Filed 7/22/13; pub. order 8/20/13 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
DAVID HENDLEMAN et al., B235404
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC406059)
v.
LOS ALTOS APARTMENTS, L.P., et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of Los Angeles County,
Michael Johnson, Judge. Affirmed.
Law Office of Sheri L. Kelly, Sheri L. Kelly; Consumer Law Offices and
Daniel T. LeBel for Plaintiffs and Appellants.
Willis Depasquale, James M. Hansen, Larry N. Willis and Thomas M.
Rutherford, Jr., for Defendants and Respondents.
_________________________
INTRODUCTION
Named plaintiffs David Hendleman and Anne Aaronson appeal from the order of
the trial court denying their motion for certification of a class of tenants at the Los Altos
Apartments in the context of their lawsuit against the landlord. Plaintiffs brought this
action alleging the landlord failed to repair and maintain the property in a safe and
habitable condition over a period of 10 months, unlawfully demanded increased rents,
and retaliated against the tenants for exercising their rights. The trial court denied
plaintiffs‟ motion for class certification for lack of ascertainability, community of
interest, and superiority. In their appeal, plaintiffs contend that the class is ascertainable
and there are common issues of law and fact, with the result they should be able to
proceed as a class against defendants Los Altos Apartments, L.P., Charles and Cynthia
Eberly, Inc., Allen Gross, Charles Eberly and David Strahm who are owners, managers,
or representatives of the apartment building (together the landlord or defendants). To the
extent problems of ascertainability or commonality exist, they argue, the class can be
modified. We conclude the trial court correctly ruled that individual issues of law and
fact predominate all five causes of action. Accordingly, we affirm the order.
FACTUAL AND PROCEDURAL BACKGROUND
1. The ordinances at issue
Plaintiffs‟ lawsuit is premised on two City of Los Angeles ordinances, the Rent
Escrow Account Program (REAP) (L.A. Mun. Code, § 162.00 et seq.) and the
Los Angeles Rent Stabilization Ordinance (RSO) (L.A. Mun. Code, § 151.00 et seq.).
The Los Angeles City Housing Code is designed to address the problem of “substandard
and unsanitary residential buildings” in the city that render the dwellings “unfit or unsafe
for human occupancy” and are detrimental to the health, safety, and welfare of their
occupants and threaten the physical, social, and economic stability of residential
buildings. (L.A. Mun. Code, § 161.102.) The goal of REAP is to provide a “just,
equitable and practical method” for enforcement of the purposes of the Housing Code
and “to encourage compliance by landlords with respect to the maintenance and repair of
residential buildings, structures, [and] premises.” (L.A. Mun. Code, § 162.01(A).) The
2
RSO addresses a declared shortage of decent, safe and sanitary housing at affordable
levels that has a detrimental effect on substantial numbers of renters in the city.
(L.A. Mun. Code, § 151.01.) The RSO regulates rents to safeguard tenants from
excessive rent increases while providing landlords with reasonable returns from their
rental units. (Ibid.)
Under REAP, the Los Angeles Housing Department (LAHD), among other city
agencies, periodically inspects rental buildings and orders landlords to correct violations
of the city‟s Housing Code and California‟s Health and Safety Code (L.A. Mun. Code,
§ 161.401, 161.201, 161.602.1, 161.701.2 & 161.702.) If the property is the subject of
one or more of such orders, the period for compliance has expired, and the orders concern
violations that affect the health or safety of the occupants, or if the property is subject to
the RSO and results in the deprivation of housing services or habitability, the LAHD
places the property into REAP. (L.A. Mun. Code, §§ 162.03-162.05.) Among the effects
of being placed into REAP is a mandatory reduction in rents, up to 50 percent, according
to a schedule that takes into account the nature of the violation, the severity of the
conditions, and the history of past untenantable conditions. (L.A. Mun. Code, § 162.05.)
When it accepts a property into REAP, the LAHD serves notice on all affected
tenants (L.A. Mun. Code, § 162.04(E)) and establishes a trust fund account into which
tenants may deposit rent payments. (L.A. Mun. Code, § 162.07(a)(1).) Once the
landlord complies with the notices and corrects the violations, the LAHD terminates
REAP and returns the funds in the escrow account minus fees to the landlord.
(L.A. Mun. Code, § 162.08.)
The RSO regulates rents. (L.A. Mun. Code, § 151.01.) A rent increase is defined
as an increase in rent or a reduction in housing services without a concomitant reduction
in rent. (L.A. Mun. Code, § 151.02.) The RSO controls the rate at which a landlord may
increase rent for property that is subject to the RSO.
3
2. The Los Altos Apartments and the LAHD
The Los Altos Apartments, located at 4121 Wilshire Boulevard, Los Angeles, is a
68-unit, five story apartment building constructed in the 1920s. Twenty eight units, or 40
percent of the apartments, are affordable units intended for low-income tenants.
The LAHD inspected the Los Altos Apartments three times in May, July, and
August 2006. It placed the property into REAP in February 2007 (Case No. 79550) and
reduced the rents by the maximum of 50 percent for “almost every single unit.” The
REAP order became final in March 2007. (L.A. Mun. Code, § 162.02(A).)
