Is a Duty Owed by a Landowner for an Open and Obvious Defect?

The recent California case of Nicoletti v. Kest, involved an appeal from a trial court order granting Respondent Dolphin Marina Apartments’ (Dolphin) summary judgment motion against Appellant Susan Nicoletti (Nicoletti). 

The appellate court concluded that Dolphin owed no duty to warn Nicoletti of a water current that openly and obviously interfered with one of three building entrances. 

 

In 2020, Nicoletti took her neighbor’s dog for a walk around Dolphin’s apartment complex located in Marina Del Rey, California. Nicoletti observed that it was raining that day with thunderstorms. 

 

At around 3:30 p.m., Nicoletti crossed the driveway of the North Side Gate entrance that led to the underground parking lot. The apartment complex also had a South Side Gate entrance and another entrance on Panay Way. 

 

Nicoletti was a thirteen-year resident of Dolphin’s apartment complex and was familiar with its premises. Nicoletti testified that she had gone past the North Side Gate “thousands of times” before the incident. 

 

Before crossing, Nicoletti observed that the concrete on the North Side Gate driveway was wet, and rainwater formed a current that was running down the driveway. Nicoletti did not observe any caution tape or other warning advisements. 

 

Nicoletti proceeded to cross, and the rainwater current knocked her down. Nicoletti then fell down the North Side Gate driveway and hit the gate at the bottom of the driveway. Nicoletti sustained injuries to her right shoulder, left knee, and face. 

 

Nicoletti filed a complaint against Dolphin alleging general negligence and premises liability because Dolphin had a duty to warn of the running rainwater on the driveway with caution tape or other warning signals. 

 

Dolphin filed a motion for summary judgment arguing that because the running rainwater was open and obvious, Dolphin had no duty to warn. 

 

The trial court granted Dolphin’s motion for summary judgment. 

 

The trial court reasoned that Dolphin did not have a duty to warn of the running rainwater on the driveway because it was a dangerous condition that was sufficiently obvious.

The trial court concluded that a reasonably careful person would know that the running water on the driveway was dangerous and thus, the undisputed facts show that she was aware of an open and obvious condition for which the Defendant had no duty of care about which to warn her. 

 

Nicoletti argued that the dangerous condition caused by the lateral force of rainwater was not open and obvious. As such, Dolphin had a duty to warn of the dangerous condition.

 

A landowner must maintain land in its possession and control in a reasonably safe condition. 

 

But an accident on a landowner’s property does not necessarily create premises liability.  

 

The elements of a cause of action for premises liability are the same as those for negligence. 

The plaintiff must prove duty, breach of duty, causation, and damages. 

 

Whether a duty should be imposed on a defendant in a premises liability action depends on a variety of policy considerations, known as the Rowland factors. 

 

The “most important” of these considerations or factors is “the foreseeability of injury to another.” 

 

A court’s task—in determining duty—is not to decide whether a particular plaintiff’s injury was reasonably foreseeable in light of a particular defendant’s conduct, but rather to evaluate more generally whether the category of negligent conduct at issue is sufficiently likely to result in the kind of harm experienced that liability may appropriately be imposed on the negligent party.

 

Foreseeability, when analyzed to determine the existence or scope of a duty, is a question of law to be decided by the court.

 

A harm is typically not foreseeable if the “dangerous condition is open and obvious.” 

 

Generally, if a danger is so obvious that a person could reasonably be expected to see it, the condition itself serves as a warning, and the landowner is under no further duty to remedy or warn of the condition.

 

In that situation, owners and possessors of land are entitled to assume others will "perceive the obvious" and take action to avoid the dangerous condition. 

 

The presence of standing water and the manner in which it drained into or toward the transportation office would have been obvious and apparent to any reasonably observant person, as would the danger that the water might create slippery surfaces and cause one to slip and fall. 

 

As such, the property owner had no duty to warn of the dangerous condition. 

 

Nicoletti contended that although she was aware that it was raining and the ground on the driveway to the North Side Gate was wet with rainwater, she did not know that the current of rainwater posed a danger to her safety. 

 

Nicoletti did not dispute that she observed that there was water running down the driveway. 

 

Running water on a surface is arguably a more obvious danger than standing water. Not only does the water current make the surface slippery, but also a reasonable person would observe that running water could create a force that would cause someone to fall over. 

 

Further, it is a matter of common knowledge among children and adults that wet concrete is slippery and that, when on a slanting incline such as a driveway, it does not provide a safe footing. 

