ERIN CAMERON v. LAS ORCHIDIAS PROPERTIES, LLC,
B313971 consolidated with B316033
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE
Filed 08/22/21
CERTIFIED FOR PUBLICATION
(Los Angeles County Super. Ct. No. 19STCV11918)
Barbara M. Scheper, Judge
Horvitz & Levy, David M. Axelrad and Shane H. McKenzie; Craig Mordoh for Defendant and Appellant.
Campbell & Farahani and Frances M. Campbell and Nima Farahani for Plaintiff and Respondent.
Defendant and Appellant Las Orchidias Properties, LLC, (LOP) appeals the trial court‘s judgment in favor of Plaintiff and Respondent Erin Cameron (Cameron) on her causes of action for wrongful eviction and financial elder abuse following a bench trial, the court‘s order denying LOP‘s motion for new trial, and the court‘s order awarding attorney fees and costs to Cameron.
LOP contends that (1) it was unfairly surprised at trial because the pleadings were inadequate to put LOP on notice of Cameron‘s claims; (2) Cameron failed to prove financial elder abuse; (3) the trial court erred in the admission and exclusion of evidence; (4) Cameron is not entitled to damages, or alternatively, her damages should be limited; and (5) the award of attorney fees and costs should be reversed.
We affirm the trial court‘s judgment, order denying the motion for new trial, and order awarding Cameron attorney fees.
FACTS
Cameron moved into an apartment located at 6907 Bonita Terrace in Los Angeles in 1964. In 2003, LOP purchased Las Orchidias, the nine-unit
Jon Padgett and Mark Howell were the controlling members of LOP. About two years after LOP purchased Las Orchidias, Padgett came to Cameron‘s door with a large dog and knocked loudly. When she opened the door he said “I want your unit.” He did not greet her, he just said, “I want your unit.” Cameron had “a real sense of -- anxiety, if not downright fear at that time.” She did not know what to say. Cameron invited Padgett in. He offered to pay her $25,000 to leave her apartment. Cameron declined. She said, “I don‘t really care what you offer me, I don‘t want to move. I like it here. I love it here. It‘s home. I‘ve been here many years. And, you know, I don‘t want to leave.” Cameron‘s heart was pounding. She testified, “I did not want to leave, and I was afraid.”
On January 20, 2015, Padgett filed a Notice of Intent to Withdraw Units From Rental Housing Use under the Ellis Act with the Los Angeles Housing and Community Investment Department (the Department). The four units that LOP planned to remove from rental use included 1903–1905 Orchid Avenue and 6907 and 6907 ½ Bonita Terrace. At that time, LOP intended to convert the complex into condominiums. Padgett and Howell sent Cameron a letter informing her that her tenancy would be terminated on May 20, 2015. The letter included a notice of impending withdrawal and informed Cameron that she had the right to extend her tenancy by one year.1 The notice also stated that if the unit was returned to the rental market within five years, LOP was required to offer Cameron the right to return to her apartment, provided that she requested such an offer in writing within 30 days.
Cameron timely invoked her right to extend her tenancy through January 20, 2016, and her right to return if the unit was reoffered for rent within five years.
Cameron did not move out on January 20, 2016, and LOP initiated an unlawful detainer action against her. Ultimately, the parties entered into a stipulated judgment under which Cameron agreed to vacate the apartment by July 1, 2016.
LOP had started construction on Las Orchidias in 2014, which continued through 2019. Padgett testified that Roger Henry performed managerial tasks at Las Orchidias and provided a presence to deter crime when the units were not rented. Padgett “had [Roger Henry] staying at the building throughout [construction].” Henry “stayed in all of the units,” including Cameron‘s. LOP did not compensate Henry for his services, but instead “allowed him use of the property.” Leases for 1903 and 1905 Orchid Avenue that were executed in January 2019 stated that Henry was authorized to manage Las Orchidias and listed his address as 6907 Bonita Terrace.
The construction costs went over-budget, so Padgett decided to put four units, including Cameron‘s apartment, back on the rental market. On July 26, 2018, LOP filed with the Department a notice of intent to return the units located at 1903 and 1905 Orchid Avenue to the rental market. On August 30, 2018, LOP filed a notice of intent to return the units located at 6907 (Cameron‘s apartment) and 6907 ½ Bonita Terrace to the rental market. Edward Jacobs, who worked for the Department, wrote to LOP regarding its obligations, including the obligation to re-rent to displaced tenants. LOP, however, intended to rent exclusively to short-term tenants so that it could deliver the premises unoccupied to the eventual buyer, as an unoccupied property would command a higher price.
The Department notified the displaced tenants that their apartments would be returned to the rental market, and that they had the right to re-rent if they informed the Department and LOP that they intended to do so. Jacobs called Cameron to convey the news. Cameron was “thrilled” at the prospect of returning home, and timely notified LOP of her intent. James Boothby, who had formerly lived in the apartment above Cameron at 6907 ½ Bonita Terrace, also informed the Department and LOP of his intent to return to his apartment.
LOP‘s attorney sent Cameron a letter that stated:
“Unfortunately, my client has decided not to offer the unit to you at this time. [¶] In accordance with
Government Code Section 7060.2(b)(2) , enclosed please find a check in the sum of $6,649.56, representing six months [sic] rent for the above unit. This constitutes full payment of any damages you may be entitled to for myclient‘s failure to re-rent to you.”
A check was enclosed, dated June 20, 2018 in the amount of $6,649.56. Cameron did not cash the check. Receiving the letter made Cameron feel like she had been punched in the stomach. She was “literally sick at [her] stomach.” Boothby received an identical letter (with the exception that his monthly rent and corresponding check were higher). Boothby negotiated with LOP and relinquished his right to re-rent in exchange for a payment of $14,000.
