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SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
Andrew Yen et al No. RG21100261
Plaintiff/Petitioner(s)
vs. Date: 04/22/2022
Neveo Mosser et al Time: 10:36 AM
Defendant/Respondent(s)
Dept: 21
Judge: Evelio Grillo
ORDER re: Ruling on Submitted Matter
The Court, having taken the matter under submission on 04/12/2022, now rules as follows: There
are five related cases:
Yen v. Mosser, RG21-100261 (1x demurrer). Demurrer (Omnibus) of all defendants.
Rosenberg v. Mosser, RG21-100160 (3x demurrer). Demurrer of Mosser et al. Demurrer of
Deposit IQ and Renters IQ. Demurrer of Yes et al
Boulakdem v. Mosser, RG21-100186 (2x demurrer). Demurrer of Mosser et al. Demurrer of Yes
and Yardi
Annus v. Mosser, RG21-100259 (1x demurrer) Demurrer of Mosser et al.
Rogashevsky v. Mosser. RG21-100506 (5x demurrer) Demurrer of Mosser et al. Demurrer of
Yes and Yardi. Demurrer of Conservice et al. Demurrer of FPI et al. Demurrer of Oak9 and Pach
et al.
The stip/order filed 1/6/22 in Yen v. Mosser, RG21-100261, sets out the motion procedure. The
court appreciates the cooperation of counsel in presenting the issues to the court in an organized
manner.
Many of the demurrers in the cases present identical issues regarding whether defendants
violated Oakland Rent Board Reg 10.1.10 or defrauded tenants by paying for water, sewer, and
garbage removal and then allocating the costs of those serves among the tenants.
The court’s decision on the common issues is based on the complaint in Yen v. Mosser. The
court trusts counsel in the related cases to be able to apply the principles in the order to the
related cases.
THE COMPLAINT IN YEN V. MOSSER (2AC filed 12/3/21)
The court assumes "the truth of the properly pleaded factual allegations, facts that reasonably can
be inferred from those expressly pleaded and matters of which judicial notice has been taken."
ORDER re: Ruling on Submitted Matter Page 1 of 18
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
(Redfearn v. Trader Joe's Co. (2018) 20 Cal.App.5th 989, 996.)
The Landlord Defendants (553 Sycamore Street Associates, LP, 1428 Jackson Street Associates,
LP, Oak9 Portfolio Owner, Oak 406 Van Buren Avenue Property, 1425 Harrison Street Property,
LLC, 1428 Jackson LLC, PACH Affordable Holdings, LLC, and The Mosser Companies), own
property on Oakland and rent units to residential tenants.
The Management Defendants (FPI Management, Does 1-500) are the agents of the Landlords
and manage the property in Oakland.
The Service Defendants (YES Energy Management, Yardi Systems, Conservice) provide the
software and related administrative services that the Landlords and Management Defendants use
to manage the property in Oakland.
The Service Defendants collect billing data about a property and then allocate the costs of water,
sewer, and garbage removal among the tenants. (2AC, para 34-35, 38.) The billing data about a
property concerns entire properties and is not broken down by rental unit.
The Tenant Plaintiffs entered into leases at the relevant properties. The leases state that utilities
are in addition to the stated rent price. (2AC, para 46, 56.)
The rental units do not have separate meters for water, which the court infers would be with
EBMUD. (2AC para 49.) The rental units impliedly do not have separate meters for water and
sewer. (2AC para 49.) The rental units impliedly do not have separate contracts for garbage
removal. (2AC para 49.)
The Landlords use the allocations provided by the Service Companies to bill the tenants for
water, sewer, and garbage removal. (2AC, para 51.) The Landlords also charge a monthly $4.25
“Admin Billing Fee.” (2AC, para 51.)
The 2AC asserts claims for (1) violation of Oakland’s Rent Adjustment Ordinance, Reg 10.1.10,
(2) violation of Oakland’s Tenant Protection Ordinance, and (3) the UCL, B&P 17200, based on
billing or charging of utilities in violation of Oakland’s Rent Adjustment Ordinance.
Defendants collectively argue (1) Oakland Reg 10.1.10 is limited to “utilities” and that water,
sewer, and garbage removal are not “utilities” and (2) there is no private right of action to
enforce Oakland Reg 10.1.10.
The court interprets the Oakland Ordinance and Regulations before examining whether there is a
private right of action. The purpose and effect of the Ordinance and Regulations are relevant to
whether the City intended a private right of action.
ORDER OF 11/5/21
This order builds on the analysis in the order of 11/5/21. The order of 11/5/21 tried to frame the
underlying issues.
ORDER re: Ruling on Submitted Matter Page 2 of 18
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
THIS CASE IS AT THE PLEADING STAGE
The case is at the pleading stage. The court’s order is focused on determining the legal
framework in which the claims will be asserted. At this stage, the court assumes the truth of the
allegations and takes inferences in favor of plaintiff. The court does not make factual findings
that tenant payments for water, sewer, and garbage serves are “rent” or “not rent.”
MOTION OF CITY OF OAKLAND FOR RECONSIDERATION
PROCEDURE
The order of 11/5/21 addressed City of Oakland ordinances and regulations. The order
concluded: “The Rent Board may, in its discretion, move to intervene and file a motion for
reconsideration if the Rent Board is of the opinion that the Court has erred (1) in the
interpretation of the Ordinance and implementing regulations, (2) in accepting the allegation that
the Landlords’ separately itemized charges for water, sewer, and garbage removal are plausibly
“not rent”, or (3) otherwise.”
After the parties had worked out an orderly briefing schedule in the stip/order filed 1/6/22, the
City on 3/9/22 filed an ex parte application to file an amicus brief addressing the issues in the
order of 11/5/21. The court strongly encourages the City to cooperate in responsible case
management.
The court GRANTS the application of the City to file a motion for reconsideration. The court
construes the application to file an amicus brief as a motion for reconsideration to the extent that
the City is addressing matters the court decided in the order of 11/5/21. (Austin v. Los Angeles
Unified School District (2016) 244 Cal.App.4th 918, 930.) The court invited a motion for
reconsideration and will reconsider the issues raised. (Le Francois v. Goel (2005) 35 Cal.4th
1094, 1096.)
The City’s brief is not evidence of a longstanding policy on a technical issue that that has been
considered and approved by senior authorities in the City. (Yamaha Corp. of America v. State
Bd. of Equalization (1998) 19 Cal.4th 1, 14-15, 23-24; Allende v. Department of Cal. Highway
Patrol (2011) 201 Cal.App.4th 1006, 1018.) The court does not give the City’s arguments the
weight of an established City policy or procedure.
The City’s brief is a litigation argument. (Yamaha Corp. of America v. State Bd. of Equalization
(1998) 19 Cal.4th 1, 9 and 23-24 [Mosk, concurring] [“Tax annotations representing the Board's
long-standing position may usefully be contrasted to positions.
the Board might adopt in the context of litigation”]; Culligan Water Conditioning v. State Bd. of
Equalization (1976) 17 Cal.3d 86, 93 [contrasting between “a regulation or ruling of general
application” and a “litigating position in this particular matter”]; Citicorp North America, Inc. v.
Franchise Tax Bd. (2000) 83 Cal.App.4th 1403, 1419 [“Arguments in litigation, although they
may be enlightening or helpful, do not control our review of the subsequent acts of the
ORDER re: Ruling on Submitted Matter Page 3 of 18
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
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agency”].)
That distinction noted, “An administrative agency's interpretation of its own regulation deserves
substantial weight, even if it amounts to a “litigating position.” (State Farm Mutual Automobile
Ins. Co. v. Quackenbush (1999) 77 Cal.App.4th at 65, 71.) Therefore, the court considers the
City’s arguments and gives them substantial weight, but the court does not accept the City’s
arguments as definitive. The court conducts its own independent analysis.
THE ORDINANCE AND REGULATIONS
The statutory interpretation starts with OMC 8.22.020, which defines “rent” as “"the total
consideration charged or received by an owner in exchange for the use or occupancy of a
covered unit including all housing services provided to the tenant.” OMC 8.22.020 states that
“Rent” includes “housing services,” which includes “all services provided by the owner related
to the use or occupancy of a covered unit, including, but not limited to, insurance, repairs,
maintenance, painting, utilities, heat, water, elevator service, laundry facilities, janitorial service,
refuse removal, furnishings, parking, security service…” Reg 10.1.4 states that “rent” may
include “housing services” such as gas, electric, water, sewer, and garbage removal.
The directly relevant regulations are 10.1.9 and 10.1.10, both of which concern the payment of
“utilities” by tenants either as part of “rent” or directly to third parties as “not-rent.”
Reg 10.1.9 states: The transfer of utility costs to the tenant by the landlord is not considered as
part of the rent increase unless the landlord is designated in the original rental agreement to be
the party responsible for such costs.
Reg 10.1.10 states: When more than one rental unit shares any type of utility bill with another
rental unit, it is illegal to divide up the bill between units. Splitting the costs of utilities among
tenants who live in separate units is prohibited by the Public Utilities Commission Code and
Rule 18 of PG&E. The best way to remedy the bill is to install individual meters. If this is too
expensive, then the property owner should pay the utility bill himself/herself and build the cost
into the rent.
The City’s brief addresses four issues of ordinance and regulation interpretation.
ISSUE #1. Rent Board Reg 10.1.9 and definition of “utility.”
The order of 11/5/21 states: “The context of Reg 10.9.10 suggest that when it refers to “utilities,”
it is referring to services that tenants obtain from third parties. In that context, “utilities” are
services that are not “rent.””
