De Paolo v. RosalesDe Paolo v. Rosales
LAKESHORE LAW CENTER, Jeffrey N. Wilens and Macy Wilens for Defendants and Appellants.
Frank D. Rubin for Plaintiff and Respondent.
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PROCEDURAL BACKGROUND
Complaint
On August 22, 2024, plaintiff (owner and trustee) filed an unlawful detainer complaint against Rosales and all unnamed occupants based on a 30-day notice to quit. The complaint, which indicated that the tenancy was subject to the Tenant Protection Act of 2019 (TPA) (
“1) Owner has an ownership interest in the real property located at 14000 Dickens Street, Sherman Oaks, California (the ‘Premises’) . . . . [¶] . . . [¶] . . . Owner and Resident Managers2 agree as follows:
1. Hiring. Owner hereby employs Resident Managers and Resident Managers hereby accept said employment as provided for in this Agreement. The relationship between Owner and Resident Managers are solely one of employer and employee. [¶] . . . [¶]
6. Residence and Rent. Throughout the term of this Agreement, Resident Managers shall reside in Unit No.106, or in such other unit at the Premises . . . Owner’s sole discretion[ may] designate. Resident Managers’ residency at the Premises is required for the convenience of Owner. Owner and Resident Managers agree that at the present time, the reasonable, fair and ordinary rental value for Resident Managers’ said existing unit is $780.00 per month, but Resident Managers shall only be required to pay rent of $710.00 per month, payable in advance on the first day of each month so long as this Agreement is in effect and unmodified . . . . [¶] . . . [¶]
7.1 Resident Managers’ sole and exclusive collective compensation under this Agreement for all hours worked pursuant to paragraph 4 hereof shall be the gross sum of $710.00 per month less any amounts required to be deducted by any governmental authority. Owner shall pay one-half of said compensation to Resident Managers on a semi-monthly basis. [¶] . . . [¶]
11. Termination. Owner’s employment of Resident Managers is “AT WILL.” Owner may terminate this Agreement and Resident Managers’ employment at any time with or without cause and with or without advance notice. Resident Managers may terminate this Agreement with or without cause only be [sic] giving Owner thirty (30) days prior written notice . . . . Within 30 days following any termination of Resident Managers’ employment or at the end of 30 days following Resident Managers’ Notice, whichever first occurs, Resident Managers shall vacate the unit at the Premises in which the Resident Managers are then residing, restore possession of the unit to Owner free of all other occupants, and leave the unit in a clean condition and in a good state of repair. If Resident Managers fail to so vacate the unit and restore possession thereof to Owner, Resident Managers shall be liable to owner for the reasonable rental value of the unit following the termination . . . . Any termination effected pursuant to this paragraph shall be by written notice given by one party to the other by personal service or certified mail, return receipt requested. Service shall be deemed complete at the time of personal service or deposit into the mail. In the event that Resident Managers’ employment is terminated, all compensation and payments to be made pursuant to this Agreement shall be prorated through the termination date.”
The complaint further alleged that Rosales’s “resident manager’s services terminated as of August, 2023” and defendant and all unnamed occupants failed to comply with the requirements of the 30-day notice by the end of the compliance period. A copy of the notice, which was dated July 10, 2024, was attached to the complaint, and it stated, in pertinent part, that defendant and all others in possession were required to quit and deliver possession of the premises within 30 days after service of the notice or by Monday, August 13, 2024 at noon, whichever was later in time. The notice read that “[t]his notice to quit is served upon you for the purpose of enforcing your written August 9, 2023 termination as employee (on site
Answer
On September 17, 2024, defendants filed an answer raising general denials and affirmative defenses. Among the documents attached to the answer was a purported tenant ledger reflecting that monthly rent of $710 had been “paid and cleared” from January 1, 2021 through April 1, 2024. Beginning May 1, 2024 through September 1, 2024, the ledger reflects that the rent was paid, but not cashed.
FACTUAL BACKGROUND
Trial
Trial took place on November 7, November 21, and December 23 of 2024.
Plaintiff’s Case
Plaintiff testified as follows. He was the trustee of the De Paolo trust and was charged with the care of the premises. In November 2020, he hired Rosales as the on-site manager and she was given Unit 106 as a manager’s unit. The manager’s contract, which was admitted into evidence as exhibit 1, was executed and signed in person by both De Paolo and Rosales on December 1, 2020, and took effect the same day. Rosales signed the document in plaintiff’s presence. The termination letter, dated August 9, 2023, which was entered into evidence as page one of exhibit 2 stated, in pertinent part, “beginning Friday, August 11, 2023, you will no longer be the manager of the [premises]. Your duties terminate at 11:59PM, August 10, 2023. [¶] As per the agreement signed by you, this is your 30 [sic] notice to move from your current residence at Unit #106.” The second page of exhibit 2 was an email from Rosales dated August 10, 2023, that read, “John and Hilda, [¶] I am in receipt of your wrongful termination letter as of August 10, 2023, dated August 9, 2023. . . . I consider this retaliation due to reports I have made against your illegal business practices.”
