Case Name: Monument 3: Realty Fund VII, Ltd. v. Hill
Case No.: 19CV343193

This is an unlawful detainer action. According to the allegations of the complaint, on February 5, 2018, defendant Howard Hill (“Defendant”) entered into a written rental agreement with plaintiff Monument 3: Realty Fund VII, Ltd. dba Heritage Park Apartments (“Plaintiff”) for the rental of property located at 555 E. Washington Avenue, unit number 302 in Sunnyvale. (See complaint, ¶¶ II-IV, exh. A.) On the first day of each month, Defendant was required to pay $2,550 to Plaintiff; however, as of February 28, 2019, Defendant has not paid rent totaling $7,846.81. (See complaint, ¶¶ V-VI.) On February 5, 2019, Plaintiff served Defendant with a written notice stating the amount of rent past due, and requiring Defendant to pay the whole thereof or deliver possession of the premises within three days. (See complaint, ¶ VII, exh. B.) More than three days later, no part of the rent has been paid and Defendant remains in possession of the subject premises. (See complaint, ¶ VIII.) The reasonable rental value of the premises is $85 per day, and damages accrue at such a rate from March 1, 2019, and will continue to accrue at that rate as long as Defendant remains in possession. (See complaint, ¶ IX.) On February 25, 2019, Plaintiff filed a complaint for unlawful detainer against Defendant. Defendant demurs to the complaint.

Defendant first appears to assert “that a Judicial Council Complaint form was used.” (See Def.’s memorandum of points and authorities in support of demurrer (“Def.’s memo”), p.2:22-28.) However, the complaint does not use such a form; Defendant is plainly mistaken.

Defendant next complains that the three day notice to pay rent or quit attached to the complaint for unlawful detainer fails to “identify the name of a person to whom the money is to be handed… Plaintiff’s alleged notice identifies no such person, but only the fictitious business name used by Plaintiff.” (Def.’s memo, p.3:24-27.) Defendant does not cite to any case suggesting that a business entity such as Plaintiff may not be a “person” as stated in Code of Civil Procedure section 1161, subdivision 2. In fact, the Code of Civil Procedure specifically states that a “‘Person’ includes a corporation as well as a natural person.” (Code Civ. Proc. § 17, subd. (b)(6) (stating that this definition applies “[a]s used in this code”).) Defendant’s argument that a “person” excludes names of a business entity is counter to the Code of Civil Procedure’s explicit definition of “person.”

Defendant next argues that “[t]he Complaint also alleges a premature notice… [because t]he lease provides that late fees are due if the rent is not paid by the 5th day of the month… and it could not legally have been served until February 6th.” (Def.’s memo, p.4:3-10.) Defendant relies on Baypoint Mortgage Corp. v. Crest Premium Real Estate etc. Trust (1985) 168 Cal.App.3d 818, to support his belief that “[a] late fee provision extends the due date to the last day before the late fee is imposed.” (Def.’s memo, p.4:6-7.) As Plaintiff argues, however, Baypoint, supra, is distinguishable from the instant case. First, Baypoint did not involve an unlawful detainer; rather, it involved a mortgage foreclosure. Second, Baypoint did not hold that a late fee provision extends the due date; in fact, the court explicitly stated “we do not consider the issue to be whether the late fee clause constitutes a ‘grace period’ to be allowed as a matter of law after timely performance is due.” (Baypoint, supra, 168 Cal.App.3d at p.827 (emphasis original).) Instead, the Baypoint court addressed whether equity would sanction foreclosure as a remedy for the minor delays in installment payments. (Id. at pp.825-828 (stating “[c]onsequently, equity will not allow the drastic sanction of foreclosure to be used to enforce compliance with payment on the ‘due date’”).) In Baypoint, the mortgagor was tardy in making a number of payments on the mortgage; however, the mortgagee nevertheless accepted those checks and deposited them into its account while at the same time attempting to foreclose on those same amounts, asserting non-payment of those installments. (Id. at p.823.) Ultimately, the court stated that “‘equity should relieve the defendant from a mere technical default in the payment of interest on the … mortgage.’” (Id. at p.829.) “One of the most important functions of the law is to maintain a proper balance between creditor and debtor.” (Id. at p.831.) “To this end, it attempts to match the creditor’s remedy to the debtor’s default.” (Id.) “Major defaults justify drastic remedies; minor defaults only warrant lesser remedies.” (Id.) “Thus, where the debtor is unable or unwilling to pay at all the creditor is entitled to recapture the security the debtor gave for the loan.” (Id.) Here, the instant action does not involve a mortgage foreclosure. Moreover, unlike the mortgagor in Baypoint, Defendant is alleged to have not made any payments in rent for the entire period at issue. Baypoint is inapposite and does not support Defendant’s argument.

Defendant argues that “[t]he Complaint also fails to allege any attempt to personally serve the subject notice prior to using substituted notice.” However, the proof of service for the three day notice to pay rent or quit states that there was an attempt and there was no person of suitable age or discretion to be found at the residence. (See complaint, ¶ VII, exh. B.) As Plaintiff argues, Defendant appears to argue with the alleged facts, but on demurrer, the Court accepts the allegations as true. (See Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496 (stating that “it is well settled that a general demurrer admits the truth of all material factual allegations in the complaint… the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court”).)

Lastly, Defendant asserts that the notice is defective because it does not check the box marked “cash” for payment, citing Noyes v. Habitation Resources, Inc. (1975) 49 Cal.App.3d 910. It is unclear as to how Noyes assists Defendant. Noyes involved the breach of a contract for employment. The defendant there paid an installment payment on a settlement by cashier’s check, but due to difficulties in collecting on that check, the plaintiff demanded future payments to be made in cash or certified check. (See Noyes, supra, 49 Cal.App.3d at p. 912.) When the defendant then tendered an uncertified check, the plaintiff refused it and claimed a default. (Id.) The Noyes court stated that “advance notice demanding specific tender is, although not expressly provided for, permitted by the code section.” (Id. at p. 914.) The court then affirmed the trial court’s order granting a writ of execution for the unpaid balance. Here, the notice has specified a form of specific tender, which Noyes states is permissible. Defendant’s own cited authority negates his argument.

As Defendants’ arguments all lack merit, the demurrer to the complaint is OVERRULED.

As ordered by the Court, the trial remains set on Monday, May 6, 2019, at 8:45 a.m. The parties will be notified of the trial department by the end of the week before the trial.

The Court will prepare the Order.