Court Opinion

ID: 9840522
Source: CourtListenerOpinion
Date Created: 2023-09-18 23:03:14.047159+00
Date Added: 2024-06-11T10:34:09.066846
License: Public Domain

Filed 9/18/23
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                         DIVISION THREE

 JIANNA MAARTEN et al.,                       B308055

         Plaintiffs and Appellants,           (Los Angeles County
                                              Super. Ct. No. 19STCV00094)
         v.

 ISAAC COHANZAD et al.,

         Defendants and Respondents.

     APPEAL from an order of the Superior Court of
Los Angeles County, Yvette Palazuelos, Judge. Reversed and
remanded.
     Moneymaker & Stewart, Ryan Stewart; Tycko & Zavareei,
Annick Persinger and Hassan Zavareei for Plaintiffs and
Appellants.
     Law Office of Parham Hendifar and Parham Hendifar for
Defendants and Respondents.

                    ‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗
       The plaintiffs appeal from a trial court order sustaining a
demurrer to the class allegations in their complaint against the
defendants, their former landlords.1 The complaint asserts
claims under the Ellis Act (Gov. Code, § 7060 et seq.)2 and the
Los Angeles Rent Stabilization Ordinance (the Ordinance)
(Los Angeles Municipal Code (LAMC), §§ 151.00–151.31), as well
as for fraud and violations of section 17200 of the Business and
Professions Code (Unfair Competition Law) (Bus. & Prof. Code,
§ 17200 et seq.). Defendants evicted plaintiffs from their rent
controlled apartments. Plaintiffs allege that although defendants
declared they were removing the apartment buildings from the
rental market entirely, defendants subsequently listed units in
the same buildings for rent on Airbnb, thereby returning the
properties to the residential rental market while evading rent
control laws, before eventually demolishing the buildings to make
way for new construction.
       Defendants demurred to the class allegations in the
complaint, asserting plaintiffs could not satisfy the requirements
for class certification as a matter of law. The trial court found
plaintiffs could not satisfy the community of interest requirement

1     The named plaintiffs are Jianna Maarten, Joanne Maarten,
Richard Koehler, Joseph Fria, Ashleigh Wulff-Giron, Alana Beck,
Brandon Biggins, Brenda Davidson, Patricia Miranda, Ana
Reyes, Julio Vargas, Miguel Rivas, Miriam Rivas, Carlos Castillo,
and Natalie Hermosillo (collectively plaintiffs). The defendants
are Isaac Cohanzad, Benjamin Cohanzad, Wiseman Management
LLC, Belmond Homes, LP, The Cohanzad Family Trust, and
Hayworth Hyde LLC (collectively defendants).

2    All further undesignated statutory references are to the
Government Code.

                                2
for liability or damages, and class treatment was not the superior
method for resolving the litigation.
       We conclude the trial court erred in finding, as a matter of
law, that there is no reasonable probability plaintiffs will show
common questions of law or fact predominate as to the classwide
claims for liability. While plaintiffs’ allegations indicate a need
for individualized proof or calculation of damages, we conclude
plaintiffs have alleged such issues may be effectively managed
and there remains a reasonable probability plaintiffs will satisfy
the requirements for class certification. We reverse and remand
with directions to reinstate the class allegations.
       FACTUAL AND PROCEDURAL BACKGROUND
       Plaintiffs’ original complaint, filed in January 2019,
asserted a theory of class liability based on the Ordinance,
specifically LAMC section 151.25, which incorporates the Ellis
Act. Under that provision, when a rent-controlled property is
withdrawn from the rental market pursuant to the Ellis Act, but
is offered again for residential rental within two years, “[t]he
landlord shall be liable to any tenant or lessee who was displaced
from the property for actual and exemplary damages.” (LAMC,
§ 151.25, subd. (A).) Plaintiffs filed a first amended complaint in
June 2019. Defendants demurred to the class allegations. The
trial court determined plaintiffs adequately alleged that common
issues predominated as to their first cause of action for liability
under the Ellis Act. However, the court found plaintiffs had not
alleged sufficient facts to support a class claim for fraud and thus
sustained the demurrer with leave to amend.
       Plaintiffs filed a second amended complaint in January
2020. The complaint asserts six causes of action: (1) violation of
the Ordinance, LAMC sections 151.00–151.31; (2) fraud;

                                 3
(3) violation of the Unfair Competition Law; (4) breach of the
covenant of quiet enjoyment; (5) intentional infliction of
emotional distress; and (6) breach of the warranty of habitability.
Plaintiffs again seek to bring their first three causes of action on
behalf of a class.
       According to the complaint, Wiseman Management LLC
(Wiseman) owns and operates at least 35 apartment buildings in
Los Angeles. Isaac Cohanzad, Benjamin Cohanzad, and Michael
Cohanzad control Wiseman and have created various shell
companies to carry out their business practices. The complaint
alleges Wiseman buys rent-controlled buildings and falsely
declares to the City of Los Angeles (the City) that it is
permanently removing all of the units in the buildings from the
rental market, thus allowing it to evict the existing tenants.
Wiseman then offers the apartments for rent on Airbnb before
eventually tearing down the properties, constructing new
buildings, and renting out new apartments for as much as $5,195
per month.
       Plaintiffs resided in apartment buildings owned by
defendants and subject to the Ordinance. After defendants
submitted a Notice of Intent to Withdraw from the rental market
for each building, they received approval from the City to evict
the tenants. Defendants used the “standard Ellis Act form” and
made identical representations to the City on each form,
certifying that all accommodations in the building would be
permanently removed from rental housing. Defendants then
provided each plaintiff and class member an eviction notice on
the City’s standard form.
       According to the complaint, after the evictions, defendants,
using various aliases, offered to rent or re-rented the apartments

                                 4
on Airbnb. The Airbnb postings allow hosts to set a minimum
and maximum number of nights for a rental. The complaint
alleges that “[v]irtually all the Airbnb listings posted by
Defendants had a maximum stay of 1,125 nights, and at least
nine included optional ‘monthly’ rates.” Two hosts linked to
defendants’ properties had at least 42 Airbnb listings each.
There were other alias host names as well, with listings matching
Wiseman properties for which notices of withdrawal were filed.
       Plaintiffs seek to certify a class of “former tenants of any
property owned by any Defendant who were displaced from their
rental units pursuant to the Ellis Act and where at least one
rental unit within their buildings was offered for rent or lease
within two years of the date of the withdrawal of that rental unit
from the rental market.”
       Defendants successfully demurred to the second amended
complaint. The trial court rejected the prior court’s
determination that the class allegations in the first cause of
action were sufficient. Instead, the court concluded individual
issues predominated as to all of plaintiffs’ claims, including
liability under the Ellis Act. The trial court also found common
issues did not predominate as to damages, and that a class action
was not a superior means of litigating plaintiffs’ first three causes
of action. The court granted leave to amend. Plaintiffs timely
appealed the trial court order.3

3     An order sustaining a demurrer to class allegations is
appealable under the “ ‘death knell’ doctrine,” regardless of
whether leave to amend is granted. (In re Baycol Cases I & II
(2011) 51 Cal.4th 751, 757; Williams v. Impax Laboratories, Inc.
(2019) 41 Cal.App.5th 1060, 1070–1071.)

