Case Name: Christopher Bonhage et al v. Hiral Hansapriya Rawson
Case No.: 2014-1-CV-271558

Factual and Procedural Background

This case brought by plaintiffs Christopher Bonhage (“Bonhage”) and Brittany Collins (“Collins”) (collectively, “Plaintiffs”) against Hiral Hansapriya Rawson (“Rawson”), an individual and trustee of The Hiral Hansapriya Rawson Living Trust, U/A Dated November 1, 2010, Murahari Amarnath (“Amarnath”), Eunice Foster (“Foster”), Stanford Real Estate Networks, LLC dba Amar Realtor, and Silicon Valley Real Estate Corporation, dba Keller Williams Palo Alto, (collectively, “Defendants”) arises from Plaintiffs’ attempt to rent an apartment from Rawson.

According to the fourth amended complaint (“4AC”), Rawson is the owner of a single-family home located at 3050 Manda Drive in San Jose (“Property”). Plaintiffs along with prospective housemates, Jessica McCargar (“McCargar”) and Arielle Aspacio, desired to rent the Property which was posted for rent on Craigslist.com as becoming available for rent on September 15, 2014. Bonhage and McCargar each submitted a rental application, credit report, and paystub to Foster, an assistant to Rawson’s broker, Amarnath. Plaintiffs are an unmarried couple and Bonhage’s application identified Collins as his domestic partner.

After Bonhage submitted his application, Collins noticed the Property had been re-listed on Craigslist.com and inquired of Foster and Rawson why they had posted a new listing. Rawson told Bonhage that he and his prospective housemates were the strongest candidates, but that she would continue looking for more applicants. Rawson explicitly told Bonhage that she preferred to rent the Property to a family. Bonhage and McCargar’s applications were the only applications she received. Rawson further admitted that Plaintiffs were financially stable, but she was unable to make a decision at this time.

Subsequently, Plaintiffs sent Rawson a letter through their attorney, which asserted discrimination. Rawson’s attorney replied with a proposed lease. At about this time McCargar stated she had decided not to rent the Property. Plaintiffs refused to consider the proposed lease because of disagreement with its terms and because it did not compensate them for the rent that would have been paid by their prospective housemates had Rawson initially rented to Plaintiffs.

In September 2017, Plaintiffs filed the operative 4AC, alleging the following causes of action against Rawson: (1) invasion of privacy under the California Constitution, article I, section 1; (2) Fair Employment and Housing Act (FEHA) housing discrimination under Government Code section 12955, subdivision (a); (3) interference with fair housing rights under Government Code section 12995.7; (4) retaliation under under Government Code section 12955, subdivision (f); (5) making discriminatory statements under Government Code section 12955, subdivision (c); (6) discrimination by a person whose business involves real estate transactions under Government Code section 12955, subdivision (i); (7) aiding and abetting discrimination under Government Code section 12955, subdivision (g); (8) Unruh Act housing discrimination under Civil Code section 51; (9) unlawful business practices under Business and Professions Code section 17200; (10) negligence; and (11) vicarious liability.

Currently before the Court is Rawson’s demurrer to the first and tenth causes of action. Plaintiffs filed an opposition, and Rawson filed a reply.

Discussion

I. Meet and Confer

As a preliminary matter, Rawson did not file a meet and confer declaration. Prior to filing a demurrer, the moving party must meet and confer with the party who filed the challenged pleading to determine whether an agreement can be reached that would resolve the objections to the pleading. (Code Civ. Proc., § 430.41.) If an agreement cannot be reached and a demurrer is filed, the demurring party must file a declaration stating the means by which he or she met and conferred with the party who filed the pleading. (Code Civ. Proc., § 430.41, subd. (a)(3).)

Here, Rawson did not file a meet and confer declaration with her demurrer. As such, the Court cannot ascertain whether Rawson attempted to meet and confer or did not engage in any such efforts. In either case, she failed to file the required declaration. Thus, Rawson did not comply with Code of Civil Procedure section 430.41. With that said, an insufficient meet and confer process is not a basis for overruling a demurrer. (Code Civ. Proc., § 430.41, subd. (a)(4).) Accordingly, the Court will consider the merits of the motion despite this procedural defect. Rawson is admonished to comply with Code of Civil Procedure section 430.41 in the future.

