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Multani v. Knight

California Court of Appeals, Second District, Fourth Division

May 24, 2018

SALIMA MULTANI, Plaintiff and Appellant,
EVELYN KNIGHT, Defendant and Respondent.

          APPEAL from a judgment of the Superior Court for Los Angeles County, No. BC531587 Terry A. Green and Lawrence H. Cho, Judges. Affirmed.

          Law Office of Gary Kurtz and Gary Kurtz for Plaintiff and Appellant.

          Law Offices of Marc Coleman and Marc Coleman for Defendant and Respondent.


         The primary question presented in this case is: Can a landlord be held liable to a commercial tenant for damage to the tenant's property resulting from an alleged sewer backup when the tenant (who had a month-to-month tenancy in the premises after her lease expired) had stopped paying rent, had been served (but failed to comply) with a three-day notice to pay rent or quit, and had been named in an unlawful detainer action filed before the alleged sewer backup occurred? We find that the month-to-month tenancy was terminated by the tenant's failure to pay rent coupled with the landlord's filing of the wrongful detainer action. Therefore, as of the filing of the wrongful detainer action, the tenant was a tenant at sufferance who had no lawful right to possession of the premises. Accordingly, the landlord is not liable for damage to the tenant's property left on the premises when that damage was not caused by the landlord's intentional act or negligence.

         In this case, plaintiff Salima Multani (Salima[1]), who operated a medical clinic in a space she leased from defendant Evelyn Knight, brought claims against Knight for conversion, breach of the covenant of quiet enjoyment, nuisance, negligent maintenance of property and/or strict liability (negligence/strict liability), negligent interference with contract relations (contract interference), and violations of Business and Professions Code section 17200 (section 17200). The trial court granted Knight's motion for summary adjudication as to all of the claims except the contract interference claim, finding that Salima was not lawfully on the premises when the alleged sewage spill occurred. The contract interference claim went to trial before a jury, and the jury found in favor of Knight, finding that the alleged contractual or economic relationship did not exist.

         On appeal, Salima contends the trial court erred by granting summary adjudication because a tenant who does not pay rent retains all legal rights of possession up until the time she is dispossessed following the successful conclusion of an unlawful detainer action. She also contends the jury's verdict was not supported by substantial evidence. Neither contention has merit. Accordingly, we affirm the judgment.


         A. Facts Leading to the Lawsuit

         The following facts are, for the most part, undisputed.[2]

         Knight owned commercial property located in Long Beach, California (the premises). She entered into a five-year lease for the premises with Salima in 1993, with rent due on or before the first of every month. Salima, who was a physician, ran a medical clinic on the premises. In 1998, Knight and Salima entered into a second five-year lease. After that lease expired in 2003, Salima continued to pay the agreed-upon rent on or before the first day of every month, and Knight accepted those payments; thus by law, Salima had a month-to-month tenancy beginning in 2003 under the same terms as the expired lease.

         In or before May 2011, Dr. Boniface Onubah heard from Salima's son Rahim that Salima was winding down her medical practice, and he asked about the future of the clinic. He was told that the clinic, including its health contracts and equipment, would be available for purchase. On May 26, 2011, Onubah purportedly entered into a written agreement with Salima to purchase the clinic for $400, 000.[3] The sale was supposed to close in January 2012, but it did not go through.

         In July 2011, Salima was experiencing knee problems and stopped working at the clinic.[4] She failed to pay rent for July 2011, and paid no rent thereafter. In early December 2011, Knight caused a three-day notice to pay rent or quit to be conspicuously posted on the premises, with a copy mailed to Salima. Salima did not respond to the notice.

         On December 9, 2011, Knight filed an unlawful detainer action against Salima. Salima defaulted, and judgment was entered in favor of Knight. Knight obtained a writ of possession, and Salima was evicted from the premises on May 17, 2012.

         In the meantime, according to Rahim and Khaleel, sometime between late December 2011 and January 6, 2012, the sewer line for the premises had backed up, causing raw sewage to flow from all of the sinks, contaminating all of the medical equipment, supplies, and patient files for the clinic, rendering them unusable. As a result, the sale to Onubah could not be completed.

         B. The Present Lawsuit

         A year and a half after she was evicted, Salima filed the instant lawsuit against Knight, alleging claims for conversion, breach of the covenant of quiet enjoyment, nuisance, negligence/strict liability, contract interference, and violations of section 17200. In the complaint, Salima is named as “an individual d/b/a FAMILY HEALTH SERVICES MEDICAL CLINIC.”