Padgett testified that LOP did not re-rent to Cameron because LOP “needed to maintain the building as an empty property” so it would be “a more valuable product.” LOP‘s real estate agent estimated that Las Orchidias could sell for $14 million if delivered unoccupied. Padgett did not believe Cameron would leave when Las Orchidias sold because “if somebody‘s lived in a unit for as long as she has . . . she would not be amenable to leaving and meet our criteria that we were selling the building empty.” Padgett did not feel that Cameron‘s right to return “would trump what [LOP‘s] plans were for the development.” Las Orchidias was later sold unoccupied for $12.5 million.
Padgett conceded that he spoke to Jacobs who informed him that LOP could not avoid re-renting to Cameron by paying six months’ rent. Jacobs said he would likely refer the matter to the city. Although this concerned Padgett, it did not ultimately affect his decision not to honor Cameron‘s right to return. Padgett conceded in testimony that payment of six months’ rent was an admission that LOP had violated Cameron‘s right to return.
Trial Court‘s Statement of Decision
The trial court concluded that LOP violated
The trial court concluded that “the same conduct, the refusal to re-rent to [Cameron], constitutes financial elder abuse.” Cameron‘s “right to return to her apartment was a personal property interest that [LOP] took ‘to a wrongful use’ so it could house its manager/security guard in exchange for his services and ultimately sell the property vacant.” The court concluded that it was “beyond dispute” that LOP knew its conduct was likely to harm Cameron, in light of the communications it received from the Department that its plan not to re-rent to Cameron was illegal, Cameron‘s age, and her assertion that she did not want to leave and would always assert her right to return. LOP‘s representations in the letter refusing to re-rent to Cameron misleadingly suggested that LOP could refuse to re-rent to her although it could not, and its check for damages deceitfully suggested that she was entitled to no more.
The court awarded economic damages of $68,948.10, an amount equal to Cameron‘s rent and storage costs less the amount she would have been required to pay in rent for her former apartment had she re-rented it, for 65 months (her life expectancy). It awarded $250,000 in non-economic damages for the emotional harm Cameron suffered and would continue to suffer due to LOP‘s wrongful refusal to honor her right to return to her apartment. The court found that LOP‘s denial of Cameron‘s right to re-rent her apartment was “particularly cruel in light of the history between the parties.” “[T]o hold out hope” to Cameron that she could return to her beloved home of over 50 years “and then snatch it away was devastating ...” The court observed that it was apparent that Cameron continued to experience severe emotional distress while testifying. Finally, it found that an award of $250,000 in punitive damages was appropriate “given the reprehensibility of [LOP‘s] willful and conscious disregard of [Cameron‘s] rights and the need to deter future misconduct,” as LOP had purchased another apartment building with the proceeds from its sale of Las Orchidias. The court cited LOP‘s attempt to mislead Cameron into believing that she was entitled to only $6,649.56 in compensation for violation of her right to re-rent as worthy of punitive damages. The court found LOP‘s assertion that it never re-rented Cameron‘s apartment not credible. It also found that LOP had the ability to pay the damages awarded, and the amount was not excessive.
Motion for New Trial and Motion for Attorney Fees
LOP moved for a new trial based on the arguments that (1) Cameron failed to plead her statutory claims; (2) LOP did not waive the defenses of advice of
Cameron‘s counsel moved for attorney fees based on Cameron‘s successful financial elder abuse cause of action.
A hearing was held in which both motions were considered. The trial court observed that LOP‘s arguments in the motion for new trial were a re-hash of arguments that had been “presented to the court in the past in different phases of the proceedings,” and that the court had considered and rejected the arguments previously. The court stated that it did not believe that LOP was surprised by either the theories that Cameron relied upon or the evidence supporting those theories. The court ruled that LOP had not provided any grounds for granting a new trial.
LOP‘s counsel argued that Cameron had not pleaded a claim for wrongful eviction based on the theory that LOP refused to re-rent to her. There was not sufficient evidence to support the finding that LOP re-rented Cameron‘s apartment to anyone.
Cameron‘s counsel responded that LOP‘s trial brief clearly stated that “Cameron seeks damages from defendant for failure to rerent the premises to her prior to offering the unit for rent...” LOP was not surprised by the theory at trial.
The court denied the motion for new trial.
The court awarded Cameron attorney fees in the amount of $172,092.2
DISCUSSION
The Ellis Act and the Los Angeles Rent Stabilization Ordinance
“The Ellis Act (Act) sets forth the procedure by which a landlord may go out of business by removing rental units from the market.” (Drouet v. Superior Court (2003) 31 Cal.4th 583, 589 (Drouet).) “Concerned about the possible adverse effect on rent control ordinances, the Legislature included provisions to insure against the removal of rental units for the sole purpose of circumventing rent control ordinances by,
The Los Angeles Rent Stabilization Ordinance (“LARSO“) (
Standards of Review
Bench Trial
“In reviewing a judgment based upon a statement of decision following a bench trial, we review questions of law de novo. [Citation.] We apply a substantial evidence standard of review to the trial court‘s findings of fact. [Citation.] Under this deferential standard of review, findings of fact are liberally construed to support the judgment and we consider the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences in support of the findings. [Citation.]
“A single witness‘s testimony may constitute substantial evidence to support a finding. [Citation.] It is not our role as a reviewing court to reweigh the evidence or to assess witness credibility. [Citation.] ‘A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and
“When[, as here,] a proper request for a statement of decision has been made, the scope of appellate review may be affected. [Citation.]’ . . . [I]f the statement of decision does not resolve a controverted issue or is ambiguous, and the omission or ambiguity was brought to the attention of the trial court, it shall not be inferred on appeal . . . that the trial court decided in favor of the prevailing party as to those facts or on that issue.’ [Citations.]” (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981 (Thompson).)