 

Accordingly, the dangerous condition was open and obvious to Nicoletti, and Dolphin had no duty to warn. 

 

Nicoletti further argued that necessity required her to cross the North Side Gate driveway. 

 

The appellate court disagreed, and concluded that she was not required to use the North Side Gate entrance and could have used a different entrance to enter the apartment complex. 

 

While as a general rule, a landowner does not have a duty to remedy or warn of an obviously dangerous condition on his or her property, this is not true in all cases. It is foreseeable that even an obvious danger may cause injury, if the practical necessity of encountering the danger, when weighed against the apparent risk involved, is such that under the circumstances, a person might choose to encounter the danger. 

 

A landowner’s duty of care is not negated when it is foreseeable that, because of necessity or other circumstances, a person may choose to encounter the condition.

 

Nicoletti was not required to use the North Side Gate entrance to the apartment complex. Nicoletti failed to rebut Dolphin’s evidence showing that the apartment complex had multiple entrances. 

 

Nicoletti’s testimony that she commonly used one of the three entrances falls short of establishing a “necessity” to use that entrance when water currents impeded it.

 

Other residents’ common use of an entrance does not point to a “necessity” to use that particular entrance. 

 

Accordingly, the undisputed facts indicated that it was not foreseeable that Nicoletti would knowingly embrace an entirely obvious risk by choosing to cross the North Side Gate driveway. 

 

The California Supreme Court has declared that courts must assign tort duties to ensure that those best situated to prevent such injuries are incentivized to do so. 

 

Under these circumstances, Nicoletti was in a better position to avoid the obvious danger of walking across a current of water that formed as a result of a rainstorm that began that same day. 

 

Nicoletti could have chosen to use a different entrance. 

The burden imposed on Dolphin to constantly monitor weather conditions and immediately install warning signals is outweighed by Nicoletti’s ability to avoid a condition she should have observed as obviously dangerous. 

 

LESSONS:

 

1.         A landowner must maintain land in its possession and control in a reasonably safe condition. 

 

2.         The elements of a cause of action for premises liability are the same as those for negligence. The plaintiff must prove duty, breach of duty, causation, and damages. 

 

3.         A harm is typically not foreseeable if the “dangerous condition is open and obvious.” 

 

4.         Generally, if a danger is so obvious that a person could reasonably be expected to see it, the condition itself serves as a warning, and the landowner is under no further duty to remedy or warn of the condition.

When is it a Lease or a License Agreement in California Real Estate?

This issue was explored in the recent California case of Castaic Studios, LLC v. Wonderland Studios, LLC. 

Plaintiff Castaic Studios, LLC (Castaic) and Wonderland Studios, LLC (Wonderland) entered an agreement under which Castaic granted Wonderland the “exclusive right to use” certain areas of its commercial property. 

 

The agreement specified that it was a “license agreement,” as opposed to a lease, with Castaic “retain[ing] legal possession and control” of the premises. 

 

The agreement was to be “governed by the contract[] laws and not by the landlord tenant laws.” 

 

When Wonderland defaulted, Castaic nonetheless filed an unlawful detainer action seeking possession of the property. 

 

The trial court sustained Wonderland’s demurrer without leave to amend, reasoning that Castaic had waived its right to pursue the remedy of unlawful detainer. 

 

This was correct, so the appellate court affirmed. 

 

Castaic owns a commercial property in Castaic, California. In October 2021, Castaic entered a “License Agreement” with Wonderland, under which Castaic granted Wonderland “the exclusive,” but “non-possessory” right “for the use of” the property, with the exception of a stage area and storage building.

 

The agreement afforded Wonderland 35 consecutive one-month options to extend. To exercise these options, Wonderland was required to timely make all payments owed and to send Castaic a letter of intention to extend the term for the next period at least 20 days before the end of the current month. 

 

In July 2022, Wonderland was in default of the payments owed and failed to timely send a letter of intention to extend the term for August of 2022 as required.

 

Therefore, Castaic alleged the agreement expired by its own terms as of July 31, 2022.

 

On July 13, 2022, Castaic sent Wonderland an email notifying Wonderland that it was in default.

 

Section 6 of the agreement states it was not a lease or any other interest in real property. It was a contractual arrangement that creates a revocable license. Licensor retains legal possession and control of the Premises and the areas assigned to Licensee. Licensor has the right to terminate this Agreement due to Licensee's default.

