Michael Reyes Vettoretto v. Joshua Gafni

DEMURRER TO FIRST AMENDED COMPLAINT

 

MOVING PARTY: Defendant Joshua Gafni

RESPONDING PARTY(S): Plaintiff Michael Reyes Vettoretto

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Michael Reyes Vettoretto alleges he owned the condominium unit located at 750 N. Kings Road, Unit 109, Los Angeles, CA. Plaintiff, as landlord, leased the unit to Defendant Joshua Gafni as tenant pursuant to a written lease.

Plaintiff alleges that after entering escrow to sell the unit to a third party, Defendant refused to allow a reasonable inspection of the premises. Plaintiff brought this action for (1) Enforcement of Inspection Rights per Civil Code section 1954, (2) declaratory relief, and (3) breach of contract. 

The case is related to Joshua Gafni v. Michael Reyes, LASC Case no. 22STCV34223. There, Gafni, as Plaintiff, alleges his unit suffered water damage from flooding on multiple occasions and that Defendant failed to undertake the necessary repairs in a proper or timely manner. The unit also displayed mold and faulty plumbing and electric, among other issues. It was not until Defendant decided to sell the unit—allegedly without providing the mandated statutory notice to Plaintiff—that Defendant made some of the necessary repairs.

Defendant Gafni now demurrers to each cause of action in the FAC. Plaintiff opposed.

TENTATIVE RULING:

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

Defendant is ordered to file an Answer to the FAC within 21-days of this Ruling.

Moving party to give notice, unless waived.  

DISCUSSION:

Demurrer

I. Judicial Notice

Pursuant to Tenant’s request, the court takes judicial notice of Exhibits 1, 2, 3, 4, 6, and 7. The court declines to take judicial notice of Exhibit 5 (the December 22, 2022 email from Jeff Kahn) as it is not the proper subject of judicial notice. (See LaChance v. Valverde (2012) 207 Cal.App.4th 779, 783 [denying request for judicial notice of e-mail].)

II. Meet and Confer

The Declaration of Eemaan Jalili, Counsel for Defendant, reflects that the parties met and conferred.

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

A. Demurrer to All Causes of Action

1. Landlord’s Standing and Defect or Misjoinder of Parties

First, Tenant contends Landlord lacks standing to maintain this lawsuit because he has sold the unit to third-party Ashley Trapp, and therefore is no longer the real party in interest. Landlord “relinquished his right to sue as part of the Assignment of the Lease Agreement to the new landlord Ashley Trap.” (Dem. 6: 18-19.) In related argument, Tenant contends the failure to include Trapp as a Plaintiff results in a defect or misjoinder of parties. 

In support of the First and Second Causes of Action, Landlord alleges Tenant prevented an inspection prior to the sale of the property. Among other things, Landlord seeks compensatory and consequential damages, and “a temporary and permanent injunction against Defendants, and each of them, requiring the Defendants, and each of them, to comply with Plaintiff’s rights of inspection.” (FAC, Prayer.) 

In the Third Cause of Action for Breach of Contract, Landlord alleges that Tenant breached the Lease agreement by preventing an inspection and making it “difficult, onerous, or impossible for [Landlord] to show the Subject Unit to prospective buyers.” (FAC ¶ 29.) This “dissuaded” potential buyers, which allegedly forced Landlord to “remove[] the Subject Unit from the market,” and later re-list the Unit for a reduced price. (Id. ¶¶ 30, 31.) On this cause of action, Landlord seeks only compensatory and consequential damages. (Id., Prayer.) 

Tenant contends Landlord relinquished its rights in the causes of action by operation of the “Assignment of Lease Agreement” executed between Landlord and the unit’s new owner. (See RJN, Exh. 4.) In relevant part, that Assignment provides:

FOR VALUE RECEIVED, the receipt and sufficiency of which is hereby acknowledged, the undersigned, Michael Reyes Vettoretto, "Assignor," Lessor of that certain lease agreement described below, does hereby grant, bargain, sell, convey and assign unto Ashley Trapp, "Assignee(s)", all his right, title and interest in and to said Lease Agreement, as well as all obligations of Lessor thereunder.