“A judgment may not be reversed on appeal . . . unless “after an examination of the entire cause, including the evidence,” it appears the error caused a “miscarriage of justice.” (
Motion for New Trial
The court may order a new trial on all or part of the issues upon motion of the aggrieved party upon a showing that the ground for the motion materially affected the rights of the moving party. (
“The right to a new trial is purely statutory, and a motion for a new trial can be granted only on one of the grounds enumerated in the statute. [Citations.]” (Fomco, Inc. v. Joe Maggio, Inc. (1961) 55 Cal.2d 162, 166.)
“““““A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, nor upon the ground
Surprise/Adequacy of the Complaint
LOP contends that Cameron did not adequately plead (1) that both causes of action were based on a violation of
We need not address the adequacy of the pleadings. As the trial court concluded, even if Cameron did not adequately plead her re-rental theory, LOP‘s contention would fail because it did not object in a timely manner. “The general and longstanding rule is that a party must recover on the cause of action he has alleged in his complaint and not on another cause of action disclosed by the evidence. [Citations.] However, the general rule may yield where a case is tried on the theory that a matter is in issue and evidence is received thereon without objection. [Citations.] [¶] “““It has long been settled law that where (1) a case is tried on the merits, (2) the issues are thoroughly explored during the course of the trial and (3) the theory of the trial is well known to court and counsel, the fact that the issues were not pleaded does not preclude an adjudication of such litigated issues and a review thereof on appeal.““” [Citation.]” (Pierce v. Pacific Gas & Electric Co. (1985) 166 Cal.App.3d 68, 78.)
The citation to the record that LOP offers to demonstrate that it objected prior to trial does not support its position. Before trial, counsel for Cameron objected to LOP‘s argument that the Ellis Act preempted the LAMC, which LOP had not asserted in its answer. LOP‘s counsel responded that the complaint did not allege the LAMC imposed a requirement that a party wishing to withdraw a unit from the rental market under the Ellis Act must do so in good faith, although Cameron made the argument in her trial brief. LOP‘s counsel argued that if Cameron could argue that the LAMC required good faith removal of housing from the rental market, he should be permitted to argue that the Ellis Act preempted
In its summation brief, LOP made the reverse of the argument that it makes now, claiming that Cameron‘s complaint alleged wrongful eviction and financial elder abuse based on LOP‘s refusal to re-rent to her in 2018, but not on LOP‘s bad faith eviction of Cameron in 2016.
LOP changed course after the trial court found that LOP did not initially go out of the rental business in bad faith, but found in Cameron‘s favor on both causes of action on the basis of LOP‘s refusal to re-rent. LOP argued in its motion for new trial (and argues now on appeal) that it was surprised by the theory that it was liable for its wrongful refusal to re-rent to Cameron in 2018, and requested that the trial court reopen proceedings to allow it to raise new defenses and present evidence in support of those defenses.
“‘[T]he question of the sufficiency of the complaint to support the findings and judgment in any given case cannot be raised or reviewed upon an appeal from an order denying a motion for a new trial.’ [Citation.]” (Pemberton v. Barber (1962) 199 Cal.App.2d 534, 540.) Regardless, “[i]t is well settled that a party‘s right to a new trial upon the ground of surprise is waived if the alleged surprise is not called to the court‘s attention by a motion for a continuance or other relief. [Citations.] The rule finds its justification upon essentially practical and equitable considerations: it would be intolerable, in such cases, to permit parties to proceed without objection or application for relief, speculate as to the rulings of the court, and then after an unfavorable decision, predicate a claim of surprise upon a ground which could have been obviated in the first instance had timely objection been made. Moreover, the failure to object tends strongly to indicate that the party has not, in fact, been misled.” (Noble v. Tweedy (1949) 90 Cal.App.2d 738, 742–743.)
The record demonstrates that LOP was not misled. The trial court did not abuse its discretion by denying LOP‘s motion for new trial on this basis. Having argued that refusal to re-rent was the only theory of recovery for
Substantial Evidence Supports the Finding That LOP Re-Rented to Henry
LOP further argues that the evidence is insufficient to demonstrate that it had a duty to re-rent to Cameron because there was no evidence that LOP returned her apartment to the rental market within five years of withdrawal. Cameron argues that LOP has waived this, and all other arguments based on the sufficiency of the evidence, by presenting only the facts favorable to its position. Cameron‘s argument is not without support. LOP purports to “present a comprehensive review of the record to assist the court with the ‘whole record’ review necessary to determine the sufficiency of the evidence and whether there is clear and convincing evidence to support punitive damages.” In fact, in its statement of facts, LOP argues the facts that are favorable to it to the exclusion of facts favorable to Cameron. It also includes “facts” based on evidence that the trial court excluded. “Facts” do not include excluded evidence. “‘A party who challenges the sufficiency of the evidence to support a particular finding must summarize the evidence on that point, favorable and unfavorable, and show how and why it is insufficient. [Citation.]’ [Citation.] Where a party presents only facts and inferences favorable to his or her position, ‘the contention that the findings are not supported by substantial evidence may be deemed waived.’ [Citation.]” (Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 738.)
