800 CARSON MANAGEMENT VS DUSTIN NOWICK DBA AWAKENINGS

Tentative Rulings

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Case Number: 20CMUD00076 Hearing Date: July 8, 2021 Dept: A

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Gupta v. Nowick 20CMUD00076

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Defendant’s demurrer to the third amended complaint is\r\nOVERRULED. Defendant is ordered to answer within 5 court days.

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A. STANDING

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Defendant contends that Plaintiff Surya Gupta, trustee of SG\r\nBusiness Trust, dba 800 Carson Management has not sufficiently alleged standing\r\nto bring this case.

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“Every action must be prosecuted in the name of the real\r\nparty in interest, except as otherwise provided by statute.” (Code Civ. Proc. § 367.) The complaint must allege the plaintiff’s\r\nstanding to sue. (See Friendly Village\r\nCommunity Assn., Inc. v. Silva Hill Constr. Co. (1973) 31 Cal. App. 3d 220,\r\n223.) In the unlawful detainer context,\r\nthis means that the plaintiff must allege the basis for its claim to a right of\r\npossession.

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Generally, the real party in interest in an unlawful\r\ndetainer action is the person who owns or hold title to the claim or property\r\ninvolved. In addition, an agent of the\r\nowner “has standing to sue if the lease or rental agreement was entered into in\r\nthe agent’s name.” (Rutter Group,\r\nCalifornia Practice Guide, Landlord Tenant, \r\n§ 8:29.2.) Further, when the\r\nowner or lessor of the property is a trust, the real party in interest is the\r\ntrustee. (Presta v. Tepper (2009) 179\r\nCal.App.4th 909, 915.) An action may not be brought in the name of the trust;\r\nit has to be brought in the name of the trustee. (Id.)

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Plaintiff alleges that he is the agent, property manager and\r\nlessor for the owner, and that Defendant Dustin Nowick dba Awakenings entered\r\ninto a written agreement with plaintiff, by its dba 800 Carson Management. These allegations are sufficient to allege\r\nstanding.

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With the moving papers, Defendant requests that the court\r\ntake judicial notice of a Fictitious Name Statement, showing that 800 Carson\r\nManagement is a dba of SG Business Trust, and that Surya Gupta signed the\r\nstatement as the Trustee of the SG Business Trust. The court grants the request for judicial\r\nnotice to the extent it asks the court to take judicial notice of the document\r\nitself (not counsel’s characterization of the document). The Fictitious Name\r\nStatement supports Plaintiff’s position and is consistent with the allegations\r\nin the complaint. Plaintiff has\r\nsubstantially complied with the requirements under Business and Professions\r\nCode section 17913 in filling out the form. \r\nAmong other things, Surya Gupta is identified as the trustee of the SG\r\nBusiness Trust in that filing.

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Finally, Defendant has not established through documents for\r\nwhich the court may take judicial notice that the Fictitious Name Statement was\r\nnot published as required under the law.

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The demurrer on this basis is overruled.

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B. Sufficiency of\r\nAllegations Regarding Service of the Notice to Cure or Quit.

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The court has already addressed Defendant’s argument with\r\nrespect to the sufficiency of the allegations regarding service of the\r\nthree-day notice to cure or quit. As the\r\ncourt explained in its minute order dated May 4, 2021, which analysis is repeated\r\nverbatim below:

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Section 1161 of the Code of Civil Procedure sets forth the\r\nrequirements for notices to quit. \r\nSection 1162 sets forth the service requirements for such notices. Section 1162, subdivision (b) sets forth the\r\nrequirements for service of the notice on a commercial tenant. A plaintiff in an unlawful detainer action\r\n“must allege and prove proper service of the requisite notice.” (Palm Property Investments, LLC v. Yadegar\r\n(2011) 194 Cal. App. 4th 1419, 1425.)