As of the date of the trial, defendants were still in possession of the premises. Plaintiff’s exhibits 1 through 8 were admitted into evidence.
Defense Case
Rosales testified that she worked part time for plaintiff and his wife “at all of their properties.” In October 2020, plaintiff offered her a position as on-site manager at the premises and said she would not need to pay rent as part of her compensation. She had “never paid any rent to [plaintiff and] our verbal agreement said that it was free rent.” She moved into the apartment on November 11, 2020, and started working immediately. On Thanksgiving of 2020, Rosales reconciled with Charlemagne, who was the father of her children. When Rosales shared this development with plaintiff, he suggested, “why don’t I just move my family in?” Plaintiff asked Rosales to “collect the rental application and run a credit check” on Charlemagne and stated that he wanted a month-to-month lease for Charlemagne. The application was approved and Charlemagne paid a security deposit and prorated rent. Rosales “collected a $1,000 check from [Charlemagne] and drove it to [plaintiff’s] house.” Plaintiff “endorsed all the checks and personally deposited the checks into his own account.” Defendant Charlemagne moved in about six weeks after Rosales did.
On cross-examination Rosales testified that under the “additional occupants” section of her rental application dated November 30, 2020, she listed Charlemagne as her spouse. She
Charlemagne testified that when he completed the rental application, he listed Rosales as his spouse even though they were not married. He never had or signed a lease agreement or rental agreement for the premises and never asked for an application. He moved in early December 2020.
Pointing to “discrepancies” in the resident manager’s agreement, defendants objected to admission of the agreement into evidence, arguing that it was a forged document and that Rosales never signed it.
Rebuttal
Hilda De Paolo, plaintiff’s custodian of records, was called to testify. In her capacity as custodian of records, she maintained the manager’s agreement in her regular business files. The purported “original” signed manager’s agreement was presented to the court. After handling and examining the document, the court noted for the record that “there are indentations on the back from signatures, from above the– behind the signature of Jenny Rosales” tending to indicate that a “live person” signed it. The court admitted exhibit 1 into evidence over defense objection.
Defense moved to strike the admission of exhibit 1 pointing out inconsistencies in the document. The court declined to do so stating that it had been identified and authenticated, but noted that, based on defense argument, it would take a look at it, and determine what weight to give it.
Trial Court’s Ruling
The court found that Defendant Rosales did not have an independent right of possession of the unit that was separate and apart from the “Resident Manager’s Agreement” and her right to occupancy of the premises was dependent upon her continuation of her employment as the resident manager. “The parties’ agreement clearly stated that Defendant Rosales’ occupancy was dependent upon the continuation of the employer-employee relationship and that when the
The court found that Charlemagne did not create a separate leasehold with plaintiff, but rather took possession of the premises as an additional occupant pursuant to the terms of Rosales’s resident manager’s agreement. Accordingly, his occupancy was dependent on Rosales’s employment and once Rosales’s employment ended, he was no longer entitled to reside at the premises.
The court ordered judgment entered in favor of plaintiff and against defendants, awarded plaintiff possession and restitution of the premises, canceled the rental agreement and forfeited the lease agreement.
Defendants timely appealed the judgment.
DISCUSSION
Rosales’s Occupancy was Dependent on Her Employment as Resident Manager
Defendants’ contentions on appeal are entirely premised on their position that they were tenants. However, the facts adduced at trial, including defendants’ own testimony, make it abundantly clear that they were not.
