OrderCal. Super. - 6th Dist.January 18, 2021KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA PRISCILLA JOHNSON, Case N0.: 21CV375255 Plaintiff, ORDER CONCERNING DEFENDANT SCK ILARA VS. INVESTORS, LLC’S DEMURRER TO PLAINTIFF’S CLASS ACTION SCK ILARA INVESTORS, LLC, et a1., COMPLAINT Defendants. This is a putative class action 0n behalf 0f tenants 0f 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 t0 each cause 0f action in the operative Class Action Complaint on the ground that Plaintiff Priscilla Johnson fails t0 allege facts showing class certification is appropriate. Plaintiff filed an opposition 0n July 15, 2021 .1 The Court issued a tentative ruling 0n August 4, 2021, and n0 one appeared at the hearing 0n August 5 t0 contest it. The Court now issues its final order, which OVERRULES Defendant’s demurrer. 1 The Court will consider Plaintiff” s opposition although it was filed after the deadline established by the parties and the Court at a case management conference. Plaintiff’s counsel explains that the late filing was in error, and the opposition was still filed well before the deadline established by the Code 0f Civil Procedure. 1 Electronically Filed by Superior Court of CA, County of Santa Clara, on 8/6/2021 9:02 AM Reviewed By: R. Walker Case #21CV375255 Envelope: 7010023 KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO I. BACKGROUND As alleged in the operative complaint, in November 20 1 9, Plaintiff rented a residential apartment in a building Defendant owns in Milpitas and paid a $995 security deposit. (Class Action Complaint,w 2-3, 5, 18-20.) When she vacated her apartment 0n June 24, 2020, Defendant overcharged her security deposit and failed t0 show her invoices for repairs charged against it. (Id, 1] 20.) Plaintiff paid the overcharges under protest. (Ibid) Pursuant t0 Civil Code section 1950.5,2 a landlord must furnish a departing tenant with a copy 0f an itemized statement indicating the basis for, and the amount 0f, any security received and the disposition 0f the security, and shall return any remaining portion 0f the security t0 the tenant. (Id., 1] 8.) Plaintiff alleges that Defendant negligently 0r intentionally failed to return her and other tenants’ security deposits as required by the statute, and failed t0 train staff concerning the statute’s requirements. (Id,W 25-26.) Defendant’s “Violations include, but are not limited t0: Defendants’ impermissible deductions for routine cleaning expenses and normal wear and tear; Defendants’ charging 0f unreasonable hourly rates for their work; Defendants[’] failure and refusal t0 provide adequate accounting 0f the use 0f the security deposits; and Defendants[’] failure and refusal t0 return all 0r any portion 0f the security deposits t0 the Class Representative and Class Members.” (Id., 1] 32.) Based 0n these allegations, Plaintiff brings a this action 0n behalf 0f a putative class 0f similarly situated individuals, “including all former tenants and occupants 0f real property owned, managed, 0r controlled by Defendants, which Class Members have been refused the lawful accounting 0f and return 0f their security deposits following their vacating their rental units.” (Class Action Complaint, 1] 23.) Plaintiff asserts claims for (1) Violation 0f Civil Code section 1950.5, (2) negligent hiring/supervision 0f employees, and (3) unfair and unlawful business practices in Violation 0f Business & Professions Code sections 17200 et seq. / / / / / / 2 A11 future statutory references are t0 this section unless otherwise noted. KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO II. LEGAL STANDARD A demurrer tests the legal sufficiency 0f the complaint. (Chen v. PayPal, Inc. (2021) 61 Cal.App.5th 559, 568.) Consequently, it “reaches only t0 the contents 0f the pleading and such matters as may be considered under the doctrine ofjudicial notice.” (Wei! v. Barthel (1955) 45 Cal.2d 835, 837; see also Code CiV. Proc., § 430.30, subd. (a).) “It is not the ordinary function 0f a demurrer t0 test the truth 0f the plaintiff” s allegations 0r the accuracy with which he describes the defendant’s conduct. Thus, the facts alleged in the pleading are deemed t0 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 0f the complaint must be liberally construed, with a View t0 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 0r conclusions 0f law 0r fact.” (George v. Automobile Club ofSouthern California (201 1) 201 Cal.App.4th 1112, 1120.) A demurrer will succeed where the allegations and matters subject t0 judicial notice clearly disclose a defense 0r bar t0 recovery. (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 183.) III. DISCUSSION “Class certification is generally not decided at the pleading stage 0f a lawsuit. The preferred course is t0 defer decision 0n the propriety 0f the class action until an evidentiary hearing has been held 0n the appropriateness 0f class litigation.” (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 0f class certification 0n the pleadings “ ‘only if it concludes as a matter 0f law that, assuming the truth 0f the factual allegations in the complaint, there is n0 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, KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO supra, 208 Cal.App.4th at p. 211 [n0 commonality regarding consumer claim where reliance and materiality varied among individuals and disclosures were provided that were likely seen by some putative class members].) A. Commonality Here, Defendant argues that section 1950.5 permits a landlord t0 withhold portions 0f a security deposit “reasonably necessary” for various purposes: (1) The compensation 0f a landlord for a tenant’s default in the payment 0f rent. (2) The repair 0f damages t0 the premises, exclusive 0f ordinary wear and tear, caused by the tenant 0r by a guest 0r licensee 0f the tenant. (3) The cleaning of the premises upon termination 0f the tenancy necessary t0 return the unit t0 the same level 0f cleanliness it was in at the inception 0f the tenancy. ... (4) T0 remedy defaults by the