Judge: Peter A. Hernandez, Case: 24STCV10576, Date: 2024-09-26 Tentative Ruling

The Court often posts its tentative several days in advance of the hearing. Please re-check the tentative rulings the day before the hearing to be sure that the Court has not revised the ruling since the time it was posted.

Please call the clerk at (213) 633-0154 by 4:00 pm. the court day before the hearing if you wish to submit on the tentative.

Case Number: 24STCV10576    Hearing Date: September 26, 2024    Dept: 34

James Magdaleno v. Richard Gerwe, et al. (24STCV10576)

Defendant Richard Gerwe’s Demurrer to Plaintiff’s First Amended Complaint is OVERRULED, in part, as to Plaintiff’s fourth, fifth, seventh, and eighth causes of action; and SUSTAINED, in part, as to Plaintiff’s twelfth, and thirteenth causes of action. The court will inquire at the hearing whether leave to amend should be granted.

Background

Plaintiff James Magdaleno (“Plaintiff”) alleges as follows:

The property located at 1906 S. Marvin Ave., Los Angeles, CA 90016 consists of a single-family residence and a garage. Defendant Richard Gerwe (“Defendant”) converted the garage into an ADU for human residence. The Los Angeles Department of Building and Safety notified Defendant that the unit was illegally constructed and converted. Nevertheless, Defendant entered into a lease agreement for the unit with Plaintiff on March 1, 2021. Defendant received $1,500.00 to $1,550.00[1] per month from Plaintiff as rent for the unit.

Since April 2021, the unit was substantially uninhabitable due to multiple issues with the structure. Plaintiff verbally complained regarding the habitability issues to Defendant from April 2021 until February 4, 2024. Defendant failed to cure the issues.

On February 4, 2024, the unit sustained severe water damage, which resulted in Plaintiff vacating the unit and damage to his personal property. Plaintiff was not provided with any alternative accommodations by Defendant.

On February 22, 2024, Plaintiff contacted the Los Angeles Department of Public Health and Safety to inquire about his rights under the lease agreement with Defendant. Plaintiff was then informed that the unit was an illegal dwelling unit without a certificate of occupancy. As such, Plaintiff requested an inspection on the unit that was carried out on March 12, 2024 revealing multiple code violations.

At the time Plaintiff leased the unit from Defendant, Defendant had verbally represented that the unit was legal and in compliance with California law. Defendant also failed to register the unit with the City of Los Angeles Housing Department or under the Rent Stabilization Ordinance.

On April 3, 2024, Plaintiff attempted to retrieve his belongings and discovered that Defendant had ordered to change the locks of the unit. Defendant also failed to provide Plaintiff with any notice terminating his tenancy. Subsequently, Plaintiff’s belongings remain inside the unit without Plaintiff’s consent.

On April 26, 2024, Plaintiff filed a Complaint asserting the following causes of action against Defendant and Does 1-50:

1.               Tortious Breach of Implied Warranty of Habitability;

2.         Contractual Breach of Implied Warranty of Habitability;

3.         Breach of the Implied Covenant of Quiet Enjoyment;

4.         Violation of the Rent Stabilization Ordinance § 151.04 of the Los Angeles Municipal Code – Illegal Collection of Rent;

5.         Violation of the Rent Stabilization Ordinance § 151.04 of the Los Angeles Municipal Code – Excessive Collection of Rent;

6.         Unfair and Deceptive Business Practices Cal. Bus. & Prof. Code § 17200;

7.         Fraud;

8.         Negligent Misrepresentation;

9.         Constructive Eviction;

10.       Illegal Eviction – Violation of Civil Code 789.3;

11.       Tenant Harassment – Los Angeles Municipal Code § 45.33;

12.       Conversion; and  

13.       Trespass to Chattels.

On May 5, 2024, Plaintiff filed a First Amended Complaint (“FAC”) asserting the same causes of action.

On July 2, 2024, Defendant filed this Demurrer to Plaintiff’s FAC. On September 13, 2024, Plaintiff filed an opposition to Defendant’s Demurrer.[2] On September 17, 2024, Defendant filed a reply to Plaintiff’s opposition.

Legal Standard

            “The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in section 430.30, to the pleading on any one or more of” various grounds listed in statute. (Code Civ. Proc., § 430.10.)

            When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

            Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

Discussion[3]

            Defendant demurs, pursuant to Code of Civil Procedure section 430.10, subdivision (e), to the fourth, fifth, seventh, eighth, twelfth, and thirteenth causes of action in Plaintiff’s FAC, on the basis that they each fail to state facts sufficient to constitute a cause of action. Defendant also demurs, per Code of Civil Procedure section 430.10, subdivision (f), to the twelfth and thirteenth causes of action on the basis that they are uncertain.