Even absent this significant defect in LOP‘s appellate briefing, LOP‘s contention is belied by the record. Padgett testified that Las Orchidias was under construction from 2014 through 2019, and he “had [Roger Henry] staying at the building throughout that time.” Henry “did stay at different units at different times.” Henry “stayed in all of the units, so [Cameron‘s apartment] would have been one of them.” Padgett testified that he did not compensate Henry for his services, but instead “allowed him use of the property.” Padgett explained that Henry was a “fine artist” and used the apartments to work on his art. Leases for two other Las Orchidias units executed in January 2019 stated that Henry was authorized to manage Las Orchidias and listed his address as 6907 Bonita Terrace, Cameron‘s former apartment. The trial court found that Cameron‘s apartment was re-rented based on the leases and Padgett‘s testimony that Henry lived in her apartment at various times and was not otherwise compensated for his managerial
LOP cites to Santa Monica Rent Control Bd. v. Bluvshtein (1991) 230 Cal.App.3d 308 (Santa Monica Rent Control Bd.), in support of its argument that Henry could not have “re-rented” Cameron‘s apartment from LOP because there was no landlord/tenant relationship between them. In that case, the defendants were sued individually and as partners in a general partnership. (Id. at p. 312.) The defendants purchased the property as joint tenants or tenants in common, invoked their rights to cease operating the property as a residential rental property under the Ellis Act, evicted the tenants, and occupied the units of the property themselves pursuant to an oral agreement. (Id. at p. 315.) Under the oral agreement, “[defendants] occupied various units at the subject property as their personal residence” and “each [defendant] granted to the other [defendants] a terminable right of exclusive possession of said unit in consideration for each occupant‘s contribution of a
sum of money toward purchase and ongoing maintenance of the property.” (Id. at p. 312.)
The trial court sustained the defendants’ demurrer without leave to amend. It found that the complaint did not allege a violation of the Ellis Act because the plaintiff failed to allege a landlord/tenant relationship. (Santa Monica Rent Control Bd., supra, 230 Cal.App.3d at p. 16.) On appeal, the appellate court agreed, concluding that the complaint failed to allege that the general partnership owned the property and did not designate the parties as landlord and tenant. (Id. at p. 317.) Additionally, the oral agreement was not an agreement to pay “rent,” which is “‘the consideration paid by the tenant for the use, possession and enjoyment of the demised premises.’ [Citation.]” (Ibid.) “[T]he payments to be made were for the mortgage and maintenance of the property, not for use and possession. . . .” (Ibid.)
No such circumstances exist here. Cameron‘s complaint clearly identifies LOP as the landlord, and alleges that she was harmed because LOP refused to re-rent her apartment to her because it intended to rent the apartment to someone else. Henry‘s identity was revealed in discovery, and the case was tried without objection on the theory that Henry rented Cameron‘s apartment from LOP. In consideration for the use, possession, and enjoyment of the property, Henry provided services as a manager and security presence.
LOP‘s reliance on Chan v. Antepenko (1988) 203 Cal.App.3d Supp. 21 (Chan), fares no better. In Chan, the owners of an apartment
In this case, we are not interpreting the San Francisco rent ordinance. In its statement of decision, the trial court relied upon
Financial Elder Abuse
The Legislature enacted the Elder Abuse and Dependent Adult Civil Protection Act (
“When a plaintiff proves ‘by a preponderance of the evidence that a defendant is liable for financial abuse, as defined in Section 15610.30, in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney‘s fees and costs.’ ([
The Right to Re-Rent Under LAMC Section 151.27 and the Ellis Act is a Property Right within the Meaning of the Elder Abuse Act
LOP argues that Cameron‘s financial elder abuse cause of action must be reversed because her right to re-rent her apartment under the Ellis Act and
“The interpretation of state statutes . . . entails a resolution of a pure question of law, which is examined de novo.” ( Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2009) 173 Cal.App.4th 13, 21.) “‘[A]s in any case of statutory interpretation, our task is to determine afresh the intent of the Legislature by construing in context the language of the statute.’ [Citation.] In determining such intent, we begin with the language of the statute itself. [Citation.] That is, we look first to the words the Legislature used, giving them their usual and ordinary meaning. [Citation.] ‘If there is no ambiguity in the language of the statute, “then the Legislature is presumed to have meant what it said, and the plain meaning of the language governs.” [Citation.]‘” (Nguyen v. Western Digital Corp. (2014) 229 Cal.App.4th 1522, 1544 (Nguyen).) “‘In construing a statute, we must also consider “the object to be achieved and the evil to be prevented by the legislation.” [Citation.]’ [Citation.] We ‘avoid a construction that would produce absurd consequences, which we presume the Legislature did not intend.’ [Citation.]” (Ibid.)
The Legislature promulgated the Elder Abuse Act in the recognition that “elders and dependent adults may be subjected to abuse, neglect, or abandonment and that this state has a responsibility to protect these persons.” (
Under the financial elder abuse statute, “a person or entity takes, secretes, appropriates, obtains, or retains real or personal property when an elder or dependent adult is deprived of any property right, including by means of an agreement, donative transfer, or testamentary bequest, regardless of whether the property is held directly or by a representative of an elder or dependent adult.” (
“The concept of property in California is extremely broad.” (Estate of Sigourney (2001) 93 Cal.App.4th 593, 603.) “It has
In light of the breadth of the protections afforded to elders by the Elder Abuse Act and California‘s expansive construction of the term “property,” it is clear that the Legislature intended “property” in the financial elder abuse statute to encompass interests that do not involve harms to one‘s person—which are addressed under separate provisions of the Elder Abuse Act—i.e., “any valuable right or interest protected by law.” (Fields, supra, 91 Cal.App.2d at p. 449.) We hold that “property” as used in the Elder Abuse Act includes a displaced tenant‘s right to re-rent under the LAMC and the Ellis Act.
We are not otherwise persuaded by Cunningham v. Universal Underwriters (2002) 98 Cal.App.4th 1141 (Cunningham), upon which LOP relies. Cunningham addressed whether an insurer had a duty to defend an insured landlord for failure to deliver premises to a tenant under a property damage provision in an insurance policy that “covered only those claims alleging ‘damage to or loss of use of tangible property.‘” (Id. at p. 1155.) The Court of Appeal held interference with a tenant‘s right to possession was not covered by the policy because it was an intangible property right. (Ibid.) In so holding, the appellate court explained: “A tenant‘s right to possess property on the lease commencement date is a contractual right that does not mature into a property right until possession actually occurs. A landlord‘s failure to deliver possession of the premises merely gives the tenant a right to abandon the tenancy and sue for damages. . . .” (Id. at pp. 1155–1156.)
