EIGHTEEN, LLC VS CALIFIT, INC., ET AL.

Tentative Rulings

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Case Number: *******1419 Hearing Date: October 6, 2021 Dept: T

*******1419 EIGHTEEN V CALIFIT

TENTATIVE RULING

1. MOTION TO COMPEL COMPLIANCE DENIED. THE COURT HAS CORRECTED THE SUBJECT ORDER NUNC PRO TUNC AS THERE WAS NO AUTHORITY FOR THE COURT TO ORDER MONEY TO BE DEPOSITED ON A WRIT OF ATTACHMENT. THE WRIT OF ATTACHMENT HAS BEEN ORDERED AND PLAINTIFF HAS ALL RIGHTS AVAILABLE TO IT UNDER THOSE ATTACHMENT LAWS.

2. THE COURT ORDERS THAT *******1419 AND 21VEUD00592 CONSOLIDATED FOR ALL PURPOSES. THE COURT WILL DISCUSS WHETHER ANY ISSUES IN THE CONSOLIDATED CASES SHOULD BE BIFURCATED AND TRIED FIRST.

3. TRIAL OF 21VEUD00592 IS TO CONTINUED AS FOLLOWS: TRIAL READINESS CONFERENCE SET 11/12/2021 8:30 am AND TRIAL SET 11/15/2021 10 am. PARTIES ARE TO ADVISE WHETHER THEY WISH A JURY TRIAL ON 21VEUD00592. THE CLERK AUTOMATICALLY ASSIGNED A NON-JURY TRIAL DATE TO ALL UD CASES. HOWEVER, DEFENDANT HAS POSTED JURY FEES IN THE UD CASE.

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Case Number: *******1419 Hearing Date: August 26, 2021 Dept: T

Tentative Ruling: 8/26/2021

*******1419 Eighteen v. CaliFit

Motion for Summary Judgment is Denied.

Plaintiff’s Request for Judicial Notice:

1. Grant

2. Grant

3. Grant

4. Grant

Plaintiff’s Objections to Defendant’s Opposition:

1. – 6. Overruled

7. Privileged, lacks foundation, sustained

8. – 37. Overruled

38. Lacks foundation, vague, sustained

39. – 40. Overruled

The court notes that defendants have failed to properly respond to the MSJ and have violated CCP section 437c(b)(3) which states as follows:

(3) The opposition papers shall include a separate statement that responds to each of the material facts contended by the moving party to be undisputed, indicating if the opposing party agrees or disagrees that those facts are undisputed. The statement also shall set forth plainly and concisely any other material facts the opposing party contends are disputed. Each material fact contended by the opposing party to be disputed shall be followed by a reference to the supporting evidence. Failure to comply with this requirement of a separate statement may constitute a sufficient ground, in the court’s discretion, for granting the motion.

Defendants filed no separate statement responding to each of the “material facts” stated by plaintiff nor did they submit their own material facts in dispute although they did submit declarations in opposition to the motion. However, as the declarations were reviewed and considered by the plaintiff, there is no discernable prejudice.

Here, the court finds that the moving party has failed to establish by admissible evidence that defendant Caramanis and Patin are proper parties to this case. Accordingly, the motion is denied as to those defendants.

Furthermore, the court finds that moving party has failed to establish by admissible evidence that as a matter of law defendant has no defenses available under "the Covid-19 pandemic and the resulting government orders and regulations, including but not limited to the Los Angeles County Temporary Eviction Moratorium for Commercial Tenants..."

The operative Answer was filed on 1/4/2021. The affirmative defenses within the Answer define the issues for the MSJ. The only affirmative defense in the Answer which refers to any Covid-19 "resulting government orders and regulations" is the Los Angeles County Temporary Eviction Moratorium for Commercial Tenants. No other orders or regulations are cited.

Exhibit 4 to the Plaintiff’s Request for Judicial Notice sets forth the relevant County Moratorium. It states, in pertinent part:

Commercial Tenants who are unable to pay rent incurred during the Moratorium Period are protected from eviction under this Moratorium, so long as the reason for nonpayment is Financial Impacts Related to COVID-19, and the commercial Tenant provides notice to the Landlord to this effect within the time-frame specified in this Paragraph V.

