Gombiner v. Swartz

167 Cal. App. 4th 1365, 85 Cal. Rptr. 3d 83, 2008 Cal. App. LEXIS 1713
CourtCalifornia Court of Appeal
DecidedOctober 29, 2008
DocketB196182
StatusPublished
Cited by34 cases

This text of 167 Cal. App. 4th 1365 (Gombiner v. Swartz) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gombiner v. Swartz, 167 Cal. App. 4th 1365, 85 Cal. Rptr. 3d 83, 2008 Cal. App. LEXIS 1713 (Cal. Ct. App. 2008).

Opinion

Opinion

RUBIN, J.

Tenant Andrew S. Combiner appeals from the court’s judgment following a trial involving his residential lease of a home owned by landlord Daniel B. Swartz. Because the trial court erroneously found Los Angeles’s Rent Stabilization Ordinance (L.A. Mun. Code, § 151.00 et seq.) did not apply to the dispute, we reverse and remand.

FACTS AND PROCEEDINGS

In 1997, landlord Daniel B. Swartz (landlord) converted the house he owned at 1314 Sunset Plaza Drive in Los Angeles into two residential units designated as 1400 and 1314 Sunset Plaza Drive. 1 In January 1998, tenant Andrew S. Combiner (tenant) signed a two-year lease for 1400 Sunset Plaza Drive, agreeing to pay $3,500 per month for the first year and $4,000 per month for the second. At the time, landlord did not tell his new tenant that the structure’s ground floor was landlord’s separate residence in which he was living under the address 1314 Sunset Plaza Drive.

In July 1998, tenant sued landlord for fraud and related causes of action for misrepresenting the property as a single-family home by not disclosing the *1368 building’s second residence. (Gombiner v. Swartz (Super. Ct. L.A. County, 2000, No. BC194275).) In February 2000, the parties settled the lawsuit. Under their settlement, landlord paid tenant $25,000. In addition, they signed Amendment No. 1 to their lease, extending the term of the lease 18 months to August 2001 while leaving the rent at $4,000 per month. As part of the settlement, tenant promised not to complain to any governmental authorities about matters covered by the settlement, and promised not to interfere with landlord’s' efforts to restore the property to a single-family residence. In July 2001, both parties signed Amendment No. 2 to the lease, raising the monthly rent to $5,900 and making the lease terminable by either party upon 90 days’ notice.

In January 2004, troubles reemerged between landlord and tenant. Expressing displeasure with landlord’s delay in repairing his broken water heater, tenant paid to fix the heater and deducted the repair costs from that month’s rent. Demanding that tenant pay his rent in full, landlord assessed a charge of $300 against tenant for late payment of rent; the lease allowed, however, a late fee of only $25.

Following landlord’s demand, tenant informed landlord that he believed the Rent Stabilization Ordinance of the City of Los Angeles (RSO) applied to the property, making landlord’s unilateral increase in the late payment fee illegal. In addition, tenant insisted that landlord reimburse tenant for $83,400 in unauthorized rent increases that landlord had collected from tenant in violation of the RSO. Landlord reacted by serving tenant with a three-day notice to pay the $300 late fee or quit the property. Landlord also simultaneously exercised his right to give tenant a 90-day notice of termination of the lease. When giving notice, landlord told tenant that if tenant “approaches the City or any related governmental agency regarding the Premises [tenant] will be liable for return of the $25,000 settlement payment and further subject to a $25,000 penalty for breaching the Settlement Agreement.”

A little over a week later, tenant sued landlord. We refer to this lawsuit as “the civil action” to distinguish it from the unlawful detainer action between the parties. The gist of tenant’s complaint was landlord had violated the RSO by overcharging tenant for rent. Landlord cross-complained, alleging causes of action against tenant for breach of the settlement agreement and for promissory fraud from tenant’s undisclosed intention not to adhere to the settlement agreement. In addition to cross-complaining, landlord filed an unlawful detainer action against tenant to regain possession of the property.

While the civil action remained pending, the Honorable Judith Abrams presided over the unlawful detainer trial in August 2004. Judge Abrams found landlord had spent tens of thousands of dollars (and possibly more) to create *1369 two separate residential units within the erstwhile single-family structure. Each unit had its own full kitchen, laundry area, driveway, mailbox, and garbage pickup location. Landlord and tenant used separate entries and exits, had their own telephone and cable television lines, and did not interact while in their homes. Based on the property’s condition and use, Judge Abrams found the building was a duplex. Entering judgment for tenant, Judge Abrams ruled the duplex was subject to the RSO, which limited rent increases to approximately 3 percent a year during the period at issue in these proceedings. In November 2005, the appellate department of the superior court affirmed Judge Abrams’s ruling. In doing so, it noted “the residence did not retain its essential character as a single-family residence. Substantial remodeling was done to create two truly separate and complete units.”

Following his victory in the unlawful detainer trial, tenant stopped paying rent to offset the unauthorized excess rent that landlord had collected from him. In crediting past overpayments against his current rent obligation, tenant relied on the authority of Minelian v. Manzella (1989) 215 Cal.App.3d 457 [263 Cal.Rptr. 597], which permitted a tenant to recover unauthorized excess rent payments by withholding current rent. (Id. at pp. 460, 464.) Landlord thereafter filed a second unlawful detainer action against tenant. In response, tenant filed a first amended complaint in the civil action adding a cause of action for retaliatory eviction and pleading the res judicata effect of Judge Abrams’s finding that the property was a duplex subject to the RSO.

In February 2006, the parties stipulated to a bifurcated court and jury trial in the civil action before the Honorable Mary Ann Murphy, whose rulings and judgment are at issue in this appeal. As to nonjury matters, they agreed the trial court could rely on the parties’ briefs to decide the legality under the RSO of the rent increases in the February 2000 settlement agreement and lease amendments. They further agreed the court could decide based on the parties’ evidence whether landlord had restored the property to a single-family residence exempt from the RSO.

The court trial—named “Phase 1” by the parties—took place in February and March 2006. At the end of Phase 1, the court found the February 2000 settlement and two lease amendments did not violate the RSO because the parties were sophisticated professionals who knew about the ordinance and had negotiated their agreements at arm’s length represented by counsel and “supervised” by a retired superior court judge. The court also found landlord had restored the property to a single-family residence as of November 17, 2004. Based on the trial court’s findings in Phase 1, landlord filed a second amended cross-complaint adding a cause of action for breach of the lease. He argued tenant’s refusal to pay rent since Judge Abrams’s ruling in August 2004 lacked legal justification because Phase 1 established the lawfulness of those increases.

*1370 Phase 2 of the trial was tried to a jury.

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Cite This Page — Counsel Stack

Bluebook (online)
167 Cal. App. 4th 1365, 85 Cal. Rptr. 3d 83, 2008 Cal. App. LEXIS 1713, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gombiner-v-swartz-calctapp-2008.