Boshernitsan v. Bach

• Decision Date: 12 March 2021
• Docket Number: A159532
• Citation: 61 Cal.App.5th 883,276 Cal.Rptr.3d 109
• Court: California Court of Appeals Court of Appeals
• Parties: Rimma BOSHERNITSAN et al., Plaintiffs and Appellants, v. Belvia BACH et al., Defendants and Respondents.

61 Cal.App.5th 883

276 Cal.Rptr.3d 109

Rimma BOSHERNITSAN et al., Plaintiffs and Appellants,

v.Belvia BACH et al., Defendants and Respondents.

A159532

Court of Appeal, First District, Division 1, California.

Filed March 12, 2021

Certified for Partial Publication.^*

Counsel for Plaintiffs and Appellants: Aleksandr A. Volkov, Volkov Law Firm, Inc.

Counsel for Defendants and Respondents: Stephen Booth, Tenderloin Housing Clinic, Inc.

Humes, P.J. Rimma Boshernitsan and Mark Vinokur (appellants) brought this unlawful detainer action against respondents Belvia Bach and four of her children (the tenants) in August 2019. Appellants sought to evict the tenants under a provision of San Francisco's rent control ordinance¹ that allows a "landlord" to evict renters from a unit to make the unit available for a close relative of the landlord (the family move-in provision). (Rent Ord., § 37.9, subd. (a)(8)(ii).) A rule enacted by the San Francisco Rent Stabilization and Arbitration Board (Board) defines "landlord" for purposes of the family move-in provision as "a natural person, or group of natural persons, ... who in good faith hold a recorded fee interest in the property."² (Rule 12.14(a).)

The tenants demurred to the complaint, arguing that their landlord is not such a natural person or group of natural persons because title to the apartment building is held by appellants’ revocable living trust. The trial court accepted this argument, sustained the demurrer without leave to amend, and entered judgment for the tenants in December 2019.

In sustaining the demurrer, the trial court correctly ruled that a trust is not a "natural person." (See, e.g., Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson (1987) 197 Cal.App.3d 1, 4, 242 Cal.Rptr. 595.) But it was mistaken in assuming that appellants’ trust is the landlord. As a matter of law, only trustees—not trusts—can hold legal title to property. We hold that natural persons who are acting as trustees of a revocable living trust and are also the trust's settlors and beneficiaries qualify as a "landlord" under the family move-in provision. Accordingly, appellants are not barred from seeking to evict the tenants under that provision, and we reverse and remand for further proceedings.³

I.

FACTUAL AND PROCEDURAL BACKGROUND

Appellants own a two-unit building in San Francisco. They live in one unit, and the tenants rent the other. In mid-2018, appellants transferred title of the building to the Vinokur and Boshernitsan Living Trust Dated April 30, 2018 (the trust).⁴ About a year later, they served the tenants with a notice of termination of tenancy, claiming an intent to move Vinokur's mother into the tenants’ unit under the authority of the family move-in provision.

After the tenants declined to vacate the premises, appellants brought this unlawful detainer action against them. The complaint alleges that appellants "hold[ ] 100% of the interest in the property and the title as trustees" of the trust. Appellants also attached the notice of termination as an exhibit to the complaint.

The tenants demurred, arguing that (1) the eviction was not being sought by a "landlord" as defined in rule 12.14(a) and (2) the notice of termination "add[ed] requirements more onerous" in various respects than those of the Rent Ordinance. In response, appellants argued that they as trustees, not the trust itself, hold title to the property. Thus, although admitting that a "trust is not a natural person," they argued that they, a group of natural persons, were the landlord, not the trust. Appellants also responded that the notice of termination was proper.

The trial court sustained the demurrer without leave to amend and entered judgment in the tenants’ favor. The court's written order recited, "The property is owned by a trust and not a ‘natural person.’ For purposes of [Rent Ordinance, § 37.9, subdivision (a)(8),] a landlord is a ‘natural person’ or ‘a group of natural persons.’ The drafters of the [Rent Ordinance] and [the Rules] limited the definition of the landlord as stated above and excluded non-natural persons thereby." The court did not rule on the other ground for demurrer the tenants raised.

II.

DISCUSSION

Both below and on appeal, the tenants framed the primary issue as whether the term "landlord" under rule 12.14 includes a revocable trust established by natural persons who are both settlors and trustees of the trust.⁵ We agree with appellants, however, that title to the building is held by them, not the trust. Accordingly, the relevant question is whether appellants in their capacity as trustees qualify as a landlord for purposes of the family move-in provision, and we conclude that they do.