II. Request for Judicial Notice

In support of her reply, Rawson asks the Court to take judicial notice of the following three facts:

1. At all relevant times, Defendant RAWSON was not the only property owner offering a three-bedroom, single family house for rent in the City of San Jose, California;

2. At all relevant times, other property owners in the City of San Jose, California, were willing to rent three-bedroom, single family homes to groups of unrelated friends, and were doing so; and

3. At all relevant times, Defendant RAWSON lacked the power to prevent Plaintiffs and their friends Jessica McCargar and Arielle Aspacio from renting some other house together from some other landlord.

(RJN, p. 2:1-8.)

Rawson argues judicial notice is proper based upon Evidence Code section 452, subdivision (f), which permits judicial notice of facts and propositions that are “so universally known that they cannot reasonably be the subject of dispute.” (Evid. Code, § 452, subd. (f).) She also seeks judicial notice under subdivisions (g) and (h) of that section, which allow a court to take judicial notice of “[f]acts and propositions that are of such common knowledge within the territorial jurisdiction of the court that they cannot reasonably be the subject of dispute” (Evid. Code, § 452, subd. (g)) and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy” (Evid. Code, § 452, subd. (h)).

Judicial notice is proper only where the facts at issue are indisputably true. (Mack v. State Bd. of Ed. (1964) 224 Cal.App.2d 370, 373.) The type of information Rawson asks the Court to take judicial notice of is not the type that have been noticed under these subdivisions. (See People v. Kutz (1960) 187 Cal.App.2d 431, 434 [taking judicial notice of a major street]; Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1145 [describing information judicially noticeable under Evidence Code, § 452, subd. (h)]; Barreiro v. State Bar (1970) 2 Cal.3d 912, 925 [“If there is any doubt whatever either as to the fact itself or as to its being a matter of common knowledge, evidence should be required”].)

Rawson seeks judicial notice of these facts to support her arguments that Plaintiffs could have lived elsewhere and she did not prevent them from doing so. Whether Plaintiffs had other housing options is beyond the scope of facts alleged in the 4AC, and there is no reason to conclude that there is no dispute between the parties as to the availability of other housing. Accordingly, the request for judicial notice is DENIED.

III. Failure to Allege Sufficient Facts to State a Claim

Rawson demurs to the first cause of action for invasion of privacy and the tenth cause of action for negligence on the ground of failure to state facts sufficient to constitute a cause of action. (See Code Civ. Proc., 430.10, subd. (e).)

A. First Cause of Action

1. General Law Regarding Invasion of Privacy

The California Constitution creates a right to privacy. (Cal. Const., art.1, § 1.) This right can be asserted against both government and private entities. (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 20 (Hill).) In the seminal case of Hill, the California Supreme Court outlined the test for assessing an invasion of privacy. (Id. at pp. 39–40.) There, the National Collegiate Athletic Association, required its student athletes to participate in a drug testing program. (Hill, supra, 7 Cal.4th at p. 12.) As part of this program, athletes providing a urine sample in the presence of a same sex monitor. (Ibid.) Student athletes challenged the drug testing program as a violation of their right to privacy. (Id. at pp. 8-9.) The court held that to bring an invasion of privacy claim under the California Constitution a plaintiff “must establish each of the following: (1) a legally protected privacy interest; (2) a reasonable expectation of privacy in the circumstances; and (3) conduct by defendant constituting a serious invasion of privacy.” (Id. at pp. 39–40.)

Legally protected privacy interests meeting the first element would be “generally of two classes: (1) interests in precluding the dissemination or misuse of sensitive and confidential information (‘informational privacy’); and (2) interests in making intimate personal decisions or conducting personal activities without observation, intrusion, or interference (‘autonomy privacy’).” (Hill, supra, 7 Cal.4th at p. 35.) Whether a piece of information or a decision is protected “is to be determined from the usual sources of positive law governing the right to privacy—common law development, constitutional development, statutory enactment, and the ballot arguments accompanying the Privacy Initiative.” (Id. at p. 36.)