                                 5
                            DISCUSSION
I.     Standard of Review
       Although a court generally determines whether a case is
suitable for class treatment on a motion for class certification, it
is “beyond dispute that trial courts are permitted to decide the
issue of class certification on demurrer.” (Schermer v. Tatum
(2016) 245 Cal.App.4th 912, 923 (Schermer).) A trial court “may
decide the question earlier [than class certification] by sustaining
a demurrer to the class action allegations of a complaint only if it
concludes as a matter of law that, assuming the truth of the
factual allegations in the complaint, there is no reasonable
possibility that the requirements for class certification will be
satisfied.” (Bridgeford v. Pacific Health Corp. (2012) 202
Cal.App.4th 1034, 1041–1042 (Bridgeford), citing Vasquez v.
Superior Court (1971) 4 Cal.3d 800, 813; Tucker v. Pacific Bell
Mobile Services (2012) 208 Cal.App.4th 201, 211 (Tucker).)
       The general principles that govern review of an order
sustaining a demurrer apply to an order specific to class
allegations. (Schermer, supra, 245 Cal.App.4th at pp. 922–923;
Newell v. State Farm General Ins. Co. (2004) 118 Cal.App.4th
1094, 1100 (Newell).) We review the “ ‘ “complaint de novo to
determine whether it alleges facts sufficient to state a cause of
action under any legal theory, such facts being assumed true for
this purpose.” [Citations.]’ [Citation.]” (Tucker, supra, 208
Cal.App.4th at p. 210; Schermer, at p. 922.) “The court does not,
however, assume the truth of contentions, deductions or
conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2
Cal.4th 962, 967 (Aubry); Daar v. Yellow Cab Co. (1967) 67 Cal.2d
695, 713.)

                                 6
       “If a demurrer is sustained, we exercise our independent
judgment on whether a cause of action has been stated as a
matter of law, regardless of reasons stated by the trial court.
[Citation.] We affirm if the trial court’s decision was correct on
any theory. [Citation.]” (Tucker, supra, 208 Cal.App.4th at
pp. 210–211.)
II.    Applicable Law on Class Certification
       A class action may be maintained if there is an
ascertainable and sufficiently numerous class, a well-defined
community of interest among the class members, and substantial
benefits from certification render proceeding as a class superior
to other alternatives. (Brinker Restaurant Corp. v. Superior
Court (2012) 53 Cal.4th 1004, 1021 (Brinker); Code Civ. Proc.,
§ 382.) The trial court concluded plaintiffs established there is an
ascertainable class and defendants do not challenge that analysis
on appeal. Instead, the parties’ dispute concerns the community
of interest and superiority requirements.
       “As part of the community of interest requirement, the
party seeking certification must show that issues of law or fact
common to the class predominate.” (Duran v. U.S. Bank
National Assn. (2014) 59 Cal.4th 1, 28 (Duran).) This inquiry
“ ‘hinges on “whether the theory of recovery advanced by the
proponents of certification is, as an analytical matter, likely to
prove amenable to class treatment.” [Citation.] “As a general
rule if the defendant’s liability can be determined by facts
common to all members of the class, a class will be certified even
if the members must individually prove their damages.”
[Citations.]’ ” (Ibid.)
       To determine whether common issues predominate, the
court must ask whether “ ‘the issues framed by the pleadings and

                                 7
the law applicable to the causes of action alleged’ ” are
“susceptible of common proof” for all members of the proposed
class (Brinker, supra, 53 Cal.4th at p. 1024), or whether the class
members will be “ ‘required to litigate numerous and substantial
questions determining [their] individual right to recover . . . .’ ”
(Duran, supra, 59 Cal.4th at p. 28.) The predominance inquiry
focuses on the facts and the elements necessary to establish the
defendant’s liability. (Ibid.; Brinker, at p. 1024.)
       We therefore first determine what plaintiffs must prove to
establish defendants’ liability, and whether those elements are
susceptible to common proof in this case. The parties’ dispute
centers on liability under section 7060.2, subdivision (b) of the
Ellis Act (hereafter section 7060.2(b)). Briefly described, under
section 7060.2(b)(1), owners of rent-controlled accommodations
who take a property off the rental market under the Ellis Act,
then offer the accommodations for residential rent or lease again
within two years of the withdrawal, are liable to former tenants
for actual and exemplary damages.
       Defendants’ primary argument, which the trial court
accepted, is two-fold. First, defendants contend a tenant may
only establish liability by showing that the landlord re-offered for
rent or re-rented that particular tenant’s previously withdrawn
unit, thus requiring a unit-by-unit analysis that cannot be
established with common proof. Second, defendants argue
plaintiffs must establish the accommodations were returned to
the market for “residential purposes,” and that also can only be
determined on a unit-by-unit basis, by evaluating whether each
unit was actually rented for something other than a temporary
occupancy. Defendants additionally assert plaintiffs’ damages
can only be established with individualized proof.

                                 8
       Plaintiffs counter that an offer by defendants to return any
unit on a property to the residential rental market within two
years of the Ellis Act withdrawal creates liability to all tenants
who were evicted from that property. Plaintiffs further argue
they have sufficiently alleged facts demonstrating that whether
the accommodations were offered for residential purposes can be
determined on a classwide basis. Plaintiffs contend they have
proposed methods of calculating damages that are amenable to
class treatment, or, alternatively, that they have sufficiently
established they can meet class certification requirements for a
classwide determination of liability, and the court could certify a
liability-only class. We conclude plaintiffs have the better
argument, and that they have alleged facts sufficient to
withstand demurrer on the class allegations.
III. Liability Under the Ellis Act and the Ordinance
       A. The Ellis Act
       In 1985, the Legislature enacted the Ellis Act (the Act)
explicitly to supersede the California Supreme Court’s decision in
Nash v. City of Santa Monica (1984) 37 Cal.3d 97, “to the extent
that the holding, or portion of the holding, conflicts with this
chapter, so as to permit landlords to go out of business.”
(§ 7060.7.) The Act provides, “No public entity . . . shall, by
statute, ordinance, or regulation, or by administrative action
implementing any statute, ordinance or regulation, compel the
owner of any residential real property to offer, or to continue to
offer, accommodations in the property for rent or lease . . . .”
(§ 7060, subd. (a).) The Act defines “[a]ccommodations” as
“residential rental units in any detached physical structure
containing four or more residential rental units” (§ 7060,
subd. (b)(1)(A)) or, “[w]ith respect to a detached physical

                                 9
structure containing three or fewer residential rental units, the
residential rental units in that structure and in any other
structure located on the same parcel of land, including any
detached physical structure . . . .” (§ 7060, subd. (b)(1)(B).)
       The Act “preempt[s] any local ordinance that prohibited a
landlord from removing its rental units from the marketplace.”
(San Francisco Apartment Assn. v. City and County of San
Francisco (2016) 3 Cal.App.5th 463, 477, citing § 7060.7.) It also
“ ‘ “completely occupies the field of substantive eviction controls
over landlords who wish to withdraw” all units from the
residential rental market.’ [Citations.]” (Id. at p. 478.)
       Although landlords may “go out of business,” the Act does
not “[p]ermit an owner to . . . [¶] [w]ithdraw from rent or lease
less than all of the accommodations, as defined by paragraph (1)
or (2) of subdivision (b) of Section 7060.” (§ 7060.7, subd. (d)(1).)4
Further, a landlord who re-enters the residential rental market
after withdrawing accommodations is subject to liability to
former tenants and must also comply with statutory restrictions.
       Section 7060.2 governs re-rental of previously rent
controlled properties.5 The Act’s re-rental, or “recontrol

4     The Ordinance, like the Ellis Act in section 7060.7,
subdivision (d)(1), requires the withdrawal of all of a property’s
units from the rental market. (LAMC, § 151.09, subd. (A)(10).)

