Opinion
B296831
05-06-2020
ELENA TOBON DE HUERTA et al., Plaintiffs and Respondents, v. 11121 ARMINTA STREET, INC. et al., Defendants and Appellants.
The Cameron Law Firm, Parry G. Cameron, James K. Autrey, for Defendants and Appellants. Castelblanco Law Group, Eric E. Castelblanco, Shilpa Anand, 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC700651) APPEAL from an order of the Superior Court of Los Angeles County, Patricia D. Nieto, Judge. Affirmed. The Cameron Law Firm, Parry G. Cameron, James K. Autrey, for Defendants and Appellants. Castelblanco Law Group, Eric E. Castelblanco, Shilpa Anand, for Plaintiffs and Respondents.
____________________
Defendants and appellants 11121 Arminta Street, Inc., J.K. Residential Services, Inc., and Anil Mehta (landlords) appeal the trial court's order denying their motion to compel arbitration, based on an arbitration clause (the arbitration clause) contained in a residential lease (the lease). (Code Civ. Proc, § 1294, subd (a).) The underlying lawsuit, which alleges tort and statutory causes of action related to the habitability of an apartment complex, was brought by plaintiffs and appellants Elena Tobon De Huerta and other tenants (tenants), who resided at the apartment complex when they brought suit.
The multiple leases at issue are identical in essentials, so we refer to them collectively as "the lease" for simplicity.
The trial court denied landlords' motion to compel, concluding that the arbitration clause was contrary to public policy and void under Civil Code section 1953, subdivision (a)(4), and Jaramillo v. JH Real Estate Partners, Inc. (2003) 111 Cal.App.4th 394 (Jaramillo).
All further statutory references are to the Civil Code unless otherwise indicated.
On appeal, landlords contend that the arbitration clause is valid and enforceable under Jaramillo and that the remaining objections to arbitration that tenants raised in the trial court are without merit.
We conclude that the arbitration clause is void and affirm the trial court's order.
PROCEDURAL HISTORY
Tenants are individuals who reside at the apartment complex, which landlords own, manage, and control. The majority of tenants are not signatories to the lease. Most of the signatory tenants negotiated the terms of their tenancy in Spanish, although the lease is written in English.
Tenants allege that none of the landlords are signatories to the lease in their statement of facts, but do not contend that this is a basis for finding the arbitration clause unenforceable.
The lease contains a section entitled "Indemnification and Liability," which sets forth "Limitations on LANDLORD's Liability and Indemnification by Resident." The arbitration clause at issue is contained in this section, under "C. Other Limitations." It states:
"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 rents/fees/costs and associated damages), such dispute shall be submitted to Arbitration instead of litigated in Court. The specific terms of Arbitration are stated in Addendum 'B', receipt of which is hereby acknowledged by TENANT."
A space for "TENANT initials" follows the arbitration clause. The signatory tenants each signed their initials below the arbitration clause. Multiple clauses within the leases required initialing, and were initialed by the signatory tenants.
Tenants filed a complaint against landlords on April 3, 2018, alleging tort and statutory causes of action relating to habitability. Tenants claimed that landlords failed to timely abate known substandard housing conditions, including structural deficiencies, defective plumbing, flooring, and weatherproofing, and infestations of cockroaches and bedbugs. Landlords answered on June 25, 2018. On December 19, 2018, tenants filed a first amended complaint, naming an additional tenant as a plaintiff.
The court's March 21, 2019 minute order incorrectly states that the complaint was filed on February 26, 2018.
The court's March 21, 2019 minute order incorrectly states that the answer was filed on May 25, 2018.
The first amended complaint is not part of the record on appeal. We are taking the filing date from the court's March 21, 2019 minute order. The parties agree that the first amended complaint differs from the original complaint only in that an additional plaintiff was added.
On February 22, 2019, landlords filed the motion to compel arbitration against all but two named plaintiff- tenants, on the basis that they agreed to arbitrate any dispute with landlords by initialing the arbitration clause and signing the lease. Landlords attached the executed leases, and an e-mail exchange with tenants' counsel stating that tenants were unwilling to arbitrate the matter. Addendum "B," referenced in the arbitration clause, was not filed with the motion to compel.
