each missed rental payment.
(Motion, MPA, p. 12:6-10.)
The Court finds that Defendants owe $12,585.29 on their rental debt of
$100,737.50.
III.
CONCLUSION
Plaintiff Christopher W. Parker’s Motion for Summary Adjudication as to
the First Cause of Action for Breach of Contract is GRANTED.
Plaintiff Christopher W. Parker’s Motion for Summary Adjudication as to
Prejudgment Interest is GRANTED in the amount of $12,585.29.