Opinion
B312257
09-28-2022
LAURA AN, Plaintiff and Appellant, v. ASAD AYAZ et al., Defendants and Respondents.
Richards, Watson & Gershon, T. Peter Pierce, Steven A. Nguy for Plaintiff and Appellant. Volkov Law Firm and Aleksandr A. Volkov for Defendants and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order and judgment of the Superior Court of Los Angeles County No. 19STCV12643, David Sotelo, Judge. Affirmed.
Richards, Watson & Gershon, T. Peter Pierce, Steven A. Nguy for Plaintiff and Appellant.
Volkov Law Firm and Aleksandr A. Volkov for Defendants and Respondents.
COLLINS, J.
INTRODUCTION
Plaintiff Laura An rented an apartment from defendants Asad Ayaz, Harma Hartouni, and Ali Ketabachi from 2002 to 2014. An sued defendants in 2019, alleging the rental unit was illegal and defendants illegally evicted her. Defendants demurred, asserting that An's claims were untimely. The trial court sustained the demurrer and granted An leave to amend. An amended her complaint, alleging on information and belief that she learned of her claims less than a year before she filed her complaint. Defendants demurred again, and the trial court sustained the demurrer on the basis that An failed to allege facts to support application of the delayed discovery rule.
The court granted An leave to amend, but after the time to amend elapsed, An filed a request to dismiss the complaint without prejudice. Defendants filed a motion to have the complaint dismissed with prejudice; the court granted the motion and entered judgment. The court later granted defendants' motion for attorney fees.
An appealed the judgment and attorney fee ruling. Defendants assert that An's notice of appeal was untimely. We agree with An that defendants' service of the notice of entry of judgment was ineffective, and therefore An's notice of appeal was timely under the 180-day period in California Rules of Court, rule 8.104(a)(1). We therefore reach the merits of An's appeal, find no error, and affirm the judgment. An appeals the trial court's postjudgment award of attorney fees only on the basis that if the demurrer ruling is reversed, defendants are not the prevailing parties. Because we affirm the demurrer ruling and judgment, we also affirm the attorney fee award.
FACTUAL AND PROCEDURAL BACKGROUND
A. Complaint and First Amended Complaint
An rented an apartment from defendants from May 2002 to November 2014. The rental included use of a garage, a laundry room that was accessible through a storage room, and an "enclosed garden entertainment area." The rental unit was subject to the Los Angeles Rent Stabilization Ordinance (LARSO) (Los Angles Municipal Code (LAMC), § 151 et seq.). In October 2014, defendants told An that the mother of one of the defendants was going to move into An's unit, so An needed to vacate the unit. An moved out around November 30, 2014.
A landlord may seek in good faith to recover possession of a rent-controlled unit for use as a primary residence of the landlord or the landlord's family member. (See LAMC, § 151.09(A)(8); Civ. Code, § 1947.10.)
An filed her original complaint more than four years later, on April 11, 2019. She alleged the storage room and garden entertainment area of the premises had been unpermitted and illegal. She asserted that the City of Los Angeles found them to be prohibited and ordered them demolished; they were demolished in May 2016. An alleged that due to the unpermitted nature of the premises, "the lawful maximum rent" for her unit "was zero," and she "was charged beyond the lawful maximum rent (which was zero)." She asserted that because the premises was illegal, her lease was void.
An also alleged that she vacated the premises based on defendants' representation that a family member was going to move in, but she discovered "sometime on or after September 2016" that no family member had actually moved in. She asserted she was therefore illegally evicted in violation of LARSO. She also alleged that defendants failed to pay her the correct relocation fee and security deposit refund.
An alleged causes of action for declaratory relief, fraudulent intent to occupy (Civ. Code, § 1947.10), breach of LARSO, and unlawful business practices under California's Unfair Competition Law (UCL, Bus. &Prof. Code, § 17200, et seq.). She prayed for compensatory, statutory, and punitive damages.