Tenants opposed the motion on March 8, 2019. They argued that (1) the arbitration clause was invalid and unenforceable because it was contrary to public policy and procedurally and substantively unconscionable, (2) landlords waived the right to compel arbitration, and (3) non-signatory tenants were not bound by the alleged arbitration agreement, which could result in conflicting rulings. Tenants attached a declaration of counsel, as well as their individual declarations, in support of the opposition.
Landlords filed an acerbic reply on March 18, 2019, claiming that there was no precedent supporting tenants' legal position, and generally refuting tenants' arguments. It alleged, among other things, that tenants "cited inapposite cases and incorrectly paraphrased statutes, erroneously stated what they would like the law to state, though it clearly does not, and slickly attempted to divert the court's attention from the strong, unchallenged points and authorities in the [motion to compel], which is a 'favored' motion, according to our state (1) Legislature, (2) Supreme Court and (3) Appellate Courts." Landlords attached an unsigned document purported to be Addendum "B," tenants' rental applications, and the declaration of property manager Jasmine Lopez stating that the lease was negotiated solely in English.
The trial court heard argument on March 21, 2019, and denied the motion to compel arbitration. In a written ruling, the trial court noted that landlords were mistaken in their assertions that tenants' claims were not supported by law. The trial court cited section 1953, subdivision (a)(4), which provides, "[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." The court additionally cited Jaramillo, in which the court held that "a tenant of residential premises cannot validly agree, in a residential lease agreement, to binding arbitration to resolve disputes regarding his or her rights and obligations as a tenant." (Jaramillo, supra, 111 Cal.App.4th at p. 404, fn. omittted.) In conformance with precedent, the trial court found that the arbitration clause contained in the lease, which inherently required waiver of the right to a jury trial, and thereby limited tenants' "procedural rights in litigation involving their rights as tenants," was void.
No court reporter was present at the hearing.
Landlords timely appealed.
DISCUSSION
Preliminarily, we conclude that the record on appeal, which includes the lease and the court's March 21, 2019 minute order detailing the basis for its ruling, is adequate for our review. Although landlords make multiple arguments in support of their position that the trial court erred in denying their motion to compel arbitration, we need only address the legal question of whether an arbitration clause contained in a residential lease agreement is valid and enforceable to reach a disposition. As the parties do not dispute the language of the arbitration clause or that the arbitration clause was contained within a residential lease, the issue is a pure question of law, which we review de novo. (Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 707, quoting Gravillis v. Coldwell Banker Residential Brokerage Co. (2006) 143 Cal.App.4th 761, 771 ["[w]hen 'the language of an arbitration provision is not in dispute, the trial court's decision as to arbitrability is subject to de novo review'"].) We independently reach the same conclusion as the trial court, and affirm the order denying landlords' motion to compel arbitration.
The resolution of this matter rests upon our reading of Jaramillo, supra, 111 Cal.App.4th 394, and its interpretation of section 1953, subdivision (a)(4), which landlords assert the trial court misapprehended.
In Jaramillo, the plaintiff tenants filed suit against the defendant landlords for general negligence, intentional tort, premises liability, breach of contract, breach of the implied warranty of habitability, and unfair business practices and false and deceptive advertising as a result of defendants' refusal to abate "'an unsafe, unsanitary and dangerous condition due to the presence of mold, mold spores, mycotoxins, fungus, and bacteria [in plaintiffs' rental unit].'" (Jaramillo, supra, 111 Cal.App.4th at p. 397.) Defendants moved to compel arbitration based on an arbitration clause in the rental agreement. (Id. at pp. 397-398.)
In ruling on the motion to compel arbitration, the Jaramillo court considered whether section 1953, subdivision (a)(4), rendered an arbitration clause in a residential lease void as contrary to public policy. (Jaramillo, supra, 111 Cal.App.4th at p. 396.) The Jaramillo court's determination involved a statutory analysis of the interplay between section 1953, subdivision (a)(4), and section 1942.1. (Id. at pp. 401-403.)