5     Section 7060.2 of the Act permits statutes, ordinances, or
regulations that enact the section’s provisions. The Ordinance
accordingly includes these provisions. As the Ordinance
explicitly incorporates the Ellis Act, our analysis focuses on the
Act. (LAMC, § 151.22 [“It is the purpose of this section, and

                                  10
provisions [are] designed to thwart efforts by landlords to
circumvent rent control by evicting tenants under the false
pretense that they intend to go out of the rental business, and
then re-leas[e] their property at market rental rates.”
(Apartment Assn. of Los Angeles County, Inc. v. City of Los
Angeles (2009) 173 Cal.App.4th 13, 18; accord City of Santa
Monica v. Yarmark (1988) 203 Cal.App.3d 153, 168 [“Concerned
about the possible adverse effect on rent control ordinances, the
Legislature included provisions to insure against the removal of
rental units for the sole purpose of circumventing rent control
ordinances by, e.g., subjecting withdrawn accommodations to rent
control if offered again for residential purposes. (Gov. Code,
§ 7060.2.)”].)
       The property owner’s return of accommodations to the
residential rental market within two years of withdrawal exposes
the owner to the greatest penalties and restrictions: actual and
exemplary damages, a right of first refusal for displaced tenants,
and the owner is restricted to charging only the lawful rent in
effect at the time of the notice of intent to withdraw, plus
permitted annual adjustments.6 (§ 7060.2, subds. (a), (b); LAMC,
§§ 151.25, 151.27, subd. (A).) Any action by a tenant or lessee for
actual and exemplary damages must be brought within three
years. (§ 7060.2(b)(1); LAMC, § 151.25, subd. (A).)

Sections 151.23 through 151.28, to implement provisions of the
Ellis Act”].)

6      Under section 7060.2(b)(2), a public entity may also
“institute a civil proceeding against any owner who has again
offered accommodations for rent or lease subject to this
subdivision, for exemplary damages for displacement of tenants
or lessees.” (§ 7060.2(b)(2).)

                                11
       After two years, but within five years of the withdrawal or
filing of a notice of intent to withdraw, the owner is no longer
subject to actual and exemplary damages to any displaced tenant,
but remains restricted to charging only the prior lawful rent plus
adjustments. (§ 7060.2, subd. (a); LAMC, § 151.26, subd. (A).)
The owner must also provide displaced former tenants a right of
first refusal and is subject to limited punitive damages for failure
to comply with the right of first refusal provisions. (§ 7060.2,
subd. (c); LAMC, § 151.27, subd. (B).)
       After five years, but within 10 years, the owner is no longer
restricted to charging only the prior lawful rent, but still must
provide former tenants a right of first refusal, and remains
subject to limited punitive damages for failure to comply with the
right of first refusal provisions. (§ 7060.2, subd. (c); LAMC,
§ 151.27, subd. (B); Drouet v. Superior Court (2003) 31 Cal.4th
583, 590; City of West Hollywood v. Kihagi (2017) 16 Cal.App.5th
739, 744 (Kihagi).)
       Plaintiffs assert claims under LAMC section 151.25,
subdivision (A), which incorporates section 7060.2(b)(1), the two-
year provision entitling displaced tenants or lessees to actual and
exemplary damages. Plaintiffs contend that under this provision,
a property owner who offers even one unit in the formerly
withdrawn property for residential rent or lease becomes liable to
all former tenants who were displaced by the Ellis Act eviction.
Defendants assert a property owner is only liable on a unit-by-
unit basis, thus a former tenant may only recover under
section 7060.2(b)(1) by establishing the property owner has
returned that particular tenant’s former unit to the residential
rental market. We turn to the statute to resolve this issue.

                                12
       B. Principles of statutory interpretation
       When interpreting a statute, our “core task . . . is to
determine and give effect to the Legislature’s underlying purpose
in enacting the statutes at issue.” (McHugh v. Protective Life Ins.
Co. (2021) 12 Cal.5th 213, 227 (McHugh); accord Jarman v. HCR
ManorCare, Inc. (2020) 10 Cal.5th 375, 381 (Jarman).) “We first
consider the words of the statutes, as statutory language is
generally the most reliable indicator of legislation’s intended
purpose. [Citation.]” (McHugh, at p. 227.) “We consider the
ordinary meaning of the relevant terms, related provisions, terms
used in other parts of the statute, and the structure of the
statutory scheme. [Citation.]” (Ibid.) “ ‘We do not examine that
language in isolation, but in the context of the statutory
framework as a whole in order to determine its scope and purpose
and to harmonize the various parts of the enactment.’ ” (Jarman,
at p. 381.) “ ‘If the statutory language permits more than one
reasonable interpretation, courts may consider other aids, such
as the statute’s purpose, legislative history, and public policy.’
[Citation.]” (Ibid.; accord McHugh, at p. 227.)
       C. A landlord is liable under section 7060.2(b)(1) to
          all displaced tenants if any unit within the
          building is re-rented for residential purposes
          within two years
       We begin our analysis with the plain text of section
7060.2(b)(1), which provides, “(b) If the accommodations are
offered again for rent or lease for residential purposes within two
years of the date the accommodations were withdrawn from rent
or lease, the following provisions shall govern: (1) The owner of
the accommodations shall be liable to any tenant or lessee who

                                13
was displaced from the property by that action for actual and
exemplary damages.” (See also LAMC, § 151.25.)
      The ordinary meaning of the phrase “any tenant or lessee
who was displaced from the property by that action” encompasses
any tenant displaced from the property by the action of
withdrawing the property from the rental market.
(§ 7060.2(b)(1).) Defendants agree that “ ‘by that action’ ” refers
to the action of withdrawing the accommodations from the rental
market. However, they assert that a landlord is only liable for
damages to the tenants who “were displaced as a result of re-
rental of ‘the accommodations’ that were withdrawn.” The
statutory language does not support this reading. A tenant is
displaced from a property by the withdrawal of the property from
the market under the Ellis Act, not by the subsequent re-rental of
the vacant unit.
      Moreover, the singular word “property” in the phrase “[t]he
owner of the accommodations shall be liable to any tenant or
lessee who was displaced from the property,” refers to the entire
building or structure, not an individual tenant’s unit.
(§ 7060.2(b)(1), italics added.) Indeed, the Legislature’s use of the
word “unit” in section 7060.2(b)(3), and elsewhere in section
7060.2, indicates the contrasting use of the word “property” in
subdivision (b)(1) must be read more broadly than an individual
unit. (McHugh, supra, 12 Cal.5th at p. 227 [we must consider the
“ordinary meaning of the relevant terms” together with the
“terms used in other parts of the statute”].) For example, under
section 7060.2(b)(3), “[a]ny owner who offers accommodations
again for rent or lease shall first offer the unit for rent or lease to
the tenant or lessee displaced from that unit by the withdrawal
pursuant to this chapter . . . .” (Italics added.) Section

                                  14
7060.2(b)(1) has no similar language connecting or limiting the
availability of damages to the displacement from or re-rental of a
specific unit.
       Defendants’ claim that a landlord is liable only to the
tenant whose unit was offered for re-rental would lead to results
at odds with the Act as a whole. Under defendants’ reading of
section 7060.2(b)(1), if a landlord conducted an Ellis Act eviction
in a four-unit building, then offered only one of the units for re-
rental, only that tenant whose unit was offered for re-rental
would be entitled to actual and exemplary damages. The other
three tenants, who were similarly injured by the initial Ellis Act
eviction and the landlord’s failure to truly “go out of business,”
would be unable to seek compensation. We do not assume that
the Legislature would intend such an arbitrary distribution of
damages for the same injury. (In re Greg F. (2012) 55 Cal.4th
393, 406 [“ ‘We must also avoid a construction that would produce
absurd consequences, which we presume the Legislature did not
intend’ ”]; Cameron v. Las Orchidias Properties, LLC (2022) 82
Cal.App.5th 481, 508.)
       Our reading of the Act is further supported by considering
section 7060.2(b)(1) and section 7060.7 together. Section 7060.7
applies to the entire Act. (§ 7060.7 [discussing the “intent of the
Legislature in enacting this chapter”].) The section explicitly
states the Act does not permit a landlord who is exiting the rental
market to withdraw “less than all of the accommodations.”
(§ 7060.7, subd. (d)(1).)7 Defendants’ interpretation of section