tenant in any obligation under the rental agreement t0 restore, replace, 0r return personal property 0r appurtenances, exclusive 0f ordinary wear and tear, if the security deposit is authorized t0 be applied thereto by the rental agreement. (§ 1950.5, subds. (b) & (6).) Defendant contends that addressing the reasonableness 0f any and every deduction it made from a security deposit for any 0f these various permissible purposes will raise a substantial number 0f 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 “0f 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 KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO correct that most 0f the complaint is vague about the Violations at issue, Plaintiff does specifically allege that Defendant’s “Violations include, but are not limited t0: Defendants’ impermissible deductions for routine cleaning expenses and normal wear and tear; Defendants’ charging 0f unreasonable hourly rates for their work; Defendants[’] failure and refusal t0 provide adequate accounting 0f the use 0f the security deposits; and Defendants[’] failure and refusal t0 return all 0r any portion 0f the security deposits t0 the Class Representative and Class Members.” (Class Action Complaint, 1] 32.) It is not apparent that individual issues will predominate with regard t0 these theories. Indeed, Peviani v. Arbors at California Oaks Properly 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 t0 distinguish Peviani 0n reply, it relies 0n facts not reflected in the Complaint t0 d0 so. Defendant Cites Schermer v. Tatum (2016) 245 Cal.App.4th 912 (Schermer), Which held that a demurrer t0 class claims was properly sustained in an action alleging unconscionable leasing practices at 18 mobile home parks in different cities. The Court 0f Appeal identified several individual issues that would predominate in that case as a matter 0f law: (i) the alleged unconscionable policies and/or procedures at issue in this case primarily arose out 0f one-on-one interactions between different defendants (and/or their agents) and each plaintiff and putative class member in each 0f the 18 mobilehome parks; (ii) these one-on-one interactions allegedly involved improper 0r unlawful conduct 0f defendants throughout the negotiation, 3 The Court 0f Appeal explained: We fail t0 see why, in order t0 prove the reasonableness 0f their deductions, defendants would need t0 g0 through every deduction for every move-out. A detailed analysis such as that might be necessary for some claims 0f damages, but it would not be necessary for reasonableness. Reasonableness involves the decisionmaking process, the criteria, and the consistency 0f the decision maker If the criteria are reasonable and the criteria are consistently applied, then reasonableness is properly proven by common evidence. In sum, we conclude the trial court erred by concluding there is a lack 0f commonality. (Peviani, supra, 62 Cal.App.5th at p. 902.) KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO execution, and enforcement 0f each lease agreement; (iii) the unconscionable policies and/or procedures alleged in the SAC involved at least eight different leasing practices defendants purportedly used t0 “trap” plaintiffs and the putative class members in connection with the negotiation, execution, and enforcement 0f each lease agreement; and (iv) several 0f the eight different leasing practices allegedly used by defendants t0 “trap” plaintiffs and the putative class members involved facts particular t0 the individual negotiation 0f the lease agreement, including, by way of example only, (a) whether plaintiffs and the putative class members were presented with the lease agreement 0n a “take it 0r leave it basis,” (b) whether plaintiffs and the putative class members were provided all documents related t0 the lease at the time 0f 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 d0 not appear t0 require such a fact-specific analysis 0f individual interactions between Defendant and its tenants. Defendant also cites Newell v. State Farm General Ins. C0. (2004) 118 Cal.App.4th 1094 (Newell), which held that a class action alleging improper insurance claims practices failed 0n the pleadings: Even if State Farm and Farmers adopted improper claims practices t0 adjust Northridge earthquake claims, each putative class member still could recover for breach 0f contract and bad faith only by proving his 0r her individual claim was wrongfully denied, in whole 0r 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 0f his 0r 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 t0 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 0n prior authority KOOONONUl-hwwu-t NNNNNNNNNHHHHHHHHHH OONONM-PWNHOKOOONONm-PWNHO denying class certification in an action challenging improper practices related t0 Northridge earthquake Claims. (See id. at pp. 1102-1 106 [discussing Basurco v. 21st Century Insurance C0. (2003) 108 Cal.App.4th 110 (Basurco)].) Here, by contrast, there is authority that supports class certification in security deposit-based putative class actions. In sum, the Court cannot conclude, as a matter 0f law, that there is n0 reasonable possibility that commonality will be established in this case. B. Superiority Finally, Defendant urges that due t0 the individual issues in the case-for example, variations in lease agreements, the conditions 0f 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 0f the relief sought-the repair 0f substantial damage t0 their homes and the payment 0f expenses for having t0 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 0f “prodigious and innovative efforts 0f the superior court t0 manage the complexities 0f 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 t0 pursue individual claims 0r would desire t0 d0 so. It seems likely that a class action would be superior t0 individual lawsuits in this IV. CONCLUSION For the reasons discussed above, the Court OVERRULES Defendant’s demurrer. IT IS SO ORDERED. Date: The Honorable Sunil R. Kulkarni Judge 0f the Superior Court 7 August 6, 2021