The City cautions that this interpretation of Reg 10.1.9 improperly equates “utilities” with
“housing services provided by third parties.” (City brief at 5:15-6:3.) The City argues “If a rental
agreement is permitted to carve out any identified housing service from the definition of “rent”,
unscrupulous landlords could escape the Ordinance’s reach simply by making tenants
responsible for a myriad of housing services in the rental agreement.” The City does not,
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SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
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however, identify or propose any definition of “utilities.”
The court will not change its interpretation of “utility” in Reg 10.1.9 as broadly including “gas,
electric, sewer, water, cable TV, internet access, or other services” provided by third parties. The
statutory definition of “public utility” at PUC 216(a) indicates that a utility includes gas,
electricity, telephone, water, sewer, and heat. The City has not demonstrated that this broad
definition is inconsistent with the purpose of the City’s ordinance.
The City’s implicit concern is that the City will lose its ability to regulate rents if landlords
recharacterize “rent” paid to the landlord as “utilities” paid to landlord affiliated entities. The
City’s concern is, therefore, not with the nature of the “housing service” or “utility” provided but
with whether the third party that provides the service is a bona fide third party and not an agent
or affiliate of the landlord. The distinction between “housing services” and “utilities” may boil
down to point that owners provide “housing services” as part of “rent” and bona fide third parties
provide “utilities” in independent contracts with tenants.
The Rent ordinance applies to “owners.” OMC 8.22.020 states: “"Owner" means any owner,
lessor or landlord, as defined by state law, of a covered unit that is leased or rented to another,
and the representative, agent, or successor of such owner, lessor or landlord.” (See also Civil
Code 1980.) The Rent ordinance does not regulate bona fife third party providers of services. As
long as the owner is meeting the owner’s statutory obligation to provide habitable space (E.g.
Civil Code 1941.1), the allocation of the costs of “housing services” and “utilities” as “rent” or
“not rent” is a matter of contract.
Tenants can pay third parties for a wide range of services without raising the specter of owners
circumventing the rent control ordinances – from traditional “utilities” such as water, gas,
electricity, and garbage, to modern “utilities” such as cable TV or internet access, to potentially
evolving “utilities” such as food delivery services. A lease agreement could reasonably charge a
lower “rent” and have the tenant buy the services a la carte from third parties or the owner could
change a higher “rent” in exchange for offering a wide range of included services.
ISSUE #2. Rent Board Reg 10.1.10 and need to elect between “rent” and “not rent.”
The order of 11/5/21 states: “Read in the context of the Ordinance and Regulation, Reg 10.1.10
states that a landlord must make a choice in a lease. The lease can state that the landlord is
responsible for identified housing service costs (“rent”) or the lease can state that the tenant is
responsible for identified housing service costs (“not rent”). (Reg 10.1.9.) What the landlord
cannot do is to incur the costs and then on a monthly basis re-allocate the variable costs among
the tenants as “not rent.”
The City agrees with this interpretation. (City brief at 3:21-23.) The City then notes “While
accurate, this statement does not make clear that a landlord also cannot simply re-allocate
variable shared utility costs on a monthly basis in the form of “rent.” Any increases made on the
“rent” based on increased housing service costs, such as utilities, must first be approved by a
petition to the RAP. O.M.C. 8.22.065.A.”
ORDER re: Ruling on Submitted Matter Page 5 of 18
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
The court will not change its interpretation of an owner’s need to make a choice under Reg
10.1.10. The court agrees with the City that if an owner or an owner’s agent charges or receives
consideration in exchange for a “housing service” or a “utility,” then it is “rent” under OMC
8.22.020 and therefore and must be approved as “rent” under the City’s ordinance.
ISSUE #3 - Administrative exhaustion.
The order of 11/5/21 states: “If the Landlords’ charges for water, sewer, and garbage removal are
“rent,” then the plaintiffs arguably must exhaust the administrative procedure before seeking
relief from the court.”
The City argues: “The Ordinance allows violations to be “enforced administratively or by civil
remedies.” (O.M.C. 8.22.150(A)(2) and 8.22.159 (C).)
The court will read the OMC as permitting a tenant to seek relief in court without exhausting the
administrative procedure of the City’s Rent Adjustment Program.
ISSUE #4 – Private enforcement of Rent regulations.
The order of 11/5/21 states: “Neither the Ordinance not the Regulations have an express private
right of action for the Regulations. … The plain language of the OMC and Regulations is that the
City did not create a private right of action to enforce the implementing regulations. Thurman v.
Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1132, states “Only the
Legislature, through enactment of a statute, can create a private right of action to directly enforce
an administrative regulation.” … The court concludes that plaintiffs do not have a private right of
action under the Residential Rent Adjustment Program to enforce Reg 10.1.10. Plaintiffs may
amend to allege a claim based on the Ordinance.”
The City argues that “Thurman recognized that when a statute prohibits activity by reference to
an implementing regulation, a private right of action under the statute can be used to indirectly
enforce the Regulation.” The City points to OMC 8.22.150(C), which states: “An aggrieved
party … may bring a civil action … for any violation of the provisions of this Chapter …” and
that or an order or decision issued by a Hearing Officer or the Board..” The City then points to
OMC 8.22.065(B), which states: “Rent increases are subject to the requirements of this Chapter
and Regulations.”
The court reads the provisions together. The court finds that that under OMC 8.22.150(C) an
aggrieved person can bring a civil action for rent increases and that under OMC 8.22.065(B) this
includes civil actions for violations of the Ordinance and the Regulations.
The court will permit plaintiffs to state a cause of action for violation of the Residential Rent
Adjustment Program (OMC 8.22.010-8.22.250) including for violations if the related
regulations. The merit of any such claim will, however, depend on a finding that the
consideration charged or received by an owner or an owner’s agent is “rent” under OMC
8.22.020.
ORDER re: Ruling on Submitted Matter Page 6 of 18
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
YEN V. MOSSER, RG21-100261 - OMNIBUS DEMURRER
FIRST CAUSE OF ACTION - RENT ADJUSTMENT ORDINANCE.
The demurrers of the Landlord and Management Defendants to the claims under the Rent
Adjustment Ordinance are OVERRULED.
Plaintiffs adequately allege that the consideration charged or received by an owner or an owner’s
agent for water, sewer, and garbage services is “rent.” The 2AC adequately asserts that the
Service defendants act as agents of the Landlord and Management Defendants when they charge
the tenants for water, sewer, and garbage services.
2AC para 40 asserts: “while Defendants YES and CONSERVICE prepare monthly billing
statements on their letterheads and cause tenants to be charged fees for their “services,” they do
not collect or handle tenants’ money. Instead, they enable and cause property owners and
property management companies to charge their tenants for illegal utility and “service” fees. All
alleged utility costs and service fees are collected by property owners or property management
companies.”
2AC, para 122, asserts “The Landlord and Management Defendants contracted directly with the
respective utilities to provide water, sewer, and refuse removal for each respective building.
Since these housing services are “provided by the owner,” they [should be] included in each
rental unit’s monthly contract rent.”
The adequate assertion that the charges for water, sewer, and garbage services are “rent” under
OMC 8.22.020 is central to all of the resulting analysis.
First, Plaintiffs adequately allege that the transfer of the costs of water, sewer, and garbage
services to the tenants constitutes a rent increase violative of Reg 10.1.9.
Assuming the consideration for water, sewer, and garbage services is paid directly or indirectly
to the Landlord and Management Defendants, then it is arguably “rent.”
Defendants argue that even if the consideration is “rent,” that the monthly fluctuations in the
consideration are not rent increases because Reg 10.1.9 states: “The transfer of utility costs to the
tenant by the landlord is not considered as part of the rent increase unless the landlord is
designated in the original rental agreement to be the party responsible for such costs.”
The location of Reg 10.1.9 in section 10.0 et seq regarding rent increases and the plain language
of Reg 10.1.9 is that the phrase “The transfer of utility costs to the tenant” refers to whether a
decision to transfer utility costs to a tenant in any given year is deemed to be a de facto rent
increase for purposes of evaluating any annual increase of the base rent. The court cannot
reasonably read Reg 10.1.9 as permitting a landlord to charge variable monthly base rent to
tenants.
Second, Plaintiffs adequately allege that dividing bills for water, sewage, and garbage services
ORDER re: Ruling on Submitted Matter Page 7 of 18
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among units is prohibited under Reg 10.1.10. Again, if the consideration paid for water, sewer,
and garbage services is arguably “rent,” then the division of the costs of those services among
the tenants is arguable violative of Reg 10.1.10.
Defendants argue that water, sewage, and garbage services cannot be “utilities” under Reg
10.1.10 because there is no physical infrastructure for allocating them to individual tenants. This
argument tends to prove plaintiffs’ point that they should be included in the base monthly “rent”
payment.
Defendants argue that if water, sewage, and garbage services are “rent” that they complied with
the law by building them into the monthly rent. The 2AC alleges, however, that the consideration
for those services was not built into the fixed monthly rent but was instead a variable monthly
payment to the landlords.
Third, Plaintiffs have a private right action under the Rent Adjustment Ordinance for an alleged
violation of ordinance and the implementing regulations. As noted above, the court will follow
the City’s interpretation of its own ordinance and regulations and permit plaintiffs to enforce the
both the ordinance and the implementing regulations.
SECOND CAUSE OF ACTION - TENANT PROTECTION ORDINANCE
The order of 11/5/21 states: “The court concludes that plaintiffs must more clearly allege how or
why a violation of Reg 10.1.10 in the Residential Rent Adjustment Program is also a violation of
the Tenant Protection Ordinance. The former appears to concern payment for rent, including
housing services, and the latter appears to concern whether the tenants are receiving housing
services.”
