Land Development Holdings v. Meza CA2/8 ( 2016 )

Filed 4/28/16 Land Development Holdings v. Meza CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
LAND DEVELOPMENT HOLDINGS, B262696
INC.,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No. BC550747)
v.
LAURA MEZA et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Rolf M. Treu, Judge. Affirmed.
Law Office of Daniel J. Bramzon & Associates, P.C., Daniel J. Bramzon,
Ross T. Kutash and Matthew L. Brinton, for Defendants and Appellants.
No appearance for Plaintiff and Respondent.
__________________________________
When a landlord brings an unlawful detainer (UD) action alleging nonpayment
of rent, and the tenant successfully defends the action on breach of habitability grounds,
the tenant is entitled to a “conditional judgment” that preserves the tenant’s possession
of the premises, on the condition that the tenant pays the fixed “adjusted rental value”
owed to the landlord, or, in other words, the rental value of the premises in its less
habitable condition. (See Code Civ. Proc., § 1174.2;1 and see also Hyatt v. Tedesco
(2002) 96 Cal.App.4th Supp. 62, 67.)
Here, defendants and appellants Laura Meza and Fernando Meza appeal a final
UD judgment based on an underlying conditional judgment. The trial court entered the
final UD judgment after the Mezas failed to pay the past due adjusted rental value
payment by the deadline date specified in the conditional judgment. On appeal, the
Mezas argue the court erred in entering the final UD judgment because their failure to
pay the adjusted rental value by the date specified in the underlying conditional judgment
was caused by the court’s failure to serve them with a copy of the conditional judgment.
We affirm the UD final judgment.
FACTS
The Conditional Judgment
In June 2014, plaintiff and respondent Land Development Holdings, Inc. (LDH)
served the Mezas with a three-day notice for failure to pay rent for a house on West 15th
Street in Los Angeles. In July 2014, LDH filed a UD action against the Mezas. The
Mezas filed an answer asserting an affirmative defense that LDH had breached the
implied warranty of habitability.
In November 2014, LDH tried its UD action to a jury. On November 26, 2014,
the jury returned a verdict with special findings of fact as follows:
1. LDH owned the 15th Street property;
2. LDH had a lease agreement with the Mezas;
1
All further section references are to the Code of Civil Procedure.
2
3. LDH’s three-day notice accurately reflected the rent due
under the parties’ lease agreement;
4. LDH breached the implied warranty of habitability during
the period for which rent was not paid;
5. The Mezas’ rent should be reduced by 40 percent in light
of LDH’s breach of the implied warranty of habitability.
After the jury returned its special verdict findings, the trial court and the lawyers
discussed the form of judgment. During these exchanges, the court stated that a money
judgment in the amount of $24,386.40 would be entered for LDH. When the discussion
turned to the conditional judgment aspect of UD proceedings, the court directed LDH’s
counsel to prepare a judgment in the appropriate form.
In early December 2014, LDH submitted a proposed judgment to the trial court.
The proposed judgment provided that the Mezas owed a total of unpaid rent (after the 40
percent reduction in claimed rent under the jury’s special verdict findings) of $24,386.40,
as stated by the trial court at trial, and included a blank space for the court to designate a
date upon which the rent had to be paid. Further, in accord with conditional judgment
principles as generally discussed above, the judgment included the following provisions:
“IT IS THEREFORE ORDERED:
“If the defendant pays plaintiff the sum of $24,386.40 by certified
check, money order or cash no later than 5:00 p.m. on
__________________, at the offices of [LDH’s counsel], defendant shall
be the prevailing party and shall be entitled to have judgment for possession
of the premises and costs of the suit including reasonable attorneys fees to
be determined by noticed motion pursuant to CCP § 1033.5.
“If defendant does pay said sum specified above timely, plaintiff
shall repair and correct the defects constituting the breach of warranty and
this Court retains jurisdiction over the matter until the following repairs and
corrections are made: [¶] holes in walls, mice, the gate being broken, toilet
3
not working, no hot water, faucets leaking in bathroom and kitchen.
