Judge: Monica Bachner, Case: BC643861, Date: 2022-09-21 Tentative Ruling

Case Number: BC643861    Hearing Date: September 21, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants’ motion for summary judgment is granted.

Defendants DOE 101 Paola Caldera (“P. Caldera”), DOE 102 Mian Guo erroneously sued as Mian Gvo (“Guo”), DOE 103 Jia Shen (“Shen”), DOE 104 Yunying Li erroneously sued as Yun Ying Li (“Li”), DOE 105 Min Zhou (“Zhou”), DOE 112 Yavuz Ertas (“Ertas”), DOE 113 Nima Razfar (“Nima” or “N. Razfar”), DOE 114 Ali Razfar (“Ali” or “A. Razfar”), DOE 115 Jessica Caldera (“J. Caldera”), DOE 116 Nadia Saban (“Nadia”), DOE 117 Lebiba Saban erroneously sued as Lily Saban (“Lebiba”), DOE 118 Paul Luigi (“Luigi”), DOE 119 Ganchimeg Oyunchimeg erroneously sued as JanChungOzu (“Oyunchimeg”), DOE 120 Daniel Sacilotto (“Sacilotto”), and DOE 121 Arnaud Larousse erroneously sued as Arnald LaRousse (“Larousse”) (collectively, “Defendants”) move for summary judgment on the second amended complaint (“SAC”) filed by Plaintiff A.C.A. LLC (“Plaintiff”) on June 2, 2021. 

In the alternative, Defendants move for summary adjudication of the 1^st (declaratory relief), 2^nd (ejectment) 3^rd (trespass), 4^th (aiding and abetting breach of fiduciary duty), 5^th (intentional interference with contractual relations), 6^th (declaratory relief – in the alternative), and 7^th (breach of contract – in the alternative) causes of action on the following issues: (1) the 1^st, 2^nd, and 3^rd causes of action are barred by Plaintiff’s judicial admissions in the SAC; (2) the 1^st, 2^nd, and 3^rd causes of action fail because Plaintiff cannot establish the terms of the alleged management agreement between Rita Seifer (“Seifer”) and Myron Holmstrom (“Holmstrom”) or that Holmstrom was unauthorized or acted outside the scope of his authority; (3) the 2^nd (ejectment) cause of action fails because (a) Plaintiff did not provide prior notice required under Civil Code §789 and (b) Plaintiff cannot establish Defendants are not valid tenants entitled to possession; (4) the 3^rd (trespass) cause of action fails because (a) Plaintiff has never been in possession of Defendants’ apartments during their possession and (b) Plaintiff cannot establish Defendants do not have the right to possession; (5) the 4^th (aiding and abetting breach of fiduciary duty) cause of action fails because Plaintiff cannot establish: (a) Holmstrom breached a fiduciary duty to Seifer, (b) Defendants had actual knowledge Holmstrom owed Seifer a duty to rent the units at “market rents,” (c) Defendants had actual knowledge Holmstrom was embezzling from Seifer, and/or (d) Defendants knowingly participated in Holmstrom’s embezzlement and for the alternative reason that acceptance of a benefit of below market rent does not constitute tortious conduct; (6) the 5^th (intentional interference) cause of action fails because Plaintiff cannot establish: (a) Defendants were aware of any contract between Holmstrom and Seifer, and (b) Defendants engaged in conduct intended to interfere with any such contract; and (7) the 6^th and 7^th  causes of action fail because: (a) Plaintiff cannot establish the existence of a contract, (b) Plaintiff cannot establish Defendants signed AAGLA leases, (c) Seifer ratified the terms of the Defendants’ tenancies including the amount of rent to be paid by accepting payment of that rent over a period of years, (d) Plaintiff cannot use parol or extrinsic evidence to contradict the written leases of Luigi and Sacilotto, and (e) Defendants’ past conduct cannot constitute a breach of future contract terms. (Notice of Motion, pgs. 1-3.) 

Requests for Judicial Notice

Plaintiff’s 4/26/22 request for judicial notice is granted as to the complaint filed by Jeffrey Melichar in Melichar v. Seifer et al. Case No. SC125932 and the 9/19/16 Minute Order granting Seifer’s Motion to Expunge Lis Pendens in the same case; however, the Court does not take judicial notice of the truth of the matters asserted in the documents. (P-RJN, Nos. 1, 2, Decl. of Correll Exhs. 27, 28.) 

CRC Violations and Procedural Issues

Plaintiff’s evidentiary objections do not comply with CRC Rule 3.1354(b)(3), which requires that written objections to evidence quote or set forth the objectionable statement or material. Out of the 106 objections, 68 simply object to a given paragraph of a declaration “in its entirety,” without quoting the objectionable material. (See, e.g., Nos. 12, 15, 17, 18, 22, 23, etc.)  Plaintiff’s evidentiary objections to reply evidence also fail to comply for the same reason.

Certain responses in Plaintiff’s Response Separate Statement of Facts (“R-SSF”) does not comply with CRC Rule 3.1350(f)(2) which requires that Plaintiff state, “the nature of the dispute and describe the evidence that supports the position that the fact is controverted[;] [c]itation to the evidence in support of the position that a fact is controverted must include reference to the exhibit, title, page, and line numbers.”  Certain responses do not describe evidence supporting Plaintiff’s version of the disputed fact and do not properly cite to the evidence. 

The Court notes Defendants’ Separate Statement sets forth 58 separate material facts in support of the motion for summary judgment and thereafter relies on subsets of these same facts, using the original numeration of Nos. 1-58, in support of the individual issues for adjudication. 

Evidentiary Objections

As a preliminary matter, C.C.P. §437c(q) provides that, “[i]n granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.”

Plaintiff’s 7/11/22 evidentiary objections to the Declaration of James R. Tweedy (“Tweedy”), Seifer’s estate attorney for 15 years, are sustained as to Nos. 4, 5 (as to “did not want… Properties” otherwise overruled), 6 (as to “because she was concerned… rented” otherwise overruled), 7, and 8 (only as to “because she wanted to know… sell” otherwise overruled) and overruled as to Nos. 1, 2, 3, 9, 10, and 11.

Plaintiff objects to the Declaration of Jeffery R. Melichar (“Melichar”), a licensed real estate broker whose primary business activity for the past 25 years has been managing commercial properties including apartment buildings, and who for the past 19 years provided Seifer guidance in her management of the Properties.  (See Decl. of Melichar ¶¶1-4.)  Plaintiff’s objections are sustained as to No. 17 (as to, “While Myron Holmstrom was not… offering them reasonable rents” otherwise overruled) and overruled as to Nos. 14 and 18.  The Court does not rule on Nos. 12, 13, 15, 16, 19, 20, 21, 22, 23, 24, 25, 26, 27 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of P. Caldera are overruled as to Nos. 28, 29, 30, and 31.

Plaintiff’s evidentiary objections to the Declaration of Guo are overruled as to Nos. 32, 33, 35, 36. The Court does not rule on Nos. 34 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Shen are overruled as to Nos. 37, 38 and 39. The Court does not rule on Nos. 40 or 41 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Li are overruled as to Nos. 42, 43, 44, and 45.  The Court does not rule on No. 46, as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Zhou are overruled as to Nos. 47, 49, 50, and 51. The Court does not rule on Nos. 48 or 52 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Ertas are overruled as to Nos. 53, 55, 56, and 57. The Court does not rule on Nos. 54, 58, or 59 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Nima are overruled as to Nos. 61, 62, 63, 64. The Court does not rule on Nos. 65 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Ali are overruled as to Nos. 66-69.

Plaintiff’s evidentiary objections to the Declaration of J. Caldera are overruled as to Nos. 70-73.

Plaintiff’s evidentiary objections to the Declaration of Nadia Saban are overruled as to Nos. 74-77. The Court does not rule on No. 78 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Lebiba Saban are overruled as to Nos. 79-82. The Court does not rule on No. 83 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Luigi are overruled as to Nos. 84, 86, 87, and 88. The Court does not rule on No. 85 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Oyunchimeg are overruled as to Nos. 89-93.

Plaintiff’s evidentiary objections to the Declaration of Sacilotto are overruled as to Nos. 94-98. The Court does not rule on No. 99 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Larousse are overruled as to Nos. 100-103. The Court does not rule on No. 104 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s evidentiary objections to the Declaration of Dennis P. Riley (“Riley”) are overruled as to No. 105.  The Court does not rule on No. 106 as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Defendants’ 7/21/22 evidentiary objections to the Declaration of David Bessler (“Bessler”) are sustained as to Nos. 1 (only as to “She was getting older… help” otherwise overruled) and 6 and overruled as to Nos. 2, 3, 4, 5, 7.

