Court Opinion

ID: 4563611
Source: CourtListenerOpinion
Date Created: 2020-09-08 18:02:36.067384+00
Date Added: 2024-06-11T12:21:53.930150
License: Public Domain

Filed 9/4/20 Garcia v. Gresham Apartments Investors CA2/5
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION FIVE

ALBERT GARCIA et al.,                                        B299066

  Plaintiffs and Appellants,                                 (Los Angeles County
                                                             Super. Ct. No. BC699421)
         v.

GRESHAM APARTMENTS
INVESTORS,

  Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of Los
Angeles County, Holly J. Fujie, Judge. Reversed.
         Ross & Morrison, Andrew D. Morrison, for Plaintiffs and
Appellants.
         LightGabler, Maureen M. Home and Glenn J. Dickinson,
for Defendant and Respondent Gresham Apartments Investors.

                        _________________________________
       Gerald Doren and Sheldon Seltzer, through various
entities, owned a number of residential apartment buildings; one
such ownership entity is known as Gresham Apartments
Investors (“Gresham”). They also formed a management
company whose only business was to manage residential real
estate owned by Doren, Seltzer, and their families; that company
is Sierra Management. Plaintiffs and appellants Albert and
Stephanie Garcia were hired by Sierra Management as live-in
managers at the Gresham property.
       Shortly after Albert Garcia was diagnosed with cancer,
Doren, with Seltzer’s concurrence, terminated the Garcias’
employment, which resulted in the loss of their apartment. The
Garcias brought suit against both Sierra Management and
Gresham, alleging violations of the employment and housing
provisions of the Fair Employment and Housing Act (FEHA).
Gresham, alone, moved for summary judgment, on the basis that
when Doren and Seltzer had fired the Garcias, they had been
acting on behalf of Sierra Management, not Gresham, and
Gresham was not otherwise liable for Sierra Management’s
actions. The trial court agreed and granted summary judgment.
We reverse.
        FACTUAL AND PROCEDURAL BACKGROUND
1.     Underlying Facts
       Because summary judgment was granted to Gresham on
the issue of lack of entity liability, we need not discuss the
underlying facts in significant detail. In August 2013, the
Garcias were hired by Sierra Management to manage the
property owned by Gresham. Pursuant to their employment
agreement, they received a monthly salary plus “free rent
occupancy” of a unit on the premises. The employment

                               2
agreement expressly states that it does not create “the
relationship of landlord and tenant between [the Garcias] and
[Sierra Management]. Rather [the Garcias are] entitled to
occupy the unit, as a term and condition of employment only.”
       In March 2017, Albert Garcia was diagnosed with thyroid
cancer and commenced treatment. That month, the Garcias
informed Seltzer and Doren. On November 10, 2017, the Garcias
were fired, which resulted in the loss of their apartment. They
allege they were fired “on false and pretextual grounds, based on
[Albert Garcia]’s medical conditions/disability (cancer), need for
and/or request for accommodation, association, and/or other
protected characteristic(s).”
2.     The Relationship Between the Two Seltzer-Doren
       Entities
       Because Gresham obtained summary judgment on the
theory that if any entity was liable, it was Sierra Management
only, the relationship between Gresham and Sierra Management
is critical to our disposition of the appeal. Unfortunately, this
issue was complicated by Gresham de-emphasizing key facts in
its summary judgment motion, and by Garcias’ counsel
committing a procedural default in opposition.
       The truth, however, is actually undisputed. The owner of
the building is Gresham Apartment Investors – an entity which
was formed solely to hold title to the apartment building at issue.
Gresham is a general partnership, the general partners of which
are Seltzer Real Estate, LP and Doren Real Estate, LP. Seltzer is
a principal of Seltzer Real Estate; Doren is a principal of Doren
Real Estate.1

1    Gresham did not identify the other partners in the limited
partnerships or their relative shares. Seltzer testified at