The Los Altos Apartments sued the City of Los Angeles (the City) for placing it
into REAP. Among other things, the landlord alleged that it had cooperated with
LAHD‟s inspectors and timely repaired the violations. The trial court dismissed the
action because, inter alia, the Los Altos Apartments failed to exhaust its administrative
remedies. Another division of this District Court of Appeal affirmed the lawsuit‟s
dismissal on the basis that the Los Altos Apartments failed to present a timely claim.
(Los Altos Apartments, L.P. v. City of Los Angeles (July 7, 2011, B222174) [nonpub.
opn.].)1
3. The instant complaint brought by the named plaintiffs
The named plaintiffs filed the fourth amended complaint on behalf of similarly
situated tenants who resided at, and paid rent to, the Los Altos Apartments between
January 22, 2005 and September 2010. The complaint alleges that the LAHD issued the
landlord repeated notices and placed the property into REAP for the following: fire safety
violations, such as the failure to maintain required self-closing, self-latching separation
fire doors in the common areas, obstructed exits and stairwells blocked emergency
egress, and problems with the exterior weatherproofing, all of which defects are alleged
to have an impact on the common areas and constitute violations of the Los Angeles
Municipal Code and California‟s Health and Safety Code. The complaint alleges that
1
Unpublished opinions of the Court of Appeal may be cited under the doctrines of
law of the case and collateral estoppel. (Cal. Rules of Court, rule 8.1115(b).)
4
during the class period, the landlord reduced the following housing services: (1) fire and
emergency safety and (2) weatherproofing, which service reductions caused the building
to be accepted into REAP; along with (3) trash pickup causing overflowing trash bins;
(4) elevator function; and (5) security, all of which deficiencies affect tenants in a similar
fashion. The complaint alleges further that in violation of REAP, the landlord demanded
the full unadjusted rent, and sometimes more, by (1) issuing multiple notices to plaintiffs
and the putative class falsely stating the tenants were obligated to pay the full amount
directly to the landlord, (2) issuing three-day notices to pay rent or quit, and (3) issuing
notices falsely stating the tenants owed past due rent in the amount of hundreds and
sometimes thousands of dollars.
Plaintiffs allege against the landlord: (1) violation the RSO (L.A. Mun. Code,
§ 151.04) by charging the full rent despite reducing housing services; (2) retaliation
against the class in violation of REAP (L.A. Mun. Code, § 162.00 et seq.) by demanding
every tenant pay rent that exceeded the reduced amounts, issuing three-day notices to pay
rent or quit, and demanding tenants pay past-due rent directly to the landlord; (3-4)
breach of the implied warranty of habitability and nuisance by reducing services and
causing the property to be accepted into REAP; and (5) abuse of process. In addition to
damages, plaintiff seek an injunction to abate the nuisance and the landlord‟s harassment.
4. Plaintiffs’ class certification motion
a. class and subclass definition
The two named plaintiffs moved for certification of a class defined as follows:
“All tenants of the Los Altos Apartments, located at 4121 Wilshire Blvd., Los Angeles,
CA 90010, during any part of the time period of January 22, 2005 to the present.”
Plaintiffs‟ proposed subclass would consist of “Any class member who received
any of the following notices: (1) a three-day notice to pay rent or quit on or about
April 12, 2007; (2) a notice dated April 16, 2007 stating that the tenant was obligated to
„pay your full rent directly to the landlord;‟ or (3) a notice in late June, 2007 stating that
the tenant owed a past due amount, without an explanation as to what the overdue amount
referred.”
5
The certification motion defined the term “ „tenant‟ ” in the class and subclass,
based on the RSO (L.A. Mun. Code, § 151.02). The trial court proposed a revision to
plaintiffs‟ definition to include, rental payments accepted by the landlord. It reasoned
that case law recognizes as tenants, not just those who were parties to leases or subleases,
but also those who were subtenants whose rental payments were accepted by a tenant.
The final proposed iteration read: “The term „tenant‟ in the Class and Subclass means any
tenant, lessee, or occupant under a written lease or rental agreement, or any tenant,
subtenant, sublessee or other person entitled to use or occupy a rental unit and who
submitted one or more rental payments that were accepted by the Landlord.”
Plaintiffs emphasized that the class was ascertainable. The landlord provided the
names, dates of occupancy, and last known addresses of 132 tenants who signed leases.
Thus, identifying the tenants who overpaid rent when the property was in REAP could be
accomplished by comparing the landlord‟s records with the City‟s orders, plaintiffs
argued. In fact, defendants had already identified many of the class and subclass
members, plaintiffs observed.
b. Common questions of law and fact
Plaintiffs averred that the class and subclass shared a community of interest
because, among other things, common questions of law and fact predominated. Plaintiffs
asserted their complaint‟s five causes of action arose from a single set of four common
questions: “(1) whether severe Code violations, as cited by the LAHD, affecting the
whole building existed at Los Altos from May 2006 through March 2007, and if so,
whether Plaintiffs are entitled to recover partial refunds of rent under Plaintiffs‟ legal
theories; (2) whether, under the circumstances of the Property being placed in REAP, the
Landlord wrongfully demanded, collected or retained more than 50% of rent from the
tenants; (3) whether the uniform three-day notices to pay rent or quit and other uniform
notices demanding more than the reduced amount of rent from the tenants when the
Property was in REAP constituted retaliation; and (4) whether the Landlord has failed to
adequately maintain the elevator, security, garbage, and other housing services at the
Los Altos during the class period.”