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Plaintiff here relies on section 1162, subdivision (b)(3),\r\nwhich provides:

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“If at the time of attempted service, a person of suitable\r\nage or discretion is not found at the rental property through the exercise of\r\nreasonable diligence, then by affixing a copy in a conspicuous place on the\r\nproperty and also sending a copy through the mail addressed to the tenant at\r\nthe address where the property is situated.” \r\n

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Subdivision (b)(3) thus requires a person to “exercise\r\nreasonable diligence” to find a person of suitable age or discretion at the\r\nrental property before posting and mailing is effective. This is in contract to section 1162,\r\nsubdivision (a)(2), which applies to residential properties. That section provides that if “a person of suitable\r\nage or discretion” cannot be found at the tenant’s residence or place of\r\nbusiness (if known), then service may be effectuated by posting and\r\nmailing. There is no requirement that\r\nreasonable diligence be used to find a person of suitable age and discretion in\r\nthe residential context.

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Here, the second amended complaint is silent as to whether\r\nreasonable diligence was exercised. \r\nInstead, the plaintiff checked boxes in Judicial Conference form\r\ncomplaint 100 to allege service by posting and mailing. The question presented here is whether an\r\nunlawful detainer complaint in the commercial context must specifically allege\r\nthat the person serving the notice exercised reasonable diligence to find a\r\nperson of suitable age or discretion at the rental property before posting and\r\nmailing.

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Section 1166, subdivision (a)(5) provides that an unlawful\r\ndetainer complaint must “[s]tate specifically the method used to serve the\r\ndefendant with the notice or notices of termination upon which the complaint is\r\nbased.” Further, and importantly, the statute states that the requirements for\r\nallegations of service “may be satisfied by using and completing all items\r\nrelating to service of the notice or notices in an appropriate Judicial Council\r\nform complaint . . . .” (Code Civ. Proc.\r\n§ 1166, subd. (a)(5).)

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As noted, Plaintiff used a Judicial Council form 100\r\ncomplaint and completed the item related to service of the notice by posting\r\nand mailing. The Judicial Council has\r\nnot promulgated a separate form complaint for commercial tenancies; instead,\r\nForm 100 is intended to be used for both residential and commercial\r\ntenancies. (See, e.g., ¶ 6, f\r\n[specifying that paragraph must be completed for residential property, implying\r\nthat the form generally may be used for both commercial and residential\r\nproperties].)

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Thus, by filling in the portion of the form complaint\r\nregarding service, Plaintiff adequately complied with the pleading requirements\r\nregarding the service of the notice to cure or quit. (Code of Civ. Proc. § 1166, subd. (a)(5).)

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The court emphasizes that a trial Plaintiff will have to\r\nprove compliance with all of the requirements under section 1162, subdivision\r\n(b)(3), including the exercise of reasonable diligence to find a person of\r\nsuitable age or discretion before posting and mailing. But, pursuant to section 1166, subd.\r\n(a)(5), Plaintiff is not required to\r\nspecifically allege compliance with that requirement in order to state a valid\r\nclaim.

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Moving party is ordered to give notice.

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Case Number: 20CMUD00076    Hearing Date: May 4, 2021    Dept: A

800 Carson Management v. Dustin Nowick dba Awakenings

Defendant’s demurrer to the second amended complaint is SUSTAINED with leave to amend. Plaintiff has 30 days leave to amend.

In the second amended complaint, Plaintiff Surya Gupta, trustee of SG Business Trust, dba 800 Carson Management alleges that he is the agent, property manager and lessor of property located at 800 W. Carson Street, Unit #35, Torrance, CA 90502. The complaint further alleges that defendant entered into a written rental or lease agreement with Plaintiff’s agent.

Plaintiff further alleges, among other things, that Defendant was served with a three-day notice to cure or quit, and that Defendant failed to comply with the requirements of the notice by its expiration. The notice was allegedly served on the Defendant by posting a copy on the premises and mailing a copy to defendant on the premises on December 30, 2019 because no person or suitable age or discretion could be found there.

Defendant demurs to the second amended complaint, claiming that the second amended complaint does not adequately allege service of the 3-day notice and does not adequately allege that Plaintiff is the real party in interest with standing to bring the action.

DISCUSSION

A. ALLEGATIONS REGARDING STANDING

“Every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute.” (Code Civ. Proc. § 367.) The complaint must allege the plaintiff’s standing to sue. (See Friendly Village Community Assn., Inc. v. Silva Hill Constr. Co. (1973) 31 Cal. App. 3d 220, 223.) In the unlawful detainer context, this means that the plaintiff must allege the basis for its claim to a right of possession.