                                3
       The management company is Seltzer-Doren Management
Company, Inc., dba Sierra Management. Seltzer is Sierra
Management’s Vice President and Secretary; Doren is Sierra
Management’s President and Treasurer. Sierra Management
was formed by Seltzer and Doren to manage several dozen
properties owned by the Seltzer and Doren families. Gresham
contracted with Sierra Management to manage the Gresham
property.2
       A declaration submitted in support of Gresham’s summary
judgment motion included Seltzer and Doren on a lengthy list of
Sierra Management employees “who communicated with [the
Garcias] during their employment, including those that were
involved in the hiring, supervision, management and termination
of [their] employment.” The Garcias would later submit
deposition excerpts that Doren oversees the property
management of the buildings, is principally involved in the hiring
of property managers, and has the final say in terminating them.
Doren admitted he was involved in the decision to terminate the
Garcias. Seltzer could not recall if he was also involved in the
termination decision, but he admitted that he had agreed with

deposition that either he, or his family, has a 50 percent
ownership interest in the Gresham property. Doren similarly
testified that he has a 50 percent ownership interest in the
Gresham property.

2     The parties did not submit the contract as part of the
record on summary judgment. Seltzer’s declaration states that
“[m]ore than 25 years ago, Gresham contracted [Sierra
Management] to manage the Subject property.”

                                4
it.3 Scott Reed, the Sierra Management employee who
immediately supervised the Garcias, testified that both Doren
and Seltzer made the decision to terminate the Garcias and both
of them told him as much.
3.     Allegations of the Complaint
       The Garcias asserted three causes of action against
defendants Gresham and Sierra Management: (1) violation of
FEHA – employment; (2) violation of FEHA – housing; and
(3) wrongful termination.
       The Garcias alleged that the named defendants “owned
and/or operated the property . . . and acted as plaintiff’s
employer/co-employer, and/or landlord.”
       The Garcias also included allegations of vicarious liability,
via agency, alter ego, and joint employer.
4.     Gresham’s Summary Judgment Motion
       Gresham sought summary judgment or summary
adjudication of six separate issues – only four of which are
relevant on appeal:4

3     As we will discuss, the trial court sustained Gresham’s
objection to these deposition excerpts due to what the trial court
considered a procedural default. Nevertheless, on appeal,
Gresham concedes these facts are undisputed.

4      The remaining two issues were (1) the Garcias’ claim for
punitive damages, which rises and falls with the resolution of the
substantive claims; and (2) Gresham’s assertion that the Garcias
failed to exhaust their administrative remedies as to it. The trial
court found a triable issue of fact on this point, and Gresham
does not challenge that part of the ruling on appeal.

                                  5
       (A) That the Garcias “were never employed by Gresham,”
entitling Gresham to judgment on the FEHA-employment and
wrongful termination causes of action;
       (B) That the Garcias cannot establish that Gresham and
Sierra “(1) are a single employer or integrated enterprise; (2) are
joint employers; (3) that one entity is the agent of the other
entity; or (4) one entity is the alter ego of the other,” justifying
judgment on the FEHA-employment and wrongful termination
causes of action;
       (C) That there was no landlord-tenant “or other housing
relationship” between the Garcias and Gresham, entitling
Gresham to judgment on the FEHA-employment cause of action;
and
       (D) That the Garcias “cannot show that any actions alleged
in their [complaint] were carried out by an employee(s) who were
acting within the scope of their agency or employment for
Gresham,” entitling Gresham to judgment on the FEHA-housing
cause of action.
       Gresham’s summary judgment motion took the position
that the termination of the Garcias was an act taken by
individuals acting solely in their capacity as Sierra Management
employees – without openly acknowledging that those individuals
were Seltzer and Doren, who also had ownership interests in
Gresham.
       According to the motion, “Gresham and Sierra
Management are separate and distinct business entities who
have always operated independently and without any joint
operation or joint labor relations.” Gresham’s motion argued,
“Gresham had no relationship to or control over Sierra
Management’s employees who were involved with the Subject

                                 6
Property and therefore cannot be held vicariously liable for their
actions. The managing agents of Sierra Management acted
exclusively on behalf of themselves or Sierra Management.”
       Both Seltzer and Doren submitted declarations that the
only communications they ever had with the Garcias were in
their capacity as officers of Sierra Management.5
5.     The Garcias’ Opposition
       The Garcias’ opposition argued “that defendant Gresham’s
two individual principals (Sheldon Seltzer and Gerald Doren)
monitor and control their properties (including the Gresham
property) on a day-to-day basis; have ultimate authority over
property management decisions affecting the Gresham Property,