 

Section 13.3(a) provides that if Wonderland defaults, Castaic may immediately terminate Licensee’s right to use of the Premises by any lawful means, in which case Licensor’s obligations under this Agreement shall immediately terminate and Licensor shall have option to immediately take over use of the Premises from the Licensee.

 

Section 29 provides, “[t]his agreement will be governed by the contract[] laws and not by the landlord tenant laws.” 

 

Castaic filed its complaint for unlawful detainer against Wonderland on August 22, 2022, seeking possession of the property and unpaid “rent.” 

 

Wonderland demurred on the grounds the agreement expressly states it is not governed by landlord-tenant laws and the three-day notice Castaic served on Wonderland did not contain the information that Code of Civil Procedure section 1161(2) requires before the filing of an unlawful detainer action. 

 

The trial court sustained the demurrer without leave to amend. 

 

Relying on sections 6 and 29 (designating agreement as “revocable license,” “not a lease,” and governing law as “contract[] law,” not “landlord tenant law”), the court concluded that Castaic had waived its right to pursue the remedy of unlawful detainer. 

 

The court reasoned Castaic has not alleged and cannot allege a relationship between it and Wonderland that would allow Castaic to pursue an unlawful detainer action against Wonderland.

 

The trial court also observed that even if Castaic could state a claim under the unlawful detainer statute, Castaic failed to comply with the statutory notice requirements set forth in Code of Civil Procedure section 1161(2).

 

Castaic asserted that the trial court erred in sustaining Wonderland’s demurrer without leave to amend, arguing that despite express designation of “contract[] laws” and disavowal of “landlord tenant laws” as the governing law, the agreement did not preclude Castaic from resorting to the summary proceedings of unlawful detainer.  

 

The fundamental goal of contract interpretation is to give effect to the mutual intention of the parties as it existed at the time they entered into the contract. 

 

When the contract is clear and explicit, the parties’ intent is determined solely by reference to the language of the agreement.”

 

The words of the contract are to be understood in their ordinary and popular sense.

 

The principles of contract interpretation apply equally to leases as to any other kind of contract. 

 

Anyone may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.

 

Unlawful detainer is a remedy available to a landlord against a tenant who breaches a lease and is intended and designed to provide an expeditious remedy for the recovery of possession of real property.

 

Whether an agreement constitutes a lease or a license is “a subtle pursuit.” 

 

Although Castaic argued at length that the agreement was in fact a lease despite its express designation to the contrary, the appellate court did not need to decide this issue to resolve the appeal. 

 

Even assuming the agreement contains some elements of a lease, its express terms show the parties’ intent to waive any rights afforded by the landlord-tenant laws, including a landlord’s remedy of unlawful detainer. That is what the trial court concluded, and the appellate court agreed. 

 

The parties’ intent to avoid application of landlord-tenant law is evinced by Castaic retaining “legal possession” of the premises. Simply put, the parties unmistakably recorded their intent to forego the application of laws specific to landlord tenant relationships. 

 

On appeal, Castaic urged that the parties may not elect to contract around particular statutory protections.

 

But Castaic did not cite a single authority that supports this position. Nor did Castaic argue that the parties’ election to disavow the applicability of landlord-tenant laws violated any public policy. 

 

A bedrock principle of contract law in California has always been that competent parties should have the utmost liberty of contract to arrange their affairs according to their own judgment so long as they do not contravene positive law or public policy. 

 

Because the parties were found to have waived the landlord-tenant laws, no unlawful detainer could be filed.

 

LESSONS:

 

1.         The fundamental goal of contract interpretation is to give effect to the mutual intention of the parties as it existed at the time they entered into the contract. 

 

2.         When the contract is clear and explicit, the parties’ intent is determined solely by reference to the language of the agreement.”

 

3.         The words of the contract are to be understood in their ordinary and popular sense. 

 

4.         The principles of contract interpretation apply equally to leases as to any other kind of contract. 

 

5.         Any one may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.

 

 

Can a Bank Mortgage be Reinstated after a Foreclosure by a Homeowners Association?

The recent California case of Shetty v. HSBC Bank USA involved an appeal from a demurrer sustained without leave to amend.  

Plaintiff Niki-Alexander Shetty purchased a home that had been foreclosed upon by a homeowners association. 

 

The home, however, was still subject to a defaulted mortgage and deed of trust between the bank and the original borrower. 

 

The bank and mortgage servicer defendants recorded a notice of default and scheduled a foreclosure sale. 

 

Shetty sought to cure the default and resume regular payments on the loan. 