An filed a first amended complaint (FAC) alleging the same four causes of action on November 12, 2019. The facts alleged were largely identical. An added an allegation that "[d]uring her occupancy, and until at least the time of the demolition, [An] did not know and had no reason to know that the Premises was illegal and . . . not fit for occupancy during the time of her tenancy." She added an additional allegation that she "did not know, and had no reason to know, until sometime after September 2016 that an eligible family member of Defendants did not occupy the Premises" after An moved out.
The register of actions does not show a demurrer to the original complaint, and the record on appeal does not indicate a reason for the amendment.
Defendants demurred to the FAC, asserting that An's claims were time-barred. (Code Civ. Proc., § 430.10, subd. (e).) Defendants noted that An filed her complaint more than four years after her tenancy ended, and about two and a half years after she allegedly learned that a family member had not moved into the unit she vacated. Defendants argued that most of An's causes of action were governed by the one-year statute of limitations in Code of Civil Procedure section 340, subdivision (a), which applies to statutory penalties and voiding contracts. Defendants also asserted that An's UCL cause of action was untimely under the applicable four-year statute of limitations (Bus. &Prof. Code, § 17208).
In her opposition, An argued that the one-year statute of limitations was inapplicable, and that instead, her "claim is clearly timely under the four-year limitations period applicable to written contracts (C.C.P. §337) or the four-year limitations period under C.C.P. §343." As to her allegation of delayed discovery, An asserted, "Plaintiff does not contend, definitively, that she learned of the violation in September 2016, but rather, 'sometime after September 2016'. At a minimum, the Court should allow discovery to proceed to establish when Plaintiff learned of the facts supporting her wrongful eviction claim...." She further argued that the UCL cause of action was not time-barred. Defendants filed a reply supporting the demurrer.
The trial court issued a tentative ruling sustaining the demurrer. The court stated that the one-year statute of limitations in Code of Civil Procedure section 340 applied to An's first three causes of action, which were based on LARSO. The court rejected An's claim of delayed discovery, stating, "It is unreasonable to read 'sometime on or after September 2016' to mean up to April 2018, which is one year before the original complaint was filed." The court also stated that the UCL claim, which was derivative of An's other claims, was also time-barred.
At the hearing on the demurrer, An's counsel argued in part that a statute of limitations issue could not be determined on a demurrer to an unverified complaint. An's counsel also stated that allegations regarding the timeliness of the claims could be cured with amendment. The court sustained the demurrer and gave An leave to file an amended complaint.
B. Second Amended Complaint
An's Second Amended Complaint (SAC) included only claims for declaratory relief, fraudulent intent to occupy, and breach of LARSO; she did not include a UCL claim. An added an allegation that the premises were "illegal for reasons other than LARSO, including laws pertaining to standards of habitability. As a result of the Premises being illegal, the lease was void ab initio." The FAC had stated, "During her occupancy, and until at least the time of the demolition, Plaintiff did not know and had no reason to know that the Premises was illegal and were not fit for occupancy during the time of her tenancy." The SAC included the same allegation, but deleted "until at least the time of the demolition." In place of the FAC's allegation that An learned "sometime on or after September 2016" that no family member had moved into her former unit, An alleged in the SAC, "On information and belief, less than a year before filing this action, Plaintiff learned" that no family member had moved into her former unit. In another paragraph, An removed the allegation that she learned this information "sometime after September 2016" and replaced it with an allegation that she "did not know and had no reason to know until, on information and belief, less than a year before filing this action." The allegations were otherwise unchanged.
Defendants demurred to the SAC. They noted that the court allowed An to amend her complaint to allege facts to support the timeliness of her claims, but An" did not endeavor to provide any detail in the new pleading, instead opted to just allege that she made the discovery 'less than a year before filing this action,' and even that statement she had made not on her own personal knowledge, but '[o]n information and belief.'" Defendants also asserted that An could have discovered her alleged causes of action earlier, and she did not allege that she was prevented from learning any relevant facts. Defendants further asserted that the SAC constituted a sham pleading because it contradicted and omitted previously pleaded facts without an explanation, and each cause of action was time-barred.