6
Many of the defects involved code violations or habitability issues in individual
apartments. On appeal, plaintiffs declare they are not challenging the trial court‟s order
denying certification of a class for defects in individual units. Rather, plaintiffs seek
review of the trial court‟s denial of certification of a class affected by defects in the
common areas only.
As common evidence of substandard conditions in the common areas, plaintiffs
pointed to testimony from the LAHD‟s housing inspectors, the LAHD inspection reports
and work logs reflecting the 2006-2007 violations, the landlord‟s maintenance records
and past due trash bills, testimony from percipient witnesses, and photos. Attached to the
certification motion was a list the landlord gave LAHD of over 60 tenants who lived at
Los Altos Apartments when the building was referred to REAP, along with the tenants‟
then-current, non-REAP rents. Also included with the motion were the landlord‟s notice
to “All Tenants” demanding full rent while the building was in REAP, which the building
manager testified in deposition was distributed to every tenant and posted in the common
areas.
5. Opposition to the class certification motion
Defendants‟ opposition first raised questions about plaintiffs‟ ability to
demonstrate an ascertainable class. Defendants argued that, as defined by plaintiffs,
membership in the class “would require a person by person inquiry and evaluation of
individual facts.” For example, Unit 307 was leased to one person, whereas named
plaintiff Aaronson occupied it, necessitating individual inquiry of the facts giving rise to
the occupancy to determine class membership. Referring to the named plaintiffs,
defendants asserted that Aaronson lacked standing and was an inadequate class
representative as she never signed a lease agreement and she paid her rent directly to the
lessee of Unit 307 until August 2007, after the property was removed from REAP. Also,
Aaronson testified that while the property was in REAP, she never paid more than 50
percent rent. Hendleman was an inadequate representative because the trial court had
already ruled Hendleman‟s claims in the second cause of action were barred by the
statute of limitations.
7
Defendants also argued that individualized issues predominated defeating
commonality. Evidence of retaliation and harassment raised individual issues about the
circumstances of the communications between the landlord and each tenant and whether
a tenant felt harassed and their individual reactions to rent demands, defendants averred.
As for defects of the property, individual evidentiary issues existed about whether any of
the alleged conditions interfered with each tenant‟s use of the services, how long the
conditions affected each tenant, the type of harm suffered, the seriousness of the harm,
and individual issues of causation. Defendants also argued that the LAHD cited many
Code violations that were caused by tenants.2
Finally, defendants‟ opposition to the certification motion urged that class action
is not a superior method to other litigation approaches.
6. The trial court’s ruling
The trial court requested supplemental briefing on the class definition explained
above, and about whether, as the result of the outcome of defendants‟ lawsuit against the
City of Los Angeles, defendants are collaterally estopped from arguing that alleged
habitability problems were caused by class members. After further briefing and
argument, the trial court denied plaintiffs‟ class certification motion. The court ruled the
class was not ascertainable, individual questions of fact and law predominated, collateral
estoppel did not bar defendants from raising the tenant misconduct defense, and class
action was not a superior method of litigation. Plaintiffs filed their timely appeal.
DISCUSSION
1. Principles of class certification
“Code of Civil Procedure section 382 authorizes class actions „when the question
is one of a common or general interest, of many persons, or when the parties are
numerous, and it is impracticable to bring them all before the court . . . .‟ The party
2
To refute the named plaintiffs‟ habitability claims, defendants submitted
declarations executed in 2010 and 2011 from 40 tenants averring that, in the particular
declarant‟s opinion, there was no problem with the enumerated defects. The trial court
did not mention these declarations in its ruling on the certification motion.
8
seeking certification has the burden to establish the existence of both an ascertainable
class and a well-defined community of interest among class members [citations]” (Sav-
On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326), and “substantial
benefits from certification that render proceeding as a class superior to the alternatives.”
(Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021 (Brinker).)
As “ „trial courts are ideally situated to evaluate the efficiencies and practicalities
of permitting group action, they are afforded great discretion in granting or denying
certification.‟ ” (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at
p. 326.) Accordingly, “in the absence of other error, a trial court ruling supported by
substantial evidence generally will not be disturbed „unless (1) improper criteria were
used [citation]; or (2) erroneous legal assumptions were made [citation]‟ [citation].
Under this standard, an order based upon improper criteria or incorrect assumptions calls
for reversal „ “even though there may be substantial evidence to support the court‟s
order.” ‟ [Citations.] Accordingly, we must examine the trial court‟s reasons for denying
class certification” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435–436) and
“ignore any unexpressed grounds that might support denial.” (Kaldenbach v. Mutual of
Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 844.) “We may not reverse, however,
simply because some of the court‟s reasoning was faulty, so long as any of the stated
reasons are sufficient to justify the order. [Citation.]” (Ibid.)