5      The Garcias objected to these statements as legal
conclusions. The trial court overruled the objections. In Golden
W. Baseball Co. v. Talley (1991) 232 Cal. App. 3d 1294, a former
City Manager was sued; in support of his motion for summary
judgment, he submitted a declaration stating that he had been
acting at all times in the course of his employment. The plaintiff
argued that this was an inadmissible legal conclusion. The trial
court held that the statement, which was otherwise
uncontradicted by the plaintiff, was sufficient to establish that
the defendant had, in fact, been working in his official capacity.
On appeal, the Court of Appeal agreed, holding that a
government employee’s uncontroverted declaration that he was
acting in the course of employment is dispositive when the
opposing party never asserted a theory as to how the employee
could have been acting outside his official duties. (Id. at
pp. 1304-1305.) Based on this authority, we conclude that the
trial court did not err in overruling the Garcias’ objection that the
declaration was conclusory. However, as the Garcias did offer a
reasonable competing theory – that Seltzer and Doren were
acting in their capacity as owners of the Gresham property – the
declarations are not dispositive on this point.

                                  7
including property managers personnel decisions; and personally
made the decision to terminate plaintiffs’ employment and
housing accommodations on the Gresham property in this case.”
      As relevant to both housing and employment causes of
action, the Garcias argued triable issues of fact existed as to
multiple theories of vicarious liability, including that Sierra
Management was Gresham’s agent for whose acts Gresham was
responsible under respondeat superior. The Garcias specifically
relied on the evidence of Seltzer and Doren’s day-to-day
participation in the operation of Sierra Management. The
Garcias argued that Seltzer and Doren “ran the operation from
both ends, and in so doing made all key personnel decisions. This
included hiring and firing plaintiffs, and providing them with,
then taking away, housing accommodations.”
      The evidence on which the Garcias relied to establish
Seltzer and Doren’s involvement in Sierra Management and the
Garcias’ termination included 24 pages excerpted from Seltzer’s
deposition; 5 pages excerpted from the deposition of the Garcias’
immediate supervisor, Reed; 11 pages excerpted from the
deposition of the chief financial officer of Sierra Management;
and what was supposed to be some pages excerpted from the
deposition of Doren, but was instead (mistakenly) additional
pages of the Seltzer deposition. The deposition excerpts which
were attached did not have highlighting on the relevant portions,
an error upon which Gresham pounced.
6.    Gresham’s Evidentiary Objections
      In addition to its formal reply, Gresham also filed
evidentiary objections to the Garcias’ evidence.
      California Rule of Court, rule 3.1116, subdivision (c),
provides that when deposition testimony is used as an exhibit,

                                8
“[t]he relevant portion of any testimony in the deposition must be
marked in a manner that calls attention to the testimony.”
Although the Garcias had complied with subdivision (b) of the
rule, which requires the party to include “only the relevant pages
of the transcript,” the Garcias had failed to mark the testimony
on those pages to which they wished to call the court’s attention.
Gresham objected to all of the deposition excerpts the Garcias
had submitted in this condition, and also noted the Garcias’
failure to include Doren deposition excerpts as they had
apparently intended.
7.     Gresham’s Reply
       Despite its evidentiary objections, Gresham conceded that
Seltzer and Doren were involved in the day-to-day operation of
Sierra Management. Indeed, Gresham submitted additional
deposition excerpts of Seltzer and Doren identifying their daily
tasks. Gresham argued, however, “that the undisputed evidence
only shows that Mr. Seltzer and Mr. Doren were acting on behalf
of Sierra Management while doing these things. There is no
evidence that Mr. Seltzer or Mr. Doren were acting on behalf of
Gresham at any time in their dealings with the management and
operation of the Subject Property or their dealings with Sierra
Management’s employees.”
       Gresham also argued that there is no evidence of agency,
on the theory that in order to establish agency, the Garcias would
have to show that Gresham exercised control over the
employment decisions at Sierra, which it did not. “To the
contrary, the undisputed evidence shows that Sierra
Management, through its own employees, conducted its own
business in property management, made its own employment
decisions free of any control by Gresham which was formed

