Judge Teresa A. Beaudet, Case 22STCV01348 2023-03-28 Tentative Ruling

On September 13, 2022, Plaintiff Tamim, LLC (“Tamim”) filed this Unlawful Detainer action against Defendants Eugene Chorny and Irina Ermakova (jointly, “Defendants”).

In the Complaint, Tamim alleges that Defendants are in possession of the premises located at 13300 Burbank Boulevard, Sherman Oaks, California 91401 (the “Premises”). (Compl., ¶ 3.) Tamim is the owner of the Premises. (Compl., ¶ 4.) On or about July 1, 2005, Defendants agreed to a 10-year lease of the Premises and agreed to pay rent of $4,200 monthly. (Compl., ¶ 6(a).) Tamim alleges that the lease term subsequently extended through June 30, 2022, and Defendants became holdover tenants as of July 1, 2022. (Compl., ¶ 6(d).) At the time the 3-day notice to pay rent or quit was served, the amount of rent due was $21,480.75. (Compl., ¶ 12.)

On November 30, 2022, Defendants filed a motion in this action for an order consolidating the instant case with the case Eugene Chorny, et al. v. Samuel Ohana, et al., Case No. 22STCV18736 (“the Chorny Action”). The instant case and the Chorny Action were related pursuant to this Court’s October 17, 2022 minute order.

The Court’s January 25, 2023 minute order in this action provides, inter alia, “[o]n the Court’s own motion, the Hearing on Motion to Consolidate scheduled for 01/25/2023 is continued to 03/28/2023…The Court hereby stays the case in its entirety. until the completion of the hearing set for March 28, 2023, related to case 22STCV18736.”

Tamim now moves for an order requiring Defendants “to pay monthly rental expenses in the amount of $7,896.15 to the Court as the rental expenses becomes due and payable or into an escrow designated by the Court for so long as the Defendants remains in possession pending the termination of the action.” Tamim further moves “for an order requiring Defendants to deposit an additional sum representing the amount of rental expenses due under the lease from November 14, 2022 (the date 20 days after [Tamim] first filed its request to set case for trial) through the hearing date of this motion.” Defendants oppose.

The Court denies Tamim’s request for judicial notice filed with the reply. The Court notes that “[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.” (Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537.)

Tamim notes that pursuant to Code of Civil Procedure section 1170.5, subdivision (a), “[i]f the defendant appears pursuant to Section 1170, trial of the proceeding shall be held not later than the 20th day following the date that the request to set the time of the trial is made. Judgment shall be entered thereon and, if the plaintiff prevails, a writ of execution shall be issued immediately by the court upon the request of the plaintiff.” On October 25, 2022, Tamim filed a Request to Set Case for Trial – Unlawful Detainer.

“If trial is not held within the time specified in this section, the court, upon finding that there is a reasonable probability that the plaintiff will prevail in the action, shall determine the amount of damages, if any, to be suffered by the plaintiff by reason of the extension, and shall issue an order requiring the defendant to pay that amount into court as the rent would have otherwise become due and payable or into an escrow designated by the court for so long as the defendant remains in possession pending the termination of the action.

The determination of the amount of the payment shall be based on the plaintiff’s verified statement of the contract rent for rental payment, any verified objection thereto filed by the defendant, and the oral or demonstrative evidence presented at the hearing. The court’s determination of the amount of damages shall include consideration of any evidence, presented by the parties, embracing the issue of diminution of value or any set off permitted by law.”

A trial date has not yet been set in this action. As set forth above, Tamim seeks an order requiring Defendants to “pay monthly rental expenses in the amount of $7,896.15 to the Court as the rental expenses becomes due and payable or into an escrow designated by the Court for so long as the Defendants remains in possession pending the termination of the action.” (Mot. at p. 2:1-3.) Tamim also seeks an order requiring Defendants “to deposit an additional sum representing the amount of rental expenses due under the lease from November 14, 2022 (the date 20 days after Plaintiff first filed its request to set case for trial) through the hearing date of this motion.” (Mot. at p. 2:4-6.)

Tamim provides the Declaration of Samuel Ohana, a manager/member of Tamim, in connection with the instant motion. (Ohana Decl., ¶ 1.) Mr. Ohana states that Tamim owns the commercial real property located at the Premises. (Ohana Decl., ¶ 2.) At the time Tamim purchased the property, it inherited Defendants as tenants at the property under a written lease agreement (“Lease”) with Tamim’s predecessor in interest. (Ohana Decl., ¶ 2, Ex. 1.)

Mr. Ohana states that “[t]he Lease expired on June 30, 2022 at which time Defendants became holdover tenants. As Defendants became holdover tenants, the monthly base rent increased by 150% as per the Lease (Lease paragraph 26) and, accordingly, increased from $4,500.00 to $6,750.00 effective July 1, 2022. In addition to the monthly base rent, the Lease requires payment of property taxes (Lease paragraph 10.2).” (Ohana Decl., ¶ 3.)

