Judge Yolanda Orozco, Case 19STCV04161 2023-02-09 Tentative Ruling

Judge: Yolanda Orozco, Case: 19STCV04161, Date: 2023-02-09 Tentative Ruling

Counsel may submit on the tentative ruling by emailing Dept. 31 before 8:30 the morning of the hearing. The email address is smcdept31@lacourt.org. Please do not call the court to submit on the tentative. Please do not submit to the tentative ruling on behalf of the opposing party. Please do not e-mail the Court if you plan to appear and argue.

In deciding whether to submit on the tentative ruling or attend the hearing and present oral argument, please keep the following in mind:

The tentative rulings authored by this court reflect that the court has read and considered all pleadings and evidence timely submitted to the court in connection with the motion, opposition, and reply (if any). Because the pleadings were filed, they are part of the public record.

Oral argument is not an opportunity to simply regurgitate that which a party set forth in its pleadings. Nor, is oral argument an opportunity to "make a record" when there is no court reporter present and the statements and arguments of counsel are already part of the record because they were set forth in the pleadings. Finally, simply because a party or attorney disagrees with the court's analysis and ruling or is not satisfied with it does not necessarily warrant oral argument when no new arguments will be articulated.

If you submit on the tentative, you must immediately notify all other parties email that you will not appear at the hearing. If you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the motions. If all parties to the motion submit, this tentative ruling will become the final ruling after the hearing date and it will be memorialized in a minute order. This tentative ruling is not an invitation, nor an opportunity, to file further documents relative to the hearing in question. No such document will be considered by the Court.

**Tentative rulings on Motions for Summary Judgment will only be available for review in the courtroom on the day of the hearing.

Case Number: 19STCV04161 Hearing Date: February 9, 2023 Dept: 31

DEFENDANTS’ MOTION FOR SEPARATE TRIAL/BIFURCATION

& PLAINTIFFS’ MOTION FOR TERMINATING SANCTIONS

TENTATIVE RULING

I. Defendants’ Motion for Separate Trial/Bifurcation is DENIED.

II. The Court GRANTS Plaintiffs’ request for evidentiary sanctions establishing: (1) Plaintiffs put Defendant Las Aguilas Properties, LLC on notice of the uninhabitable conditions and (2) Defendant Las Aguila’s Properties, LLC failed to timely make repairs.

The Court also GRANTS Plaintiffs’ request for monetary sanctions in the amount of $7,500.00 against Defendant Las Aguilas Properties, LLC, and its counsel of record.

Background

This action arises from the rental of a residential apartment unit located at 3318 Drew Street, Unit 106, in Los Angeles, California (“Subject Premises”).

On February 4, 2019, DeAndre Vaughns, Danielle Watkins, DeAndre Vaughns, Jr., and DreDann Vaughns (collectively, “Plaintiffs”) initiated the present action by filing a Complaint against Las Aguilas Properties, LLC and Does 1 through 50. Plaintiffs’ Complaint alleges the following causes of action: (1) Breach of Implied Warranty of Habitability; (2) Breach of Statutory Warranty of Habitability; (3) Breach of the Covenant of Quiet Enjoyment; (4) Negligence; (5) Violation of Civil Code Section 1942.4; and (6) Private Nuisance.

On April 30, 2020, Plaintiffs amended the Complaint, adding Management and Leasing Services, Juan Vargas, Elvira Vargas, and Irma Verduzco as Does 1, 2, 3, and 4, respectively.

On February 5, 2021, Plaintiffs filed a Motion for Sanctions against Defendant Las Aguilas Properties, LLC (“Las Aguilas”), alleging Defendant engaged in the spoliation of documentary evidence.

On July 15, 2021, pursuant to Plaintiffs’ Request for Dismissal, Plaintiffs dismissed Juan Vargas and Elvira Vargas from the action, without prejudice.