                                9
merely to hold title to a piece of property.” Of course, Sierra
Management’s “own employees” who were making these decisions
were Seltzer and Doren.
8.    The Garcias’ Corrected Submissions
      Gresham’s reply and objections were served, by overnight
delivery, on Friday, March 22, 2019. On Monday, March 25, for
reasons that are not stated in the record, the court continued the
hearing on the motion from March 27 to March 29. On March 28,
the day before the hearing, the Garcias re-filed their opposition
evidence, this time with the 40 pages of relevant deposition
excerpts underlined and the additional 38 pages of Doren’s
deposition previously omitted. Counsel apologized for its clerical
errors in preparing the initial submission.
      Included in the new Doren deposition transcript excerpts
was Doren’s admission that Gresham gets to decide “who it gets
to hire as property managers.”
9.    The Court’s Ruling
      The record on appeal does not include a reporter’s
transcript of the hearing on the motion. The trial court’s minute
order indicates that it overruled all of the Garcias’ evidentiary
objections and sustained nearly all of Gresham’s.6 The court’s
order does not specifically address the Garcias’ submission of
corrected evidence, but, as the court sustained the objections
based on the original submission’s failure to comply with Rule
3.1116, it appears the court rejected the corrected submission.
      Turning to the merits, the court granted summary
judgment. As to the FEHA-employment and wrongful

6     The court overruled two of Gresham’s objections, which
related to the Garcias’ evidence of exhaustion of administrative
remedies.

                                10
termination causes of action, the court concluded the Garcias had
no employer-employee relationship with Gresham. The court
concluded that Gresham met its burden of establishing that
Sierra, not Gresham, was the Garcias’ employer, thus shifting the
burden to the Garcias to establish a triable issue of fact.
Concluding that the Garcias “do not show by way of admissible
evidence” that Gresham ever communicated with them about
their employment, controlled their work, or paid their wages, the
court found they did not meet their burden. The court stated that
the Garcias relied only on evidence that the principals of
Gresham were the same as the principals of Sierra Management,
but the mere fact of common ownership does not establish that
Gresham is an employer.
      As to the FEHA-housing cause of action, the court agreed
that no landlord/tenant relationship had been created. As the
Garcias had been granted the right to use the apartment only as
part of their employment compensation, they were only licensees,
not tenants. The court impliedly concluded that a
landlord/tenant relationship was a prerequisite to the FEHA-
housing claim the Garcias were pursuing, and did not address
any other basis for FEHA-housing liability which had been
pleaded.
      The court also rejected all of the Garcias’ proposed bases for
vicarious liability. Specifically as to agency, the court held that
Gresham met its burden by establishing that Sierra made all
decisions with respect to the management of the property without
consulting Gresham. The court found the Garcias failed to raise
a triable issue of fact, as they relied solely on common ownership
“without presenting admissible evidence of the degree of control
exercised by [Gresham] over Defendant Sierra.”

                                11
10.    Judgment and Appeal
       The court entered judgment for Gresham accordingly. The
Garcias filed a timely notice of appeal.
                           DISCUSSION
       We first consider whether the court abused its discretion in
excluding the vast bulk of the Garcias’ evidence; we conclude that
it did. Turning to the merits of the summary judgment motion,
we conclude the motion should have been denied – both because
Gresham failed to meet its burden as moving party on the
employment causes of action, and upon a consideration of the
Garcias’ improperly-excluded evidence in opposition.
1.     The Court Abused Its Discretion In Declining to
       Consider the Garcias’ Evidence
       In sustaining Gresham’s objections to the Garcias’
evidence, the court impliedly made two rulings which we consider
separately. First, it declined to consider the 40 pages of
deposition excerpts which were submitted without the relevant
passages being marked, and also declined to consider the marked
excerpts submitted prior to the hearing. Second, it declined to
consider the 38 pages of Doren deposition excerpts erroneously
omitted from the opposition, but also submitted prior to the
hearing.
       A.    Standard of Review
       We review for abuse of discretion a trial court’s decision to
grant a motion for summary judgment because the opposing
party failed to comply with the requirement for a separate
statement or other procedural defect. (Hollywood Screentest of
America, Inc. v. NBC Universal, Inc. (2007) 151 Cal. App. 4th 631,
644; Parkview Villas Assn., Inc. v. State Farm Fire & Casualty
Co. (2005) 133 Cal. App. 4th 1197, 1208.) “In applying the abuse

