2017-00213355-CU-PO

Janet Ross vs. Johnny Luong

Nature of Proceeding: Motion for Summary Judgment and/or Adjudication

Filed By: Yang, Rey S.

Defendants Johnny Luong and Jessica Phong’s motion for summary judgment and/or summary adjudication is denied.

In this personal injury action, Plaintiffs allege causes of action for negligence, breach of implied warranty of habitability, negligent maintenance of premises, maintenance of nuisance, and wrongful eviction. Plaintiffs contend that there were substandard living conditions at a four-plex residential unit. The defendants in this action are the various owners of the four-plex. The moving Defendants are the latest owners of the four-plex.

Any party may move for summary judgment in any action or proceeding if the party contends that (1) the action or proceeding has no merit or (2) there is no defense to the action or proceeding. CCP 437c(a). A cause of action has no merit if one or more of the elements of the cause of action cannot be separately established, even if that element is separately pleaded, or a defendant establishes an affirmative defense to that cause of action. CCP §437c(o).

The Court must grant a motion for summary judgment if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (CCP §437c(c); Mann v. Cracchiolo (1985) 38 Cal.3d 18, 35). Section 437c(c) imposes an affirmative duty on a Court to grant summary judgment motion in appropriate case. (Preach v. Moister Rainbow (1993) 12 Cal. App. 4th 1441, 1450). The Court must decide if a triable issue of fact exists; if none does, and the sole remaining issue is one of law, the Court has a duty to determine it. ( Pittelman v. Pearce (1992) 6 Cal. App. 4th 1436, 1441; see also Seibert Sec. Servs., Inc. v. Superior Court (1993) 18 Cal. App. 4th 394, 404).

Summary judgment is properly granted only if the moving party’s evidence establishes that there is no issue of material fact to be tried. ( Huynh v. Ingersoll-Rand (1993) 16 Cal. App. 4th 825, 830). In evaluating a motion for summary judgment or summary adjudication the court engages in a three step process.The Court first identifies the issues framed by the pleadings. The pleadings define the scope of the issues on a motion for summary judgment or summary adjudication. (FPI Dev. Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382). Because a motion for summary judgment or summary adjudication is limited to the issues raised by the pleadings (see Lewis v. Chevron (2004) 119 Cal. App. 4th 690, 694), all evidence submitted in support of or in opposition to the motion must be addressed to the claims and defenses raised in the pleadings. An issue that is “within the general area of issues framed by the pleadings” is properly before the court on a summary judgment or summary adjudication motion. ( Lennar Northeast Partners v. Buice (1996) 49 Cal. App. 4th 1576, 1582-1583.) A party may not raise new issues in a declaration submitted in connection with a summary judgment motion. Lewinter v Genmar Indus., Inc. (1994) 26 Cal. App. 4th 1214, 1223.

Next, the Court is required to determine whether the moving party has met its burden. A plaintiff moving for summary judgment meets its burden of showing that there is no defense to its cause of action by proving each element of its cause of action. CCP §437c(p)(1). It is no longer required also to disprove any defense asserted by the defendant. Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) ¶ 10:235, p. 10-89 (rev. # 1, 2006) [when plaintiff moves for summary judgment “[u]nlike former law, it is not plaintiff’s initial burden to disprove affirmative defenses and cross-complaints asserted by defendant”].) If the plaintiff does so, the burden shifts to the defendant to show that a triable issue of fact exists as to that cause of action or defense. In doing so, the defendant cannot rely on the mere allegations or denial of its pleadings, “but, instead, shall set forth the specific facts showing that a triable issue of material fact exists … .” (Code Civ. Proc., § 437c, subd. (p)(1).) A triable issue of material fact exists “if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. [Fn. omitted.]” (Aguilar v. Atlantic Richfield Co., (2001) 25 Cal. 4th 826, 850.)

Defendants’ separate statement includes the following. Plaintiffs were residential tenants at the subject four-plex. Plaintiff Janet Ross, resided in unit 3 between June/July 2012 to May 2016 and unit 4 between May 2016 to May 2017. Plaintiffs Serena Kamara and Thomas Beardsley resided in unit 1 from November 2014 to August 2018. Plaintiff Travis Franklin resided in units 3 and 4 from 2013 to 2017. Plaintiffs Vanessa Akhbari and Michael Blevins resided in unit 2 from November 2011 to August 2018. On January 30, 2017, Defendants, the new owners of the property, entered into a property management agreement with Defendant Rodney Luman of Key Realty Center to manage the property.