Turning to the second element, circumstances, customs, and practices can create or inhibit the reasonable expectations of privacy. (Hill, supra, 7 Cal.4th at p. 35.) “A ‘reasonable’ expectation of privacy is an objective entitlement founded on broadly based and widely accepted community norms.” (Id. at p. 37.) Whether the intrusion is voluntary is also a factor to be considered. (Ibid.)

With respect to the third element, the court limited the scope of what invasions of privacy would be actionable. (Hill, supra, 7 Cal.4th at p. 37.) “Actionable invasions of privacy must be sufficiently serious in their nature, scope, and actual or potential impact to constitute an egregious breach of the social norms underlying the privacy right. Thus, the extent and gravity of the invasion is an indispensable consideration in assessing an alleged invasion of privacy.” (Ibid.)

“Whether a legally recognized privacy interest is present in a given case is a question of law to be decided by the court.” (Hill, supra, 7 Cal.4th at p. 40.) Unlike the first element, whether the second and third are met is a mixed question of law and fact, suitable for adjudication as a matter of law only where “undisputed facts show no reasonable expectation of privacy or an insubstantial impact on privacy interests….” (Id. at pp. 39-40.)

The court also stated that an invasion of privacy would not violate the constitutional right to privacy if justified by a competing interest. (Hill, supra, 7 Cal.4th at p. 37.) The existence of a sufficient countervailing interest or an alternative course of conduct present threshold questions of law for the court, but the strength of the interests and the feasibility of other options are mixed questions. (Hill, supra, 7 Cal.4th at p. 40.)

Applying the analysis summarized above, the court considered the autonomy privacy interests in freedom from observed urination. (Hill, supra, 7 Cal.4th at p. 41.) The court found all three elements were met. (Id. at p. 42.) However, the invasion was supported by competing interests and, thus, permissible. (Id. at p. 9.)

2. Existence of a Legally Protected Privacy Interest

Rawson asserts that there is no legally protected privacy interest at issue here. Rawson contends that the right to choose with whom to live is not at issue in this case. Rawson acknowledges that several cases have found an autonomy privacy right in choosing with whom one lives can be asserted against the government, but states that she is not aware of any decision where autonomy privacy “was successfully asserted against a private entity.” (Dem., p. 5:25-26.)

Rawson is correct that several cases have found violations of the right to privacy where a government created a rule limiting the ability of people not related by blood or marriage to live together. (City of Santa Barbra v. Adamson (1980) 27 Cal.3d 123 (Adamson); Coalition Advocating Legal Housing Options v. City of Santa Monica (2001) 88 Cal.App.4th 451 (CALHO).) In Adamson, twelve people unrelated by blood or marriage living together in a house, challenged a city ordinance prohibiting more than five unrelated people from living together in a single residence on the ground that it violated their right to privacy. (Adamson, supra, 27 Cal.3d at p. 130.) The question presented was “whether that right [the right to privacy] comprehends the right to live with whomever one wishes or, at least, to live in an alternate family with persons not related by blood, marriage, or adoption.” (Ibid.) The court ruled in favor of the residents and against the city. (Id. at p. 134.) Subsequent cases have cited Adamson as creating an autonomy interest in choosing who one lives with, a right which is protected by the constitutional right to privacy. (See Tom v. City and County of San Francisco (2004) 120 Cal.App.4th 674, 680 [“there is an ‘autonomy privacy’ interest in choosing the persons with whom a person will reside, and in excluding others from one’s private residence. Such was the case in City of Santa Barbra v. Adamson….”].)

Rawson cites two cases that purportedly draw a distinction between a governmental and a private entity. In the first case, Schmidt v. Superior Court (1989) 48 Cal.3d 370, 389 (Schmidt), the California Supreme Court assessed whether a private mobile home park owner violated the right to privacy by limiting residents to persons 25 years of age or older. Schmidt states that the facts before the court were distinguishable from prior cases involving government imposed restrictions limiting with whom someone could live. (Id. at p. 388.) If read in isolation, this language—quote by Rawson—could support a distinction between “a state-imposed rule directly limiting an individual’s right to live with whom he or she wanted” and a private landlord’s fiat on the same topic. (Ibid.) However, as Plaintiffs point out, the court noted that it had “no occasion … to consider under what circumstances, if any, purely private action by a property owner or landlord would constitute a violation of the state constitutional privacy provision.” (Id. at p. 390, fn.14.) Thus, Schmidt does not stand for the proposition for which Rawson’s cites the case.

