Grant Beall et al vs Ronald L. Wolfe and Associates
Case No: 18CV03820
Hearing Date: Fri Jun 21, 2019 9:30

Nature of Proceedings: Motion: Judgment on the Pleadings

Tentative Ruling: The court grants, in part, defendant Ronald L. Wolfe Associates, Incorporated’s motion for judgment on the pleadings and grants judgment on the pleadings on the entire first amended complaint as to plaintiff Kent Beall, without leave to amend; on the second, third, fourth, and fifth causes of action in the first amended complaint as to plaintiff Grant Beall, with leave to amend; and on the sixth, seventh, and ninth causes of action in the first amended complaint as to plaintiff Grant Beall, without leave to amend. The court denies the motion in all other respects.

First Amended Complaint (“FAC”): In their FAC, plaintiffs Grant Beall and Kent Beall allege that Grant was a tenant and resident of 6606-6608 Del Playa, HSE, in Isla Vista. Kent was a co-obligor on the year-long lease. The landlord was defendant Ronald L. Wolfe and Associates.

Plaintiffs allege that defendant’s pre-termination notice did not comply with Civil Code § 1950.5 in several respects, the security deposit itemization is improper, and paragraph 36 of the lease improperly limits defendant’s obligations and liability. Plaintiffs bring a class action complaint on behalf of themselves and other similarly situated.

The causes of action in the FAC are: 1) violation of Civil Code § 1950.5(f)(1) – failure to disclose right of storage, failure to store; 2) violation of Civil Code § 1950.5(f)(1) – improper pre-termination notice; 3) violation of Civil Code § 1950.5(g) – improper compelling of disbursement of security deposit and statement to designated tenant/forfeiture; 4) violation of Civil Code §§ 1950.5, 1953 – improper imposition of vendor oversight fee; 5) violation of Civil Code §§ 1950.5(g), 1953 – failure to itemize security deposit receipts and/or provide documentation for corrections; 6) breach of contract/request for declaratory and injunctive relief – improper waiver/assumption of risk in lease; 7) violation of Consumer Legal Remedies Act (“CLRA”); 8) violation of Unfair Business Practices Act (“UCL”; B&P Code §§ 17200, et seq.); 9) declaratory and injunctive relief.

Defendant answered the complaint on October 25, 2018. CMC is scheduled for June 28, 2019.

Motion for Judgment on the Pleadings: Defendant moves for judgment on the pleadings on the ground that plaintiffs have failed to state facts sufficient to constitute the causes of action. Defendant contends that the class allegations fail because each claim would require the determination of multiple issues that would require the presentation of individualized proof, and thus common questions of fact do not predominate; and plaintiffs have failed to allege facts sufficient to establish that plaintiffs could obtain certification of any potential class, including with respect to the issues of ascertainability, numerosity, typicality, or the superiority of proceeding as a class action. Defendants also contend that plaintiff Kent Beall is not a tenant on the lease and, therefore, lacks standing to assert the claims. Plaintiffs oppose the motion.

1. Standards for Judgment on the Pleadings: A defendant may move for judgment on the pleadings if the complaint does not state facts sufficient to constitute a cause of action against that defendant. CCP § 438(c)(1)(B)(ii). In considering a motion for judgment on the pleadings, the court “assumes the truth of, and liberally construes, all properly pleaded factual allegations in the complaint.” Bezirdjian v. O’Reilly, 183 Cal.App.4th 316, 321 (2010). “The standard for granting a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law.” Schabarum v. California Legislature, 60 Cal.App.4th 1205, 1216 (1998). “On a motion for judgment on the pleadings, like a demurrer, all reasonable inferences must be drawn in favor of the pleader.” Evans v. California Trailer Court, Inc., 28 Cal.App.4th 540, 551 (1994).

