Case Number: 22STCV19824    Hearing Date: March 2, 2023    Dept: 49

CASE:  ¿Gloria Schulman Hughes, et al. v. Living the Dream, et al.

(1) DEMURRER TO FIRST AMENDED COMPLAINT

(2) MOTION TO STRIKE

MOVING PARTY:¿Defendant Living the Dream

RESPONDING PARTY(S): Plaintiff Gloria Shulman Hughes, et al.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

¿

Plaintiffs Gloria Shulman Hughes and John E. Hughes, both individuals and co-Trustees of the Hughes Shulman Family Trust (the “Trust”), bring this unlawful detainer action against Defendants Living the Dream, Applied Plant Science, Inc., Michael Straumietis, and California Numbered Company 4009746.  The Trust is the sole owner of real property located at 1646 Blue Jay Way, Los Angeles, CA 90069, which includes a single-family residence. Plaintiffs allege that Defendants Living the Dream and Applied Plant Science, Inc., as tenant and subtenant, respectively, are in unlawful possession of the property. Plaintiff also alleges that the tenant subleased the property in violation of the lease agreement.

This court previously sustained Defendant Living the Dreams’ demurrer to the Complaint in its entirety, with leave to amend. Plaintiffs filed a First Amended Complaint. Defendant now demurs to the First Amended Complaint and moves to strike portions therein.  Plaintiffs opposed.

This matter first came for hearing on February 7, 2023.  At that hearing, Defendants raised that a new LA Ordinance No. 187737 related to evictions and could be applicable to the dispute.  This court therefore ordered the parties to file and serve supplemental briefs on the effect of the new ordinance. The court has read and considered Defendant’s supplemental brief of February 16, 2023, and Plaintiffs’ supplemental brief of February 24, 2023, and now rules as follows.

TENTATIVE RULING:

Defendant’s Demurrer to the First Amended Complaint is OVERRULED. 

Defendant’s Motion to Strike is GRANTED in part and DENIED in part, as stated herein.

Defendant is to file an Answer to the FAC within 5 days, consistent with this ruling.  To wit, it may not plead any violation of the Tenant Protection Act, nor the recent LA Ordinance as an affirmative defense.  It may only plead a violation of any Covid-related defenses, if any, from the City and/or County of Los Angeles, which existed and were in effect at the time of the filing of this unlawful detainer action.

Moving party to give notice, unless waived.  

DISCUSSION:

Demurrer

I. Meet and Confer

¿As was the case on the previous demurrer, the moving party has not attached a declaration reflecting compliance with the meet and confer obligation.  (CCP § 430.41.) Plaintiff again does not raise the issue in opposition.  To conserve judicial resources and without objection by the opposing party, the court exercises its discretion to hear the motion absent the meet and confer declaration, assuming none occurred. 

II. Judicial Notice

Pursuant to Defendant’s request, the court takes judicial notice of Exhibits 1 through 5, and Supplemental Exhibits 1-3.

Pursuant to Plaintiffs’ request, the court takes judicial notice of Exhibits 1 and 2.

The court takes judicial notice of the exhibits without assuming the truth of the assertions contained therein.  (See Seelig v. Infinity Broad. Corp. (2002) 97 Cal. App. 4th 798, 808.)

III. Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.)  When considering demurrers, courts read the allegations liberally and in context.  (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.)  In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice.  (CCP § 430.30(a).)  A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)  Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.  (Id.)  The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.  (Hahn, 147 Cal.App.4th at 747.)

IV. Analysis

Defendant Living the Dream again demurs to the First Amended Complaint on the ground that it fails to allege facts sufficient to state a cause of action for unlawful detainer againstit.  Specifically, Defendants argue that Plaintiffs have not alleged compliance with the notice requirements of either the Tenant Protection Act (“the Act”) (Cal. Civ. Code § 1946.2.), or the Los Angeles Rent Stabilization Act (“the LA Ordinance.”) It appears undisputed that Plaintiffs did not provide notice. 

Section 1946.2(a) provides:

Notwithstanding any other law, after a tenant has continuously and lawfully occupied a residential real property for 12 months, the owner of the residential real property shall not terminate the tenancy without just cause, which shall be stated in the written notice to terminate tenancy.