The next case Rawson is Leibert v. Transworld Systems, Inc. (1995) 32 Cal.App.4th 1693 (Leibert). In that case, a man alleged his employer violated his right to privacy by firing him because of his sexual orientation. (Leibert, supra, Cal.App.4th at p. 1697.) This case does not aid Rawson because the Leibert court made no distinction between an invasion of privacy by a government actor and a similar invasion by a private actor. Moreover, the only mention of governmental and private entities in Leibert’s discussion of privacy is a citation to Hill which equates governmental and private defendants. (See id. at p. 1702.)

In sum, Leibert does not state that the right to privacy cannot be asserted against individuals or against landlords.

Rawson also argues that Plaintiffs could have sought other housing. (Dem., p. 9:5-7.) This argument is misplaced as it is directed at the first element. A lack of alternatives is relevant in assessing the reasonableness of the privacy interest and severity of the intrusion under the second and third elements; but nothing in Hill suggests the presence or absence of alternatives alters whether a privacy right exists. (See Hill, supra, 7 Cal.4th at pp. 37-39.)

Lastly, for the first time in reply, Plaintiffs argue that permitting this case to continue would be “[t]o expand the right of privacy into a right to restrict landlords from making commercially rational choices” and create an unbridled right to personal freedom of the sort warned of in Hill. (Reply, p. 3:9-15.) Courts typically do not consider points raised for the first time on reply for due process reasons. (In re Tiffany Y. (1990) 223 Cal.App.3d 298, 302-303 (Tiffany); see also Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764 (Reichardt); REO Broadcasting Consultants v. Martin (1999) 69 Cal.App.4th 489, 500 (REO).) Accordingly, the Court declines to consider this argument.

Therefore, Rawson has not negated the element of a legally protected privacy interest.

3. Reasonable Expectation of Privacy

Rawson argues that Plaintiffs’ expectation of privacy was not reasonable because “there is no ‘broadly based and widely accepted community norm’ that individual landlords cannot choose not to rent to unrelated tenants sharing a single home as a group without violating the applicants’ private right to decide with whom they live….” (Dem., p. 9:9-11.) Additionally, she argues that prospective tenants, such as Plaintiffs, can find another place to live. Finally, she asserts that landlords have “competing interests” that must be balanced against Plaintiffs’ privacy rights. (Dem., p. 9:13-14.)

Whether an expectation of privacy is reasonable under Hill is largely a question of fact. (Hill, supra, 7 Cal.4th at p. 37.) Factors that can play a role in determining if the privacy expectation was reasonable are customs, practices, physical surroundings, and whether the plaintiff consented to the invasion. (Ibid.) When applying the standard to private actors the degree of competition in the marketplace and the availability of alternatives such as other landlords might be relevant to weighing the reasonableness of privacy claims asserted. (Id. at pp. 38-39.)

Rawson’s argument is, in essence, an assertion that the facts alleged do not show that Plaintiffs’ expectation of privacy was reasonable. Rawson initially cites to Willard v. AT & T Communications of Cal., Inc. (2012) 204 Cal.App.4th 53 (Willard) for the proposition that Plaintiffs cannot reasonably expect every landlord to agree to rent to them. In Willard, the court considered the privacy rights of telephone service customers in their telephone numbers. (Willard, supra, 204 Cal.App.4th at p. 62.) The court held that “plaintiffs did not expect privacy in the circumstances, as they knew their listing would be public unless they paid a fee to opt out of being listed.” (Willard, supra, 204 Cal.App.4th at p. 62, italics added.) Willard is distinguishable in that there is no similar allegation in the 4AC that Plaintiffs knew that they would not be able to rent a home because they were not related by blood or marriage, or that Plaintiffs actually expected to be offered a chance to rent every single apartment they applied for. Rather, the 4AC alleges Plaintiffs did not expect to be refused a rental because they were not related by blood or marriage. Thus, Willard does not aid Rawson.