A. Governing Law

1. Standard of review

We review an order sustaining a demurrer de novo. ( Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 276, 236 Cal.Rptr.3d 790.) In doing so, "we accept the truth of material facts properly pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact or law. We may also consider matters subject to judicial notice." ( Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924, 199 Cal.Rptr.3d 66, 365 P.3d 845.) Regardless of a trial court's stated reasons for sustaining a demurrer, we must affirm " ‘if any one of the several grounds of demurrer is well taken.’ " ( Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967, 9 Cal.Rptr.2d 92, 831 P.2d 317.)

"The proper interpretation of a statute is a question of law" that we also review de novo. ( People v. Jacobo (2019) 37 Cal.App.5th 32, 42, 249 Cal.Rptr.3d 236.) This rule applies equally to review of local ordinances. ( Van Wagner Communications, Inc. v. City of Los Angeles (2000) 84 Cal.App.4th 499, 509, fn. 9, 100 Cal.Rptr.2d 922 ; see Danekas v. San Francisco Residential Rent Stabilization & Arbitration Bd. (2001) 95 Cal.App.4th 638, 645, 115 Cal.Rptr.2d 694.)

2. The Rent Ordinance and rule 12.14

"The San Francisco rent ordinance restricts tenant evictions except upon certain specified grounds." ( Reynolds v. Lau (2019) 39 Cal.App.5th 953, 964, 252 Cal.Rptr.3d 548.) One such ground is set forth in Rent Ordinance section 37.9, subdivision (a)(8), which allows a landlord to evict a tenant when the "landlord seeks to recover possession [of the rented property] in good faith, without ulterior reasons and with honest intent," for either the landlord's own "use or occupancy as his or her principal residence for a period of at least 36 continuous months" (the owner move-in provision) or, under the family move-in provision, "the use or occupancy of the landlord[’]s grandparents, grandchildren, parents, children, brother or sister, or the landlord[’]s spouse or the spouses of such relations, as their principal place of residency for a period of at least 36 months, in the same building in which the landlord resides as his or her principal place of residency." (Rent Ord., § 37.9, subd. (a)(8)(i)–(ii).) The landlord must also satisfy a number of other requirements, including, for "landlords who bec[a]me owners of record of the rental unit after February 21, 1991," being "an owner of record of at least 25 percent interest in the property." (Rent Ord. § 37.9, subd. (a)(8)(iii); see generally Cwynar v. City and County of San Francisco (2001) 90 Cal.App.4th 637, 644–645, 109 Cal.Rptr.2d 233.)

The Rent Ordinance defines "landlord" as "[a]n owner, lessor, [or] sublessor, who receives or is entitled to receive rent for the use and occupancy of any residential rental unit or portion thereof in the City and County of San Francisco, and the agent, representative[,] or successor of any of the foregoing." (Rent Ord., § 37.2, subd. (h).) Rule 12.14(a), which is entitled "Evictions under Section 37.9(a)(8)," further provides that "[f]or purposes of an eviction under Section 37.9(a)(8) of the [Rent Ordinance], the term ‘landlord’ shall mean a natural person, or group of natural persons ... who in good faith hold a recorded fee interest in the property."⁶

B. Title to the Building Is Held by Appellants as Trustees, not by the Trust.

Appellants argue that they, not the trust, hold title to the building. They point out that revocable trusts have no right to sue or be sued, and they assert that the trust is inseparable from them as the settlors and trustees. We agree that appellants as trustees "hold a recorded fee interest" in the building under rule 12.14(a).

To begin with, the tenants are simply incorrect when they argue that "according to the allegations of the [c]omplaint and the [g]rant [d]eed, the owner of the [property] is the Vinokur and Boshernitsan Living Trust dated April 30, 2018." The complaint alleges that "Plaintiffs "—defined as Boshernitsan and Vinokur—"are owners of the [b]uilding, of which [the tenants’ unit] is part, holding 100% of the interest in the property and the title as trustees of the Vinokur and Boshernitsan Living Trust dated April 30, 2018." (Italics added.) Likewise, the recorded grant deed states that appellants "hereby grant to Mark Vinokur and Rimma Boshernitsan, Trustees , or their successors in interest, of the Vinokur and Boshernitsan Living Trust dated April 30, 2018, and any amendments thereto, their whole interest in [the building]." (Italics added.) Thus, the plain terms of both the complaint and the grant deed specify that the building's title is held by appellants as trustees, not by the trust.

Even apart from these circumstances, the law of trusts confirms that the building's title is held by appellants as trustees, because trusts do not themselves as entities hold title to property. "Unlike a corporation, a trust is not a legal entity." ( Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1343, 7 Cal.Rptr.3d 178.) Rather, a trust is " ‘a fiduciary relationship with respect to property.’ " ( Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1132, fn. 3, 69 Cal.Rptr.2d 317, 947 P.2d 279, quoting Rest.2d Trusts, § 2, p. 6.) When property is held in trust, ...