"Financial Impacts" means any of the following: 1. Substantial loss of household income caused by the COVID-19 pandemic; 2. Loss of revenue or business by Tenants due to business closure; 3. Increased costs; 4. Reduced revenues or other similar reasons impacting a Tenant\'s ability to pay rent due; 5. Loss of compensable hours of work or wages, layoffs; or 6. Extraordinary out-of-pocket medical expenses.”

Plaintiff has failed to show by admissible evidence and as a matter of law that defendant did not suffer loss of revenue or business due to business closure or increased costs or reduced revenues or other similar reasons impacting a Tenant\'s ability to pay rent due, and was not unable to pay rent due to circumstances related to the Covid-19 pandemic. In other words, there is a triable issue of fact as to whether defendant was unable to pay rent due to circumstances related to the Covid-19 pandemic under the County Moratorium.

Plaintiff’s separate statement admits that “[p]resumably, CaliFit’s failure to pay their April 2020 rent was due to the Covid-19 shutdowns.” Decl. of Mr. Kobi at paragraph 10. This, alone, is sufficient to deny the motion. However, there are a number of the “facts” set forth in the separate statement are unsupported by any evidence. See, e.g., paragraphs 19, 29, 34 and 39. Some of the “facts” are supported by a declaration that doesn’t set forth the foundation for the statement. See, e.g., paragraphs , 8, 9, and 10.

Additionally, it is a matter of general notice to the court that during periods during when rent was due in this case, California was under emergency stay at home orders, and gyms and similar businesses were ordered to be closed. This is confirmed in the declaration of Mr. Patin that defendant was forced to shut down its indoor operations.

For these reasons, the motion is denied.

Finally, the court’s order granting of the application for Writ of Attachment was solely for the purpose of determining whether the writ should issue. As part of that hearing, the court determined that plaintiff had shown, on the evidence provided at that time, that there was a probability of success in the case. The court specifically did not rule that its findings in the hearing on the application for writ was binding on any other aspect of the case and specifically preserved the defendants’ right to proceed on its affirmative defenses.

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Case Number: *******1419 Hearing Date: July 26, 2021 Dept: T

EIGHTEEN, LLC; et. al.; Plaintiff, vs. CALIFIT, INC.; et. al. Defendants.

CASE NO: 19STCV42541 TENTATIVE RULING ON DEFENDANTS’ MOTION FOR STAY OF PROCEEDINGS Dept. T 8:30 a.m. Hearing date: 7/26/2021

[TENTATIVE] ORDER: The Defendants’ Motion for Stay of Proceedings is CONDITIONALLY GRANTED upon Defendant Califit, Inc. filing of an undertaking.

1. INTRODUCTION

Plaintiff Eighteen, LLC ("Plaintiff") filed this unlawful detainer action on December 2, 2020, against defendants Califit, Inc. ("Califit") Jason Caramanis, and Pierre Patinwiltz (collectively "Defendants").

On April 12, 2021, the court granted Plaintiff\'s application for a right to attach order and filed a Right to Attach Order and Order for Issuance of Writ of Attachment against defendant Califit. Defendant Califit was ordered to deposit $109,791.99 with the Clerk of Court upon Plaintiff\'s filing of an undertaking in the amount of $10,000.00.

On May 3, 2021, Defendant Califit filed a Notice of Appeal that was later abandoned pursuant to a filing dated May 11, 2021.

Defendant Califit filed a second Notice of Appeal on May 12, 2021, as to the April 12, 2021, Order on Submitted Matter of Hearing for Right to Attach Order and the April 12, 2021, Right to Attach Order After Hearing and Order for Issuance of Writ of Attachment. The Notice of Filing of Appeal was filed on May 24, 2021.

On June 22, 2021, the court issued an Order to Show Cause re: Contempt. The court order directed Defendants Califit, Inc., Jason Caramanis, and Pierre Patinwiltz to show cause why they should not be held in contempt of the Court\'s April 12, 2021, Order.