“A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. [Citations] Presentation of extrinsic evidence is therefore not proper on a motion for judgment on the pleadings.” Cloud v. Northrop Grumman Corp., 67 Cal.App.4th 995, 999 (1998). Like a demurrer, judgment on the pleadings may not be granted “as to a portion of a cause of action.” Daniels v. Select Portfolio Servicing, Inc., 246 Cal.App.4th 1150, 1167 (2016).

Plaintiffs discuss at length the meet and confer process under CCP § 439. There was no in-person or telephonic meeting as required by CCP § 439(a). The statute is toothless as insufficiency of the meet and confer process is not grounds to grant or deny the motion for judgment on the pleadings. CCP § 439(a)(4). Plaintiffs also raise discovery issues not germane to this motion.

2. Length of Memorandum in Opposition: Defendant asks the court to strike plaintiffs’ opposition to the motion because it exceeds by one page the page limitation in CRC 3.1113(d) and includes three pages of single-spaced argument. The single-spaced portion of the memorandum is a recitation of a May 15 meet and confer email referenced in defendant’s motion. It could have been included as an attachment and the substance of the memorandum would not exceed the page limitation. The court has not considered the substantive argument in the email. The court denies the motion to strike the entire opposition.

3. First Cause of Action: This cause of action involves the pre-termination notice (“PTN”) pursuant to Civil Code § 1950.5(f)(1). Specifically, plaintiffs allege the failure to provide notice of personal property storage rights as required by Civil Code §§ 1946, 1946.1, and 1950.5(f). [FAC ¶34]

Defendant says that plaintiffs have failed to “attach a copy of this notice to the FAC nor quote all of its language verbatim, as required by well-settled case law,” citing Harris v. Rudin, Richman & Appel, 74 Cal.App.4th 299, 307 (1999). But that only applies if the action is based on alleged breach of a written contract, in which the contract must be set forth verbatim or attached. Id. There is no requirement that every written document referenced in a complaint must be set forth verbatim or attached.

Defendant argues that plaintiffs have failed to allege that the failure to provide the notice caused them damage. Plaintiffs allege that Grant Beall did leave property behind “and his personal property was taken and destroyed, rather than stored.” [FAC ¶6] Plaintiffs allege that “Defendants fail to abide by the storage rights announced by 1950.5(f), 1946 and 1946.1 and/or that named plaintiffs and others have wrongly lost property because of this and thereby been damaged.” [FAC ¶35]

Defendant contends that the FAC is deficient because plaintiffs do not allege “that they would have acted differently had they received a notice or that they relied on the lack of notice in failing to timely retrieve their personal property.” It is not clear how one could rely on the lack of a notice. The court finds that plaintiffs have sufficiently pled causation. “[T]o withstand a demurrer [or motion for judgment on the pleadings], a complaint must allege ultimate facts, not evidentiary facts….” Logan v. Southern Cal. Rapid Transit Dist., 136 Cal.App.3d 116, 126 (1982). See also McCaughey v. H. C. Schuette, 117 Cal. 223, 224 (1897).

Defendant argues that Grant Beall lost property because he never tried to reclaim it. But that fact does not appear in the FAC.

Defendant argues: “The class allegations also should be dismissed because litigating this claim would require individualized proof as to a variety of issues, such as (a) whether each class member left behind personal property, (b) the reasons why they did so, (c) whether each class member received any notice about storage rights, (d) whether that notice was substantially in compliance with the statute, (e) whether each class member relied on the notice, (f) whether each class member reclaimed, or tried to reclaim, any personal property, (g) the fact of any damages, and (h) the application of [defendant]’s defenses.”

“[N]othing prevents a court from weeding out legally meritless suits prior to certification via a defendant’s demurrer or pretrial motion. In fact, it is settled that courts are authorized to do so.” Linder v. Thrifty Oil Co., 23 Cal.4th 429, 440 (2000). “Where there is a ‘reasonable possibility’ that the plaintiff in a class action can establish a community of interest among class members, ‘the preferred course is to defer decision on the propriety of the class action until an evidentiary hearing has been held on the appropriateness of class litigation.’ However, where the invalidity of the class allegations is revealed on the face of the complaint, and/or by matters subject to judicial notice, the class issue may be properly disposed of by demurrer or motion to strike.” Canon U.S.A., Inc. v. Superior Court, 68 Cal.App.4th 1, 5 (1998) [citations omitted].