7     The Ordinance’s prohibitions set forth in LAMC
section 151.09, subdivision (A)(10) are thus consistent with the
Act. A landlord may evict a tenant in a rental unit subject to the

                                15
7060.2(b)(1) would permit a landlord who withdrew all
accommodations from the rental market to subsequently—
perhaps even immediately—re-rent a single unit on the property,
yet limit its liability for failing to actually exit the rental market
to the single tenant whose unit was re-rented. This would render
the requirement that an owner withdraw all accommodations
from the rental market meaningless, or at least ineffective,
because it leaves the other tenants without recourse. Defendants
argue the Act’s requirement that a property owner withdraw all
rental units in a building from the market is “inapposite,” but we
“do not examine [particular statutory] language in isolation, but
in the context of the statutory framework as a whole in order to
determine its scope and purpose and to harmonize the various
parts of the enactment.” (Jarman, supra, 10 Cal.5th at p. 381.)
      Defendants further assert that because section 7060.7,
subdivision (d)(1), requires the withdrawal of all units from the
rental market, but the Act lacks a similar provision requiring the
re-rental of all units, we should view this as an indication that
the Legislature did not intend that an offer to re-rent any unit in
a building renders the landlord liable to all tenants evicted from
the building. We reject this argument for the reasons explained
above, and also in light of the Legislature’s express statement of

Ordinance “a. to demolish the rental unit; or [¶] b. to remove the
rental unit permanently from rental housing use. . . . [¶] This
subdivision constitutes lawful grounds for eviction only where a
landlord is withdrawing from rent or lease all of the rental units
in a structure or building. A landlord seeking to evict tenants
pursuant to either of the circumstances described in this
subdivision may not withdraw from rent or lease less than all of
the accommodations in a structure or building.”

                                 16
the scope of the Act as set forth in section 7060.7,
subdivision (d)(2).
       Assembly Bill No. 1399 (2019–2020 Reg. Sess.) (Assembly
Bill 1399) added section 7060.7, subdivision (d)(2) to section
7060.7 of the Ellis Act. The provision states the Act does not
“[p]ermit an owner to . . . [¶] . . . [¶] [d]ecline to make a written
rerental offer to any tenant or lessee who occupied a unit at the
time when the owner gave the public entity notice of its intent to
withdraw the accommodations, in the manner and within the
timeframe specified in paragraph (3) of subdivision (b) . . . of
[s]ection 7060.2.” (§ 7060.7, subd. (d)(2).)
       According to the Legislative Counsel’s Digest, Assembly
Bill 1399 added this subsection to the Ellis Act’s statement of
legislative intent “to specify that [the Act] is not intended to
permit an owner to return to the rental market less than all of
the accommodations . . . .”8 (Legis. Counsel’s Dig., Assem. Bill.
No. 1399 (2019–2020 Reg. Sess.) Stats. 2019, ch. 596.) This and
other changes to the Ellis Act in Assembly Bill 1399 were
motivated by concerns that “landlords have been taking
advantage of an ambiguity in the Act by removing, and
reintroducing, units in a piecemeal fashion in order to avoid the
Act’s restrictions and evade rent control laws.” (Assem. Com. on

8     “Even when the plain language of the statute makes
reference to extrinsic materials unnecessary, a reviewing court
may consult a legislative history for material that confirms the
court’s construction of statutory language. [Citations.] And, ‘[t]o
determine the purpose of legislation, a court may consult
contemporary legislative committee analyses of that legislation,
which are subject to judicial notice.’ [Citation.]” People v.
Johnson (2015) 234 Cal.App.4th 1432, 1443, fn. 5, citing In re
Tobacco II Cases (2009) 46 Cal.4th 298, 316.)

                                 17
Judiciary, Analysis of Assem. Bill No. 1399) (2019–2020 Reg.
Sess.) as amended April 25, 2019, p. 1.) A Senate Rules
Committee report described the purpose of the Assembly Bill
1399 amendments as, among other things, to clarify that “once
any unit is returned to the rental market, the entire property is
considered back on the rental market for purposes of the Act.”
(Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis
of Assem. Bill No. 1399 (2019–2020 Reg. Sess.) as amended July
11, 2019, p. 4.)
       Section 7060.7, subdivision (d)(2) specifically concerns the
right of first refusal provisions under section 7060.2(b)(3), which
are not directly at issue in this case. However, the statement of
legislative intent remains instructive and supports our reading of
what the plain text of section 7060.2(b)(1) requires. If the return
of any unit to the rental market renders the entire property back
on the rental market, it follows that the return of any unit allows
any displaced tenant to seek relief under section 7060.2(b)(1).
       The statute’s plain text, as incorporated by the Ordinance,
indicates that to lawfully evict tenants in rent controlled units, a
property owner must withdraw all of the accommodations in a
property from the rental market. Returning any previously
withdrawn unit to the rental market is an indication that the
landlord has not, in fact, “gone out of business.” Once any unit is
returned to the rental market within two years, the landlord is
liable to any tenant evicted when the entire property was
removed from the market. The landlord cannot return individual
units in a piecemeal fashion, paying damages under section
7060.2(b)(1) to each tenant only when it re-rents, or offers to re-
rent, that tenant’s former unit.

                                18
      D. Neither section 7060.2, subdivision (c), nor Kihagi
          governs the interpretation of 7060.2(b)(1)
      Defendants argue that section 7060.2, subdivision (c),
which applies to re-rental within 10 years, contains similar, if not
broader language than 7060.2(b)(1). Under section 7060.2,
subdivision (c), “an owner who offers accommodations again for
rent or lease within a period not exceeding 10 years from the date
on which they are withdrawn, and which are subject to this
subdivision, shall first offer the unit to the tenant or lessee
displaced from that unit by the withdrawal . . . . The owner of
the accommodations shall be liable to any tenant or lessee who
was displaced by that action for failure to comply with this
paragraph, for punitive damages in an amount which does not
exceed the contract rent for six months, and the payment of
which shall not be construed to extinguish the owner’s obligation
to comply with this subdivision.” (See LAMC, § 151.27,
subd. (B).) Defendants contend section 7060.2, subdivision (c)
clearly provides for unit-by-unit liability only, so section
7060.2(b)(1) must as well.
      We reject defendants’ argument. Section 7060.2,
subdivision (c) is neither at issue in this case, nor does it govern
an interpretation of section 7060.2(b)(1), because the two
provisions have key differences. As explained above, section
7060.2(b)(1) affords tenants displaced by an Ellis Act eviction a
monetary remedy when the property owner offers the
accommodations again for rent for residential purposes within
two years of the withdrawal date. Section 7060.2(b)(3) governs a
tenant’s right of first refusal if the accommodations are returned
to the rental market within two years.