Defendants filed the instant Motion for Stay of Proceedings Pending Appeal on June 28, 2021. Plaintiff opposes.

2. DISCUSSION

Defendants move the court for an order staying the enforcement of the two April 12, 2021, orders pending appeal. Defendants cite Code of Civil Procedure sections 916 and 1176.

Code of Civil Procedure Section 916

Under section 916, "[e]xcept as provided in Sections 917.1 to 917.9…and 116.810, the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order." (Cal. Civ. Proc. ; 916(a).) The court retains "jurisdiction of proceedings related to the enforcement of the judgment as well as any other matter embraced in the action and not affected by the judgment or order appealed from." (Cal. Civ. Proc. ; 916(b).)

Code of Civil Procedure section 917.65 states the following:

The perfecting of an appeal shall not stay enforcement of a right to attach order unless an undertaking is given. The undertaking shall be in the amount specified in the right to attach order as the amount to be secured by the attachment. The undertaking shall be on condition that if the right to attach order is not reversed and the plaintiff recovers judgment in the action in which the right to attach order was issued, the appellant shall pay the amount of the judgment, together with any interest which may have accrued. The liability on the undertaking may be enforced if the judgment is not paid within 30 days after it becomes final. If a surety on the undertaking pays the judgment, either with or without action, the surety is substituted to the rights of the creditor and is entitled to control, enforce, and satisfy the judgment, in all respects as if the surety had recovered the judgment.

(Cal. Civ. Proc. ; 917.65, emphasis added.)

Defendants contend that they are entitled to an automatic stay of proceedings enforcing the April 12, 2021, orders. Defendants cite Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180 as further support.

The question presented to the Varian Medical Systems, Inc. ("Varian") court asked whether the perfecting of an appeal from the denial of a special motion to strike automatically stayed all further trial court proceedings on the merits upon the causes of action affected by the motion. (Varian at 186.) The appellate court found that it did. (Id.)

While this case does not concern an Anti-SLAPP motion, the court discussed Code of Civil Procedure section 916.

The court explained that "the purpose of the automatic stay provision of section 916, subdivision (a) \'is to protect the appellate court\'s jurisdiction by preserving the status quo until the appeal is decided. The [automatic stay] prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.\'" (Id. at 189.) Thus, all proceedings "upon the matters or embraced in or affected by" the appeal must be stayed under section 916, subdivision (a). (Id.)

To be stayed, the proceeding "must directly or indirectly seek to \'enforce, vacate, or modify [the] appealed judgment or order.\'" (Id.) "By contrast, an appeal does not stay proceedings on \'ancillary or collateral matters which do not affect the judgment [or order] on appeal\' even though the proceedings may render the appeal moot." (Id. at 191.)

Defendants contend that the contempt proceeding scheduled for August 26, 2021, and the Right to Attach Order directed at the sheriff to attach Defendant Califit\'s bank account are both affected by the appeal. Defendants assert that their noncompliance with the April 12, 2021, Order is based on "Defendants\' good faith belief that the order is invalid and beyond the California attachment laws." (Motion, 3:13-15.)

Defendants argue that the purpose of Defendant Califit\'s appeal is to avoid the two orders being enforced, i.e., to avoid the contempt proceeding and to avoid the sheriff attaching Defendant Califit\'s bank account.

In opposition, Plaintiff points to the language of Section 917.65, which expressly states that "[t]he perfecting of an appeal shall not stay the enforcement of a right to attach order unless an undertaking is given." (Cal. Civ. Proc. ; 917.65, full language above.) Plaintiff asserts that the exception to section 916 still requires that Defendant Califit give an undertaking in the amount stated in the Attachment Order.

Further, Plaintiff distinguishes Varian, noting that Varian concerned an Anti-SLAPP motion. Plaintiff repeats the sentiment that "an appeal does not stay proceedings on \'ancillary or collateral matters which do not affect the judgment [or order] on appeal\' even though the proceedings may render the appeal moot." (Gridley v. Gridley (2008) 166 Cal.App.4th 1562, 1587.)