Mr. Ohana states that “[o]n or about September 2, 2022, Defendants were served with a three day notice to pay rent or quit in which the $21,480.75 was demanded inclusive of base rent due from July 1, 2022 through September 30, 2022 and prorated property taxes for the period of May 1, 2022 through September 30, 2022. Defendants failed to pay the demand, or any amount for the matter, and instant action was filed. Moreover, Defendants have not tendered any rent since the filing of this action.” (Ohana Decl., ¶ 4.) Mr. Ohana indicates that “[t]otal monthly rental expenses amount to $7,896.15. Divided by 30 days, the daily rental rate totals $263.21.” (Ohana Decl., ¶ 5.)

In the opposition, Defendants assert that “Plaintiff lacks standing to bring the motion at bar as Samuel Ohana is judicially estopped from asserting property rights on behalf of Tamim LLC.” (Opp’n at p. 3:1-3.) But Tamim is the moving party bringing the instant motion, not Ohana.

Defendants also assert that in a demurrer filed in the related Chorny Action, Tamim indicated that “Ohana did not purchase the property and is not the owner of the property. The property was purchased by Tamim, LLC.” (See Opp’n at p. 3:15-17.)[1] Defendants assert that “the court should deem Ohana’s admission of not being a part of Tamim, LLC as true and dismiss this Motion as based on Declaration of a person who cannot represent Plaintiff Tamim, LLC.” (Opp’n at p. 4:15-18.) But Defendants do not provide any evidence that Ohana admitted he was not a part of Tamim. Rather, Defendants indicate that Tamim stated in a demurrer that Ohana is not the owner of the subject Premises. In the instant motion, Ohana does not assert that he owns the Premises. Rather, he states that he is a “manager/member of Plaintiff Tamim, LLC,” and that Tamim owns the Premises. (Ohana Decl., ¶¶ 1-2.)

Next, Defendants assert that Tamim “did not comply with statutory requirements of an unlawful detainer proceeding, thus is unlikely will [sic] prevail in the action.” (Opp’n at p. 4:23-25.) Defendants assert that Tamim “did not provide Defendants with a valid notice of termination, increase in lease and change in lease terms.” (Opp’n at p. 5:6-8.) Defendants appear to cite to Civil Code section 827, subdivision (b)(3)(A)[2], which provides that “[i]f the proposed rent increase for that tenant is greater than 10 percent of the rental amount charged to that tenant at any time during the 12 months before the effective date of the increase, either in and of itself or when combined with any other rent increases for the 12 months before the effective date of the increase, the notice shall be delivered at least 90 days before the effective date of the increase, and subject to Section 1013 of the Code of Civil Procedure if served by mail.”

Defendants assert that “[o]n September 9, 2022, Plaintiff served Defendants with the Three-Day Notice, asserting $21,480.75 in retroactive charges for the months the defendants had already paid the rent. The Notice indicated fifty percent increase in rent, without a prior notice to the defendants.” (Opp’n at p. 5:16-19.)

Tamim counters that Defendants’ contention that Tamim imposed a rental increase for which it was required to provide statutory notice is wrong. As set forth above, Tamim alleges in the Complaint that Defendants became holdover tenants as of July 1, 2022. (Compl., ¶ 6(d).) Tamim notes that here, the parties’ lease contains the following provision:

“26. No Right To Holdover. Lessee has no right to retain possession of the Premises or

any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.” (Ohana Decl., ¶ 2, Ex. 1, § 26.)

Tamim asserts that accordingly, when Defendants became holdover tenants under the lease, the base rent was adjusted in accordance with the lease.

Next, Defendants assert that “even if Ohana’s contention that one hundred fifty percent increase had happened after the defendants became holdover tenants (which is not true), the increase is unenforceable penalty and thus unlawful. As such, Plaintiff will unlikely prevail in the unlawful detainer action and the court shall not make an order requiring deposit of rent with the court.” (Opp’n at p. 6:13-18.) Defendants cite to Harbor Island Holdings v. Kim (2003) 107 Cal.App.4th 790, 793, where “[a] landlord, displeased with its tenant, reluctantly agreed to a lease extension requiring greatly increased rental payments. The landlord demanded one price if the tenant complied with the lease agreement in every regard and double that amount in the event of any breach. After the conclusion of the extended lease term, the landlord sued the tenant, seeking both damages occasioned by the tenant’s failure to properly maintain the premises, plus nearly a quarter of a million dollars for the doubled rent. The trial court awarded damages for the failure to maintain the property, but held the lease provision for the doubled rent was unenforceable as a penalty.” The landlord appealed, and the Court of Appeal “agree[d] with the trial court’s reasoning and affirm[d].” (Ibid.)