An's opposition to the demurrer noted that the court "gave Plaintiff an opportunity to plead around the perceived statute of limitations deficiency," and that the SAC "has two substantive changes: (1) Plaintiff changed an allegation in the First Amended Complaint reading 'sometime on or after September 2016', to 'on information and belief, less than a year before filing this action'; and (2) Plaintiff dropped her claim for 'Unlawful Business Practices'." An also argued that the SAC did not constitute a sham pleading because she "alleges the discovery was 'less than a year' before this action was filed. This new allegation is consistent with the earlier 'on or after' language. Defendants are free to question Plaintiff in discovery as to the basis for the change." Defendants filed a reply in support of their demurrer.
The court issued a tentative ruling sustaining the demurrer. The record on appeal does not include a transcript of the hearing. In a written ruling on September 10, 2020, the court sustained the demurrer with leave to amend. The court stated, "Considering that Plaintiff vacated the premises in November 2014 and did not file the action till [sic] April 11, 2019, the complaint its face would be time barred. Plaintiff[ ] has failed to allege sufficient facts for the delayed discovery rule to apply. [¶] Although, Plaintiff has failed to allege how she discovered the violations 'less than a year' before filing the original complaint and why she did not discover the facts earlier, the Court will allow a final attempt to amend the complaint." The court gave An 11 days, until September 21, 2020, to file an amended complaint, and stated that if An did not do so, defendants were to file an order of judgment. In the same written order, the court granted An's attorney's pending motion to be relieved as counsel.
C. Dismissal and judgment
An did not file an amended complaint. Instead, acting in propria persona, she electronically filed a request for dismissal on September 22, 2020. On the form, An checked the box requesting that the action be dismissed without prejudice. The clerk entered the dismissal the same day.
An apparently filed two requests for dismissal-one at 8:41 a.m. and one at 8:59 a.m. The clerk denied the second request with the statement, "Request for dismissal previously filed and entered on same date."
The following day, September 23, 2020, Defendants filed a motion to have the action dismissed with prejudice and for entry of judgment. They asserted that when a demurrer is sustained with leave to amend and the plaintiff does not amend the complaint, the plaintiff no longer has the right to dismiss the action without prejudice. They argued, "Plaintiff unequivocally indicated her willingness to dismiss this action. However, she was erroneous in requesting a dismissal without prejudice, because her time to do so had by then expired."
No opposition to the motion is included in the record on appeal, and the court's minute order addressing the motion states that An did not appear at the hearing on October 28, 2020. The court granted the motion, signed an "Order of Judgment for Dismissal" the same day, and ordered defendants to give notice. On November 2, 2020, Defendants served a notice of the order and judgment electronically and by mail.
D. Motion for attorney fees
Defendants submitted a memorandum of costs and filed a motion requesting $18,620.00 in attorney fees. Defendants asserted they were entitled to attorney fees because An alleged fraudulent intent to occupy under Civil Code section 1947.10, and subdivision (a) of that statute states in part, "The prevailing party shall be awarded attorney's fees and court costs." Defendants also asserted that the requested amount of attorney fees was reasonable. No opposition to the motion is in the record on appeal.
On March 19, 2021, the court granted defendants' motion for attorney fees, and awarded defendants $18,620.00 in attorney fees and $2,646.54 in costs. The court entered an amended judgment against An including the costs and attorney fees on March 19, 2021.
E. Notices of appeal
On April 23, 2021, represented by new counsel, An filed a notice of appeal, checking the box stating that she was appealing the October 28, 2020 order dismissing the action with prejudice. On May 14, 2021, An filed a second notice of appeal for the March 19, 2021 order. This court consolidated the appeals.
DISCUSSION
An asserts on appeal that the trial court erred in sustaining the demurrer and in awarding attorney fees to defendants. Defendants contend that An's appeal from the judgment is untimely, and that the trial court's rulings were correct. We find that An's notice of appeal was timely, and affirm both the judgment and the post-trial order for attorney fees.