2. Commonality of law and fact
The “ „ “community of interest requirement embodies three factors:
(1) predominant common questions of law or fact; (2) class representatives with claims or
defenses typical of the class; and (3) class representatives who can adequately represent
the class.” ‟ [Citations.]” (Brinker, supra, 53 Cal.4th at p. 1021.) The “[p]laintiffs [have
the] burden to establish the requisite community of interest and that „. . . questions of law
or fact common to the class predominate over the questions affecting the individual
members.‟ [Citation.]” (Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th
1096, 1104.) “ „The ultimate question in every case of this type is whether . . . the issues
which may be jointly tried, when compared with those requiring separate adjudication,
9
are so numerous or substantial that the maintenance of a class action would be
advantageous to the judicial process and to the litigants.‟ [Citations.]” (Id. at pp. 1104-
1105.) Thus, “[p]resented with a class certification motion, a trial court must examine
the plaintiff‟s theory of recovery, assess the nature of the legal and factual disputes likely
to be presented, and decide whether individual or common issues predominate.”
(Brinker, supra, at p. 1025.) “Proof of most of the important issues as to the named
plaintiffs” must “supply the proof as to all” members of the class. (Vasquez v. Superior
Court (1971) 4 Cal.3d 800, 815.)
Although on review we assume all causes of action have merit, “ „issues affecting
the merits of a case may be enmeshed with class action requirements . . . .‟ [Citations.]
When evidence or legal issues germane to the certification question bear as well on
aspects of the merits, a court may properly evaluate them. [Citations.] The rule is that a
court may „consider[ ] how various claims and defenses relate and may affect the course
of the litigation‟ even though such „considerations . . . may overlap the case‟s merits.‟
[Citations.]” (Brinker, supra, 53 Cal.4th at pp. 1023-1024.) More specifically, “whether
an element may be established collectively or only individually, plaintiff by plaintiff, can
turn on the precise nature of the element and require resolution of disputed legal or
factual issues affecting the merits. For example, whether reliance or a breach of duty can
be demonstrated collectively or poses insuperable problems of individualized proof may
be determinable only after closer inspection of the nature of the reliance required or duty
owed and, in some instances, resolution of legal or factual disputes going directly to the
merits. [Citations.]” (Id. at p. 1024.)
“Predominance is a factual question; accordingly, the trial court‟s finding that
common issues predominate generally is reviewed for substantial evidence. [Citation.]
We must „[p]resum[e] in favor of the certification order . . . the existence of every fact the
trial court could reasonably deduce from the record . . . .‟ [Citation.]” (Brinker, supra,
53 Cal.4th at p. 1022.)
With these rules in mind, we turn to the trial court‟s ruling denying class
certification.
10
a. The third cause of action: The trial court did not err in ruling the claim for
breach of the implied warranty of habitability is not amenable to common proof.
A warranty of habitability is implied in residential leases in California. (Green v.
Superior Court (1974) 10 Cal.3d 616, 629.) “In most cases substantial compliance with
those applicable building and housing code standards which materially affect health and
safety will suffice to meet the landlord‟s obligations under the common law implied
warranty of habitability.” (Id. at p. 637, italics added.)
However, the mere “existence of a prohibited (uninhabitable) condition or other
noncompliance with applicable code standards does not necessarily constitute a breach of
the warranty of habitability.” (Friedman et al., Cal. Practice Guide: Landlord-Tenant
(The Rutter Group 2012) § 3:39, p. 3-13, citing Green v. Superior Court, supra,
10 Cal.3d at pp. 637-638.) “Whether the defect or code noncompliance is „substantial‟
(and thus a cognizable breach) or „de minimis‟ (no actionable breach) is determined on a
case-by-case basis.” (Friedman et al., supra, § 3:40, p. 3-13.) “In considering the
materiality of an alleged breach, both the seriousness of the claimed defect and the length
of time for which it persists are relevant factors. Minor housing code violations standing
alone which do not affect habitability must be considered de minimis and will not entitle
the tenant to reduction in rent; and likewise, the violation must be relevant and affect
the . . . common areas which [the tenant] uses.” (Hinson v. Delis (1972) 26 Cal.App.3d
62, 70, disapproved on other grounds by Knight v. Hallsthammar (1981) 29 Cal.3d 46,
55, fn. 7.) Stated otherwise, whether a particular defect or violation of a housing code
constitutes a breach of the implied warranty of habitability depends on the severity and
duration of the defect or violation. Breach is a rebuttable presumption affecting the
burden of producing evidence. (Friedman et al., supra, §§ 3:46 to 3:47, pp. 3-14 to 3-
15.)
Plaintiffs do not quarrel with the proposition that whether a defect or code
violation is sufficiently substantial to constitute an actionable breach is determined on a
case by case basis. They argue instead that a cause of action for breach of the warranty
of habitability can be brought with evidence common to all tenants in a building.
11
Plaintiffs claim their common evidence for their liability-only class includes the LAHD
inspection reports, work logs, past due trash bills, and plaintiffs‟ testimony and
photographs. The LAHD inspector declared that the fire-safety and weatherproofing
violations “affect the entire building.” Plaintiffs note that this evidence is how any
individual tenant would prove the landlord breached the warranty of habitability as to
them. (Friedman et al., Cal. Practice Guide: Landlord-Tenant, supra, § 3:63 to 3:65,
pp. 3-19 to 3-20.)3 It is important here to make the distinction between code violations
and service reductions. The common-area code violations cited by the LAHD concerned
weatherproofing and fire exit defects that triggered REAP, but not the alleged service
reductions, i.e., trash, elevator, and security. In our view, the code violations and service
reduction defects raise individualized problems of proof that go to the heart of the merits
and defeat commonality.
