De Witte Mortgage Investors Fund v. Carradine CA2/1 ( 2023 )

Filed 5/24/23 De Witte Mortgage Investors Fund v. Carradine CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE
DE WITTE MORTGAGE B317957
INVESTORS FUND, LLC,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. 19STUD00909)
v.
SANDRA WILL CARRADINE,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Teresa Beaudet, Judge. Affirmed.
Law Office of Shalom Rubanowitz, Shalom Rubanowitz;
Zarmi Law and David Zarmi for Plaintiff and Appellant.
BASTA, Inc., Eric Post and Daniel J. Bramzon for
Defendant and Respondent.
____________________
INTRODUCTION
Appellant De Witte Mortgage Investors Fund, LLC1 (De
Witte) acquired a property in the City of Los Angeles through
foreclosure. De Witte filed an unlawful detainer action to obtain
possession of the property. A tenant, respondent Sandra Will
Carradine (Carradine), opposed the unlawful detainer action,
alleging she had entered into a pre-paid, long-term lease with the
prior owner before the foreclosure. Carradine’s allegations
regarding her lease potentially brought her within the
protections of Code of Civil Procedure2 section 1161b, subdivision
(b) (section 1161b(b)), which provides that “tenants or subtenants
holding possession of a rental housing unit under a fixed-term
residential lease entered into before transfer of title at the
foreclosure sale shall have the right to possession until the end of
the lease term, and all rights and obligations under the lease
shall survive foreclosure.” (§ 1161b(b).) Section 1161b(b) has
several exclusions, however, including when “[t]he lease was not
the result of an arms’ length transaction” and when “[t]he lease
requires the receipt of rent that is substantially less than fair
market rent for the property.” (§ 1161b(b)(3) & (4).) Section
1161b, subdivision (e) further states that nothing in section
1161b “is intended to affect any local just cause eviction
ordinance.” (Id., subd. (e).)
Carradine moved for summary judgment, arguing that the
notice to vacate De Witte had served in advance of the unlawful
1Appellant indicates it was erroneously identified as De
Witte Mortgage Investment Fund, LLC in its notice of appeal.
2Unspecified statutory references are to the Code of Civil
Procedure.
2
detainer action did not comply with just cause-related eviction
requirements imposed by the Los Angeles Municipal Code
(LAMC) that restrict the grounds on which landlords can recover
possession of rental units. Carradine’s summary judgment
motion addressed only alleged deficiencies in the notice to vacate
(namely, the failure to specify an authorized ground for eviction
under the LAMC), and did not argue that her lease fit within the
terms of section 1161b(b). De Witte’s response likewise did not
mention or reference section 1161b(b). The trial court found the
notice to vacate non-compliant with the LAMC, granted the
motion, and entered judgment in Carradine’s favor.
De Witte now challenges the summary judgment ruling on
the ground that Carradine failed to present evidence showing she
was entitled to protection under section 1161b(b). Specifically,
De Witte contends that Carradine failed to present evidence to
show her lease did not fall into the “arms’ length” and “fair
market rent” exclusions set forth in section 1161b(b)(3) and (4).
De Witte’s challenge fails because Carradine did not rely on
section 1161b(b) when moving for summary judgment, and
Carradine was not otherwise required to present evidence to
show that 1161b(b) applied.
Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Lease3
Prior to October 2018, Lee Wong, 1565 Haslam, LLC, Alex
Cardenas, Ruben Trejo, and LW Asset Management, LLC (the
3The following facts are taken from De Witte’s unlawful
detainer complaint and the evidence submitted by Carradine in
3
prior owners) owned a property at 2115 Kress Street in Los
Angeles (Kress Street property).
On or about May 1, 2018, Carradine entered into a three-
year lease with Wong to rent the property. Carradine prepaid
two years of rent.
B. The Foreclosure, Notice to Vacate and Unlawful
Detainer Action
On October 1, 2018, De Witte acquired ownership of the
Kress Street property through foreclosure.
On October 26, 2018, De Witte served a notice to vacate
and surrender possession. The notice was served by mail on the
prior owners at the Kress Street address and also posted at the
property. The notice was addressed to all of the prior owners,
except LW Asset Management, LLC, and also to “all other
occupants in possession” of the Kress Street property. The notice
gave any former owners, and any individuals claiming an interest
in the property through a former owner, three days to vacate; any
tenant of the former owner 30 days to vacate; and any tenant of
the former owner “pursuant to a periodic tenancy or an expired
lease” 90 days to vacate. An attachment addressed to “[a]ny
[r]enters [l]iving at” the Kress Street property summarized
various tenants’ rights and listed some possible sources for free
advice. The notice did not specify any reason for the termination
of tenancies other than the sale of the property following
foreclosure.
