Minute OrderCal. Super. - 6th Dist.January 18, 2021SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Line 2 Hearing Start Time: 1:30 PM Johnson v. SCK Ilara Investors, LLC 21CV375255 Hearing Type: Hearing: Demurrer Date of Hearing: 08/05/2021 Comments: Heard By: Kulkarni, Sunil R Location: Department 1 Courtroom Reporter: - No Court Reporter Courtroom Clerk: Ann Vizconde Court Interpreter: Court Investigator: Parties Present: Future Hearings: Exhibits: - Demurrer by Defendant SCK Ilara Investors, LLC to the Complaint. Set by the Court at the 5/20/21 CMC. Moving papers due 6/18/21; opposition due 7/9/21; reply due 7/23/21. No one called to contest the Tentative Ruling. No appearance. Tentative Ruling is not contested. THE COURT ADOPTS THE TENTATIVE RULING; see below: This is a putative class action on behalf of tenants of apartment buildings owned by Defendant SCK Ilara Investors, LLC, alleging that Defendant illegally withheld portions of tenants security deposits. Before the Court is Defendant s demurrer to each cause of action in the operative Class Action Complaint on the grounds that Plaintiff fails to allege facts showing class certification is appropriate. Plaintiff filed an opposition on July 15, 2021. As discussed below, the Court OVERRULES Defendant s demurrer. l. BACKGROUND As alleged in the operative complaint, in November 2019, Plaintiff rented a residential apartment in a building Defendant owns in Milpitas ancl paid a $995 security deposit. (Class Action Complaint, 2 3, 5, 18 20.) When she vacated her apartment on June 24, 2020, Defendant overcharged her security deposit and failed to show her invoices for repairs charged against it. (ld., 20.) Plaintiff paid the overcharges under protest. (|bid.) Printed: 8/5/2021 08/05/2021 Hearing: Demurrer - 21CV375255 Page 1 of 6 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Pursuant to Civil Code section 1950.5, a landlord must furnish a departing tenant with a copy of an itemized statement indicating the basis for, and the amount of, any security received and the disposition of the security, and shall return any remaining portion of the security to the tenant. (Id., 8.) Plaintiff alleges that Defendant negligently or intentionally failed to return her and other tenants security deposits as required by the statute, and failed to train staff concerning the statute s requirements. (Id., 25 26.) Defendant s violations include, but are not limited to: Defendants impermissible deductions for routine cleaning expenses and normal wear and tear; Defendants charging of unreasonable hourly rates for their work; Defendantsl ] failure and refusal to provide adequate accounting of the use of the security deposits; and Defendants[ ] failure and refusal to return all or any portion of the security deposits to the Class Representative and Class Members. (Id., 32.) Based on these allegations, Plaintiff brings a this action on behalf of a putative class of similarly situated individuals, including all former tenants and occupants of real property owned, managed, or controlled by Defendants, which Class Members have been refused the lawful accounting of and return of their security deposits following their vacating their rental units. (Class Action Complaint, 23.) Plaintiff asserts claims for (1) violation of Civil Code section 1950.5, (2) negligent hiring/supervision of employees, and (3) unfair and unlawful business practices in violation of Business & Professions Code sections 17200 et seq. II. LEGAL STANDARD A demurrer tests the legal sufficiency of the complaint. (Chen v. PayPal, Inc. (2021) 61 Cal.App.5th 559, 568.) Consequently, it reaches only to the contents of the pleading and such matters as may be considered under the doctrine ofjudicial notice. (Weil v. Barthel (1955) 45 Cal.2d 835, 837; see also Code Civ. Proc., 430.30, subd. (a).) It is not the ordinary function of a demurrer to test the truth of the plaintiff s allegations or the accuracy with which he describes the defendant s conduct. Thus, the facts alleged in the pleading are deemed to be true, however improbable they may be. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omitted.) In ruling on a demurrer, the allegations of the complaint must be liberally construed, with a view to substantial justice between the parties. (Glennen v. Allergan, Inc. (2016) 247 Cal.App.4th 1, 6.) Nevertheless, while [a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions of law or fact. (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1120.) A demurrer will succeed where the allegations and matters subject to judicial notice clearly disclose a defense or bar to recovery. (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 183.) Ill. DISCUSSION As explained by the Court of Appeal for the Sixth Appellate District: Class certification is generally not decided at the pleading stage of a lawsuit. The preferred course is to defer decision on the propriety of the class action until an evidentiary hearing has been held on the appropriateness of class