Community of interest “means „each member must not be required to individually
litigate numerous and substantial questions to determine his [or her] right to recover
following the class judgment.” (Washington Mutual Bank v. Superior Court (2001)
24 Cal.4th 906, 913-914, italics added.) Although plaintiffs‟ proffered evidence raises a
rebuttable presumption that there are code violations and service reductions having an
impact on the common areas of the building, plaintiffs must nonetheless demonstrate that
each defect is sufficiently substantial to be actionable. (Friedman et al., Cal. Practice
3
The parties argue at length about defendants‟ affirmative defense that tenant
misconduct caused the habitability problems. Among the reasons for defendants‟
opposition to class certification was the necessity of individualized evidence of particular
tenants‟ misconduct. Plaintiffs argued that certification cannot be defeated by a defense.
To the contrary, “[a] liability-only class certification may be denied . . . where there are
defenses that require individualized inquiry into each class member‟s claim.” (Weil &
Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2012)
§ 14:103.6, p. 14-74, citing In re Ford Motor Co. Ignition Switch Products (D.N.J. 1997)
174 F.R.D. 332, 347.) Plaintiffs also argued that defendants were collaterally estopped
from raising the question of tenant misconduct because they failed to raise the defense
when they could have in an appeal before the LAHD. Because we agree with the trial
court that class certification is defeated by the predominance of individual issues of
liability, we need not address the collateral estoppel question.
12
Guide: Landlord-Tenant, supra, § 3:40, p. 3-13.) While the trial court recognized that the
fire safety defects affected everyone in the building and three LAHD inspectors declared
that the cited violations affected every apartment in the building, the evidence supports
the trial court‟s finding that the alleged code violations and service reductions do not
affect all of the tenants in the same manner or to the same degree. (Vasquez v. Superior
Court, supra, 4 Cal.3d at p. 815.) As defendants demonstrated, some of the tenants have
not noticed and are not affected by some of the alleged code violations and service
reductions. The differences among the two named plaintiffs alone about the effect of the
alleged code violations and reductions in service reveal the need for individual proof of
impact on each plaintiff. For example, Hendleman and Aaronson report different
problems with the trash bins and by the condition of the elevator. Some tenants do not
use the elevator and so they would not be harmed by its intermittent failures. Security
was not promised under the lease and the manner and extent to which a tenant is
disturbed by defects in security differs. Weatherproofing problems may affect one tenant
and “never be seen by those who live in another area of the building.” Whether and how
each tenant is affected by the alleged code violations and service reductions, and the
extent and type of harm suffered, so as to establish that these conditions are “substantial”
and thus actionable, is not subject to common proof.
Plaintiffs insist that they need not demonstrate the effect that the code violations
have on each tenant because, citing Knight v. Hallsthammar, supra, 29 Cal.3d at page 54,
they argue tenants need not have been aware that a code violation existed for a landlord
to have breached the implied warranty of habitability. Knight stated “the fact that a
tenant was or was not aware of specific defects is not determinative of the duty of a
landlord to maintain premises which are habitable.” (Ibid., italics added.) But, the
implied warranty of habitability “does not support an action for strict liability.”
(Peterson v. Superior Court (1995) 10 Cal.4th 1185, 1191, 1206.) The question here is
not whether plaintiffs can by common proof demonstrate a breach of the duty, but
whether they can demonstrate a breach that is sufficiently substantial to be actionable.
(Green v. Superior Court, supra, 10 Cal.3d at pp. 637-638.) Certification of the class for
13
this cause of action would necessarily include tenants who are unaware of and do not
experience a service reduction, and would thus make the landlord strictly liable for the
mere existence of a defect. This is not simply a question of calculating damages, as
plaintiffs insist. The individual issues pervading this cause of action go to the question of
each tenant‟s entitlement to recover. “[A] class action cannot be maintained where each
member‟s right to recover depends on facts peculiar to his case.” (City of San Jose v.
Superior Court (1974) 12 Cal.3d 447, 459.) Here, evidence of numerous, substantial, and
individualized facts would be necessary for each tenant to establish his or her individual
right to recover thus rendering class litigation inappropriate. (Wilens v. TD Waterhouse
Group, Inc. (2003) 120 Cal.App.4th 746, 756; see also Basurco v. 2st Century Ins. Co.
(2003) 108 Cal.App.4th 110, 119 [no certification where “the existence of [earthquake]
damage, the cause of damage, and the extent of damage would have to be determined on
a case-by-case basis”].) Put otherwise, for the same reason that, as plaintiffs concede,
defects in an individual apartment are not amenable to common proof, defects that
substantially impinge on only some tenants in the building require individualized
evidence, particularly where there is demonstrated disagreement between the named
plaintiffs.4
In sum, the record contains substantial evidence to support the trial court‟s
findings that individual issues predominate and the court employed proper criteria and
legal assumptions in ruling that plaintiffs have not demonstrated the requisite
commonality with respect to the third cause of action.
4
On appeal, plaintiffs assert they are only seeking damages in the third cause of
action under a contract theory, i.e., the difference between the rent paid and the rent that
would have been reasonable (12 Witkin, Summary of Cal. Law (10th ed. 2005) Real
Property, § 627, p. 734), under which individualized “damages for discomfort and
annoyance are not recoverable.” (Ibid.) However, as we conclude individual issues of
liability predominate, we need not reach the question of damages.