                                19
       In contrast, section 7060.2, subdivision (c), contains no
provision for damages simply because the property owner has
returned accommodations to the market within 10 years.
Instead, it guarantees that former rent-control tenants may
return, and it penalizes the property owner for not complying
with the requirement that those former tenants be provided a
right of first refusal for the units being returned to the market.
This is reflected in the language of section 7060.2, subdivision (c),
that the owner is liable for punitive damages “to any tenant or
lessee who was displaced by that action for failure to comply with
this paragraph . . . .” (Italics added.) We disagree that, to the
extent liability under section 7060.2, subdivision (c) can only be
determined on a unit-by-unit basis—an issue we need not and do
not decide—the same is true under section 7060.2(b)(1).
       Further, the section 7060.2, subdivision (c) 10-year
provision is not before us. Plaintiffs’ first cause of action is based
exclusively on the Ordinance, LAMC section 151.25, which
incorporates section 7060.2(b)(1) of the Ellis Act. These
provisions govern liability for return of accommodations to the
residential rental market within two years. (LAMC, § 151.25;
§ 7060.2(b)(1).) The complaint also expressly limits the proposed
class to “former tenants of any property owned by any Defendant
who were displaced from their rental units pursuant to the Ellis
Act and where at least one rental unit within their buildings was
offered for rent or lease within two years of the date of the
withdrawal . . . .” (Italics added.) Although defendants assert
there is “no fundamental reason” to limit the claim to two years,
we are bound to evaluate plaintiffs’ complaint as drafted. (Aryeh
v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1202 [at
demurrer stage, plaintiff is “master” of the complaint and we

                                 20
must accept allegations at face value].)9
       Defendants’ reliance on Kihagi, supra, 16 Cal.App.5th 739,
is equally misplaced. In Kihagi, the city moved to enforce a
settlement agreement regarding the landlord’s re-rental of
previously rent controlled units in an apartment building. The
settlement agreement required the landlord to comply with the
Ellis Act, and the city contended that by re-renting three
previously occupied units, the landlord breached the agreement.
(Id. at pp. 747, 750.) The appellate court examined whether,

9      Defendants suggest in their appellate briefing that
plaintiffs cannot limit their claims to section 7060.2(b)(1), but
must also assert claims under section 7060.2, subdivision (c). At
oral argument, counsel for defendants also asserted that
plaintiffs’ decision to assert claims only under section
7060.2(b)(1) may raise due process concerns. (See e.g., City of
San Jose v. Superior Court (1974) 12 Cal.3d 447, 464 [trial court
abused its discretion in certifying class action because plaintiffs
did not adequately represent the class in failing to “raise claims
reasonably expected to be raised by the members of the class”].)
However, this issue is properly addressed as whether the
proposed class representatives will adequately protect the
proposed class. The trial court did not address the issue of the
adequacy of proposed class representatives to represent those
with claims outside of the proposed two-year period in section
7060.2(b)(1), and the defendants did not raise the issue in their
demurrer. Moreover, the issue may be decided at the class
certification stage. (Hicks v. Kaufman & Broad Home Corp.
(2001) 89 Cal.App.4th 908, 924–925 [rejecting as “premature”
argument that plaintiffs who sought recovery for some types of
damages but not others were “effectively waiving” any possibility
of recovery for the other damages for the class; trial court could
“certify a class without waiving the right of class members” by
either limiting class to a liability class or dividing the class into
subclasses, among other solutions].)

                                 21
under the Ellis Act, the landlord had to offer the units to the
previous tenants and what rental rates the landlord could now
charge for those units under section 7060.2, subdivisions (a) and
(c). (Id. at pp. 751–752.)
       The Kihagi court did not examine the questions presented
here. None of the alleged violations in Kihagi occurred within
two years of the landlord’s purported withdrawal or notice of
withdrawal of accommodations from the rental market. (Kihagi,
supra, 16 Cal.App.5th at p. 747.) Nor did the Kihagi court
examine liability to all tenants under section 7060.2(b)(1). It only
considered the question of whether the units needed to be offered
to the previous tenants and at what rates—issues that were unit
specific under the circumstances of that case and within the
framework of section 7060.2, subdivision (c). (Id. at p. 752.) That
analysis does not apply here.
       Liability under LAMC section 151.25, subdivision (A) and
section 7060.2(b)(1) does not require a unit-by-unit analysis. The
entire property must be removed from the rental market for a
property owner to permissibly go “out of business.” (§ 7060.7,
subd. (d)(1); LAMC, § 151.09, subd. (A)(10).) If the landlord
violates this requirement by returning any of the units to the
residential rental market within two years, any tenant who was
displaced from the property may seek relief under LAMC
section 151.25, subdivision (A) and section 7060.2(b)(1). Thus,
the scope of what plaintiffs must prove is narrower than
defendants claim. Plaintiffs need not establish that every unit in
each of defendants’ buildings was returned to the rental market,
or that the specific units each putative class member occupied
were the units defendants offered for residential re-rental.
Instead, common proof may be used to determine whether any

                                22
units in each of defendants’ withdrawn buildings were returned
to the residential rental market.
IV. Plaintiffs Have Alleged Facts Demonstrating a
       Reasonable Possibility They Can Establish Common
       Issues Predominate
       Defendants also argue that section 7060.2(b)(1) only creates
owner liability for residential re-rentals. We agree. The plain
text states that “[i]f the accommodations are offered again for
rent or lease for residential purposes,” there is liability for
damages. (§ 7060.2(b), italics added.) However, we disagree that
whether defendants’ re-rental offers were for “residential
purposes” is a question that cannot be resolved with common
proof. Plaintiffs have sufficiently alleged facts showing a
common scheme of residential re-rental offers for defendants’
properties. If plaintiffs ultimately establish at class certification
that defendants’ re-rental offers are sufficiently similar and
contain common indicia of a residential rental offer, as alleged,
liability under the Ordinance and the Ellis Act can be determined
on a classwide basis.
       The Ellis Act does not define “residential purposes.”
However, the term “residence” was discussed in Bullock v. City
and County of San Francisco (1990) 221 Cal.App.3d 1072. In
Bullock, the court reasoned that the term “residential” in the
context of the Act, “at the very least demonstrates an emphasis
on habitations not of a temporary nature.” (Id. at p. 1097.) The
trial court here also recognized that other Government Code
provisions state that in “determining the place of residence the
following rules shall be observed: [¶] (a) [i]t is the place where
one remains when not called elsewhere for labor or other special
temporary purpose . . . . [¶] (b) There can only be one residence.

                                 23
[¶] (c) A residence cannot be lost until another is gained.”10
(§ 244.)
        The determination of whether defendants’ accommodations
were offered for “residential purposes” may thus involve multiple
factors. However, the question before us is whether, “assuming
the truth of the factual allegations in the complaint, there is no
reasonable possibility” the trial court could determine that the
offers were for “residential purposes” on a classwide basis.
(Bridgeford, supra, 202 Cal.App.4th at pp. 1041–1042; Schermer,
supra, 245 Cal.App.4th at p. 925.) Only then would dismissal of
the class allegations on demurrer be warranted.
        Plaintiffs have alleged facts sufficient to demonstrate there
is a reasonable possibility that liability can be determined by
facts common to all class members. (Bridgeford, supra, 202
Cal.App.4th at pp. 1041–1042.) The statute applies to
“accommodations . . . offered again for rent or lease for residential
purposes.” (§ 7060.2(b), italics added.) Plaintiffs have
sufficiently alleged a common offer to rent for residential
purposes, pleading that “Defendants used Airbnb to offer to re-
rent withdrawn accommodations for periods of 30 days or more.”
Plaintiffs also allege that the offers were not significantly
different, asserting “[v]irtually all the Airbnb listings posted by
Defendants had a maximum stay of 1,125 nights.” While not
determinative, the allegation that defendants offered “virtually
all” listed units for stays of over three years, if true, could be one
significant indication that the proposed occupancies were not

10    We need not and do not decide whether the section 244
rules are appropriately applied to define “residential” under the
Act.

