Court Opinion

ID: 5128531
Source: CourtListenerOpinion
Date Created: 2021-11-22 23:02:48.105734+00
Date Added: 2024-06-11T08:23:07.357312
License: Public Domain

Filed 11/22/21 510Pacificave v. La Piana CA2/1
  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                      SECOND APPELLATE DISTRICT

                                     DIVISION ONE

510PACIFICAVE,                                                  B304189

        Plaintiff and Respondent,                               (Los Angeles County
                                                                Super. Ct. No. BC720734)
        v.

GINA M. LA PIANA,

        Defendant and Appellant.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Holly J. Fujie, Judge. Affirmed.
     Frank H. Whitehead III for Defendant and Appellant.
     Robert Miller for Plaintiff and Respondent.
            ___________________________________
      An apartment lease agreement provided that the renter
would be the apartment’s sole occupant, and would pay an added
$200 “per occupant” if she allowed someone else to occupy the
apartment. Rather than occupy the apartment herself, the renter
sublet it to 1,090 Airbnb guests on a day-rate basis. The landlord
sued for breach of contract and moved for summary adjudication
of that sole cause of action.
      Finding no triable issue as to whether the renter breached
the lease agreement, the trial court granted summary
adjudication, and at a later hearing the court determined the
undisputed damages were $200 per Airbnb guest, amounting to
$218,000. The court entered judgment for that amount.
      The renter contends the $200 charge per Airbnb guest
constituted a rent “increase” that violated the Rent Stabilization
Ordinance of the City of Los Angeles. We disagree, and therefore
affirm.
                          BACKGROUND
      A.      Lease
      Gina M. La Piana leased an apartment from 510pacificave
(Pacific) for $3,385 per month.
      The pertinent portions of the lease agreement are Sections
K and L, and Paragraph 5.
      Section K named La Piana as the “Named Renter.”
      Section L stated that the “Added per Occupant Rent” was
“$200.”
      Paragraph 5 of the lease provided that “The Premises shall
not be occupied by . . . any person other than the Named Renter
set out in Section K without the advance written consent of the
Owner and at the additional rent set out in Section L . . . .
Renter’s right to possession sh[a]ll not be assigned or sublet.”

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      La Piana seldom occupied the apartment, instead renting it
out on Airbnb, an online home rental platform, to 1,090 short-
term guests over a period of four years, charging nightly sums
exceeding $200.
      B.     Complaint
      Pacific sued La Piana for breach of contract and sought
injunctive relief, alleging that La Piana breached the lease
agreement by delivering possession of the subject premises to
unauthorized occupants, and pursuant to sections K and L of the
lease owed Pacific “the sum of $200 for each and every one of the
said occupants in a total sum exceeding $200,000.”
      C.     Answer
      In her second amended answer to the complaint, La Piana
asserted 27 affirmative defenses. The first defense alleged that
the complaint failed to state a cause of action. The second alleged
that Pacific failed to comply with the Rent Stabilization
Ordinance of the City of Los Angeles, Los Angeles Municipal
Code (LAMC) section 151.00 et seq. (Rent Stabilization
Ordinance), which governs the property.
      Pacific demurred to all but the first defense.
      La Piana’s third through eighth, 10th, 12th and 13th
defenses alleged that Pacific violated specified subparts of LAMC
section 151.00. The trial court sustained Pacific’s demurrer to
these defenses on the ground that they duplicated the second
defense.
      La Piana’s 11th and 23rd defenses alleged failure to state a
claim. The court sustained Pacific’s demurrer to these defenses
on the ground they duplicated the first defense.
      The ninth, 15th, 16th, 17th, 21st, 25th, 26th and 27th
defenses alleged, respectively, violation of Civil Code section 1671