Defendant relies on a number of issues that do not appear on the face of the complaint. Plaintiffs allege that the defects in the PTN regarding storage rights were common to the alleged class members. [FAC ¶22] A class can be “united by a common interest in determining whether a defendant’s course of conduct is in its broad outlines actionable” and that “is not defeated by slight differences in class members’ positions….” Blackie v. Barrack, 524 F.2d 891, 902 (9th Cir. 1975).

[A] presumption, or at least an inference, of reliance arises wherever there is a showing that a misrepresentation was material. [Citations.] A misrepresentation is judged to be “material” if “a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question.”

Tucker v. Pacific Bell Mobile Services, 208 Cal.App.4th 201, 226 (2012) (referencing misrepresentations in a sales pitch).

“[A] class action is not inappropriate simply because each member of the class may at some point be required to make an individual showing as to his or her eligibility for recovery or as to the amount of his or her damages.” Employment Development Dept. v. Superior Court, 30 Cal.3d 256, 266 (1981).

Defendant relies on Schermer v. Tatum, 245 Cal.App.4th 912, 918-920 (2016), in which the court affirmed an order sustaining a demurrer to class action allegations. That case is inapposite. The court recounted at length the many dissimilarities among mobilehome owners in 18 mobilehome parks in 16 different cities in seven different counties.

On the face of the FAC, it does not appear that there is no reasonable possibility that plaintiffs can establish a community of interest among class members. By this decision, the court in no way opines on whether plaintiffs can ultimately obtain class certification.

Defendant says there is no basis for injunctive relief because plaintiffs fail to allege any potential future harm since they and the alleged class members are no longer tenants. An injunction is not an available remedy for past wrongs. “Ordinarily, injunctive relief is available to prevent threatened injury and is not a remedy designed to right completed wrongs. It should neither serve as punishment for past acts, nor be exercised in the absence of any evidence establishing the reasonable probability the acts will be repeated in the future.” Madrid v. Perot Systems Corp., 130 Cal.App.4th 440, 464-465 (2005) [internal quotations and citations omitted].

However, demurrers and motions for judgment on the pleadings are not proper vehicles for challenging the relief sought in a complaint. Venice Town Council v. City of L.A., 47 Cal.App.4th 1547, 1562 (1996). The request for injunctive relief is only part of this cause of action.

The court denies the motion as to the first cause of action.

4. Second Cause of Action: This cause of action, too, is based on the alleged deficiencies in the PTN. First, plaintiffs allege that the PTN served on Grant Beall and others vacating in June 2018 contained the wrong termination date. [FAC ¶39] Plaintiffs also allege that the PTN does not comply with provisions regarding the initial inspection, including stating that having someone present is encouraged rather than stating it is a right [FAC ¶40]; remedial conduct by the tenant may lead to more of the deposit being returned rather than stating that if all remedial conduct is taken, all of the deposit must be returned [FAC ¶41]; the PTN states that inspections fill up fast, implying a waiver for delay when there is a process for assuring an inspection is done when there is a disagreement as to when [FAC ¶42], and the PTN appears to contain artificial and illegal limits on when the tenant can request an inspection [FAC ¶43].

Defendant argues that the only factual allegation is the incorrect date. But other allegations state how the PTN allegedly does not comply with the statute either by direct language or implication from language used.

Defendant argues that there are no allegations that the purported deficiencies caused plaintiffs harm. Plaintiffs say they allege damage at ¶¶44 and 46. These paragraphs allege a requirement to return deposits and double damages, but plaintiffs do not allege their deposit was not returned. The damages they seek under Civil Code § 1950.5(l) require retention of the security deposit or some portion thereof in violation of the section. For this reason, the court will grant judgment on the pleadings as to the second cause of action. (There is no need to address the class issues if plaintiffs have not alleged a representative claim.)

