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. 18CV338709

TENTATIVE RULING RE: DEMURRER TO FIRST AMENDED CLASS ACTION COMPLAINT; MOTION TO STRIKE PORTIONS OF FIRST AMENDED CLASS ACTION COMPLAINT

The above-entitled action comes on for hearing before the Honorable Patricia M. Lucas on January 31, 2020 at 9:00 a.m. in Department 3. The Court now issues its tentative ruling as follows:

VII. INTRODUCTION
VIII.
This is a putative class action. According to the allegations of the First Amended Class Action Complaint for Damages and/or Declaratory Judgment and/or Injunctive Relief (“FAC”), filed on November 23, 2019, plaintiff Lowri McGill (“Plaintiff”) was a resident and tenant at a residential rental property known as Vine by Vintage. (FAC, ¶ 1.) Plaintiff alleges that she lives in a street-level apartment with her husband and two young children. (Id. at ¶ 7.) 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 ¶ 8.) The landlord unsuccessfully attempted to evict the upstairs tenants. (Ibid.) Plaintiff has asked to be relieved of or have rent returned, but her requests were refused. (Id. at ¶ 9.)

In addition to these factual allegations, Plaintiff alleges that a number of provisions in the lease are unenforceable. (FAC, ¶ 9.) Plaintiff lists these provisions in the Complaint. (FAC, ¶¶ 10-17.)

The original Complaint set forth a single cause of action for declaratory judgment and injunctive relief. On August 16, 2019, the Court issued an order on three demurrers: (1) demurrer by defendant Woodstone by Vintage, L.P. (“Woodstone”); (2) demurrer by defendant RP On-Site, LLC; and (3) demurrer by FPI Management, Inc. The Court sustained Woodstone’s demurrer with leave to amend and sustained the other two demurrers without leave to amend.

The FAC sets forth the following causes of action: (1) Violation of Civil Code §§ 1953, 1927, 1929, 1941 – for Declaratory and Injunctive Relief; (2) General Public Injunction under Civil Code §§ 1785.26, 1927, 1929, California Constitution Art. 1, Section 1, Proposition 65; and (3) Violation of Unfair Business Practices Act for Injunctive Relief and/or Restitution. Woodstone demurs to the first and second causes of action on the ground that they fail to state facts sufficient to constitute causes of action. Woodstone also moves to strike portions of the third cause of action and the prayer.

IX. DEMURRER
X.
A. Request for Judicial Notice
B.
Woodstone requests judicial notice of the following:

(1) Order re Demurrers, filed on August 16, 2019; and
(2)
(3) Stipulation of Facts Regarding Eviction of Tenants Living Above Plaintiff’s Unit, filed on October 24, 2019.
(4)
The request for judicial notice is GRANTED as to these court records. (Evid. Code, § 452, subd. (d).)

C. First Cause of Action
D.
The first cause of action seeks declaratory relief. Woodstone argues that the cause of action cannot be maintained because there is no actual controversy and because there is no basis for declaratory relief where only past wrongs are involved.

The standard for declaratory relief is as follows:

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.)

In the original Complaint, Plaintiff listed a large number of lease provisions that she argued were ambiguous or illegal. The Court found that Plaintiff’s allegations did not demonstrate any actual controversy and did not establish any basis for declaratory relief. Plaintiff has now limited the allegations of the FAC to eight lease provisions.

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 does not allege an actual controversy with regard to some of the lease provisions. For example, Plaintiff alleges that paragraph 36 of the lease has a Prop. 65 warning regarding certain toxic chemicals on the premises, but it is unclear whether such actually exist on the premises. (FAC, ¶ 17.) It is not apparent what controversy exists with regard to this provision, or what benefit there would be to a Court ruling.

However, Plaintiff also sets forth at least one lease provision for which there appears to be an actual controversy. Plaintiff alleges paragraph 33 of the lease allows the release of information on residents to a government or law enforcement agency. (FAC, ¶ 13.) Plaintiff alleges further that Woodstone is in possession of Plaintiff’s private information which is subject to disclosure under this provision. (Ibid.) Woodstone’s “past wrongs” argument does not apply to the provision regarding the release of information to a government or law enforcement agency.

As stated by the California Supreme Court:

Code of Civil Procedure section 1060 does not require a breach of contract in order to obtain declaratory relief, only an “actual controversy.” Declaratory relief pursuant to this section has frequently been used as a means of settling controversies between parties to a contract regarding the nature of their contractual rights and obligations.

(Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 647.)

One purpose of declaratory relief is to liquidate doubts with respect to uncertainties or controversies which might otherwise result in subsequent litigation. (Meyer v. Sprint Spectrum L.P., supra, 45 Cal.4th at p. 647.) Here, there is alleged to be at least one lease provision that could result in litigation in the future and which Plaintiff believes to be invalid. Therefore, Plaintiff has shown a right to declaratory relief.