 

Defendants, however, refused, insisting that, as a stranger to the loan, he was not entitled to reinstate it. 

 

Shetty sued for wrongful foreclosure, arguing he had the right to reinstate the loan pursuant to Civil Code section 2924c (section 2924c). 

 

The trial court ruled that Shetty did not have standing under the statute. 

 

The appellate court disagreed with the trial court's interpretation of the statute and reversed the judgment as to all defendants except Mortgage Electronic Registration Services, Inc. (MERS), whom Shetty conceded had no liability. 

 

The lawsuit concerned a condominium in the City of La Habra. 

 

The prior owner, S.L., took out a mortgage and deed of trust on the property. Defendant PHH Mortgage Corporation serviced the loan. 

 

In May 2018, the homeowners association for the community where the condominium is located foreclosed on the property. Shetty obtained the property from the homeowners association by way of a grant deed. The grant deed made no mention of the mortgage or deed of trust. 

 

In July 2020, defendants recorded a notice of default against the condominium, which listed an amount due of $11,537.25. In February 2021, defendants recorded a notice of trustee’s sale, setting a foreclosure sale date of April 21, 2021. The total unpaid balance was listed as $206,285.41. Appropriate notices were mailed to Shetty. 

 

Prior to the scheduled sale, Shetty “made numerous attempts” to obtain from defendants information he needed to “bring the loan secured by the [d]eed of [t]rust current and continue to make payments thereon.” However, defendants refused to provide any information on the ground that Shetty was not the borrower under the note secured by the deed of trust. 

 

The complaint asserted causes of action for wrongful foreclosure, declaratory relief, and an accounting. Shetty sought an injunction postponing the foreclosure sale for a minimum of two weeks after defendants provide to Shetty information as to the amounts currently due, and where and how to make such payments. 

 

The trial court concluded that Shetty had not pleaded the essential elements of a wrongful foreclosure cause of action because he did not allege tender, and that he did not have standing under section 2924c to reinstate the loan. The court entered a judgment of dismissal, and Shetty timely appealed. 

Shetty’s sole contention on appeal was that he was entitled to reinstate the loan pursuant to section 2924c. The issue came down to whether Shetty had standing under the statute. The trial court found he did not and sustained a demurrer without leave to amend. 

 

The appellate court concluded that Shetty had standing to sue under section 2924c. 

 

Section 2924c, subdivision (a)(1), provides, in relevant part, “Whenever all or a portion of the principal sum of any obligation secured by deed of trust or mortgage on real property . . . has, prior to the maturity date fixed in that obligation, become due or been declared due by reason of default in payment of interest or of any installment of principal, . . . the trustor or mortgagor or their successor in interest in the mortgaged or trust property or any part thereof . . . may pay to the beneficiary or the mortgagee . . . the entire amount due, at the time payment is tendered, . . . other than the portion of principal as would not then be due had no default occurred, and thereby cure the default theretofore existing, and thereupon, all proceedings theretofore had or instituted shall be dismissed or discontinued and the obligation and deed of trust or mortgage shall be reinstated and shall be and remain in force and effect, the same as if the acceleration had not occurred.” 

 

If all or part of the principal secured by a mortgage or deed of trust becomes due as the result of the borrower’s default in paying interest or installments of principal, section 2924c allows the borrower to cure the default, reinstate the loan, and avoid foreclosure by paying the amount in default, plus specified fees and expenses. 

 

California courts have long recognized the public policy behind the right to reinstatement. 

 

The question of whether Shetty had standing to reinstate the loan pursuant to section 2924c boiled down to whether he is, in the language of the statute, the mortgagor’s “successor in interest" in the mortgaged or trust property.

 

Under the plain language, Shetty had the right to reinstate the loan. 

 

The term “successor in interest” is not specifically defined in the statutory scheme. 

 

The general definition of “successor in interest” is: “Someone who follows another in ownership or control of property. A successor in interest retains the same rights as the original owner, with no change in substance.” 

 

Under this definition, purchasers at a foreclosure sale have been deemed successors in interest: the plaintiffs fit the ordinary or general definition of successor in interest since their title can be traced back to the foreclosure through the chain of title.

 

Crucially, section 2924c extends the right of reinstatement to the successor in interest to the mortgaged or trust property. 

 

It is not the successor in interest to the mortgage, but to the property subject to the mortgage. Shetty, as the current chain-of-title owner, clearly was the successor in interest to the property itself. 