In addition, Rawson’s argument that Plaintiffs’ expectation of privacy was unreasonable is premised upon unstated assumptions such as the availability of comparable housing at the time. However, the 4AC does not include allegations regarding the availability of housing nearby. Additionally, it does not contain allegations regarding the prevalence of unrelated tenants in the area, the norms in the local housing market, or whether nearby landlords would rent to an unrelated group like Plaintiffs and prospective housemates. Thus, the allegations in the 4AC lack sufficient detail to support Rawson’s argument or affirmatively show Plaintiffs’ expectation of privacy was unreasonable. Where, as here, the pleadings do not provide enough information to assess the reasonableness of the privacy right asserted, the California Supreme Court has found it is improper to sustain a demurrer. (See Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th 992, 996.)

Accordingly, Rawson has not shown that Plaintiffs failed to adequately allege the second element.

4. Seriousness of the Invasion of Privacy

Rawson contends her alleged refusal to rent to Plaintiffs was not sufficiently serious to meet the requirements of the third element under Hill. Rawson points out that Plaintiffs did not even apply to other landlords, and describes the refusal of a single landlord to rent to them as an “annoyance” that does not rise to the level of an “egregious breach of the social norms underlying a privacy right.” (Dem., pp. 9:23 to 10:2.) In essence Rawson contends that the allege privacy intrusion is de minimis, and therefore does not meet the standard under Hill.

Cases applying Hill make it clear that the third element “is intended simply to screen out intrusions on privacy that are de minimis or insignificant.” (Loder v. City of Glendale (1997) 14 Cal.4th 846, 895, fn.22; American Academy of Pediatrics v. Lungren (1997) 16 Cal.4th 307, 339.)

However, Plaintiffs allege that the refusal to rent to them had serious impacts, including loss of rental payments from prospective housemates, emotional distress, humiliation, anxiety, sleep deprivation, and remaining in an apartment they dislike. These allegations are “ ‘deemed to be true, however improbable they may be.’ [Citation.]” (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) Comparing these allegations to cases finding de minimus invasions of privacy, Plaintiffs have alleged significantly greater harm than those cases. (See Folgelstrom v. Lamps Plus, Inc. (2011) 195 Cal. App.4th 986, 992 [finding obtaining plaintiffs’ address and sending promotional materials to be “routine” commercial practice and not sufficiently serious]; Williams v. Superior Court (2017) 3 Cal.5th 531, 555 [disclosure of employees contact information after written opportunity to opt out was not sufficiently serious].) Rawson’s argument ignores the disparity between the present allegations and these cases.

Moreover, at least two cases hold that a limitation on who a person can live with is not “de minimis or insignificant.” (CALHO, supra, 88 Cal.App.4th at p. 460.) In CALHO, the Court of Appeal considered whether a local ordinance limiting who could live in second units located on residential lots violated property owners’ privacy right to live with whomever they wished. (Ibid.) The court stated that based upon Adamson, “the right to choose with whom to live is fundamental-not ‘so insignificant or de minimis an intrusion….’ ” (Ibid.) Thus, under CALHO’s interpretation of Hill, Plaintiffs have adequately alleged the third element, even if they had not alleged substantial actual harm.

5. Conclusion

Accordingly, the demurrer to the first cause of action for invasion of privacy is OVERRULED.

B. Tenth Cause of Action

Rawson demurs to the tenth cause of action for negligence on the basis that Plaintiffs have not adequately alleged duty or proximate causation. Each of these are necessary elements of a traditional negligence claim. (Chavez v. 24 Hour Fitness USA, Inc. (2015) 238 Cal.App.4th 632, 640; Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673.)

Plaintiffs’ tenth cause of action discusses the alleged negligence of Amarnath and Foster. The breaches allegedly committed by Amarnath and Foster are: (1) posting an advertisement indicating a preference for a family; (2) aiding and abetting Rawson’s discrimination; and (3) giving Rawson bad advice. Rawson is alleged to be vicariously responsible for the negligence of Amarnath and Foster, who were acting as her agents.

