Duncan v. Kihagi

• Decision Date: 09 August 2021
• Docket Number: A153521
• Citation: 68 Cal.App.5th 519,284 Cal.Rptr.3d 426
• Parties: Dale DUNCAN et al., Plaintiffs and Appellants, v. Anne KIHAGI et al., Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

68 Cal.App.5th 519

284 Cal.Rptr.3d 426

Dale DUNCAN et al., Plaintiffs and Appellants,

v.Anne KIHAGI et al., Defendants and Appellants.

A153521

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

Filed August 9, 2021

Certified for Partial Publication.^*

Counsel for Defendants and Appellants: Ryan B. Polk, Edward Romero, Kevin Liu, Gordon Rees Scully Mansukhani, LLP

Counsel for Plaintiffs and Appellants: Steven J. McDonald, Ariel Gershon, Greenstein & McDonald

Humes, P.J. Respondents Dale Duncan and Marta Munoz Mendoza sued their former landlords for wrongful eviction and harassment after they were forced from their longtime San Francisco apartment. A jury found in their favor and awarded them damages that totaled $3,528,000 after trebling, which the trial court later reduced to $2.7 million. The landlords appealed, and respondents cross-appealed to challenge the amended and reduced judgment. We affirm.

I.

FACTUAL AND PROCEDURAL BACKGROUND

Duncan moved into a two-bedroom unit in a five-unit building on Hill Street in San Francisco in early 1994. Under his lease, he was responsible for gas and electric, and the landlord was responsible for water and garbage services. He had access to a parking space behind the building, and soon after he moved in he was also given access to a storage space where he could keep his bicycle and other items. Duncan's wife Mendoza moved into the unit in 2010, and they lived together with their daughter. Duncan never missed a rent payment and was never late with his rent.

Duncan's unit was subject to San Francisco's rent-control ordinance, meaning his rent could be raised a maximum of around 1.9 percent per year and in fact was raised around 1.5 percent per year. During his tenancy, the maximum that stabilized rent could be increased was a total of 31 percent, whereas the market rent for a two-bedroom, one-bath unit in San Francisco increased by 254 percent.

In late May 2014, Duncan was informed that the building was going to be sold. At that time, he was paying $1,261.85 in monthly rent. Appellant Zoriall LLC purchased the building for $2.5 million. Appellants Anne Kihagi and Christina Mwangi are members of Zoriall, with Mwangi holding a 27 percent interest in the LLC. We sometimes refer collectively to appellants as "the landlords."

On August 1, the day the first rent payment to the new owner was due, Duncan received a letter placed under his door. The letter was from Zoriall and stated the building was under new ownership as of June 26, 2014, with Kihagi¹ as the primary contact. The letter provided an address for Zoriall where future rent payments should be sent. According to the letter, all terms of Duncan's rental agreement would remain the same, with the exception of "the changes in the separate notice change of terms with the same date." No separate notice, however, was included.

Almost immediately, and for the next 14 months until Duncan and his family were forced to rent a new apartment, the landlords took away various benefits that had previously been provided to the tenants, ignored or delayed responding to maintenance and upkeep issues, were uncommunicative and uncooperative, and became increasingly hostile. One of the first things Duncan noticed was that one of the building's two recycling bins was removed, and recycling materials started "spilling over everywhere."

Duncan soon received additional notices slipped under his door. On August 10, he received a 30-day-notice of change of tenancy, which related to attorney fees. It provided that in the event of action to enforce terms of the rental agreement, each party shall bear their own attorney fees and costs. A few days later, Duncan received a packet of house rules, and the document stated that tenants would be deemed to have accepted the rules by staying in their units and continuing to pay rent. Duncan "was kind of freaked out" because the agreement "felt kind of forceful." One of the new rules required tenants to replenish the amount of their original security deposit (Duncan's was $1,275), which struck Duncan as "kind of weird." Duncan was told he would be responsible for his own garbage service and tenants would not be allowed to store items anywhere except in their rental units or other areas designated by the landlord. Duncan contacted a tenant's rights group and was reassured that he would not be agreeing to all the new rules simply by making his next rent payment.