                                 3
(illegal demand for late fees), unclean hands, waiver, estoppel,
laches, accord and satisfaction, privilege, and statute of frauds.
The court overruled the demurrer to them.
       La Piana’s 14th and 24th defenses also alleged waiver and
estoppel, and the trial court sustained Pacific’s demurrer to them
on the ground that they duplicated the 16th and 17th defenses,
above.
       The 18th defense alleged entitlement to sanctions under
Code of Civil Procedure section 128.5, the 19th alleged third
party liability, and the 22nd alleged contributory negligence. The
court sustained the demurrer to these defenses on the ground
that they constituted no defense in a breach of contract action.
       In sum, the court overruled Pacific’s demurrer to 10 of La
Piana’s affirmative defenses and sustained without leave to
amend the demurrer to 16 defenses. (Pacific did not demur to the
first defense—failure to state a claim.)
       D.    Motion for Summary Judgment
       Pacific moved for summary adjudication of its cause of
action for breach of contract.
       In support of the motion, Pacific offered the lease
agreement and the declaration of Kim Lu, trustee of the Lindeva
Living Trust doing business under the fictitious name of
510pacificave. Lu declared that a tenant in the Pacific apartment
complex complained that La Piana was using her apartment as
an Airbnb location, and her guests were disturbing the neighbors.
Pacific notified La Piana, who denied renting her apartment to
Airbnb guests.
       Pacific also presented La Piana’s discovery responses, in
which she admitted listing the apartment for short-term rental
on Airbnb, and from 2015 to 2019 hosted 1,090 guests at the

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apartment over 936 nights without Pacific’s permission, receiving
gross receipts in the amount of $213,975.
       In opposition to the motion, La Piana argued that Pacific
waived its right to enforce the lease agreement with respect to
Airbnb guests because it knew La Piana was subletting the
apartment, and failed to comply with the Rent Stabilization
Ordinance in several respects. She argued that Pacific’s “attempt
through this lawsuit to collect damages for each Air BnB guest
who stayed in La Piana’s residence” constituted an illegal rent
increase under section 151.04(A) of the Rent Stabilization
Ordinance. La Piana argued that these violations may be
asserted as defenses when a landlord seeks to collect rent by way
of a lawsuit.
       In support of the opposition, La Piana declared that the
apartment was her primary residence, and when she signed the
lease agreement she told Lu she intended to host guests at the
apartment through Airbnb, which caused Lu to raise the rent to
$3,385, significantly higher than the advertised price. She also
declared she was “informed and believ[ed]” that her apartment
was subject to the Rent Stabilization Ordinance, which Pacific
violated by failing to credit interest on the security deposit,
imposing rent increases without proper notice, demanding a
registration fee, failing to register the property, and failing to
post a certificate of registration.
       In her opposing separate statement, La Piana did not
dispute Pacific’s assertion of undisputed fact that the lease
provided “a maximum of one occupant” identifying La Piana as
the “ ‘Renter’, ” or that the lease provided “an added ‘per
occupant’ rent of $200.” Her only retort in her opposing separate

                                5
statement was that Pacific knew defendant intended “to use” the
leased premises for short-term vacation rentals.
       She also did not dispute Pacific’s assertion of undisputed
fact that she stated in her discovery responses she “allowed 1090
Airbnb short term renters to occupy” her unit and she “received
gross receipts of $213,975 from her Airbnb short term rentals[.]”
She did not dispute Pacific’s evidence that she “booked 936 nights
for short term rentals” of her unit “through Airbnb” other than to
state she did not recall. Finally, she did not dispute that she did
not obtain Pacific’s written consent to sublet her unit, although
she obtained Pacific’s “actual” consent to use her unit “at times as
a short term rental.”
       The trial court observed that La Piana’s declaration that
she had Lu’s tacit permission to rent out her apartment
contradicted her discovery response that she had no written
permission. Finding no triable issue as to whether La Piana
breached the lease agreement, the court granted Pacific’s motion
for summary adjudication of the first cause of action, then invited
further briefing on whether judgment could be entered.
       In her further briefing, La Piana argued that a triable issue
remained as to damages because to assess $200 for each of her
1,090 Airbnb guests would constitute a misinterpretation of
paragraph 5 of the lease and would violate City of Los Angeles
Rent Stabilization Ordinances.
       Pacific argued that the order granting summary
adjudication of its cause of action for breach of contract effectively
ended the case.
       The court entered judgment in favor of Pacific in the
amount of $200 per each of 1,090 additional occupants, for a total
of $218,000.