Further, Plaintiff is ordered to return to Department 58 on ______________
at 8:30 a.m., show proof of completion, or proof of progress toward those
repairs and corrections.
“Future monthly rent for the premises shall be limited to the
reasonable rental value as determined herein, that is $1,890 ($3,150 less
40% reduction) per month, until the defects constituting the breach of
warranty are repaired and corrected and proof of correction is accepted by
the Court, except that plaintiff may apply to this Court for adjustments to
the reasonable rental value determination in the event repairs are made and
continuing good faith efforts are being pursued to complete the balance of
the repairs and correction.
“The Court retains jurisdiction to enforce the provisions of the
Conditional Judgment.
“If defendant does not pay that sum by the specified date and time,
in the manner and at the location provided in the preceding paragraph,
plaintiff shall be the prevailing party and shall be entitled to have judgment
for possession of the premises, forfeiture of the rental agreement, for
$40,644 as rent and holdover damages, for costs of suit including
reasonable attorney fees to be determined by noticed motion pursuant to
CCP § 1033.5 and judgment pursuant to CCP Section 415.46 against all
unnamed occupants. Plaintiff shall bring defendant’s failure to pay to the
court’s attention by filing an ex parte application for entry of judgment in
plaintiff’s favor, including supporting declaration, within five curt days of
the date the payment was due. Plaintiff shall give defendant telephonic
notice of the filing of such application, and shall advise the court whether
defendant intends to oppose it.”
4
The Application to Enter Final Judgment
On January 12, 2015, the trial court filled in the blank payment date, choosing a
rent payment date of January 22, 2015, and signed and issued the conditional judgment.
On the same date, the clerk of the trial court served a copy of a minute order stating:
“Judgment after trial filed and entered this day.”
According to a subsequent declaration from one of the Mezas’ lawyers: on a date
not stated, he received the clerk’s notice that a judgment had been entered on January 12,
2015. On another date not stated in the declaration, the lawyer went to the trial court’s
central file room, where an employee told the lawyer that, if he wanted a copy of the
January 12, 2015 judgment, then he had to go to Department 58, where the case file was
being held. When the lawyer went to Department 58, the courtroom clerk there told the
lawyer that the judgment was not available because it had not yet been “scanned” into the
court’s records. The declaration does not show any further attempts to get a copy of the
January 12, 2015 judgment.
On January 29, 2015, LDH filed an ex parte application “for entry of judgment
pursuant to conditional judgment.” LDH claimed in its application that the Mezas had
failed to pay the designated rent of $24,386.40 by the date prescribed in the conditional
judgment, that is, by January 22, 2015.
At the ex parte hearing on January 29, 2015, the trial court heard arguments from
both LDH’s lawyer and the Mezas’ lawyer, and took the matter under submission. Later,
the court granted LDH’s application. The court’s written order reads as follows:
“Upon reading the attached application of Plaintiff, and it appearing
to the Court that good cause exists for the granting thereof,
“IT IS ORDERED that Plaintiff recover from Defendants the total
sum of $24,386.40 against said named defendants. The Clerk is ordered to
enter the judgment as modified. . . .
“IT IS ORDERED THAT sheriff conduct the lockout at the subject
property, as specified by law. A writ of possession is to immediately issue.
5
“IT IS FURTHER ORDERED: This order is stayed for 5 days to
allow [Defendants] time to take a writ to Court of Appeal.””
The Post-Judgment Proceedings
On February 25, 2015, the Mezas filed a motion for a new trial challenging the
final judgment entered on January 29, 2015. The Mezas supported the motion for new
trial with a memorandum of points and authorities, arguing several issues, including that
the Mezas had never been served with a copy of the conditional judgment entered on
January 12, 2015. Also, that there were various grounds undermining the underlying
conditional judgment and infecting the UD trial, including that LDH had not validly
served a three-day notice.
Also on February 25, 2015, the Mezas filed a motion to vacate the final judgment
entered on January 29, 2015, as well as a motion for judgment notwithstanding the
verdict, both of which raised the claim that the trial court had failed to serve the
underlying conditional judgment entered on January 12, 2015 on the Mezas.