On July 16, 2021, Plaintiffs’ Motion for Sanctions came before the Court for hearing. The Court awarded monetary sanctions, in the amount of $6,000, against Defendant Las Aguilas Properties, LLC for Defendant’s failure to preserve relevant evidentiary documents.

On January 11, 2022, the Plaintiffs filed a Motion for Terminating Sanctions. On December 20, 2022, Defendants filed opposing papers. Plaintiffs filed a reply on December 28, 2022.

The hearing was continued to allow the parties additional time to respond. (See Min Or. 01/04/23.)

On January 09, 2023, Defendants filed a Motion to Bifurcate. Plaintiff filed opposing papers on January 27, 2023. Defendants filed a reply on February 01, 2023.

Both motions are now before the Court.

Legal Standard

I. Motion to For Separate Trial/Bifurcation

“The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any cause of action . . . or of any separate issue . . . .”¿ (Code Civ. Proc., § 1048,¿subd. (b).)¿ Additionally, “[t]he court may, when the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby, on motion of a party, after notice and hearing, make an order . . . that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case . . . .”¿ (Code Civ. Proc., § 598.)¿¿

“It is within the discretion of the court to bifurcate issues or order separate trials of actions, such as for breach of contract and bad faith, and to determine the order in which those issues are to be decided.”¿ (Royal Surplus Lines Ins. Co., Inc. v. Ranger Ins. Co.¿(2002) 100 Cal.App.4th 193, 205.)¿ “The major objective of bifurcated trials is to expedite and simplify the presentation of evidence.”¿ (Foreman & Clark Corp. v. Fallon¿(1971) 3 Cal.3d 875, 888.)¿

II. Motion for Terminating Sanctions

“The trial court may order a terminating sanction for discovery abuse ‘after considering the totality of the circumstances: [the] conduct of the party to determine if the actions were willful; the detriment to the propounding party; and the number of formal and informal attempts to obtain the discovery.’” (Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 390.) “Generally, ‘[a] decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction.’” (Id. at 390.)

“The court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney's fees, incurred by anyone as a result of that conduct. The court may also impose this sanction on one unsuccessfully asserting that another has engaged in the misuse of the discovery process, or on any attorney who advised that assertion, or on both.” (Code Civ. Proc., § 2023.030(a).)

Discussion

I. Motion for Separate Trial/Bifurcation

Defendants Las Aguilas Properties LLC, Irma Verduzco, Power Property Management Inc., and Management & Leasing Services, Inc. request a separate trial on whether the Unlawful Detainer Stipulation and Judgment filed on November 16, 2018, in the underlying Los Angeles Superior Court case captioned Elvira Vargas, Trustee of the Vargas Family Revocable Living Trust v. Deandre Vaughns (Case No. 18STUD10445) resulted in Plaintiffs waiving their right to sue for damages based on habitability. Plaintiffs oppose the Motion to Bifurcate and argue that the Stipulation and Judgment did not bar the Plaintiffs’ right to sue for breach of the warranty of habitability and damages.

The November 16, 2018 Stipulation and Judgment states “Plaintiff (in that action - Elvira Vargas) is also granted Judgment as to all unnamed tenants.” The Stipulation and Judgment further states:

“Plaintiff and defendant(s) further stipulate as follows:

Plaintiff agrees to waive any and all rent, holdover, costs, fees, damages, and any monies due or owing through the vacate date, including sanctions against defense counsel (if any).”

The Stipulation and Judgment also specifies the terms of the $15,000.00 payment to Defendant Deandre Vaughns and the return of the keys and premises to Plaintiff. The section that appears to be titled “WAIVER OF RIGHTS” is crossed out/scribbled over and is illegible.

Defendants ask the Court to interpret the Stipulation and Judgment as a matter of law. “A stipulated judgment is a contract and must be construed under the rules applicable to any other contract. Where, as here, there is no competent parol evidence as to the meaning of an agreement, construction of the contract is a question of law, subject to our independent review.” (Jamieson v. City Council of the City of Carpinteria (2012) 204 Cal.App.4th 755, 761. [internal citations omitted]) “Terms and conditions not found in the wording of the agreement cannot be added by the court.” (Id.)

