DeLisi v. Lam

• Decision Date: 07 August 2019
• Docket Number: A151014
• Citation: 252 Cal.Rptr.3d 336,39 Cal.App.5th 663
• Court: California Court of Appeals Court of Appeals
• Parties: Nicole DELISI et al., Plaintiffs and Respondents, v. Collin LAM et al., Defendants and Appellants.

39 Cal.App.5th 663

252 Cal.Rptr.3d 336

Nicole DELISI et al., Plaintiffs and Respondents,

v.Collin LAM et al., Defendants and Appellants.

A151014

Court of Appeal, First District, Division 2, California.

Filed August 7, 2019

Certified for Partial Publication.^*

Attorneys for Appellant: Horvitz & Levy, Mitchell C. Tilner, Allison W. Meredith, Stratman Patterson & Hunter, Edward J. Rodzewich

Attorneys for Respondent: Mark Hooshmand, Idin Kashefipour

Kline, P.J. Respondents Nicole DeLisi and Leon Pitre were served with an eviction notice after new owners purchased the four-unit building in which they rented an apartment. Believing that the owners were violating the local rent control ordinance because their purported reason for the eviction was a pretext for the true motivation of increasing the rental value of the unit, DeLisi and Petri sued, together with the former tenant of another unit who had been evicted previously. The jury returned a verdict in favor of DeLisi and Petri. The owners contend the judgment must be reversed because the relative move-in provisions of the rent control ordinance are unconstitutionally vague, no substantial evidence supports the jury's finding that they violated the rent control ordinance, the claims are barred by the litigation privilege, and the damages award was based on an erroneous standard and is not supported by substantial evidence. We affirm.

BACKGROUND

In June 2014, appellants Collin Lam and Kimberly Wong purchased the four-unit building at 4441 Balboa Street in San Francisco. The building was subject to the San Francisco Residential Rent Stabilization and Arbitration Ordinance (Rent Ordinance) (codified as S.F. Admin. Code, ch. 37), and tenants occupied each of the four units. William Randt had lived in unit 2 since August 2008, and paid $1,370.18 per month in rent. Nicole DeLisi had lived in unit 1 since September 2013, and paid $1,455 per month in rent; Leon Pitre had moved into the unit with her in January 2014. Unit 3 was occupied by George Chan, and unit 4 by tenants who held protected status under the Rent Ordinance and paid monthly rent of $779.47. Lam sent the tenants a letter introducing himself as the new owner of the building and requesting that rent payments be sent to his address at 279 11th Avenue.

On June 18, 2014, Lam served Randt with a "60 Day Notice of Termination of Tenancy" pursuant to section 37.9, subdivision (a)(8), of the Rent Ordinance, so that appellants could move into unit 2.

On August 1, 2014, Chan gave notice of his intent to vacate unit 3. Randt asked Lam to rescind his eviction, but Lam declined. Randt moved out of the building on August 4 and Chan moved out on August 25. After Chan left, Lam painted and refinished the wood floor of unit 3 and in mid-September, rented it for more than the rent Chan had been paying.

In September 2014, DeLisi's rent check bounced and Lam had her served with a 30-day notice to pay rent or quit. DeLisi testified that Lam had verbally agreed she could pay her September rent with her October rent because she was not going to be paid until the end of September. DeLisi paid the owed rent and Lam rescinded the notice. Shortly thereafter, Lam asked DeLisi if she was thinking about moving out and she said she was not. On September 30, 2014, Lam gave DeLisi notice of a rent increase to $1,469.55, effective November 1, 2014, pursuant to the Rent Ordinance.

Appellants remodeled unit 2, making the one-bedroom, one-bath, apartment into a two-bedroom, two-bath, in anticipation of having a family. Lam informed the tenants by letter dated October 1, 2014, that construction would begin the next day, with a target completion date of December 2014. The letter stated, "Kimi and I look forward to becoming your neighbors before the end of the year!" The contractor's work took six to eight weeks, finishing at the end of November.

Appellants Lam and Wong testified that they moved into unit 2 in December 2014. As will be described, respondents presented evidence suggesting appellants did not move in until July 2015 or later.

On June 11, 2015, DeLisi and Pitre were served with a 60-day notice of termination of tenancy stating appellants' intention to have Wong's brother, Jordan Wong, move into the unit. The next day, Lam texted DeLisi, inviting her to let him know if she wanted to meet regarding the notice. She responded with a text message stating she was "overwhelmed with grief by how your greed for money and power affects the lives of those such as teachers that put their heart and soul into making this world a better place only to be counteracted by selfish people like yourself that destroy our communities."