On March 11, 2015, the trial court heard arguments from a lawyer for LDH and
for the Mezas, and then entered a minute order denying the Mezas’ motion for new trial
and their motion for judgment notwithstanding the verdict. The court’s minute order of
March 11, 2015 is silent on the Mezas’ motion to vacate the January 29, 2015 final
judgment, but in light of the record, it is plain that the court declined to vacate the
judgment as well.
On March 13, 2015, the Mezas filed a notice of appeal from the final judgment
entered on January 29, 2015.
DISCUSSION
The Mezas contend the trial court erred in granting LDH’s ex parte application to
enter the final judgment against them because they “had no notice of the payment date for
the [underlying] conditional judgment.” In this vein, the Mezas argue that, because the
court did not serve a copy of the conditional judgment on them as required under section
1172.4, the time for them to pay the adjusted rent prescribed in the conditional judgment
6
“never began to run,” and, thus, the court “erred in entering [the final] judgment against
them based upon their failure to make the payment.” Further, the Mezas argue that,
having erred in entering the final judgment against them, the court erred again in not
setting the final judgment aside “when the issue of nonservice [of the underlying
conditional judgment] was brought to the court’s attention.” The Mezas’ arguments do
not persuade us to reverse the final judgment.
We agree with the Mezas that there does not appear to be any published cases
giving direct guidance on what results may ensue or what remedies may be available
when a trial court fails to serve a copy of a conditional judgment that is entered under
section 1174.2. For example, whether such a failure excuses the tenant from complying
with a time deadline set for the payment of any prescribed rent. We also agree with the
Mezas that, as a general rule, due process requires that a party must be provided with
appropriate notice before a court may take any action against that party.
This said, we must note on our own, even without assistance from a respondent’s
brief (LDH has not appeared in the Mezas’ current appeal), that we are guided on appeal
by certain well-settled rules of review. In particular, we must presume that an appealed
judgment is correct, and must infer all findings necessary to support the judgment where
there is no statement of decision, and must presume that the trial court followed the law.
(See, e.g., Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal. 3d 554, 563; and see
In re Marriage of Cohn (1998) 65 Cal. App. 4th 923, 928.)
Here, the trial court expressly found that “good cause exist[ed]” for the entry of
the final judgment on January 29, 2015. Accordingly, we presume the court either found
that it did not believe the Mezas’ assertion that they never had a copy of the underlying
conditional judgment in hand before the date upon which they were required to pay the
adjusted rent of $24,386.40 or, alternatively, the court found that the Mezas had failed to
show good reason why they did not obtain a copy of the conditional judgment sooner.
We find both supported by the record. Plainly, LDH had been able to get a copy of the
judgment because it knew the date that the Mezas’ payment was due, and it brought its ex
parte application to enter the final judgment shortly after the payment date expired.
7
We have another reason dissuading us from reversing the judgment. The record
establishes – without any room for doubt – that the Mezas knew the exact amount of
adjusted rent ($24,386.40) that they were required to pay to LDH by late November
2014, at the end of the UD trial. Further, the record establishes – again without any room
for doubt – that the Mezas knew the exact amount of rent that they had to pay to LDH in
early December 2014, when LDH submitted its proposed conditional judgment. Further
still, the Mezas were given notice of the ex parte hearing set on January 29, 2015, at
which LDH requested entry of the final judgment, and they appeared by their counsel at
that hearing. Notwithstanding all of this notice as to the amount they had to pay to LDH
in unpaid rent, and that they had a two-month time period in which to pay, we see
nothing in the record to show that the Mezas, at any time, attempted to tender the
specified adjusted rental value payment, or any payment in any amount. Indeed, we see
nothing in the record to show that the Mezas ever even submitted a declaration stating
that they were “ready, willing and able” to tender payment of the adjusted rent due under
the conditional judgment. Given the totality of the factual circumstances, we are not
persuaded to reverse the final UD judgment.
Our view of the Mezas’ motion to set aside the January 29, 2015 final judgment is
similar. There is nothing in the record to support a conclusion that the Mezas would, or
were even able to, make the adjusted rental value payment specified in the underlying
conditional judgment at any time.