         Knight filed a cross-complaint against Salima seeking the rent Salima failed to pay from July 2011 until she was evicted. Knight also alleged claims for nuisance and negligence based upon water damage to the premises that occurred while Salima was in sole possession of the premises.[5]

         1. The Motion for Summary Judgment/Adjudication

         a. Knight's Motion

         Knight filed a motion for summary judgment or summary adjudication of each of Salima's claims. She argued that Salima could not prevail on any of her claims because she was unlawfully on the premises at all times after July 1, 2011, and was illegally on the premises after December 9, 2011. She also argued that (1) the conversion claim failed because Salima abandoned and did not try to recover her property left on the premises; (2) the breach of the covenant of quiet enjoyment failed because Salima's occupancy of the premises was illegal after December 9, 2011, and because this claim did not exist for commercial property as a matter of law; (3) the nuisance claim failed because Salima's occupancy of the premises was illegal and there was no evidence of a legally sufficient nuisance; (4) the negligence/strict liability claim failed because Salima's occupancy of the premises was illegal, there was no strict liability as a matter of law, and Knight was not negligent; (5) the contract interference claim failed because Salima did not have a contract to sell her business, but even if she did, Knight was unaware of it and did nothing to harm any alleged relationship, and Salima sustained no damages; and (6) the section 17200 claim failed because all the underlying claims failed, there was no business practice within the meaning of that statute, and Salima sustained no actual injury.

         In support of her motion, Knight submitted, among other things, her own declaration, the declaration of a maintenance man who maintained Knight's commercial real estate, including the premises, and excerpts from Salima's deposition.

         In her own declaration, Knight described the history of Salima's tenancy and rental payments (or lack thereof), her service of the three-day notice to pay rent or quit, and the wrongful detainer action. She also stated that at no time during Salima's possession of the premises did Salima or anyone on her behalf inform Knight that there were any problems with the plumbing or with sewage on the premises, and she was not aware of any such problems other than one incident in March 2012. With regard to that incident, she explained that she was contacted by neighbors of the premises, who told her that the Long Beach Hazmat team had been called to the premises to investigate water damage. She contacted her maintenance man, Salvador Ornelas, and asked him to go to the premises to see what had happened. Ornelas reported back to her that all of the sinks except one were clogged and filled with water; he said the faucets had been left on, causing the sinks to overflow onto the floors and carpets and out the front door. He also reported that there were no sewage problems, and that the two bathrooms on the premises were working fine. Knight also declared that Salima had changed the locks, and she (Knight) did not have a key; therefore, the only people who had access to the premises at the time of the incident were Salima and anyone to whom she entrusted a key. Finally, Knight declared that all of Salima's medical and office equipment on the premises were intact and undamaged, that neither Salima nor anyone on her behalf ever responded to Knight's several attempts to contact Salima to ask her to remove the property, and that no one ever informed her (and she was not aware) that Salima was attempting to enter into or had entered into a contract to sell Salima's medical practice.[6]

         In his declaration, Ornelas also described the March 2012 incident. He stated that he went to the premises at Knight's request. When he arrived, neither Salima nor anyone from the clinic was there. He had to cut the locks on the security gates to gain access because neither he nor Knight had a key. He went through all of the rooms on the premises, and found that all of the sinks except one were clogged with dirty water. He observed that water had come from the faucets into the sinks, and the sinks had overflowed onto the floors and carpet and out the front door. It appeared to him that the dirty water and dirty carpet had been there for some time, which caused a stench inside. He did not observe any sewage damage or leak of any kind, and noted that none of the medical equipment or furniture on the premises was damaged by the water leak. Finally, Ornelas stated that at no time from 2010 to March 2012 was he made aware of any plumbing issues at the premises.

         The excerpts of Salima's deposition testimony submitted in support of Knight's motion included her testimony that (1) she stopped working after undergoing knee surgery in July 2011; (2) she stopped paying rent in July 2011; (3) she was the only doctor who worked at the clinic, so the clinic closed when she stopped working; (4) she was renting the premises on a month-to-month basis; (5) she did nothing to retrieve her property from the premises after the clinic closed in July 2011, even though she had opportunities to do so; and (6) she did not attempt to sell her medical practice, and did not remember entering into a contract to sell the clinic.