                                 24
transitory. Plaintiffs also allege that at least some of the Airbnb
listings offered monthly rental rates.
       While we do not consider contentions or conclusions in a
complaint (Aubry, supra, 2 Cal.4th at p. 967), plaintiffs have
alleged facts supporting a common policy of residential offers
sufficient to survive a demurrer. That one unit was re-rented,
and one was not, or that one unit was rented on a temporary
basis and one for residential purposes, does not determine
whether liability can be established on a classwide basis. As
discussed above, plaintiffs do not need to show that all units in
each building were returned to the residential rental market to
establish liability. Further, liability turns on the defendants’
offers to create residential tenancies, not on whether they were
ultimately successful in obtaining residential tenants.
(§ 7060.2(b) [“If the accommodations are offered again for rent or
lease for residential purposes within two years . . . .” (Italics
added.)]; see Coyne v. De Leo (2018) 26 Cal.App.5th 801, 815 [in
retaliatory eviction case landlord entitled to possession only if he
could prove he had a “bona fide intent to withdraw the Property
in its entirety”].) Thus, plaintiffs only need to establish that
there was one offer for residential purposes for each building, or
that at least one unit in each building was actually re-rented for
residential purposes, to create liability to all tenants in that
building under section 7060.2(b)(1). That the plaintiffs may need
to look at the circumstances surrounding the rental of an
individual unit, or several individual units, to find a unit offered
for residential purposes does not mean that common issues
cannot predominate if there is a common policy.
       The primary legal question in this case will be whether
defendants’ practice of offering previously withdrawn

                                 25
accommodations for rent on Airbnb constitutes re-rental for
residential purposes under the Act. If, as they have alleged,
plaintiffs show at class certification that defendants’ offers and
conduct in placing the units back on the market were sufficiently
similar across rental units, the relevant issues of law and fact
will be susceptible to common proof and liability can be
determined on a classwide basis. We cannot conclude at this
preliminary stage of the litigation that as a matter of law
plaintiffs will not be able to establish liability with common proof.
(Tucker, supra, 208 Cal.App.4th at p. 230.)
       Defendants assert that even if liability under section
7060.2(b)(1) does not mandate a unit-by-unit analysis, it must be
assessed building-by-building, so the central issue is still not
amenable to class treatment. We agree that only former tenants
who lived in buildings with at least one residential re-rental offer
would be eligible for relief. A building that was taken off the
market and never offered for re-rental does not fall under the
ambit of section 7060.2(b)(1).
       However, that potential class members would have to
establish eligibility for class relief by showing there was an offer
to rent a unit in their building does not mean that common
questions do not predominate. (Sav-On Drug Stores, Inc. v.
Superior Court (2004) 34 Cal.4th 319, 334 (Sav-On Drug Stores);
Nicodemus v. Saint Francis Memorial Hospital (2016)
3 Cal.App.5th 1200, 1218–1219 (Nicodemus); Medrazo v. Honda
of North Hollywood (2008) 166 Cal.App.4th 89, 99–100.) Courts
have consistently held that common issues may predominate
even when each class member will have to establish that he or
she is eligible. (Acree v. General Motors Acceptance Corp. (2001)
92 Cal.App.4th 385, 397.)

                                 26
       For example, in Nicodemus, supra, 3 Cal.App.5th 1200, the
plaintiff alleged the defendants had a practice of overcharging
patients for copies of their medical records. (Id. at p. 1205.) The
court found the “common question” was the application of a
statute to the defendant’s “uniform practices in response to
attorney requests for medical records. The fact that each class
member ultimately may be required to establish his or her
records request was submitted before or in contemplation of
litigation does not overwhelm the common question regarding
those uniform copying practices.” (Id. at p. 1219; Franchise Tax
Bd. Limited Liability Corp. Tax Refund Cases (2018)
25 Cal.App.5th 369, 394 [theory of recovery was that statute was
unconstitutional; question was “manifestly a legal question
common to all proposed class members that is highly amenable to
class action treatment,” even though only those who paid the levy
would be eligible].)
       Likewise, in Sav-On Drug Stores, supra, 34 Cal.4th 319,
our Supreme Court concluded common issues predominated
where plaintiffs, store managers at various Sav-On Drug Stores,
sought unpaid overtime compensation based on a common policy
that allegedly improperly exempted the managers from overtime
laws. The court recognized that the defendant was “entitled to
defend against plaintiffs’ complaint by attempting to demonstrate
wide variations in the types of stores and, consequently, in the
types of activities and amounts of time per workweek the [two
types of managers] in those stores spent on different types of
activities. Nevertheless, a reasonable court crediting plaintiffs’
evidence could conclude it raises substantial issues as to both
whether a misclassification policy existed and whether, in any

                                27
event, a uniform classification policy was put into practice under
the standardized conditions alleged.” (Id. at p. 330.)
       Similarly, here, that a tenant will have to show that at
least one unit in the tenant’s building was offered for residential
rental to demonstrate eligibility, or that defendants may defend
on the basis that some buildings lacked any re-rental offers, does
not establish that common questions as to liability do not
predominate.
       Defendants rely on two cases in support of their argument
that plaintiffs cannot show common questions predominate. Both
are distinguishable from this case. In Schermer, supra, 245
Cal.App.4th 912, the plaintiffs sought to represent a class in a
case involving 18 mobile home parks operated by the defendants.
(Id. at p. 915.) The plaintiffs alleged the defendants subjected
them to unconscionable lease agreements and leasing practices.
The trial court sustained the defendants’ demurrer and the Court
of Appeal affirmed, holding that individual issues predominated.
(Id. at pp. 925–926.) The alleged unconscionable policies and
procedures were based on one-on-one interactions between
different defendants and plaintiffs in each of the 18 mobile home
parks. The allegations involved improper conduct in the
negotiation, execution, and enforcement of each lease agreement.
There were at least eight different leasing practices. There were
16 cities involved, with at least eight different applicable rent
control ordinances. (Id. at pp. 926–927.)
       In contrast, here the question is whether defendants’
common online offer to re-rent was an offer to create a residential
occupancy. Defendants may be held liable to any displaced
tenant in a building where there was such an offer. All of
defendants’ buildings are alleged to be in one city, subject to the

                                28
same rent control ordinance. While plaintiffs will need to prove
and substantiate their allegations of a common unlawful re-
rental practice, it is undisputed that defendants’ conduct directed
at the plaintiffs was uniform; plaintiffs’ claims do not depend on
defendants’ individualized interactions with each putative class
member, as was the case in Schermer.
       In Newell, supra, 118 Cal.App.4th 1094, the plaintiffs were
insured homeowners at the time of the Northridge earthquake.
The Court of Appeal affirmed the trial court’s order sustaining a
demurrer and dismissing class allegations, finding that common
questions of law and fact did not predominate. Plaintiffs alleged
a “pervasive scheme” by the defendant insurance companies that
caused the insurers to improperly limit liability on the plaintiffs’
earthquake claims. (Id. at p. 1103.) The Newell court held that
even if the insurance companies had “adopted improper claims
practices to adjust Northridge earthquake claims, each putative
class member still could recover for breach of contract and bad
faith only by proving his or her individual claim was wrongfully
denied, in whole or in part, and the insurer’s action in doing so
was unreasonable. [Citation.] Thus, each putative class
member’s potential recovery would involve an individual
assessment of his or her property, the damage sustained and the
actual claims practices employed. [Citation.] In such cases, class
treatment is unwarranted.” (Ibid.) Here, in contrast, each
putative class member’s claim rests on whether the alleged
similar offers to re-rent were “residential” offers, which is a
common question capable of classwide resolution.
       When reviewing the evidence at class certification, the trial
court may ultimately determine that there is insufficient
evidence to show defendants engaged in a common course of

