Judge: Stephen I. Goorvitch, Case: 22STCV29479, Date: 2023-02-21 Tentative Ruling

Case Number: 22STCV29479    Hearing Date: February 21, 2023    Dept: 39

Mindset Box LLC v. Farmand Property LLC, et al.

Case No. 22STCV29479

Demurrer

BACKGROUND

            Mindset Box LLC (“Mindset Box”), Dr. Joel Sereboff (“Dr. Sereboff”), and Alan Sereboff (“Sereboff”) filed this action against Farmand Property LLC (“Farmand”), Castle Rock Property Management, Inc. (“Castle Rock”), Shahrokh Mokhtarzadeh, and Shahpour Mokhtarzadeh, asserting causes of action for constructive eviction and violation of the City of Los Angeles’s eviction moratorium.  The Court previously tried the related case—Case Number 21STCV02011—at which these issues were litigated.  The Court also denied leave to file the plaintiffs’ cross-complaint in that case.  Accordingly, Defendants demur to the complaint, arguing that the claims were compulsory in Case Number 21STCV02011.  The demurrer is sustained without leave to amend. 

PROCEDURAL HISTORY

            Plaintiff Farmand Property LLC filed Case Number 21STCV02011 against Mindset Box LLC (“Mindset Box”), Dr. Joel Sereboff (“Dr. Sereboff”), and Alan Sereboff (“Sereboff”) on January 19, 2021, asserting causes of action for breach of contract and breach of a written guarantee of lease.  In brief, Plaintiff owns commercial property at 1864 to 1870 North Vermont Avenue in Los Angeles, California.  Mindset Box owns and operates a crossfit gym and boxing studio and leased two of Plaintiff’s units, 1868 and 1870 North Vermont Avenue.  Sereboff owns Mindset Box and both he and his father, Dr. Sereboff, were guarantors on the lease. 

            The complaint in Case Number 21STCV02011 was filed on January 19, 2021.  On August 30, 2022, Defendants sought leave to file a cross-complaint in that case, and the Court denied the motion.  The Court found no good cause for the delay.  (See Court’s Minute Order, dated September 9, 2022.)  The Court also found undue prejudice to Plaintiff in permitting an amendment shortly before trial.  (Ibid.)  The Court incorporates its minute order from Case Number 21STCV02011 by reference.

            The case proceeded to trial.  Plaintiff sought to recover rent owed under the lease.  Defendants argued primarily that Plaintiff perpetrated an unlawful eviction and that they were entitled to protections under the City of Los Angeles ordinance passed in response to the pandemic.  The Court issued a tentative statement of decision on February 1, 2023, finding in favor of Plaintiff, and against Defendants, in the amount of $116,403.29.  The Court found that there was no constructive eviction and no violation of the City’s ordinance based upon the evidence presented:

As discussed, the Court finds that Mindset Box could not pay the bulk of the rent due to the pandemic, but that does not excuse the rent. “Nothing in this article eliminates any obligation to pay lawfully charged rent.” (See City of Los Angeles Ordinance No. 186606, § 49.99.3.)  Rather, Mindset Box “shall have up to three months following the expiration of the Local Emergency Period to repay any rent deferred during the Local Emergency Period.” (Ibid.)  Defendants’ counsel argues that Plaintiff constructively evicted her client and violated the City’s ordinance.  This does not constitute a defense for several reasons. It is not a violation of the City’s ordinance to send monthly invoices for rent, request that tenants propose a plan to pay outstanding rent, or to request that a tenant whose lease expired and was on a month-to-month tenancy to sign a new lease. The evidence demonstrates that is what occurred in this case.  Defendant relies on Plaintiff’s counsel’s letter of October 28, 2020, demanding that Mindset Box surrender possession and threatening an unlawful detainer action. To the extent that constitutes a constructive eviction, that was not prohibited by the City’s ordinance because Mindset Box owed rent before the pandemic occurred and had not executed a new lease, as required by Plaintiff.   

(Court’s Statement of Decision, dated February 22, 2023.)  The Court incorporates its statement of decision in Case Number 21STCV02011.    

LEGAL STANDARD

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.”  (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  In ruling on a demurrer, the court must “liberally construe[]” the allegations of the complaint.  (Code Civ. Proc., § 452.)  “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.”  (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

DISCUSSION

            Defendants argue that the claims in the instant action were compulsory cross-claims in Case Number 21STCV02011.  Claims are compulsory cross-claims if they arise out of the same transaction, occurrence or series of transactions or occurrences.  (Code Civ. Proc., §§ 426.10, 426.50.)  The claims in this complaint fall squarely within that definition.  Indeed, these were the very issues litigated in Case Number 21STCV02011.  Although the Court precluded Plaintiffs from seeking damages based upon these claims, Plaintiffs still litigated the underlying issues because they were related to Farmand’s complaint in that matter.  Based upon Plaintiff’s complaint in the instant case (not to mention the evidence at trial in Case Number 21STCV02011), it is clear that all defendants allegedly were acting in concert as the landlord that evicted Plaintiff (and, in the case of Shahpour Mokhtarzadeh, the attorney handling the eviction.)  Therefore, the cross-claims were compulsory with respect to all defendants.  The Court need not reach the issue whether there is collateral estoppel and res judicata based upon the statement of decision in Case Number 21STCV02011.  Defendants seek $3,250 in attorney’s fees relating to this motion.  The Court denies that request, as the Court previously found that the attorney’s fees provision in the parties’ lease is unconscionable.  (See Court’s Statement of Decision, ¶ K.)

CONCLUSION AND ORDER

            Based upon the foregoing, the Court orders as follows:

1.                  The Court sustains the demurrer without leave to amend.

2.                  The Court denies Defendants’ request for attorney’s fees.

3.                  Defendants’ counsel shall provide notice and file proof of such with the Court.