As we have discussed, the term “property” has different meanings in different contexts, and in the context of the financial elder abuse statute, we interpret “property” to encompass intangible rights that an insurance policy provision for physical damage to property does not. Additionally, Cameron‘s right to re-rent her apartment differs from a tenant‘s right to possess property
We reject LOP‘s attempts to characterize the property right at issue under
LOP next contends that there is insufficient evidence that it took Cameron‘s property “for a wrongful use or with the intent to defraud” within the meaning of LOP first argues that the court abused its discretion when it relied on prejudicial hearsay contained in a work log attributed to the Department‘s representative, Jacobs, that was not admitted into evidence, as well as Padgett‘s testimony about the work log. “Hearsay is an out-of-court statement offered to prove the truth of its content.” (People v. Valencia (2021) 11 Cal.5th 818, 831; see First, LOP has waived this challenge by failing to object at trial. Although it claims to have timely objected, LOP‘s citation to the reporter‘s transcript reveals that counsel objected to specific portions of Cameron‘s testimony only. After Cameron described at length a phone conversation she had with Jacobs, including statements that Jacobs made to her, LOP‘s counsel stated: “Your honor, object. Move to strike. Nonresponsive. Also, in a more specific manner, move to strike all the hearsay statements by the person referred to as Mr. Jacobs.” When the trial court asked if counsel had any more objections to an exhibit, about which Cameron had been testifying, counsel responded, “Your honor, my objections are to Miss Cameron‘s testimony.” The record demonstrates that counsel‘s objection was directed at Regardless, the work log itself was not admitted. Padgett testified that he recalled talking to Jacobs, but stated that he believed Jacobs‘s interpretation of the Ellis Act was incorrect. Padgett‘s conversations with Jacobs did not affect his decision to send Cameron the letter refusing to re-rent to her and the accompanying check. The trial court expressly stated in the statement of decision that it did not consider Padgett‘s testimony regarding Jacobs‘s advisements for the truth of the matter asserted, but rather as evidence of Padgett‘s state of mind under Finally, LOP cannot show that it suffered prejudice. The Notice of Intent to Re-Rent Withdrawn Accommodations that LOP filed with the Department clearly set forth in a section entitled “Restrictions for Re-Rental for Ellis Act Provisions” that when a property is returned to the rental market within five years of the date of withdrawal, the landlord must first offer the unit to the displaced tenant. The Notice of Intent to Re-Rent Withdrawn Accommodations does not state that a landlord may avoid renting to a displaced tenant by paying six months’ rent instead. Padgett and Howell both signed the Notice of LOP also forfeited its argument that the letter was privileged. (See In re S.B., supra, 32 Cal.4th at p. 1293 [appellate court may hold that an issue is forfeited if not timely raised].) When the letter was admitted into evidence at trial, the court asked LOP‘s counsel if he had any objections. Counsel responded, “I have no objection to the document.” Counsel did not raise the issue of privilege until after the liability phase of the trial had concluded and the trial court had found that Cameron established malice and fraud. LOP first sought to assert the defense that the letter was privileged as an offer of compromise in a late-filed brief, which the trial court struck because the brief was filed without permission.8 Even if LOP had not forfeited its challenge to the letter, the letter was admissible as a party admission. Although letters offering settlement may be privileged, party admissions are not. (Volkswagen of America, Inc. v. Superior Court (2006) 139 Cal.App.4th 1481, 1493–1495.) “In considering whether a person‘s statement amounts to an ordinary admission or constitutes an offer of compromise, the intention of the party is dispositive.’ [Citation.] If the statement was not intended as a concession but as an assertion of ‘“all that he deemed himself entitled to,“’ it is not an offer of compromise. [Citation.]” (Id. at p. 1494.) Here, Padgett‘s own testimony demonstrates that the letter was an admission. He responded in the affirmative when he was asked whether “that payment [was] an admission” that he had “violated [Cameron‘s] right to come back to her unit.” Moreover, the language of the letter offered no compromise—LOP flatly refused Cameron‘s request to re-rent the apartment and tendered a check to Cameron in the LOP challenges the trial court‘s exclusion of evidence relating to its arguments that (1) the letter refusing to re-rent should have been excluded under the litigation privilege; (2) LOP simply misunderstood the law regarding re-rental and had no intent to defraud Cameron; (3) LOP was following the advice of counsel; (4) LOP followed Jacobs‘s advice; (5) LOP never re-rented Cameron‘s apartment; and (6) LOP never intended to re-rent Cameron‘s apartment. We reject these contentions. All of the evidence at issue was relevant to liability, and its admission should have been sought in the first phase of trial. Instead, LOP first sought to admit the evidence in a late-filed brief that was submitted after the liability phase of the trial had concluded. The trial court struck the brief, which was filed without the court‘s permission. LOP‘s argument that this evidence was improperly excluded is forfeited on appeal. (See In re S.B., supra, 32 Cal.4th at p. 1293.) LOP further argues that the trial court abused its discretion by refusing to reopen proceedings for this evidence to be considered. “‘To be entitled to relief on appeal from the result of an alleged abuse of discretion it must clearly appear that the injury resulting from such a wrong is sufficiently grave to amount to a manifest miscarriage of justice . . . .’ [Citation.]’ [Citation.]” (Estate of Young (2008) 160 Cal.App.4th 62, 82.) That is not the case here. As we have discussed, LOP was not unfairly surprised by Cameron‘s claims. LOP had an entire trial to present the evidence at issue but did not seek to do so until it had already lost its case. There is no manifest injustice in the trial court‘s refusal to afford LOP the equivalent of a second trial. LOP argues the evidence was insufficient to show that it took Cameron‘s property “for a wrongful use or with the intent to defraud” because it was unclear whether the Ellis Act permitted landlords to avoid the obligation of offering displaced tenants the opportunity to re-rent by paying them the equivalent of six months’ rent. ( At the time that LOP placed Cameron‘s apartment back on the rental market, the language of the Ellis Act and Merriam Webster defines “shall” as “used in laws, regulations, or directives to express what is mandatory.” (Merriam-Webster‘s Unabridged Dict. (2022) <https://unabridged.merriam-webster.com/unabridged/shall> [as of Aug. 17, 2022], archived at <https://perma.cc/UQF2-ZETE>.) Common principles of statutory interpretation similarly establish that, absent evidence to the contrary, “shall” is directive or mandatory. (People v. Superior Court (Zamudio) (2000) 23 Cal.4th 183, 194 [the word “shall” is ordinarily construed as mandatory, unless such a construction would imply an unreasonable legislative purpose].) In contrast, the word “may” grants permissive or discretionary authority. (California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1143 [the word “may” is ordinarily deemed permissive].) The Ellis Act did not provide that a landlord “may” first offer a unit to a displaced tenant or “may” be liable to the displaced tenant for punitive damages. If a unit was taken off the rental market and then re-offered for rent, both a first offer and punitive damages were mandatory and the courts interpreted these obligations as such. (See Coyne v. De Leo (2018) 26 Cal.App.5th 801, 815–816, italics added (Coyne) [“If the landlord offers the previously withdrawn rental units for rent within five years of their withdrawal, the landlord must offer the unit for rent or lease to the displaced tenant at the previous rental plus intervening annual adjustments, and the landlord is liable to the displaced tenant for punitive damages (not to exceed six months’ rent) for failure to offer the rental to the displaced tenant“].)9 Had the Legislature intended it to be otherwise, it could have stated that a landlord who did not wish to first offer the unit to a displaced tenant could instead pay the displaced tenant six months’ rent. It did not. We are not otherwise persuaded by LOP‘s argument that the Legislature‘s amendment to The evidence showed that LOP took Cameron‘s property for a wrongful use and with the intent to defraud. LOP knew that Cameron was elderly and had lived in her apartment for over 50 years. LOP also knew that Cameron would do whatever was in her power to stay in the home that she loved—whether by exercising a statutory right or over-staying her lease. LOP was aware of the law and regulations that required it to offer to re-rent the apartment to Cameron; however, LOP did not want to rent to her because it did not believe that Cameron would vacate her apartment when asked, and LOP wanted to be able to deliver Las Orchidias unoccupied, which would result in a larger return on its investment. Padgett testified that he did not feel that Cameron‘s right to return “would trump what [LOP‘s] plans were for the development.” He conceded in testimony that payment of six months’ rent was an admission that LOP had violated Cameron‘s right to return. Padgett was not deterred by Jacobs‘s warnings. Howell, for his part, testified that, based on online research and conversations at dinner parties, it was his understanding that Cameron was only entitled to the statutory penalty. The wording of LOP‘s letter suggests, as the trial court observed, that LOP had the option not to re-rent to Cameron if it did not wish to, and that six months’ rent was all she could recover under the law. It was reasonable for the trial court to infer that LOP sent the letter and check despite the fact that LOP knew this was not the law, and that LOP intended for Cameron to believe it was acting lawfully, to her detriment. Substantial evidence supports the trial court‘s findings that LOP took Cameron‘s property for a wrongful use, did so with fraudulent intent, and did so with full knowledge of the harm that it would cause to Cameron. With respect to damages, LOP first argues that even if this court concludes that it violated LOP‘s reliance on De Anza Santa Cruz Mobile Estates Homeowners Assn. v. De Anza Santa Cruz Mobile Estates (2001) 94 Cal.App.4th 890 (De Anza Santa Cruz Mobile Estates Homeowners Assn.) and Turnbull & Turnbull v. ARA Transportation, Inc. (1990) 219 Cal.App.3d 811 (Turnbull & Turnbull) is misplaced. Those cases stand for the proposition that a plaintiff may not be awarded double recovery based on the same conduct. They do not hold that trial courts are bound to impose damages under one statute over another in cases like Cameron‘s. De Anza Santa Cruz Mobile Estates Homeowners Assn. holds that although trial courts may not impose both statutory penalties and punitive damages, a plaintiff may proceed on two theories of recovery, either of which may be the basis for an award of damages following trial. (De Anza Santa Cruz Mobile Estates Homeowners Assn., supra, 94 Cal.App.4th atAdmission of Jacobs‘s Work Log
Admission of the Refusal to Re-Rent Letter
Exclusion of Evidence Supporting LOP‘s Theories of Defense
Substantial Evidence of “Wrongful Use” and “Intent to Defraud”
Here, the damages award is consistent with both De Anza Santa Cruz Mobile Estates Homeowners Assn. and Turnbull & Turnbull. Cameron proceeded on two causes of action and was awarded damages under the financial elder abuse statute.11
LOP makes several arguments regarding the amount of damages imposed, which we reject in turn. The amount of damages to award is a question of fact. (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 299 (Bigler-Engler).) “An appellate court can interfere on the ground that the judgment is excessive only on the ground that the verdict is so large that, at first blush, it shocks the conscience and suggests passion, prejudice or corruption on the part of the [fact finder].’ [Citation.] ““The question is not what this court would have awarded as the trier of fact, but whether this court can say that the award is so high as to suggest passion or prejudice.” [Citation.]” (Ibid.) “In making this assessment, the court may consider, in addition to the amount of the award, indications in the record that the fact finder was influenced by improper considerations.’ [Citation.]” (Ibid.) “There are no fixed or absolute standards by which an appellate court can measure in monetary terms the extent of the damages suffered by a plaintiff as a result of the wrongful act of the defendant. The duty of an appellate court is to uphold the jury and trial judge whenever possible. [Citation.] The amount to be awarded is “a matter on which there legitimately may be a wide difference of opinion” [citation].’ [Citation.]” (Id. at pp. 299-300.) “We review [a] damages award for substantial evidence . . . ‘In considering the contention that the damages are excessive the appellate court must determine every conflict in the evidence in respondent‘s favor, and must give [her] the benefit of every inference reasonably to be drawn from the record [citation].’ [Citation.]” (Id. at p. 300.)