14
b. The first cause of action: the trial court did not abuse its discretion in denying
certification of the claim of illegal rent increases under the RSO for lack of commonality.
In the first cause of action under the RSO, plaintiffs allege that the landlord
reduced services affecting the entire property without correspondingly reducing rent,
which conduct constitutes a rent increase under the RSO (L.A. Mun. Code, § 151.02).
They also allege that between February 2007 and June 2007, the property was in REAP
with a corresponding 50 percent reduction in rent. Nonetheless, plaintiffs allege,
defendants demanded, accepted, or retained more than the “Maximum Adjusted Rent
from all of the tenants” in violation of Los Angeles Municipal Code section 151.04. That
section reads, “It shall be unlawful for any landlord to demand, accept or retain more than
the maximum adjusted rent permitted pursuant to this chapter or regulation or orders
adopted pursuant to this chapter.” (L.A. Mun. Code, § 151.04(A).) The RSO defines
“Maximum Adjusted Rent” as maximum rent “less any rent reductions . . . imposed
pursuant to Section 162.00 et seq. [REAP].” (L.A. Mun. Code, § 151.02.) Plaintiffs rely
on this section to argue the landlord violated the RSO for by demanding, accepting, or
retaining, more than the maximum adjusted rent as determined by the LAHD, which by
definition involved reductions imposed pursuant to REAP.
The trial court found that by alleging reduced housing services, plaintiffs had
injected the same individualized habitability questions raised in the third cause of action.
We agree. The RSO defines housing services as “Services connected with the use or
occupancy of a rental unit including, but not limited to, utilities (including light, heat,
water and telephone) . . . the provision of elevator service, laundry facilities and
privileges, common recreational facilities, janitor service, resident manager, refuse
removal, furnishings, food service, parking and any other benefits privileges or
facilities.” (L.A. Mun. Code, § 151.02.) As noted, defendants presented evidence that
many tenants did not contract for the parking garage and its security, the two named
plaintiffs report different reactions to the condition of the trash bins, and many tenants
never use the elevator. Thus, as with the third cause of action for breach of the implied
warranty of habitability, individual factual issues predominate.
15
c. The second cause of action: the trial court did not abuse its discretion by
denying certification of plaintiffs’ retaliation claim for lack of commonality and lack of
an adequate representative.
In the second cause of action, plaintiffs allege that after the property was placed in
REAP, the landlord “harassed and retaliated against the tenants by demanding rent
exceeding the reduced amounts,” by issuing notices falsely stating that the tenants were
obligated to pay the full rent amount directly to the landlord, by issuing three-day notices
to pay rent or quit, or by issuing notices falsely stating that the tenants owed the landlord
hundreds and sometimes thousands of dollars in past due rent.
The trial court denied certification of a class for the second cause of action
because the “REAP program gives tenants the choice of paying full or reduced rent to the
landlord or to the City” and defendants had shown that “some tenants voluntarily chose to
continue paying their full rent to the landlord.”
Plaintiffs contend the trial court‟s ruling denying class certification was based on
an erroneous legal assumption because, they argue, a landlord of property in REAP
“cannot accept more than the reduced rent.” For this proposition, plaintiffs cite Los
Angeles Municipal Code section 151.04(A), which is a provision of the RSO. As noted,
section 151.04 states: “It shall be unlawful for any landlord to demand, accept or retain
more than the maximum adjusted rent permitted pursuant to this chapter or regulation or
orders adopted pursuant to this chapter.” (L.A. Mun. Code, § 151.04(A), italics added.)
While an RSO tenant may not acquiesce to paying more than the maximum adjusted rent
permitted (Gombiner v. Swartz (2008) 167 Cal.App.4th 1365, 1372 [“a landlord cannot,
even with the tenant‟s acquiescence or by mutual agreement, circumvent that which the
law prohibits” in RSO section 151.04]), the RSO is contained in an entirely different
chapter of the Municipal Code -- Chapter XV -- than REAP, which is found in Chapter
XVI. Section 151.04(A) of the Los Angeles Municipal Code is not authority for
plaintiffs‟ contention that the trial court made an erroneous legal assumption in ruling
that tenants have the option of paying the full amount of rent to the landlord under REAP.
16
Plaintiffs argue it stands to reason that the landlord of REAP property should be
precluded from demanding the full amount of rent lest landlords try to intimidate tenants.
However, the City, who enacted the RSO Chapter XV, knew how to forbid landlords
from demanding, accepting, or retaining rent in excess of the maximum adjusted rent
(L.A. Mun. Code, § 151.04), but noticeably did not enact a similar provision in REAP,
Chapter XVI. To be sure, REAP does contain tenant protections. Landlords may not
bring unlawful detainer actions on the basis of nonpayment of rent if the tenant is paying
rent into the escrow account. (L.A. Mun. Code, § 162.09(A).) A landlord “who retaliates
against a tenant for the tenant‟s . . . exercise of rights or duties under this article shall be
liable in a civil action for damages.” (L.A. Mun. Code, § 162.09(C).) And, landlords
“shall not increase the rent” for the current or subsequent tenants during the REAP period
and for a certain time thereafter. (L.A. Mun. Code, § 162.09(B), italics added.) Yet, this
last prohibition against increasing the rent, does not use the phrase “maximum adjusted
rent,” as defined in section 151.02 and as referred to by section 151.04. Plaintiffs have
not cited us to a provision of REAP that precludes landlords from accepting and tenants
from paying the full amount of rent notwithstanding his or her apartment is in REAP.