“Standing is the threshold element required to state a cause of action.” (Martin v. Bridgeport Cmty. Assn., Inc. (2009) 173 Cal. App. 4th 1024, 1031.) Generally, every action must be prosecuted in the name of the real party in interest. (See CCP § 367) “A real party in interest is one who has ‘an actual’ and substantial interest in the subject matter of the action and who would be benefited or injured by the judgment in the action.” (Martin, supra, 173 Cal. App. 4th at 1031–32.)

There is no doubt a would-be real party in interest, subject to some limitations, can assign its right to a cause of action. (See Civ. Code § 954 [“A thing in action, arising out of the violation of a right of property, or out of an obligation, may be transferred by the owner.”; see also Essex Ins. Co. v. Five Star Dye House, Inc. (2006) 38 Cal. 4th 1252, 1259 [addressing assignment of rights under contract].) When this happens, the assignee becomes the real party in interest, and the assignor loses standing to prosecute the claim. (Searles Valley Minerals Operations Inc. v. Ralph M. Parson Service Co. (2011) 191 Cal.App.4th 1394, 1402.)

Landlord brings his third cause of action for breach of the lease agreement. However, Landlord assigned “all his right, title and interest in” the Lease Agreement to the new owner around the time of sale. (RJN, Exh. 4.) Does this “interest” include Landlord causes of action here? 

Tenant cites no authority for that position, and no authority analyzing the legal effect of a similar Lease Assignment. Importantly, it’s notable what the agreement does not say: it does not address the assignment of causes of action or damages. 

Going further, all of the events and alleged damages at issue in the FAC occurred prior to the sale of the property.  [FN 1]  After the sale, the harms alleged remain unique to Landlord. Put differently, the new purchaser of the property appears disinterested in this lawsuit. Even the third cause of action for breach of the lease agreement—purportedly assigned to the new owner—is based on harms unique to Landlord, namely, an alleged reduction of the Unit’s sale price. Indeed, the new owner of the property would actually benefit from this price reduction. 

Therefore, there is nothing to suggest that the third-party is the proper Plaintiff here. “While ordinarily the owner of the real property is the party entitled to recover for injury to the property, the essential element of the cause of action is injury to one's interests in the property—ownership of the property is not. It has been recognized in many instances that one who is not the owner of the property nonetheless may be the real party in interest if that person's interests in the property are injured or damaged.” (Vaughn v. Dame Constr. Co. (1990) 223 Cal. App. 3d 144, 148.) Here, it is landlord who allegedly suffered the harm, and therefore maintains standing to sue.

2. Another Action Between the Same Parties on Same Causes of Action

Next, Tenant contends there is another action pending between the same parties on the same causes of action.  (See CCP § 430.10(c).) To be applicable, however, the parties must stand in the same relative position in each action (e.g. the same Plaintiff or Defendant). (See Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal. App. 3d 781, 788-789 [requiring “absolute identity of parties”].)

This is not the case here. In the instant case, Landlord is the Plaintiff and Tenant is the Defendant. In the related case, those roles are reversed. Thus, the actions are not between the same parties on the same cause of action.  

3. Landlord’s Right of Entry

Tenant next contends the FAC “does not provide any allegation that would permit the right of entry” under Civil Code section 1954. (Dem. 11: 24.) Section 1954, however, permits a landlord to enter a dwelling unit to “exhibit the dwelling unit to prospective or actual buyers.” Landlord alleges the buyer of the property sought a contingency inspection pursuant to the agreement to purchase the unit. (FAC ¶ 9.) Accordingly, Landlord gave Tenant notice that buyer would be inspecting the property. (Id. ¶¶ 9, 10.) This is a statutorily permitted ground for entry, and Tenant’s attempts to portray the entry as something else fail.