Moreover, before issuing a notice to terminate for just cause for a curable lease violation, the Act requires that an owner must first give the tenant a three-day notice of the violation with an opportunity to cure pursuant to CCP § 1161(3). If not cured within the time period set forth in the notice, a three-day notice to quit without an opportunity to cure may be served. (Civ. Code § 1946.2(c).) 

In Opposition, Plaintiffs first contend the Tenant Protection Act does not apply here because the Act expressly gives precedence to the Los Angeles Rent Stabilization Act. The Act, in Section 1946.2(g)(1) provides: 

“This section does not apply to the following residential real property: 

(A) Residential real property subject to a local ordinance requiring just cause for termination of a residential tenancy adopted on or before September 1, 2019, in which case the local ordinance shall apply.

(B) Residential real property subject to a local ordinance requiring just cause for termination of a residential tenancy adopted or amended after September 1, 2019, that is more protective than this section, in which case the local ordinance shall apply…”

It appears that the LA Ordinance provides for just cause termination and was enacted prior to September 1, 2019, thus falling into the statutory scenario “in which case the local ordinance shall apply.” (§ 1946.2(g)(1)(A).) 

Defendant responds, however, that “[s]ince the Ordinance was amended post-September 1, 2019, it would not supersede the Act unless it was ‘more protective than’ the Act.” (Reply 5: 5-6 [referencing (§ 1946.2(g)(1)(B)].) And because all single family homes are exempt under the Ordinance, “on its face the Ordinance is not ‘more protective’ than the Act, since the Act does not provide a similar blanket exception for single family homes.” (Reply 5: 7-9.) 

Regarding whether the Ordinance is “more protective” than the Act, Defendant fails to recognize that the statute itself provides the test for when an ordinance is “more protective” than the Act. Section 1946.2(g)(1)(B) states:

For purposes of this subparagraph, an ordinance is “more protective” if it meets all of the following criteria:

(i) The just cause for termination of a residential tenancy under the local ordinance is consistent with this section.

(ii) The ordinance further limits the reasons for termination of a residential tenancy, provides for higher relocation assistance amounts, or provides additional tenant protections that are not prohibited by any other provision of law.

(iii) The local government has made a binding finding within their local ordinance that the ordinance is more protective than the provisions of this section.

Defendant fails to address any of these factors, and therefore cannot meet its burden as the moving party to establish that the TPA, and not the LA Ordinance, governs the property here. The court therefore continues with its analysis assuming the LA Ordinance governs here.

Defendant then argues that “the LA Ordinance mimics the Act in requiring ‘just cause’for termination of a residential tenancy, precluding an eviction based on expiration of the Lease term.” (Dem. 11: 16-18.) Defendant further argues the “LA Ordinance contains none of theexceptions upon which Plaintiffs rely in connection with the Act.” (Dem. 11: 18-19.) Thus, assuming the property is subject to the LA Ordinance, because “the instant action is based entirely on the expiration of the Lease term, Plaintiffs’ own allegations render the FAC fatally defective.” (Dem. 11: 22-23.)

Plaintiffs counter that the LA Ordinance does, in fact, contain an exemption for single family residences.  Plaintiffs points to section 151.02 of the Ordinance, which defines “rental units” to include “[a]ll dwelling units…” That section continues that “rental units” shall not include “[d]wellings, one family, except where two or more dwelling units are located on the same parcel.” (See § 151.02.) Thus, Plaintiffs argue, because the “FAC alleges that the Home is a single-family residence that was subleased to Subtenant,” the dwelling is exempted from the Ordinance and its just cause or notice requirements. (Opp. 8: 1-2.)

In response, Defendant contends that the “property cannot be both (a) categoricallyexempt from a statute; and simultaneously (b) subject to the same statute.” (Reply 4: 11-12.) 

Defendant’s argument, however, fails to recognize how a statutory exemption operates.  By its nature, the exemption here provides a carve-out for single family dwellings that would otherwise be subject to the act absent the exemption. It is therefore entirely accurate to state that the property here is subject to the Ordinance, and further falls into one of the Ordinance’s express exemptions.  Moreover, the FAC allege that the property is a single family residence. (FAC ¶ 13.)