Rich v. Schwab (1984) 162 Cal.App.3d 739, does not aid plaintiffs. There, the
tenants sued their landlord for increasing rents to a mobile home park without giving
90 days‟ notice in violation of Civil Code section 798.30 for the purpose of retaliating
against the tenants for organizing and petitioning the city for rent control under
Civil Code section 1942.5. (Rich v. Schwab, at p. 742.) Certification of a class of tenants
was proper there because of the predominance of common questions of law and fact: The
rent increase notice to all tenants in Rich violated Civil Code section 798.30. (Rich v.
Schwab, at pp. 744-745.) Here, however, REAP does not preclude tenants from paying
the full amount of rent to the landlord. Therefore, individual issues predominate about
who paid the full amount voluntarily and who did so because they were intimidated.
More important, however, the trial court identified another obstacle to certification
of the second cause of action, namely a problem of adequacy of representation. “ „ “The
cases uniformly hold that a plaintiff seeking to maintain a class action must be a member
17
of the class he claims to represent.” ‟ ” (Caro v. Procter & Gamble Co. (1993) 18
Cal.App.4th 644, 663.) Hendleman‟s claim under the second cause of action is barred by
the statute of limitations; and Aaronson was not a tenant between March and June 2007.
As defined, a tenant is “any tenant, lessee, or occupant under a written lease or rental
agreement, or any tenant, subtenant, sublessee or other person entitled to use or occupy a
rental unit and who submitted one or more rental payments that were accepted by the
Landlord.” Aaronson did not live in her apartment under a lease and she paid rent
directly to the tenant of that apartment until August 2007, after the property was removed
from REAP and beyond the proposed subclass period. Thus, there is no representative
for the second cause of action. There was no error in denying the certification motion as
to the second cause of action.
d. The fourth cause of action: The trial court did not abuse its discretion in
denying certification of the nuisance cause of action for lack of commonality.
Plaintiffs alleged the landlord‟s harassment of tenants by issuing notices
demanding rent, “as well as the defective conditions of the Property . . . constitute a
nuisance” in that they are injurious to tenants‟ health and comfortable enjoyment of the
property. In denying plaintiffs‟ certification motion, the trial court ruled that individual
factual and legal issues predominate. We agree.
“Code of Civil Procedure section 731 specifically authorizes an action by any
person whose property is injuriously affected, or whose enjoyment of property is lessened
by a nuisance, as the same is defined in Civil Code section 3479 (see also 47 Cal.Jur.3d,
Nuisance, § 59, p. 299). Civil Code section 3479 defines a nuisance as „[a]nything which
is injurious to health, or is indecent or offensive to the senses, or an obstruction to the
free use of property, so as to interfere with the comfortable enjoyment of life or
property . . . .‟ ” (Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 919.) “The
statutory definition of nuisance appears to be broad enough to encompass almost any
conceivable type of interference with the enjoyment or use of land or property.” (Ibid.)
“ „It is settled that, regardless of whether the occupant of land has sustained physical
injury, he may recover damages for the discomfort and annoyance of himself and the
18
members of his family and for mental suffering occasioned by fear for the safety of
himself and his family when such discomfort or suffering has been proximately caused
by a trespass or a nuisance.‟ ” (Id. at p. 920.) The nuisance plaintiff must show “a
substantial interference with the use and enjoyment of the premises not merely
de minimis interference.” (Ibid., italics added)
City of San Jose v. Superior Court, supra, 12 Cal.3d 447 involved the certification
of a class of nuisance plaintiffs. There, the plaintiffs, who lived in the flight pattern of
the San Jose airport, sued the city seeking recovery for diminution in the market value of
their properties caused by airplane noise, vapor, dust, and vibration. (Id. at p. 453.) The
Supreme Court vacated the order certifying a class, explaining: “the present action for
nuisance and inverse condemnation is predicated on facts peculiar to each prospective
plaintiff. An approaching or departing aircraft may or may not give rise to actionable
nuisance or inverse condemnation depending on a myriad of individualized evidentiary
factors. While landing or departure may be a fact common to all, liability can be
established only after extensive examination of the circumstances surrounding each
party. Development, use, topography, zoning, physical condition, and relative location
are among the many important criteria to be considered. No one factor, not even noise
level, will be determinative as to all parcels.” (Id. at pp. 460-461, italics added, fn.
omitted.)
Likewise here, as explained with respect to the third cause of action for breach of
the implied warranty of habitability, even if the existence of the code violations and
service reductions in the common areas of the property were subject to common proof,
whether a tenant has suffered discomfort and annoyance from an intermittently operating
elevator, defects in the garage security, trash, inoperable fire-exit door, or
weatherproofing problems, or was intimidated by the landlord depends on facts specific
to each particular tenant. Whether the nuisance is actionable can only be established after
examination of the circumstances of each tenant, such as the location of each tenant‟s
unit, whether and how much a particular tenant used the specific service or was affected
19
by its reduction, or felt harassed by the landlord‟s demands for rent. (City of San Jose v.