Non-Economic Damages
LOP argues that the trial court‘s award of damages for emotional distress cannot stand because it was based on Cameron‘s 2016 eviction, which the court found was not unlawful, rather than LOP‘s refusal to re-rent to Cameron in 2018.
The statement of decision expressly states that non-economic damages were awarded to compensate Cameron for the emotional harm she suffered and would continue to suffer resulting from LOP‘s refusal to re-rent to her in 2018. The trial court specifically agreed with LOP that Cameron could not recover damages for the earlier eviction. The court discussed the events that occurred prior to LOP‘s refusal to re-rent to Cameron to illustrate that LOP‘s denial of her right to return was “particularly cruel in light of the history between the parties.” It did not base the award on those prior events.
Substantial evidence supports the trial court‘s award. Under the circumstances, we cannot say the award is so high as to suggest passion or prejudice. Evidence was presented that Cameron lived in her apartment for 52 years. She was very attached to it, did not want to leave, and was upset by her eviction. In light of these facts, she was emotionally distressed when, after being overjoyed at the prospect of returning to her home, LOP flatly denied her right to do so, dashing her long-held hopes. Cameron described feeling sick, as if she had been punched in the stomach. The trial court observed her demeanor when she testified about receiving the letter, and reasonably inferred that her emotional distress over the incident was ongoing. The factors that would influence the trial court‘s award, including Cameron‘s advanced age and vulnerability, are the precise factors that the Legislature decided should be considered when there is a claim of financial elder abuse. There is no basis to overturn the award for non-economic damages.
Punitive Damages
Clear and Convincing Evidence of Malice or Fraud
“In a civil case not arising from the breach of a contractual obligation, [the fact finder] may award punitive damages ‘where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.’ (
“Malice” is defined as intentional injury or “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (
LOP argues that there is not clear and convincing evidence of malice or fraud that would support the trial court‘s award of punitive damages. LOP asserts that “[t]o amount to clear and convincing evidence justifying punitive damages, evidence must be inconsistent with any explanation other than LOP‘s malice or conscious disregard of Ms. Cameron‘s health or safety. (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1288, fn. 14 (Tomaselli).)”
This is a gross misstatement of Tomaselli and the law. Tomaselli states: “[P]unitive damages should not be allowable upon evidence that is merely consistent with the hypothesis of malice, fraud, gross negligence or oppressiveness. Rather some evidence should be required that is inconsistent with the hypothesis that the tortious conduct was the result of a mistake of law or fact, honest error of judgment, over-zealousness, mere negligence or other such noniniquitous human failing.” (Tomaselli, supra, 25 Cal.App.4th at p. 1288, fn. 14, italics added.)
Our Supreme Court has described the standard of review as follows: “When reviewing a finding that a fact has been proved by clear and convincing evidence, the question before the appellate court is whether the record as a whole contains substantial evidence from which a reasonable fact finder could have found it highly probable that the fact was true. In conducting its review, the court must view the record in the light most favorable to the prevailing party below and give appropriate deference to how the trier of fact may have evaluated the credibility of witnesses, resolved conflicts in the evidence, and drawn reasonable inferences from the evidence.” (Conservatorship of O.B. (2020) 9 Cal.5th 989, 1011-1012.)
Here, the evidence is not merely consistent with the conclusion that LOP was acting with malice, fraud, gross negligence or oppressiveness—it is inconsistent with the conclusion that LOP made a mistake of law or fact, an honest error of judgment, was overzealous, merely negligent, or suffered from some other noniniquitous human failing. LOP refused to rent to Cameron although it knew that it was required to, and knew that refusing to rent to her would cause her emotional distress, because by doing so LOP could increase its profits. To accomplish this goal, LOP represented to Cameron that it had the right to refuse to rent to her and that she had no recourse other than to accept the damages in the amount of six months’ rent it provided. As the trial court observed, the evidence showed that LOP “was not trying to negotiate a compromise of any claim [Cameron] might have. [LOP] was trying to hood
The Punitive Damages Award Does Not Violate Due Process
LOP argues that the trial court‘s award of punitive damages was unreasonable because there was no evidence that LOP‘s behavior was reprehensible or that punishment was required for deterrence. LOP further argues that the Legislature has determined that the reasonable penalty for LOP‘s actions is damages in the amount of six months’ rent.
“The due process clause of the Fourteenth Amendment to the United States Constitution places constraints on state court awards of punitive damages. (See State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 416-418 (State Farm); BMW of North America v. Gore (1996) 517 U.S. 559, 568, (BMW).) [Our Supreme Court] explained the basis of these constraints: ‘The imposition of “grossly excessive or arbitrary” awards is constitutionally prohibited, for due process entitles a tortfeasor to “fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a State may impose.” [Citation.]’ (Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159, 1171 (Simon).)
“In State Farm, the high court articulated ‘three guideposts’ for courts reviewing punitive damages: (1) the degree of reprehensibility of the defendant‘s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the [fact finder] and the civil penalties authorized or imposed in comparable cases.’ (State Farm, supra, 538 U.S. at p. 418; see also BMW, supra, 517 U.S. at p. 575.)” (Roby, supra, 47 Cal.4th at p. 712.)
“[A] court reviewing [an] award for due process compliance may consider what level of punishment is necessary to vindicate the state‘s legitimate interests in deterring conduct harmful to state residents . . .” (Simon, supra, 35 Cal.4th at p. 1185.) Thus, “the defendant‘s financial condition [is] a legitimate consideration in setting punitive damages. (See State Farm, supra, 538 U.S. at p. 428 [use of wealth as a factor not “unlawful or inappropriate“].)” (Ibid.)