 It should be noted here that Defendant gives relatively little discussion to support its(mainly conclusory) argument that the TPA—and not the LA Ordinance—should govern.  Instead, Defendant devote most of its discussion by arguing that the demurrer should be sustained under either statutory scheme. 

Based on the arguments made, this court concludes that the Act expressly defers to the LA Ordinance as governing the property here.  (See Civil Code § 1946.2(g)(1)(A).) Under that Ordinance, this court further concludes that the property, as a single-family dwelling, falls within the exemption to the Ordinance recognized in section 151.02. Thus, at least for pleadings purposes, the FAC is not barred for lack of notice.  

V. Supplemental Briefing and Applicability of the “Just Cause for Eviction Ordinance”

This matter first came for hearing on February 7, 2023.  At that hearing, Defendant raised that a new LA Ordinance No. 187737, the “Just Cause for Eviction Ordinance,” (the “JCE”),LAMC 165.00, et seq., could be applicable to the dispute here.  This court therefore ordered the parties to file and serve supplemental briefs addressing the implication of the JCE, if any. This court has read and considered Defendant’s supplemental brief of February 16, 2023, and Plaintiffs’ supplemental brief of February 24, 2023.

Defendant argues the JCE “serves as a complete bar to the instant action.” (D’s Supp. Brief 4: 6-7.) This is because the “JCE complies with the requirements of § 1946.2(g) of the TPA, and precludes an eviction based on the expiration of a lease,” which the parties agree is the sole ground for the eviction here.  (D’s Supp. Brief 7: 25-26.) The threshold issue then becomes whether the JCE applies retroactively to apply to this dispute.

The JCE became effective on January 27, 2023—its date of publication. (See D’s Supp. RJN, Exh. 1.) Defendant correctly contends that “the Legislature expressly intended the JCE to take immediate effect.” (D’s Supp. Brief 9: 16-17.) Defendant has not demonstrated, however, that the JCE applies retroactively.

“Generally, statutes operate prospectively only.” (McClung v. Emp. Dev. Dep't (2004) 34 Cal. 4th 467, 475 [citing Myers, 28 Cal.4th at p. 840].) “The presumption against statutory retroactivity has consistently been explained by reference to the unfairness of imposing new burdens on persons after the fact.” (McClung, supra, 34 Cal. 4th at 475.) Thus, “it has long been established that a statute that interferes with antecedent rights will not operate retroactively unless such retroactivity be ‘the unequivocal and inflexible import of the terms, and the manifest intention of the legislature.’” (Id.) “[A] statute may be applied retroactively only if it contains express language of retroactivity or if other sources provide a clear and unavoidable implication that the Legislature intended retroactive application.” (Id.)

Here, the JCE lacks any express retroactivity clause. Rather, the legislature relied on the Urgency Clause to “find[] and declare[] that [the JCE] is required for the immediate protection of the public peace, health and safety…and therefore, adopts [the JCE] to become effective upon publication…” (See D’s Supp. RJN, Exh. 1, Sec. 8 [emphasis added].)

Thus, the Legislature expressly recognized the “immediate” need of the JCE and therefore determined that the JCE would become effective upon publication. Of course, the Legislature could have gone a step further and called for the JCE to apply retroactively.  That itdid not—in spite of the recognized urgency—suggests it had no such intent, much less an express one.  For similar reasons, Defendant fails to demonstrate any “clear and unavoidable implication that the Legislature intended retroactive application.” (McClung, supra, 34 Cal. 4th at 475.) Thus, there is nothing here to overcome the “strong presumption” against retroactivity.(Id.)

Accordingly, because the JCE was enacted after the instant action had been filed, and because there is no indication the legislature intended it to apply retroactively, it does not apply to the property here.

Accordingly, Defendant’s Demurrer to the First Amended Complaint is OVERRULED.

Motion to Strike

I. Legal Standard

A motion to strike lies either (1) to strike any irrelevant, false or improper matter inserted in any pleading; or (2) to strike any pleading or part thereof not drawn or filed in conformity with the laws of this state, a court rule or order of court.  (CCP § 436.)

II. Analysis

Defendant moves to strike fourteen portions of the First Amended Complaint. The Court addresses each in the same manner the moving parties do.