THE OMC 8.22.640(a)(1) CLAIM
The demurrers of the Landlord and Management Defendants to the claims under the Tenant
Protection Ordinance are SUSTAINED WITHOUT LEAVE TO AMEND regarding the OMC
8.22.640(a)(1) claim for charging for water, sewage, and garbage services.
OMC 8.22.640(a)(1) states: “No Owner or such Owner's agent, contractor, subcontractor, or
employee, shall do any of the following, in bad faith. (1) Interrupt, terminate, or fail to provide
housing services required by contract or by State, County or municipal housing, health or safety
laws, or threaten to do so.”
Plaintiffs allege that defendants “failed to provide” the services because under the Rent
Ordinance at Reg 10.1.10 the base rent includes the services unless the tenant agrees to open
their own utility account and the infrastructure exists to do so. (2AC para 149, 151-155.)
Defendants argue that the claim does not assert that tenants were denied services but rather that
tenants were required to pay for services.
The court reads the phrase “Interrupt, terminate, or fail to provide housing services” in OMC
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8.22.640(a)(1) as relating to a failure to physically provide the housing services and not to a
failure to comply with the Rent Adjustment Ordinance regarding the payment for the services.
OMC 8.22.640 is captioned “Tenant Harassment.” The listed actions in OMC 8.22.640 are
generally in the nature of actions that physically degrade the use of the rental property or that
“substantially interfere with or disturb the comfort, repose, peace or quiet of any” tenant. (OMC
8.22.640(a)(15.) Where a statute lists actions and a catch all provision, the court reads each
action in the context of the list as a whole and the catch all provision.
The claim that the Landlord and Management Defendants required the tenants make variable
payments for water, sewage, and garbage services might be a violation of the Rent Adjustment
Ordinance, but it not “tenant harassment” under the Tenant Protection Ordinance.
THE OMC 8.22.640(a)(22) CLAIM
The demurrers of the Landlord and Management Defendants to the claims under the Tenant
Protection Ordinance are SUSTAINED WITH LEAVE TO AMEND regarding the OMC
8.22.640(a)(22) claim.
OMC 8.22.640(a)(22) states: “No Owner or such Owner's agent, contractor, subcontractor, or
employee, shall do any of the following, in bad faith. … (22) Other repeated acts or omissions of
such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet
of any person lawfully entitled to occupancy of such dwelling unit and that cause, are likely to
cause, or are intended to cause any person lawfully entitled to occupancy of a dwelling unit to
vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy.”
Plaintiffs allege “Defendants, by incurring the variable monthly costs of water, sewer, and
garbage services, or “housing services,” and then re-allocating these costs to Plaintiffs each
month, violate numerous provisions of the Rent Adjustment Ordinance, as more fully described
above. These variable monthly costs exceed the lawful base rent, and more fees and charges are
added on each month, all of which accumulate into significant running “rent” balances for each
Plaintiff. The running balances are compounded each month and re-submitted to each Plaintiff,
along with a demand for prompt and full payment. These practices substantially disturbed
Plaintiffs’ comfort and/or repose. These tactics are likely to cause or are intended to cause
Plaintiffs to forego resisting the violation of their rights under the Rent Adjustment Ordinance, as
further described above, and instead to relent and pay the unlawful sums of money.” (2AC para
157.)
At the hearing, plaintiffs further explained their claim under OMC 8.22.640(a)(22), which the
court now understands to be that the Defendants unlawfully and in bad faith recharacterized
variable utility payments as “rent” and in doing so coerced tenants not to dispute the charges. If a
tenant disputes a utility charge, then the tenant’s dispute is over the amount of the charge and the
utility’s ability to cut off the utility is limited by law. In contrast, if a utility charge is
characterized as “rent,” then if a tenant disputes a utility charge, then the tenant’s dispute is over
the payment of “rent” and the landlord can evict the tenant for the nonpayment of the “rent.”
This arguably states a claim for an action that is “likely to cause, or are intended to cause any
person lawfully entitled to occupancy of a dwelling unit to … surrender or waive any rights in
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relation to such occupancy.”
The court does not read the TPO at OMC 8.22.640(A)(22) regarding the prohibition of “other
repeated acts” as incorporating repeated violations of any statute or ordinance that might affect
any tenant. The TPO is not a procedural vehicle to allege repeated violations of any other statute,
ordinance, or regulation. The violations must be “of such significance as to substantially interfere
with or disturb the comfort, repose, peace or quiet” of tenants.
Plaintiffs may amend to distinguish between and clarify the claims under OMC 8.22.640(A)(1)
and OMC 8.22.640(A)(22).
THIRD CAUSE OF ACTION – UCL
The demurrers of the Landlord and Management Defendants to the claims under the UCL are
OVERRULED. The order of 11/5/21 states: “The complaint adequately alleges a claim under the
UCL’s unlawful prong borrowing from Reg 10.1.10.”
SERVICE DEFENDANTS
FIRST AND SECOND CAUSES OF ACTION
The order of 11/5/21 dismissed the RAO and TPO claims against the Service Defendants.
THIRD CAUSE OF ACTION
The demurrers of the Service Defendants to the claims under the UCL are OVERRULED.
Regarding the UCL claim, the order of 11/5/21 states: “Plaintiffs must amend to allege, if
possible, that the Service Defendant have some duty to the Tenants. Plaintiffs must amend to
allege, if possible, that the Service Defendant took some act that is in the nature of an intentional
tort or otherwise might create liability.”
The 2AC at para 168-195 asserts UCL unfair and fraudulent claims.
The UCL unfair claim has merit. The Court of Appeal have not settled on the scope of an
“unfair” UCL claim. There is the balancing test, the tethering test, and the FTC section 5 test.
(Nationwide Biweekly Administration, Inc. v. Superior Court of Alameda County (2020) 9
Cal.5th 279, 303 fn 10.) This trial court finds the FTC test to be the best test because of the
parallels between the FTC Act’s purpose and the UCL’s purpose. ( Nationwide, 9 Cal.5th at 302)
The FTC section 5 test has a three-part definition of unfairness: “(1) The consumer injury must
be substantial; (2) the injury must not be outweighed by any countervailing benefits to
consumers or competition; and (3) it must be an injury that consumers themselves could not
reasonably have avoided.”
The complaint states a potentially valid UCL unfair claim against the Service Defendants. The
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Service defendants were arguably working as agents of the Landlord Defendants to evade the
City’s rent control system and to overcharge tenants. There was no countervailing benefits to
tenants or competition. The tenants could not reasonably have avoided the injury.
The court has considered Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 837-841, and the
holding at the demurrer stage that a payroll processing company has no duty to the employees of
its clients. Goonewardene is distinguishable because it concerns the negligence tort duty and this
case concerns UCL unfairness under the FTC test. The negligence concern with making a payroll
processor liable for damages does not apply. “While the scope of conduct covered by the UCL is
broad, its remedies are limited.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th
1134, 1144.) Under the UCL claim, the remedy again the Service Defendants would appear to be
limited to restitution of the “billing admin” or “service” fee that the Service Defendants charged
and an injunction to change their business practices on Oakland to conform to Oakland’s Rent
Adjustment Ordinance.
The complaint also alleges that Service defendants repeatedly charged a “billing admin” or
“service” fee that was not authorized in the initial contract. A policy or practice of systematically
breaching contracts can constitute an unfair business practice under the UCL. (Smith v. Wells
Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1483.)
The UCL fraudulent claim have merit. The billing practices were fully disclosed. That noted, the
2AC alleges that the Service defendants repeatedly charged a “billing admin” or “service” fee
that was not disclosed in the initial contract. (2AC, 39, 77, 92, 101, 172.) That arguable
overbilling could support a UCL fraudulent claim.
ROSENBERG V MOSSER, RG21-100160
DEMURRER OF MOSSER
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., 445 Sycamore Street Associates,
LP, and OAK-553 Sycamore, LLC to First (RAO) and Third (UCL) causes of action are
OVERRULED. See Yen v. Mosser Omnibus order.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., 445 Sycamore Street Associates,
LP, and OAK-553 Sycamore, LLC to Second (TPO) cause of action is (1) SUSTAINED
WITHOUT LEAVE TO AMEND regarding the OMC 8.122.640(A)(1) claims about charging
for water, sewage, and garbage services; (2) SUSTAINED WITH LEAVE TO AMEND
regarding the OMC 8.122.640(A)(22) claims about practices that substantially interfere with or
disturb the comfort, repose, peace or quiet” of tenants; and (3) OVERRULED regarding the
claims related to habitability of the premises.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., 445 Sycamore Street Associates,
LP, and OAK-553 Sycamore, LLC to Seventh (Nuisance) cause of action is OVERRULED. The
Complaint adequately alleges a nuisance claim that is distinct from a negligence claim. More
specifically, plaintiffs allege that defendants through both negligent inaction and potentially non-
negligent action created a nuisance that interfered with plaintiffs’ right of enjoyment of their
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units. (Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92, 101-104.)
DEMURRER OF DEPOSIT IQ ET AL
The court DENIES the request of Deposit IQ and Renters IQ for judicial notice of a Bond
Enrollment Form and Security Addendum. The court will not use the RJN procedure to turn a
demurrer into a motion for summary judgment. (Richtek USA, Inc. v. uPI Semiconductor
Corporation (2015) 242 Cal.App.4th 651, 660)
The court GRANTS the request of plaintiff for judicial notice of the order of 12/10/21 on the
motion to compel arbitration. The court does not take judicial notice of the truth of the factual
findings in that order. (Steed v. Department of Consumer Affairs (2012) 204 Cal.App.4th 112,
121.)