“If there is a reasonable possibility that the defect in a complaint can be cured by amendment, it is an abuse of discretion to sustain a demurrer without leave to amend.” Hendy v. Losse, 54 Cal.3d 723, 742 (1991). The court will permit plaintiffs to amend the complaint if they can truthfully allege that the deposit was not returned in full as a result of the deficiencies in the PTN alleged in the second cause of action.

5. Third Cause of Action: In this cause of action, plaintiffs allege that the PTN notice “suggests” that all the tenants in a terminating unit must designate a single tenant of the unit to receive the various notices, itemizations and the check for the returned deposit funds, which designation must be countersigned by each tenant. [FAC ¶49] The PTN also “suggests” that because some tenants might be hard to reach, tenants may execute a security deposit forfeiture form. [FAC ¶50] It is not clear what language “suggests” these procedures. Also, plaintiffs do not say this practice caused them any harm, such as a forfeiture of a deposit or a return of the deposit to someone else who did not give plaintiffs their portion.

For the same reason the court granted the motion as to the second cause of action, the court grants judgment on the pleadings as to the third cause of action with leave to amend.

6. Fourth Cause of Action: Plaintiffs allege that the PTN “suggests” that they may impose a “Vendor oversight fee” and/or a “10% admin fee” of the amount paid to cleaners, maintenance, or contractors to repair resident related damage. Plaintiffs allege that “plaintiffs and the class are charged this fee and it is deducted from their deposit.” [FAC ¶56]

The allegation of charging is ambiguous. Plaintiffs do not say they were charged the fee or the amount. By saying they and the class “are charged this fee,” plaintiffs appear to describe defendant’s practice rather than what actually happened to plaitniffs. The court grants judgment on the pleadings as to the fourth cause of action with leave to amend.

7. Fifth Cause of Action: Plaintiffs describe a practice of providing “a receipt for money deducted from tenants’ deposits, including the named tenants.” [FAC ¶62] They say the itemized statement does not include copies of documents showing charges incurred and deducted by the landlord to repair or clean the premises as required by Civil Code § 1950.5(g)(2). [FAC ¶63] In ¶62, plaintiffs describe the practice and not what actually happened to them. The allegation appears to suggest that plaintiffs did not get all of their deposit back. Plaintiffs need to affirmatively allege that in order to state the claim. The court grants judgment on the pleadings as to the fifth cause of action with leave to amend.

8. Sixth Cause of Action: Plaintiffs allege breach of contract because a paragraph of the lease improperly limits the landlord’s liability for damages in the event of criminal acts and failures of security. [FAC ¶¶69, 70] “To be entitled to damages for breach of contract, a plaintiff must plead and prove (1) a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff.” Troyk v. Farmers Group, Inc., 171 Cal.App.4th 1305, 1352 (2009) [internal quotation and citation omitted].

Plaintiffs do not allege a breach of any contractual provision. Nor do they allege that they suffered any damage from any of the acts from which this provision shielded defendant from liability. If they had and if the provision is void under Civil Code § 1953 as alleged, then defendants would be able to pursue the tort remedies.

To the extent that plaintiffs seek declaratory relief regarding this paragraph, there is no present controversy as plaintiffs are no longer tenants. Plaintiffs do not state a cause of action and there is no possibility of curing the defect by amendment. The court grants judgment on the pleadings as to the sixth cause of action without leave to amend.

9. Seventh Cause of Action: This is a cause of action under the CLRA. Defendant contends this applies to the sale or lease of goods or services and, therefore, does not apply to real property leases.

The CLRA sets forth “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer.” Civil Code § 1770(a). “ ‘Goods’ means tangible chattels bought or leased for use primarily for personal, family, or household purposes….” Civil Code § 1761(a). “ ‘Services’ means work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods.” Civil Code § 1761(b).