The Court does not rule on Defendants’ evidentiary objections Nos. 1-22 to the Declaration of Damian Akhavi (“Akhavi”) as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Defendants’ evidentiary objections to the Declaration of James E. Spar, M.D. (“Dr. Spar”) are sustained as to Nos. 2 (only for the truth of the matter asserted in the entries, otherwise overruled) and 4 (only for the truth of the matters asserted by Grishman, otherwise overruled) and overruled as to Nos. 1, 3, 5, and 6.

Defendants’ evidentiary objections to the Declaration of Ben F. Tunnell III (“Tunnell”) are sustained as to Nos. 1-12.

The Court does not rule on Defendants’ evidentiary objections Nos. 1-12 to the Declaration of Michelle Correll (“Correll”) as the information contained in the declaration is not material to the motion pursuant to C.C.P. §437c(q).

Plaintiff’s 8/26/22 corrected evidentiary objections to the Supplemental Declaration of Riley are sustained as to Nos. 107-124.

Procedural Background

           On December 15, 2016, Plaintiff filed its complaint against Defendant Holmstrom and DOES 1-200, alleging causes of action for (1) declaratory relief, (2) rescission and restitution, (3) ejectment, (4) trespass, (5) breach of fiduciary duty, (6) false promise, (7) concealment, (8) intentional misrepresentation, (9) intentional interference with contractual relations, (10) breach of contract, (11) professional negligence, and (12) Business and Profession Code §17200, in which the 4^th, 5^th, 6^th, 7^th, 8^th, and 12^th causes of action were asserted against all Defendants, the 1^st, 2^nd, and 3^rd causes of action were asserted against all Defendants except DOES 1-100, the 10^th cause of action was asserted only against Holmstrom, and the 9^th cause of action was asserted against all Defendants except Holmstrom.  Plaintiff thereafter filed numerous DOE Amendments to the complaint, as well as requests for dismissals of certain causes of action against Holmstrom and certain DOE Defendants.  Plaintiff’s complaint is based on allegations that Seifer, who owned certain real property buildings which share a border and are located at 540 Glenrock Avenue (“Glenrock Property”) and 543 Landfair Avenue (“Landfair Property”) (collectively “Buildings”) prior to Plaintiff’s purchase of them, assigned her claims against Holmstrom (the Buildings’ property manager) and his alleged co-conspirators (the tenants of the Buildings, moving Defendants) to Plaintiff in an assignment dated December 12, 2016 (“Assignment”), and that Holmstrom allegedly engaged in a scheme whereby he would charge tenants less than market rent, retain half of the rent, and send the remainder to Seifer as landlord. 

           On April 19, 2018, DOES 101-105 filed a cross-complaint against Plaintiff and Cross-Defendant Damian Akhavi (“Akhavi”) (collectively, “Cross-Defendants”).  On April 20, 2018, DOES 101-105 filed a first amended cross-complaint (“FACC”).  On August 9, 2018, J. Caldera, Ertas, Larousse, Luigi, Lebiba, Nadia, Ali, and Nima (collectively, “DOES 112-118, 121”) filed a complaint against Cross-Defendants in a separate action, Case No. BC717036, alleging the same four causes of action as in the FACC.  On February 11, 2020, the Court ordered the instant action and BC717036 consolidated.  On March 27, 2020, DOES 101-105 filed a second amended cross-complaint (“SACC”) alleging the same four causes of action against Cross-Defendants.  On September 14, 2020, the Court granted Oyunchimeg’s ex parte application for leave to file a third amended cross-complaint (“TACC”) to include DOE Defendant names inadvertently omitted from the SACC.  The TACC was thereafter filed on September 15, 2020.

           On September 11, 2020, the Court granted the motion for summary adjudication brought by DOES 101-105 as to Issues Nos. 2-7 and denied the motion as to Issues Nos. 1 and 8.  Accordingly, the Court granted DOES 101-105’s motion for summary adjudication as to the original complaint’s 1^st, 3^rd, 4^th, 9^th, 11^th, and 12^th causes of action, while the 2^nd and 5^th causes of action remained in the operative pleading.  On December 10, 2020, the Court granted Plaintiff’s motion for leave to file an amended verified complaint in part.  Specifically, the Court granted Plaintiff leave to amend the 1^st (declaratory relief), 4^th (trespass), 5^th (breach of fiduciary duty), 6^th (false promise), 11^th (professional negligence), and 12^th (Section 17200) causes of action and denied leave to amend as to the 2^nd (recission and restitution), 3^rd (ejectment), 7^th (concealment), 8^th (intentional misrepresentation), 9^th (intentional interference with contractual relations), and 10^th (breach of contract) causes of action. 

           On January 7, 2021, Plaintiff filed its first amended complaint (“FAC”) alleging the following causes of action: (1) declaratory relief [as to all Defendants except DOES 1-100]; (2) ejectment [as to all Defendants except DOES 101-105], (3) trespass [as to all Defendants except DOES 101-105], (4) breach of fiduciary duty [as to all Defendants], (5) intentional interference with contractual relations [as to all Defendants except DOES 101-105], (6) declaratory relief (in the alternative) [as to all Defendants], (7) breach of contract (in the alternative) [as to all Defendants], and (8) declaratory relief (in the alternative) [as to all Defendants].  On May 13, 2021, the Court overruled Defendants’ demurrer to the FAC’s 1^st and 6^th causes of action and sustained the demurrer as to the 7^th cause of action (with leave to amend) and 8^th cause of action (without leave to amend).  On June 2, 2021, Plaintiff filed the operative SAC alleging the following causes of action: (1) declaratory relief [as to all Defendants except DOES 1-100]; (2) ejectment [as to all Defendants except Caldera, Guo, Shen, Li, and Zhou (collectively, “DOES 101-105”)], (3) trespass [as to all Defendants except DOES 101-105], (4) aiding and abetting breach of fiduciary duty [as to all Defendants], (5) intentional interference with contractual relations [as to all Defendants except DOES 101-105], (6) declaratory relief (in the alternative) [as to all Defendants], and (7) breach of contract (in the alternative) [as to all Defendants]. 

           Defendants filed the instant motion on February 24, 2022.  In April 2022, Defendants filed motions to quash subpoenas for production of Defendants’ consumer banking records, third parties’ consumer records, and Defendants’ consumer records served by Plaintiff. On May 10, 2022, the Court addressed the timeliness of the motion and Plaintiff’s request for a continuance and continued the hearing on the instant motion to July 28, 2022.  The Court set a special briefing schedule so as to allow Plaintiff to file a supplemental opposition and supporting documents by July 11, 2022, and Defendants a supplemental reply and supporting documents by July 21, 2022.  On June 9, 2022, and June 22, 2022, the Court granted Defendants’ motions to quash deposition subpoenas for their bank records and mortgage records. Trial is set for November 29, 2022. 

Declaratory Relief (1^st COA) [Issues Nos. 1, 2] [as to all Defendants except DOES 1-100]

A cause of action for declaratory relief requires the following elements: (1) person interested under a written instrument or a contract; or (2) a declaration of his or her rights or duties (a) with respect to another or (b) in respect to, in, over or upon property; and (3) an actual controversy.  (C.C.P. §1060.) 

Plaintiff’s declaratory relief cause of action is based on allegations that, on account of a lack of the formation of a valid tenancy, plus a lack of contract formation given Seifer’s lack of capacity to appoint an agent (Holmstrom) and contract with Defendants/tenants, the Court should declare DOES 101-200 do not have a lawful right to possess or occupy the Buildings.  (SAC ¶255, Civil Code §2306.)  Plaintiff alleges the following: (1) the purported leases were entered into outside the scope of Holmstrom’s agency and thus he had no authority to enter them or grant permission for Defendants/tenants to enter the Buildings; (2) this lack of authority was known by all Defendants; (3) in May 2016 most of the Defendants supplied tenant estoppel certificates for prospective purchasers that were signed by them and Holmstrom and the rents listed in the certificates were only the non-cash portion of the rent despite the fact they paid approximately double that amount, about half to Seifer and half to Holmstrom; (4) Defendants knew or should have known the fair market value of their rental units was over double the amount they were paying.  (SAC ¶¶53, 56, 84, 107, 129, 141, 204, 219, 235, 245.) 

Civil Code §2306 provides as follows: “An agent can never have authority, either actual or ostensible, to do an act which is, and is known or suspected by the person with whom he deals, to be a fraud upon the principal.”

