SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

LOWRI MCGILL, and a class of similarly situated others,

Plaintiff,

vs.

ON-SITE aka ON-SITE MANAGER, INC.; VINTAGE HOUSING; KENNEDY WILSON; FPI MANAGEMENT, INC.; and DOES 1-50,

Defendants.

Case No. 2018-1-CV-338709

TENTATIVE RULING RE: DEMURRERS

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on August 16, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION
II.
This is a putative class action. According to the allegations of the Class Action Complaint for Declaratory Judgment and Injunctive Relief (“Complaint”), filed on December 3, 2018, plaintiff Lowri McGill (“Plaintiff”) was a resident and tenant at a residential rental property known as Vine by Vintage. (Complaint, ¶¶ 1-2.) Plaintiff alleges she lives in a street-level apartment with her husband and two young children. (Id. at ¶ 9.) The tenants in the unit above have been in violation of the lease provisions on many occasions, including having tenants who are not supposed to be residing there, making loud and excessive noises late at night, throwing trash off their balcony into Plaintiff’s yard, having animals they are not supposed to have, and smoking things that get into Plaintiff’s unit. (Id. at ¶ 10.) The landlord has unsuccessfully attempted to evict the upstairs tenants. (Ibid.) Plaintiff has asked to be relieved of the lease and paid for relocation to a different complex, but her requests have been refused. (Id. at ¶ 11.)

The Complaint sets forth a single cause of action for declaratory judgment and injunctive relief. Plaintiff alleges a number of provisions in her form lease are illegal or so vague and ambiguous that a declaration of their legal effect and meaning needs to be made by the Court. (Complaint, ¶ 13.) Plaintiff lists these provisions in the Complaint. (See Complaint, pp. 4:1-10:4.) Plaintiff seeks a declaration with respect to the “respective rights and duties of the parties and/or the legality, unenforceability or meaning of the lease provisions in dispute.” (Id., at p. 14.) Plaintiff is thus not seeking relief for past acts. Instead, she is asking the court to opine on the legality, unenforceability or meaning of the lease provisions listed in the Complaint.

There are now three demurrers before the Court: (1) demurrer by defendant Woodstone by Vintage, L.P. (“Woodstone”); (2) demurrer by defendant RP On-Site, LLC (“On-Site”); and (3) demurrer by FPI Management, Inc. (“FPI”).

III. Legal Standard for Declaratory Relief
IV.
As noted, Plaintiff has filed a declaratory relief action. Specific statutes and distinct cases apply to such actions. The legal standard for asserting a declaratory relief claim is a matter of statute. The relevant statute states:

Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.

(Code Civ. Proc. § 1060.)

In an action for declaratory relief, the complaint is sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a contract and requests the rights and duties be adjudged. If these requirements are met, the court must declare the rights of the parties whether or not the facts alleged establish the plaintiff is entitled to a favorable declaration. (See Condor Ins. Co. v. Williamsburg Nat. Ins. Co. (1996) 49 Cal.App.4th 554, 565.)

[T]he declaratory procedure operates prospectively, and not merely for the redress of past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.

(Travers v. Louden (1967) 254 Cal.App.2d 926, 931.)

V. DEMURRER BY WOODSTONE
VI.
As an initial matter, the Court notes there are no allegations in the Complaint regarding Woodstone. Woodstone is identified neither in the caption nor in any paragraph of the Complaint. The only place Woodstone’s name appears is on the attached lease contract. (Complaint, Ex. A.) The lease contract indicates Woodstone is the owner of the subject property.

Additionally, Plaintiff has attached an “Index of Illegal/Ambiguous Provisions” to her memorandum of points and authorities in opposition. However, Plaintiff has not sought judicial notice of the document and it is not properly before the Court on demurrer. Therefore, the document cannot be considered by the Court.

Woodstone demurs both to the entire Complaint and to the class action allegations. Woodstone argues its demurrer should be sustained because: (1) there is no actual controversy; and (2) Plaintiff has not alleged the declaratory relief sought would have any practical consequences at the present time with respect to the resolution of any dispute. In particular, Woodstone contends there is no actual controversy because Plaintiff seeks no relief related to the dispute arising from the upstairs tenants’ conduct and, additionally, Plaintiff alleges nothing to show questions regarding the legality or ambiguity of the challenged lease terms involve more than a mere abstract, academic, or hypothetical legal exercise.

Woodstone is correct that the only factual allegations in the Complaint relate to the dispute arising from the upstairs’ tenants’ conduct and that Plaintiff requests no relief with regard to that dispute. Plaintiff alleges no facts connected to the extensive list of lease provisions in the Complaint.

Plaintiff argues the fact that the listed provisions are in the lease, by itself, indicates Woodstone believes the provisions are legal and shows an actual controversy exists. Plaintiff contends declaratory relief is proper as a prophylactic measure before a breach occurs.