The demurrer of Deposit IQ et al to First (Negligence) cause of action is OVERRULED. The
complaint alleges that Deposit IQ’s contract for a security bond was actually a nonrefundable
security deposit and unlawful under Civil Code 1950.5(m).) Negligence requires duty, breach,
and damages.
Plaintiff argues that the violation of Civil Code 1950.5(m) supports a claim by tenants against
landlords for negligence. This is plausible given that breach of any statute designed to protect
persons supports breach of a duty owed to those persons. (Evid Code 669; Gilmer v. Ellington
(2008) 159 Cal.App.4th 190, 203.) Case law suggests that there is a private right of action to
enforce Civil Code 1950.5. (Peviani v. Arbors at California Oaks Property Owner, LLC (2021)
62 Cal.App.5th 874; Granberry v. Islay Investments (1984) 161 Cal.App.3d 382.)
The demurrer is overruled because there is a private right to enforce Civil Code 1950.5(m).
Plaintiffs’ framing of that claim as one for negligence is reasonable.
The demurrer of Deposit IQ et al to Eighth (UCL) cause of action is OVERRULED. The alleged
statutory violation of Civil Code 1950.5(m) supports a UCL unlawful claim. The alleged actions
support a UCL unfair claim under the FTC test. The complaint adequately alleges that Furtkamp
has UCL standing. As noted in the order of 12/10/21 on the motion to compel arbitration, when
evidence it presented the court might find that Furtkamp has no UCL standing.
DEMURRER OF YES ET AL
The demurrer of Yes et al. to First (RAO) and Second (TPO) causes of action are SUSTAINED
WITHOUT LEAVE TO AMEND. Yes et al are “Service Defendants.” The order of 11/5/21
dismissed the RAO and TPO claims against the Service Defendants.
The demurrer of Yes Energy Management, Inc. to first (negligence) cause of action is
SUSTAINED WITHOUT LEAVE TO AMEND. Yes provided services to the
landlords/manager, who then billed the tenants. The court finds that Yes owed no duty to the
tenants. Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 837-841, held at the demurrer stage
that a payroll processing company has no duty to the employees of its clients. The same
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principles apply in this situation.
The demurrer of Yes to Eighth (UCL) cause of action is OVERRULED. See Yen v. Mosser
Omnibus order.
BOULAKDEM V. MOSSER, RG21-100186
DEMURRER OF MOSSER ET AL
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th
Street Associates, LP, Luis C. Villalobos, and Maria Recht to First (RAO) and Third (UCL)
causes of action are OVERRULED. See Yen v. Mosser Omnibus order.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th
Street Associates, LP, Luis C. Villalobos, and Maria Recht to Second (TPO) cause of action is
SUSTAINED WITHOUT LEAVE TO AMEND regarding the claims about charging for water,
sewage, and garbage services. (OMC 8.122.640(A)(1).)
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th
Street Associates, LP, Luis C. Villalobos, and Maria Recht to Second (TPO) cause of action is
OVERRULED regarding the claims related to habitability of the premises. Plaintiffs in
Boulakdem allege that Defendants failed to provide elevator service (3AC, at 69-71), maintain
the washroom (3AC, at 72), failed to provide mail service (3AC, at 74-75), and failed to address
an ongoing rodent infestation. (3AC, at 76.) These do not relate to the RAO issue regarding
billing of water, sewer, and garbage in the omnibus briefing. These do support a TPO claim.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th
Street Associates, LP, Luis C. Villalobos, and Maria Recht to Second (TPO) cause of action is
SUSTAINED WITH LEAVE TO AMEND regarding the OMC 8.22.640(A)(22) claims about
practices that substantially interfere with or disturb the comfort, repose, peace or quiet” of
tenants.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th
Street Associates, LP, Luis C. Villalobos, and Maria Recht to Seventh (Nuisance) cause of action
is OVERRULED. The Complaint adequately alleges a nuisance claim that is distinct from a
negligence claim. More specifically, plaintiffs allege that defendants through both negligent
inaction and potentially non-negligent action created a nuisance that interfered with plaintiffs’
right of enjoyment of their units. (Lussier v. San Lorenzo Valley Water Dist. (1988) 206
Cal.App.3d 92, 101-104.)
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th
Street Associates, LP, Luis C. Villalobos, and Maria Recht to Eighth (UCL) cause of action is
OVERRULED. See Yen v. Mosser Omnibus order.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th
Street Associates, LP, Luis C. Villalobos, and Maria Recht to Eleventh (Unruh Civil Rights Act,
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Civil Code 51(b)) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must
at a minimum for each plaintiff allege facts that would support a conclusion that defendants
knew that they were disabled and thereafter failed to provide appropriate accommodations .
(CACI 3060.) Given the distinctions between the claims common to the related cases and the
Unruh Act claims peculiar to this case, the court encourages the parties to meet and confer about
whether the Unruh Act claims should be asserted in a different case. Given the individualized
nature of the Unruh Act claims and the possibility that due process might require separate trials
for each plaintiff, the court encourages the parties to meet and confer about whether the Unruh
Act claims of the over 25 plaintiffs are properly joined in a single case.
DEMURRER OF YES AND YARDI
Yes and Yardi are Service Defendants that provide the software and related administrative
services that the Landlords and Management Defendants use to manage the property in Oakland.
The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to the First (negligence)
is SUSTAINED WITHOUT LEAVE TO AMEND. Yes et al provided services to the
landlords/manager, who then billed the tenants. The court finds that Yes et al owed no duty to
the tenants. Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 837-841, held at the demurrer
stage that a payroll processing company has no duty to the employees of its clients. The same
principles apply in this situation.
The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to the First (conspiracy
regarding negligence) is SUSTAINED WITHOUT LEAVE TO AMEND.
Regarding the law on conspiracy, “ “[i]n order to state a cause of action based upon a conspiracy
theory the plaintiff must allege the formation and operation of the conspiracy, the wrongful act or
acts done pursuant to it, and the damage resulting from such acts. [Citation.] In making such
allegations bare legal conclusions, inferences, generalities, presumptions, and conclusions are
insufficient.” (State of California ex rel. Metz v. CCC Information Services, Inc. (2007) 149
Cal.App.4th 402, 419.)
Regarding the law on conspiracy and negligence, “the law in California remains that a civil
conspiracy requires an express or tacit agreement only to commit a civil wrong or tort, which
then renders all participants “responsible ... for all damages ensuing from the wrong....” …
[There is no] authority requiring the participants to a conspiracy to possess the specific intent to
harm a particular person or commit a specific injury. ” (Navarrete v. Meyer (2015) 237
Cal.App.4th 1276, 1293-1294.) There can be a claim for conspiracy to be negligent where two
persons agree to do an action and knew that was the specific unlawful purpose of their
agreement. (Navarette, supra.)
“[T]ort liability arising from conspiracy [based on negligence] presupposes that the
coconspirator is legally capable of committing the tort, i.e., that he or she owes a duty to plaintiff
recognized by law and is potentially subject to liability for breach of that duty. (Applied
Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.)
ORDER re: Ruling on Submitted Matter Page 14 of 18
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The 3AC alleges that the Landlord and Management defendants made efforts to change the lease
agreements from “rent, utilities included” to “rent, plus utilities.” The 3AC alleges that the
Landlord and Management defendants retained Yes and Yardi to assist in those efforts. As stated
above, “The court finds that Yes et al owed no duty to the tenants.” Given that Yes and Yardi
owed no direct duty to the tenants, Yes and Yardi cannot be liable for conspiring with the
Landlord and Management defendants to take actions that would breach a duty to the tenants.
The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. the Second (TPO) is
SUSTAINED WITHOUT LEAVE TO AMEND. See omnibus order.
The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to the Eighth (UCL) is
OVERRULED. See omnibus order.
ANNUS V. MOSSER, RG21-100259
The Demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-1428 Jackson, LLC, and
1428 Jackson Street Associates, LP to the seventh (Nuisance) cause of action is OVERRULED.
The Complaint adequately alleges a nuisance claim that is distinct from a negligence claim.
More specifically, plaintiffs allege that defendants through both negligent inaction and
potentially non-negligent action created a nuisance that interfered with plaintiffs’ right of
enjoyment of their units. (Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92,
101-104.) The 1AC adequately alleges habitability issues regarding heat that would support a
claim for nuisance.
The Demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-1428 Jackson, LLC, and
1428 Jackson Street Associates, LP to the tenth (Unruh Civil Rights Act, Civil Code 51(b))
cause) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must at a
minimum for each plaintiff allege facts that would support a conclusion that defendants knew
that they were disabled and thereafter failed to provide appropriate accommodations. Plaintiff
should for each plaintiff allege fact that track the elements of the claim. (CACI 3060.)
ROGASHEVSKY V. MOSSER, RG21-100506
DEMURRER OF MOSSER
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street
Property, LLC to Second (TPO) cause of action under OMC 8.122.640(A)(1) is SUSTAINED
WITHOUT LEAVE TO AMEND regarding the claims about charging for water, sewage, and
garbage services.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street
Property, LLC to Second (TPO) cause of action is OVERRULED regarding the
claims related to habitability of the premises. See Yen v. Mosser Omnibus order. The plaintiffs
in Rogashevsky allege construction nuisance, utility shut offs, improper access t units, elevator
outages, and safety issues. These do not relate to the RAO issue regarding billing of water,
ORDER re: Ruling on Submitted Matter Page 15 of 18
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
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sewer, and garbage in the omnibus briefing. These do support a TPO claim.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street
Property, LLC to Second (TPO) cause of action is SUSTAINED WITH LEAVE TO AMEND
regarding the OMC 8.22.640(A)(22) claims about practices that substantially interfere with or
disturb the comfort, repose, peace or quiet” of tenants.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street
Property, LLC to Third (RAO) cause of action is OVERRULED. The plaintiffs in Rogashevsky
allege decreases in “housing services” without corresponding decrease in rent. These do not
relate to the RAO issue regarding billing of water, sewer, and garbage in the omnibus briefing.