DeLisi and Pitre investigated their rights and learned that the owner was supposed be living in the building in order to evict them for a relative move-in. They believed appellants were not living in the building when the eviction notice was served and, therefore, that the eviction was unlawful. They did not move out. DeLisi contacted Randt, and she, Pitre, and Randt filed the present lawsuit against defendants on July 29, 2015. On August 12, 2015, appellants filed an unlawful detainer action against DeLisi and Pitre, which ended with a settlement in October 2015 that allowed Pitre and DeLisi to remain in unit 1 until July 2016.

Trial in the present case began on July 26, 2016. Alleging claims for violation of the owner move-in and relative move-in provisions of the Rent Ordinance, intentional infliction of emotional distress and intentional misrepresentation, respondents' theory was that both appellants' own move into unit 2 and Jordan Wong's move into unit 1 were actually motivated by appellants' desire to recover possession of the apartments from the rent-controlled tenants in order to rent them at market rates in the future.¹

Appellants testified that they had been raised in the Richmond District and wanted to live near family. Wong's parents live at 9th Avenue and Balboa, about 30 blocks from the building Lam and Wong purchased, and Lam had aunts and a grandmother living at 23rd Avenue, 33rd Avenue and 38th Avenue. Appellants had tried unsuccessfully to buy a single family home in the Richmond in 2008. They had previously lived in an apartment at 279 11th Avenue, a building in which some of Wong's relatives lived that was two blocks from Wong's parents' house, then bought a condominium on Folsom Street where they lived from 2010 to 2014. When they purchased the Balboa building, they were living in a different apartment in the building at 279 11th Avenue, having moved back in order to live close to Wong's parents. A tenant rented the condominium, but appellants kept a parking space at the Folsom Street building and a key fob for the building. Wong learned about the Balboa building after Lam made an offer on it.

Lam testified that appellants chose to move into unit 2 because a ground-floor unit would be easier to manage with groceries and a baby and for grandmothers to visit, and because this apartment had two storage units. When appellants moved in, they covered the windows of the apartment with newspaper because they realized they were "exposed." The newspaper remained until at least August 2015 or, according to some evidence, at least November 2015.² Wong testified that the newspapers did not bother her because she preferred to be more "covered than exposed," and that they eventually replaced the newspaper with temporary paper blinds because it came to her attention that "others were concerned" about the newspapers and she was not ready to decide on permanent window fixtures.

Appellant's evidence of their move-in date included a receipt for rental of a U-Haul on December 7, 2014, a date-stamped photograph of relatives dismantling a large bed frame to get it through the door, and the testimony of Wong's cousin and uncle, who helped with the move. Lam testified that their Comcast account was transferred from 11th Avenue to Balboa the day they moved in, and a friend of Wong's brother who moved into the 11th Avenue apartment appellants vacated, testified that he did so on December 15, 2014.

Other evidence appellants presented to show they were living in unit 2 included Lam telling the tenants they could leave rent checks on the door of the apartment instead of mailing them, and DeLisi paying her rent this way after December 2014. Lam signed for a Christmas card Randt sent by registered mail to the Balboa unit (which Randt acknowledged doing as a test, to see if anyone would sign for it). Lam described a time in March 2015, when he "ran down" and moved his car in response to a text from DeLisi and Pitre saying the car was blocking their garage; on April 7, Lam received a text from DeLisi about Pitre being locked out of their apartment, but by the time Lam received the text, it had "sorted itself out." Lam testified that his car was registered in January 2015 with the Balboa address. A photograph showed Wong inside unit 2, taking a photograph of herself in a bridesmaid's dress for a January 2015 wedding. Uber receipts showed that Lam was picked up from 4441 Balboa at 5:30 or 6:00 a.m. on March 24, 2015, to go to the San Francisco International Airport, and picked up from the airport at 11:21 p.m. on April 3, 2015, and taken to 4441 Balboa. A May 30, 2015 receipt showed a ride leaving San Carlos Airport at 10:00 a.m. and arriving at Balboa Street at 10:35 a.m.

Randt testified that after moving out of unit 2, he passed by on his way to visit friends, surf, or go to businesses he continued to frequent, and noticed that his old apartment "sat vacated," with newspaper on the windows. This made him feel disheartened at first, then infuriated, as he felt he had been "taken advantage of."

DeLisi, whose unit was across the hall from unit 2, testified that she did not see anyone living in unit 2 during the first half of 2015. She did not hear any sounds from the apartment or see lights in the living room area, but a light in the pantry was...