Opinion
B298573
05-26-2020
SOFIA VISHNEVETSKA, et al., Plaintiffs and Respondents, v. SUNSET PLACE APTS., INC., et al., Defendants and Appellants.
The Cameron Law Firm, Parry G. Cameron and James K. Autrey for Defendants and Appellants. Law Office of Robert Starr and Adam Rose for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC714700) APPEAL from an order of the Superior Court of Los Angeles County, Elizabeth Allen White, Judge. Affirmed. The Cameron Law Firm, Parry G. Cameron and James K. Autrey for Defendants and Appellants. Law Office of Robert Starr and Adam Rose for Plaintiffs and Respondents.
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Defendants Sunset Place Apts., Inc. and J.K. Residential Services, Inc. (collectively, Sunset) appeal the trial court's denial of their motion to compel arbitration of landlord-tenant claims brought by plaintiffs Sofia Vishnevetska, Emma Hernandez, Hiyun Ki, William McCullough, Brooke McCullough, and William Renfroe (collectively, Plaintiffs). We have jurisdiction pursuant to Code of Civil Procedure section 1294, subdivision (a). As we agree with the trial court that the arbitration agreement Sunset seeks to invoke is not enforceable under California law, we affirm.
BACKGROUND
Plaintiffs filed this action on July 20, 2018, against Sunset alleging causes of action for breach of warranty of habitability, constructive eviction, negligence per se, and wrongful retention of their security deposits in violation of Civil Code section 1950.5. The complaint alleges that on November 25, 2017, a fire broke out at the building where all the Plaintiffs were tenants. It appeared to Plaintiffs that the building did not contain adequate smoke detectors. After the fire, the building's condition was not remediated, resulting in a constructive eviction. When Plaintiffs moved out, Sunset would not refund their security deposits.
All unspecified statutory references are to the Civil Code.
Sunset answered the complaint on September 26, 2018. On March 13, 2019, Sunset filed a motion to compel arbitration based on language in the residential lease agreements signed by Plaintiffs. The arbitration language on which Sunset sought to rely on came in two pieces. First, section XVIII of the residential lease agreement stated as follows: "Should any dispute arise between LANDLORD and TENANT relating to any matter (excluding an Unlawful Detainer case or other case, filed by LANDLORD, for possession, arrearages under this LEASE, as such may constitute past due rent/fees/costs and associated damages), such dispute shall be submitted to Arbitration instead of litigation in Court. The specific terms of Arbitration are stated in Addendum 'B', receipt of which is hereby acknowledged by TENANT." Sunset submitted copies of residential leases applicable to all of the Plaintiffs, showing that each had initialed the above paragraph.
Sunset also submitted an unsigned document purporting to be the "Addendum B" referred to in section XVIII of the lease. The declaration signed by Sunset's counsel stated he was attaching "a true and correct copy of Addendum B which sets forth additional specifics. Unfortunately, Defendants could not find a signed copy of Addendum B in the Plaintiffs['] tenant file. However, Plaintiffs acknowledged receiving Addendum B by placing their initials under paragraph XVIII." Counsel's basis for purporting to know the attached document was the Addendum in question was not explained.
The submitted Addendum B is three pages long, single-spaced, with places for both landlord and tenant to initial on each page and a signature block at the end. No initials appear on any of the pages, nor are there any signatures at the end. The document recites in its initial paragraph: "The purpose of this Agreement is to establish final and binding arbitration for all disputes arising out of TENANT'S relationship with LANDLORD[ ] (excepting eviction proceedings and/or collection of rents), including without limitation TENANT's residency and lease rights and obligations arising out of the lease for residential housing. . . ." The remaining language includes procedures for initiating private arbitration, including that only "[l]imited discovery shall be permitted pursuant to the then applicable arbitration rules of JAMS," and states that the parties "KNOWINGLY AND VOLUNTARILY WAIVE ANY CONSTITUTIONAL RIGIIT TO HAVE ANY DISPUTE BETWEEN THEM DECIDED BY A COURT OF LAW AND/OR BY A JURY IN COURT."
In opposition to the motion to compel arbitration, Plaintiffs argued that (a) Sunset had waived the right to arbitrate by waiting so long to file the motion to compel, (b) the arbitration clause violated section 1953, subdivision (a)(4), which makes voidable any lease provision that purports to waive a tenant's rights in litigation, (c) the arbitration clause violated section 1942.1, which imposes strict form and content requirements on any agreement to arbitrate tenantability claims, and (d) Sunset had not properly established the existence and terms of the purported agreement to arbitrate given evidentiary deficiencies with Addendum B.