These do support a RAO claim.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street
Property, LLC to Seventh (UCL) cause of action is OVERRULED. See omnibus order.
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street
Property, LLC to Eighth (Unrun Civil Rights Act, Civil Code 51(b)) cause of action is
SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must at a minimum for each plaintiff
allege facts that would support a conclusion that defendants knew that they were disabled and
thereafter failed to provide appropriate accommodations. Plaintiff should for each plaintiff allege
fact that track the elements of the claim. (CACI 3060.)
The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street
Property, LLC to Ninth (FEHA) cause of action is SUSTAINED WITH LEAVE TO AMEND.
Plaintiffs appropriately added the claim because it related to the court’s reason for sustaining the
prior demurrer. (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.) Plaintiffs must at a
minimum for each plaintiff allege facts that would support a conclusion that defendants knew
that they were disabled and thereafter failed to provide appropriate accommodations .
DEMURRER OF FPI
FPI is a property manager.
The demurrer of FPI to Eighth (Unrun Civil Rights Act, Civil Code 51(b)) cause of action is
SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must at a minimum for each plaintiff
allege facts that would support a conclusion that defendants knew that they were disabled and
thereafter failed to provide appropriate accommodations. Plaintiff should for each plaintiff allege
fact that track the elements of the claim. (CACI 3060.)
The demurrer of FPI to Ninth (FEHA) cause of action is SUSTAINED WITH LEAVE TO
AMEND. Plaintiffs appropriately added the claim because it related to the court’s reason for
sustaining the prior demurrer. (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.)
Plaintiffs must at a minimum for each plaintiff allege facts that would support a conclusion that
defendants knew that they were disabled and thereafter failed to provide appropriate
accommodations. Plaintiff should for each plaintiff allege fact that track the elements of the
ORDER re: Ruling on Submitted Matter Page 16 of 18
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claim. (CACI 2548, 2549)
DEMURRER OF YES AND YARDI
The demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to Seventh (UCL) cause
of action is OVERRULED. See Yen v. Mosser Omnibus order.
DEMURRER OF CONSERVICE
The Demurrer of Conservice to Seventh (UCL) cause of action is O
Preview
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse Andrew Yen et al No. RG21100261 Plaintiff/Petitioner(s) vs. Date: 04/22/2022 Neveo Mosser et al Time: 10:36 AM Defendant/Respondent(s) Dept: 21 Judge: Evelio Grillo ORDER re: Ruling on Submitted Matter The Court, having taken the matter under submission on 04/12/2022, now rules as follows: There are five related cases: Yen v. Mosser, RG21-100261 (1x demurrer). Demurrer (Omnibus) of all defendants. Rosenberg v. Mosser, RG21-100160 (3x demurrer). Demurrer of Mosser et al. Demurrer of Deposit IQ and Renters IQ. Demurrer of Yes et al Boulakdem v. Mosser, RG21-100186 (2x demurrer). Demurrer of Mosser et al. Demurrer of Yes and Yardi Annus v. Mosser, RG21-100259 (1x demurrer) Demurrer of Mosser et al. Rogashevsky v. Mosser. RG21-100506 (5x demurrer) Demurrer of Mosser et al. Demurrer of Yes and Yardi. Demurrer of Conservice et al. Demurrer of FPI et al. Demurrer of Oak9 and Pach et al. The stip/order filed 1/6/22 in Yen v. Mosser, RG21-100261, sets out the motion procedure. The court appreciates the cooperation of counsel in presenting the issues to the court in an organized manner. Many of the demurrers in the cases present identical issues regarding whether defendants violated Oakland Rent Board Reg 10.1.10 or defrauded tenants by paying for water, sewer, and garbage removal and then allocating the costs of those serves among the tenants. The court’s decision on the common issues is based on the complaint in Yen v. Mosser. The court trusts counsel in the related cases to be able to apply the principles in the order to the related cases. THE COMPLAINT IN YEN V. MOSSER (2AC filed 12/3/21) The court assumes "the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of which judicial notice has been taken." ORDER re: Ruling on Submitted Matter Page 1 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse (Redfearn v. Trader Joe's Co. (2018) 20 Cal.App.5th 989, 996.) The Landlord Defendants (553 Sycamore Street Associates, LP, 1428 Jackson Street Associates, LP, Oak9 Portfolio Owner, Oak 406 Van Buren Avenue Property, 1425 Harrison Street Property, LLC, 1428 Jackson LLC, PACH Affordable Holdings, LLC, and The Mosser Companies), own property on Oakland and rent units to residential tenants. The Management Defendants (FPI Management, Does 1-500) are the agents of the Landlords and manage the property in Oakland. The Service Defendants (YES Energy Management, Yardi Systems, Conservice) provide the software and related administrative services that the Landlords and Management Defendants use to manage the property in Oakland. The Service Defendants collect billing data about a property and then allocate the costs of water, sewer, and garbage removal among the tenants. (2AC, para 34-35, 38.) The billing data about a property concerns entire properties and is not broken down by rental unit. The Tenant Plaintiffs entered into leases at the relevant properties. The leases state that utilities are in addition to the stated rent price. (2AC, para 46, 56.) The rental units do not have separate meters for water, which the court infers would be with EBMUD. (2AC para 49.) The rental units impliedly do not have separate meters for water and sewer. (2AC para 49.) The rental units impliedly do not have separate contracts for garbage removal. (2AC para 49.) The Landlords use the allocations provided by the Service Companies to bill the tenants for water, sewer, and garbage removal. (2AC, para 51.) The Landlords also charge a monthly $4.25 “Admin Billing Fee.” (2AC, para 51.) The 2AC asserts claims for (1) violation of Oakland’s Rent Adjustment Ordinance, Reg 10.1.10, (2) violation of Oakland’s Tenant Protection Ordinance, and (3) the UCL, B&P 17200, based on billing or charging of utilities in violation of Oakland’s Rent Adjustment Ordinance. Defendants collectively argue (1) Oakland Reg 10.1.10 is limited to “utilities” and that water, sewer, and garbage removal are not “utilities” and (2) there is no private right of action to enforce Oakland Reg 10.1.10. The court interprets the Oakland Ordinance and Regulations before examining whether there is a private right of action. The purpose and effect of the Ordinance and Regulations are relevant to whether the City intended a private right of action. ORDER OF 11/5/21 This order builds on the analysis in the order of 11/5/21. The order of 11/5/21 tried to frame the underlying issues. ORDER re: Ruling on Submitted Matter Page 2 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse THIS CASE IS AT THE PLEADING STAGE The case is at the pleading stage. The court’s order is focused on determining the legal framework in which the claims will be asserted. At this stage, the court assumes the truth of the allegations and takes inferences in favor of plaintiff. The court does not make factual findings that tenant payments for water, sewer, and garbage serves are “rent” or “not rent.” MOTION OF CITY OF OAKLAND FOR RECONSIDERATION PROCEDURE The order of 11/5/21 addressed City of Oakland ordinances and regulations. The order concluded: “The Rent Board may, in its discretion, move to intervene and file a motion for reconsideration if the Rent Board is of the opinion that the Court has erred (1) in the interpretation of the Ordinance and implementing regulations, (2) in accepting the allegation that the Landlords’ separately itemized charges for water, sewer, and garbage removal are plausibly “not rent”, or (3) otherwise.” After the parties had worked out an orderly briefing schedule in the stip/order filed 1/6/22, the City on 3/9/22 filed an ex parte application to file an amicus brief addressing the issues in the order of 11/5/21. The court strongly encourages the City to cooperate in responsible case management. The court GRANTS the application of the City to file a motion for reconsideration. The court construes the application to file an amicus brief as a motion for reconsideration to the extent that the City is addressing matters the court decided in the order of 11/5/21. (Austin v. Los Angeles Unified School District (2016) 244 Cal.App.4th 918, 930.) The court invited a motion for reconsideration and will reconsider the issues raised. (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1096.) The City’s brief is not evidence of a longstanding policy on a technical issue that that has been considered and approved by senior authorities in the City. (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 14-15, 23-24; Allende v. Department of Cal. Highway Patrol (2011) 201 Cal.App.4th 1006, 1018.) The court does not give the City’s arguments the weight of an established City policy or procedure. The City’s brief is a litigation argument. (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 9 and 23-24 [Mosk, concurring] [“Tax annotations representing the Board's long-standing position may usefully be contrasted to positions. the Board might adopt in the context of litigation”]; Culligan Water Conditioning v. State Bd. of Equalization (1976) 17 Cal.3d 86, 93 [contrasting between “a regulation or ruling of general application” and a “litigating position in this particular matter”]; Citicorp North America, Inc. v. Franchise Tax Bd. (2000) 83 Cal.App.4th 1403, 1419 [“Arguments in litigation, although they may be enlightening or helpful, do not control our review of the subsequent acts of the ORDER re: Ruling on Submitted Matter Page 3 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse agency”].) That distinction noted, “An administrative agency's interpretation of its own regulation deserves substantial weight, even if it amounts to a “litigating position.” (State Farm Mutual Automobile Ins. Co. v. Quackenbush (1999) 77 Cal.App.4th at 65, 71.) Therefore, the court considers the City’s arguments and gives them substantial weight, but the court does not accept the City’s arguments as definitive. The court conducts its own independent analysis. THE ORDINANCE AND REGULATIONS The statutory interpretation starts with OMC 8.22.020, which defines “rent” as “"the total consideration charged or received by an owner in exchange for the use or occupancy of a covered unit including all housing services provided to the tenant.” OMC 8.22.020 states that “Rent” includes “housing services,” which includes “all services provided by the owner related to the use or occupancy of a covered unit, including, but not limited to, insurance, repairs, maintenance, painting, utilities, heat, water, elevator service, laundry facilities, janitorial service, refuse removal, furnishings, parking, security service…” Reg 10.1.4 states that “rent” may include “housing services” such as gas, electric, water, sewer, and garbage removal. The directly relevant regulations are 10.1.9 and 10.1.10, both