On January 25, 2019, De Witte filed a complaint for
unlawful detainer against the prior owners and “Doe” defendants.
support of her motion for summary judgment. De Witte did not
submit any evidence in opposition to the motion.
4
On March 15, 2019, the clerk entered the default of the prior
owners at De Witte’s request. On March 18, 2019, the court
entered a default clerk’s judgment in favor of De Witte against
the prior owners.
Carradine later filed a claim of right of possession pursuant
to section 1174.3, alleging that she lived at the Kress Street
property and had a rental agreement with a former owner who
lost the property through foreclosure.4 As a result of the filing,
Carradine was added as a defendant in the action.
C. Carradine’s Motion for Summary Judgment
Carradine filed a motion for summary judgment on July 12,
2021. Carradine argued she was entitled to judgment in her
favor because (1) the LAMC prohibited tenant evictions from
foreclosed residential rental properties unless the eviction was for
one of 14 permissible reasons prescribed in the LAMC, (2) the
LAMC requires the notice to vacate set forth the permissible
reason(s) for the eviction, and (3) the notice to vacate on which
the complaint against Carradine was based did not list any
permissible reason to evict as required by the LAMC.
In making this argument, Carradine relied on sections
49.92 and 151.09 of the LAMC. Section 49.92 of the LAMC
provides that “A landlord who obtains title through Foreclosure
to property containing Rental Units may bring an action to
4 Section 1174.3 provides, in relevant part, “any occupant
not named in the judgment for possession who occupied the
premises on the date of the filing of the action may object to
enforcement of the judgment against that occupant by filing a
claim of right to possession as prescribed in this section. . . .
Filing the claim of right to possession shall constitute a general
appearance . . . .” (§ 1174.3, subd. (a)(1).)
5
recover possession of a Rental Unit on the property from a tenant
whose tenancy commenced on or before the date that the landlord
obtained title, only upon the grounds set forth in Subdivision A.
of Section 151.09 of this Code. To recover possession of a Rental
Unit from a tenant, the landlord must comply with all of the
requirements and provisions of Section 151.09 . . . .”5 (Ibid.)
LAMC section 151.09 in turn provides that a tenant can be
evicted only for one of 14 listed reasons. (Id., subd. (A).) LAMC
section 151.09 provides that “In any action to recover possession
of a rental unit, the landlord shall serve on the tenant a written
notice setting forth the reasons for the termination. . . .” (Id.,
subd. (C).)
Carradine submitted a declaration in support of her
summary judgment motion in which she stated that she signed a
three-year lease on May 1, 2018, to rent the Kress Street
property, which is an approximately 750 sq. ft. residential single-
family home. Carradine averred that she signed the lease with
the landlord at the time, Lee Wong, and that she had negotiated
a lower monthly rate by agreeing both to prepay rent for two
years and to pay for needed repairs to the property. Carradine
further declared that she had money to prepay rent because she
had received a settlement after being forced to move out of her
5 Section 49.92 is within article 14.1 of the LAMC, which is
titled “Eviction of Tenants from Foreclosed Residential Rental
Properties.” The LAMC provides that article 14.1 “shall be in
effect through December 31, 2020, unless the City Council acts by
ordinance to amend this Section to extend its effective period.”
(LAMC, § 49.95.) There is no dispute that the notice to quit and
unlawful detainer complaint were filed while article 14.1 was in
force.
6
previous residence. Carradine’s declaration also authenticated
copies of the lease and a receipt for her prepayment of rent.
On August 26, 2021, De Witte filed an opposition raising
four arguments: (1) that the court should strike Carradine’s
amended answer because it was not verified; (2) that the LAMC
provisions upon which Carradine relied were inapplicable
because they had expired; (3) that De Witte was not a “landlord”
under the LAMC and thus was not required to satisfy the LAMC
notice requirements for eviction; and (4) that Carradine’s three-
year lease had expired. De Witte did not submit any evidence, or
otherwise dispute the facts on which Carradine moved for
summary judgment.