Reprehensibility
“Of the three guideposts that the high court outlined in State Farm, supra, 538 U.S. at page 418, the most important is the degree of reprehensibility of the defendant‘s conduct. On this question, the high court instructed courts to consider whether ‘[1] the harm caused was physical as opposed to economic; [2] the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; [3] the target of the conduct had financial vulnerability; [4] the conduct involved repeated actions or was an isolated incident; and [5] the harm was the result of intentional malice, trickery, or deceit, or mere accident.’ (Id. at p. 419.)” (Roby, supra, 47 Cal.4th at p. 713.)
Here, almost all of the factors indicating reprehensibility are present. First, LOP‘s actions caused Cameron both physical and economic harm. (See Roby, supra, 47 Cal.4th at p. 713 [harm to plaintiff “was ‘physical’ in the sense that it affected her emotional and mental health, rather than being a purely economic harm“].) Second, LOP‘s conduct evinced an indifference or reckless disregard for Cameron‘s health and safety because LOP was aware that its actions would affect her emotional well-being. (See Ibid. [conduct evinced an indifference to or a reckless disregard of the health or safety of others where “it was objectively reasonable to assume [defendant‘s tortious] acts . . . would affect [the plaintiffs] emotional well-being“].) Third, Cameron was
Disparity Between Award and Actual Harm
LOP does not argue that there is a disparity between the punitive damages award and the actual harm Cameron suffered, which is unsurprising as a comparison of compensatory and punitive damages reveals a multiplier of less than 1, well below generally accepted ratios. (State Farm, supra, 538 U.S. at p. 425 [ratios of punitive damages of double, triple, and quadruple compensatory damages, while not binding, are instructive of appropriate awards].)
Comparable Civil Penalties
We disagree with LOP that LAMC section 151.27, subdivision (B), is a comparable civil penalty that sets the reasonable amount of punitive damages in this case. First, the Legislature created two categories of penalty for refusal to re-rent, which differ based only upon the time that has passed since the accommodations were withdrawn from the rental market. Although a plaintiff is limited to the equivalent of six months’ rent in punitive damages under LAMC section 151.27, subdivision (B), when a violation has occurred within two and ten years after withdrawal of the unit from rental use, punitive damages are not limited by the LAMC or the Ellis Act when the violation occurred less than two years after the accommodations are withdrawn pursuant to LAMC section 151.27, subdivision (A). Here, even if we were to assume Cameron‘s recovery under LAMC section 151.27, subdivision (A), was barred due to the statute of limitations (an issue we do not decide), LOP‘s conduct is more closely comparable to the conduct penalized under that subdivision. The trial court found that LOP re-rented to Henry in less than two years based on Padgett‘s testimony that Henry lived in all of the units between 2014 and 2019 while construction was ongoing. Padgett‘s testimony constitutes substantial evidence to support that finding. (Thompson, supra, 6 Cal.App.5th at p. 981 [testimony of a single witness constitutes substantial evidence].) Accordingly, a punitive damages award of six months’ rent is not the comparable civil penalty.
Second, in this case the conduct is not limited to refusing to rent to a displaced tenant—LOP refused to re-rent to a displaced elderly tenant, which is conduct that the Legislature has deemed to be more egregious. The trial
LOP‘s Financial Condition
LOP contends that an award of $250,000 in punitive damages was not necessary given that its net worth was at most $2.6 million. LOP argues that an award equal to almost 10% of its net worth is “significantly outside ‘the norm.” The trial court never made a finding of LOP‘s net worth beyond placing it between $2.6 and $4.6 million and stating that, in either case, a punitive damages award of $250,000 was appropriate. In the statement of decision, the trial court found that $250,000 in punitive damages was an appropriate amount given the reprehensibility of LOP‘s actions and the fact that it purchased another apartment building with the $4.6 million in proceeds realized from its sale of Las Orchidias.
We agree. “In assessing whether a punitive damages award is excessive relative to the defendant‘s wealth, ‘the key question . . . is whether the amount of damages “exceeds the level necessary to properly punish and deter.” [Citations.]’ [Citation.]” (Bankhead v. ArvinMeritor, Inc. (2012) 205 Cal.App.4th 68, 78 (Bankhead).) “Although net worth is the most common measure of the defendant‘s financial condition, it is not the only measure for determining whether punitive damages are excessive in relation to that condition. [Citations.]’ [Citation.]” (Id. at p. 79; see also Rufo v. Simpson (2001) 86 Cal.App.4th 573, 625 [allowing punitive damages award that “technically exceed[ed]” the wealthy individual defendant‘s net worth, because the evidence showed that the defendant would not be financially “destroyed by the award“].) “Indeed, it is likely that blind adherence to any one standard [of determining wealth] could sometimes result in awards which neither deter nor punish or which deter or punish too much.’ [Citation.]” (Bankhead, supra, 205 Cal.App.4th at p. 79.) ““[N]et worth” is subject to easy manipulation and . . . should not be the only permissible standard.’ [Citation.]” (Ibid.)
Here, LOP returned four units to the rental market. Two of the displaced tenants could not be contacted. Both of the other displaced tenants—Cameron
In sum, our independent review leads us to conclude that all of the relevant factors weigh in Cameron‘s favor. The damages award does not violate LOP‘s due process rights and is not otherwise excessive.
Attorney Fees and Costs
With respect to attorney fees and costs, LOP argues only that the award should be reversed because the judgment should be reversed. As we do not reverse the judgment, the award of attorney fees and costs stands.
DISPOSITION
We affirm the trial court‘s judgment and orders. Respondent Erin Cameron is awarded her costs on appeal.
MOOR, J.
We concur:
RUBIN, P. J.
KIM, J.