of which concern the payment of “utilities” by tenants either as part of “rent” or directly to third parties as “not-rent.” Reg 10.1.9 states: The transfer of utility costs to the tenant by the landlord is not considered as part of the rent increase unless the landlord is designated in the original rental agreement to be the party responsible for such costs. Reg 10.1.10 states: When more than one rental unit shares any type of utility bill with another rental unit, it is illegal to divide up the bill between units. Splitting the costs of utilities among tenants who live in separate units is prohibited by the Public Utilities Commission Code and Rule 18 of PG&E. The best way to remedy the bill is to install individual meters. If this is too expensive, then the property owner should pay the utility bill himself/herself and build the cost into the rent. The City’s brief addresses four issues of ordinance and regulation interpretation. ISSUE #1. Rent Board Reg 10.1.9 and definition of “utility.” The order of 11/5/21 states: “The context of Reg 10.9.10 suggest that when it refers to “utilities,” it is referring to services that tenants obtain from third parties. In that context, “utilities” are services that are not “rent.”” The City cautions that this interpretation of Reg 10.1.9 improperly equates “utilities” with “housing services provided by third parties.” (City brief at 5:15-6:3.) The City argues “If a rental agreement is permitted to carve out any identified housing service from the definition of “rent”, unscrupulous landlords could escape the Ordinance’s reach simply by making tenants responsible for a myriad of housing services in the rental agreement.” The City does not, ORDER re: Ruling on Submitted Matter Page 4 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse however, identify or propose any definition of “utilities.” The court will not change its interpretation of “utility” in Reg 10.1.9 as broadly including “gas, electric, sewer, water, cable TV, internet access, or other services” provided by third parties. The statutory definition of “public utility” at PUC 216(a) indicates that a utility includes gas, electricity, telephone, water, sewer, and heat. The City has not demonstrated that this broad definition is inconsistent with the purpose of the City’s ordinance. The City’s implicit concern is that the City will lose its ability to regulate rents if landlords recharacterize “rent” paid to the landlord as “utilities” paid to landlord affiliated entities. The City’s concern is, therefore, not with the nature of the “housing service” or “utility” provided but with whether the third party that provides the service is a bona fide third party and not an agent or affiliate of the landlord. The distinction between “housing services” and “utilities” may boil down to point that owners provide “housing services” as part of “rent” and bona fide third parties provide “utilities” in independent contracts with tenants. The Rent ordinance applies to “owners.” OMC 8.22.020 states: “"Owner" means any owner, lessor or landlord, as defined by state law, of a covered unit that is leased or rented to another, and the representative, agent, or successor of such owner, lessor or landlord.” (See also Civil Code 1980.) The Rent ordinance does not regulate bona fife third party providers of services. As long as the owner is meeting the owner’s statutory obligation to provide habitable space (E.g. Civil Code 1941.1), the allocation of the costs of “housing services” and “utilities” as “rent” or “not rent” is a matter of contract. Tenants can pay third parties for a wide range of services without raising the specter of owners circumventing the rent control ordinances – from traditional “utilities” such as water, gas, electricity, and garbage, to modern “utilities” such as cable TV or internet access, to potentially evolving “utilities” such as food delivery services. A lease agreement could reasonably charge a lower “rent” and have the tenant buy the services a la carte from third parties or the owner could change a higher “rent” in exchange for offering a wide range of included services. ISSUE #2. Rent Board Reg 10.1.10 and need to elect between “rent” and “not rent.” The order of 11/5/21 states: “Read in the context of the Ordinance and Regulation, Reg 10.1.10 states that a landlord must make a choice in a lease. The lease can state that the landlord is responsible for identified housing service costs (“rent”) or the lease can state that the tenant is responsible for identified housing service costs (“not rent”). (Reg 10.1.9.) What the landlord cannot do is to incur the costs and then on a monthly basis re-allocate the variable costs among the tenants as “not rent.” The City agrees with this interpretation. (City brief at 3:21-23.) The City then notes “While accurate, this statement does not make clear that a landlord also cannot simply re-allocate variable shared utility costs on a monthly basis in the form of “rent.” Any increases made on the “rent” based on increased housing service costs, such as utilities, must first be approved by a petition to the RAP. O.M.C. 8.22.065.A.” ORDER re: Ruling on Submitted Matter Page 5 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse The court will not change its interpretation of an owner’s need to make a choice under Reg 10.1.10. The court agrees with the City that if an owner or an owner’s agent charges or receives consideration in exchange for a “housing service” or a “utility,” then it is “rent” under OMC 8.22.020 and therefore and must be approved as “rent” under the City’s ordinance. ISSUE #3 - Administrative exhaustion. The order of 11/5/21 states: “If the Landlords’ charges for water, sewer, and garbage removal are “rent,” then the plaintiffs arguably must exhaust the administrative procedure before seeking relief from the court.” The City argues: “The Ordinance allows violations to be “enforced administratively or by civil remedies.” (O.M.C. 8.22.150(A)(2) and 8.22.159 (C).) The court will read the OMC as permitting a tenant to seek relief in court without exhausting the administrative procedure of the City’s Rent Adjustment Program. ISSUE #4 – Private enforcement of Rent regulations. The order of 11/5/21 states: “Neither the Ordinance not the Regulations have an express private right of action for the Regulations. … The plain language of the OMC and Regulations is that the City did not create a private right of action to enforce the implementing regulations. Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1132, states “Only the Legislature, through enactment of a statute, can create a private right of action to directly enforce an administrative regulation.” … The court concludes that plaintiffs do not have a private right of action under the Residential Rent Adjustment Program to enforce Reg 10.1.10. Plaintiffs may amend to allege a claim based on the Ordinance.” The City argues that “Thurman recognized that when a statute prohibits activity by reference to an implementing regulation, a private right of action under the statute can be used to indirectly enforce the Regulation.” The City points to OMC 8.22.150(C), which states: “An aggrieved party … may bring a civil action … for any violation of the provisions of this Chapter …” and that or an order or decision issued by a Hearing Officer or the Board..” The City then points to OMC 8.22.065(B), which states: “Rent increases are subject to the requirements of this Chapter and Regulations.” The court reads the provisions together. The court finds that that under OMC 8.22.150(C) an aggrieved person can bring a civil action for rent increases and that under OMC 8.22.065(B) this includes civil actions for violations of the Ordinance and the Regulations. The court will permit plaintiffs to state a cause of action for violation of the Residential Rent Adjustment Program (OMC 8.22.010-8.22.250) including for violations if the related regulations. The merit of any such claim will, however, depend on a finding that the consideration charged or received by an owner or an owner’s agent is “rent” under OMC 8.22.020. ORDER re: Ruling on Submitted Matter Page 6 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse YEN V. MOSSER, RG21-100261 - OMNIBUS DEMURRER FIRST CAUSE OF ACTION - RENT ADJUSTMENT ORDINANCE. The demurrers of the Landlord and Management Defendants to the claims under the Rent Adjustment Ordinance are OVERRULED. Plaintiffs adequately allege that the consideration charged or received by an owner or an owner’s agent for water, sewer, and garbage services is “rent.” The 2AC adequately asserts that the Service defendants act as agents of the Landlord and Management Defendants when they charge the tenants for water, sewer, and garbage services. 2AC para 40 asserts: “while Defendants YES and CONSERVICE prepare monthly billing statements on their letterheads and cause tenants to be charged fees for their “services,” they do not collect or handle tenants’ money. Instead, they enable and cause property owners and property management companies to charge their tenants for illegal utility and “service” fees. All alleged utility costs and service fees are collected by property owners or property management companies.” 2AC, para 122, asserts “The Landlord and Management Defendants contracted directly with the respective utilities to provide water, sewer, and refuse removal for each respective building. Since these housing services are “provided by the owner,” they [should be] included in each rental unit’s monthly contract rent.” The adequate assertion that the charges for water, sewer, and garbage services are “rent” under OMC 8.22.020 is central to all of the resulting analysis. First, Plaintiffs adequately allege that the transfer of the costs of water, sewer, and garbage services to the tenants constitutes a rent increase violative of Reg 10.1.9. Assuming the consideration for water, sewer, and garbage services is paid directly or indirectly to the Landlord and Management Defendants, then it is arguably “rent.” Defendants argue that even if the consideration is “rent,” that the monthly fluctuations in the consideration are not rent increases because Reg 10.1.9 states: “The transfer of utility costs to the tenant by the landlord is not considered as part of the rent increase unless the landlord is designated in the original rental agreement to be the party responsible for such costs.” The location of Reg 10.1.9 in section 10.0 et seq regarding rent increases and the plain language of Reg 10.1.9 is that the phrase “The transfer of utility costs to the tenant” refers to whether a decision to transfer utility costs to a tenant in any given year is deemed to be a de facto rent increase for purposes of evaluating any annual increase of the base rent. The court cannot reasonably read Reg 10.1.9 as permitting a landlord to charge variable monthly base rent to tenants. Second, Plaintiffs adequately allege that dividing bills for water, sewage, and garbage services ORDER re: Ruling on Submitted Matter Page 7 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse among units is prohibited under Reg 10.1.10. Again, if the consideration paid for water, sewer, and garbage services is arguably “rent,” then the division of the costs of those services among the tenants is arguable