         b. Salima's Opposition

         In opposition to Knight's motion, Salima argued that she was lawfully in possession of the premises, and retained all legal rights of possession up to the time she was dispossessed following the completion of the unlawful detainer process. With regard to the conversion claim, Salima argued that Knight's defense that Salima had abandoned her property was legally deficient because her claim was based upon environmental contamination, and that the act of conversion was completed when her medical equipment and supplies were contaminated as a result of the raw sewage spill. She also argued that the abandonment defense was factually deficient because Knight failed to show that she complied with statutory notice requirements that apply when premises are vacated. With regard to the breach of the covenant of quiet enjoyment claim, Salima agreed with Knight's assertion that this kind of claim does not apply to commercial properties, but argued that the allegations of the claim adequately pleaded a claim for constructive eviction; she asked the court to ignore the label of the claim and treat it as a claim for constructive eviction. Addressing the nuisance claim, Salima argued that Knight's illegality argument was baseless, and that there were disputed factual issues raised by Rahim's testimony. Salima argued that the negligence/strict liability claim could not be resolved on summary judgment because there was evidence that Knight was given notice of plumbing problems in the past, and was given notice of the sewage issue immediately after it occurred. With regard to the contract interference claim, Salima argued there were factual disputes regarding Knight's knowledge of the sale and the fact of the sale; she noted there was a signed contract for the sale, and that her deposition testimony that she did not sell her practice was of “no moment” because she was not involved in the business end of the practice. Finally, Salima argued there were no grounds to grant summary adjudication of the section 17200 claim because it is based upon her other claims, all of which should survive summary adjudication.

         In support of her opposition, Salima submitted declarations from Khaleel, Rahim, Onubah, and expert witness Dr. Marvin Pietruszka. In addition, Salima submitted a copy of an asset purchase agreement between Salima and Onubah for the sale of the clinic, as well as undated photographs of the premises, purportedly showing the damage caused by the alleged sewage spill.[7]

         Khaleel stated in his declaration that he was the administrator and manager for Family Health Services Medical Clinic from 1993 through 2012, with primary responsibility for the business aspects of the clinic; his brother Rahim assisted him. He declared that he did not regularly consult his mother regarding business aspects of the clinic, particularly toward the end of the clinic's operation, and therefore there were many business matters that took place of which she was not aware. He stated that there were physicians in addition to Salima who were employed by the clinic between 2007 and 2011, including Dr. Onubah. He also stated that in 2011, Salima entered into a contract (a copy of which was attached to his declaration) to sell the clinic to Onubah; Onubah agreed to purchase every item in the office, including the medical equipment and devices, office furniture and equipment, and patient files. Although Khaleel's declaration included a discussion about the alleged sewage backup incident, Knight's objections to that discussion were sustained, except for Khaleel's statement that after he and Rahim discovered the alleged sewage backup they attempted to contact Knight and left messages for her, telling her about the condition of the property.

         Rahim stated in his declaration that he negotiated the original lease for the premises in 1993, and arranged (along with Salima) to purchase the office furniture and equipment, the medical equipment, and the medical supplies. He noted that over the years, Salima's medical practice became very successful, and she hired additional physicians and medical staff, and upgraded the clinic's equipment. By 2011, the clinic had approximately 4, 000 active patients and the latest advanced technological medical equipment. Rahim declared that he arranged for Onubah to purchase the practice. He stated that he spoke to Knight, explained that Salima would be winding down her treatment of patients, and that he had arranged for Onubah to take over the practice, although it would take Onubah between three to six months to get the accreditation in various health plans and staff privileges in nearby hospitals that were necessary for him to take over the practice. Rahim stated that Knight agreed to assign the lease for the premises to a new tenant physician, and that Onubah's ownership was to be complete by January 2012.

         Rahim declared that Salima and her staff closed the clinic for the New Year's holiday in December 2011 and reopened it on January 6, 2012. When they went to reopen it, he and Khaleel discovered that “raw human sewage exploded from each of the sinks of the clinic spilling sewage onto and over everything in the clinic, ” and that the medical equipment, supplies, drug samples, and patient files were all contaminated with sewage and permanently ruined. He stated that he and Khaleel both tried to contact Knight, and left detailed messages on her voicemail describing the condition of the premises, but she ignored their requests to address the situation. He declared that as a result of the sewage spill, the sale of the practice to Onubah could not be completed, and Salima lost the $400, 000 purchase price. Finally, Rahim declared that the December 2011/January 2012 incident was not the first plumbing problem at the premises. He stated that in 2009, water backed up from a drain in one of the sinks and filled the sink with ...

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