(1) Paragraph 12 of the FAC (4:10-11) that reads: “The Property is not subject to the notice requirements of the Tenant Protection Act, California Civil Code Section 1946.2.”

(2) That portion of Paragraph 16 of the FAC (5:10-15) that reads: “The Addendum did not ‘renew’ the Lease as that term is used under Section 1946.2. Therefore, the Tenants [sic] Protection Act does not apply to the Property. If the legislature intended that lease extensions after July 1, 2020, required notice, it would have expressly so provided. Civil Code Section 1946.2, itself, recognizes the distinction between lease ‘extensions’ and lease ‘renewals’. See, e.g., Cal. Civ Code Section 1946.2 (b)(1)(E).”

(3) That portion of Paragraph 17 of the FAC (5:21-23) that reads: “Therefore, because the Property is ‘[h]ousing that has been issued a certificate of occupancy within the previous fifteen years’ as provided under Civil Code Section 1946.2(e)(7), the Tenants [sic] Protection Act does not apply to the Property.” 

(4) That portion of Paragraph 18 of the FAC (6:1-6) that reads: Plaintiffs reasonably relied upon Tenant’s expertise in the selection of the form of lease, including whether any notice requirement under California Civil Code Section 1946.2(e)(8)(B)(i), as necessary, to the extent it even applied to the Property. Defendant must be estopped from benefitting from the omission of statutory notice that it was responsible to include into the lease form, even assuming any notice was required, which it was not.”

(5) Paragraph 19 of the FAC (6:9-16) that reads: As reflected in the legislative history of the Tenant Protection Act, AB 1482, the act was never intended to afford special protection for commercial property managers such as Defendant, whose business it is to lease out residential housing for commercial gain. The purpose of the Tenant Protection Act is to ‘provide eight million Californians in nearly three million households price stability and certainty and protection against discriminatory and retaliatory evictions.’ See Concurrence in Senate Amendments report (September 5, 2019). The purpose of the act would not be served by construing the phrase ‘lawfully occupied’ to mean anything other than people who reside in the dwelling unit.

(6) Paragraph 54 of the FAC (19:13-16) that reads: “When a fixed-term lease expires by its own terms, no 30-day notice of termination of an at-will tenancy or three-day notice to pay rent or quit is required before the landlord can sue for unlawful detainer. Ryland v. Appelbaum (1924) 70 Cal.App. 268, 270; Code of Civil Procedure Section 1161(1); 2 CACI 4301.”

(7) That portion of Paragraph 14 of the FAC (4:26-5:2) that reads: “The use of a residential lease for the purpose of property management was entirely unsuitable for the purpose intended by the parties for the Property. At no time did the parties ever contemplate Defendant residing at the Property, and at no time did Defendant reside at the Property.”

Defendant contends these portions of the First Amended Complaint should be stricken because they are “legal conclusions and purely argumentative,” or are “speculative and conclusory.” (MTS 12: 20-21; 13: 1.) 

This court agrees, generally, that Complaints should state facts and not legal conclusions—this court also agrees that the FAC largely violates that principle. Be that as it may, Defendant cites no authority requiring a court to strike such allegations.  

If and when the time comes to apply the law to facts in this case, it will be this court’s interpretation of the governing laws—as aided by the parties’ briefings—that will control the analysis. Quite simply, the legal conclusions made in the First Amended Complaint will be disregarded. (See Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1699 [noting courts are given “broad discretion” when ruling on a motion to strike].)

Accordingly, it is unnecessary to strike these portions of the FAC.

(8) Paragraph 5 of the FAC (2:26-3:2) that reads: “Defendant California Numbered Company 4009746 (‘Sublessor’) is a business entity form unknown, that entered into a sublease agreement for the Property with APS dated June 13, 2019 (‘Sublease’). At no time did Tenant request or receive permission from Landlord to assign the Lease to Sublessor.”

(9) That portion of Paragraph 22 of the FAC (7:5-6) that reads: “On or about June 13, 2019, Sublessor entered into a written sublease for the Property with Subtenant without the knowledge or written consent of Landlord.”