The language "[t]he undertaking shall be on condition that if the right to attach order is not reversed and the plaintiff recovers judgment in the action in which the right to attach order was issued, the appellant shall pay the amount of the judgment, together with any interest which may have accrued..." indicates that the undertaking is a condition of the stay/if the order is or is not reversed.

Plaintiff contends that the contempt proceeding is an "ancillary matter" that pertains to the willful violation of a court order, and is a provisional remedy not effecting the overall disposition of the case. Plaintiff argues that even if the appeal is successful, Defendants will still have willfully disobeyed the order at the time it was valid and enforceable.

In reply, Defendants maintain that the court has the authority to issue a stay under Varian without any undertaking.

The court finds that it has the authority to issue a stay here, but the stay must still require Defendants to provide an undertaking. (Cal. Civ. Proc. ;; 916, 917.65.) The perfecting of an appeal stays proceedings under Section 916 "[e]xcept as provided in Sections 917.1 to 917.9…" (Cal. Civ. Proc. ; 916.) This range of provisions includes Section 917.65, which does not stay proceedings of a right to attach order unless an undertaking is given.

The undertaking would consist of "the amount specified in the right to attach order as the amount to be secured by the attachment." (Cal. Civ. Proc. ; 917.65.) The attachment order here orders Defendant Califit to deposit $109,791.99 with the court. Such deposit would moot the OSC re: contempt.

However, Defendants appear to move the Court to avoid the filing of such a deposit. Accordingly, the court discusses if it has authority to stay the proceeding without this attachment under Code of Civil Procedure section 1176.

Code of Civil Procedure section 1176

Alternatively, and in addition to the above, Defendants argue that section 1176 of Code of Civil Procedure supports their motion for a stay.

"Section 1178 states that the general Code of Civil procedure sections governing stays of enforcement in civil appeals (; 916 - 923) apply to appeals in unlawful detainer proceedings, except insofar as they are inconsistent with the unlawful detainer provisions (; 1161-1179a)." (Selma Auto Mall II v. Appellate Department (1996) 44 Cal.App.4th 1672, 1681.) "The statutory language [in Section 1176 subdivision (a)] vests the court with discretion to impose conditions on granting the stay." (Id. at 1682.)

Code of Civil Procedure section 1176 acknowledges that a defendant\'s appeal "shall not automatically stay proceedings upon the judgment." (Cal. Civ. Proc. ; 1176(a).) However, the "stay of judgment shall be granted when the court finds that the moving party will suffer extreme hardship in the absence of a stay and that the nonmoving party will not be irreparably injured by its issuance." (Cal. Civ. Proc. ; 1176(a).) Upon a denial of the motion to stay, the defendant may file a petition for an extraordinary writ.

Defendants assert that the present contempt order presents hardship. Defendants state that the contempt order may lead to fines, community service, or jail time, as contempt of court is a misdemeanor. (Cal. Pen. Code ; 166(a).) Without the stay, Defendants contend that they could be found to be in contempt and faced the penalties for such contempt for an order that the appellate court may invalidate on appeal. This, according to Defendants, poses extreme hardship on Defendants that would be unjust.

Concerning the Right to Attach order directed at the sheriff, Defendants argue that the enforcement of this order will put Defendant Califit out of business. Thus, Defendants request the enforcement of the two April 12, 2021, orders be stayed pending resolution of the appeal.

Plaintiff denies that Defendants will suffer extreme hardship, arguing that Defendants merely recite the procedures following enforcement of the Attachment Order and the possible outcomes of contempt proceedings.

Further, Plaintiff asserts that it is the party that will be irreparably injured by a stay. Plaintiff argues that $119,293.15 of back rent is currently owed, which has burdened Plaintiff and puts the property at risk of foreclosure.

In reply, Defendant asserts that Plaintiff\'s arguments are inapplicable, and the focus should be on whether the stay would protect Defendants against the potentially unjust and unfair contempt order and to avoid having the sheriff levy a bank account pursuant to that order.