Defendants argue Plaintiff cannot establish its declaratory relief cause of action for the following reasons: (1) it is barred by Plaintiff’s judicial admissions; and (2) Plaintiff has no evidence to establish the terms of the alleged management agreement between Seifer and Holmstrom or that Holmstrom was unauthorized or acted outside the scope of his authority. (Motion, pgs. 12-19.)  The Court notes Plaintiff argues that summary adjudication should be grated as to the 2^nd and 3^rd causes of action based on these two issues as well because all three causes of action are premised on Defendants’ alleged lack of the right to possess their apartments based on Holmstrom’s lack of authority to rent the units to them. (Motion, pgs. 13-14.)

1.    Whether Plaintiff Can Establish an Agreement Between Seifer and Holmstrom and/or that Holmstrom Acted Outside the Scope of his Authority

Civil Code §2319 provides that an agent has authority to: “do everything necessary or proper and usual, in the ordinary course of business, for effecting the purpose of his agency; [and] make a representation respecting any matter of fact, not including the terms of his authority, but upon which his right to use his authority depends, and the truth of which cannot be determined by the use of reasonable diligence on the part of the person to whom the representation is made.” 

“Actual authority is such as a principal intentionally confers upon the agent… or by want of ordinary care, allows the agent to believe himself to possess.” (Civil Code §2316.)

“Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.” (Civil Code §2317.)

Defendants submitted evidence that Seifer hired Holmstrom as the resident property manager after her husband’s death.  (Motion, pg. 15, [Disputed Separate Statement of Fact (“D-SSF”) No. 6 (fact that in 1988, Seifer asked Holmstrom to work for her managing the Properties)] Defendants’ Compendium of Evidence (“D-COE”) Vol. 1: Decl. of Tweedy ¶4 [after Seifer’s husband passed away, she inherited the properties and hired Holmstrom to be their resident manager; Holmstrom was responsible for leasing units, collecting rent, addressing tenant complaints, and performing repairs]; [The Court notes in their motion, Defendants cite to SSFs No. 8 and 9; however, it appears Defendants intended to cite to SSF No. 6, which relates to Tweedy’s declaration and evidence Holmstrom began working for Seifer after her husband died].)  Defendants submitted evidence that Holmstrom was responsible for leasing units, setting terms, collecting rent, facilitating repairs, and addressing tenant complaints. ([D-SSF No. 13 (SSF that Holmstrom’s duties as property manager included authority to rent units, set rental rates, and other terms and that Seifer instructed Holmstrom to keep rents low for students and to refrain from making repairs) The Court notes the second part of the SSF addressing Seifer’s instructions to Holmstrom to keep rents low does not rely on admissible evidence and does not support the contention for which Defendants have cited SSF No. 13 in their motion, which only addresses Holmstrom’s responsibilities with respect to the Properties] D-COE, Vol. 1: Decl. of Tweedy ¶4 [summarized above]; Vol. 1, pg. 222: Decl. of Melichar ¶6 [declaration that Holmstrom had discretion as the manager to do what was necessary to keep units occupied including offering the units at a reduced rental rate]; [D-SSF No. 19] Decl. of Riley, Exh. 4 [Vol. 3, pg. 551]: Holmstrom Depo at 37:9-10 [testified, “Normally I didn’t increase rent. Maybe once every ten years.”]; Decl. of Melichar ¶6 [summarized above].)   

Defendants submitted evidence that all their dealings were with Holmstrom as the Properties’ manager, since Defendants tendered rent to Holmstrom who paid it to Seifer, and all maintenance problems were reported to and handled by Holmstrom.  ([D-SSF No. 25 (SSF asserting Defendants’ only connection to the Properties is as tenants and their only involvement with Holmstrom was to give him their monthly rent, payable to Seifer, and request repairs when necessary)] D-COE, Decl. of P. Caldera ¶5; Decl. of Guo ¶6; Decl. of Shen ¶6; Decl. of Li ¶5; Decl. of Zhou ¶6; Decl. of Ertas ¶6; Decl. of N. Razfar ¶5; Decl. of A. Razfar ¶5; Decl. of J. Caldera ¶5; Decl. of N. Saban ¶5; Decl. of L. Saban ¶5; Decl. of Luigi ¶5; Decl. of Oyunchimeg ¶5; Decl. of Sacilotto ¶7; Decl. of LaRousse ¶5.)  Defendants submitted evidence that throughout their tenancies, they dealt with Seifer through Holmstrom, including negotiations of the terms of their tenancies and any amendments thereto.  ([D-SSF No. 24 (SSF that Defendants entered into oral or written leases for their units and that they tendered monthly rent to Holmstrom)] Decl. of P. Caldera ¶¶3-6; Decl. of Guo ¶¶3, 5, 6; Decl. of Shen ¶¶3, 6, 7; Decl. of Li ¶¶3, 5, 6; Decl. of Zhou ¶¶3, 6, 7; Decl. of Ertas ¶¶3, 6, 7; Decl. of N. Razfar ¶¶3-5; Decl. of A. Razfar ¶¶3-5; Decl. of J. Caldera ¶¶3-6; Decl. of N. Saban ¶¶3-5; Decl. of L. Saban ¶¶3, 5; Decl. of Luigi ¶¶3, 5-6; Decl. of Oyunchimeg ¶¶3-5; Decl. of Sacilotto ¶¶3, 5, 7; Decl. of LaRousse ¶¶3-6; [D-SSF No. 27 (SSF assertion Defendants’ only knowledge of Holmstrom was that he was the building’s resident manager and performed maintenance; that Defendants have no knowledge as to whether Holmstrom had any agreement with Seifer to manage the Properties and/or the terms of any such agreement)] Defendants’ Declarations at ¶¶5 and/or 6, 7.) 

Defendants submitted evidence that Seifer accepted their rental payments for years and they were never informed their rental payments were not accepted for any reason.  ([D-SSF No. 31] D-COE, Vol. 2, pgs. 235-319 [Exhs. 3-17] Defendants’ Declarations.) Defendants also cite to Plaintiff’s allegations in the SAC that Seifer conferred actual authority on Holmstrom to handle the day-to-day management duties and to rent the Properties’ apartments.  (Motion, pg. 16, citing SSF No. 8, citing SAC ¶32, 52, 57-58.) 

Defendants argue the above evidence is undisputed because the parties to the agreement cannot testify to its terms, Plaintiff’s PMQ had no knowledge of the agreement, and Plaintiff has failed to identify facts, witnesses, or evidence supporting the terms of the agreement.  (Motion, pgs. 16-17.)  Specifically, Defendants submitted evidence that the principal (Seifer) and agent (Holmstrom) cannot presently testify to the contrary (of the agency relationship) because they are deceased, given Seifer died in 2016 and Holmstrom in 2020.  (USSF Nos. 34, 35 (“USSF” refers to undisputed facts).)  Defendants submitted evidence that Plaintiff’s PMQ testified he has no knowledge of facts relating to the terms or scope of the management agreement between Seifer and Holmstrom. ([D-SSF No. 38] D-COE, Vol. 3, Decl. of Riley, Exh. 2 pg. 399 [PDF pg. 78] Akhavi Depo Vol. I at 95:24-96:2 [testimony he has no personal knowledge Holmstrom and Seifer’s arrangement in terms of Holmstrom’s management agreement]; 124:4-13 [testimony he was not party to any conversations between Holmstrom and Seifer and had no knowledge as to their arrangement or its terms]; 183:8-18 [no personal knowledge as to whether Holmstrom acted outside or within the scope of his authorities in entering the tenancies reflected in estoppel certificates]; 191:10-17 [same]; D-COE, Decl. of Riley Exh. 3: Vol. 3, pg. 497 [PDF pg. 177], Akhavi Depo Vol. II 331:24-333:4 [same]; 335:19-338:4 [testimony discussing rent rolls as to individual tenants and that Akhavi did not have any personal knowledge as to whether Holmstrom had authority to rent the units to them].)  Defendants assert there are no facts, witnesses, or documents identified in Plaintiff’s response to Form Interrogatory 17.1 establishing the terms of a management agreement between Holmstrom and Seifer and/or any limits Seifer imposed on Holmstrom’s actual authority.  ([D-SSF Nos. 51-52] Decl. of Riley, Exhs. 6-9.)  Defendants also cite to Akhavi’s testimony that he had no knowledge concerning Seifer’s mental capacity as demonstrating Plaintiff cannot submit evidence that Seifer lacked capacity to appoint Holmstrom as the Properties’ manager. (Motion, pg. 16; SSF No. 41.) 

Defendants argue the evidence they (1) entered into oral or written leases to rent their units at the Properties, (2) tendered monthly rent to the property manager, as instructed by Holmstrom, (3) are only connected to the Properties as tenants, and (4) are only involved with Holmstrom to give him monthly rent and request repairs demonstrates that, from the perspective of Defendants, Seifer cloaked Holmstrom with broad authority and Defendants had no reason to doubt his authority. (Motion, pg. 16, SSFs Nos. 24-25 [evidence summarized above].) 