 

The particular right to reinstate claimed by Shetty arose pursuant to statute. Perhaps the deed of trust had its own reinstatement provisions, but those would be neither here nor there since Shetty was not relying on them. 

 

One of the trial court’s other basis for sustaining the demurrer was that Shetty had failed to allege a wrongful foreclosure cause of action because he had not alleged that he had tendered the amount due under the defaulted mortgage. 

 

One of the elements of a wrongful foreclosure cause of action is the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering. 

 

However, because Shetty paid off the entirety of the original mortgage, he acknowledged he does not have a cause of action for wrongful foreclosure, but instead claimed he can amend his complaint to allege a violation of section 2924c. He claimed damages in the form of the additional costs associated with the replacement mortgage he was forced to take out in order to retire the existing loan. 

 

At first blush, this would seem to be a viable legal theory, and Shetty should be permitted an opportunity to amend his complaint to attempt to state a claim under section 2924c. 

 

LESSONS:

 

1.         If all or part of the principal secured by a mortgage or deed of trust becomes due as the result of the borrower’s default in paying interest or installments of principal, section 2924c allows the borrower to cure the default, reinstate the loan, and avoid foreclosure by paying the amount in default, plus specified fees and expenses. 

 

2.         California courts have long recognized the public policy behind the right to reinstatement. 

 

3.         Purchasers at a foreclosure sale have been deemed successors in interest, and the plaintiffs fit the ordinary or general definition of successor in interest since their title can be traced back to the foreclosure through the chain of title.

 

4.         One of the elements of a wrongful foreclosure cause of action is the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering. 

 

Who are "Interested Persons" Authorized in California Probate Actions?

In the recent appeal of Colvis v. Binswanger, Garaventa Enterprises, Inc. (Company) appealed from the probate court’s order finding the Company lacked standing to participate in proceedings on a trust petition filed by respondents Linda Garaventa Colvis and Joseph Garaventa (Petitioners), because the Company was not a beneficiary or a trustee.  

The appellate court disagreed, and found, as a matter of statutory interpretation, that the California Probate Code authorizes “interested persons” to respond or object at or before a hearing in a trust proceeding. 

 

During their lifetimes, Silvio Garaventa, Sr., and Mary Garaventa established the Garaventa Family Marital Trust (Trust).

 

Silvio, Sr., died in 1998 and Mary died in 2015. One of their five children, Louisa, is the trustee under the terms of the Trust. The other children are Silvio, Jr., Marie, Joseph, and Linda. 

 

The Trust is a 70 percent shareholder of the Company. Each of the siblings own an equal share of the remaining 30 percent of the Company. 

 

A Company shareholder agreement provides that any shareholder owning more than 50 percent of the company can take various actions in their “sole discretion,” including borrowing money, lending money, and transferring assets. 

 

The Trust provides that the balance of its estate, after expenses and specific distributions, shall be distributed equally to five subtrusts benefiting, respectively, each of the five siblings and their families. 

 

Among the Trust’s liabilities are outstanding loans made to the Trust by the Company. Since Mary’s death, disputes have arisen among the siblings over management of the Company and administration of the Trust. 

 

In 2022, Linda and Joseph filed a petition (Petition) to instruct Louisa, as trustee, to take specified actions, including directing the Company to borrow substantial sums of money to pay estate taxes owed by the Trust. 

 

In advance of a status hearing, the Company filed a status report responding to the Petition. 

Petitioners objected to the Company’s filing on the ground the Company lacked standing. The court subsequently issued an order finding that because the Company was neither a trustee nor a beneficiary of the Trust, it lacked standing to participate in proceedings on the Petition. 

The parties disputed whether, under the statutory scheme, “interested persons” can respond to petitions in trust proceedings, or whether only trustees and beneficiaries can do so.  

 

The Company points to section 1043(a), which provides, “An interested person may appear and make a response or objection in writing at or before the hearing.” 

“Interested person” is defined to include persons “having a property right in or claim against a trust estate . . . which may be affected by the proceeding.” 

 

“Person’ means an individual, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership, limited liability company, association, or other entity.

 

Petitioners point to section 17200(a), which provides, with exceptions not relevant here, “a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust.” 

 

While this provision governs who may file a petition, it does not prescribe a procedure different from section 1043 as to who may respond or object to such a petition. 

 

The Legislature may reasonably have discerned a distinction between the ability to initiate judicial proceedings and the ability to respond to pending proceedings. Indeed, the statutory scheme demonstrates the Legislature expressly contemplated persons other than trustees and beneficiaries could be impacted by trust proceedings, even though such proceedings can only be initiated by trustees or beneficiaries. 

