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Erlach v. Sierra Asset Servicing, LLC

California Court of Appeals, Sixth District

June 10, 2014

JOSEPH R. ERLACH, Plaintiff and Appellant,
v.
SIERRA ASSET SERVICING, LLC, Defendant and Respondent.

Monterey County Superior Super. Ct. M115493 Court Hon. Kay T. Kinsgley Judge

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COUNSEL

Raymond N. Stella Erlach for Plaintiff and Appellant.

Western Center on Law and Poverty S. Lynn Martinez Richard A. Rothschild and Madeline Howard for Amicus Curiae for Plaintiffs and Appellants.

Soltman, Levitt, Flaherty & Wattles Garth M. Drozin and Steven S. Nimoy for Defendant and Respondent.

OPINION

ELIA, J.

Joseph R. Erlach (appellant) appeals from a judgment of dismissal of his complaint against Sierra Asset Servicing LLC (Sierra) entered after the trial court sustained Sierra's demurrer without leave to amend. Appellant contends that it was error for the trial court to determine that his residential lease was void and that he was a squatter with no legal rights because a code enforcement notice (red tag) terminated his original tenancy, and to determine that any subsequent lease with Sierra was an illegal contract and void.[1] We agree and reverse the judgment of dismissal.

Factual and Procedural Background

Our factual summary is derived from appellant's complaint.[2]

Starting in 2009, appellant was the tenant/lessee of one bedroom, one bathroom and all the common areas of the residence at 7171 Oak Tree Place in Monterey. Mary Schwann (Schwann) was the owner of the premises. On April 6, 2010, appellant and Schwann entered into a written agreement whereby appellant paid $3, 500 in advance to rent the property for seven months ($500 a month) covering the period from April 1, 2010 to October 30, 2010. At some point, appellant had paid a $600 security deposit. On October 9, 2010, appellant and Schwann entered into a modification of the agreement whereby appellant paid an additional $500 to extend the agreement to November 30, 2010.

Late in October 2010, Schwann had the gas and electricity services to the property turned off; she sad it was because other tenants had failed to pay

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rent. Appellant demanded that Schwann restore the utilities, but Schwann refused and told appellant that she was going to " 'freeze [him] out.' " Thereafter, Schwann turned off the water service despite the fact that appellant's name was on the account. On November 8, 2010, a code enforcement inspector for the county "red tagged" the property for " 'no electric, no heat, no hot water.' " Appellant was precluded from occupying the property except to gather his belongings.

Four days later, on November 12, 2010, the property was sold in a foreclosure sale to Sierra. After the foreclosure sale, appellant met with Sierra's representative and explained that he had a lease with Schwann; the representative stated that appellant could stay for the remainder of the lease, but work needed to be done on the property. Sierra began work on the premises removing the carpets, flooring, and kitchen and bathroom fixtures; appellant objected.

On November 15, 2010, appellant spoke with Brian Grocott, Sierra's agent. Grocott told appellant that he could stay in the property until the end of December using appellant's $600 security deposit as rent for that month; Grocott said the property would be repaired and restored promptly. From November 15 to December 3, 2010, repeatedly, appellant requested that Sierra restore the property as promised. On December 3, 2010, Sierra told appellant that the property was ready for him. However, the property was not restored. Some of appellant's belongings were missing and the kitchen and bathroom had not been restored; piles of construction garbage were left throughout the property. The flooring and wall coverings were missing. On December 27, 2010, the property had still not been restored; the red-tag was still on the property and so appellant moved out.

Appellant filed a complaint for unspecified damages alleging eight causes of action against Schwann and Sierra:[3] 1) "Violation of California Civil Code Section 1942.4"; 2) "Tortious Violation for Breach of the Warranty of Habitability"; 3) "Intentional Infliction of Extreme Emotional Distress"; 4) "Negligent Infliction of Extreme Emotional Distress"; and (5) "Negligence: Violation of Duty to Maintain Habitable Conditions"; 6) "Constructive Eviction"; 7) "Breach of the Covenant of Quiet Enjoyment"; 8) "Retaliatory Eviction."

Sierra demurred to every cause of action in the complaint on the ground that Sierra "had no lease with" appellant and that "there was no obligation at law that compelled SIERRA to take any action regarding SCHWANN's former tenant.... Further, even if the subject lease between SCHWANN and ...


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