The CLRA does not apply to the sale of real property. McKell v. Washington Mut., Inc., 142 Cal.App.4th 1457, 1488 (2006). Defendant also relies on a case in which a federal district court held that the CLRA does not apply to a scheme involving purchase of a timeshare interest. Abramson v. Marriott Ownership Resorts, Inc., 155 F.Supp.3d 1056, 1066 (C.D. Cal. 2016). Defendant cites and the court can find no authority addressing whether the rental of real property is a lease of goods or services under the CLRA.

Plaintiffs point to authority that describes a residential rental as offering a package of goods and services. “When American city dwellers, both rich and poor, seek ‘shelter’ today, they seek a well known package of goods and services – a package which includes not merely walls and ceilings, but also adequate heat, light and ventilation, serviceable plumbing facilities, secure windows and doors, proper sanitation, and proper maintenance.” Green v. Superior Court, 10 Cal.3d 616, 623 (1974) (implying a warranty of habitability in residential leases). “In most significant respects, the modern urban tenant is in the same position as any other normal consumer of goods.” Id. at 627.

The analogy of a common law warranty of habitability to a consumer statute expressly limited to goods and services is inexact. “Goods” are unequivocally chattels under the CLRA and, therefore, real property is not a “good’ under the CLRA. Any “services” rendered by a landlord are ancillary to the provision of real property, not services purchased independently of the residential lease.

The court determines that the CLRA is not applicable to a lease of residential real property. The court grants judgment on the pleadings as to the seventh cause of action without leave to amend.

10. Eighth Cause of Action: Plaintiffs assert that the various violations enumerated above constitute violations of the UCL. Claims for relief under the UCL “stand or fall depending on the fate of the antecedent substantive causes of action.” Krantz v. BT Visual Images, 89 Cal.App.4th 164, 178 (2001). Because the first cause of action survives, so does the UCL claim.

11. Ninth Cause of Action: The object of the declaratory relief statute “is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.” California Ins. Guarantee Assn v. Superior Court, 231 Cal.App.3d 1617, 1624 (1991). Because the cause of action adds nothing to the FAC, the court grants summary adjudication as to the ninth cause of action without leave to amend.

12. Kent Beall as Plaintiff: Defendant contends that the statutes under which plaintiffs assert rights confer rights upon tenants and lessees. Plaintiffs allege that Kent Beall is a co-obligor. They do not say what that means. Defendant suggests he is a guarantor of the lease. Plaintiffs have not provided the lease, so the court does not know Kent Beall’s exact relationship to it. Because plaintiffs allege that Grant is a tenant and Kent is a co-obligor, it is clear that Kent is not a tenant.

In the opposition to the motion, plaintiffs assert that Kent Beall paid the security deposit, contributed to the rent, and some of the property was his (presumably this means some of the property that plaintiffs allege was taken and destroyed rather than stored). These facts do not appear in the FAC.

The rights to notices and return of a security deposit and rights in property are those of the tenant or lessee. Grant may have an obligation to return some of that deposit or property to Kent, but that is not defendant’s obligation. There is no right to return of any rent asserted in the FAC. Plaintiffs say Kent “seems to have sufficient interest in the issues.” The court needs more than that.

The court grants judgment on the pleadings on the entire FAC as to Kent Beall without leave to amend.

13. Order: The court grants, in part, defendant Ronald L. Wolfe Associates, Incorporated’s motion for judgment on the pleadings and grants judgment on the pleadings on the entire first amended complaint as to plaintiff Kent Beall, without leave to amend; on the second, third, fourth, and fifth causes of action in the first amended complaint as to plaintiff Grant Beall, with leave to amend; and on the sixth, seventh, and ninth causes of action in the first amended complaint as to plaintiff Grant Beall, without leave to amend. The court denies the motion in all other respects.