On May 14, 2019, the trial court denied the motion to compel arbitration. The trial court held that Sunset had not waived the right to seek arbitration. Instead, the trial court denied arbitration based on the statutory arguments made by Plaintiffs, relying on sections 1942.1 and 1953 as well as the interpretation of those two statutes in Jaramillo v. JH Real Estate Partners, Inc. (2003) 111 Cal.App.4th 394 (Jaramillo).
DISCUSSION
A. Standard of Review
" 'There is no uniform standard of review for evaluating an order denying a motion to compel arbitration. [Citation.] If the court's order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court's denial rests solely on a decision of law, then a de novo standard of review is employed. [Citations.]' [Citation.] Interpreting a written document to determine whether it is an enforceable arbitration agreement is a question of law subject to de novo review when the parties do not offer conflicting extrinsic evidence regarding the document's meaning. [Citation.]" (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 60.) As we interpret the lease and its addendum to determine whether they constitute an enforceable agreement to arbitrate, our review here is de novo.
B. The Agreement at Issue Violates California Law Concerning the Arbitration of Landlord-tenant Disputes
California favors the enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.) The Legislature, however, has specifically carved out the landlord-tenant relationship from the broad general rule favoring arbitration and subjected it to additional strictures.
Section 1953 provides, in pertinent part, that "[a]ny provision of a lease or rental agreement of a dwelling by which the lessee agrees to modify or waive any of the following rights shall be void as contrary to public policy: [¶] . . . [¶] (4) His procedural rights in litigation in any action involving his rights and obligations as a tenant." (Id., subd. (a)(4).) This language means that "the tenant cannot waive in advance, in a residential lease agreement, the right to conduct discovery and to have a jury trial in any affirmative action against the landlord that involves the tenant's rights or obligations." (Jaramillo, supra, 111 Cal.App.4th at p. 404, fn. omitted.)
Section 1942.1 provides, in pertinent part, that "[a]ny agreement by a lessee of a dwelling waiving or modifying his rights under Section 1941 or 1942 [to a tenantable dwelling] shall be void as contrary to public policy with respect to any condition which renders the premises untenantable . . . . [¶] The lessor and lessee may, if an agreement is in writing, set forth the provisions of Sections 1941 to 1942.1, inclusive, and provide that any controversy relating to a condition of the premises claimed to make them untenantable may by application of either party be submitted to arbitration . . . ."
As section 1942.1 could arguably be read to permit agreements to arbitrate prohibited by section 1953, subdivision (a)(4), Jaramillo examined both provisions and harmonized them as follows. Arbitration provisions cannot be included within a residential lease, but a landlord and tenant can enter an entirely separate arbitration agreement complying with the formal requirements of section 1942.1 and directed solely to "tenantability" claims without running afoul of section 1953, subdivision (a)(4). (Jaramillo, supra, 111 Cal.App.4th at p. 404.)
Sunset argues that Addendum B should be treated as the type of "separate agreement" that Jaramillo held permissible. This argument fails. First, Addendum B is not a "separate" agreement; it was part and parcel of the arbitration provision in the residential leases with Plaintiffs. Section 1953, subdivision (a)(4) thus applies to void the arbitration agreement sought to be enforced by Sunset in this case. Plaintiffs' complaint is an affirmative action against a landlord to enforce tenant rights and obligations, the arbitration provision at issue is contained in the lease agreement, and that provision waives full discovery rights and the right to a jury trial.
Second, even if we considered Addendum B to be an agreement to arbitrate separate from the lease, Addendum B does not set forth any of the required statutory language specified by section 1942.1; it does not, for example, "set forth the provisions of Sections 1941 to 1942.1, inclusive" as required by section 1942.1. Moreover, the arbitration provision in Addendum B is not confined solely to the subject matter of "tenantability" as required by section 1942.1; instead, it extends beyond tenantability to all landlord-tenant disputes except eviction proceedings and/or collection of rents. Plaintiffs' complaint here includes non-tenantability claims, such as the return of their security deposits, as to which the exemption provided by section 1942.1 does not extend.
Because the arbitration provision sought to be enforced violates both section 1953, subdivision (a)(4), and section 1942.1, the trial court properly denied Sunset's motion to compel arbitration.
DISPOSITION
The order denying the motion to compel arbitration is affirmed. Plaintiffs shall recover their costs on appeal.
NOT TO BE PUBLISHED
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. --------
CHANEY, J.
BENDIX, Acting P. J.