In Needelman v. DeWolf Realty Co., Inc. (2015), the Court of Appeal found that the tenant had waived any claims arising from the unlawful detainer action based on res judicata, including claims for breach of contract and wrongful eviction when he signed the stipulation and judgment in the unlawful detainer action. Needelman v. DeWolf Realty Co., Inc. (2015) 239 Cal.App.4th 750, 760 [“Needelman appeared in the unlawful detainer action and chose to sign the stipulated agreement, which specifically waived any claims related to his personal property left at the residence, as well as all his defenses to the unlawful detainer action.”)

In interpreting the stipulated judgment in Needelman, the Court of Appeal found that the “stipulated judgment unambiguously provided that Needelman waived any claims for wrongful eviction “‘or any action in any way arising out of or concerned with his tenancy....’” (Needelman, supra, 239 Cal.App.4th at 758.) Specifically, the stipulated judgment provided that “Needelman ‘waives any claims he may have, which [the lessors] assert do not exist, to bring an attempted wrongful eviction against [the lessors] or any action in any way arising out of or concerned with his tenancy....’” (Id. at 754.)

Here, Defendants fail to point to any specific language in the Stipulation and Judgment that expressly states that Plaintiffs waive their right to sue for damages based on breach of the warranty of habitability. More importantly, Defendants fail to cite any language in the Stipulation and Judgment that makes it clear the parties “crafted a sufficiently broad release that bars the habitability lawsuit.” (Mot. at 5:18-19.)

“In construing a contract, we must give effect to the parties' intentions. For purposes of ascertaining the parties' intent, the court must first look to the language of the contract itself. If the language is clear and explicit, and does not involve an absurdity, it controls interpretation.” (Jamieson, supra, 204 Cal.App.4th at 761.) Here, the Court finds no language that clearly and explicitly waives the Plaintiffs’ right to sue for damages for breach of the warranty of habitability.

Where no language of explicit waiver exists, courts have found there is no waiver. In Pelletier v. Alameda Yacht Harbor (1986), the court found that even though “the unlawful detainer action was resolved by stipulated judgment” it “made no mention of a relinquishment by the Pelletiers of claims arising from a retaliatory eviction. The retaliation defense was not fully and fairly litigated in an adversary hearing, and thus was not conclusively established.” (Pelletier v. Alameda Yacht Harbor (1986) 188 Cal.App.3d 1551, 1557.) Accordingly, the trial court erred in granting summary judgment on the retaliatory eviction claim because the plaintiffs were not estopped from pursuing their retaliatory eviction claim. (Id. [“The court erred in dismissing the cause of action for retaliatory eviction.”].)

Similarly, in Landeros v. Pankey (1995), the court found that because the stipulated judgment in the unlawful detainer action “contains no language of comprehensive settlement of all matters between the parties arising from the lease,” the tenants were not barred from bringing an action for breach of warranty of habitability. (Landeros v. Pankey (1995) 39 Cal.App.4th 1167, 1171.)

“[T]he stipulated judgment contains no language of comprehensive settlement, no releases of all claims, no waivers under Civil Code section 1542 typically found in settlement documents. Under the law of collateral estoppel, we are compelled to conclude that the prior judgment, arrived at by stipulation with no issues actually litigated, does not preclude the present action, because the face of the judgment does not show the parties so intended.”

(Id. at 1174.)

Similarly, the Court finds no language in the November 16, 2018 Stipulation and Judgment that expressly waives the parties’ right to bring additional claims related to or arising from their tenancy and the unlawful detainer action. Judgment based on a stipulation of the parties is binding only as to the matter consented to by the stipulation and is confined only to the issues within the stipulation and does not cover matters not in the stipulation. (Rappenecker v. Sea-Land Service, Inc. (1979) 93 Cal.App.3d 256, 263.)

