Justin Evergreen et al vs Susan Estelle Jansen

Case Number

24CV03062

Case Type

Hearing Date / Time

Fri, 10/04/2024 - 10:00

Nature of Proceedings

Motion to Strike

Tentative Ruling

For all reasons discussed herein, the motion of defendant to strike portions of plaintiffs’ complaint is granted, in part and with leave to amend. The following matters are stricken from the complaint: (1) the last sentence of paragraph 23, appearing at page 4, lines 26 through 27 [beginning with “Defendant has acted” and ending with “as allowed by CC § 1947.12(k)(1)(D)”]; and (2) paragraph 2 of the “Prayer For Relief” on the first cause of action. Except as otherwise herein granted, the motion to strike is denied. Plaintiffs shall file and serve a first amended complaint, if any, on or before October 18, 2024.

Background:

On May 31, 2024, plaintiffs Justin Evergreen and Alicia Evergreen (collectively, the Evergreens) filed a complaint against defendant Susan Estelle Jansen (Jansen), individually and as Trustee of the Susan Estelle Jansen Separate Property Trust dated February 3, 2021, alleging four causes of action: (1) breach of statutory obligations (Civ. Code, § 1947.12, subd. (a)(1)); (2) declaratory relief (that rental agreement is illegal); (3) breach of implied warranty of habitability; and (4) declaratory relief (that premises are uninhabitable). As alleged in the complaint:

Jansen owns a residential home located at 4160 Marina Drive in Santa Barbara, California (the premises). (Compl., ¶ 5.) On July 27, 2020, the Evergreens and Jansen entered into a fixed term lease (Lease No. 1) to rent the premises from August 1, 2020, through August 1, 2022, for a rental rate of $10,500 per month. (Id. at ¶ 6 & Exh. 1.) In connection with Lease No. 1, Jansen provided the Evergreens with a document titled “Rent Cap And Just Cause Addendum” (Addendum No. 1). (Id. at ¶ 7 & Exh. 2.)

On May 25, 2022, the Evergreens and Jansen entered into a new lease (Lease No. 2) under which Jansen leased the premises to the Evergreens for a three year term commencing on August 1, 2022. (Compl., ¶ 9 & Exh. 3.) Under Lease No. 2, the rental rate for the premises increased to $16,000 a month from August 1, 2022, through July 31, 2023; $18,000 per month from August 1, 2023, through July 31, 2024; and $20,000 per month from August 1, 2024, through July 31, 2025. (Id. at ¶ 10.) In connection with Lease No. 2, Jansen provided to the Evergreens a document titled “Rent Cap And Just Cause Addendum” (Addendum No. 2). (Id. at ¶ 11 & Exh. 4.)

The Evergreens took possession of the premises on August 1, 2020, and resided there continuously until they vacated the premises on March 25, 2024. (Compl., ¶ 13.) From August 1, 2022, through the date the Evergreens vacated the premises, Jansen increased the monthly rental rate more than the maximum amount allowed by law. (Id. at ¶¶ 18-19.) On March 6, 2024, Jansen was informed that she collected more in rent than allowed by law and was asked to repay the allegedly illegal rent, but Jansen denied the premises was subject to the rent increase limitations set forth in Civil Code section 1947.12, subdivision (a)(1), and continues to retain the rent. (Id. at ¶ 23.)

In addition, the premises lacked effective waterproofing and weather protection causing water intrusion through the walls and doors on three separate occasions and elevated mold spores in the interior of the house. (Compl., ¶ 31(a) & (b).) The sewer line serving the premises was also not maintained in good working order causing sewage to bubble up through the shower, toilet, and outside the bathroom wall. (Id. at ¶ 31(c).) Jansen was notified of these conditions but failed to take corrective action. (Id. at ¶ 31(a) & (c).)

On July 5, 2024, Jansen filed a motion to strike the entirety of paragraph 23 and paragraph 2 of the prayer for relief on the first cause of action alleged in the complaint on the grounds that the Evergreens have failed to allege facts showing that Jansen acted with malice, oppression, or fraud sufficient to support a claim for treble damages under Civil Code section 1947.12. The motion is opposed by the Evergreens.

Analysis:

“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof[.]” (Code Civ. Proc., § 435, subd. (b)(1).) Upon a motion to strike made under Code of Civil Procedure section 435, the court may “strike out any irrelevant, false, or improper matter inserted in any pleading” or “strike  all or part of any pleading not filed in conformity with applicable law, court rules, or an order of the court.” (Code Civ. Proc., § 436(a) & (b).) The grounds for a motion to strike must appear on the face of the pleading or from matters which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).)

Relevant here, under Civil Code section 1947.12, “an owner of residential real property shall not, over the course of any 12-month period, increase the gross rental rate for a dwelling or a unit more than 5 percent plus the percentage change in the cost of living, or 10 percent, whichever is lower, of the lowest gross rental rate charged for that dwelling or unit at any time during the 12 months prior to the effective date of the increase.” (Civ. Code, § 1947.12, subd. (a)(1).) (Note: Undesignated statutory references shall be to the Civil Code unless otherwise indicated.) The term “[p]ercentage change in the cost of living” means “the percentage change, computed pursuant to subparagraph (B), in the applicable, as determined pursuant to paragraph (1), Consumer Price Index for All Urban Consumers for All Items.” (Civ. Code, § 1947.12, subd. (g)(3)(A).)