(10) That portion of Paragraph 24 of the FAC (8:3-4) that reads: “Tenant assigned the Sublease to Sublessor without the knowledge or written consent of the Landlord and in violation of Paragraph 22 of the Lease.”

(11) Paragraph 46 of the FAC (13:18-24) that reads: Upon information and belief, based upon the Sublease, Tenant assigned the Lease to Sublessor without the knowledge or written consent of Landlord. Because Tenant had concealed from Landlord the assignment of the Sublease to Sublessor, Tenant had no right to exercise the Lease option, among other grounds. But even if the Extension Notice was valid, which it is not, Landlord would have had the right to terminate the Lease for breach of Paragraph 22 of the Lease or decline to extend the Lease on this basis, if it had known the true facts.

Defendant argues these portions should be stricken because “Plaintiffs have been repeatedly advised and provided evidence that LTD and “California Numbered Company 4009746” are one and the same – “4009746” is the corporate identification number for LTD as assigned by the California Secretary of State.” (MTS 13: 10-12.) 

Defendant has provided evidence that “4009746” is the corporate identification number for LTD as assigned by the California Secretary of State (See RJN Exh. “1”); and (b) that a search for the Company produced no results (See Kreshek Decl. at ¶ 4).

Plaintiffs, for their part, provide little competent argument or evidence to dispute LTD’s explanation or evidence. Plaintiffs counter by arguing, essentially, that they cannot know for sure that LTD and 4009746 are the same. 

The documents this court may take judicial notice appear to establish with little questionthat LTD and “California Numbered Company 4009746” are the same entity.  

Accordingly, the portions of the Complaint purporting to allege a separate existence are ordered stricken.

(12) That portion of Paragraph 59 of the FAC (20:8-9) that reads: Tenant [sic] continued possession is malicious, and plaintiffs are entitled to statutory damages under California Code of Civil Procedure Section 1174(b).”

(13) Item 4 of the Prayer for Relief (20:26-27) that reads: “Statutory damages up to $600.00 for Tenant’s continued malicious possession of the Property.”

Defendant argues these portions should be stricken because there are no facts supporting statutory damages. In fact, in Paragraph 35 of the FAC, “Plaintiffs acknowledge that LTD has filed suit seeking, among other things, a declaration that it timely and properly exercised its option to extend the Lease,” which demonstrates “LTD’s good faith basis for remaining in possession of the Property.” (MTS 14: 18-21.)

California Code of Civil Procedure § 1174(b) provides, in relevant part: “If defendant is found guilty of . . . unlawful detainer, and malice is shown, the plaintiff may be awarded statutory damages of up to six hundred dollars ($600), in addition to actual damages, including rent found due.” 

Here, accepting all allegation as true for purposes of the demurrer and motion to strike, the FAC alleges facts from which it can be inferred that Defendant knew that Plaintiffs had the sole right to extend (or not extend) the Lease and that Defendant had no good-faith-basis to remain in possession. These allegations, if true and proven at trial, could support a finding of malice. 

This court therefore exercises its discretion to allow the allegations to remain in the FAC at this stage.

(14) That portion of Item 5 of the Prayer for Relief (21:2-3) that reads: “and property damage for Tenant’s [sic] to maintain and repair the Property.” 

Finally, Defendant argues this portion should be stricken because damages for property are not recoverable in an unlawful detainer action. It appears the language of the Prayer seeks damages for damage to property. (See Vasey v. California Dance Co. (1977) 70 Cal. App. 3d 742, 748 [“It is well settled that damages allowed in unlawful detainer proceedings are only those which result from the unlawful detention and accrue during that time.”].) 

It is not clear, however, if those damages are sought pursuant to a breach of the lease agreement, or rather, from the unlawful detainer of the property.  (Id. [“damages resulting [from breach of lease] are not necessarily damages resulting from the unlawful detention.”].) 

Thus, this court exercises its discretion at this stage to allow the prayer to remain.

Accordingly, the Motion to Strike is GRANTED in part and DENIED in part, as stated herein.

Moving party to give notice, unless waived.  

IT IS SO ORDERED.

Dated:   March 2, 2023¿¿¿¿___________________________________

¿¿¿¿¿¿¿Randolph M. Hammock

¿¿¿¿¿¿¿Judge of the Superior Court Sent