Generally, the real party in interest in an unlawful detainer action is the person who owns or hold title to the claim or property involved. In addition, an agent of the owner “has standing to sue if the lease or rental agreement was entered into in the agent’s name.” (Rutter Group, California Practice Guide, Landlord Tenant, § 8:29.2.) A property manager has standing to sue if it is a party to the lease or rental agreement (or assignee of the principal’s interest.) (Id. § 8:30). In addition, an agent would presumably have standing to sue if “the landlord assigned its interest to the agent” or if the landlord otherwise gave the agent written authority to sue and retake possession. (Id., § 8:29.2, 8:29.3).

Similarly, successors in interest to the owner may properly sue in their own names, but “must allege their successor in interest status.” (Id. § 8:31.)

Further, “[a] nonowner plaintiff must specifically plead authority to sue as the real party in interest.” (Id. 8:29.4.)

Here, the second amended complaint does not adequately allege the basis for plaintiff’s standing. Plaintiff does not allege that he is the owner of the property or successor to the owner. Plaintiff alleges that he is the “agent, property manager and lessor of property” but also alleges that the lease or rental agreement was not entered into by Plaintiff but was entered into by Plaintiff’s agent.

It appears from the complaint that Plaintiff is neither the owner of the property nor the party identified as the lessor in the rental agreement. Given those inferences, Plaintiff must allege with more specificity the basis for its allegation that it is the “lessor” of the property. The bare allegation that Plaintiff is an “agent” is not sufficient; there is no allegation as to whose agent Plaintiff purports to be or whether the right to sue to regain possession was within the scope of the agency. Finally, the allegation that Plaintiff is the “property manager” but not the party who entered into the lease agreement is not sufficient to confer standing, without allegations regarding the assignment of the right to sue to regain possession.

In opposition to the demurrer, Plaintiff provides additional facts beyond what is alleged in the complaint. The court rules on the demurrer based on the allegations as pleaded in the complaint and does not consider additional facts.

The demurrer is thus sustained. The court cannot conclude that Plaintiff cannot cure these defects and thus leave to amend is granted. The court emphasizes that Plaintiff should plead all facts that Plaintiff’s claim of standing is based on.

B. ALLEGATIONS REGARDING SERVICE OF THE NOTICE TO CURE OR QUIT

Because the court sustains the demurrer on standing grounds, the court need not reach the question of whether the second amended complaint adequately alleges service of the notice to quit. The court nonetheless reaches the question to provide the following guidance.

Section 1161 of the Code of Civil Procedure sets forth the requirements for notices to quit. Section 1162 sets forth the service requirements for such notices. Section 1162, subdivision (b) sets forth the requirements for service of the notice on a commercial tenant. A plaintiff in an unlawful detainer action “must allege and prove proper service of the requisite notice.” (Palm Property Investments, LLC v. Yadegar (2011) 194 Cal. App. 4th 1419, 1425.)

Plaintiff here relies on section 1162, subdivision (b)(3), which provides:

“If at the time of attempted service, a person of suitable age or discretion is not found at the rental property through the exercise of reasonable diligence, then by affixing a copy in a conspicuous place on the property and also sending a copy through the mail addressed to the tenant at the address where the property is situated.”

Subdivision (b)(3) thus requires a person to “exercise reasonable diligence” to find a person of suitable age or discretion at the rental property before posting and mailing is effective. This is in contract to section 1162, subdivision (a)(2), which applies to residential properties. That section provides that if “a person of suitable age or discretion” cannot be found at the tenant’s residence or place of business (if known), then service may be effectuated by posting and mailing. There is no requirement that reasonable diligence be used to find a person of suitable age and discretion in the residential context.

Here, the second amended complaint is silent as to whether reasonable diligence was exercised. Instead, the plaintiff checked boxes in Judicial Conference form complaint 100 to allege service by posting and mailing. The question presented here is whether an unlawful detainer complaint in the commercial context must specifically allege that the person serving the notice exercised reasonable diligence to find a person of suitable age or discretion at the rental property before posting and mailing.