"Section 1942.1 . . . was enacted in 1970 (Stats. 1970, ch. 1280, § 4, p. 2316) as part of a statutory scheme imposing stricter standards of 'tenantability' (see § 1941.1; Henrioulle v. Marin Ventures, Inc. (1978) 20 Cal.3d 512, 518) . . . ." (Jaramillo, supra, 111 Cal.App.4th at pp. 401-402.) Section 1942.1 provides: "Any agreement by a lessee of a dwelling waiving or modifying his rights under Section 1941 or 1942 shall be void as contrary to public policy with respect to any condition which renders the premises untenantable, except that the lessor and the lessee may agree that the lessee shall undertake to improve, repair or maintain all or stipulated portions of the dwelling as part of the consideration for rental.
"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, pursuant to the provisions of Title 9 (commencing with Section 1280), Part 3 of the Code of Civil Procedure, and that the costs of such arbitration shall be apportioned by the arbitrator between the parties." (§ 1942.1.)
Section 1941 provides, in relevant part, "[t]he lessor of a building intended for the occupation of human beings must, in the absence of an agreement to the contrary, put it into a condition fit for such occupation, and repair all subsequent dilapidations thereof, which render it untenantable . . . ." Section 1942 addresses the extent of a tenant's rights to repair dilapidations rendering a premises untenantable, and to offset the cost against rent due, or to vacate the premises and to be discharged from the rent obligation. --------
Section 1953, which was subsequently enacted in 1975 (Stats. 1975, ch. 302, § 1, p. 749), mandates that: "(a) Any 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."
The Jaramillo court recognized that, "despite the strong public policy favoring arbitration agreements, the California Arbitration Act 'does not prevent our Legislature from selectively prohibiting arbitration in certain areas.' [Citation.]" (Jaramillo, supra, 111 Cal.App.4th at p. 403.) It emphasized that although section 1953 did not expressly address arbitration, "running throughout the legislative history is a profound concern with the generally weaker bargaining position of tenants as compared to landlords and leverage a landlord may exert by making the availability of rental housing contingent upon the waiver of rights." (Ibid.)
The Jaramillo court held that section 1953 precluded an arbitration provision regarding disputes over tenantability in a residential lease, because such a provision would constitute a waiver of jury trial, one of the lessee's "'procedural rights in litigation in any action involving his rights and obligations as a tenant.'" (Jaramillo, supra, 111 Cal.App.4th at pp. 403-404.) The court concluded, however, that "nothing in section 1953 precludes a tenant of residential premises and the tenant's landlord from entering into a separate agreement to arbitrate that is entirely independent of any lease agreement. Certainly, section 1942.1 expressly authorizes a written agreement to arbitrate controversies 'relating to a condition of the premises claimed to make them untenantable.' We think that the most reasonable interpretation of section 1953, subdivision (a)(4), is that it establishes the general rule that a tenant of residential premises cannot validly agree, in a residential lease agreement, to binding arbitration to resolve disputes regarding his or her rights and obligations as a tenant." (Id. at p. 404, fn. omitted.) The court declined to resolve "whether section 1942.1 establishes an exception to section 1953, subdivision (a)(4), so that a written residential rental agreement may validly provide for mandatory binding arbitration of 'tenantability' disputes or whether section 1953 controls residential lease agreements and section 1942.1 merely makes clear written arbitration agreements regarding 'tenantability' disputes are not void as against public policy under that section but are permissible as otherwise permitted by law." (Id. at p. 404, fn. 6.) Importantly, the court stated that "the arbitration provision at issue here was not so narrow in scope and did not 'set forth the provisions of Sections 1941 to 1942.1, inclusive.' (§ 1942.1.)" (Ibid.)
The facts before us are analogous: landlords seek to compel arbitration based on an arbitration clause contained in a residential lease, which is not confined to tenantability disputes and does not "set forth the provisions of Sections 1941 to 1942.1, inclusive" as section 1942.1 requires. We agree with the well-reasoned opinion of our sister court that under these circumstances an arbitration clause is void.
DISPOSITION
We affirm the trial court's order denying the motion to compel arbitration. Defendants and appellants 11121 Arminta Street, Inc., J.K. Residential Services, Inc., and Anil Mehta shall bear costs on appeal.
MOOR, J.
We concur:
BAKER, Acting P. J.
KIM, J.