Based on the foregoing, Defendants met their burden on summary judgment/adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact.  As discussed below, Plaintiff did not meet its burden.

Plaintiff failed to submit evidence creating a triable issue of fact as to whether Plaintiff can establish the terms of Holmstrom’s agency relationship with Seifer so as to determine its scope and whether Holmstrom’s actions in his capacity as the Properties’ building manager exceeded that scope.  Plaintiffs did not submit evidence creating a triable issue of fact that Holmstrom’s building-manager interactions with Defendants with respect to setting their rental rates and entering rental agreements for units at the Properties exceeded the scope and authority of his agency relationship with Seifer.  In opposition, Plaintiff argues triable issues of fact exist as to the scope of the purported agency between Seifer as principal and Holmstrom as agent and that Defendants did not meet their burden of establishing the scope and extent of Holmstrom’s agency. (Opposition, pgs. 2-3.)  However, this argument disregards the evidence Defendants submitted that Holmstrom held himself out as the building’s manager and that Defendants negotiated their rental agreements with him, paid him their rent, and contacted him with repair requests that he addressed, all of which, as discussed above, was sufficient for Defendants to meet their burden of establishing an agency relationship from their perspective.  The Court notes the issue is whether Defendants reasonably believed Holmstrom to be acting on behalf of Seifer as her agent.  Plaintiff’s evidence as to reasons the Court should find no agency relationship existed is not relevant if Defendants were unaware of such evidence or facts and had no reason to doubt the Holmstrom’s agency. 

Plaintiff cites to evidence that Defendants knew Seifer, now Holmstrom, owned the Properties, yet they do not have written lease agreements signed by Seifer and argue that their failure to ascertain the scope of Holmstrom’s authority was “at their own peril.” (Opposition, pg. 3, citing AMF No. 65; citing also La Malfa v. Piombo Bros. (1945) 70 Cal.App.2d 840, 844.)

Plaintiff cites to the declaration of Dr. James Spar (“Dr. Spar”) as to Seifer’s ability to manage her finances and resist undue influence due to dementia as early as July 6, 2015 through the date of his evaluation (June 13, 2016), and likely through the rest of her life as creating a triable issue of fact as to whether Seifer understood and authorized what Holmstrom was doing from 2015 onward. (Opposition, pg. 4, citing Decl. of Spar ¶¶1-13, Exhs. 1-4 [.)  [The Court does not evidence deemed inadmissible in the Court’s ruling on the evidentiary objections, above.]  However, evidence Seifer suffered from mental incapacity in 2015 and after does not create a triable issue of fact as to whether Holmstrom was Seifer’s agent in the context of managing the Properties and setting rents for tenants, a position Plaintiff does not dispute Seifer gave him many years prior. 

Plaintiff argues Defendants cannot rely on Civil Code §2319 provision authorizing an agent to do everything necessary or proper in the ordinary course of business because the agreed-upon rental rates were 50% of market rates creating a triable issue as to whether Holmstrom’s ability to rent units at such low rates was “in the ordinary course of business.”  (Opposition, pg. 4.)  However, Plaintiff’s assertion that Defendants were paying 50% of market rates is conclusory, as Plaintiff only cites to the Declaration of Ben F. Tunnell (“Tunnell”), paragraph unspecified, in support of its assertion that Defendants’ rental rates were 50% of market rates.  (Opposition, pg. 4.)  However, as discussed above, the Court sustained Defendants’ evidentiary objections to Tunnell’s declaration as lacking sufficient foundation.  Even if the Court had overruled the evidentiary objections and were to consider Tunnell’s declaration, Tunnel does not make a declaration as whether Defendants rent amounts were 50% of market rates; rather, he only sets forth his expert opinion, based on observations made in 2022, as to the following fair market rate for the at-issue units: (1) Landfair #1: $2,035 as of 2015; (2) Landfair #3: $2,035 as of 2015; (3) Landfair #4: $1,735 as of 2015; (4) Landfair #8: $2,085 as of 2016; (5) Landfair #10: $2,325 as of 2012; (6) Landfair #12: $870 as of 1996; (7) Landfair #14: $2,000 as of 2012; (8) Landfair #16: $1,650 as of 2016; (9) Glenrock #1: $1,125 as of 2007; (10) Glenrock #2: $1,400 as of 2011. (Decl. of Tunnell ¶¶2-4, Exh. 1.)  However, there is no evidence that Defendants had knowledge of these market rates at the time they rented their units from Holmstrom so as to give them notice that their rates were 50% of the market rates, and such knowledge is necessary for Defendants to have known Holmstrom was acting outside the scope of his authority in setting the rates of the units at the alleged low amounts.  Accordingly, Plaintiff’s argument that Defendants cannot rely on Civil Code §2319 is not supported by competent evidence.

Plaintiff disputes Defendants’ assertion that Seifer wanted Holmstrom to keep rents low for students based on evidence that most Defendants were not students when they started occupying the buildings.   (Opposition, pgs. 4-5, citing Additional Material Fact (“AMF”) No. 59 [evidence that eight out of 15 Defendants were not students when their occupancies began].)  However, this argument is irrelevant given Defendants’ failure to submit admissible evidence that Seifer wanted Holmstrom to keep rents low for students or any other reason.  Even absent this evidence, as discussed above, Defendants met their burden of establishing the scope of Holmstrom’s agency relationship with Seifer as the Properties’ manager.  Whether Seifer instructed Holmstrom to keep rents low is not relevant to the scope of his agency, which, based on the submitted evidence, included the power to negotiate tenancies with new tenants and set rental values for those tenancies. 

Plaintiff asserts it is Defendants’ burden, not Plaintiff’s, to produce evidence of the limits to Holmstrom’s authority. (Opposition, pg. 5.)  However, this argument ignores Defendants’ evidence discussed above, namely that based on Holmstrom’s performance and Seifer’s acceptance of Defendants’ rental payments, together with Seifer’s appointment of Holmstrom as the Properties’ manager, Holmstrom had authority to negotiate rental agreements with tenants and accept rent payments on Seifer’s behalf. 

Plaintiff cites evidence it contends shows disputes of fact as to the existence and scope of Holmstrom’s agency relationship with Seifer including: (1) Seifer trusted Holmstrom to “get the most rent for her” but Defendants’ claimed rents were 50% of market rates; (2) Seifer expected Holmstrom to obtain signed lease agreements from all tenants; (3) Seifer did not understand what was going on at the Properties; (4) Seifer was unable to manage her finances as of July 6, 2015 and cognition did not improve after 2015; (5) Holmstrom was stealing rents he collected from tenants given Defendants were sending him money directly, by wire or check; (6) Seifer fired Holmstrom on learning he had been taking advantage of her, demonstrating his actions were not in the scope of agency; and (7) Holmstrom pled the Fifth Amendment at his deposition as to every substantive question relating to the Properties. (Motion, pg. 5, citing AMF No. 61 [SSF of Seifer’s mental incapacity in 2015] Decl. of Spar ¶¶1-13, Exhs. 1-4; Decl. of Correll: Exh. 19: Collins Depo 48:20-49:11 (authenticating his prior declaration), 51:5-54:9 (testimony supporting his assertion that he perceived her as mentally not well in 2015), Exh. 32 (Collins’s Declaration); Decl. of Correll ¶¶37-38 [Seifer’s Medical Records]; citing also AMF No. 62 [SSF that Seifer did not authorize renting units at below-market] Decl. of Bessler ¶¶4-5 [declaration of letter to Holmstrom prepared in June 2016 for Seifer’s signature addressing inconsistencies in rent receipts and Bessler’s conclusion Holmstrom was stealing from Seifer]; Decl. of Akhavi ¶¶2-13, Exhs. 1-10 [the Court notes Akhavi’s declaration has no evidence supporting the SSF; rather the declaration sets forth purported similar rents being charged in the neighborhood, which is not relevant to establishing whether Seifer authorized renting units below market]; Decl. of Correll, Exh. 24: Holmstrom Depo (his assertion of Fifth Amendment), and other evidence relied on in support of SSF No. 61; citing also AMF No. 63 [SSF that Seifer did not authorize Holmstrom to lease units without obtaining written lease agreements] Decl. of Correll: Exh. 19: Collins Depo 23:18-25:24 [Collins’s testimony that Holmstrom was expected, by Seifer, to have up to date leases for every single tenant indicating the names of those on the lease and the amount of rent based on his having heard Seifer say that to Holmstrom a few months before she became incapacitated from the stroke (date not specified)] and other testimony cited above; other evidence cited above.) 