As a preliminary matter, Plaintiffs do not show that the posting of an advertisement stating the property was a “delightful home for a family” caused their damages. Rawson argues that the posting of the advertisement cannot have caused any actual damage to Plaintiffs because they applied in spite of it. Plaintiffs concede in opposition that the pro-family notice had no actual effect on them. Nevertheless, Rawson’s causation argument only addresses one of several breaches, and so does not negate the claim in its entirety. (See PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682 [“A demurrer does not lie to a portion of a cause of action.”].)

The remainder of the demurrer is directed towards the issue of duty. “[T]he existence of a legal duty is a question of law for the court to determine.” (Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 237.) In general, each person has a duty to use ordinary care and is liable for injuries caused by his failure to exercise reasonable care in the circumstances. (Rowland v. Christian (1968) 69 Cal.2d 108, 112; Civ. Code, § 1714.)

Plaintiffs allege that Amarnath and Foster “owed a duty to Bonhage and Collins, who, as prospective tenants, were parties to a contemplated transaction of Rawson renting the Property to them.” (FAC, ¶¶ 235, 239.) Plaintiffs insist case law establishes that “depending on the circumstances, a party to a transaction can owe a duty of care to third parties who may be affected by their negligence.” (Opp., p. 15:3-4.) Rawson disagrees, arguing that no law imposes a duty on realtors to protect prospective tenants like Plaintiff by preventing their client from discriminating. Rawson does not cite any law affirmatively stating realtors have no duty to prospective tenants, but rather distinguishes the case Plaintiffs cite.

Plaintiffs cite to Merrill v. Buck (1962) 58 Cal.2d 552 (Merrill) as the basis of Amarnath and Foster’s duty. In Merrill, a tenant fell down a concealed flight of stairs soon after moving into a rented home. (Merrill, supra, 58 Cal.2d at p. 556.) The tenant sued the owners of the house, the real estate salesperson who showed the tenant the home, and the real estate agent who employed the salesperson. (Ibid.) The court found that the real estate agent and salesperson owed the tenant a duty, despite not being in privity of contract with her. The court stated “[p]rivity of contract is not necessary to establish the existence of a duty to exercise ordinary care not to injure another, but such duty may arise out of a voluntarily assumed relationship if public policy dictates the existence of such a duty.” (Id. at pp. 561-562.) Insomuch as Plaintiffs assert that Merrill creates a duty of care that realtors owe to prospective tenants, they overstate its scope. The issue in Merrill was whether a realtor on an inspection tour with a prospective renter had a duty to warn of a concealed danger that might harm anyone who rented the home. (Merrill, supra 58 Cal.2d at p. 562 [“these defendants were under a duty of care to warn her of a concealed danger in the premises of which they were aware and from which her injury might be reasonably foreseen if she did become a tenant”].) There is no similar concealed danger alleged here.

The other cases cited in Plaintiffs’ opposition do not assist them because they are distinguishable. Plaintiffs also cite Lucus v. Hamm, (1961) 56 Cal. 2d 583, 589 (Lucus), where an attorney engaged to prepare a will was sued by a beneficiary. Plaintiffs cite Lucus for the point “the lack of privity between plaintiffs and defendant does not preclude plaintiffs from maintaining an action in tort against defendant.” Here, Plaintiffs were not the intended beneficiary of a document or agreement between Rawson and the realtors, and thus are not similar to the plaintiffs in Lucus. Moreover, the Court is unaware of any law holding that a real estate agent’s negligent advice to his or her client can be the basis for a cause of action for negligence by the prospective renter.

For the first time on reply, Rawson asserts that Plaintiffs have alleged intentional conduct not negligence, by Amarnath and Foster. Courts typically do not consider points raised for the first time on reply for due process reasons. (Tiffany, supra, 223 Cal.App.3d at pp. 302-303; see also Reichardt, supra, 52 Cal.App.4th at p. 764; REO, supra, 69 Cal.App.4th at p. 500.) The Court, therefore, will not consider the merits of Rawson’s new argument.

Accordingly, the demurrer to the tenth cause of action for negligence is SUSTAINED, with 10 days’ leave to amend.