A party cannot demur to a portion of a cause of action. (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682.) Since there is at least one lease provision for which a right to declaratory relief is sufficiently alleged, the demurrer to the first cause of action must be OVERRULED.

E. Second Cause of Action
F.
The second cause of action is for a public injunction. Woodstone argues that an injunction is a remedy, not a cause of action. Woodstone also contends that the second cause of action is entirely duplicative of the first cause of action.

Plaintiff argues that she has cited various provisions of law and then set forth the remedy for their violation. Plaintiff states that it is not necessary that a cause of action be the one intended by the plaintiff; rather, the test is whether the complaint states any valid claim entitling the plaintiff to relief.

Public injunctive relief by and large benefits the general public and benefits the plaintiff, if at all, only incidentally or as a member of the general public. (McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 955.) This is in contrast to private injunctive relief, which primarily resolves a private dispute between the parties and rectifies individual wrongs, and benefits the public, if at all, only incidentally. (Ibid.)

The relief sought in this case is private injunctive relief. The alleged dispute revolves around a lease that applied to residents of the subject residential rental property, and not to the public at large.

A cause of action for a private injunction is “improper as an injunction is a remedy, not a cause of action.” (Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 618.) Accordingly, Woodstone’s demurrer to the second cause of action is SUSTAINED WITHOUT LEAVE TO AMEND.

XI. MOTION TO STRIKE
XII.
Woodstone moves to strike portions of the third cause of action for unfair business practices and part of the prayer. Specifically, Woodstone seeks to eliminate allegations regarding Plaintiff’s claim that she is entitled to a refund of rent paid to Woodstone. Plaintiff also seeks restitution for late fees in the third cause of action, which is not a subject of the motion to strike.

Woodstone argues that Plaintiff (1) lacks standing and (2) Plaintiff has failed to allege Woodstone violated Business & Professions Code section 17200.

A. Standing
B.
“Proposition 64 amended section 17204 to provide that no private party has standing to prosecute a UCL action unless he or she ‘has suffered injury in fact and has lost money or property as a result of the unfair competition.’” (Law Offices of Mathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 555.)

Woodstone argues that Plaintiff has not shown that she has standing to bring an unfair competition claim. Woodstone contends that Plaintiff’s payment of rent was not a “loss” because there was no breach of the warranty of habitability and therefore no right to withhold rent.

Plaintiff argues that withholding rent is a remedy for breach of the warranty of habitability. Plaintiff focuses on allegations that there were non-tenants in the upstairs unit and there was smoke and noise. Plaintiff also contends that the right to withhold should apply to a breach of the covenant of quiet enjoyment.

Plaintiff alleges that certain lease provisions were unfair acts that led tenants to believe they had no right to abate rent. (FAC, ¶ 38.) Plaintiff alleges further that she suffered from uninhabitable conditions and sought rent abatement, but it was denied. (Id. at ¶ 39.) Rent was paid as a result of and in reliance on certain provisions of the lease. (Ibid.)

A “tenant’s duty to pay rent is ‘mutually dependent’ upon the landlord’s fulfillment of his implied warranty of habitability.” (Green v. Superior Court (1974) 10 Cal.3d 616, 635.) In other words, if a tenant can prove such a breach, he or she will be justified in nonpayment of rent. (Ibid.)

To show a breach of the warranty of habitability, a party must demonstrate that “the living quarters were not in a habitable state, that bare living requirements have not been maintained … or that [the landlord has] failed to comply with applicable building and housing code standards.” (See Penner v. Falk (1984) 153 Cal.App.3d 858, 868-869.)

In this case, Plaintiff has not alleged facts demonstrating a breach of the warranty of habitability. Plaintiff herself refers to the smoke and noise from the upstairs tenants as “a nuisance at least.” (Opposition to Motion to Strike of Woodstone by Vintage, L.P., p. 4:19.) Plaintiff does not allege any facts showing the property was uninhabitable.

Plaintiff cites no authority actually holding that the right to withhold rent should also apply to a breach of the covenant of quiet enjoyment.

In sum, Plaintiff does not allege facts showing a right to withhold rent. Consequently, the fact that Plaintiff paid rent was because rent was due under the lease, not because of any purportedly unlawful lease provision. Therefore, Plaintiff has not alleged that she lost money or property “as a result of” any unfair competition and has not established standing with regard to the rent abatement. Accordingly, Woodstone’s motion to strike is GRANTED WITH 10 DAYS’ LEAVE TO AMEND. The Court therefore does not reach Woodstone’s argument that it did not violate Business & Professions Code section 17200.

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