However, Plaintiff’s evidence that Seifer was relying on Holmstrom to manage the Properties “appropriately,” by, among other things, getting the most rent that he could for the units is not competent, as it is based on the David Besser’s belief of Seifer’s state of mind.  Moreover, while Collins testified to having heard Seifer instruct Holmstrom to ensure written leases were prepared and on file for all the tenants (which, if submitted for the truth of the matter would be hearsay), a duty it appears Holmstrom did not fulfill, it is not clear how Seifer’s expectation that Holmstrom would prepare such leases limited his authority to enter into leases with Defendants for purposes of determining the scope of his agency.  Facts relating to Seifer later discovering Holmstrom had been stealing from her and her subsequent decision to fire of him for such stealing do not create a triable issue of fact as to whether Holmstrom was acting within the scope of his agency in entering into leases with Defendants on Seifer’s behalf.

Plaintiff argues triable issues of fact exist as to whether Defendants knew or should have known Holmstrom was acting outside any authority Seifer may have granted.  (Opposition, pgs. 7-8, citing Civil Code § 2306 [“[a]n agent can never have authority, either actual or ostensible, to do an act which is, and is known or suspected by the person with whom he deals, to be a fraud upon the principal.”].)  Specifically, Plaintiff argues that based on the fact seven out of the 15 Defendants have advanced degrees, they are highly educated and, as such, knew or should have known Holmstrom was acting outside the scope of his authority given various facts Plaintiff contends suggested as much.  (Opposition, pg. 8.)  However, as discussed below, Plaintiff’s arguments are conclusory and not sufficiently supported. Notably, Plaintiff cites no authority supporting its contention that the fact a person has obtained an advanced degree means he or she should know or suspect his or her building manager is acting beyond the scope of his authority as a building manager based only on having low rent, no written lease agreement, and/or a lack of rent increases.

Plaintiff cites to Shen’s rental of Landfair #16 as an example; however, Plaintiff’s assertion that the fact Shen negotiated a lower rent for the same unit eight years later “supports an inference that [Shen, Li, and/or Zhou] were paying Holmstrom additional funds on the side to occupy [the unit]” is speculative, conclusory, and wholly unsupported. (Opposition, pg. 8.)  Plaintiff asserts in the alternative that even if Shen and Guo were not paying Holmstrom additional amounts on the side (so as to be directly participating in his embezzlement), “any reasonable person would find the foregoing [very low rent amounts] very suspicious if they were not in on Holmstrom’s breach of his fiduciary duties to [Seifer].”  (Opposition, pg. 9.)  However, this argument is also conclusory.

Plaintiff cites to the fact Nima (an attorney) and Ali (collectively, “the Razfars”) did not sign the estoppel certificates presented to them by Holmstrom as supporting an inference they knew Holmstrom was acting outside the scope of his agency.  (Opposition, pg. 9.)  However, this argument is conclusory—the Razfars’ refusal to sign the certificates could have been for a variety of reasons that would not implicate their knowledge of Holmstrom’s embezzlement, including the reason Nima testified as to, namely, that the estoppel certificate was not reflective of his tenancy.  (Opposition, pg. 9, citing Correll Decl. Ex. 5: Nima Depo at 66:19-71:15.)  Plaintiff contends Nima’s refusal to sign the certificate based on it not being reflective of his tenancy creates a triable issue as to agency because a jury can infer that the certificate was not reflective of his tenancy because Nima had sublet his unit and/or had received free rent, partial rent, rent abatements, or rent concessions from Holmstrom, all of which the certificate prohibited and/or denied.  (Opposition, pg. 10.)  However, Plaintiff submits no evidence supporting their contention that any alleged reason was the actual reason Nima did not sign the certificate, and its contention that a jury could infer any of these reasons is speculative.  Plaintiff does not cite to evidence that Nima knowingly received free rent, partial rent, or rent abatements from Holmstrom such that for these reasons he refused to sign.  Similarly, Plaintiff does not cite to evidence that, even if Nima had sublet his unit in contravention of the estoppel certificate, such subletting was in violation of the rental agreement Nima had negotiated with Holmstrom, such that his present testimony that he did not sign the estoppel certificate did not match the terms of his tenancy would have had merit on this ground without creating a triable issue as to whether he should have known Holmstrom lacked authority to act as Seifer’s agent.

Plaintiff argues facts relating to Shen’s tenancy at Landfair #10, namely that she misrepresented the move-in date on the estoppel certificate and that she was subletting the unit for a profit, create a triable issue as to agency.  (Opposition, pg. 10.)  However, Plaintiff fails to submit evidence connecting these facts of Shen’s tenancy to how she knew or should have known Holmstrom was acting outside the scope of his agency so as to create a triable issue.  Defendants submitted evidence they believed Holmstrom to be Seifer’s agent, as he was the individual who set the rents, collected rents, and addressed repair requests. Evidence that Shen misstated the move in date on an estoppel certificate does not demonstrate she had knowledge of Holmstrom acting outside the scope of his agency.  Similarly, Shen’s subletting of her unit for a profit, which she contends was not in violation of her rental agreement with Holmstrom, does not demonstrate she had knowledge Holmstrom was acting beyond his agency’s scope.

Finally, Plaintiff argues that there are triable issues of fact as to “all Defendants’ knowledge” that Holmstrom was exceeding the scope of his agency based on the “well-below-market rents” Defendants claim Holmstrom offered them, the lack of rent increases, and the lack of written lease agreements signed by Seifer.  (Opposition, pgs. 10.)  However, as discussed above, Plaintiff has not submitted evidence supporting its assertion that the fact Defendants’ units were rented at below market means they should have known Holmstrom’s renting of the units at those rates was acting outside the scope of his agency.  Plaintiff’s assertion of as much is conclusory.  Plaintiff’s attempt to reframe evidence that Defendants knew their monthly rents were low as evidence Defendants knew or should have known Holmstrom lacked the authority to offer them those rents is improper.  Plaintiff has the burden of submitting evidence supporting its assertion that Defendants should have known Holmstrom was acting outside his agency authority, and mere knowledge that one’s own rent is lower than average is not sufficient. Similarly, Plaintiff’s attempt to reframe Defendants’ awareness of a lack of rent increases over the years as imputing knowledge that Holmstrom was acting outside the scope of his agency relationship is likewise conclusory and improper.  As noted above, the units are rent-controlled, and as such, Plaintiff fails to submit evidence suggesting Defendants should have expected rent increases on their rent-controlled units over the years. 

In addition, even if Defendants should have expected slight rent increases over the years, Plaintiff submits no evidence demonstrating that the fact they received no rent increases meant they should have known Holmstrom was acting outside of the scope of his agency, as opposed to Seifer herself not wishing to raise the rent for independent reasons.  Finally, Plaintiff’s contention that the lack of written lease agreements “signed by Seifer” was sufficient to give Defendants actual or constructive knowledge that Holmstrom was acting outside the scope of his agency is not supported by evidence.  Notably, Plaintiff does not cite evidence suggesting it is standard for tenants to have written lease agreements signed by a building’s owner. Moreover, even if it is standard, there is no evidence that Defendants’ lack of such agreements imputes knowledge of Holmstrom’s lack of authority. Defendants’ evidence that they entered into rental agreements with Holmstrom for their tenancies based on his role as the Properties’ building manager is undisputed. 

           Based on the foregoing, Defendants’ motion for summary judgment is granted.  In the alternative, and for appeal purposes only, Defendants’ motion for summary adjudication of Issue No. 2 and the 1^st cause of action is granted.

The Court does not reach Issue No. 1, whether Plaintiff’s judicial admissions bar the cause of action.

Ejectment (2^nd COA) [Issues Nos. 1, 2, 3] [as to all Defendants except DOES 101-105]

As noted above, the Court previously granted summary adjudication of this cause of action as to DOES 101-105.  Accordingly, Plaintiff’s SAC asserts this cause of action against remaining defendant tenants who here move for summary adjudication in their favor.

“A tenancy or other estate at will, however created, may be terminated by the landlord’s giving notice in writing to the tenant in the manner prescribed by [C.C.P. §1162], to remove from the premises within a period of not less than 30 days, to be specified in the notice.”  (Civil Code §789.) 

In support of its ejectment cause of action, Plaintiff alleges that based on the lack of the formation of a valid tenancy as a result of Civil Code §2306 and “a lack of contract formation and lack of capacity,” or in the alternative, rescission of the “leases.”  (SAC ¶257.)

Defendants argue Plaintiff cannot establish its ejectment cause of action for the same reasons as the 1^st cause of action and a third additional reason, namely: (1) it is barred by Plaintiff’s judicial admissions [Issue No. 1]; (2) Plaintiff has no evidence to establish the terms of the alleged management agreement between Seifer and Holmstrom or that Holmstrom was unauthorized or acted outside the scope of his authority [Issue No. 2]; (3) Plaintiff cannot establish it provided notice required under Civil Code §789 or that Defendants are not valid tenants entitled to possession of their units [Issue No. 3].

