Judge: Monica Bachner, Case: BC643861, Date: 2023-02-14 Tentative Ruling

Department 71: Attorneys who elect to submit on these published tentative rulings, without making an appearance at the hearing, may so notify the Court by communicating this to the Department's staff at (213) 830-0771 before the set hearing time.  See, e.g., CRC Rule 324(b).   All parties are otherwise encouraged to appear by Court Call for all matters.

Case Number: BC643861    Hearing Date: February 14, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants’ motion for judgment on the pleadings as to the 6th and 7th causes of action is denied.

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 judgment on the pleadings as to the 6th and 7th causes of action alleged in the second amended complaint (“SAC”) filed by Plaintiff A.C.A. LLC (“Plaintiff”). 

Request for Judicial Notice

Defendants’ 11/3/22 request for judicial notice is granted as to Plaintiff’s Complaint (Exh. 1.) in this action, Plaintiff’s first amended complaint (“FAC”) in this action (Exh. 2), Plaintiff’s SAC in this action (Exh. 3), this Court’s 10/24/22 Order (Exh. 4), the Declaration of Damian Akhavi (“Akhavi”) filed by Plaintiff on 3/22/22 (Exh. 5), the DOE amendments filed by Plaintiff on 5/31/17 and 9/13/18 (Exh. 6), and portions of Plaintiff’s Response to Defendants’ Separate Statement filed on 7/11/22 (Exh. 7).  (D-RJN, Exhs. 1, 2, 3, 4, 5, 6, 7.) Defendants’ request is denied as to this Court’s 10/24/22 ruling, Exhibit 4.

Evidentiary Objections

Plaintiff’s 12/20/22 evidentiary objection to Defendants’ Request for Judicial Notice of this Court’s 10/24/22 Order is sustained. (See Raghavan v. Boeing Co. (2005) 133 Cal App. 4^th 1120, 1136-37 (holding summary adjudication of general issues or of facts not permitted.)

Procedural Background

           On December 15, 2016, Plaintiff filed its complaint against Defendant Myron Holmstrom (“Holstrom”) 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 4th, 5th, 6th, 7th, 8th, and 12th causes of action were asserted against all Defendants, the 1st, 2nd, and 3rd causes of action were asserted against all Defendants except DOES 1-100, the 10th cause of action was asserted only against Holmstrom, and the 9th 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 Rita Seifer (“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 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 1st, 3rd, 4th, 9th, 11th, and 12th causes of action, while the 2nd and 5th 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 1st (declaratory relief), 4th (trespass), 5th (breach of fiduciary duty), 6th (false promise), 11th (professional negligence), and 12th (Section 17200) causes of action and denied leave to amend as to the 2nd (recission and restitution), 3rd (ejectment), 7th (concealment), 8th (intentional misrepresentation), 9th (intentional interference with contractual relations), and 10th (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 1st and 6th causes of action and sustained the demurrer as to the 7th cause of action (with leave to amend) and 8th 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]. 

           On October 24, 2022, this Court denied Defendants’ motion for summary judgment and granted Defendants’ motion for summary adjudication as to the 1st, 2nd, 3rd, 4th, and 5th causes of action and as to Issues Nos. 2, 5, and 6, and denied summary adjudication as to the 6th and 7th causes of action and as to Issue No. 7.  This Court did not reach Issue Nos. 1, 3, or 4.

           Defendants filed the instant motion on November 3, 2022.  Plaintiff filed its opposition on December 20, 2022.  Defendants filed their reply on December 27, 2022.  Plaintiffs argue Defendants’ motion is untimely under C.C.P. §438(e) on the basis the instant motion should have been brought no later than 30 days before May 31, 2022, the date this case was initially set for trial.  (Opposition, pg. 1.)  Defendants moved for judgement on the pleadings pursuant to C.C.P. §438 and common law.  Defendants’ motion is denied on the basis that it is untimely. 

Legal Standard

The grounds for a motion for judgment on the pleadings must appear on the face of the challenged pleading or be based on facts the court may judicially notice. (C.C.P §438(d); Tung v. Chicago Title Co. (2021) 63 Cal.App.5th 734, 758-759.)  A motion for judgment on the pleadings lies where the complaint shows on its face it is barred by the statute of limitations, and therefore does not state facts sufficient to constitute a cause of action.  (See Hunt v. County of Shasta (1990) 225 Cal.App.3d 432, 440.)

Breach of Contract (7th COA)

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 6th (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 Oyunchimeg 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 statute of limitations for breach of written contract is four years from accrual of the claim. (C.C.P. §337.) The statute of limitations for breach of oral contract is two years. (C.C.P. §339.) Traditionally, a claim accrues “ ‘ “when [it] is complete with all of its elements”–those elements being wrongdoing [or breach], harm, and causation.’ ” (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.)  However, there are exceptions to the statute of limitation, including the “continuous accrual doctrine.” 