Tenant next contends that notwithstanding Civil Code section 1954, Landlord’s rights to inspection or entry were suspended during the Covid-19 pandemic. 

First, Tenant contends Assembly Bill No. 3088, known as the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020, “provided additional protections for tenants and homeowners impacted by the coronavirus pandemic.” (Dem. 10: 1-3.) While this court agrees that AB No. 3088 provided certain protections to tenants, Tenant has not identified any portion of the Bill that limited a landlord’s right to entry or inspection. 

Tenant also relies on the 2022 County of Los Angeles COVID-19 Tenant Protections Resolution. (See RJN, Exh. 6.) That Resolution provided Tenants various affirmative defenses to an unlawful detainer action. As raised by Tenant, Section VI.A.5 allowed a tenant to “assert an affirmative defense to an unlawful detainer action brought on the ground that such tenant denied entry by the Landlord into the rental unit.” (Emphasis added.) Section VI.A.5(a) goes on to provide two circumstances in which a Landlord may enter a residential tenant’s unit, neither of which are applicable here.

The instant case is not an unlawful detainer action. This court is unaware—and Tenant as not provided—any authority interpreting the Resolution as modifying a Landlord’s right of entry permitted by Civil Code 1954 in something other than an unlawful detainer action. “Courts do not have the authority to expand the scope of the statute beyond its plain meaning, even if [they] think it would serve the Legislature’s purpose.” (People v. Morgan (2023) 87 Cal. App. 5th 858, 866.) On the face of the FAC, there are no allegations that Landlord was or is attempting to evict Tenant. Rather, Tenant seeks money damages, declaratory relief, and injunctive relief. (FAC, Prayer.) A demurrer can be used only to challenge defects that appear on the face of the pleading, or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.)

Finally, Tenant relies on The Tenant Anti-Harassment Ordinance, codified in Chapter IV, Article 5.3 of the Los Angeles Municipal Code. The legislature enacted the Ordinance on the finding that “landlords have been constructively evicting long-term tenants by engaging in harassing conduct in order to coerce vacancies.” (LAMC Ch. IV, Art. 5.3, § 45.30.)  The Ordinance “augments existing protections provided to residential tenants under state, federal, and local laws to prohibit and deter tenant harassment by landlords in all rental units” and “provides an aggrieved tenant with a private right of action.” (Id., §§ 45.31, 45.35.) It goes on to enumerate sixteen nonexclusive categories of conduct that constitute “tenant harassment,” including “[a]buse of the right of access into a rental unit as established and limited by California Civil Code Section 1954…” (§ 45.33(3).)

Thus, the Ordinance expressly still allowed a landlord to enter a rental unit “as established and limited by” Civil Code section 1954—it only provides relief to Tenants where the landlord “abuses” those rights. (Id.) On the face of the FAC, this court cannot determine that Landlord abused the right to entry pursuant to a sale of the property, which again, is expressly permitted under section 1954. 

Accordingly, Defendant’s Demurrer fails on these grounds. 

B. Demurrer to Each Individual Cause of Action

Finally, Defendant also demurs to each cause of action individually, contending that Landlord has failed to allege a requisite element, or, that each is ambiguous or uncertain. 

When reading the allegations liberally and in context—as the court must on a demurrer—Landlord has alleged the facts necessary to maintain each cause of action.  (See Taylor, supra, 144 Cal. App. 4th at 1228.) This includes breach of contract damages based on Tenant’s alleged interference with the inspection. Moreover, “demurrers for uncertainty are disfavored,” and are strictly construed “because ambiguities can reasonably be clarified under modern rules of discovery.”  (Lickiss v. Fin. Indus. Regul. Auth., (2012) 208 Cal. App. 4th 1125, 1135.)

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

Defendant is ordered to file an Answer to the FAC within 10-days of this Ruling.

Moving party to give notice.

IT IS SO ORDERED.

Dated:   December 6, 2023 ___________________________________