litigation. Printed: 8/5/2021 08/05/2021 Hearing: Demurrer - 21CV375255 Page 2 of 6 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER (Tellez v. Rich Voss Trucking, Inc. (2015) 240 Cal.App.4th 1052, 1062, citing In re BCBG Overtime Cases (2008) 163 Cal.App.4th 1293, 1298 1299, internal citations and quotations omitted.) A court may decide the propriety of class certification on the pleadings only if it concludes as a matter of law that, assuming the truth of the factual allegations in the complaint, there is no reasonable possibility that the requirements for class certification will be satisfied. (Tucker v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th 201, 211 (Tucker), citing Bridgeford v. Pacific Health Corp. (2012) 202 Cal.App.4th 1034, 1041 1042.) This is most commonly the case in circumstances where it is clearly apparent that individual issues will predominate. (See Tucker, supra, 208 Cal.App.4th at p. 211 [no commonality regarding consumer claim where reliance and materiality varied among individuals and disclosures were provided that were likely seen by some putative class membersl.) A. Commonality Here, Defendant argues that section 1950.5 permits a landlord to withhold portions of a security deposit reasonably necessary for various purposes: (1) The compensation of a landlord for a tenant s default in the payment of rent. (2) The repair of damages to the premises, exclusive of ordinary wear and tear, caused by the tenant or by a guest or licensee of the tenant. (3) The cleaning of the premises upon termination of the tenancy necessary to return the unit to the same level of cleanliness it was in at the inception of the tenancy. (4) To remedy defaults by the tenant in any obligation under the rental agreement to restore, replace, or return personal property or appurtenances, exclusive of ordinary wear and tear, if the security deposit is authorized to be applied thereto by the rental agreement. ( 1950.5, subds. (b) & (e).) Defendant contends that addressing the reasonableness of any and every deduction it made from a security deposit for any of these various permissible purposes will raise a host of individual issues. In opposition, Plaintiff urges that she does not contend Defendant violated section 1950.5 in every conceivable way, but more specifically that it has a practice of improperly retaining security deposits by charging for normal wear and tear, adding frivolous charges, and failing to provide statements and documentation for security deposit deductions. While Defendant is correct that most of the complaint is vague about the violations at issue, Plaintiff does specifically allege that Defendant s violations include, but are not limited to: Defendants impermissible deductions for routine cleaning expenses and normal wear and tear; Defendants charging of unreasonable hourly rates for their work; Defendants[ ] failure and refusal to provide adequate accounting of the use of the security deposits; and Defendants[ ] failure and refusal to return all or any portion of the security deposits to the Class Representative and Class Members. Printed: 8/5/2021 08/05/2021 Hearing: Demurrer - 21CV375255 Page 3 of 6 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER (Class Action Complaint, 32.) It is not apparent that individual issues will predominate with regard to these theories. Indeed, Peviani v. Arbors at California Oaks Property Owner, LLC (2021) 62 Cal.App.5th 874 (Peviani) recently held that commonality was satisfied in a security deposit case alleging similar violations. While Defendant attempts to distinguish Peviani on reply, it relies on facts not reflected in the Complaint to do so. Defendant cites Schermer v. Tatum (2016) 245 Cal.App.4th 912 (Schermer), which held that a demurrer to class claims was properly sustained in an action alleging unconscionable leasing practices at 18 mobile home parks in different cities. The Court of Appeal identified several individual issues that would predominate in that case as a matter of law: (i) the alleged unconscionable policies and/or procedures at issue in this case primarily arose out of one- on-one interactions between different defendants (and/or their agents) and each plaintiff and putative class member in each of the 18 mobilehome parks; (ii) these one-on-one interactions allegedly involved improper or unlawful conduct of defendants throughout the negotiation, execution, and enforcement of each lease agreement; (iii) the unconscionable policies and/or procedures alleged in the SAC involved at least eight different leasing practices defendants purportedly used to trap plaintiffs and the putative class members in connection with the negotiation, execution, and enforcement of each lease agreement; and (iv) several of the eight different leasing practices allegedly used by defendants to trap plaintiffs and the putative class members involved facts particular to the individual negotiation of the lease agreement, including, by way of example only, (a) whether plaintiffs ancl the