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The CBM Group, Inc. v. Llamas

Superior Court of California, Appellate Division, Fresno

April 5, 2017

THE CBM GROUP, INC., Plaintiff/Respondent,
GABRIELA LLAMAS, Defendant/Appellant.

         APPEAL from a judgment of the Superior Court of Fresno County, No. 16CECL00668 Dale Ikeda, Judge. Reversed.[1]

          Marcos Segura, Central California Legal Services, Inc., attorney for defendant/appellant Gabriela Llamas.

          Michael J. Lampe, the Law Offices of Michael J. Lampe, attorney for plaintiff/respondent The CMB Group, Inc.


          Hon. Donald S. Black, Presiding Judge.



         In this appeal, defendant/appellant Gabriela Llamas (hereinafter “appellant”) challenges an unlawful detainer judgment in favor of plaintiff/respondent The CBM Group, Inc. (hereinafter “respondent”). The judgment was based on appellant's failure to pay full market rate rent after she failed to complete paperwork to recertify her application for federal subsidized housing through the Rural Development Program, and also on her alleged drug use and involvement in criminal activities on the property. Appellant contends that the 60-day notice served on her was insufficient to support the judgment because it did not mention any alleged drug use or criminal activity and gave her no opportunity to cure the alleged violations. She also contends that there was no substantial evidence to support the judgment to the extent that it relied on the three-day notice because respondent refused to allow her to complete the recertification process to qualify for the federal subsidy program. We agree that the judgment was not supported by either the 60-day notice or the three-day notice, and therefore we will reverse the judgment.



         Appellant entered into a lease agreement with respondent in November of 2012 to rent an apartment in Kerman. The rent was $766 per month, but appellant was only required to pay $25 per month because she qualified for subsidies under the United States Department of Agriculture's Rural Development Program. In order to remain in the program, appellant had to recertify her income and household size annually. This required her to meet with the property manager, sign forms, and fill out a questionnaire. The recertification had to be completed before the current certification expired. In appellant's case, this required her to complete the recertification on or before December 31, as her certification expired on January 1. In addition, there was a ten-day grace period, so effectively appellant could complete her paperwork as late as January 10.

         The respondent has a policy and practice of sending out several notices to tenants before their certifications expire. Respondent sends a notice 120 days in advance of the expiration date, another notice at 90 days, and a notice at 60 days. The notices state that the recertification is due 45 days prior to the certification effective date, and that a notice of termination will be served if the recertification remains incomplete 30 days prior to the effective date. However, the notice also states that a certification completed after the expiration date will not be accepted. Thus, appellant had until December 31, 2015 to recertify.

         In the present case, respondent sent appellant a 120-day notice on September 1, 2015, a 90-day notice on October 1, 2015, and a 60-day notice on November 2, 2015. The 120-day notice set a recertification interview for September 11, 2015. However, appellant was unable to meet with the property manager during this period because she was living in a 90-day substance abuse program. She was not allowed to leave the facility for the first 40 days, and even after this “blackout” period, she was only allowed to leave under very specific circumstances.

         Appellant's sister, Leticia Llamas, told the respondent's property manager, Maria Velez, that appellant was in a rehabilitation program and asked if she still had time to complete the process. Velez said “yes”, but told her that appellant still had to come in personally and sign the paperwork. Appellant also called Velez and explained the situation. Appellant told Velez that she would be able to come in to complete the recertification paperwork on November 21, 2015.

         Appellant returned home on November 22, 2015, and then met with Velez on November 23 or 24. However, Velez refused to process appellant's recertification. According to appellant, when she went in to complete the recertification, Velez told her that it was too late and that she would not be recertifying appellant. Velez testified that when appellant came into her office and told her she wanted to recertify, Velez told her that she had spoken to her supervisor, Stacey Smith, and that “we will not be renewing your lease.” She told her that “we would not be able to do that. Certification has ended.” However, Velez subsequently testified that she only told appellant that respondent would not renew her lease, not that she could not recertify under the subsidy program.

         When appellant did not complete the recertification process, the rent for the apartment went up to the full market rate of $1, 050. Appellant was not able to pay the full amount, and respondent refused to accept her usual payment of $25.

         On January 19, 2016, respondent served appellant with a 3-day notice to quit or pay rent. The notice stated that, because appellant did not complete her recertification paperwork by January 1, 2016, the rent for her apartment went up to the full market rate of $1, 050 per month. Appellant did not pay the full market rate rent as requested, nor did she vacate the premises.

         Respondent then filed its unlawful detainer complaint, alleging that appellant had been served with a 3-day notice, and that appellant had failed to quit the premises or pay rent as demanded. The complaint did not allege any other ground for relief, such as failure to comply with the 60-day notice. A copy of the 60-day notice was attached to the complaint, but, although the notice did refer generally to various other lease provisions, the only specific ground for termination in the notice was failure to pay rent after appellant failed to complete the recertification process.

         The trial took place on March 7, 8, 28, and April 18, 2016, in Department 401, Judge Ikeda presiding. Ms. Velez and Ms. Smith testified on behalf of respondent regarding appellant's failure to recertify and failure to pay rent after her federal subsidy expired, and their subsequent service of the 3-day notice. Appellant testified that she was in rehabilitation and unable to fill out the paperwork until she was allowed to leave on November 22. 2015. She also testified that, when she went to see Velez on November 23 or 24, Velez refused to allow her to complete the recertification and told her that it was “too late.”

         Also, Velez testified that she refused to renew appellant's lease because of “some other incident that doesn't serve as a basis for this particular lawsuit.” Appellant's counsel objected that this testimony was irrelevant, but the court overruled the objection. Velez then testified that there was an incident involving appellant's ex-boyfriend, Steve Valdivia, in which the Kerman police came to the apartment. She also mentioned that there had been a “rash of burglaries” in the area, and that there was “stolen property” on the premises. The court then sustained a relevance objection.

         Respondent's counsel also attempted to ask appellant about her stint in the rehabilitation program, claiming that such 90-day programs are imposed by courts in cases involving cocaine or methamphetamine charges, and asking appellant if she had been convicted of any Penal Code violations. The court sustained a relevance objection to this question. Respondent's counsel then asked further questions, which established that appellant had not been convicted of any criminal conduct, and that she had voluntarily enrolled in the rehab program.

         The court then concluded the evidentiary portion of the trial, and directed the parties to submit post-trial briefs by March 18, 2016, with closing arguments on March 28, 2016.

         However, at the hearing on March 28, the trial court informed the parties that he had noticed additional issues that might require presentation of further evidence. In particular, Judge Ikeda claimed that, while he had been under the impression that the sole basis for the termination was the failure to complete the recertification, he later realized that the termination might also be based on possible criminal activity and drug use at the apartment. He also pointed out that the 60-day notice had referenced certain lease covenants regarding criminal activity and drug use which might support the eviction. He noted that the respondent's counsel had not pointed out that these provisions might support the eviction, but he believed the alleged activity might fall within the purview of the provisions. He also indicated that he might not have sustained some of appellant's objections if he had realized that the eviction might relate to the criminal activity and drug use allegations. Respondent's counsel stated that this was a “very simple” case, and that it was based on the “three-day notice” based on a ...

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