Fourth Cause of Action (Violation of the Rent Stabilization Ordinance § 151.04 of the Los Angeles Municipal Code – Illegal Collection of Rent)

            Los Angeles Municipal Code (“LAMC”) section 151.04 states that “[i]t shall be unlawful for any landlord to demand, accept or retain more than the maximum adjusted rent permitted pursuant to this chapter or regulation or orders adopted pursuant to this chapter.”

            LAMC section 151.05(A) provides that a landlord of a rental unit subject to LARSO must register the unit with the City of Los Angeles and serve the tenant with a statement of registration before demanding or accepting rent from a tenant: 

On or after July, 1979, no landlord shall demand or accept rent for a rental unit without first procuring and serving on the tenant or displaying in a conspicuous place a valid written registration statement from the Department or its designee. On or after April 30, 1983, no landlord shall demand or accept rent for a rental unit without first serving a copy of a valid registration or annual registration renewal statement on the tenant of that rental unit. . . . 

            Plaintiff alleges that Defendant wrongfully rented the unit since Defendant failed to register the unit with the City of Los Angeles knowing of the unit’s illegal construction. (FAC, ¶ 26.) Plaintiff alleges that Los Angeles Department of Building and Safety put Defendant on notice as to the unit’s illegality before Plaintiff’s lease began. (Id., ¶ 15.) Plaintiff alleges that Defendant subsequently and intentionally concealed the unit’s illegality from Plaintiff and misrepresented the unit’s permit status for purposes of obtaining rent money from Plaintiff. (Id., ¶¶ 15, 25, 30.) Additionally, Plaintiff alleges that Defendant did not procure, and the City of Los Angles did not issue a statement of registration or certificate of occupancy before or during Plaintiff’s tenancy. (Id., ¶ 36.)  

            Defendant contends that Plaintiff is not entitled to a return of the rent under this provision. Or put it another way, it appears that Defendant’s argument centers on Plaintiff’s inability to collect damages. However, even if the court agrees that a tenant is not permitted to seek restitution of past rent when service of the LAMC ordinance has not been completed, the FAC seeks more than just rents paid. In fact, it seeks a declaration that Plaintiff is entitled to relocation fees, attorney fees, etc. (FAC, [Prayer for Relief] at p. 27.)¶  

            For demurrer purposes, these allegations are sufficient to support Plaintiff’s cause of action for violation of LAMC section 151.04 for improper collection of rent where a violation of LAMC section 151.05 exists.

            The demurrer is OVERRULED.

Fifth Cause of Action (Violation of the Rent Stabilization Ordinance § 151.04 of the Los Angeles Municipal Code – Excessive Collection of Rent)

            Defendant makes the same arguments mentioned above for the fifth cause of action. The FAC alleges that Defendant was prohibited by LAMC section 151.04 from collecting any rent payments from Plaintiff’s tenancy in the unit. (FAC, ¶¶ 85-86.) Plaintiff contends that since Defendant was not entitled to any rent payments from Plaintiff, any money given to Defendant from Plaintiff as rent for the unit was in excess and thus in violation of LAMC section 151.04. (Ibid.) What the remedy is for this violation is alleged in the Prayer for Relief.

            For demurrer purposes, these allegations are sufficient to support Plaintiff’s cause of action for violation of LAMC section 151.04 for excessive collection of rent where a violation of LAMC section 151.05 exists.

            The demurrer is OVERRULED.

Seventh Cause of Action (Fraud)

            “The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

            Plaintiff alleges that Defendant represented both in writing and orally that the unit was legal, in compliance with California law, and that the unit had a valid Certificate of Occupancy to induce Plaintiff into executing the lease agreement. (FAC, ¶¶ 106-107.) Plaintiff alleges that the Los Angeles Department of Building and Safety put Defendant on notice as to the unit’s illegality before Plaintiff’s lease began. (Id., ¶ 15.) Plaintiff also alleges that Defendant failed to register the unit with the City of Los Angeles knowing of the unit’s illegal construction. (Id., ¶ 26.) Plaintiff alleges that Defendant had knowledge of their obligation to comply with the requirements of Los Angeles Rent Stabilization Ordinance (“LARSO”) and LAMC section 1151.00. (Id., ¶ 30.)

            Plaintiff contends that Plaintiff was unaware of the falsity of Defendant’s representations, relied on them to remain in the unit, and tendered rent payments to Defendant. (Id., ¶ 110.) Plaintiff alleges that it was not until February 2024, when Plaintiff contacted the Los Angeles Department of Public Health and Safety, that Plaintiff discovered the unit’s illegality. (Ibid.) Plaintiff alleges that as a result of Defendant’s false representations, Plaintiff suffered damages in an amount according to proof, but no less than $400,000. (Id., ¶ 111.)