Superior Court, supra, 12 Cal.3d at p. 459.)
Plaintiffs argue on appeal that the trial court omitted to discuss the possibility of
certifying a remedy class for the prayer for injunctive relief. However, we must “ignore
any unexpressed grounds” for denial of certification and need not reverse simply because
the court failed to address the injunction issue where the court‟s stated reason was
sufficient to justify the denial of the certification motion as to the fourth cause of action
for nuisance. (Kaldenbach v. Mutual of Omaha Life Ins. Co., supra, 178 Cal.App.4th at
p. 844.)
e. The fifth cause of action: the trial court did not abuse its discretion in denying
plaintiffs’ abuse of process claim for lack of numerosity.
Plaintiffs‟ fifth cause of action for abuse of process alleges that on April 12, 2007,
the landlord issued three-day notices to pay rent or to quit to “several tenants residing at
the Property” without intending to evict the recipients and without contemplating
litigation, and that “many tenants to whom three-day notices were issued” paid more than
the reduced rent amount imposed by the LAHD. (Italics added.) Certification of a class
for this cause of action was inappropriate, according to the trial court, because among
other things, the class definition proposed by the plaintiffs, all tenants from January 2005
to September 2010, is far more expansive than the April 12, 2007 date. Plaintiffs offered
to redefine the class to include a subclass of tenants who received notices in April and
June 2007. The trial court properly concluded that this would restructure the class
configuration as proposed in plaintiffs‟ motion for certification and plaintiffs had not
justified the proposed subclass in terms of numerosity, ascertainability, commonality, and
adequacy of representation.
The record supports the trial court‟s ruling. For example, plaintiffs assert that 18
members of the class received three-day notices and of those, a smaller amount, “many,”
paid more than the REAP imposed rent. “For a class to be considered ascertainable, its
members must have a plausible cause of action against the defendant. [Citation.] If
multiple plaintiffs fail to meet this elementary standard, no ascertainable class exists, and
20
a class action may not be maintained. [Citation.]” (American Suzuki Motor Corp. v.
Superior Court (1995) 37 Cal.App.4th 1291, 1294-1295, disapproved on another point in
Linder v. Thrifty Oil Co., supra, 23 Cal.4th at pp. 442-443.)
f. Amendment
Both on appeal and during oral argument in the trial court, plaintiffs made
repeated offers to redefine the class or subclass, or to certify a class with respect to
certain allegations but not others, or damages only.5 Plaintiffs are essentially asking this
court not to act as a court of review, but to rule on the class certification anew, based on
representations made after plaintiffs filed their motion for certification. That is not the
function of the appellate court. (Sav–On Drug Stores, Inc. v. Superior Court, supra,
34 Cal.4th 319, 326; Linder v. Thrifty Oil Co., supra, 23 Cal.4th at pp. 435–436;
Kaldenbach v. Mutual of Omaha Life Ins. Co., supra, 178 Cal.App.4th at p. 844.)
Plaintiffs seeking to certify a class have the burden to demonstrate to the trial court
ascertainability, commonality, and adequacy of the class representatives. (Sav–On Drug
Stores, Inc. v. Superior Court, supra, at p. 326.) Such showing is not made in argument
or by adjusting, amending, or jettisoning various allegations or prayers in the complaint
on the fly. Plaintiffs proposed so many amendments that they are effectively redefining
their entire class action. If plaintiffs would like to reconsider the shape of their class and
the class allegations, they must do so in the first instance in the trial court.
To summarize, the trial court‟s reasoning was correct and it did not use improper
criteria or erroneous legal assumptions. As the result of our conclusion that the court did
not abuse its discretion in denying certification of all five of plaintiffs‟ causes of action
5
For example, plaintiffs‟ certification motion seeks to include a class of tenants
“during any part of the time period of January 22, 2005 to the present,” i.e., September
2010. However, both below and on appeal, plaintiffs repeatedly assert that they are only
seeking damages for violations that the landlord did not timely correct for a 10 month
period between May 2006 and March 2007 causing acceptance into REAP. Plaintiffs
argue on appeal that the class could be redefined or a subclass could be certified around
the dates. Plaintiffs have yet to explain this discrepancy in dates, although the trial court
raised it in its ruling denying certification.
21
on the basis that individual issues predominate, we need not address plaintiffs‟ other
challenges to the trial court‟s ruling. (Kaldenbach v. Mutual of Omaha Life Ins. Co.,
supra, 178 Cal.App.4th at p. 844.)
DISPOSITION
The order is affirmed. Respondents to recover costs on appeal.
ALDRICH, J.
We concur:
CROSKEY, Acting P. J.
KITCHING, J.
22
Filed 8/20/13
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
DAVID HENDLEMAN et al., B235404
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC406059)
v.
ORDER CERTIFYING OPINION
LOS ALTOS APARTMENTS, L.P., et al., FOR PUBLICATION
[NO CHANGE IN JUDGMENT]
Defendants and Respondents.
THE COURT:
The Los Altos Apartments, L.P., et al. has requested that our opinion, filed on
July 22, 2013, be certified for publication. It appears that our opinion meets the standards
set forth in California Rules of Court, rule 8.1105(c). The request is granted. The
opinion is ordered published in the Official Reports.
[There is no change in the Judgment.]