As discussed above, Defendants submitted evidence that Holmstrom was acting within the scope of his agency authority when he entered into leases with Defendants and Plaintiff cannot submit evidence establishing the terms of Holmstrom’s agency agreement so as to create a triable issue of fact with respect to whether he was acting outside the scope of his agency. However, Plaintiff did not meet its burden of submitting evidence sufficient to create a triable issue of fact.  As such, Defendants’ motion for summary adjudication of the 2^nd cause of action is granted.  The Court does not reach Issues Nos. 1 or 3.

Trespass (3^rd COA) [Issues Nos. 1, 2, 4] [as to all Defendants except DOES 101-105]

As noted above, the Court previously granted summary adjudication of this cause of action as to DOES 101-105.  Accordingly, Plaintiff’s SAC asserts this cause of action against remaining defendant tenants who here move for summary adjudication in their favor.

“The proper plaintiff in an action for trespass to real property is the person in actual possession…” (Smith v. Cap Concrete, Inc. (1982) 133 Cal.App.3d 769, 774.)

Plaintiff’s trespass cause of action is based on the following allegations: (1) Plaintiff and its assignor/predecessor-in-interest owned the Buildings; (2) Defendants intentionally entered and intentionally caused other defendants to enter before and after the December 8, 2016 sale; (3) Plaintiff nor its assignor gave permission for such entry; (4) Plaintiff was harmed in an amount no less than $2,700,000 from “each and every defendant” as aiders-and-abettors in the scheme.  (SAC ¶¶259-262.) 

Defendants argue Plaintiff cannot establish its trespass cause of action for the same two reasons as the 1^st cause of action as well as for a third additional reason as follows: (1) it is barred by Plaintiff’s judicial admissions [Issue No. 1]; (2) Plaintiff has no evidence to establish the terms of the alleged management agreement between Seifer and Holmstrom or that Holmstrom was unauthorized or acted outside the scope of his authority [Issue No. 2]; (3) Plaintiff cannot establish it has been in possession of Defendants’ units during their possession or that Defendants do not have the right to possession [Issue No. 4].

As discussed above, Defendants established they are entitled to summary adjudication of Issue No. 2.  Accordingly, Defendants’ motion for summary judgment is granted.  In the alternative, and for appeal purposes only, Defendants’ motion for summary adjudication of Issue No. 2 and the 3^rd cause of action is granted. The Court does not reach Issue No. 4.

Aiding and Abetting Breach of Fiduciary Duty (4^th COA) [Issue No. 5] [as to all Defendants]

“To establish a cause of action for breach of fiduciary duty, a plaintiff must demonstrate the existence of a fiduciary relationship, breach of that duty and damages. [Citations]” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 182.)

“California has adopted the common law rule for subjecting a defendant to liability for aiding and abetting a tort.  Liability may... be imposed on one who aids and abets the commission of an intentional tort if the person (a) knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person’s own conduct, separately considered, constitutes a breach of duty to the third person.” (Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727, 744.) 

           Plaintiff’s 4^th cause of action is based on the following allegations: (1) Holmstrom owed Seifer a fiduciary duty; (2) Holmstrom breached his duty by embezzling $750,000, and by renting units in the Properties below market costing Seifer another $750,000 in lost rents and $1,200,000 in a lower sales price, for a combined loss of $2,700,000; (3) Defendants had actual knowledge of Holmstrom’s fiduciary duties to Seifer, and all breaches thereof, and intended the same; (4) Defendants provided assistance, including accepting the benefits of artificially low rent, paying cash, paying for utilities in cash to Holmstrom, and signing estoppel certificates with knowingly false rent amounts and their assistance was a substantial factor in causing $2,700,000 in harm.  (SAC ¶¶264-267.)

           Defendants argue Plaintiff cannot establish: (1) Holmstrom breached his fiduciary duty to Seifer by embezzling rents from her and renting the units below market; (2) Defendants had actual knowledge Holmstrom owed Seifer a fiduciary duty to rent the units at market rate; (3) Defendants decided to participate in Holmstrom’s embezzlement; and/or (4) that acceptance of the benefit of below market rent is tortious conduct [Issue No. 5].

           Defendants submitted they had no knowledge Holmstrom was engaging in any fraud when they rented their apartments from him, and they did not become aware of any such fraud during their tenancies.  (Motion, pg. 17; [D-SSF Nos. 25, 26, 27, 28] D-COE, Decl. of P. Caldera ¶5; Decl. of Guo ¶6; Decl. of Shen ¶6; Decl. of Li ¶5; Decl. of Zhou ¶6; Decl. of Ertas ¶6; Decl. of N. Razfar ¶5; Decl. of A. Razfar ¶5; Decl. of J. Caldera ¶5; Decl. of N. Saban ¶5; Decl. of L. Saban ¶5; Decl. of Luigi ¶5; Decl. of Oyunchimeg ¶5; Decl. of Sacilotto ¶7; Decl. of LaRousse ¶5 [Defendants’ declarations in which each declares that he or she had no knowledge Holmstrom did not have authority to rent the apartment or was engaged in fraud, that he or she never conspired with Holmstrom and/or were aware of any facts or evidence that Holmstrom was defrauding Seifer, that he or she did not have knowledge as to Holmstrom’s agreement with Seifer to manage the Properties, and that he or she never took action to interfere with Holmstrom’s management of the Properties or his relationship with Seifer].)  Defendants also submitted evidence they paid their rent for years, which was accepted, since, aside from filing the instant lawsuits, Defendants’ rent payments were never questioned by Seifer or anyone on her behalf.  ([D-SSF No. 31] D-COE, Decl. of P. Caldera ¶¶6, 8, 11; Decl. of Guo ¶¶9, 11; Decl. of Shen ¶¶7, 9, 11; Decl. of Li ¶¶6, 8, 10; Decl. of Zhou ¶¶7, 9, 11; Decl. of Ertas ¶¶7, 9, 11; Decl. of N. Razfar ¶¶6, 8, 9; Decl. of A. Razfar ¶¶6, 8, 9; Decl. of J. Caldera ¶¶6, 8, 11; Decl. of N. Saban ¶¶6, 8, 10; Decl. of L. Saban ¶¶6, 8, 10; Decl. of Luigi ¶¶6, 8, 10; Decl. of Oyunchimeg ¶¶6, 8, 10; Decl. of Sacilotto ¶¶8, 10, 12; Decl. of LaRousse ¶¶6, 8, 10.)  As such, Defendants submitted evidence that they had no knowledge that Holmstrom was not giving Seifer all they rent monies they tendered to him, and that he was instead embezzling funds for himself.  Defendants assert Plaintiff failed to identify facts, documents, or witnesses establishing Defendants knew or suspected Holmstrom was defrauding Seifer.  (Motion, pg. 19, fn. 10, citing D-SSF No. 55.) 

Based on the foregoing, Defendants met their burden on summary judgment/adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact.  As discussed below, Plaintiff did not meet its burden.

Plaintiff failed to submit evidence creating a triable issue of material fact as to whether it can establish Defendants knew Holmstrom was defrauding Seifer so as to assert the cause of action against them.  Plaintiff argues the “same evidence” indicating Defendants knew or should have known Holmstrom was acting outside any authority Seifer may have granted him supports Plaintiff’s claims that Defendants aided and abetted Holmstrom’s breach of fiduciary duty.  (Opposition, pgs. 10-11, citing Section I.C.)  However, as discussed above, Plaintiff failed to submit competent evidence supporting its assertion that Defendants knew or should have known Holmstrom was acting outside his authority based on their education levels, low rents, lack of a written lease agreement, and other grounds. 