                                12
of discretion standard of review, it is not the role of the appellate
court to substitute its own view as to the proper decision.
[Citation.] The trial court’s discretion, however, ‘is not unlimited
and must be exercised in conformity with the spirit of the law
and in a manner to subserve and not to impede or defeat the ends
of substantial justice. [Citations.]’ [Citation.] Moreover, we
carefully examine a trial court order finally resolving a lawsuit
without permitting the case to proceed to a trial on the merits.
[Citations.]” (Parkview Villas, at pp. 1208-1209.)
       When faced with a procedural default which makes it more
difficult for the trial court to efficiently resolve the summary
judgment motion, the court is not required to simply ignore the
defect. “It is appellants’ duty to direct the court to evidence that
supports their claims. It is not the court’s duty to rummage
through the papers to construct or resuscitate their case.”
(Collins v. Hertz Corp. (2006) 144 Cal. App. 4th 64, 75.) However,
a trial court can, and sometimes must, grant the party an
opportunity to correct its defective submission before entering
summary judgment against it for a procedural default. (Parkview
Villas, supra, 133 Cal.App.4th at pp. 1214-1215.)
       While case law does not delineate circumstances deserving
a second chance, cases on both sides of the line are illustrative. A
trial court which declined to read “over 1,500 pages of unmarked
deposition” on the ground they were not marked in accordance
with the predecessor to Rule 3.1116 did not abuse its discretion.
(Hollywood Screentest of America, supra, 151 Cal.App.4th at
pp. 641, 644-645.) A trial court also acted within its discretion in
striking the plaintiff’s opposition papers when, after the court
identified procedural defects in the papers and directed the
plaintiff to refile them in compliance with the applicable rules,

                                 13
the resubmitted papers still failed to comply. (Collins, supra,
144 Cal.App.4th at pp. 70-72.) In contrast, a trial court abused
its discretion in granting summary judgment based on the
plaintiff’s failure to file a separate statement which specifically
referred to the portions of the relevant evidence on which it relied
for its opposition to each proposed fact. The court was obligated
to first grant the plaintiff an opportunity to fix its procedural
error, possibly conditioned on the payment of sanctions.
(Parkview Villas, supra, 133 Cal.App.4th at pp. 1204-1205, 1208,
1212.)
       B.     The Failure to Mark Relevant Passages in 40 Pages of
              Deposition Excerpts
       The failure to mark excerpts on a few dozen pages of
deposition testimony appears to us to be on the side of de
minimus noncompliance. The Garcias’ separate statement
properly identified the relevant portions of the deposition
excerpts in connection with each disputed fact; and the Garcias
submitted only the relevant pages, not the entire transcripts.
They assuredly failed to mark those portions on 40 pages of
deposition excerpts, something we would not expect most lawyers
to do. The Garcias’ failure to mark did not require the court to
pore over hundreds or thousands of pages to search for the
relevant evidence. The court could have overlooked this error.
Even if we were to assume the court acted within its discretion in
not ignoring the defect, the court then abused that discretion by
not allowing the Garcias an opportunity to cure. Reasonable
monetary sanctions should have been a sufficient reminder of
counsel’s obligation to follow court rules and would compensate
Gresham for any continuance the trial court may have ordered.
(See United Community Church v. Garcin (1991) 231 Cal. App. 3d
14
327, 335 [“The failure to file a responsive separate statement
usually results in a continuance of the motion to permit the filing
of proper papers and an award of fees and costs as a condition of
the continuance for purposes of complying with the statute.”].)
       As explained in Parkview Villas, “in the absence of
extraordinary circumstances not present here, a trial court faced
with an opposing party’s defective separate statement plainly
indicating which proposed material facts are disputed and
including at least general references to the evidence supporting
its position does not have the discretion to enter a judgment
against that party solely as a result of that party’s failure to
explain the nature of the dispute and to provide sufficiently
specific citations to the evidence supporting its position.
[Citations.]” (Parkview Villas, supra, 133 Cal.App.4th at
pp. 1214-1215.) We are mindful that Parkview Villas addressed
an omitted separate statement; plaintiffs here did not comply
with the highlighting rule. We see little difference; if anything
the failure to file a separate statement is the more egregious
failure.
       Although the court did not expressly grant summary
judgment because of the procedural default, it effectively did.
The court sustained objections to nearly all of the Garcias’
evidence, then granted summary judgment on the basis that in
many respects the Garcias had submitted no admissible evidence
to raise a triable issue of fact. Under these circumstances,
Parkview Villas required an opportunity to cure.
       C.     The Erroneous Attachment of the Wrong Deposition
       The record is clear from the Garcias’ opposition that the
Garcias intended to include excerpts from Doren’s deposition
transcript. Their separate statement cites to specific pages and