On February 8, 2017, Plaintiff Janet Ross signed a Tenant Estoppel Certificate. On July 7, 2017, Plaintiffs Serena Kamara and Thomas Beardsley signed Tenant Estoppel Certificates. Paragraph 4 of the Tenant Estoppel Certificates provides that “[a]ll obligations of Landlord under the Lease have been fully performed and Landlord is not in default under any terms of the Lease. Tenant has no defenses, off-sets or counterclaims to the payment of rent or other amounts due from Tenant to Landlord under the Lease.”

Summary Judgment as to Plaintiffs Janet Ross, Serena Kamara, and Thomas Beardsley

Defendants seek summary judgment as to the claims asserted by Plaintiffs Janet Ross, Serena Kamara, and Thomas Beardsley on the basis that the estoppel certificates provide a complete defense. The motion is denied.

“An ‘estoppel certificate’ (or ‘offset statement’) is a signed certification of various matters with respect to a lease [citation]. An estoppel certificate binds the signatory to the statements made and estops that party from claiming to the contrary at a later time.” (Greenwald & Asimow, Cal. Practice Guide: Real Property Transactions (The Rutter Group 1999) P 7.292, p. 7-73 (rev. # 1 1997).) Black’s Law Dictionary defines “estoppel certificate” as “[a] signed statement by a party, such as a tenant or a mortgagee, certifying for the benefit of another party that a certain statement of facts is correct as of the date of the statement, such as that a lease exists, that there are no

defaults and that rent is paid to a certain date. Delivery of the statement by the tenant prevents (estops) the tenant from later claiming a different state of facts.” (Black’s Law Dict. (6th ed. 1990) p. 551, col. 2.) Evidence Code section 622 provides: “The facts recited in a written instrument are conclusively presumed to be true as between the parties thereto, or their successors in interest; but this rule does not apply to the recital of a consideration.” While an estoppel certificate is a written “instrument” and not a contract, that does not mean different rules of construction apply. To the contrary, courts interpreting written “instruments” have routinely looked to the rules governing the construction of contracts, generally.

An estoppel certificate must be interpreted along with the lease. (Robert T. Miner, M.D., Inc. v. Tustin Ave. Investors (2004) 116 Cal.App.4th 264, 270-271.) Here the estoppel certificate specifically references the underlying lease and also purports to set forth certain modifications to the lease with respect to the property management company and to whom rent will be paid. The underlying lease, however, has not been provided in connection with the instant motion. In any event, the estoppel certificates here cannot serve to provide a complete defense to the claims by Plaintiffs Janet Ross, Serena Kamara, and Thomas Beardsley. At most the estoppel certificates provide a potential defense to a claim for rent or amount dues under the lease. Plaintiffs, however, have made no claims for breach of lease and are not seeking to avoid payment of rent. Rather, the instant action involves claims for substandard living conditions in violation of statutory and common law duties including Civil Code § 1941. To the extent that Defendants would seek to argue that the estoppel certificate could be interpreted to apply as a defense to a claim for substandard living conditions, they are incorrect. To that end, Civil Code Section 1942.1 provides that “[a]ny agreement by a lessee of a dwelling waiving or modifying his rights under Section 1941 or 1942 shall be void as contrary to public policy with respect to any condition which renders the premises untenantable, except that the lessor and lessee may agree that the lessee shall undertake to improve, repair or maintain all or stipulated portions of the dwelling as part of the consideration for rental.” (Civ. Code § 1942.1) [emphasis added] “We agree that public policy requires that landlords generally not be permitted to use their superior bargaining power to negate the warranty of habitability rule.” ( Green v. Superior Court (1974) 10 Cal.3d 616, 625, fn. 9, citing to Boston Housing Authority v. Hemingway (1973) Mass. [293 N.E.2d 831, 843.) Indeed, in Knight v. Hallsthammar, (1981) 29 Cal. 3d 46, 53, the Supreme Court reiterated “The declaration in Green of an implied warranty of habitability and of a public policy which generally prohibits waiver of that warranty is consistent with California’s statutory pattern of landlord-tenant relations. Provisions of the Civil Code “are to be liberally construed with a view to effect its objects and to promote justice.” ( Civ. Code, § 4.) Further, “[all] contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for . . . violation of law, whether willful or negligent, are against the policy of the law.” (Id., § 1668.) The Legislature has declared that “[the] lessor of a building intended for the occupation of human beings must, in the absence of an agreement to the contrary, put it into a condition fit for such occupation, and repair all subsequent dilapidations thereof, which render it untenantable . . . .” (Id., § 1941.)” Generally, if a waiver is illegal or contrary to public policy, it should not be honored.

A.H.D.C. v. City of Fresno, 2000 U.S. Dist. LEXIS 23026, *22.