Section 1947.12 further provides that“[a]n owner who demands, accepts, receives, or retains any payment of rent in excess of the maximum rent allowed by this section shall be liable in a civil action to the tenant from whom those payments are demanded, accepted, received, or retained … [¶] … [¶] … [¶] … [¶] [u]pon a showing that the owner has acted willfully or with oppression, fraud, or malice, damages up to three times the amount by which any payment demanded, accepted, received, or retained exceeds the maximum allowable rent.” (Civ. Code, § 1947.12, subd. (k)(1)(D).)
 

Jansen does not appear to contend that the rent increases alleged in the complaint do not, on their face, violate the provisions of section 1947.12. Instead, Jansen contends that the Court may “consider whether or not[] a mutual mistake” exists with respect to Jansen’s “failing to check” a box appearing in Addendum No. 1 and Addendum No. 2 stating that the premises is exempt from the limitations specified in section 1947.12. (Memo. at p. 9.)

Matters relating to whether or not Jansen or her broker neglected to indicate on either Addendum No. 1 or Addendum No. 2 that the premises was exempt from the provisions of section 1947.12 do not appear on the face of the complaint or from judicially noticeable material. Jansen also offers no reasoned argument explaining why the allegations of the complaint or matters for which the Court may take judicial notice show that the premises is exempt from the provisions of Civil Code section 1947.12. Therefore, the Court may not consider this ground on which the present motion is ostensibly brought. (Spears v. Spears (2023) 97 Cal.App.5th 1294, 1301, fn. 5.)

Jansen also argues that the claim for treble damages alleged in the complaint arises from what Jansen contends is a privileged pre-litigation communication under section 47 on which the Evergreens may not rely. The same analysis applies. The allegations of the complaint do not, on their face, show that the communication described in paragraph 23 of complaint, which alleges the date on which Jansen was informed that she collected more rent than allowed by law, was made in the discharge of any official duties, or in any legislative, judicial or other official proceeding authorized by law. (Civ. Code, § 47, subds. (a) & (b).) For these reasons, Jansen has failed to show that the claim for treble damages, on its face, arises from a communication which is privileged under section 47.

Jansen further contends that she is entitled to rent due under the unexpired term of Lease No. 2 from the time the Evergreens vacated the premises, which Jansen asserts the Evergreens have not paid. Because the amount of rent due and unpaid by the Evergreens under Lease No. 2 is greater than the amount of overpaid rent alleged in the complaint, Jansen argues, she is entitled to an offset and the Evergreens remain liable to Jansen.

In the complaint, the Evergreens allege that they vacated the premises because it was uninhabitable for the reasons set forth in paragraph 31 of the complaint, which include an alleged lack of effective waterproofing or wallcovering and a failed sewer line. Based on the alleged uninhabitability of the premises, the Evergreens seek a declaration that they were constructively evicted and are relieved of any further liability under Lease No. 2. (Compl., ¶¶ 34-35 & 37-28.)

Under section 1941.1, a dwelling “shall be deemed untenantable for purposes of [s]ection 1941” if the dwelling lacks “[e]ffective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors[]” or “[p]lumbing … facilities … maintained in good working order.” (Civ. Code, § 1941.1, subd. (a)(1) & (2).) To the extent a tenant is successful in proving that any of the conditions specified in section 1941.1, subdivision (a) exist, or that a landlord has breached a warranty of habitability implied in a lease, the tenant “may demonstrate that his nonpayment of rent was justified and that no rent is in fact ‘due and owing’ to the landlord.” (Green v. Superior Court (1974) 10 Cal.3d 616, 635.)

Apart from the claim for treble damages, Jansen offers no reasoned argument demonstrating that the allegations of the complaint with respect to the third or fourth causes of action, which arise from allegations that the premises was untenantable, are otherwise deficient. In addition, for present purposes, the Court assumes as true that the premises substantially lacked characteristics described in subdivision (a)(1) & (2) of section 1941.1, and was untenantable as of the date the Evergreens vacated the premises. (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) Therefore, Jansen’s contention that the claim for treble damages is defeated by an offset for unpaid rent due from the Evergreens is, for present purposes, an insufficient ground upon which the Court may grant the motion.

Jansen also argues that the Evergreens have failed to allege facts showing that Jansen acted willfully or with oppression, fraud, or malice sufficient to support a claim for treble damages under subdivision (k)(1)(D) of section 1947.12. Jansen asserts that because the treble damages authorized under section 1947.12 are punitive in nature, the Evergreens must allege facts that would be sufficient to support a claim for punitive damages. The Evergreens contend that the allegations of the complaint are sufficient to show willful conduct by Jansen in accepting rent payments which exceeded the limits set forth under section 1947.12, and also show, at a minimum, oppression by Jansen.