A. Timeliness of An's appeal from the judgment
In general, a notice of appeal must be filed on or before the earliest of three options: 60 days after the superior court clerk serves notice of entry of judgment, 60 days after the appellant serves or is served by a party with a notice of entry of judgment, or 180 days after entry of judgment. (Cal. Rules of Court, rule 8.104(a)(1).) Here, judgment was entered on October 28, 2020, defendants served the judgment of dismissal electronically and by mail on November 2, 2020, and An filed her notice of appeal on April 23, 2021.
This court informed An that her April 23, 2021 notice of appeal from the judgment of dismissal appeared to be untimely. An filed a response stating that her notice of appeal was timely under the 180-day limit. An asserted that defendants' service of the October 28, 2020 order of dismissal was ineffective because she had not consented to electronic service and defendants had omitted her apartment number from her mailing address. An argued that because both forms of service were defective, the appeal was governed by the 180-day limit and was timely.
Defendants filed a response asserting that An's appeal was untimely. Defendants asserted that An's notice of appeal was filed "213 days following [An's] default on the court's leave order and 212 days after her own dismissal of this action." They asserted that the October 28 order did not constitute the dismissal of the action; it only clarified that the case should be dismissed with prejudice. Defendants asserted that the appeal constituted "an attempt to relitigate the action [An] herself dismissed."
Defendants further asserted that service of the October 28 order was not defective. They argued that when An used an electronic filing service to file her dismissals and related proofs of service, she affirmatively consented to electronic service. They also noted that An's former counsel electronically served An and listed An's address without the apartment number.
We find that the notice of appeal was timely. We reject defendants' contention that An was not entitled to appeal the judgment because she chose not to amend her complaint. "When a demurrer is sustained with leave to amend, and the plaintiff chooses not to amend but to stand on the complaint, an appeal from the ensuing dismissal order may challenge the validity of the intermediate ruling sustaining the demurrer." (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 312.)
An's attempt to dismiss the case without prejudice also did not affect the appealability of the judgment. Generally, a plaintiff may dismiss an action "prior to the actual commencement of trial." (Code Civ. Proc., § 581, subd. (c).) However, "once a general demurrer is sustained with leave to amend and [the] plaintiff does not so amend within the time authorized by the court or otherwise extended by stipulation or appropriate order, [she] can no longer voluntarily dismiss [her] action . . . even if the trial court has yet to enter a judgment of dismissal on the sustained demurrer." (Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 789.) Here, An filed her request for dismissal without prejudice the day after the period provided to amend the complaint. At that point, An did not have the right to dismiss the case without prejudice. Defendants and the trial court recognized this; had An's dismissal been effective, the court would not have granted defendants' motion to dismiss the case with prejudice and enter a judgment. (See, e.g., Pittman v. Beck Park Apartments Ltd. (2018) 20 Cal.App.5th 1009, 1022 ["a plaintiff's voluntary dismissal of an action generally deprives the court of jurisdiction in the case"].) Thus, An's dismissal was ineffective and the judgment entered on October 28, 2020 is the appealable order.
Defendants' service of notice of entry of the judgment was ineffective. First, the mailing address lacked An's apartment number, and therefore was incomplete. "Notice of an appealable judgment or order mailed to an incorrect address is not sufficient to constitute legal notice." (Moghaddam v. Bone (2006) 142 Cal.App.4th 283, 288.) In Moghaddam, for example, a notice was sent to an address listing the correct post office box, but with the wrong zip code. The Court of Appeal stated, "In the absence of proof notice was actually received, the [serving party's] failure to use the correct zip code invalidates what would have otherwise been sufficient notice." (Ibid.) Here, the absence of an apartment number, coupled with lack of evidence that An received the notice, renders the mail service invalid.