Under the “continuous accrual doctrine,” each month that Defendants fail to pay rent constitutes a new breach that triggers a new statute of limitations period.  (See Gilkyson v. Disney Enters., Inc. (2016) 244 Cal. App. 4th 1336, 1341 ([“Under the continuous accrual doctrine each breach of a recurring obligation is independently actionable.”])  “The effect of the doctrine is that ‘a suit for relief may be partially time-barred as to older events but timely as to those [acts of wrongdoing occurring] within the applicable limitations period.’”  (Gilkyson, 244 Cal. App. 4th at pg. 1341.) The continuing accrual doctrine applies whenever there is a continuing or recurring obligation in a contract that is severable.  (Aryeh 55 Cal.4th at pgs. 1198-1199.)  “When an obligation or liability arises on a recurring basis, a cause of action accrues each time a wrongful act occurs, triggering a new limitations period.  [Citation.]  . . .  [T]he theory of continuous accrual supports recovery only for damages arising from those breaches falling within the limitations period.”  (Aryeh, 55 Cal.4th at pg. 1199.) 

In determining whether the doctrine applies, the question is whether, assessing the parties’ objective intent and conduct, the agreement contemplated “divisible, interval performance.”  (Eloquence Corporation v. Home Consignment Center (2020) 49 Cal.App.5th 655, 661.)  Application of the continuing violation doctrine is not proper when a complaint identifies a series of discrete, independently actionable alleged wrongs, or when a plaintiff knew of the asserted harms.  (Aryeh, 26 Cal.4th at pgs. 1197-1198, citing Yanowitz v. L’Oreal USA, Inc.  (2005) 36 Cal.4th 1028, 1058.)  For cases where there has been an injury, but the amount of harm is uncertain, the statute of limitations runs from the infliction of the “appreciable and actual harm.”  (Davies v. Krasna (1975) 14 Cal.3d 502, 514.)

The written leases are subject to the continuing accrual doctrine because Defendants have a recurring obligation to pay monthly rent, and failure to pay rent each month constitutes a new breach of their respective leases.  (Aryeh, 55 Cal.4th at pg. 1199.)  The written leases are subject to divisible, interval performance for each rent period.  (Eloquence Corporation, 49 Cal.App.5th at pg. 661.)  Plaintiff’s breach of contract cause of action is therefore not time-barred because Plaintiff alleges Defendants failed to pay rent each month, which includes Defendants’ respective two-year and four-year periods preceding the filing of the FAC.  (SAC ¶280.)  Plaintiff’s SAC seeks damages for unpaid rent owed through the date of judgment, which includes the abovementioned unpaid rent periods that precede the filing of the FAC.  (SAC ¶281.) 

Plaintiff’s seventh cause of action based on Defendants operating businesses in the units based on the continuing violation doctrine, is also timely.  (SAC ¶282.)  “The continuing violation doctrine aggregates a series of wrongs or injuries for purposes of the statute of limitations, treating the limitations period as accruing for all of them upon commission or sufferance of the last of them.”  (Aryeh, 55 Cal.4th at pg. 1192; see also City of Fontana v. Atkinson, 212 Cal. App. 2d 499, 509 (1963) [holding landowner’s violation of city zoning ordinance and building code “was a continuing violation, [so] the statute of limitations does not run”].)

Plaintiff’s seventh cause of action based on Defendants subletting is timely because Plaintiff does not allege dates when the Defendants began subletting and is therefore not barred on its face by the statute of limitations.  (SAC ¶282; see C.C.P. §438(d).) 

Based on the foregoing, Defendants’ motion for judgment on the pleadings as to the 7th cause of action is denied.

Declaratory Relief (6th COA)

“[T]he statute of limitations governing a request for declaratory relief is the one applicable to an ordinary legal or equitable action based on the same claim.”   (Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125, 1155.)  The California Supreme Court in Maguire v. Hibernia Savings & Loan Society (1944) 23 Cal.2d 719 distinguished the application of the statute of limitations with respect to declaratory relief actions arising after an alleged breach of an obligation from those brought before such a breach occurs as follows: “[I]f declaratory relief is sought with reference to an obligation which has been breached and the right to commence an action for ‘coercive’ relief upon the cause of action arising therefrom is barred by the statute, the right to declaratory relief is likewise barred.”  (Id. at pg. 734.)

Plaintiff’s cause of action for declaratory relief 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 7th 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 Oyunchimeg, have rights that contradict the alleged lease such as the right for Oyunchimeg 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.) 

Plaintiff’s claim for declaratory relief is timely because there is an ongoing dispute between Plaintiff and Defendants regarding what the terms of Defendants’ purported tenancies are.  (Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, 463; see SAC ¶276.)  Plaintiff’s cause of action seeks a judicial declaration of what the terms of Defendants’ purported leases are, not a judicial declaration that Defendants are in breach of their purported leases.

 Based on the foregoing, Defendants’ motion for judgment on the pleadings as to the 6th cause of action is denied.

Dated:  February _____, 2023

Hon. Monica Bachner

Judge of the Superior Court