 

Section 17203(b), provides notice of a hearing on a trust petition shall be served “on any person, other than a trustee or beneficiary, whose right, title, or interest would be affected by the petition.” 

 

It was not necessary to decide whether, as the Company argued, such persons are always “interested persons” within the meaning of section 48, or whether the right to receive notice necessarily includes the right to object or respond. 

 

Notice of the proceeding would be of little value if all the recipient could do is passively observe. The purpose of notice is to provide an interested person an opportunity to protect its interest by participating.

 

It is sufficient that the Legislature acknowledged persons other than trustees and beneficiaries could have rights or interests impacted by a trust petition and were thus entitled to notice, even though they cannot bring such petitions in the first instance. 

 

Petitions may be filed by “any interested person” where trust property “is claimed to belong to another. 

 

The appellate court concluded that sections 48 and 1043 apply to hearings on petitions in trust proceedings, and allow interested persons to respond or object to such petitions. 

 

The parties also disputed whether the Company is an “interested person” for purposes of proceedings on the Petition. 

 

The probate court has flexibility in determining whether to permit a party to participate as an interested party. Section 48 permits the court to designate as an interested person anyone having an interest in an estate which may be affected by a probate proceeding, and may determine the sufficiency of that party’s interest for qualify as an interested person entitled to participate for purposes of one proceeding but not for another.

 

Standing for purposes of the Probate Code is a fluid concept dependent on the nature of the proceeding before the trial court and the parties’ relationship to the proceeding, as well as to the trust (or estate).

 

A probate court’s ruling on whether a person has standing under section 48 is reviewed for abuse of discretion. 

 

LESSONS:

 

1.         The value of a trust is the California Probate Code provides a statutory process to resolve disputes regarding the trust.

 

2.         The Probate Code authorizes “interested persons” to respond or object at or before a         hearing in a trust proceeding. 

 

3.         “Interested person” is defined to include persons having a property right in or claim          against a trust estate which may be affected by the proceeding.

 

4.         “Person" means an individual, corporation, government or governmental subdivision or    agency, business trust, estate, trust, partnership, limited liability company, association, or      other entity.

 

5.         Section 17203(b), provides notice of a hearing on a trust petition shall be served “on any person, other than a trustee or beneficiary, whose right, title, or interest would be affected        by the petition.”

What is the Primary Right Theory in California?

The primary right theory was the subject of the recent case of Duncan v. Kihagi that arose out of an unlawful detainer action.

This was the second time that appellants Anne Kihagi, Christina Mwangi, and Zoriall LLC (the landlords) challenged a $2.7 million judgment against them. A jury concluded they harassed and unlawfully evicted their tenants, respondents Dale Duncan and Marta Munoz Mendoza. 

 

After the appellate court affirmed the judgment, the landlords moved to vacate the judgment, claiming it was “void.” 

 

They argued the tenants were barred from obtaining relief in this action because they had failed to pursue their legal remedies in unlawful detainer proceedings after giving up possession of their unit. 

 

Because this argument misapprehended the statute that governs surrendering possession of property in unlawful detainer proceedings, the appellate court affirmed the trial court’s order denying the landlords’ motion. 

 

Duncan in 1994 moved into a rent- controlled unit in a five-unit building on Hill Street in San Francisco. He was living there with Mendoza and their daughter when, in June 2014, the building was purchased by Zoriall, an LLC owned by Kihagi and Mwangi.

 

Starting in August 2014 and for a little over a year until Duncan and his family were forced to move, the new landlords took away various property- related benefits, ignored or delayed responding to maintenance and upkeep issues, were uncommunicative and uncooperative, and became increasingly hostile. 

 

While they were still living in their unit, the tenants initiated the proceedings when they sued the landlords in May 2015. 

 

In their first amended complaint filed that same month, they alleged causes of action for (1) nuisance, (2) breach of contract, (3) negligence, (4) harassment in violation of San Francisco’s Residential Rent Stabilization and Arbitration Ordinance (Rent Ordinance, S.F. Admin Code ch. 37), and (5) unfair business practices (Bus. & Prof. Code, § 17200 et seq.). 

 

The following month, on June 25, 2015, two unlawful detainer actions were filed against the tenants. Zoriall filed one (“the Zoriall unlawful detainer action”), and Mwangi filed a separate one (“the Mwangi unlawful detainer action”). 