The electronic service was also invalid because An, who was unrepresented, had not expressly consented to electronic service. In the absence of exceptions not relevant here, electronic service is "authorized if a party or other person has expressly consented to receive electronic service in that specific action." (Code Civ. Proc., § 1010.6, subd. (a)(2)(A)(ii).) Defendants assert that An consented to electronic service when she filed and served documents through an electronic filing service provider. However, the rule defendants cite, California Rules of Court, rule 2.251(b)(1)(B)(i) states, "A party or other person may manifest affirmative consent by serving notice of consent to all parties and other persons and" . . . "[a]greeing to the terms of service with an electronic filing service provider, which clearly states that agreement constitutes consent to receive electronic service" (emphasis added). And as Code of Civil Procedure, section 1010.6, subdivision (a)(2)(A)(ii) makes clear, "The act of electronic filing shall not be construed as express consent." An asserts that she never gave express consent to electronic service, and the record on appeal contains no such consent. Thus, electronic service on An was not authorized.
Defendants' service of notice of entry of judgment was therefore ineffective. An's notice of appeal was filed on April 23, 2021, 177 days after the court entered judgment on October 28, 2020. The appeal is therefore timely.
B. Demurrer
An asserts the trial court erred in finding her claims untimely and sustaining the demurrer on that basis. "Because the function of a demurrer is to test the sufficiency of a pleading as a matter of law, we apply the de novo standard of review in an appeal following the sustaining of a demurrer without leave to amend. [Citation.] We assume the truth of the allegations in the complaint, but do not assume the truth of contentions, deductions, or conclusions of law." (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.) A judgment or order of the lower court is presumed to be correct, and the appellant has the burden of affirmatively showing error. (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609; Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)
"[W]hen a demurrer is sustained with leave to amend, but the plaintiff elects not to amend, it is presumed on appeal that the complaint states the strongest case possible." (Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 10.) "In that circumstance, 'unlike when a demurrer is sustained without leave to amend, we determine only whether the plaintiff stated a cause of action, and not whether the plaintiff might be able to do so.'" (Ring v. Harmon (2021) 72 Cal.App.5th 844, 850.)
Here, the issue is the timeliness of An's claims. A cause of action accrues when it is complete with all of its elements, and the statute of limitations typically runs from "'the occurrence of the last element essential to the cause of action.'" (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.) An vacated the premises in November 2014, and she has not alleged that defendants engaged in any actions affecting her after November 2014. Thus, An's causes of action against defendants accrued, at the latest, in November 2014.
"An exception to the general rule for defining the accrual of a cause of action-indeed, the 'most important' one-is the discovery rule." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397.) Under this rule, accrual of a cause of action may be postponed until the plaintiff discovers, or has reason to discover, the cause of action. (Ibid.)
An relied on the delayed discovery rule in the trial court, asserting in the FAC that she did not discover defendants' wrongdoing until 2016, and alleging in the SAC that "on information and belief" she learned of the facts underlying her claims "less than a year before filing this action." The trial court sustained defendants' demurrer on the basis that An failed to adequately allege facts to support delayed discovery.
An's opening brief on appeal does not discuss when her claims accrued, nor does it argue that the delayed discovery rule should apply. In her reply brief, An acknowledges that her opening brief does not address delayed discovery, but she asks that the delayed discovery rule nonetheless "be applied to toll the limitations period." Even in her reply brief, however, An does not address the accrual of her claims, the parameters of the delayed discovery rule, or how the rule should apply here. "[A]rguments not raised in an opening brief are forfeited." (League to Save Lake Tahoe Mountain etc. v. County of Placer (2022) 75 Cal.App.5th 63, 105.) Moreover, "[w]hen an appellant asserts a point but fails to support it with reasoned argument and citations to authority, we treat the point as forfeited." (Tellez v. Rich Voss Trucking, Inc. (2015) 240 Cal.App.4th 1052, 1066.) An's failure on both counts is fatal to her contentions on appeal.