Section 1166, subdivision (a)(5) provides that an unlawful detainer complaint must “[s]tate specifically the method used to serve the defendant with the notice or notices of termination upon which the complaint is based.” Further, and importantly, the statute states that the requirements for allegations of service “may be satisfied by using and completing all items relating to service of the notice or notices in an appropriate Judicial Council form complaint . . . .” (Code Civ. Proc. § 1166, subd. (a)(5).)

As noted, Plaintiff used a Judicial Council form 100 complaint and completed the item related to service of the notice by posting and mailing. The Judicial Council has not promulgated a separate form complaint for commercial tenancies; instead, Form 100 is intended to be used for both residential and commercial tenancies. (See, e.g., ¶ 6, f [specifying that paragraph must be completed for residential property, implying that the form generally may be used for both commercial and residential properties].)

Thus, by filling in the portion of the form complaint regarding service, Plaintiff adequately complied with the pleading requirements regarding the service of the notice to cure or quit. (Code of Civ. Proc. § 1166, subd. (a)(5).)

The court emphasizes that a trial Plaintiff will have to prove compliance with all of the requirements under section 1162, subdivision (b)(3), including the exercise of reasonable diligence to find a person of suitable age or discretion before posting and mailing. But, pursuant to section 1166, subd. (a)(5), Plaintiff is not required to specifically allege compliance with that requirement in order to state a valid claim.

In sum, the demurrer is sustained with leave to amend because it does not adequately allege Plaintiff’s standing.

Moving party is ordered to give notice.

Case Number: 20CMUD00076    Hearing Date: March 11, 2021    Dept: A

800 Carson Management v. Nowick 20CMUD00076

Plaintiff’s Motion for Leave to File Plaintiff’s Second Amended Complaint is GRANTED.

Plaintiff 800 Carson Management filed a complaint for unlawful detainer against Defendant Dustin Nowick dba Awakenings regarding commercial real property located at 800 West Carson Street, Unit #35, Torrance, CA 90502. Plaintiff alleges that on 11/15/19, Defendant agreed to rent the subject premises as a term-of-years tenancy pursuant to a written agreement and agreed to pay rent in the amount of $6,500.00 per month on the first of the month.

Plaintiff allegedly served Defendant a three-day notice to cure or quit on 1/3/20, and that Defendant failed to comply with the requirements of the notice. Plaintiff requests damages at the fair rental value of $216.67 per day from 1/3/20 for each day that Defendant remains in possession through entry of judgment, as well as for reasonable attorney fees.

On 7/8/20, the Court granted Defendant’s motion for judgment on the pleadings and granted Plaintiff five days’ leave to file an amended complaint which Plaintiff accomplished on 7/20/20.

On 11/16/20, the Court sustained Defendant’s demurrer to the first amended complaint with five days’ leave to amend. Plaintiff belatedly filed a second amended complaint on 12/2/20.

On 1/21/21, the Court struck the second amended complaint because Plaintiff filed it more than five days after the 11/16/20 hearing. The Court ruled that the demurrer was rendered moot. The Court stated that Plaintiff’s arguments for why leave should be granted to file the second amended complaint late could be raised in a separate motion.

Plaintiff now requests leave to file the second amended complaint that was previously stricken. Plaintiff argues it was filed late due to counsel’s mistake, inadvertence, surprise or excusable neglect. Counsel submitted the SAC on 11/30/20 for filing but the clerk rejected the pleading on 12/2/20 because counsel’s filing selected the incorrect “document type” for e-filing. The clerk accepted the resubmitted SAC on the same day.

Defendant does not dispute that the SAC would have been timely if it had been filed on the day it was submitted to the court and does not dispute that the originally named Plaintiff should be granted leave to file a second amended complaint.

However, Defendant objects to the fact that the name of the Plaintiff has been changed in the new pleading. In the complaint and first amended complaint, the named plaintiff is “800 Carson Management.” In the proposed second amended complaint, Plaintiff is styled “Surya Gupta, trustee of SG Business Trust, dba 800 Carson Management.” Defendant contends that Gupta must seek leave to intervene.

Defendant’s argument is without merit. Leave to amend is proper to correct “a mistake in the name of a party, or a mistake in any other respect … .” Code Civ. Proc. § 473. Except as otherwise provided by statute, “[e]very action must be prosecuted in the name of the real party in interest.” Code Civ. Proc. § 367.