Plaza Freeway Ltd. Partnership v. First Mountain Bank (2000) 81 Cal.App.4th 616 which is cited by Defendants does not assist them. That case did not involve claims of substandard living conditions in violation of statutory and common law duties. Rather the case involved a commercial lease [as do most estoppel certificate cases. Id. at p. 628-629 [Estoppel certificates “inform lenders and buyers of commercial property of the tenant’s understanding of the lease agreement. Lenders and buyers rely upon the certificates in finalizing loans and purchase.”] ]. The Miner case also acknowledges the importance of estoppel certificates in commercial real estate transactions. (Miner, supra, 116 Cal.App.4th at p. 273.) In any event, in the Plaza Freeway case, the Court there noted that an estoppel certificate is a signed statement certifying that a certain statement of facts is correct, such as that a lease exists, that there are no defaults and that rent is to be paid by a certain date. (Id. at 626.) The certificate prevents the tenant from later claiming a different set of facts. (Id.) But again, the instant case does not involve claims arising from the lease but instead is based on duties imposed by statute and common law regarding living conditions. No case has been cited which would allow an estoppel certificate to provide a defense against these claims, and as seen above, it would be void to the extent it was so construed.

For the purposes of this motion, the estoppel certificates here cannot serve as a complete bar to the claims of Plaintiffs Janet Ross, Serena Kamara, and Thomas Beardsley. The Court therefore concludes that Defendants failed to meet their initial burden to show that they are entitled to judgment as a matter of law on the basis of the estoppel certificates. Therefore the burden never shifted to Plaintiffs to demonstrate the existence of a triable issue of material fact. The motion for summary judgment must be denied.

Punitive Damages as to all Plaintiffs

Defendants’ also seek summary adjudication as to all Plaintiffs’ claims for punitive damages. In this regard Defendants simply quote to the various standards governing punitive damages claims and then cite to portions of the Plaintiffs’ deposition testimony that they have never spoken with the Defendants and that some had never heard of them. Defendants also cite to the rules governing pleading punitive damages but never apply that standard to the instant complaint.

In ruling on a summary judgment or summary adjudication motion regarding punitive damages, “the judge must view the evidence presented through the prism of the substantive [clear and convincing] evidentiary burden. . . . [This] holding that the clear-and-convincing standard of proof should be taken into account in ruling on summary judgment motions does not denigrate the role of the jury. It by no means authorizes trial on affidavits. Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary judgment or for a directed verdict.” (Anderson v. Liberty Lobby, Inc. (1986) 477 U.S. 242, 254-255; see also Stewart v. Truck Ins. Exchange (1993) 17 Cal.App.4th 468, 482.)

Here, the Court finds that Defendants failed to meet their initial burden to show that every single one of the Plaintiffs will be unable to prove their punitive damages claims. Punitive damages are available where it is “proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice…” (Civ. Code § 3294(a).) Malice is defined as “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights and safety of others.” (Id. § 3294(c)(1).) Oppression is “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of the person’s rights.” (Id. § 3294(c)(2).) All claims of punitive damages must be proved by clear and convincing evidence. (Civ. Code § 3294(a).) CCP 437c(f)(1) provides that a party may move for an MSA as to “one or more claims for damages.” As the party moving for summary adjudication, Defendants must produce admissible evidence demonstrating that there is no triable issue of material fact on the question whether it acted with oppression, fraud or malice. (See Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-51, 53-55.)

Defendants here simply point to testimony that the various Plaintiffs have never spoken with them or had never heard of them. Defendants fail entirely to demonstrate how this evidence demonstrates that Plaintiffs cannot succeed on a punitive damages claim in the context of this substandard housing case. The evidence is insufficient to demonstrate that Plaintiffs do not have and cannot reasonably obtain evidence to support their punitive damages claim. As a result, Defendants failed to meet their initial burden on this issue and failed to shift to Plaintiffs the burden of demonstrating the existence of a triable issue of material facts.

In sum, the motion for summary judgment and the motion for summary adjudication as to punitive damages are denied.

The notice of motion does not provide notice of the Court’s tentative ruling system as required by with C.R.C., Rule 3.1308 and Local Rule 1.06(D). Defendants’ counsel is ordered to notify Plaintiffs’ counsel immediately of the tentative ruling system and to be available at the hearing, in person or by telephone, in the event Plaintiffs’ counsel appears without following the procedures set forth in Local Rule 1.06(B).

Plaintiffs’ counsel is directed to prepare an order for the Court’s signature pursuant to CCP § 437c(g) and CRC Rule 3.1312.