                                15
line numbers of the Doren deposition, and their declaration of
counsel in opposition to the summary judgment motion purports
to authenticate the deposition as an exhibit. That it was
mistakenly omitted cannot reasonably be disputed.
       We agree with Gresham that, when a party omits evidence
from a summary judgment motion, the party has no automatic
right to be offered an opportunity to correct that omission. We
also side with the Garcias that the court abused its discretion in
declining to accept the Garcias’ voluntary correction of the
problem, when they submitted the Doren deposition excerpts
prior to the hearing.
       We find significant that there were only 38 pages of
testimony. Although direct calendar courts do not have time to
throw around, the 38 pages would not likely result in an undue
consumption of time. Second, the evidence appeared critical to a
resolution of the motion on the merits. This case turns on a
simple question: the capacity in which Doren acted when he
terminated the Garcias’ employment and housing. Declining to
consider Doren’s own deposition testimony on this point for
counsel’s mistake appears to be an unnecessary elevation of form
over substance.
2.     The Trial Court Erred in Granting Summary
       Judgment
       A.     Standard of Review
       “ ‘A defendant is entitled to summary judgment if the
record establishes as a matter of law that none of the plaintiff’s
asserted causes of action can prevail.’ [Citation.] The pleadings
define the issues to be considered on a motion for summary
judgment. [Citation.] As to each claim as framed by the
complaint, the defendant must present facts to negate an

                                16
essential element or to establish a defense. Only then will the
burden shift to the plaintiff to demonstrate the existence of a
triable, material issue of fact. [Citation.]” (Ferrari v. Grand
Canyon Dories (1995) 32 Cal. App. 4th 248, 252.) “There is a
triable issue of material fact if, and only if, the evidence would
allow a reasonable trier of fact to find the underlying fact in favor
of the party opposing the motion in accordance with the
applicable standard of proof.” (Aguilar v. Atlantic Richfield Co.
(2001) 25 Cal. 4th 826, 850.) We review orders granting or
denying a summary judgment motion de novo. (FSR Brokerage,
Inc. v. Superior Court (1995) 35 Cal. App. 4th 69, 72; Union Bank
v. Superior Court (1995) 31 Cal. App. 4th 573, 579.)
       We exercise “an independent assessment of the correctness
of the trial court’s ruling, applying the same legal standard as the
trial court in determining whether there are any genuine issues
of material fact or whether the moving party is entitled to
judgment as a matter of law.” (Iverson v. Muroc Unified School
Dist. (1995) 32 Cal. App. 4th 218, 222.)
       B.     Employment Causes of Action
       The Garcias’ first cause of action is for disability
discrimination under FEHA-employment; their third is for
wrongful termination.
       Government Code section 12940, subdivision (a) provides in
part that it is an unlawful employment practice to discharge a
person from employment on the basis of physical disability.7

7      As Gresham’s summary judgment motion was based solely
on its purported status as an entity that did not employ the
Garcias and was not vicariously liable for Sierra Management’s
termination of the Garcias’ employment, we assume for the
purposes of this appeal that there is a triable issue of fact as to

                                 17
Gresham argues that it cannot be liable for violating this
provision, or for common law wrongful termination, as it was not
the Garcias’ employer and not otherwise liable for Sierra
Management’s employment decisions. Our analysis begins and
ends with agency.
       “[A] principal is responsible to third persons for the
negligence of his agent in the transaction of the business of the
agency, including wrongful acts committed by such agent in and
as a part of the transaction of such business, and for his willful
omission to fulfill the obligations of the principal.” (Civ. Code,
§ 2338.)
       “ ‘An agent “is anyone who undertakes to transact some
business, or manage some affair, for another, by authority of and
on account of the latter, and to render an account of such
transactions.” [Citation.] “The chief characteristic of the agency
is that of representation, the authority to act for and in the place
of the principal for the purpose of bringing him or her into legal
relations with third parties. [Citations.]” [Citation.] “The
significant test of an agency relationship is the principal’s right
to control the activities of the agent. [Citations.] It is not
essential that the right of control be exercised or that there be
actual supervision of the work of the agent; the existence of the
right establishes the relationship.” [Citation.]’ [Citation.]”
(Violette v. Shoup (1993) 16 Cal. App. 4th 611, 620.)
       Here, Gresham, as the owner of the building, contracted
with Sierra Management to manage the property. This fact alone
establishes, at the very least, a triable issue of fact that Sierra
Management was Gresham’s agent in the management of the

whether the Garcias were terminated on the basis of Albert
Garcia’s physical disability.