D. The Trial Court’s Ruling and Judgment
On September 13, 2021, the trial court granted Carradine’s
motion, concluding that De Witte’s notice to vacate did not
comply with the LAMC and this was a “complete defense” to the
unlawful detainer action. The court rejected De Witte’s four
arguments in opposition to the motion.6
The court entered judgment on September 28, 2021. The
clerk served a notice of entry of judgment by mail on
September 28, 2021.7
6 As De Witte does not argue any error in the trial court’s
ruling on these four grounds, we do not summarize the court’s
reasoning as to any of them.
7 The notice of entry of judgment was filed on
September 28, and the certificate of mailing indicated it was
served that day, but the signature block on the notice itself was
dated September 29. We need not decide which date governs
because it does not affect the timeliness or merits of this appeal.
7
De Witte timely filed its notice of appeal on November 29,
2021.8
DISCUSSION
A. Standard of Review
“ ‘Because this case comes before us after the trial court
granted a motion for summary judgment, we take the facts from
the record that was before the trial court when it ruled on that
motion. [Citation.] “ ‘We review the trial court’s decision de
novo, considering all the evidence set forth in the moving and
opposing papers except that to which objections were made and
sustained.’ ” [Citation.] We liberally construe the evidence in
support of the party opposing summary judgment and resolve
doubts concerning the evidence in favor of that party. [Citation.]’
[Citation.]” (Lonicki v. Sutter Health Central (2008) 43 Cal.4th
201, 206.)
8 De Witte contends in its briefing that it “filed a timely
notice of appeal on November 25, 2021,” but the notice of appeal
was in fact filed on November 29, 2021. Even so, assuming the
notice of entry of judgment was served on September 28, 2021,
the notice of appeal was timely filed within 60 days as required
by California Rules of Court, rule 8.104(a)(1)(A) because the 60th
and 61st days were court holidays (Saturday and Sunday), and
the notice was filed on the following Monday. (See § 12 [“The
time in which any act provided by law is to be done is computed
by excluding the first day, and including the last, unless the last
day is a holiday, and then it is also excluded”]; Estate of
Drummond (2007) 149 Cal.App.4th 46, 50 & fn. 1 [notice of
appeal filed on the 62d day after the clerk mailed a copy of the
order was timely under § 12].)
8
A defendant who moves for summary judgment “bears the
burden of persuasion that ‘one or more elements of’ the ‘cause of
action’ in question ‘cannot be established,’ or that ‘there is a
complete defense’ thereto. [Citation.]” (Aguilar v. Atlantic
Richfield Co. (2001) 25 Cal.4th 826, 850; see § 437c, subd. (o).)
Such a defendant also “bears the initial burden of production to
make a prima facie showing that no triable issue of material fact
exists. Once the initial burden of production is met, the burden
shifts to [plaintiff] to demonstrate the existence of a triable issue
of material fact.” (Laabs v. City of Victorville (2008) 163
Cal.App.4th 1242, 1250.) A triable issue of material fact exists
“ ‘ “if, and only if, the evidence would allow a reasonable trier of
fact to find the underlying fact in favor of the party opposing the
motion in accordance with the applicable standard of proof.”
[Citation.]’ [Citation.]” (Janney v. CSAA Ins. Exchange (2021) 70
Cal.App.5th 374, 389-390.)
B. Unlawful Detainer Law
“The purpose of the unlawful detainer statutes is
procedural.” (Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129,
149.) The statutes (§ 1159 et seq.) “provide landlords with a
summary procedure for exercising their rights of repossession
against tenants.” (Birkenfeld, supra, at p. 151.) Section 1161
sets forth the circumstances under which “[a] tenant of real
property, for a term less than life . . . is guilty of unlawful
detainer.”
Proper service of a valid notice to quit is an essential
prerequisite to a judgment declaring a lessor’s right to
possession. (Palm Property Investments, LLC v. Yadegar (2011)
194 Cal.App.4th 1419, 1425.) Section 1162 sets forth permissible
methods of service of the notice to quit. “ ‘A lessor must allege
9
and prove proper service of the requisite notice. [Citations.]
Absent evidence the requisite notice was properly served
pursuant to section 1162, no judgment for possession can be
obtained. [Citations.]’ ” (Palm Property Investments, LLC, supra,
at p. 1425.)