 

The tenants filed an answer in the Mwangi unlawful detainer action in which they asserted affirmative defenses of retaliation and violation of the Rent Ordinance. 

 

Then they filed a “Notice of Surrender of Possession” in the action. The notice stated that the tenants vacated the premises. The notice further stated that the matter thus became an “ordinary civil action” under Civil Code section 1952.3. 

 

That statute provides that if a landlord brings an unlawful detainer action and the tenant surrenders possession before trial (making possession no longer at issue), the case becomes an ordinary civil action in which the landlord may obtain any relief to which he or she is entitled.  

 

In such an ordinary civil action the tenant, too, may “by appropriate pleadings or amendments to pleadings, seek any affirmative relief.” 

 

In general, if a defendant named in a complaint fails to allege any related cause of action by way of a cross-complaint in the action, the defendant “may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.” 

 

But this provision does not apply in an unlawful detainer action unless after delivering the property to the landlord, the tenant files a cross-complaint or an amended answer. 

 

The landlords claimed that because the tenants did not file a cross-complaint in the unlawful detainer actions, they were barred from pursuing their claims against the landlords in their already pending separate action. 

 

In 2016, the tenants filed an additional complaint against the landlords (“Duncan 2”) alleging that Mwangi had initiated an unlawful owner move-in eviction. 

 

This complaint alleged only two causes of action: (1) wrongful owner move-in eviction in violation of the Rent Ordinance and (2) negligence. 

 

Around the time trial started, the tenants on September 1, 2017, filed a second amended complaint that consolidated Duncan 1 and Duncan 2, with no substantive changes.

 

The amended complaint included all causes of action previously alleged: (1) nuisance, (2) breach of contract, (3) negligence, (4) violation of the Rent Ordinance (harassment), (5) unfair business practices, (5) violation of the Rent Ordinance (wrongful owner move-in eviction), and (6) another negligence cause of action. 

 

Following a jury trial, jurors found the landlords liable for two separate violations of the Rent Ordinance: wrongful eviction and tenant harassment. 

 

The appellate court affirmed the judgment in Duncan I. The landlords nonetheless filed six “motions to vacate judgment after trial” on various grounds. 

 

The single motion that is the subject of this appeal argued that the judgment was void based on the “primary rights theory.” 

 

In the motion, the landlords claimed that the trial court had lacked subject matter jurisdiction over the tenants’ claims after they surrendered possession of their rental unit. According to the landlords, such a relinquishment of possession waives a tenant’s right to a wrongful-eviction claim, and the judgment was thus “void" on its face. 

 

The tenants opposed the motions and argued they were without merit, frivolous, and designed to waste resources and time and as a procedural tactic to cause delays and to create unnecessary fees and costs. 

 

Following a hearing, the trial court denied all of appellants’ motions, including the one arguing that the judgment against them was void under the primary right theory.  

 

On appeal, the landlords renewed their argument that the judgment the tenants obtained following a jury trial must be set aside as void based on the primary right theory. The appellate court held the argument failed. 

 

The argument turns on the effect of the tenants surrendering possession of their unit before trial in either of the unlawful detainer actions. 

 

In general, unlawful detainer actions are summary in character, ordinarily, only claims bearing directly upon the right of immediate possession are cognizable, and cross-complaints and affirmative defenses, legal or equitable, are permissible only insofar as they would, if successful, preclude removal of the tenant from the premises. 

 

If the tenant surrenders the property such that possession is no longer at issue, though, the landlord may expand the relief sought by way of an amended complaint. 

 

The tenant, too, may, by appropriate pleadings or amendments to pleadings, seek any affirmative relief, and assert all defenses, to which he or she is entitled, whether or not the lessor has amended the complaint.

In other words, once a tenant sued for unlawful detainer surrenders possession as set forth in section 1952.3, the tenant may seek affirmative relief that would not have otherwise been available in an unlawful detainer proceeding. 

 

Relying on the primary right theory, the landlords attempted to turn this principle on its head, contending that unless the tenant seeks affirmative relief in the unlawful detainer proceeding the tenant is barred from seeking it at all. 

 

According to them, as soon as Duncan and Mendoza relinquished possession of their unit, any causes of action or damages related to the issue of Respondents’ primary right of possession was completely resolved in favor of Appellants. 

 

The appellate court was not persuaded. 

 

The primary right theory is a theory of code pleading that has long been followed in California. It provides that a cause of action is composed of a ‘primary right’ of the plaintiff, a corresponding ‘primary duty’ of the defendant, and wrongful act by the defendant constituting a breach of that duty. 