Plaintiff also argues evidence Defendants’ estoppel certificates were a component of their efforts to aid and abet Holmstrom’s breach of fiduciary duty.  (Motion, pg. 11.)  Specifically, Plaintiff cites to evidence that a former tenant, who is not among Defendants, testified that the rent he had been paying to Holmstrom was double the rent reflected on his estoppel certificate.  (Opposition, pg. 11, Decl. of Correll, Exh. 21 17:2-20:18.)  Plaintiff also cites to evidence that another former tenant who is not among Defendants testified that in June 2016, Holmstrom told him to start paying half the rent he had been paying, that when the tenant asked why Holmstrom said he was leaving the job, so he was cutting the rent in half, and when the tenant pushed him further Holmstrom responded the tenant did not need to know why.  (Opposition, pg. 11, Decl. of Correll, Exh. 23:20:4-21:14.)  As a preliminary matter, in reply Plaintiff notes that Plaintiff failed to include testimony of these tenants reflecting that their rents in their estoppel certificates were their individual portion of the total monthly rent due to having roommates who paid the other half.  (Reply-SSF, pg. 2.)  Moreover, the testimony of Baek and Zecharia evidence does not relate to any of the moving Defendants and does not create a triable issue of fact as to their knowledge.  Even if Defendants learned the rent that they had been paying was double what was reflected on the estoppel certificate, which Plaintiff has not submitted evidence of, and/or if Holmstrom had told Defendants to start paying half the rent they had been paying in 2016, it is not clear such information establishes actual knowledge that Holmstrom was defrauding Seifer. Plaintiff asserts that based on the testimony of two former tenants, who are not parties to the action, a jury could conclude Holmstrom had Defendants sign estoppel certificates representing their rent was 50% of what they had been paying because Holmstrom had been pocketing the other half of the rent and estoppel certificates showing the true rent (i.e., the amounts Defendants were paying in total), would prove to Seifer that Holmstrom had been stealing from her.  (Opposition, pg. 11.)  However, Plaintiff has submitted no evidence supporting this contention, and its argument that a jury could infer as much is speculative.  In addition, the argument that signing inaccurate estoppel certificates meant Defendants knew Holmstrom was engaging in fraud against Seifer is conclusory. Plaintiff has not submitted competent evidence that Defendants’ estoppel certificates were knowingly false.  

Plaintiff cites to P. Caldera’s estoppel certificate and argues differences in its terms (no parking space, tenant pays for gas and electric) and her present representations about her tenancy (parking, gas, and electricity included) could cause a jury to reasonably conclude P. Caldera had “a side arrangement with Holmstrom for utilities and a parking space” and that she assisted him in breaching his fiduciary duty because it benefitted her financially.  (Opposition, pgs. 11-12.)  However, this argument is speculative and not based on any competent evidence supporting the existence of any such side agreement. P. Caldara testified that the certificate’s failure to indicate the parking space was a mistake, because she always had a parking space.  (Decl. of Correll, Exh. 7, P. Caldera Depo 24:2-8.) 

Plaintiff argues further evidence of Defendants’ “side deals” with Holmstrom is Luigi’s assertion that he was responsible for paying gas notwithstanding evidence that the gas account for Luigi’s unit was in Holmstrom’s name and Luigi wrote checks to Holmstrom directly for utilities.  (Opposition, pg. 12; Decl. of Luigi ¶¶3-4; Decl. of Correll, Exh. 33, Exh. 43 at pg. 3.)  Plaintiff argues this evidence supports Plaintiff’s theory that Defendants participated in Holmstrom’s scheme by giving him cash for utilities while Holmstrom simultaneously sought reimbursement for Seifer for the same utilities.  (Opposition, pg. 12.)  However, the submitted evidence does not support this argument—the evidence only shows that Luigi paid his gas payments to Holmstrom, which he contends.  It is not clear how the fact the account was in Holmstrom’s name or that Luigi wrote checks directly to Holmstrom’s demonstrates the existence of “side deals” given, based on the submitted declarations, Luigi believed Holmstrom to be the Properties’ manager acting on Seifer’s behalf and with authority to accept payments for rents and utilities.  Plaintiff submits no evidence supporting its conclusory assertion that Luigi or any Defendants knew Holmstrom was simultaneously seeking reimbursements for utilities from Seifer that he was also accepting Defendants’ payments for so as to establish their knowledge of his defrauding scheme.

Plaintiff argues the fact several defendants admit paying Holmstrom in cash is further evidence from which a jury could conclude Defendants knew Holmstrom was perpetuating a fraud on Seifer.  (Opposition, pg. 12.)  However, this argument is likewise conclusory and not supported by competent evidence.  The fact Defendants rented their units at allegedly below market rates, were not required to execute written leases, and/or paid rent to Holmstrom in cash is not evidence that Defendants knew or should have suspected Holmstrom’s alleged embezzlement.

Based on the foregoing, Defendants’ motion for summary judgment is granted.  In the alternative, and for appeal purposes only, Defendants’ motion for summary adjudication of Issue No. 5 and the 4^th cause of action is granted.

Intentional Interference with Contractual Relations (5^th COA) [Issue No. 6] [as to all Defendants except DOES 101-105]

As noted above, the Court previously granted summary adjudication of this cause of action as to DOES 101-105.  Accordingly, Plaintiff’s SAC asserts this cause of action against remaining defendant tenants who here move for summary adjudication in their favor.

“To prevail on a cause of action for intentional interference with contractual relations, a plaintiff must plead and prove (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant’s knowledge of that contract; (3) the defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. To establish the claim, the plaintiff need not prove that a defendant acted with the primary purpose of disrupting the contract, but must show the defendant’s knowledge that the interference was certain or substantially certain to occur as a result of his or her action.”  (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148 (Citations omitted).) 

           Plaintiff’s 5^th cause of action is based on the following allegations: (1) there was a contract between Seifer and Holmstrom to manage the building by renting the units for fair market value and forwarding all income to her; (2) Defendants knew of this contract; (3) Defendants intended to disrupt the performance of this contract; (4) Defendants’ conduct prevented performance; (4) Plaintiff and Seifer were harmed; (5) Defendants’ conduct was a substantial factor in causing their harm.  (SAC ¶¶269-274.)

           Defendants argue Plaintiff cannot establish: (1) Defendants were aware of any contract between Holmstrom and Seifer; and (2) Defendants engaged in conduct to interfere with any such contract [Issue No. 6].

Defendants submitted evidence that they had no knowledge of any contract between Seifer and Holmstrom, who they only knew to be the Properties’ resident manager authorized to rent out units and perform repairs, and that they took no action to interfere with any alleged contract term.  (Motion, pgs. 24-25; [D-SSFs Nos. 26, 27, 28] (summarized above).) 

Based on the foregoing, Defendants met their burden on summary judgment/adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact.  As discussed below, Plaintiff did not meet its burden.

Plaintiff failed to submit evidence creating a triable issue of material fact as to whether it can establish Defendants knowingly interfered with any contract between Seifer and Holmstrom so as to assert the cause of action against them.  In opposition, Plaintiff argues the “same evidence” indicating Defendants knew, or should have known, Holmstrom was acting outside his authority supports Plaintiff’s claims that Defendants tortiously interfered with Seifer’s relationship with Holmstrom.  (Opposition, pgs. 10-11, citing Section I.C.)  However, Plaintiff does not cite to competent evidence supporting its assertion that Defendants knew or should have known of the scope of Holmstrom’s agency relationship with Seifer and that he was acting outside of it. Plaintiff also argues evidence Defendants’ estoppel certificates were a component of their tortious interference with the relationship between Holmstrom and Seifer.  (Motion, pg. 11.)  Specifically, in support of this assertion, Plaintiff cites to the testimony of non-party former tenants Zecharia and Baek, Defendants P. Caldera and Luigi, and the fact that “several” Defendants paid Holmstrom for rent and/or utilities in cash.  However, as discussed above, the cited testimony and evidence is not sufficient to create a triable issue of material fact as to whether Defendants had knowledge of Holmstrom’s embezzlement of Seifer’s money in violation of his employment/agency relationship with her.

Based on the foregoing, Defendants’ motion for summary judgment is granted.  In the alternative, and for appeal purposes only, Defendants’ motion for summary adjudication of Issue No. 6 and the 5^th cause of action is granted.

Declaratory Relief (in the Alternative) (6^th COA) [Issue No. 7] [as to all Defendants]

Plaintiff’s alternative cause of action for declaratory relief (6^th COA) is based on allegations that in the event the Court finds any valid tenancies, Plaintiff and Defendants need to know the terms of such tenancies going forward for the 7^th cause of action.  (SAC ¶276.)  Plaintiff believes Defendants signed written AAGLA leases with Holmstrom based on his pattern and practice.  (SAC ¶276.)  Plaintiff seeks declaratory relief as to the following: (1) in the event Defendants are permitted to stay, whether they are to be bound by the AAGLA Form Lease’s no-subletting provision; (2) whether Defendants, such as Caldera, are entitled to claimed rights that contradict their estoppel certificates (such as the right to parking and utilities paid by Plaintiff) which Plaintiff disputes; (3) whether Defendants, such as Luigi and Ozu, have rights that contradict the alleged lease such as the right for Ozu to reside in the unit; (4) whether rent control laws apply to Defendants who do not live in the Buildings and/or have vacated and returned several times; (5) whether the “rents” should be set at the amount they could have been raised to; (6) what the proper “rent” is going forward and the accrued “rent” as of the date of the declaration of rights; (7) whether Plaintiff has the right to add roommates of its choosing to Defendants’ units; and (8) whether Defendants abandoned their units and then attempted to reclaim them without permission.  (SAC ¶276.) 