Under this provision, a stay may be granted upon a finding that "the moving party will suffer extreme hardship in the absence of a stay and that the nonmoving party will not be irreparably injured by its issuance." (Cal. Civ. Proc. ; 1176(a), emphasis added.)

Both parties assert hardship and irreparable injury. Defendants argue that the enforcement of the attachment may put Defendant out of business, while Plaintiff asserts that without the continuation of the case, there is a risk of foreclosure or of the premises being sold below market price.

The language of the statute requires that the Court find both that the moving party will suffer extreme hardship and the nonmoving party will not face irreparable injury. While the Court finds that the possibility of losing its business is an extreme hardship, the Court also finds that Plaintiff may be irreparably injured by the issuance of a stay. Plaintiff asserts that it is owed $119,293.15 of back rent "which has placed a tremendous burden on plaintiff and the risk of foreclosure of the premises or forced sale of the building below market price." (Opp. 7:4-6.) This is irreparable injury.

Thus, the Court declines to issue a stay under Code of Civil Procedure section 1176 subdivision (a).

However, as described above, the Court may issue a stay under Code of Civil Procedure section 916, subject to section 917.65 on the condition of Defendants\' filing an undertaking in the amount specified in the attachment order, i.e., $109,791.99.

Code of Civil Procedure section 1170.5

In opposition, Plaintiff cites section 1170.5 subdivision (c). The court has the authority, "[i]f trial is not held within the time specified in this section…, upon finding that there is a reasonable probability that the plaintiff will prevail in the action, [to] determine the amount of damages…to be suffered by the plaintiff by reason of the extension, and shall issue an order requiring the defendant to pay that amount into court as the rent would have otherwise become due and payable or into an escrow designated by the court for so long as the defendant remains in possession pending the termination of the action." (Cal. Civ. Proc. ; 1170.5(c).)

Plaintiff argues that Defendant\'s opposition relies on the state and county moratoriums, providing that tenants may not be evicted for nonpayment of rent if caused by the COVID-19 pandemic. Plaintiff contends that the evidence presented in this case proves that Defendants do not meet the standards for protection under this moratorium, and that Defendants are capable of paying the rent but choose not to.

Plaintiff does not assert any damages that the court should order defendant pay into an escrow. In reply, Defendant argues that this is an improper issue because it was not discussed in the moving papers.

The Court finds that this issue is mooted by its denial in part of the motion requiring Defendant to file an undertaking, described above.

Defendants\' Motion for Stay of Proceedings is conditionally GRANTED upon Defendants\' filing of an undertaking.

IT IS SO ORDERED, CLERK TO GIVE NOTICE.

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Case Number: *******1419 Hearing Date: July 9, 2021 Dept: T

TENTATIVE RULING: MOTION FOR SUMMARY JUDGMENT FILED BY PLAINTIFF

*******1419

EIGHTEEN LLC V CALIFIT

STAY HEARING ON MSJ PENDING APPEAL

THIS MOTION SPECIFICALLY ADDRESSES ISSUES WHICH ARE ON APPEAL.

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Case Number: *******1419    Hearing Date: April 12, 2021    Dept: T

*******1419 EIGHTEEN V CALIFIT

TENTATIVE RULING ON PLAINTIFF'S APPLICATION FOR PREJUDGMENT RIGHT TO ATTACH ORDER WILL BE ANNOUNCED AT THE TIME OF THE HEARING ON 4/12/2021 AT 10 A.M.

Case Number: *******1419    Hearing Date: December 22, 2020    Dept: T

TENTATIVE RULING

*******1419

EIGHTEEN, LLC V CALIFIT

EX PARTE APPLICATION IS GRANTED

DEMURRER IS OVERRULED.  5 DAYS TO ANSWER.

THE ALLEGATIONS OF THE COMPLAINT ARE SUFFICIENT TO A STATE CAUSE OF ACTION.  THE ISSUE OF WHETHER THE EVICTION MORATORIUM DOES OR DOES NOT APPLY TO THESE PARTIES ARE BASED ON FACTUAL DETERMINATIONS WHICH CANNOT BE MADE AS A MATTER OF LAW AT THE TIME OF DEMURRER.