                                29
conduct that can be evaluated on a classwide basis to determine
if the re-rental offers were for residential purposes. Defendants
may also ultimately defend against liability by arguing that there
were no re-rental offers for particular buildings. However, we
cannot conclude as a matter of law that there is no reasonable
possibility that common questions as to liability for the
Ordinance and Ellis Act claim will predominate.
V.     The Trial Court Erred in Concluding Common Issues
       Did Not Predominate as to Plaintiffs’ Other Causes
       of Action
       Defendants have argued plaintiffs’ fraud and Unfair
Competition Law claims depend on alleged misrepresentations
and violations of the LAMC, thus plaintiffs’ inability to show they
will satisfy class certification requirements as to the Ellis Act and
Ordinance claim is equally true for the remaining causes of
action. The trial court similarly concluded that its analysis of the
Ordinance and Ellis Act class claim applied equally to plaintiffs’
class claims for fraud and violations of the Unfair Competition
Law. For the reasons discussed above, we disagree. Plaintiffs
have alleged sufficient facts to show questions of law and fact
common to the class as to their fraud and Unfair Competition
Law claims.11

11    We note that while the trial court sustained the demurrer
to the first amended complaint with leave to amend as to the
fraud claims, in ruling on the demurrer to the second amended
complaint, the subsequent court found plaintiffs had “cured the
defects in the [first amended complaint] as to their fraud case of
action.” The court thus sustained the demurrer as to the fraud
cause of action based on its conclusion that “whether Defendants’
representations were false as to each unit depends on whether
Defendants’ re-rentals of each unit in fact violated the Ellis Act.”

                                 30
VI.    The Need for Individualized Proof of Damages Does
       Not Warrant Foreclosing Class Treatment at this
       Stage of the Litigation
       Plaintiffs also argue the trial court erred in finding no
reasonable probability they could establish common issues
predominate as to damages. In the alternative, they assert the
trial court should have allowed a liability-only class to go forward
even if individualized issues prevent classwide determination of
damages. Defendants contend determining damages will require
substantial individualized proof and expert testimony unique to
each plaintiff, rendering class treatment inappropriate. We
conclude that even if class members ultimately need to
individually establish damages, plaintiffs have still alleged facts
sufficient to withstand the demurrer to their class allegations.
       Section 7060.2(b)(1) provides for actual and exemplary
damages. The Ellis Act does not define “actual” damages.
(§ 7060(b)(1)–(2).) Yet, cases involving the calculation of actual
damages due to wrongful evictions under similar ordinances are
instructive. In DeLisi v. Lam (2019) 39 Cal.App.5th 663 (DeLisi),
the court considered damages for unlawful evictions under San
Francisco’s rent control ordinance, including the parties’
arguments regarding the calculation of “actual damages,” a term
not defined in the ordinance. The DeLisi court concluded actual
damages are not limited to out-of-pocket expenses. (Id. at p. 681.)
Instead, the court reasoned “ ‘ “[d]amages” are monetary
compensation for loss or harm suffered by a person, or certain to
be suffered in the future, as the result of the unlawful act or
omission of another. ([Civ. Code,] §§ 3281–3283.) “Actual” is
defined as “existing in fact or reality,” as contrasted with
“potential” or “hypothetical,” and as distinguished from

                                31
“apparent” or “nominal.” (Webster’s Third New Internat. Dict.
(1964) p. 22.) It follows that “actual damages” are those which
compensate someone for the harm from which he or she has been
proven to currently suffer or from which the evidence shows he or
she is certain to suffer in the future. . . . In short, “ ‘ “[a]ctual
damages” is a term synonymous with compensatory damages . . .
.’ ” [Citation.]’ [Citation.]” (DeLisi, at p. 681.)
       Here, plaintiffs’ expert, Dr. Richard J. Devine, proposes two
methods for assessing damages. Both require a calculation of the
“rent differential,” which is the difference between the actual rent
at the time of a tenant’s eviction and the “market rent” for a
“comparable unit” at the time of the tenant’s displacement.
Plaintiffs allege a “comparable unit” is a unit with the same
number of bedrooms and bathrooms as a tenant’s former unit,
located “as close as possible” to the original unit. Plaintiffs assert
that calculating the rent differential does not require
individualized inquiries because the original rent amounts will be
located in data in defendants’ possession and the market rents
are obtained from public sources that report comparable rent
information, such as Zillow and Apartments.com.
       After determining the rent differential, plaintiffs assert
actual damages may be calculated to a “reasonably certain”
degree. One method involves using a “capitalization rate,” which
is a published percentage that is regularly reported for a certain
market (i.e., the Los Angeles real estate market) that reflects an
estimate of the potential return on a real estate investment. The
rent at the time of displacement of the tenant is then compared to
the market rent, annualized, and “capitalized” at this set
percentage.

                                 32
       Plaintiffs’ second proposed method for calculating damages
is to compare the rent at the time of displacement with the
market rent, annualized by the expected duration of the tenancy
and projected yearly increases to the rent. According to the
complaint, average tenures differ in units subject to the
Ordinance. Thirty percent of rent controlled units in Los Angeles
have tenures of 10 years or longer, but in some “sections of the
city, such as West, Central, and East Los Angeles,” 37 percent of
tenants stay 10 years or longer. A factor in the consideration of
the projected length of tenancy is how long the tenant lived in the
unit prior to displacement. Plaintiffs argue this information can
also be obtained from data within defendants’ possession.
       Several wrongful eviction cases have considered Devine’s
rent differential method of calculating damages. Chacon v. Litke
(2010) 181 Cal.App.4th 1234 (Chacon), concerned the wrongful
eviction of a family under the San Francisco Rent Stabilization
and Arbitration Ordinance. Devine testified as an expert
regarding the plaintiffs’ damages. (Id. at p. 1245.) He calculated
the difference between the Chacons’ rent when they were evicted
and the “market rent” for a similar apartment, over an estimated
20-year tenancy. (Ibid.) The mother testified that she had
intended to live at the apartment for the rest of her life, which
was a consideration in calculating the length of the tenancy if the
family had not been evicted. (Ibid.) The court awarded damages
to the mother and father, but not the Chacons’ adult children,
who did not pay rent. The court also awarded different amounts
of emotional distress damages to various individuals who had
resided in the apartment. (Id. at p. 1246.)
       In Duncan v. Kihagi (2021) 68 Cal.App.5th 519, Devine
testified as to the amount the tenants were paying when

                                33
displaced and the market rate for a similar unit, calculated over
an estimated 20 years that the tenants would have stayed in the
apartment. (Id. at p. 544.) Devine specifically opined, based on
an interview with the tenants, how long they would have stayed
in the unit. Although the defendants argued on appeal that
Devine was not qualified to opine on how long the tenants would
have stayed in their units, the court reasoned that the duration of
tenancy was ultimately a jury question. (Id. at pp. 544, 547.)
       In DeLisi, Devine “based his opinion of fair market value on
data from a real estate reporting service that surveys rental rates
in San Francisco and his own experience in real estate finance
and development, considering size, location, and amenities.”
(DeLisi, supra, 39 Cal.App.5th at p. 679.) Devine “had not been
inside the Balboa units but had seen photographs and discussed
the units with the tenants.” (Ibid.) From this information he
determined the fair market value of comparable units. (Ibid.)
       As alleged by plaintiffs in their complaint, and illustrated
by cases concerning actual damages for wrongful evictions,
plaintiffs’ proposed methods of calculating damages rest in part
on a determination of the fair market value of each unit. Fair
market value is based on a comparison of the displaced tenant’s
unit with a similar unit on the rental market, which is in turn
based on number of bedrooms, number of bathrooms, and
location. Also relevant are the amenities in the unit. (DeLisi,
supra, 39 Cal.App.5th at p. 679.) Further, the proposed second
method of calculating actual damages requires an estimate of
how long each tenant would have stayed in the unit, which, even
if not established through individual testimony (Chacon, supra,
181 Cal.App.4th at p. 1245), would necessitate an analysis of
records specific to individual tenants. Plaintiffs have not alleged