For the stated reasons, the Court finds that the Unlawful Detainer Stipulation and Judgment filed on November 16, 2018, in the underlying Los Angeles Superior Court case captioned Elvira Vargas, Trustee of the Vargas Family Revocable Living Trust v. Deandre Vaughn (Case No. 18STUD10445) does not bar the Plaintiffs’ right to sue for damages based on breach of the warranty of habitability.

Accordingly, Defendants’ Motion for Separate Trial/Bifurcation is DENIED.

II. Motion for Terminating Sanctions

Plaintiffs move for terminating sanctions against Defendant Las Aguilas Properties LLC for intentionally engaging in the spoliation of evidence regarding monthly management repair records of the subject premises, which includes the time period relevant to Plaintiffs’ claim for violation of Civil Code section 1942.4.

Plaintiff asserts that on June 13, 2019, when Defendant received Plaintiffs’ original Request for Production of Documents, Defendant was in possession of the repair records. Defendant agreed to produce the records on August 22, 2019. Between August 22, 2019 and November 27, 2019, Defendant did not produce the “monthly management records” and instead gave them away to either their realtor, escrow agent, or subsequent purchaser of the property.

Defendant asserts that all documents in its possession have been turned over to Plaintiffs. Defendant asserts that Defendant Irma Verduzco did not purposefully or knowingly destroy the “monthly management records” but instead gave them away to the realtor or the new owner.

The July 16, 2022 Hearing

On July 16, 2022, the Court awarded Plaintiffs’ request for monetary sanctions in the amount of $6,000.00 against Defendant Las Aguilas Properties, LLC (“Las Aguilas”). (Min. Or. 07/16/22.) The Court found that because Defendant Las Aguilas had incorrectly determined some records to not be relevant and since Defendant Las Aguilas had agreed to provide the documents, monetary sanctions were appropriate. (Id.)

“Defendant’s contention that it did not need to produce ‘monthly management records’ is also wrong. Defendant’s property manager specifically identified that the Records consisted of repair records, contracts, estimates, and invoices, which are responsive to the Requests, and Defendant knew or should have known that such documents might have some relevance to this litigation.”

(Min. Or. 07/16/22.)

Although Plaintiffs accused Defendant Las Aguilas of spoliation of evidence, the Court declined to issue evidentiary sanctions at the time:

“However, at this time it is premature for the Court to determine whether Defendant spoliated the Records and whether terminating sanctions are appropriate. While Plaintiffs contend that Defendant spoliated the Records, they have failed to try and obtain the Records by issuing subpoenas to MLS or Power Management . . . While Defendant improperly determined that those documents were not relevant, and has failed to retrieve his documents, Plaintiffs have failed to exhaust all reasonable avenues to determine if MLS or Power management are in possession of the records they seek, or by seeking a motion to compel against Defendant. A motion for terminating sanctions may be appropriate if the documents cannot be obtained from any source.”

(Min. Or. 07/16/22.)

Present Motion for Terminating Sanctions

Plaintiff now moves for monetary sanctions in the amount of $12,000.00 and evidentiary sanctions against Defendant Las Aguilas and its counsel of record on the basis that terminating sanctions are appropriate due to Defendant’s failure to preserve evidence.

Plaintiffs assert that they have exhausted “all reasonable avenues to determine if MLS or Power Management are in possession of the records they seek” and have been unable to obtain the evidence from any source. Since the July 16, 2022 ruling:

· Plaintiff added MLS as a Defendant and served it with written discovery and deposed its person most knowledgeable (PMK);

· Plaintiff served a records subpoena to Power Management;

· Plaintiffs deposed and requested records from Elvira Vargas, who was the principal member of Las Aguilas Properties, LLC; and

· Filed Motions to Compel, which was set to be heard on April 22, 2022.