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                            DISCUSSION
       La Piana contends: (1) the trial court erred in entering
judgment after Pacific moved only for summary adjudication, not
summary judgment; (2) the Los Angeles Rent Stabilization laws
preclude imposition of a $200 penalty for unauthorized
occupants; (3) the trial court misinterpreted the lease agreement,
which provided for a $200 penalty only for each additional
monthly occupant, not for every single different occupant; and (4)
the award was exorbitant, bearing no reasonable relation to
Pacific’s damages.
A.     Legal Principles
       “[T]he elements of a cause of action for breach of contract
are (1) the existence of the contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4) the
resulting damages to the plaintiff.” (Oasis West Realty, LLC v.
Goldman (2011) 51 Cal.4th 811, 821.)
       “The interpretation of a contract is a judicial function.
[Citation.] In engaging in this function, the trial court ‘give[s]
effect to the mutual intention of the parties as it existed’ at the
time the contract was executed. [Citation.] Ordinarily, the
objective intent of the contracting parties is a legal question
determined solely by reference to the contract’s terms.” (Wolf v.
Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107,
1125-1126.) “When the contract has been ‘reduced to writing,’ the
parties’ intention ‘is to be ascertained from the writing alone, if
possible,’ subject to other rules of interpretation.” (Rodriguez v.
Oto (2013) 212 Cal.App.4th 1020, 1028.)
       Summary judgment is proper when all the papers
submitted on the motion show there are no triable issues of
material fact and the moving party is entitled to judgment as a

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matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25
Cal.4th 826, 843; Code Civ. Proc., § 437c, subd. (c).) A plaintiff
moving for summary judgment bears an initial burden of showing
that “he ‘has proved each element of the cause of action entitling’
him ‘to judgment on that cause of action.’ ” (Aguilar, at p. 849.)
If the plaintiff meets this burden, the defendant has the burden
to demonstrate “that a triable issue of one or more material facts
exists as to that cause of action or a defense thereto.” (Ibid.) A
triable issue of material fact exists “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.” (Id. at p. 850.)
       In reviewing an order granting a motion for summary
adjudication, we apply the same de novo standard of review that
applies to the granting of summary judgments. (Smith v. Wells
Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1471.) Our
Supreme Court has described that standard as follows:
“ ‘Because this case comes before us after the trial court granted
a motion for summary judgment, we take the facts from the
record that was before the trial court when it ruled on that
motion. [Citation.] “ ‘We review the trial court’s decision de
novo, considering all the evidence set forth in the moving and
opposing papers except that to which objections were made and
sustained.’ ” [Citation.] We liberally construe the evidence in
support of the party opposing summary judgment and resolve
doubts concerning the evidence in favor of that party.’ ” (Wilson
v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 716-717.)
       1.    Application
       Here, Pacific submitted the lease agreement and La Piana’s
discovery responses, in which, as previously noted, she admitted

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in discovery hosting 1,090 Airbnb guests at the apartment for 936
nights without Pacific’s written permission, for which she
received gross receipts of $213,975.
      This evidence carried Pacific’s initial burden to establish
the elements of its cause of action for breach of contract: The
existence of the lease agreement, Pacific’s performance
thereunder, La Piana’s breach, and contractual damages: $200
“Added per Occupant Rent,” i.e., $200 for each person who
occupies her apartment, no matter how long he or she stays. The
burden therefore shifted to La Piana to demonstrate the
existence of a triable issue of material fact.
             a.     Contract Interpretation
      La Piana argues that the “Added per Occupant Rent”
provision fails to explain what it means to occupy the apartment,
nor how much time in residence establishes a guest as an
occupant. She argues that a reasonable interpretation is that a
person is considered an occupant only he or she resides in the
apartment for at least 30 days. Under that interpretation,
visitors and overnight guests would not be occupants.
      We disagree. The agreement’s provision that “added rent”
in the amount of $200 would be assessed per “occupant” is
straightforward. A person who stays overnight in an apartment
for pay “occupies” it for that night, and is thus an occupant. The
lease agreement is completely devoid of any indication that the
parties intended that a person occupy the apartment for at least
30 days before being deemed an occupant.
             b.     Rent Stabilization Ordinance
      La Piana argues that the $200 surcharge constitutes an
“increase” in rent that violates the Rent Stabilization Ordinance.
We disagree.