DISPOSITION
The judgment is affirmed. Each party to bear its own costs on appeal.
BIGELOW, P.J.
I concur:
GRIMES, J.
8
Land Development Holdings, Inc. v. Meza
B262696
FLIER, J., Dissenting
I respectfully dissent.
Code of Civil Procedure1 section 1174.2, subdivision (a) provides in pertinent
part: “In an unlawful detainer proceeding involving residential premises after default in
payment of rent and in which the tenant has raised as an affirmative defense a breach of
the landlord’s obligations under Section 1941 of the Civil Code or of any warranty of
habitability, the court shall determine whether a substantial breach of these obligations
has occurred. If the court finds that a substantial breach has occurred, the court (1) shall
determine the reasonable rental value of the premises in its untenantable state to the date
of trial, [and] (2) shall deny possession to the landlord and adjudge the tenant to be the
prevailing party, conditioned upon the payment by the tenant of the rent that has accrued
to the date of the trial as adjusted pursuant to this subdivision within a reasonable period
of time not exceeding five days, from the date of the court’s judgment or, if service of the
court’s judgment is made by mail, the payment shall be made within the time set forth in
Section 1013 . . . .” Section 1013 in turn describes how to effectuate service of a
document including service by mail.
As the italicized language illustrates, section 1174.2 contemplates the service of
the conditional judgment and extends the time for performance (i.e., tender of the rent
due) when such service is effectuated by mail. It is undisputed that in this case the
conditional judgment was not served. It is further undisputed that Laura Meza and
Fernando Meza had no notice of the date the conditional judgment required them to pay
the rent that had accrued. Upon learning that the conditional judgment was not served as
required by the statute, the court should have provided tenants a reasonable time to tender
payment.
1
Undesignated statutory citations are to the Code of Civil Procedure.
1
In Lee v. Placer Title Co. (1994) 28 Cal. App. 4th 503, the clerk of the trial court
served notice of dismissal on plaintiff at the wrong address. (Id. at p. 507.) The appellate
court held the ensuing dismissal was void for lack of proper service. (Id. at pp. 508-510.)
The appellate court explained: “the clerk failed to comply with section 1013, subdivision
(a), in sending the rule 225 notice [re dismissal] to plaintiffs. Consequently, the notice
was of no effect.” (Id. at p. 511.) In Moghaddam v. Bone (2006) 142 Cal. App. 4th 283,
an order setting aside a judgment was void because the adverse party was not given
notice of it. Similarly, here section 1174.2 required service of the conditional judgment,
and the trial court should have ensured such service prior to concluding that tenants failed
to comply with the conditional judgment.
The majority creates obstacles untethered to the governing statute or any other rule
of law. First, there was no requirement tenants set forth a declaration indicating that they
were prepared to tender payment.2 The trial court made no effort to determine whether
tenants were prepared to tender payment and made no finding that they were not. The
majority makes that finding for the first time on appeal without affording tenants an
opportunity to argue otherwise. Second, the fact that tenants were aware that a
conditional judgment would be forthcoming does not provide notice of the date their
payment was due. Third, the fact that Land Development Holding, Inc.’s counsel had
notice of the date payment was due, does not show that tenant’s counsel similarly had
such notice, and no evidence in the record supported that conclusion. The uncontradicted
evidence showed that tenants’ counsel attempted to obtain the judgment and was told that
it was being scanned and could not be viewed.
Because the conditional judgment was not served as statutorily required, the trial
court should have vacated the final judgment (the one based on tenants’ failure to comply
with the conditional judgment) and given tenants a short period of time to tender the
payment required under the conditional judgment. I would conditionally reverse the
2
Although there may be a tender requirement in foreclosure proceedings (see, e.g.,
Lona v. Citibank, N.A. (2011) 202 Cal. App. 4th 89, 104), section 1174.2 has no similar
requirement.
2
judgment, affording tenants two days to tender the payment required under the
conditional judgment. If tenants fail to tender such payment, the final judgment would be
reinstated. This result is consistent with due process and consistent with section 1174.2.
FLIER, J.
3