“800 Carson Management” in whose name the complaint was filed, is a fictitious business name. Reply, Exhibit 1. Fictitious business names do not create separate legal entities capable of suing or being sued. Sweetwater Union High School Dist. v. Julian Union Elementary School Dist. (2019) 36 Cal.App.5th 970, 987.

The true owner of 800 Carson Management is S.G. Business Trust, of which Surya Gupta is the Trustee. Reply, Exhibit 1. A trust is not a distinct legal entity apart from its trustees; rather it is a fiduciary relationship with respect to property. Presta v. Tepper (2009) 179 Cal.App.4th 909, 914.

Accordingly, the real party in interest of a trust is the trustee. The trust itself cannot sue or be sued in its own name. Presta at 914.

Therefore, Defendant’s contention that Surya Gupta is not a party to this action is without merit. He or she is the real party in interest as trustee of a trust, whose dba is 800 Carson Management. He or she does not sue in his or her individual capacity. The second amended complaint properly identifies real parties in interest. Accordingly, no prejudice results to Defendant since new parties are not being added.

Moving party is ordered to give notice.

Case Number: 20CMUD00076    Hearing Date: January 21, 2021    Dept: A

# 9. 800 Carson Management v. Dustin Nowick dba Awakenings

Case No.: 20CMUD00076

Matter on calendar for: Demurrer to Plaintiff’s Second Amended Complaint; Motion to Strike Plaintiff’s Second Amended Complaint

Tentative ruling:

1. Background

On January 15, 2020, plaintiff 800 Carson Management filed a complaint for unlawful detainer against defendant Dustin Nowick dba Awakenings. The subject property is located at 800 West Carson Street, Unit #35, Torrance, CA 90502.

On November 16, 2020, the Court sustained Defendant’s demurrer to the first amended complaint with leave to amend. Currently before the Court are defendant’s demurrer to and motion to strike the operative second amended complaint.

1. Standard

   1. Demurrer

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.App.3d 311, 318.) The Court may not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.) Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show that the complaint alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (Code Civ. Proc., § 430.10, subd. (e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.)

Sufficient facts are the essential facts of the case "with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) "Whether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.)

1. Motion to Strike

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of the pleading. (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of the pleading not drawn or filed in conformity with the laws of California ,a court rule, or an order of the court. (Code Civ. Proc., §§ 436, subds. (a)-(b); Stafford v. Schultz (1954) 42 Cal.2d 767, 782 [“matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

1. Analysis

   1. Motion to Strike

Defendant argues that the second amended complaint should be stricken because it was filed late.

The time within which to amend runs from service of notice of the court’s order unless notice is waived in open court and entered in the minutes of the court. (Code Civ. Proc., § 472b.) Service by mail extends the time by five days. (Code Civ. Proc., § 1013, subd. (a).) After expiration of the time allowed the party must file a noticed motion seeking permission to file the amended pleading. (Leader v. Health Indus. Of America, Inc. (2001) 89 Cal.App.4th 603, 612-13.) The opposing party may file a noticed motion to strike an untimely-amended pleading. (Cal. Rules of Court, Rule 3.1320(i).)

The Court sustained defendant’s demurrer to the first amended complaint on November 16, 2020, granting plaintiff five days to amend. On November 17, 2020, defendant filed a Notice of Ruling, stating that plaintiff was served with notice of the demurrer ruling on that date, by U.S. mail. Accordingly, plaintiff had until November 30, 2020 to file an amended complaint. (See Code Civ. Proc., § 1013, subd. (a).) Plaintiff did not file its second amended complaint until December 2, 2020; plaintiff did not seek leave of court to file it.

Plaintiff argues that the late filing should be excused, pursuant to Code of Civil Procedure Section 473(b), due to inadvertence and mistake. This request would need to be made in a properly-filed request for leave to file, rather than in an opposition to defendant’s motion to strike. It cannot be considered in a motion to strike. (Code Civ. Proc., § 437.)

The Court does not reach the other arguments on the motion to strike.

1. Demurrer

The Court’s ruling on the motion to strike moots the demurrer.

1. Ruling

   The motion to strike the second amended complaint is granted. The demurrer is moot.

   Next dates:

   Notice: Defendant to give notice.