Under section 1161b, subdivision (a) “a tenant or subtenant
in possession of a rental housing unit under a month-to-month
lease or periodic tenancy at the time the property is sold in
foreclosure shall be given 90 days’ written notice to quit pursuant
to Section 1162 before the tenant or subtenant may be removed
from the property as prescribed in this chapter.” (§ 1161b,
subd. (a).) Section 1161b(b) provides, as relevant here, that a
tenant holding possession of a rental housing unit under a fixed-
term residential lease entered into before a foreclosure sale “shall
have the right to possession until the end of the lease term” but
may have that tenancy “terminated upon 90 days’ written notice
to quit pursuant to subdivision (a) if any of the following
conditions apply: [¶] . . . [¶] (3) The lease was not the result of an
arms’ length transaction. [¶] (4) The lease requires the receipt of
rent that is substantially less than fair market rent for the
property . . . .”9 (§ 1161b(b)(3) & (4).) Section 1161b places the
burden of proof to establish that a fixed-term tenancy is not
entitled to protection under section 1161(b) on “[t]he purchaser or
successor in interest” seeking possession. (§ 1161b, subd. (c).)
Finally, section 1161b states that nothing in that section “is
intended to affect any local just cause eviction ordinance”
9 The exception for rent below the fair market rate does not
apply “when rent is reduced or subsidized due to a federal, state,
or local subsidy or law.” (§ 1161b(b)(4).)
10
(§ 1161b, subd. (e)), which would include as relevant here LAMC
sections 49.92 and 151.09.
C. The Trial Court Did Not Err in Granting Summary
Judgment
De Witte contends the trial court erred in granting
summary judgment because, in order for Carradine to qualify for
protection as a tenant, section 1161b(b) required her to present
evidence that she had a bona fide tenancy negotiated through an
arm’s length transaction.
De Witte did not make this argument before the trial court.
Carradine argues we therefore should not consider it, relying on
the “well settled” principle in appellate review of summary
judgment that “ ‘possible theories that were not fully developed or
factually presented to the trial court cannot create a “triable
issue” on appeal. [Citations.]’ [Citations.]” (Sacks v. FSR
Brokerage, Inc. (1992) 7 Cal.App.4th 950, 962.) De Witte’s
argument, however, is a purely legal one—it contends the law
required Carradine to present evidence that she was a bona fide
tenant with a bona fide lease as defined in section 1161b(b). We
may consider a newly-raised issue in an appeal from a grant of
summary judgment when it involves a purely legal question that
does not turn on disputed facts or evidence, and which the parties
have fully briefed as they have here. (Noe v. Superior Court
(2015) 237 Cal.App.4th 316, 335-336.)
We begin by noting that Carradine’s motion was not based
on section 1161b. That section permits, on a statewide basis,
tenants living in foreclosed rental housing to maintain possession
pursuant to fixed-term residential leases until the end of the
lease term, unless one of the exceptions set forth in section
1161b(b) is demonstrated by the purchaser of the property or the
11
lessor’s successor in interest. That statewide baseline, however,
does not affect any local just cause eviction ordinance that affords
additional protections, nor does it affect “the authority a public
entity [here, the City of Los Angeles] that otherwise exists to
regulate or monitor the basis for eviction.” (§ 1161b, subd. (e).)
Carradine’s motion was premised on sections 49.92 and
151.09 of the LAMC. The LAMC defines “Tenant” as “A tenant,
subtenant, lessee, sublessee or any other person entitled to use or
occupancy of a rental unit.” (LAMC, § 151.02.) Thus, to invoke
the tenant protections of the LAMC Carradine did not need to
show that section 1161b(b) applied to her lease, or that she met
section 1161b(b)’s definition of tenancy as opposed to the
definition in the LAMC. De Witte does not contest that the
LAMC applies to the Kress Street property or that the LAMC
requires the property owner to provide the tenant notice of a
ground for eviction permitted under the LAMC. De Witte argues
that a tenant is not “entitled” to possession of property, within
the meaning of LAMC section 151.02, unless they can show that
section 1161b(b) applies to them, but this argument is not
supported by the language of LAMC section 151.02 and De Witte
provides no other support for it. Nor is De Witte’s argument
supported by the language of section 1161b, as (1) section 1161b
expressly states its provisions do not affect local ordinances
regulating the basis for eviction (§ 1161b, subd. (e)), and (2) even
if section 1161b somehow applied, it required De Witte—not
Carradine—to adduce evidence regarding the bona fides of the
lease (§ 1161b, subd. (c)). We therefore reject De Witte’s
argument about what section 1161b required Carradine to
adduce at summary judgment.