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       The City of Los Angeles regulates various aspects of the
landlord/tenant relationship, including rent “increases.” (LAMC,
§ 151.01.) A rent increase is defined as “An increase in rent or
any reduction in housing services where there is not a
corresponding reduction in the amount of rent received.” (LAMC,
§ 151.02.)
       The Rent Stabilization Ordinance provides that “[f]or a
rental unit which has an additional tenant joining the occupants
of the rental unit thereby resulting in an increase in the number
of tenants existing at the inception of the tenancy . . . [¶] . . . The
landlord may increase the maximum rent or maximum adjusted
rent by an amount not to exceed 10% for each additional tenant
that joins the occupants of the rental unit.” (LAMC, § 151.06,
subd. (G)(a).) “The rental unit shall not be eligible for a rent
increase until the additional tenant has maintained residence in
the rental unit for a minimum of thirty consecutive days.”
(LAMC, § 151.06, subd. (G)(b).)
       The Rent Stabilization Ordinance does not regulate initial
rents. (Civ. Code, § 1954.52, subd. (a) [“Notwithstanding any
other provision of law, an owner of residential real property may
establish the initial and all subsequent rental rates for a dwelling
or a unit”]; see also Bullard v. San Francisco Residential Rent
Stabilization Bd. (2003) 106 Cal.App.4th 488, 489 [landlords are
permitted to “set the initial rent for vacant units”].)
       Here, the $200 surcharge per occupant was a contingent
part of the initial rent for La Piana’s apartment, not an “increase”
for purposes of the Rent Stabilization Ordinance. It was set forth
in the lease agreement and never changed. That the contingency
was realized and the surcharge therefore invoked did not

                                  10
constitute a rent “increase” for purposes of the Rent Stabilization
Ordinance.
             c.    Procedural Issue
      La Piana argues that the trial court erred in entering
judgment where Pacific sought only summary adjudication. We
disagree. The court granted summary adjudication of Pacific’s
primary cause of action, for breach of contract, which obviated its
only remaining cause of action, for injunctive relief, assuming for
argument’s sake, that a claim for injunctive relief is a cause of
action and not merely a request for a remedy. The court in a
separate order invited further briefing on why judgment could
not be entered, and La Piana at a second hearing offered nothing
more than had been offered in opposition to summary judgment.
There was therefore nothing remaining to do but enter judgment.
To do so was not equivalent to granting summary judgment.
             d.    Demurrer
      La Piana argues that the trial court erred in sustaining
Pacific’s demurrer to 16 affirmative defenses without leave to
amend, as some of the defenses were factually supported, and in
any event, there was a reasonable probability she could amend
successfully.
      We agree that some of La Piana’s defenses to which
Pacific’s demurrer was sustained were factually supported, but
the trial court sustained the demurrer because they were
duplicative of other defenses. For instance, every defense
asserting a separate violation of the LAMC was subsumed in La
Piana’s second affirmative defense, which alleged violation of the
LAMC. Other defenses, such as contributory negligence, were
inapplicable to a cause of action for breach of contract. No
substantive defense was removed from La Piana’s answer, and no

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amount of amendment would render those that were removed apt
or nonduplicative.
                        DISPOSITION
      The judgment is affirmed. Each side is to bear its own
costs on appeal.
      NOT TO BE PUBLISHED

                                                 CHANEY, J.

We concur:

             BENDIX, Acting P. J.

             CRANDALL, J.*

      *
       Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.

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