Generally, “the broad allegation that the parties are unable to agree on the interpretation of various provisions in a contract does not render declaratory relief necessary and proper.” (Auberry Union School Dist. v. Rafferty (1964) 226 Cal.App.2d 599, 603.) A controversy “must be of a character which admits of specific and conclusive relief by judgment within the field of judicial determination, as distinguished from an advisory opinion upon a particular or hypothetical state of facts. The judgment must decree, and not suggest, what the parties may or may not do.” (Silva v. City and County of San Francisco (1948) 87 Cal.App.2d 784, 789.)

A difference of opinion among counsel relating to a contract provision does not create an actual controversy where there is no unsettled grievance or other controversy pending under the contract. (See Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 724; see also Conroy v. Civil Service Commission of City and County of San Francisco (1946) 75 Cal.App.2d 450, 454 [“What was really sought was an advisory opinion applying to all 1,300 members, generally, without regard to any acute, specific or pending controversy, so that there would be available and ready for use in any dispute arising in the future a judicial interpretation of the 1941 amendment.”].) Stated differently, “courts do not issue advisory opinions about the rights and duties of the parties under particular agreements, if no actual, justiciable controversy has yet developed.” (Otay Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556, 563.)

Plaintiff has alleged no facts demonstrating any unsettled grievance or other controversy pending under the lease agreement with regard to the long list of lease terms included in the Complaint. Rather, Plaintiff simply asserts the lease terms are illegal or ambiguous in the abstract and requests the Court make a finding the provisions are unenforceable. Plaintiff’s allegations do not demonstrate any actual controversy and do not establish any basis for declaratory relief.

Accordingly, Woodstone’s demurrer is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND.

VII. DEMURRER BY ON-SITE
VIII.
On-Site created the lease signed by Plaintiff. (Complaint, ¶ 4.) On-Site is a software company that provides the same or very similar leases for use by residential landlords, management companies, and tenants throughout California. (Ibid.) On-Site demurs to the first cause of action on the ground it does not state facts sufficient to constitute a cause of action. Further, On-Site argues the demurrer should be sustained because On-Site is not a party to the lease agreement, and because there is no actual controversy.

As discussed in connection with Woodstone’s demurrer, there is no actual controversy. Plaintiff simply seeks a judicial determination in the abstract that a long list of lease terms are unenforceable. However, Plaintiff alleges no facts showing any underlying actual controversy connected to those lease terms.

In this case, On-Site has an additional meritorious argument that it is not a party to the subject lease agreement. The allegations show On-Site only created the form contract. There are no allegations showing On-Site is connected to any potential controversy. Consequently, Plaintiff cannot amend the Complaint to show any controversy with On-Site.

Plaintiff argues she is a third-party beneficiary to the contract between Plaintiff’s landlord, the property management company, and On-Site. However, this is not alleged in the Complaint.

Moreover, as stated in a case cited by On-Site, “[t]he very purpose of an action for declaratory relief is to set at rest the unsettled questions which have arisen in the attempts of the contracting parties to interpret their written agreement.” (Ralphs Grocery Co. v. Amalgamated Meat Cutters & Butcher Workmen of North America, Local No. 439 (1950) 98 Cal.App.2d 539, 542.) On-Site is not a contracting party to the lease agreement.

There is no basis for liability against On-Site under the allegations of the Complaint. On Site’s demurrer to the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND.

IX. DEMURRER BY FPI
X.
FPI is the manager of the subject property. (See Complaint, ¶ 3.) FPI demurs to the first cause of action on the grounds that it fails to state facts sufficient to constitute a cause of action and is uncertain. FPI argues the demurrer should be sustained because: (1) FPI is not a party to the contract; (2) Plaintiff seeks an advisory opinion on unripe issues; (3) Plaintiff does not identify any legal violations effectuated by the lease; and (4) Plaintiff fails to adequately plead an entitlement to class certification.

The lease agreement attached to the Complaint shows FPI signed the agreement “on behalf of, and as designated agent for, Owner.” (Complaint, Ex. A, p. 12.) The “Owner” is Woodstone. (Complaint, Ex. A, p. 1.) Generally, an agent cannot be held liable under a contract to which it is not a party. (See Filippo Industries, Inc. v. Sun Ins. Co. of New York (1999) 74 Cal.App.4th 1429, 1442 [“Where the signature as agent and not as a principal appears on the face of the contract, the principal is liable and not the agent.”], quoting Lippert v. Bailey (1966) 241 Cal.App.2d 376, 382.) It is clear that FPI is not a party to the lease agreement, but only signed it as an agent for Woodstone. Therefore, FPI cannot be liable under the lease agreement.

While not identical, FPI’s arguments are similar to those raised in On-Site’s demurrer and the Court reaches the same conclusion as to FPI. Because it is apparent FPI is not a party to the lease agreement, and because there is no actual controversy between FPI and Plaintiff, FPI’s demurrer to the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND on the ground that the Complaint fails to state facts sufficient to constitute a cause of action against FPI.

The Court will prepare the final order if this tentative ruling is not contested.