 

The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action. 

 

A pleading that states the violation of one primary right in two causes of action contravenes the rule against splitting a cause of action. 

 

The primary right theory has a fairly narrow field of application. It is invoked most often when a plaintiff attempts to divide a primary right and enforce it in two suits. 

 

The theory prevents this result by either of two means: (1) if the first suit is still pending when the second is filed, the defendant in the second suit may plead that fact in abatement; or (2) if the first suit has terminated in a judgment on the merits adverse to the plaintiff, the defendant in the second suit may set up that judgment as a bar under the principles of res judicata. 

 

The latter application of the primary right theory appears to be most common: numerous cases hold that when there is only one primary right an adverse judgment in the first suit is a bar even though the second suit is based on a different theory or seeks a different remedy. 

 

Neither scenario occurred here. 

 

More fundamentally, the theory was simply inapplicable in the circumstances presented here. 

 

Again, only the right to possession is in issue in a summary unlawful detainer action. 

 

To preserve the summary nature of the proceedings, the rule developed that ordinarily affirmative defenses may not be asserted. 

 

Only defenses which are directly relevant to possession may be considered. 

 

Section 1952.3 codifies the rule that if the tenant gives up possession of the property after the initiation of unlawful detainer proceedings but before trial, the action becomes an ordinary one for damages. 

 

In other words, when the tenants gave up possession, they surrendered only the very narrow issue of current possession of their unit. 

 

Section 1952.3, subdivision (a)(2) then permitted them to seek any affirmative relief they were otherwise entitled to that was not otherwise available in an unlawful detainer action. 

 

The tenants proceeded with their own complaints and did not seek relief by filing a cross-complaint in the unlawful detainer actions. 

 

But, contrary to the landlords’ insistence, they were not required to do so. 

 

In general, where a defendant to a lawsuit fails to allege any related causes of action by way of a cross-complaint, that defendant may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded. 

 

This requirement to allege all related claims does not apply in unlawful detainer actions, however, unless one of two things happens: the tenant (1) files a cross-complaint or(2) files an answer to any amended complaint the landlord files after the case becomes a regular civil action. 

 

In other words, if a tenant chooses to file a cross-complaint in an unlawful detainer action after surrendering possession, all possible causes of action must be alleged. 

 

Here, the tenants had no reason to file such a cross-complaint after surrendering possession of their unit since they already had filed a separate complaint. And they apparently had no reason to file an amended answer, since there is no indication that after the tenants surrendered possession the landlords sought any further relief in the unlawful detainer actions. 

 

It was simply not true that the tenants improperly split a cause of action into successive suits, as the landlords claim. 

 

Here, the only legal claim the tenants abandoned when they moved out of their unit was the narrow issue of current possession, the sole focus of the unlawful detainer proceedings. The landlords apparently do not dispute for purposes of this appeal that the tenants had other valid legal claims against them. 

 

But they insist that those claims were either waived when the tenants surrendered current possession of their unit, or the claims should have been litigated in the unlawful detainer actions. 

 

As there is no legal support for these arguments, the appellate court rejected them. 

 

LESSONS:

 

1.         Civil Code section 1952.3 provides that if a landlord brings an unlawful detainer action and the tenant surrenders possession before trial (making possession no longer at issue), the case becomes an ordinary civil action in which the landlord may obtain any relief to which he or she is entitled.  

 

2.         In general, unlawful detainer actions are summary in character, ordinarily, only claims bearing directly upon the right of immediate possession are cognizable, and cross-complaints and affirmative defenses, legal or equitable, are permissible only insofar as they would, if successful, preclude removal of the tenant from the premises. 

 

3.         In other words, once a tenant sued for unlawful detainer surrenders possession as set forth in section 1952.3, the tenant may seek affirmative relief that would not have otherwise been available in an unlawful detainer proceeding. 

 

4.         The primary right theory is a theory of code pleading that has long been followed in California. It provides that a cause of action is composed of a ‘primary right’ of the plaintiff, a corresponding ‘primary duty’ of the defendant, and wrongful act by the defendant constituting a breach of that duty. 

 

5.         The primary right theory has a fairly narrow field of application. It is invoked most often when a plaintiff attempts to divide a primary right and enforce it in two suits. 

 

6.         In general, where a defendant to a lawsuit fails to allege any related causes of action by way of a cross-complaint, that defendant may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.