                                34
that all proposed class members paid the same amount of rent, or
that they occupied units that would likely have the same fair
market value. Plaintiffs also have not alleged that the buildings
and units are sufficiently similar such that the fair market value
of each can be determined without answering these
individualized questions.
       Nonetheless, our high court has “recognized that the need
for individualized proof of damages is not per se an obstacle to
class treatment [citation] and ‘that each member of the class
must prove his separate claim to a portion of any recovery by the
class is only one factor to be considered in determining whether a
class action is proper[.]’ [Citation.]” (Sav-On Drug Stores, supra,
34 Cal.4th at pp. 334–335.) Further, “[p]redominance is a
comparative concept, and ‘the necessity for class members to
individually establish eligibility and damages does not mean
individual fact questions predominate.’ [Citations.] Individual
issues do not render class certification inappropriate so long as
such issues may effectively be managed.” (Id. at p. 334.)
       While plaintiffs’ proposed methods of calculating damages
appear to inevitably require some individual unit- or tenant-
specific proof, plaintiffs have still alleged facts which, if true,
suggest the individual issues may effectively be managed. For
example, plaintiffs allege factors such as length of tenancy, the
actual rent tenants were paying, and market rates for
comparable units may be determined either from data in
defendants’ possession or publicly available sources. Defendants
contend they will have the right to advance other theories of
damages that would require additional individualized proof, yet
“[d]efenses that raise individual questions about the calculation

                                35
of damages generally do not defeat certification.” (Duran, supra,
59 Cal.4th at p. 30.)
       This case thus differs from Schermer, in which the
appellate court held that, independent of the lack of common
proof for liability issues, the demurrer to class allegations was
properly sustained due to the substantial and numerous factually
unique questions necessary to determine each plaintiff and
putative class member’s damages. (Schermer, supra, 245
Cal.App.4th at pp. 926–927.) As noted above, the allegations in
Schermer involved multiple mobile home parks, in different cities
with separate rent control ordinances, and multiple time periods.
(Id. at p. 927.) Here, while there are several properties at issue,
they are alleged to all be in the same city, and plaintiffs have
alleged facts which, while they do not eliminate the need for
individualized questions to be answered with respect to damages,
offer proposals for the management of those questions. And, in
contrast to Schermer, we have already concluded that plaintiffs
have alleged facts sufficient to establish that the central issues of
law and fact necessary for the determination of liability can be
established with common proof.
       “[C]lass treatment is not appropriate ‘if every member of
the alleged class would be required to litigate numerous and
substantial questions determining his individual right to recover
following the “class judgment” ’ on common issues.” (Duran,
supra, 59 Cal.4th at p. 28.) But we are mindful that this case is
before us on appeal from a trial court order sustaining a
demurrer. Although determining damages would necessitate at
least some individual proof, there remains a reasonable
possibility that plaintiffs will still be able to satisfy the
requirements for class certification.

                                 36
VII. Plaintiffs Have Alleged a Substantial Benefit to Class
        Resolution of Liability
        “The party advocating class treatment must demonstrate
. . . substantial benefits from certification that render proceeding
as a class superior to the alternatives. [Citations.]” (Brinker,
supra, 53 Cal.4th at p. 1021.) A class should not be certified
unless “ ‘ “substantial benefits accrue both to litigants and the
courts.” ’ [Citations.]” (Linder v. Thrifty Oil Co. (2000) 23
Cal.4th 429, 435.) In considering whether a class action would be
superior, courts consider four main factors: the interest of each
member in controlling his or her own case personally, the
difficulties in managing a class action, the nature and extent of
individual litigation already in progress involving the same
controversy, and the desirability of consolidating all claims before
the same court. (Ali v. U.S.A. Cab Ltd. (2009) 176 Cal.App.4th
1333, 1353; Basurco v. 21st Century Ins. Co. (2003) 108
Cal.App.4th 110, 121 (Basurco).)
        Plaintiffs have sufficiently alleged that classwide resolution
of their liability claims has substantial benefits over individual
actions. First, Plaintiffs do not have a particular need to control
their own cases as to liability. This is not a case where they seek
specific repairs to their own homes, for example. (Cf. Basurco,
supra, 108 Cal.App.4th at p. 121.) Even where individualized
issues predominate as to damages, a court may still certify a
liability class and then allow class members to establish damages
individually in a second damages phase of trial. (Knapp v. AT&T
Wireless Services, Inc. (2011) 195 Cal.App.4th 932, 941 [“ ‘ “As a
general rule if the defendant’s liability can be determined by facts
common to all members of the class, a class will be certified even
if the members must individually prove their damages” ’ ”]; Sav-

                                 37
On Drug Stores, supra, 34 Cal.4th at p. 332 [“That calculation of
individual damages may at some point be required does not
foreclose the possibility of taking common evidence on the
misclassification questions”].)
       Second, we have already concluded that at this stage of the
litigation, plaintiffs have adequately pled that their first three
causes of action are capable of common resolution as to liability.
       Third, there is some litigation by individual class members
already, as evidenced by two complaints in the record. However,
plaintiffs allege that there are at least 35 buildings at issue in
this case, and the two other complaints in the record are filed on
behalf of a total of seven plaintiffs. This does not render the
separate litigation so substantial that it will necessarily be
difficult for the courts to coordinate already outstanding cases.
(Cf. Basurco, supra, 108 Cal.App.4th at p. 122 [refusing to certify
class because it “would undermine the efforts of the superior
court to manage the hundreds of other similar cases”].)
       Finally, it is desirable to consolidate all of the potential
actions by the tenants before the same court because they are
based on an alleged common practice. It is more efficient for the
court to determine liability for an alleged common scheme than
for each tenant in each building. The class is alleged to be
“hundreds of members,” so individual cases would be burdensome
for the courts. We also must consider that “when potential
recovery to the individual is small and when substantial time and
expense would be consumed in distribution, the purported class
member is unlikely to receive any appreciable benefit.” (Blue
Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 386.) Here,
the potential recovery of each class member is not alleged to be
small. Plaintiffs allege the aggregate damages are “in the

                                38
millions of dollars,” so each class member is likely to come
forward. While the evidence at the class certification stage of
litigation may ultimately show otherwise, we cannot determine
as a matter of law, as we must when reviewing an order
sustaining a demurrer, that class resolution is not a superior
method of litigating plaintiffs’ first three causes of action.
(Bridgeford, supra, 202 Cal.App.4th at p. 1042.)

                               39
                         DISPOSITION
      The order sustaining defendants’ demurrer to the class
allegations in the second amended complaint is reversed. On
remand, the trial court shall issue an order reinstating plaintiffs’
class allegations and conduct further proceedings not inconsistent
with this opinion. Appellants to recover their costs on appeal.

      CERTIFIED FOR PUBLICATION

                                           ADAMS, J.

We concur:

                  EDMON, P. J.

                  EGERTON, J.

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