                                18
property, which would render Gresham liable for Sierra
Management’s wrongdoing in the course of the agency. Several
cases under the federal Fair Housing Act recognize that a
management company is the owner’s agent in managing the
property, and hold the owner liable for the management
company’s wrongdoing, even if it was not aware of the
management company’s acts. (United States v. Balistrieri (7th
Cir. 1992) 981 F.2d 916, 930 [even if owner did not approve his
rental agent’s Fair Housing Act violations, the agent was acting
in the scope of her authority, so the owner is liable]; Castellano v.
Access Premier Realty, Inc. (E.D.Cal. 2016) 181 F. Supp. 3d 798,
809 [when owner does not dispute that management company
was its agent, owner is vicariously liable for management
company’s violations of the Fair Housing Act]; United States v.
Habersham Properties, Inc. (N.D.Ga. 2003) 319 F. Supp. 2d 1366,
1371-1375 [owner may be vicariously liable for management
company’s acts of discrimination, and also those of the
management company’s on-site property manager]; Marya v.
Slakey (D.Mass. 2001) 190 F. Supp. 2d 95, 102 [triable issue of fact
exists that property owner of multi-bedroom house who allowed
tenants to vote on their co-tenants may be liable, as principal, for
her tenants’ violation of Fair Housing Act].)8
      Although each of these cases is concerned with the
management company’s acts of housing discrimination in
connection with tenants at the owner’s property, what is

8     Gresham concedes that courts “often look to cases
construing the FHA when interpreting the FEHA.” (Sisemore v.
Master Financial, Inc. (2007) 151 Cal. App. 4th 1386, 1420.) In
Meyer v. Holley (2003) 537 U.S. 280, 282, the United States
Supreme Court held that the FHA imposes vicarious liability “in
accordance with traditional agency principles.”

                                 19
important is that they allow for owner liability for its
management company’s acts of discrimination in the course of its
agency in managing the owner’s property. Here, the Garcias
allege the management company (Sierra Management)
improperly and discriminatorily fired them from their job as on-
site property managers of Gresham’s property. Because Sierra
Management was charged by Gresham with managing its
property, Sierra Management’s hiring and firing of the Garcias
appears to be within the scope of its agency. This creates a
triable issue of fact as to Gresham’s vicarious liability.
       We note that the potential agency relationship exists as a
result of the contractual relationship between Gresham and
Sierra Management – a relationship acknowledged in Gresham’s
moving papers. Thus, Gresham’s moving papers alone establish
the existence of a triable issue of fact of agency, and we need not
consider the Garcias’ evidence in response. But we do.
       The Garcias’ evidence reinforces the conclusion that, at the
very least, a triable issue of fact exists as to agency. Garcias’
evidence was that Gresham was not a hands-off owner who
transferred all responsibility for managing the property to Sierra
Management and simply cashed the checks. Instead, Gresham’s
owners were neck-deep in the day-to-day operation of Sierra
Management, and actually made the decision to terminate the
Garcias’ employment themselves. Gresham makes much of the
fact that it is a partnership that has no employees. But if that is
so, Gresham could act only through the individuals who
controlled its two partners (the partners themselves being limited
partnerships) – Doren and Seltzer. Doren and Seltzer interacted
with the Garcias as to their duties in managing the Gresham
property and there is evidence that they both participated in the