putative class members were presented with the lease agreement on a take it or leave it basis, (b) whether plaintiffs and the putative class members were provided all documents related to the lease at the time of its execution, and (c) whether plaintiffs and the putative class members signed the lease under duress. (Schermer, supra, 245 Cal.App.4th at pp. 925 926, italics original.) Here, Plaintiff s theories do not appear to require such a fact-specific analysis of individual interactions between Defendant and its tenants. Defendant also cites Newell v. State Farm General Ins. Co. (2004) 118 Cal.App.4th 1094 (Newell), which held that a class action alleging improper insurance claims practices failed on the pleadings: Even if State Farm and Farmers adopted improper claims practices to adjust Northridge earthquake claims, each putative class member still could recover for breach of contract and bad faith only by proving his or her individual claim was wrongfully denied, in whole or in part, and the insurer s action in doing so was unreasonable. [Citation.] Thus, each putative class member s potential recovery would involve an individual assessment of his or her property, the damage sustained and the actual claims practices employed. (Newell, supra, 118 Cal.App.4th at p. 1103.) While Newell is more analogous to this case than Schermer, the property damage and insurance coverage issues there were far more complex and individualized than the issues here. And notably, Newell relied heavily on prior authority denying class certification in an action challenging improper practices related to Northridge earthquake claims. (See id. at pp. 1102 1106 [discussing Basurco v. let Century Insurance Co. (2003) 108 Cal.App.4th 110 (Bascuro)].) Here, by contrast, there is authority that supports class certification. Printed: 8/5/2021 08/05/2021 Hearing: Demurrer - 21CV375255 Page 4 of 6 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER In sum, the Court cannot conclude, as a matter of law, that there is no reasonable possibility that commonality will be established in this case. B. Superiority Finally, Defendant urges that due to the individual issues in the case for example, variations in lease agreements, the conditions of putative class members apartments, and their communications with Defendant about repairs putative class members would be better served by pursuing their own, separate cases. Again, Defendant cites authority addressing a proposed class action dealing with Northridge earthquake insurance claims: this time, Basurco. In that distinct context, Bascurco reasoned that putative class members have a strong interest in controlling their own cases given the nature of the relief sought the repair of substantial damage to their homes and the payment of expenses for having to live elsewhere during repairs. (Basurco, supra, 108 Cal.App.4th at p. 121.) The opinion further explained that 287 separate earthquake actions with over 1,500 individual plaintiffs were already pending against the defendant; hundreds more were pending against other insurers; and these individual actions were the subject of prodigious and innovative efforts of the superior court to manage the complexities of the earthquake insurance litigation as a whole. (Id. at pp. 121 122.) Here, putative class members claims are much smaller and less complex. There is no indication that putative class members have attempted to pursue individual claims or would desire to do so. It seems likely that a class action would be superior to individual lawsuits in this case, if Plaintiff ultimately succeeds in certifying a class. IV. CONCLUSION For the reasons discussed above, Defendant s demurrer is OVERRULED. The Court will prepare the order. *** LAW AND MOTION HEARING PROCEDURES In light of the significant progress combatting the COVID-19 pandemic and favorable rates of vaccination in the State of California and Santa Clara County, the Court rescinded, effective June 21, 2021, all prior general orders restricting courthouse access. Remote appearances for complex civil matters are still permitted, but are no longer mandatory. (See General Order Rescinding Portion of May 6, 2020 General Order Concerning Complex Civil Actions, available at https://www.scscourt.org/general_info/ news_media/newspdfs/2021/Genera|OrderRescindingPortionof05062lGenera|OrderConcerningComplexCivil Printed: 8/5/2021 08/05/2021 Hearing: Demurrer - 21CV375255 Page 5 of 6 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Actions.pdf.) If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing remotely should contact CourtCalI. Public access to hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612). State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a hearing remotely or listening in on a public access line. No court order has been issued which would allow recording of any portion ofthis motion calendar. The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom. Printed: 8/5/2021 08/05/2021 Hearing: Demurrer - 21CV375255 Page 6 of 6