Defendants argue Plaintiff cannot establish its alternative declaratory relief cause of action because: (1) the terms of a contract cannot be created via pattern and practice evidence; (2) Plaintiff cannot establish Defendants signed AAGLA leases; (3) Seifer’s years of acceptance of rent payments ratified the terms of the Defendants’ tenancies; (4) the terms of Luigi and Sacilotto’s written leases cannot be contradicted by parol or extrinsic evidence; and (5) Defendants’ past conduct cannot constitute a breach of future contract terms [Issue No. 7].

Defendants argue Plaintiff cannot establish the existence of an actual controversy because, by its nature, the stated controversy is conjectural and anticipated in the future given it is dependent on a finding of valid tenancies.  (Motion, pg. 25.) 

Defendants argue Plaintiff cannot establish all Defendants, except Sacilotto, Luigi, and Ertas (in part), executed AAGLA leases to support declaratory relief that that they should all should be bound by AAGLA lease terms. (Motion, pgs. 25-26, citing [D-SSF No. 36 (SSF that Plaintiff has not produced a written management agreement between Seifer and Holmstrom or any AAGLA leases executed by defendants except Luigi and Sacilotto)] Decl. of Riley ¶7.)  Defendants argue that while Plaintiff alleges Defendants destroyed (or refused to produce) written leases, Plaintiff has not evidence to support this assertion.  (Motion, pg. 26, SAC ¶93; [D-SSF Nos. 39-40, 53].)

Defendants argue there is no actual controversy concerning rent stabilization with respect to Plaintiff’s request for a declaration whether “rent control laws apply… when several defendants do not even live in the [Properties]…” given evidence that the Properties and the tenancies therein are protected by LARSO given the Properties were built prior to 1979.  (Motion, pg. 26, citing LAMC §151.02; citing [D-SSF No. 5 (SSF that the Properties are subject to the Los Angeles Rent Stabilization Ordinance (“LARSO”)] Decl. of Riley ¶2, Exh. 2: Akhavi Depo Vol. I at 63:3-65:9; Decl. of Melichar ¶3.)  Defendant argues Plaintiff has an adequate administrative remedy to determine each unit’s rental rate to the extent Plaintiff disputes the rates Defendants are paying given the Rent Commission has authority to establish base rents and permitted increases.  (Motion, pg. 26, citing California Ins. Guaranty Assn. v. Superior Court (1991) 231 Cal.App.3d 1617, 1624.)

Defendants argue Plaintiff cannot establish entitlement to declaratory relief on the issue of whether Plaintiff is entitled to add roommates to Defendants’ units given Defendants had permission to have roommates and sublet.  (Motion, pg. 6; citing Caldera Dec. ¶3; N. Razfar Dec. ¶3; Luigi Dec. ¶9; Oyunchimeg Dec. ¶¶3, 11; Sacilotto Dec. ¶6.) 

Defendants argue Plaintiff cannot establish that AAGLA form leases were Holmstrom’s “pattern and practice” so as to bind Defendants to the terms of AAGLA leases given evidence of pattern and practice may be used to interpret contract terms but not to create a contract and Plaintiff has no competent evidence such leases were Holmstrom’s pattern and practice.  (Motion, pg. 27; citing SAC ¶276(a); citing Magna Development Co. v. Reed (1964) 228 Cal.App.2d 230, 240 [Evidence of usage and custom may be introduced to interpret vague terms in a contract “but may not be used to create a contract.”]; SSFs Nos. 34, 35, 39, 40, 57.)

Based on the foregoing, Defendants met their burden on summary judgment/adjudication. Therefore, the burden shifts to Plaintiff to create a triable issue of material fact.  As discussed below, Plaintiff did not meet its burden.

In opposition, Plaintiff failed to submit evidence creating a triable issue of fact as to whether it can establish a cause of action for declaratory relief against Defendants.  Plaintiff argues the fact Luigi, Ertas, and Sacilotto signed form AAGLA leases shows Holmstrom’s pattern and practice of obtaining written leases from tenants.  (Opposition, pg. 14; AMF No. 60.)  Plaintiff asserts Holmstrom did not deny that he obtained written leases given Holmstrom stated he gave all the written leases to Jeffrey Melichar (“Melichar”).  (Opposition, pg. 14; Decl. of Correll, Exh. 24, 16:9-19 [Holmstrom’s testimony that he gave “applications, whatever [he] had for rent, and whatever [he] had on leases” to Melichar, the real estate agent.].)  However, Holmstrom did not testify that he obtained written leases from all the tenants; rather, his testimony is limited to “whatever he had” on leases.  In addition, Plaintiff fails to address how evidence three out of 15 Defendants signed AAGLA leases supports declaratory relief that all Defendants should be subject to such leases. Plaintiff does not address Defendants’ authority that evidence of custom may be used to interpret terms but not establish a new contract. [The Court notes in reply, Defendants submitted evidence that other tenants resided at the Properties without written leases, contradicting the claim that obtaining written leases was part of Holmstrom’s pattern and practice.  (Reply, pg. 10, fn. 14, Supp-Decl. of Riley ¶9, Exh. 16: 45:5-17 & ¶8, Ex. 15 at pgs. 536-586.)  The Court has sustained Plaintiff’s evidentiary objections to this evidence.  However, as discussed above, even without considering this evidence, Plaintiff has not submitted evidence suggesting it was Holmstrom’s pattern and practice to obtain written leases.]

           Based on the foregoing, Defendants’ motion for summary judgment is granted.  In the alternative, and for appeal purposes only, Defendants’ motion for summary adjudication of Issue No. 7 and the 6^th cause of action is granted.

Breach of Contract (in the Alternative) (7^th COA) [Issue No. 7] [as to all Defendants]

“To state a cause of action for breach of contract, a party must plead the existence of a contract, his or her performance of the contract or excuse for nonperformance, the defendant’s breach and resulting damage. [Citation]” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.)  “If the action is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached an incorporated by reference.”  (Ibid.) (See also Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199 (“In an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language. [Citation]”).) “The elements of a breach of oral contract claim are the same as those for a breach of written contract: a contract; its performance or excuse for nonperformance; breach; and damages.” (Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453.) 

Plaintiff’s breach of contract cause of action is stated in the alternative, in the event the Court finds any valid tenancies.  (SAC ¶278.)  Plaintiff alleges the following: (1) Defendants entered into the written leases, orally modified to pay Holmstrom more, set forth in Paragraphs 87, 111, 134, 143, 164, 190, 208, 223, 238, and 249; (2) Plaintiff and Seifer did all things the written leases required; (3) Defendants failed to pay the rents due in the amount determined in the 6^th (declaratory relief) cause of action from January 1, 2012 (or the move-in date, if later) to June 2, 2021 in the following amounts [plus all permissible rent increases requested in Paragraph 276(e), minus any amounts Defendants can prove were deposited in Seifer’s account]: (a) Caldera failed to pay $1,600 per month for 66 months, (b) Shen and Guo failed to pay $2,000 per month for 102.5 months, (c) Li and Zhou failed to pay $1,600 for 61.5 months, (d) Ertas failed to pay $1,700 for 56 months, (e) Nima failed to pay $800 for 114 months, (f) Ali failed to pay $1,600 for 66 months, (g) the Sabans failed to pay $1,600 for 66 months, (h) Luigi [and Ozu if found to be lawful tenant] failed to pay $1,700 for 114 months, (i) Sacilotto failed to pay $2,000 for 73 months, (j) LaRousse failed to pay $1,500 for 114 months; (4) Plaintiff requests additional unpaid rent until date of judgment plus permissible rent increases; and (5) Defendants sublet and ran businesses in violation of the terms of the agreements damaging Plaintiff. (SAC ¶¶278-282.) 

           The Court notes the 7^th cause of action is derivative of the 6^th cause of action, since it is premised on the Court first finding that valid tenancies existed, and thereafter finding that the terms of those valid tenancies are as set forth in the AAGLA leases.  The breach of contract cause of action is based on allegations that Defendants violated terms of these AAGLA leases including terms relating to paying market rent, subletting, having unauthorized roommates, among other breaches.  (SAC ¶¶276(a), 280.) 

           In light of the Court’s ruling on Issue No. 7 with respect to the 6^th cause of action, Defendants are entitled to summary adjudication of Plaintiff’s 7^th cause of action as well, which is derivative of the 6^th cause of action.

           Based on the foregoing, Defendants’ motion for summary judgment is granted.  In the alternative, and for appeal purposes only, Defendants’ motion for summary adjudication of the 7^th cause of action is granted.

Dated:  September _____, 2022

Hon. Monica Bachner

Judge of the Superior Court