                                20
ultimate decision to terminate the Garcias. Although Doren and
Seltzer take the position that all of these acts were done only in
their capacity as officers and employees of Sierra Management,
the circumstances suggest they may have also been acting as
partners in Gresham. Indeed, Doren admitted that Gresham
gets to decide “who it gets to hire as property managers,” an
admission which implies Doren and Seltzer may well have been
acting on behalf of Gresham when they made decisions regarding
whether the Garcias would remain as the on-site property
managers.
       Gresham’s argument for summary judgment comes down to
the assertion that, when firing the Garcias, Seltzer and Doren
were wearing their “Sierra Management” hats and not their
“Gresham” hats. It would be a clever end-run around employee
protection statutes if a business owner could create a “human
resources company” as a separate legal entity responsible for
hiring and firing employees, have the individual business owners
run the human resources company as its officers, yet turn around
and claim the business is not liable for the employment decisions
made by the human resources company for its benefit. The rules
of agency prevent this sleight-of-hand.
       Laird v. Capital Cities/ABC (1998) 68 Cal. App. 4th 727, on
which Gresham and the trial court relied, is not controlling on
the question of agency. In Laird, a terminated employee sued not
her employer, but her employer’s corporate parent. (Id. at
p. 731.) The agency question was when can a subsidiary be
considered the agent of its parent. (Id. at p. 741.) To find agency
in that situation requires proof that the parent so controls the
subsidiary that the subsidiary becomes the mere agent or
instrumentality of the parent, and, specifically, that the parent

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exercised control over the subsidiary’s employment decisions.
(Ibid.) But the Laird test is inapplicable here. Sierra
Management was not a subsidiary of Gresham, Sierra
Management contracted with Gresham to manage the property
for it. It is the actual agency arrangement arising from that
contract, not an attempt to imply agency from joint ownership or
corporate structure, which dooms Gresham’s motion.
       C.      We Need Not Address FEHA-Housing
       Because we find a triable issue of fact exists with respect to
the employment causes of action, the summary judgment must be
reversed. Although Gresham moved in the alternative for
summary adjudication, it does not argue on appeal that we
should direct entry of summary adjudication if we reverse the
summary judgment.
                           DISPOSITION
       The summary judgment is reversed. The Garcias shall
recover their costs on appeal.

                                            RUBIN, P. J.
I CONCUR:

            MOOR, J.

                                 22
Albert Garcia et al. v. Gresham Apartments Investors
B299066

KIM, J. Dissenting

       I respectfully dissent.
       The majority observes that the court could have overlooked
plaintiff’s failure to comply with California Rules of Court rule
3.1116(c) and should have allowed plaintiffs an opportunity to
cure their error by imposing reasonable sanctions for any
continuances the court may have ordered. (Maj. at pp. 14–15.)
But where, as here, “no reporter’s transcript has been provided
and no error is apparent on the face of the existing appellate
record, the judgment must be conclusively presumed correct as to
all evidentiary matters.” (Estate of Fain (1999) 75 Cal. App. 4th
973, 992.) Without a transcript of the proceedings during which
the court sustained defendant’s evidentiary objections, we do not
know whether the court considered the propriety of a continuance
or monetary sanctions. Nor do we know what, if any, objections
or concessions any of the parties made in response. (Wagner v.
Wagner (2008) 162 Cal. App. 4th 249, 259 [a trial court’s exercise
of discretion will not be disturbed on appeal when the appellant
has not provided a record that explains the trial court’s
reasoning].) On this record, I would not hold the court abused its
discretion in its evidentiary rulings.
       The majority suggests that even without the excluded
evidence, the fact that defendant contracted with Sierra
Management to manage the property was sufficient, on its own,

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to render defendant liable for Sierra Management’s employment
decisions. (Maj. at p. 18–19.) I do not interpret any of the cases
cited in the majority opinion to support such a proposition.
Based on the evidence that was properly before the trial court, I
would affirm the court’s granting of summary adjudication on the
FEHA-employment discrimination claim.
       Finally, I believe the majority was required to address the
merits of the trial court’s ruling on the FEHA-housing
discrimination claim. The court separately considered each of
plaintiffs’ claims against defendant and concluded that summary
adjudication was appropriate. Further, defendant devoted 25
pages of its respondent’s brief to argue why the FEHA-housing
discrimination claim fails as a matter of law. I do not construe
defendant as having failed to “argue on appeal that we should
direct entry of summary adjudication if we reverse the summary
judgment.” (Maj. at p. 22.) I would affirm the court’s granting of
summary adjudication on the FEHA-housing discrimination
claim. In my view, plaintiffs were not tenants by virtue of their
free occupancy in one of defendant’s apartments as part of their
compensation from Sierra Management. (Chan v. Antepenko
(1988) 203 Cal. App. Supp. 3d 21, 23–25.) Further, on these facts,
plaintiffs could not establish “discrimination” within the meaning
of Government Code section 12927, subdivision (c)(1).
       I would affirm the judgment in full.

                              KIM, J.

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