(Christensen Decl. ¶ 46.)

Plaintiff asserts that MLS’s PMK, Kinga Lovasz, did not know about any repairs on the subject premises, but did assert that “monthly management records” contained invoices for code repairs that were sent the Defendant Las Aguilas. (Christensen ¶¶ 45-50, Ex. O.) The check registers produced by MLS referenced “invoices” for “repairs and maintenance” and “labor”, but Ms. Lovasz could not determine by looking at the check registers whether any of the invoices referenced therein pertained to repairing the code violations in the two Notices and Orders to Comply sent by the Los Angeles Housing and Community Investment Department (“LAHCID”). (Id. ¶ 51, Ex. E - G, O.) The invoices referenced in the check registers were sent to both Defendant Las Aguilas and Power management. (Id. Ex. O.)

Neither MLS nor Power Management has produced the invoices or other repair records from the time MLS or Power Management were the property managers (November 2015 to August 2016) including the time Defendant Las Aguilas was in violation of Civil Code section 1942.4. (Christensen ¶ 54, 56, and 57.) The vendor invoices are the best, most reliable source to determine when the code violations were corrected. (Id. ¶ 50.) Despite repeated requests from Plaintiffs to Defendant Las Aguilas, Defendant Las Aguilas has not sought the records from its relator or escrow agent, nor provided their names to Plaintiff. (Id. ¶ 60.)

On February 4, 2021, LAHCID Inspector Richard Bohorquez noted that all violations found on October 21, 2015, had been corrected. (Christensen Decl. ¶ 16, Ex. K, F.)

Although there is evidence that the violations were corrected, Plaintiffs allege that Defendant Las Aguilas engaged in the spoliation of evidence. Plaintiffs assert that on August 22, 2019, Defendant served evasive responses that stated it would produce 31 categories of records that “either directly or by necessary implication covered all or part of the contents” of the “monthly management records.” (Mot. at 14:21-22.) Between August 22, 2019, and November 21, 2019, Defendant Las Aguilas gave to the realtor or unidentified escrow company the “monthly management records” it received from its third-party property managers MLS and Power Management. Prior to giving away the records, Defendant screened the documents and determined some of the “monthly management records” were irrelevant. Then on November 27, 2019, without notifying the Plaintiffs, the records were given away and Defendant produced 16 pages of cherry-picked documents of little relevance. (Christensen Decl. ¶ 21-28.)

It is undisputed that at the time Defendant Las Aguilas received Plaintiffs’ discovery request, it was in possession of the “monthly management records” but five months later, an agent for Defendant screened the records and except for 16 pages, gave the documents away and never tried to request that the documents be returned. (Christensen Decl. ¶ 21-28.)

Defendant Irma Verduzco is a member of Las Aguilas Properties, LLC and the on-site managers reported to her. (Christensen Decl. Ex. D [Verduzco Depo. 13:9-11; 15:23-35].) Defendant Irma Verduzco asserts that she found the monthly management records from MLS and Power Management and they were not turned over to either Plaintiff or Defense counsel because she deemed them to be irrelevant. (Id. [Verduzco Depo. 36:1-25.) After the July 06, 2021 hearing, Defendant asserts that it served at least seven subpoenas of business records on third parties who may have possession of the documents. Responsive documents were turned over to Plaintiffs’ counsel. However, Defendant fails to demonstrate that the relevant monthly repair records were recovered and produced.

The Court finds that Defendant’s failure to produce the monthly repair records is egregious conduct that warrants sanctions. “[I]f it is sufficiently egregious, misconduct committed in connection with the failure to produce evidence in discovery may justify the imposition of nonmonetary sanctions even absent a prior order compelling discovery, or its equivalent.” (New Albertsons, Inc. v. Superior Court¿(2008) 168 Cal.App.4th 1403, 1426.)