            Thus, Plaintiff stated facts sufficient to constitute a cause of action for fraud by providing support for each element required.

            The demurrer is OVERRULED.

Eighth Cause of Action (Negligent Misrepresentation)

The elements of a cause of action for negligent misrepresentation include “[m]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage.” (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.)

“California courts have recognized a cause of action for negligent misrepresentation, i.e., a duty to communicate accurate information, in two circumstances. The first situation arises where providing false information poses a risk of and results in physical harm to person or property. The second situation arises where information is conveyed in a commercial setting for a business purpose.” (Friedman v. Merck & Co. (2003) 107 Cal.App.4th 454, 477.) 

            Plaintiff alleges the same facts used in support of her seventh cause of action for fraud to support a claim for negligent misrepresentation. Additionally, Plaintiff alleges that Defendant owed a duty to communicate accurate information during the course of Defendant’s business as Plaintiff’s landlord. (FAC, ¶ 115.)

            As such, Plaintiff stated facts sufficient to constitute a cause of action for negligent misrepresentation by alleging Defendant’s duty to communicate accurate information and conscious failure to do so which caused Plaintiff’s reliance and damages.

The Demurrer is OVERRULED.

Twelfth Cause of Action (Conversion)

            “Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.) 

            Plaintiff alleges that once Plaintiff moved into the unit, Plaintiff also brought in all of his possessions. (FAC, ¶ 149.) Plaintiff alleges that Defendant intentionally and substantially interfered with Plaintiff’s personal property by changing the unit’s locks, preventing Plaintiff from retrieving his property, and entering into the unit to discard many of his belongings without Plaintiff’s consent. (Id., ¶¶ 150-152.) Plaintiff alleges that Defendant also failed to provide Plaintiff with any notice terminating his tenancy. (Id., ¶ 32.) As a result, Plaintiff alleges that Plaintiff was harmed by Defendant’s action and suffered damages in an amount to be proven at trial but no less than $50,000. (Id., ¶ 154.)

            Defendant argues that a cause of action for conversion requires a Plaintiff to describe the property affected in the complaint with sufficient clarity to permit identification. (Hawley v. Kocher (1898) 123 Cal. 77, 55; Dem., 9:20-24.) Defendant contends that Plaintiff’s did not identify the personal property allegedly converted by Defendant with enough certainty to state facts sufficient to constitute a cause of action. Defendant also argues that Plaintiff’s conversion claim is also uncertain as it cannot be ascertained what constitutes Plaintiff’s “personal property” in paragraphs 149 to 151 of Plaintiff’s FAC.

            In opposition, Plaintiff argues that Defendant’s interpretation of Hawley does not apply here since Plaintiff alleges conversion of all his belongings that remained in the unit prior to Defendant illegally evicting him. (Opp., 20:8-11.) Plaintiff explains that the Supreme Court in Hawley sustained a demurrer upon the ground that there was not a sufficient description of the property sought to be recovered and that there was no averment as to where the property was at the time of the commencement of the suit that a lump description of the property would suffice. (Opp., 20:12-18.) Plaintiff argues that since all of Plaintiff’s disputed personal property is located within the unit, a lump description is appropriate according to Hawley.

            The court finds that Plaintiff’s use of a lump description of his allegedly converted property as “personal property” is insufficient to meet the required description in Hawley. The Court in Hawley did not establish that a lump description of the location of the property in controversy is sufficient to adequately describe the property at issue. “[I]t cannot even be claimed that a lump description of personal property situated in a certain building, or at a certain place, if such a description could be held to be good, applies here” (Hawley v. Kocher, supra, 123 Cal. 77, 83 [italics added].)                                                          

            Here, Plaintiff provides a lump description of the property allegedly converted by referencing it as “personal property” located within the unit. As such, Plaintiff fails to identify with particularity the property in dispute as required by the cause of action.

            The Demurrer is SUSTAINED.

Thirteenth Cause of Action (Trespass to Chattels)

            “[T]respass to chattels ‘lies where an intentional interference with the possession of personal property has proximately caused injury.’” (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1350-51 (quoting Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1566).) “A trespass to a chattel may be committed by intentionally dispossessing another of the chattel, or using or intermeddling with a chattel in the possession of another.” (Jamgotchian v. Slender (2009) 170 Cal.App.4th 1384, 1401.)

            Plaintiff alleges the same facts used in support of the twelfth cause of action for conversion to support a claim for trespass to chattels. Again, the property at issue is insufficiently described in the FAC.

            The Demurrer is SUSTAINED.

Conclusion

Defendant Richard Gerwe’s Demurrer to First Amended Complaint is OVERRULED in part as to Plaintiff’s fourth, fifth, seventh, and eighth causes of action; and SUSTAINED in part with as to Plaintiff’s twelfth and thirteenth causes of action.