Facts

Plaintiffs are former tenants, who rented rooms in a single-family dwelling in San Francisco. The property was owned by defendants and managed by defendant Luis Segura. Plaintiffs filed suit against the defendants claiming the property was negligently maintained and violated city ordinances.

PLAINTIFF'S CONTENTIONS:
Plaintiffs rented rooms from defendants who had rented out each room of a single-family dwelling in a residential neighborhood in San Francisco. Plaintiffs contended that defendants were renting nine rooms (including the living room, dining room, a storage room and the converted garage) and installed a second kitchen.

The City of San Francisco cited the property for code violations including lack of egress, and lack of heat, among others. The city also ordered defendants to remove the second kitchen, and restore the garage. Plaintiffs claimed the defendants had already removed the dining room walls they installed for use as a rental. Plaintiffs claimed the city ordered defendants to cease using the property as a single room occupancy. Plaintiff also claimed that after defendants had passed inspection with the city as to restoring the garage for car use and removing the second kitchen, they immediately reinstalled the second kitchen and converted the garage back to a rental room. This was later detected and re-cited by a city inspector.

Plaintiffs contended that at any given time there were 17 to 23 unrelated occupants living in the house, with no resident manager. The result was that the house could not be kept clean or safe, as some of the occupants and their guests roamed the hallways and there was alcohol and drug use often late into the night and morning hours. There was garbage accumulation both inside and outside the premises, a roach infestation, no heat, and insufficient bathing and cooking facilities due to the overcrowding. Plaintiffs contended that after they complained to the city, and asserted their rights to withhold rent, defendant Luis Segura reacted by installing a video camera covering the kitchen and bathroom hallway areas, removing the stove burner knobs and oven racks, and by threatening the physical integrity of plaintiff Sumpalaj.

Plaintiffs vacated after the Seguras filed an unlawful detainer, despite pending of Notice of Violations issued by the city, agreeing to reserve all claims.

Plaintiffs filed causes of action against defendants for breach of the implied warranty of habitability, covenant of quiet use and enjoyment, CC 1942.4 and San Francisco Rent Ordinance 37.10B (a superset of tenant claims).

DEFENDANT'S CONTENTIONS:
Defendants contended that they fulfilled their duties to maintain the parts of the property that plaintiffs used. Defendants denied they harassed plaintiffs. Defendant Yolanda Segura contended she had no responsibilities for maintaining the property or dealing with plaintiffs, a position with which defendant Luis Segura agreed.

Defendant contended that there was no evidence that that the property was an SRO and that Building Inspector Danny testified it was being used as two dwelling units, and that there were four rooms upstairs and five downstairs but he could not recall or identify how many were being used as bedrooms. The property was never cited for roaches, garbage, or insufficient bathing and cooking facilities due to overcrowding. Inspector Mak testified was nothing structurally wrong with any part of the property, and that it merely lacked the proper permits from the city.

Defendants contended that plaintiffs Sumpalaj and Bac moved into the property in December 2008 and occupied one room on the main floor. Defendants claimed that the plaintiffs stopped paying rent after September 2011 and paid no rent for five months, from October 2011 through February 2012, which sums up to either $2,750 or $2,875 in unpaid rent.

Defendants contended that plaintiff Hurtado moved into a room on the main floor of the house with her two sons in June 2010 and paid $700 for the first month. Her boyfriend, Alfredo Urtecho, moved in the next month and the rent increased to $800, which was paid from July 2010 through September 2011. Defendants claimed Hurtado paid no rent for five months either, from October 2011 through February 2012, a total of $4,000 in unpaid rent. Before Hurtado moved in, the rear room was legalized, and a new landing and stairs, accessing the back yard, were constructed.

Defendants argued that the property was in substantially the same condition when all plaintiffs moved in, as it was when they stopped paying rent in October 2011. Plaintiffs testified they entered the property, including the first time they visited, through the ground floor tradesman's entrance. Unrelated tenants occupied all the bedrooms throughout plaintiffs' tenancies. Plaintiffs did not notify defendants of any defective condition, and did not make any complaint about any aspect of the property, until they called the Department of Building Inspection in September 2011.

The Department of Building Inspection issued a Notice of Violation dated Sept. 2, 2011, mostly regarding violations for non-permitted rooms on the ground floor. The only violations found on the first floor were that of four guest rooms on the first floor and that the kitchen & bathroom, also on the first floor, had been remodeled without any permits. The violations included the front entry which it stated had been enclosed with newly constructed walls into the kitchen area to create a guest room and that the only exit path goes down a narrow stairway through the ground floor to reach the street.