12
The undisputed evidence showed the notice to quit did not
comply with LAMC section 151.09, subdivision (C) as it did not
contain any written notice of the reason for the termination of
tenancy compliant with LAMC section 151.09, subdivision (A). A
party invoking the summary procedures of unlawful detainer
must strictly comply with the applicable notice requirements
given the summary nature of the proceedings. (WDT-Winchester
v. Nilsson (1994) 27 Cal.App.4th 516, 526.) Given the deficiency
in the notice to quit, summary judgment in Carradine’s favor on
the unlawful detainer cause of action was appropriate.
At their core, De Witte’s appellate arguments confuse the
deficiency in the notice to quit with whether Carradine was
entitled to maintain possession. For example, De Witte notes the
trial court crossed out language in the proposed judgment
submitted by Carradine that she was entitled to live in the
property, arguing the court “made the impossible finding that
[Carradine] was not entitled to possession as a matter of law” but
that De Witte “was not allowed to go to trial to challenge the
bona fides of [her] tenancy.” The summary judgment motion did
not present, nor did the court rule on, whether Carradine’s
tenancy satisfied section 1161b(b). The trial court instead held
only that the notice to quit was procedurally deficient, which
meant the unlawful detainer matter could not proceed under that
particular notice to quit.
De Witte’s reliance on Crescent Capital Holdings, LLC v.
Motiv8 Investments, LLC (2022) 75 Cal.App.5th Supp. 1 (Crescent
Capital) is misplaced. In Crescent Capital, the superior court’s
appellate division addressed a claimant’s burden to prevail on a
postjudgment claim of right to possession pursuant to section
1174.3, which provides “a mechanism for an occupant of the
13
property who is not identified in a judgment favoring the landlord
to be inserted into the [unlawful detainer] lawsuit as a party
defendant.”10 (Crescent Capital, supra, at p. 4.) The property at
issue was located in Altadena; the LAMC was thus not at issue.
(Id. at p. 5.) The plaintiff in Crescent Capital argued the section
1174.3 claim at issue failed because the claimant had not shown
that the exceptions set forth in section 1161b(b)(3) and (4) did not
apply. (Crescent Capital, supra, at p. 10.) The appellate division
rejected this argument, stating “whether the claimant is a bona
fide tenant, or her lease is a bona fide lease entitled to the
protections of section 1161b, are issues to be litigated in the
unlawful detainer trial.” (Id. at p. 11.)
De Witte seizes on this statement to argue that a tenant
must show the exceptions to section 1161b(b)(3) and (4) do not
apply in order to prevail in an unlawful detainer trial. But the
appellate division’s statement reflects merely that a trial court
need not address the applicability of the exceptions to section
1161b(b) in ruling on a postjudgment claim of right to possession
under section 1174.3. Crescent Capital did not address a tenant’s
defense to an unlawful detainer action based on the provisions of
the LAMC, as is at issue in this case. “[A] case is not authority
for a proposition not considered therein or an issue not presented
by its own particular facts.” (Satten v. Webb (2002) 99
Cal.App.4th 365, 383.)
10 As is noted above, Carradine was added as a defendant
in this case after filing a claim under section 1174.3. De Witte
does not challenge the validity of Carradine’s section 1174.3
claim or contend that she was improperly added as a defendant.
14
Finally, De Witte relies on the court’s later ruling on a
motion for attorney’s fees Carradine filed after the judgment was
entered. Any materials submitted in connection with the
attorney’s fees motion, and the court’s ruling on the motion, are
irrelevant to our review of the court’s ruling on Carradine’s
motion for summary judgment. “It is well settled that in
reviewing a summary judgment, ‘ “. . . the appellate court must
consider only those facts before the trial court, disregarding any
new allegations on appeal. [Citation.]” ’ ” (Havstad v. Fidelity
National Title Ins. Co. (1997) 58 Cal.App.4th 654, 661.)11
11 De Witte included the parties’ briefing on the motion for
attorney’s fees and the court’s ruling on that motion in its
appellant’s appendix. However, in its reply brief, De Witte
stated, “The trial court’s later ruling is, of course, not necessary
for appellant’s legal argument, and appellant leaves it to the
[c]ourt whether to consider it for background or to disregard it
completely.” We do not consider these documents, which were
filed after the court entered the judgment which is the subject of
this appeal.
15
DISPOSITION
The judgment is affirmed. Carradine is awarded her costs
on appeal.
NOT TO BE PUBLISHED
WEINGART, J.
We concur:
CHANEY, J.
BENDIX, Acting P. J.
16