The Court of Appeal noted that “[t]he validity of the deferred rent provision is determined under Civil Code section 1671. Subdivision (b) thereof provides: [A] provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made.” (Harbor Island Holdings v. Kim, supra, 107 Cal.App.4th at pp. 795-796 [internal quotations omitted].) “A liquidated damages clause will generally be considered unreasonable, and hence unenforceable under [Section 1671(b)], if it bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach. The amount set as liquidated damages must represent the result of a reasonable endeavor by the parties to estimate a fair average compensation for any loss that may be sustained. In the absence of such relationship, a contractual clause purporting to predetermine damages must be construed as a penalty.” (Id. at p. 796 [internal quotations and citations omitted].) The Harbor Island Holdings Court found that “[h]ere, the lack of a proportional relationship between the $ 240,912 amount sought and the actual damages Harbor Island suffered on account of the breach of the covenant to maintain and repair could not be more obvious.” (Id. at p. 797.)

Tamim counters that it was well within its rights to impose holdover rent. Tamim cites to Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22, 25, where a “commercial lease set the rent to increase if the tenant stayed past a certain date. That date came and went. The commercial tenant stayed put. Yet it would not pay rent at the increased rate.” The Court of Appeal found that “[t]he trial court improperly refused to enforce the rent increase. We reverse this ruling. We also direct the trial court both to amend the judgment to include a sanctions award and to rule on two arguments concerning estoppel and agency.” The Constellation-F, LLC Court noted as follows:

Defendants also refer to “Subdivision (c) of section 1942.5.” (Opp’n at p. 6:21.) Civil Code section 1942.5, subdivision (c) provides that “[t]o report, or to threaten to report, the lessee or individuals known to the landlord to be associated with the lessee to immigration authorities is a form of retaliatory conduct prohibited under subdivision (a). This subdivision shall in no way limit the definition of retaliatory conduct prohibited under this section.” As Tamim notes, this provision is inapplicable here.

Defendants may appear to be referring to Civil Code section 1942.5, subdivision (d), which provides that “[n]otwithstanding subdivision (a), it is unlawful for a lessor to increase rent, decrease services, cause a lessee to quit involuntarily, bring an action to recover possession, or threaten to do any of those acts, for the purpose of retaliating against the lessee because the lessee has lawfully organized or participated in a lessees’ association or an organization advocating lessees’ rights or has lawfully and peaceably exercised any rights under the law. In an action brought by or against the lessee pursuant to this subdivision, the lessee shall bear the burden of producing evidence that the lessor’s conduct was, in fact, retaliatory.”

Defendants state that “[o]n June 8 of 2021, Defendant filed the action against Tamim, LLC and Samuel Ohana in this court, alleging intra alia a fraudulent misrepresentation of Samuel Ohana and intentional interference of Tamim, LLC in prospective business opportunity. Following that, Defendants’ received the Three-day notice with an egregious increase in rent.” (Opp’n at p. 7:8-13.) Defendants appear to refer to the related Chorny Action, which was filed on June 8, 2022. The Complaint in the instant action alleges that approximately three months later, on September 2, 2022, Defendants were served with a 3-day notice to pay rent or quit. (Compl., ¶¶ 9-10.)

Tamim counters that “the claim that the rental increase was retaliatory is of no moment because, as described above, there was no rental increase for which statutory notice was required. Plaintiff simply seeks to enforce a preexisting obligation that was jointly negotiated by Plaintiff’s predecessor in interest and Defendants.” (Reply at p. 5:4-7.)

Next, Defendants assert that the “[t]he instant Motion does not consists [sic] of a Plaintiff’s verified statement of the contract rent, required by Cal Code Civ Proc §1170.5. The Declaration of Samuel Ohana, verifying the amount, which may be construed as a statement of rent, nevertheless contradicts Plaintiff’s prior judicial admission that Mr. Ohana is not a part of Tamim, LLC and therefore cannot represent the plaintiff. Moreover, Plaintiff requests the amount of rent of which the parties have never had the agreement about.” (Opp’n at p. 8:1-8.)

But as set forth above, Mr. Ohana states that “[t]otal monthly rental expenses amount to $7,896.15. Divided by 30 days, the daily rental rate totals $263.21.” (Ohana Decl., ¶ 5.) Moreover, Tamim provides evidence of the subject lease. (Ohana Decl., ¶ 2, Ex. 1.) In addition, as discussed, Plaintiff does not provide evidence indicating that Mr. Ohana stated that he “is not a part of Tamim, LLC.”

Based on the foregoing, the Court finds that Tamim has demonstrated a reasonable probability of prevailing in the instant action.

Based on the foregoing, Tamim’s motion is denied. Tamim is ordered to give notice of this ruling.

[1]The Court notes that Defendants did not request that the Court take judicial notice of such demurrer or provide a copy of the demurrer in connection with the opposition.

[2]Defendants’ opposition references “Civil Code 827(a)(3)(A).” (Opp’n at p. 5:8, emphasis added.)

TAMIM, LLC, Plaintiff, vs. EUGENE CHORNY, et al., Defendants.	Case No.:	22VECV01348 [r/w 22STCV18736]
	Hearing Date:	March 28, 2023
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: MOTION FOR ORDER REQUIRING DEPOSIT OF RENT AS A CONDITION OF CONTINUED STAY OF UNLAWFUL DETAINER ACTION

Superior Court of California

County of Los Angeles

Department 50