Duncan experienced an escalating series of problems with the landlords. He called Kihagi to tell her about a notice from the City of San Francisco (City) regarding necessary repairs to the sidewalks outside the building. He raised the possibility of partnering with Friends of the Urban Forest to add a garden box when the repairs were done. Kihagi kept interrupting Duncan, sounded like she did not want to talk, and then announced, "I'm not spending any damn money on maintenance for the building."

In mid-September 2014, Duncan called Kihagi again, this time to report that his water heater was leaking. The two spoke briefly, and Kihagi said that Duncan should text her and not call. Duncan texted her, but she did not respond, so Duncan wrote a letter about it and included it with his October rent payment. Water pooled on the floor, and Duncan put towels and a bucket under it and checked with his downstairs neighbor to ask whether water was leaking onto the neighbor's ceiling. In his letter, Duncan also mentioned that the washer and dryer were not operational because their coin boxes were full. After not hearing a response for another two weeks, Duncan contacted the City's building department. Someone at the building department said they would call Kihagi, and within a few days two workers showed up "out of the blue" to fix the water heater. Kihagi never responded to his concerns about the laundry machines, so for a while Duncan took it upon himself to call the phone number identified on the machines to ask for the coin boxes to be emptied.

Also that fall, power that lighted outside common areas of the building went out. A separate meter controlled the power to those areas. Duncan texted Kihagi about the outage and provided the meter number, but Kihagi replied that "there was no meter" and that she "had been working with PG&E for months to figure it out." Duncan "immediately ... knew she was lying because [he] had already called PG&E and ... knew what the problem was." For a week the building lacked lighting on the exterior of the building and in the laundry area, and Duncan considered it "very unsafe" for his family when they entered and left the building in the evening because the stairs were unlit. He contacted the City's Department of Building Inspection about the power being out because, after his experience with the water heater, he believed this would be the only way to get the power restored.

On another occasion, a service person with the City's water department came to shut off water to the building because Kihagi had not opened an account in the three months since she took ownership of the building. Duncan "totally freaked out" and asked the worker to hold off, and the worker promised to do so for a few days. Duncan texted Kihagi, and this time the issue was resolved without the utility being shut off.

On yet another occasion, the tenants were told to remove bicycles and other items from the garage. At the same time, they were told that the locks on the building mailboxes were changed, but for a month they were not provided with new keys. Although the tenants could access their mail for most of this time because the master lock was unlocked, for about four days they could not get their mail. Mwangi finally brought the keys to the property and left Duncan's on the porch.

In January 2015, PG&E sent a letter to the tenants telling them that the landlords had missed payment and service would be discontinued unless the full past-due amount was paid. A short time later, the power went off for a second time. Duncan texted Kihagi about the problem, and this time she took care of it.

Duncan discovered that Kihagi owned other properties and learned that she owned a multi-unit building in San Francisco's North Beach neighborhood as well as buildings in Los Angeles. He communicated with the tenants in his own building about the problems they were having. Duncan attended a protest against Kihagi in January 2015, which he learned about on Facebook, and he met tenants in other properties owned by Kihagi.

In February 2015, the code enforcement division of the City Attorney's Office wrote to the tenants asking to inspect the property on March 4 to determine if the building was in compliance with state and local codes. It planned to conduct a "task force inspection," which is undertaken when a property has come to the City's attention and multiple agencies may need to address issues. Duncan, Mendoza, and another building resident stayed home and were waiting for inspectors to arrive when they saw Kihagi and "some black clothe[d] security people" park across the driveway and stand in front of the building's walkway "as if they were going to block the access." After City personnel arrived and "big beefy security guards" tried to block access to the building, Duncan and other tenants went downstairs and invited the inspectors inside. An investigator from the City Attorney's office was there, along with a housing inspector, a building inspector, a plumbing inspector, and an electrical inspector. One inspector was "really concerned" about Duncan's water heater because it was not up to earthquake code, and he issued "a rush violation" and said it needed to be repaired immediately.

While the inspectors were in Duncan's unit, Kihagi appeared upset and at one point held up a camera phone to Duncan and said, "I look forward to getting to know you better, Dale." Duncan considered her comment to be unpleasant and harassing, and he believed Kihagi was blaming him for having the...