The Department of Building Inspection issued a second Notice of Violation, dated Sept. 15, 2011, which held that the only violations on the first floor are walls in the kitchen/dining room area, which are not permitted, and a lack of heat. Defendants argued that although a room was indeed carved out of the kitchen/dining room area, all tenants maintained access to the kitchen and heat has been provided at all times. Defendants claimed the inspector failed to see the furnace control panel in the upstairs hallway closet.

Defendants claimed that Sumpalaj claims that Luis Segura threatened him, chased him, or beat him up are inconsistent and his testimony during deposition changed numerous times.

Luis Segura was never cited for pests at the property, but when he noticed a roach in the garage he fumigated the entire property on Aug. 3, 2011.

Defendants contended that after plaintiffs stopped paying their rent they were served with the proper Three-Day Notices to Pay Rent or Quit. After plaintiffs did not pay the overdue rent, the eviction attorney filed an Unlawful Detainer Complaint. The parties to the U.D. entered into a Settlement Agreement on Jan. 17, 2012. Plaintiffs agreed to vacate no later than March 4, 2012, and Luis Segura kept their security deposits and security deposit interest.

Defendants claimed they received no evidence supporting plaintiffs' claimed damages. Plaintiffs claimed they suffered bodily injuries including respiratory diseases, but defendant argued that plaintiffs produced no supporting evidence. Plaintiffs claimed they spent thousands of dollars eating out because the stove knobs were removed, defendant argued that plaintiffs did not think to turn the burners on with their fingers, and produced no evidence of any meal eaten out during their tenancy. Defendant claimed that plaintiffs produced no evidence of medical specials or lost wages.

Settlement Discussions

In attempting a global settlement of all claims, plaintiffs offered to settle for a total of $14,000. Defendants offered $0. According to defendants, in November 2012 during mediation, defendants offered $20,000, which expired without plaintiffs making a counter-demand. Defendants informed plaintiffs and the mediator they could not contribute significantly to a settlement agreement because did not earn much money and had no liquid assets. Their insurance carrier, which provided a defense pursuant to a reservation of rights, claimed none of plaintiffs' damages were covered under the insurance policy. At a Mandatory Settlement Conference on December 11, 2012, with a private attorney appointed by the court, the defense and Allstate reiterated the offer of $20,000. On April 25, 2013, at a pre-trial settlement conference with attorney Pang Ly defendants re-offered $20,000. After judgment was entered, defendants' insurance carrier filed for declaratory relief.

Damages

Damaged electronics from roaches, damaged clothes from moisture, having to eat out due to food being stolen, kitchen not available or too dirty to use.

Result

Plaintiffs' verdict for $132,950. Hurtado was awarded $7,900 in economic damages and $54,000 in non-economic. Bac was awarded $2,950 in economic and $27,000 non-economic. Sumpalaj was awarded $3,300 in economic and $37,800 in non-economic damages. Defendants Luis and Yolanda Segura were found to be jointly and severally liable, with two-thirds awarded against Luis Segura and one-third against Yolanda Segura. Each plaintiff prevailed as to San Francisco Rent Ordinance section 37.10B, as well as breach of the warranty of habitability. The San Francisco Rent Ordinance 37.10B amounts were trebled per the ordinance. The cause of action for violation of Rent Ordinance section 37.9(a) was dismissed before pre-trial motions, and plaintiffs dismissed six other causes of action during pre-trial motions. The court granted defendants' request to dismiss the cause of action for violation of Civil Code section 1942.4.

Other Information

A timely memorandum of costs was filed and no motion to tax was brought forth, thus costs of $11,709 were added to the First Amendment Judgment, entered on Nov. 26, 2013. Total judgment is $574,759, exclusive of interest. Defendants moved for Judgment Notwithstanding the Verdict and to be declared the prevailing parties and for attorney fees. Both were denied. Plaintiffs moved to be declared prevailing parties and for attorney fees and were awarded $430,000 with a multiplier of 1.5 and hourly rates of $400 and $500. MEDIATOR: Vivien Williamson. FILING DATE: Jan. 13, 2012.

Deliberation

6.5 hours

Poll

unanimous on liability, 11-1 (damages)

Length

11 days