The onus to prove that repairs on the subject premises were promptly made is on Defendant. The Court fails to see why Plaintiffs, rather than Defendants, are in a better position to obtain records of the repairs made to the subject premises.

For this reason, sanctions are appropriate against Defendant Las Aguilas.

Violations of Section 1942.4

This Court denied Plaintiffs’ Motion for Summary Adjudication as to violations of Civil Code section 1942.4 because the Court found that a one-year statute of limitations applied and the last date Defendant demanded rent from the Plaintiffs was in February 2016, but his action was not filed until February 04, 2019. (Min. Or. 09/09/22.) The Court did not reach the issue of whether the discovery rule applied to violations of section 1942.4. (See Id.) For this reason, the Court is not inclined to impose evidentiary sanctions that establish Defendant’s liability under Civil Code section 1942.4.

However, the Court does agree that other evidentiary sanctions are warranted due to Defendant’s failure to preserve evidence.

Defendant’s Affirmative Defense

Defendant has alleged various affirmative defenses including that the Plaintiffs are comparatively at fault for their own injuries (sixth affirmative defense), that the Plaintiffs failed to mitigate (fourth affirmative defense), and that the Plaintiffs “failed to give proper notice to defendant of the claimed breach” and “deprived defendant of the opportunity to timely correct the breach” (fourteenth affirmative defense). (Christensen Decl. ¶ 29, Ex. I.) Other affirmative defenses include that Defendant performed any and all contractual, statutory, and other duties owed under applicable law (eighteenth affirmative defense); Defendant is not liable due to “intervening and superseding acts of negligence” of third parties (nineteenth affirmative defense); that any issue affecting habitability were promptly remedied (twentieth affirmative defense); and that any issues affecting habitability were excused or rendered impossible to perform by Plaintiffs or other entities (twenty-first affirmative defense). (Id.)

Since Defendants have failed to provide evidence that the repairs were timely completed, the Court finds it appropriate to impose the following evidentiary sanctions establishing that (1) Plaintiffs put Defendant Las Aquilas on notice of the uninhabitable conditions and (2) Defendant Las Aguilas failed to make timely repairs.

The Court declines to impose the evidentiary sanction that the Plaintiffs were not comparatively at fault since the evidence at issue does not relate to this contention. “Discovery sanctions are intended to remedy discovery abuse, not to punish the offending party. Accordingly, sanctions should be tailored to serve that remedial purpose . . . and should be proportionate to the offending party's misconduct. (Williams v. Russ (2008) 167 Cal.App.4th 1215, 1223.)

Accordingly, the Court GRANTS Plaintiffs’ request for evidentiary sanctions establishing: (1) Plaintiffs put Defendant Las Aguilas Properties, LLC on notice of the uninhabitable conditions and (2) Defendant Las Aguila’s Properties, LLC failed to make timely repairs.

Monetary Sanctions

In addition, the Plaintiffs request $12,000.00 in attorney’s fees and costs. (Christensen Decl. ¶ 61.) Plaintiffs’ counsel’s hourly rate is $750.00 per hour. (Id.) Plaintiffs’ counsel spent five hours preparing for and taking the deposition of Kinga Lovsaz and Elvira Vargas. (Id.) One hour was spent reviewing the additional documents produced by Power Property Management and six hours preparing this Motion and the Separate Statement. (Id.) Counsel anticipates spending four hours reviewing any opposition, preparing a reply, and appearing at the hearing for this motion. (Id.)

The Court agrees that monetary sanctions must be awarded, however, Plaintiffs’ request is excessive and therefore unreasonable. The Court awards monetary sanctions in the amount of $7,500.00 against Defendant Las Aguilas Properties, LLC, and its counsel of record.

Conclusion

I. Defendants’ Motion for Separate Trial/Bifurcation is DENIED.

The Court also GRANTS Plaintiffs’ request for monetary sanctions in the amount of $7,500.00 against Defendant Las Aguilas Properties, LLC, and its counsel of record.

Moving party to give notice