Statutory treble damages such as those authorized under section 1947.12 “are set by a legislative body; while the factfinder must still determine whether such damages are to be awarded, if they are granted the amount is fixed by statute. Statutory damages may either take the form of penalties, which impose damages in an arbitrary sum, regardless of actual damages suffered or … may provide for the doubling or trebling of the actual damages as determined by the judge or jury. [Citation.] Thus, while both exemplary damages and statutory damages serve to motivate compliance with the law and punish wrongdoers, they are distinct legal concepts, one of which is entrusted to the factfinder, the other to the Legislature. The numerous statutes specifically providing for treble damages testify to the fact that the Legislature never intended Civil Code sections 3294 and 3295 to restrict its ability to set the appropriate damage award in particular areas. [Citation.]” (Beeman v. Burling (1990) 216 Cal.App.3d 1586, 1597-1598, original italics.)

As further discussed above, section 1947.12 authorizes an award of treble damages for “willful” conduct, as well as conduct constituting oppression, fraud, or malice. Similarly, a party may recover punitive damages under section 3294 “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice …” (Civ. Code, § 3294, subd. (a).) “Malice” under section 3294 includes “despicable conduct” carried on with a “willful and conscious disregard of the rights or safety of others.” (Civ. Code, § 3294, subd. (c)(1).) As each statute authorizes damages which are punitive in nature based on similar conduct, the treble damages authorized under section 1947.12 appear intended to serve the same legislative objective as punitive damages authorized under section 3294, which “ ‘generally serve to deter the sort of extreme disregard for the rights of others that “decent citizens should not have to tolerate.” [Citation.]’ [Citation.]” (Menefee v. Ostawari (1991) 228 Cal.App.3d 239, 244; see also Baker v. Ramirez (1987) 190 Cal.App.3d 1123, 1138 [statute providing for treble damages for “willful and malicious” trespass treated as “penal and punitive”].) As noted above, the Evergreens do not appear to contend that the treble damages alleged in the complaint are intended as something other than punitive in nature.

Absent from the complaint are any allegations sufficient to show that Jansen’s conduct was “willful” for purposes of an award of statutory treble damages. For example, notwithstanding whether the allegations of the complaint are sufficient to show that the rental increases were imposed by Jansen intentionally, there are no allegations sufficient to show that Jansen knew that the rent increases violated the provisions of section 1947.12, or that Jansen intended to violate statutory limits with a reckless disregard of the Evergreens’ rights. (See, e.g., Meek v. Fowler (1935) 3 Cal.2d 420, 425-426 [general discussion of “willful misconduct”].) The allegations are also insufficient to show, either expressly or by inference, that Jansen acted with knowledge of any statutory violations or with a conscious or deliberate intent to injure the Evergreens. (McDonell v. American Trust Co. (1955) 130 Cal.App.2d 296, 299-300 (McDonell).)

Instead, it can be inferred from the express allegations of the complaint that the first time Jansen was informed, or became aware, of the purported violations was on March 6, 2024, shortly before the Evergreens allege they vacated the premises. It can also be inferred from the express allegations of the complaint that Jansen denies that the premises are subject to the provisions of section 1947.12, subdivision (a)(1). (Compl., ¶ 23.) For these reasons, at most, the allegations of the complaint describe negligent conduct by Jansen, which is insufficient to support an award of treble damages for “willful” conduct under subdivision (k)(1)(D) of section 1947.12. (McDonell, supra, 130 Cal.App.2d at p. 300.)

The same analysis applies with respect to whether or not the allegations of the complaint are sufficient to show that Jansen acted with “oppression”. Under section 3294, “oppression” refers to “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code, § 3294, subd. (c)(2).) While the term “despicable” is not defined in Civil Code section 3294, subdivision (c), it includes “circumstances that are ‘base,’ ‘vile,’ or ‘contemptible.’ [Citation.]” (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 725.) For the same reasons further discussed above, the allegations of the complaint are also insufficient to show that any conduct by Jansen was base, vile, or contemptible.

For all reasons further discussed above, the Evergreens have failed to allege facts sufficient to show willful conduct, or malice, oppression, or fraud, by Jansen. Therefore, the Court will grant, in part, the motion of Jansen to strike allegations of treble damages asserted under subdivision (k)(1)(D) of section 1947.12. As this is an original complaint which does not show on its face that there exists no reasonable possibility that the Evergreens can allege facts sufficient to support an award of statutory treble damages, the Court will grant the Evergreens leave to amend. (Eghtesad v. State Farm General Insurance Company (2020) 51 Cal.App.5th 406, 411; Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 [standards for granting leave to amend on a motion to strike are analogous to an order sustaining a demurrer].)

The Court will order the last sentence of paragraph 23, and the prayer for treble damages appearing in paragraph 2 of the “Prayer For Relief” on the first cause of action, stricken. Because the remaining matters alleged in paragraph 23 are otherwise essential to the claims alleged by the Evergreens, the Court will deny the motion to the extent it requests that the Court strike the entirety of paragraph 23 of the complaint. (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1281.)