Applicable Law
An unlawful detainer occurs when a person remains in possession of property after the expiration of the term for which it is let to him. This can occur not only in a standard landlord-tenant situation but also in a case where the person “. . . became the occupant of the premises as a servant, employee, agent, or licensee and the relation of master and servant, or employer and employee, or principal and agent, or licensor and licensee, has been lawfully terminated.” (
“A person who occupies premises belonging to his employer as part of his compensation has no right to continue in possession on the termination of his employment. [Citation.] The discharged person is a tenant at sufferance and is entitled to no notice before an unlawful detainer action is commenced. [Citation.]” (Karz v. Mecham (1981) 120 Cal.App.3d Supp. 1, 4; cf. Chan v. Antepenko (1988) 203 Cal.App.3d Supp. 21, 24-25 [terminated employee occupant is a mere “licensee,” not a tenant and is not protected by local eviction controls], overruled in part by Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1041 [rejecting the position that discharged employees may be dispossessed without regard to the circumstances surrounding their occupancy and by means of the landlord’s self-help].) If the employee occupant holds over, the landlord is automatically entitled to bring an unlawful detainer action premised upon allegations that the employment expired or was otherwise “lawfully terminated.” (See
Standard of Review
If “‘the issue is presented to the court on the basis of undisputed facts and uncontroverted evidence and only a question of the application of the law to those facts need be answered,’ appellate review is de novo.” (Spinks v. Equity Residential Briarwood Apartments, supra, 171 Cal.App.4th at p. 1025.) “‘Whether a contract confers a mere license or instead creates a tenancy is a question of law.’” (Id. at p. 1040.) “‘“The . . . interpretation of a statute, is, of course, a question of law” and is therefore subject to our de novo review.’” (L&S Framing, Inc. v. Occupational Safety & Health Appeals Bd. (2023) 93 Cal.App.5th 995, 1015.) However, “‘we must resolve evidentiary conflicts in favor of the prevailing party, and view the
Analysis
Evidence was presented at trial that Rosales signed a resident manager’s agreement on December 1, 2020, which stated that her occupancy of the premises was at plaintiff’s “sole discretion”; that her residency was “required for the convenience of [plaintiff]”; that her employment as resident manager was “at will” and that plaintiff could terminate the agreement and her employment as resident manager “at any time with or without cause and with or without advance notice”; and defendant was required to vacate the premises and restore possession of the unit to plaintiff “free of all other occupants” within 30 days following termination of defendant’s employment as resident manager or at the end of 30 days following notice, whichever came first.
While Rosales disputed the authenticity of the signatures on the resident manager’s agreement, she never disputed that she resided at the premises as the resident manager and when asked by the court if she was the resident manager, stated that she worked for plaintiff and the premises was one of her “assigned properties that [she] worked for.” A termination letter dated August 9, 2023, admitted as evidence at trial stated, “beginning Friday, August 11, 2023, you will no longer be the manager of the [premises]. Your duties terminate at 11:59PM, August 10, 2023. [¶] As per the agreement signed by you, this is your 30 [sic] notice to move from your current residence at Unit #106.” The second page of this exhibit was an email from Rosales dated August 10, 2023, that acknowledged receipt of the termination letter and the notice, reading, “John and Hilda, [¶] I am in receipt of your wrongful termination letter as of August 10, 2023, dated August 9, 2023. . . . I consider this retaliation due to reports I have made against your illegal business practices.”
In contrast to this mountain of evidence substantiating that Rosales was indeed a resident manager whose occupancy of the premises was contingent upon and only existed as a result of her employment, there was a complete dearth of evidence that would support any argument that
Charlemagne testified that he never signed any type of lease agreement, and Rosales testified that Charlemagne only moved into the premises with her after she had been there as the resident manager. By entering into the manager’s agreement, Rosales agreed that upon her termination from employment as resident manager, Rosales along with any additional occupants would be required to vacate the premises. Both defendants admitted that in listing one another as additional occupants on their respective rental applications, they both separately indicated that they were one another’s spouses, but that in fact they were not married. This evidence establishes that Charlemagne was only able to occupy the property as an additional occupant or guest of Rosales. He had no independent right as a tenant to possess or occupy the premises.