Even if we were to consider delayed discovery on the merits, however, we would find no error in the trial court's ruling. When a plaintiff relies on the discovery rule as a reason for filing an apparently untimely complaint, the burden of pleading and proving belated discovery falls on the plaintiff. (Czajkowski v. Haskell &White, LLP (2012) 208 Cal.App.4th 166, 174.) "In order to adequately allege facts supporting a theory of delayed discovery, the plaintiff must plead that . . . he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period." (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 809 (Fox).) "In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to 'show diligence'; 'conclusory allegations will not withstand demurrer.'" (Id., at p. 808.)
An's allegations do not meet this standard. In her SAC, she alleged only "on information and belief" that she learned of the facts underlying her claims "less than a year before filing this action." She provided no explanation for the delayed discovery, and did not assert that she was unable to discover the relevant facts earlier. In addition, a "'[p]laintiff may allege on information and belief any matters that are not within [her] personal knowledge'" (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550), yet this allegation was purportedly about An's personal knowledge. These allegations are the type of "conclusory allegations" the Supreme Court stated "will not withstand demurrer." (Fox, supra, 35 Cal.4th at p. 808.)
Moreover, An's allegations about delayed discovery in the SAC contrasted with her allegations in the FAC that she learned the relevant facts in or after May and September 2016. In the FAC, for example, she alleged that she was unaware of the illegal nature of the premises "until at least the time of the demolition" in May 2016, yet she alleged in the SAC that she discovered this information one year before filing her complaint. "Inconsistent allegations in amended complaints are disregarded unless the inconsistency is explained." (Bank of New York Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 943.) Here, An made no attempt to explain the inconsistency, instead arguing that the facts she alleged "do not establish as a matter of law" that her claims were time-barred, because it "is far from certain that [An] was aware of the illegality at the time" and it is "unclear when [An] discovered the demolition."
This argument is misguided. When delayed discovery is at issue, "the burden typically falls on the plaintiff to 'plead facts sufficient to convince the trial judge that delayed discovery was justified.'" (Pollock v. Tri-Modal Distribution Services, Inc. (2021) 11 Cal.5th 918, 947.) An did not do so here, and the uncertainty caused by her failure to allege sufficient facts does not support her contention that the demurrer should have been overruled.
Defendants argue that An's removal of the previous timeline with no explanation rendered the SAC a sham pleading. "Under the sham pleading doctrine, plaintiffs are precluded from amending complaints to omit harmful allegations, without explanation, from previous complaints to avoid attacks raised in demurrers ...." (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425-426.) An argues that the SAC was not a sham pleading because the allegations in the FAC and SAC are consistent in that "within one year of filing the action" in the SAC does not contradict "on or after September 2016" in the FAC. In light of our finding that An's contentions have been forfeited and her allegations were nevertheless insufficient to invoke the delayed discovery rule, we do not address the sham pleading argument.
An also argues that the trial court should have found her claims timely by applying the four-year statute of limitations under Code of Civil Procedure section 337, which applies to actions on a written contract, or section 343, the default statute of limitations. She bases this argument on the contention that the "trial court determined that [An's] claims accrued in September 2016." This is a misrepresentation of the record; the trial court made no such finding. Because An's allegations do not support delayed discovery, her claims accrued no later than November 2014. She filed her complaint more than four years later in April 2019. An's claims were therefore untimely under even the four-year statutes of limitations.
In sum, An's contentions about the court's application of the delayed discovery rule have been forfeited, but nevertheless An has failed to allege facts sufficient to support application of the delayed discovery rule.
C. Attorney fees
An asserts that if we reverse the ruling on the demurrer, defendants would not be the prevailing parties and would not be entitled to collect attorney fees. She does not contend that the trial court's attorney fee award was otherwise erroneous. Because we find the demurrer was appropriately sustained and affirm the judgment, we also affirm the attorney fee award.
DISPOSITION
The judgment and order awarding attorney fees are affirmed. Defendants are entitled to costs on appeal.
We concur: WILLHITE, ACTING P.J., CURREY, J.