Applicability of the Tenant Protection Act
Defendants contend that because there was “no evidence, substantial or otherwise, that [the] ‘California law notice’ was provided as an addendum to the lease or rental agreement or as a written notice signed by the tenant,” the TPA was violated thereby rendering the 30-day notice void. As we have found no published opinion addressing whether individuals occupying a property that is subject to the TPA pursuant to a resident manager’s agreement are considered
Applicable Law and Standard of Review
The TPA of 2019 (
“An owner of residential real property subject to this section shall provide notice to the tenant as . . . [¶] . . . an addendum to the lease or rental agreement, or as a written notice.” (
“We review matters of statutory interpretation de novo. [Citation.] ‘Statutory interpretation requires us “to ascertain and effectuate the intended legislative purpose.” [Citation.] We consider the provisions’ language in its “broader statutory context” and, where possible, harmonize that language with related provisions by interpreting them in a consistent fashion. [Citation.] If an ambiguity remains after this preliminary textual analysis, we may
Analysis
On the complaint, plaintiff indicated that the tenancy was subject to the TPA and that the tenancy was terminated for at-fault just cause pursuant to section 1946.2, subdivision (b)(1). Defendants contend that plaintiff’s concession to the applicability of the TPA as reflected on the complaint, coupled with plaintiff’s failure to include the language required by the relevant portion of the TPA (
The ultimate question before us is whether a terminated resident manager’s continued occupancy of a premises belonging to her employer, that she was only permitted to occupy as part of her employment compensation, qualifies as a tenancy for the purposes of the TPA. We conclude it does not. In order to qualify as a tenancy within the meaning of the TPA, the occupant’s occupation of the premises must be lawful. (
The case law is clear, a terminated resident manager who refuses to vacate becomes either a tenant at sufferance or a licensee.3 (See Karz v. Mecham, supra, at p. Supp. 4 [tenant at sufferance]; Chan, supra, 203 Cal.App.3d at pp. Supp. 24-25 [licensee].) A tenant at sufferance is a person who lawfully entered into possession of a property but continues to occupy it without any legal title or the landlord’s consent after the termination of the tenancy. (Roxbury Lane LP v. Harris (2023) 88 Cal.App.5th Supp. 9, 15.) A “licensee is a person or entity authorized to do a particular act or acts on the property of another without possessing any
Thus, while the TPA includes in its list of scenarios that constitute “at fault-just cause” eviction situations where a lawful tenant may have at one time been “an employee, agent, or a licensee” who failed to vacate after they were terminated as an employee, agent, or licensee, the mere contemplation or existence of these scenarios does not serve to unilaterally transmute the status of a terminated resident manager into that of a lawful tenant where the resident manager’s initial occupation of the property was premised solely upon employment. (See Chan, supra, 203 Cal.App.3d at p. Supp. 25 [terminated employee “could not convert his status into that of a tenant by refusing to vacate upon expiration of his employment”].) Caselaw dictates that such an individual is either a tenant at sufferance or licensee who enjoys no tenant protections, including notice. (See Id. at pp. Supp. 25-26; Karz v. Mecham, supra, at p. Supp. 4.) And unless, and until, some action is taken by the parties that reflects their mutual assent to change the nature of the agreement between the two of them, such an individual remains so classified. (See Borden v. Stiles, supra, 92 Cal.App.5th at p. 349.)
Defendants contend that they “continuously and lawfully occupied” the premises from December 2020 until the 30-day notice was served and expired on August 13, 2024. Defendants seem to take the position that because they refused to vacate the premises after service of the employment termination letter and 30-day notice of termination of tenancy on August 10, 2023 and purported to make rent payments thereafter, Rosales’s status as an employee-occupant was somehow transformed into a tenancy entitling her to all of the rights and protections afforded under the TPA. We disagree.
In sum, defendants’ continued occupancy of the premises after Rosales’s termination was unlawful, rendering the TPA inapplicable to the instant unlawful detainer proceedings. (See Borden v. Stiles, supra, 92 Cal.App.5th at p. 349 [“Such an occupancy would be unlawful, rendering section 1946.2 inapplicable to the eviction proceedings initiated”]; see generally
Lawful Employment Termination
The defense of retaliatory eviction is an affirmative defense permitted by statute and common law in an unlawful detainer proceeding. (
The trial court found that Rosales had not met her burden of production of evidence sufficient to show that termination of her employment was unlawful or that her eviction was retaliatory. In our review of the record, aside from Rosales’s allegation in her email dated August 10 in response to the employment termination letter and 30-day notice, and her statement at trial that plaintiff was “violating [her] rights,” we found no evidence that demonstrated that plaintiff brought the instant action for the purpose of retaliating against Rosales because she lawfully and peaceably exercised any rights under the law. The trial court correctly concluded that defendants failed to meet their burden of establishing a retaliatory motive. (Cervantes, supra, 175 Cal.App.3d at p. 733.)
Notice
Defendants allege that the judgment must be reversed because the evidence was insufficient to prove that a valid termination notice was served as required by the TPA. As discussed in detail ante, Rosales had no right to occupy the premises independent of her employment as the resident manager and Charlemagne’s ability to occupy the premises was only as one of Rosales’s additional occupants. Thus, once Rosales’s employment terminated, so did both defendants’ right to occupy the premises. As they were not lawful tenants, the TPA protections, including notice, did not apply. (Chan, supra, 203 Cal.App.3d at pp. Supp. 24-25; accord, Karz v. Mecham, supra, 120 Cal.App.3d at p. Supp. 4.)
Indeed, the evidence adduced at trial established that Rosales signed the resident manager’s agreement wherein she explicitly agreed that plaintiff could terminate her employment at any time with or without cause, without advance notice and that she and her occupants were required to vacate the premises within 30 days following her employment
DISPOSITION
The judgment is affirmed. Plaintiff is awarded costs on appeal.
Guillemet, J.
We concur:
Ricciardulli, Acting P. J.
Hobbs, J.