violative of Reg 10.1.10. Defendants argue that water, sewage, and garbage services cannot be “utilities” under Reg 10.1.10 because there is no physical infrastructure for allocating them to individual tenants. This argument tends to prove plaintiffs’ point that they should be included in the base monthly “rent” payment. Defendants argue that if water, sewage, and garbage services are “rent” that they complied with the law by building them into the monthly rent. The 2AC alleges, however, that the consideration for those services was not built into the fixed monthly rent but was instead a variable monthly payment to the landlords. Third, Plaintiffs have a private right action under the Rent Adjustment Ordinance for an alleged violation of ordinance and the implementing regulations. As noted above, the court will follow the City’s interpretation of its own ordinance and regulations and permit plaintiffs to enforce the both the ordinance and the implementing regulations. SECOND CAUSE OF ACTION - TENANT PROTECTION ORDINANCE The order of 11/5/21 states: “The court concludes that plaintiffs must more clearly allege how or why a violation of Reg 10.1.10 in the Residential Rent Adjustment Program is also a violation of the Tenant Protection Ordinance. The former appears to concern payment for rent, including housing services, and the latter appears to concern whether the tenants are receiving housing services.” THE OMC 8.22.640(a)(1) CLAIM The demurrers of the Landlord and Management Defendants to the claims under the Tenant Protection Ordinance are SUSTAINED WITHOUT LEAVE TO AMEND regarding the OMC 8.22.640(a)(1) claim for charging for water, sewage, and garbage services. OMC 8.22.640(a)(1) states: “No Owner or such Owner's agent, contractor, subcontractor, or employee, shall do any of the following, in bad faith. (1) Interrupt, terminate, or fail to provide housing services required by contract or by State, County or municipal housing, health or safety laws, or threaten to do so.” Plaintiffs allege that defendants “failed to provide” the services because under the Rent Ordinance at Reg 10.1.10 the base rent includes the services unless the tenant agrees to open their own utility account and the infrastructure exists to do so. (2AC para 149, 151-155.) Defendants argue that the claim does not assert that tenants were denied services but rather that tenants were required to pay for services. The court reads the phrase “Interrupt, terminate, or fail to provide housing services” in OMC ORDER re: Ruling on Submitted Matter Page 8 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse 8.22.640(a)(1) as relating to a failure to physically provide the housing services and not to a failure to comply with the Rent Adjustment Ordinance regarding the payment for the services. OMC 8.22.640 is captioned “Tenant Harassment.” The listed actions in OMC 8.22.640 are generally in the nature of actions that physically degrade the use of the rental property or that “substantially interfere with or disturb the comfort, repose, peace or quiet of any” tenant. (OMC 8.22.640(a)(15.) Where a statute lists actions and a catch all provision, the court reads each action in the context of the list as a whole and the catch all provision. The claim that the Landlord and Management Defendants required the tenants make variable payments for water, sewage, and garbage services might be a violation of the Rent Adjustment Ordinance, but it not “tenant harassment” under the Tenant Protection Ordinance. THE OMC 8.22.640(a)(22) CLAIM The demurrers of the Landlord and Management Defendants to the claims under the Tenant Protection Ordinance are SUSTAINED WITH LEAVE TO AMEND regarding the OMC 8.22.640(a)(22) claim. OMC 8.22.640(a)(22) states: “No Owner or such Owner's agent, contractor, subcontractor, or employee, shall do any of the following, in bad faith. … (22) Other repeated acts or omissions of such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet of any person lawfully entitled to occupancy of such dwelling unit and that cause, are likely to cause, or are intended to cause any person lawfully entitled to occupancy of a dwelling unit to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy.” Plaintiffs allege “Defendants, by incurring the variable monthly costs of water, sewer, and garbage services, or “housing services,” and then re-allocating these costs to Plaintiffs each month, violate numerous provisions of the Rent Adjustment Ordinance, as more fully described above. These variable monthly costs exceed the lawful base rent, and more fees and charges are added on each month, all of which accumulate into significant running “rent” balances for each Plaintiff. The running balances are compounded each month and re-submitted to each Plaintiff, along with a demand for prompt and full payment. These practices substantially disturbed Plaintiffs’ comfort and/or repose. These tactics are likely to cause or are intended to cause Plaintiffs to forego resisting the violation of their rights under the Rent Adjustment Ordinance, as further described above, and instead to relent and pay the unlawful sums of money.” (2AC para 157.) At the hearing, plaintiffs further explained their claim under OMC 8.22.640(a)(22), which the court now understands to be that the Defendants unlawfully and in bad faith recharacterized variable utility payments as “rent” and in doing so coerced tenants not to dispute the charges. If a tenant disputes a utility charge, then the tenant’s dispute is over the amount of the charge and the utility’s ability to cut off the utility is limited by law. In contrast, if a utility charge is characterized as “rent,” then if a tenant disputes a utility charge, then the tenant’s dispute is over the payment of “rent” and the landlord can evict the tenant for the nonpayment of the “rent.” This arguably states a claim for an action that is “likely to cause, or are intended to cause any person lawfully entitled to occupancy of a dwelling unit to … surrender or waive any rights in ORDER re: Ruling on Submitted Matter Page 9 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse relation to such occupancy.” The court does not read the TPO at OMC 8.22.640(A)(22) regarding the prohibition of “other repeated acts” as incorporating repeated violations of any statute or ordinance that might affect any tenant. The TPO is not a procedural vehicle to allege repeated violations of any other statute, ordinance, or regulation. The violations must be “of such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet” of tenants. Plaintiffs may amend to distinguish between and clarify the claims under OMC 8.22.640(A)(1) and OMC 8.22.640(A)(22). THIRD CAUSE OF ACTION – UCL The demurrers of the Landlord and Management Defendants to the claims under the UCL are OVERRULED. The order of 11/5/21 states: “The complaint adequately alleges a claim under the UCL’s unlawful prong borrowing from Reg 10.1.10.” SERVICE DEFENDANTS FIRST AND SECOND CAUSES OF ACTION The order of 11/5/21 dismissed the RAO and TPO claims against the Service Defendants. THIRD CAUSE OF ACTION The demurrers of the Service Defendants to the claims under the UCL are OVERRULED. Regarding the UCL claim, the order of 11/5/21 states: “Plaintiffs must amend to allege, if possible, that the Service Defendant have some duty to the Tenants. Plaintiffs must amend to allege, if possible, that the Service Defendant took some act that is in the nature of an intentional tort or otherwise might create liability.” The 2AC at para 168-195 asserts UCL unfair and fraudulent claims. The UCL unfair claim has merit. The Court of Appeal have not settled on the scope of an “unfair” UCL claim. There is the balancing test, the tethering test, and the FTC section 5 test. (Nationwide Biweekly Administration, Inc. v. Superior Court of Alameda County (2020) 9 Cal.5th 279, 303 fn 10.) This trial court finds the FTC test to be the best test because of the parallels between the FTC Act’s purpose and the UCL’s purpose. ( Nationwide, 9 Cal.5th at 302) The FTC section 5 test has a three-part definition of unfairness: “(1) The consumer injury must be substantial; (2) the injury must not be outweighed by any countervailing benefits to consumers or competition; and (3) it must be an injury that consumers themselves could not reasonably have avoided.” The complaint states a potentially valid UCL unfair claim against the Service Defendants. The ORDER re: Ruling on Submitted Matter Page 10 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse Service defendants were arguably working as agents of the Landlord Defendants to evade the City’s rent control system and to overcharge tenants. There was no countervailing benefits to tenants or competition. The tenants could not reasonably have avoided the injury. The court has considered Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 837-841, and the holding at the demurrer stage that a payroll processing company has no duty to the employees of its clients. Goonewardene is distinguishable because it concerns the negligence tort duty and this case concerns UCL unfairness under the FTC test. The negligence concern with making a payroll processor liable for damages does not apply. “While the scope of conduct covered by the UCL is broad, its remedies are limited.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144.) Under the UCL claim, the remedy again the Service Defendants would appear to be limited to restitution of the “billing admin” or “service” fee that the Service Defendants charged and an injunction to change their business practices on Oakland to conform to Oakland’s Rent Adjustment Ordinance. The complaint also alleges that Service defendants repeatedly charged a “billing admin” or “service” fee that was not authorized in the initial contract. A policy or practice of systematically breaching contracts can constitute an unfair business practice under the UCL. (Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1483.) The UCL fraudulent claim have merit. The billing practices were fully disclosed. That noted, the 2AC alleges that the Service defendants repeatedly charged a “billing admin” or “service” fee that was not disclosed in the initial contract. (2AC, 39, 77, 92, 101, 172.) That arguable overbilling could support a UCL fraudulent claim. ROSENBERG V MOSSER, RG21-100160 DEMURRER OF MOSSER The demurrer of Nuevo Mosser, The Mosser Companies, Inc., 445 Sycamore Street Associates, LP, and OAK-553 Sycamore, LLC to First (RAO) and Third (UCL) causes of action are OVERRULED. See Yen v. Mosser Omnibus order. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., 445 Sycamore Street Associates, LP, and OAK-553 Sycamore, LLC to Second (TPO) cause of action is (1) SUSTAINED WITHOUT LEAVE TO AMEND regarding the OMC 8.122.640(A)(1) claims about charging for water, sewage, and garbage services; (2) SUSTAINED WITH LEAVE TO AMEND regarding the OMC 8.122.640(A)(22) claims about practices that substantially interfere with or disturb the comfort, repose, peace or quiet” of tenants; and (3) OVERRULED regarding the claims related to habitability of the premises. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., 445 Sycamore Street Associates, LP, and OAK-553 Sycamore, LLC to Seventh (Nuisance) cause of action is OVERRULED. The Complaint adequately alleges a nuisance claim that is distinct from a negligence claim. More specifically, plaintiffs allege that defendants through both negligent inaction and potentially non- negligent action created a nuisance that interfered with plaintiffs’ right of enjoyment of their ORDER re: Ruling on Submitted Matter Page 11 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse units. (Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92, 101-104.) DEMURRER OF DEPOSIT IQ ET AL The court DENIES the request of Deposit IQ and Renters IQ for judicial notice of a Bond Enrollment Form and Security Addendum. The court will not use the RJN procedure to turn a demurrer into a motion for summary judgment. (Richtek USA, Inc. v. uPI Semiconductor Corporation (2015) 242 Cal.App.4th 651, 660) The court GRANTS the request of plaintiff for judicial notice of the order of 12/10/21 on the motion to compel arbitration. The court does not take judicial notice of the truth of the factual findings in that order. (Steed v. Department of Consumer Affairs (2012) 204 Cal.App.4th 112, 121.) The demurrer of Deposit IQ et al to First (Negligence) cause of action is OVERRULED. The complaint alleges that Deposit IQ’s contract for a security bond was actually a nonrefundable security deposit and unlawful under Civil Code 1950.5(m).) Negligence requires duty, breach, and damages. Plaintiff argues that the violation of Civil Code 1950.5(m) supports a claim by tenants against landlords for negligence. This is plausible given that breach of any statute designed to protect persons supports breach of a duty owed to those persons. (Evid Code 669; Gilmer v. Ellington (2008) 159 Cal.App.4th 190, 203.) Case law suggests that there is a private right of action to enforce Civil Code 1950.5. (Peviani v. Arbors at California Oaks Property Owner, LLC (2021) 62 Cal.App.5th 874; Granberry v. Islay Investments (1984) 161 Cal.App.3d 382.) The demurrer is overruled because there is a private right to enforce Civil Code 1950.5(m). Plaintiffs’ framing of that claim as one for negligence is reasonable. The demurrer of Deposit IQ et al to Eighth (UCL) cause of action is OVERRULED. The alleged statutory violation of Civil Code 1950.5(m) supports a UCL unlawful claim. The alleged actions support a UCL unfair claim under the FTC test. The complaint adequately alleges that Furtkamp has UCL standing. As noted in the order of 12/10/21 on the motion to compel arbitration, when evidence it presented the court might find that Furtkamp has no UCL standing. DEMURRER OF YES ET AL The demurrer of Yes et al. to First (RAO) and Second (TPO) causes of action are SUSTAINED WITHOUT LEAVE TO AMEND. Yes et al are “Service Defendants.” The order of 11/5/21 dismissed the RAO and TPO claims against the Service Defendants. The demurrer of Yes Energy Management, Inc. to first (negligence) cause of action is SUSTAINED WITHOUT LEAVE TO AMEND. Yes provided services to the landlords/manager, who then billed the tenants. The court finds that Yes owed no duty to the tenants. Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 837-841, held at the demurrer stage that a payroll processing company has no duty to the employees of its clients. The same ORDER re: Ruling on Submitted Matter Page 12 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse principles apply in this situation. The demurrer of Yes to Eighth (UCL) cause of action is OVERRULED. See Yen v. Mosser Omnibus order. BOULAKDEM V. MOSSER, RG21-100186 DEMURRER OF MOSSER ET AL The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th Street Associates, LP, Luis C. Villalobos, and Maria Recht to First (RAO) and Third (UCL) causes of action are OVERRULED. See Yen v. Mosser Omnibus order. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th Street Associates, LP, Luis C. Villalobos, and Maria Recht to Second (TPO) cause of action is SUSTAINED WITHOUT LEAVE TO AMEND regarding the claims about charging for water, sewage, and garbage services. (OMC 8.122.640(A)(1).) The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th Street Associates, LP, Luis C. Villalobos, and Maria Recht to Second (TPO) cause of action is OVERRULED regarding the claims related to habitability of the premises. Plaintiffs in Boulakdem allege that Defendants failed to provide elevator service (3AC, at 69-71), maintain the washroom (3AC, at 72), failed to provide mail service (3AC, at 74-75), and failed to address an ongoing rodent infestation. (3AC, at 76.) These do not relate to the RAO issue regarding billing of water, sewer, and garbage in the omnibus briefing. These do support a TPO claim. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th Street Associates, LP, Luis C. Villalobos, and Maria Recht to Second (TPO) cause of action is SUSTAINED WITH LEAVE TO AMEND regarding the OMC 8.22.640(A)(22) claims about practices that substantially interfere with or disturb the comfort, repose, peace or quiet” of tenants. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th Street Associates, LP, Luis C. Villalobos, and Maria Recht to Seventh (Nuisance) cause of action is OVERRULED. The Complaint adequately alleges a nuisance claim that is distinct from a negligence claim. More specifically, plaintiffs allege that defendants through both negligent inaction and potentially non-negligent action created a nuisance that interfered with plaintiffs’ right of enjoyment of their units. (Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92, 101-104.) The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th Street Associates, LP, Luis C. Villalobos, and Maria Recht to Eighth (UCL) cause of action is OVERRULED. See Yen v. Mosser Omnibus order. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-25 E 18th LLC, 425 E 18th Street Associates, LP, Luis C. Villalobos, and Maria Recht to Eleventh (Unruh Civil Rights Act, ORDER re: Ruling on Submitted Matter Page 13 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse Civil Code 51(b)) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must at a minimum for each plaintiff allege facts that would support a conclusion that defendants knew that they were disabled and thereafter failed to provide appropriate accommodations . (CACI 3060.) Given the distinctions between the claims common to the related cases and the Unruh Act claims peculiar to this case, the court encourages the parties to meet and confer about whether the Unruh Act claims should be asserted in a different case. Given the individualized nature of the Unruh Act claims and the possibility that due process might require separate trials for each plaintiff, the court encourages the parties to meet and confer about whether the Unruh Act claims of the over 25 plaintiffs are properly joined in a single case. DEMURRER OF YES AND YARDI Yes and Yardi are Service Defendants that provide the software and related administrative services that the Landlords and Management Defendants use to manage the property in Oakland. The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to the First (negligence) is SUSTAINED WITHOUT LEAVE TO AMEND. Yes et al provided services to the landlords/manager, who then billed the tenants. The court finds that Yes et al owed no duty to the tenants. Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 837-841, held at the demurrer stage that a payroll processing company has no duty to the employees of its clients. The same principles apply in this situation. The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to the First (conspiracy regarding negligence) is SUSTAINED WITHOUT LEAVE TO AMEND. Regarding the law on conspiracy, “ “[i]n order to state a cause of action based upon a conspiracy theory the plaintiff must allege the formation and operation of the conspiracy, the wrongful act or acts done pursuant to it, and the damage resulting from such acts. [Citation.] In making such allegations bare legal conclusions, inferences, generalities, presumptions, and conclusions are insufficient.” (State of California ex rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 419.) Regarding the law on conspiracy and negligence, “the law in California remains that a civil conspiracy requires an express or tacit agreement only to commit a civil wrong or tort, which then renders all participants “responsible ... for all damages ensuing from the wrong....” … [There is no] authority requiring the participants to a conspiracy to possess the specific intent to harm a particular person or commit a specific injury. ” (Navarrete v. Meyer (2015) 237 Cal.App.4th 1276, 1293-1294.) There can be a claim for conspiracy to be negligent where two persons agree to do an action and knew that was the specific unlawful purpose of their agreement. (Navarette, supra.) “[T]ort liability arising from conspiracy [based on negligence] presupposes that the coconspirator is legally capable of committing the tort, i.e., that he or she owes a duty to plaintiff recognized by law and is potentially subject to liability for breach of that duty. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) ORDER re: Ruling on Submitted Matter Page 14 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse The 3AC alleges that the Landlord and Management defendants made efforts to change the lease agreements from “rent, utilities included” to “rent, plus utilities.” The 3AC alleges that the Landlord and Management defendants retained Yes and Yardi to assist in those efforts. As stated above, “The court finds that Yes et al owed no duty to the tenants.” Given that Yes and Yardi owed no direct duty to the tenants, Yes and Yardi cannot be liable for conspiring with the Landlord and Management defendants to take actions that would breach a duty to the tenants. The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. the Second (TPO) is SUSTAINED WITHOUT LEAVE TO AMEND. See omnibus order. The Demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to the Eighth (UCL) is OVERRULED. See omnibus order. ANNUS V. MOSSER, RG21-100259 The Demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-1428 Jackson, LLC, and 1428 Jackson Street Associates, LP to the seventh (Nuisance) cause of action is OVERRULED. The Complaint adequately alleges a nuisance claim that is distinct from a negligence claim. More specifically, plaintiffs allege that defendants through both negligent inaction and potentially non-negligent action created a nuisance that interfered with plaintiffs’ right of enjoyment of their units. (Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92, 101-104.) The 1AC adequately alleges habitability issues regarding heat that would support a claim for nuisance. The Demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK-1428 Jackson, LLC, and 1428 Jackson Street Associates, LP to the tenth (Unruh Civil Rights Act, Civil Code 51(b)) cause) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must at a minimum for each plaintiff allege facts that would support a conclusion that defendants knew that they were disabled and thereafter failed to provide appropriate accommodations. Plaintiff should for each plaintiff allege fact that track the elements of the claim. (CACI 3060.) ROGASHEVSKY V. MOSSER, RG21-100506 DEMURRER OF MOSSER The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street Property, LLC to Second (TPO) cause of action under OMC 8.122.640(A)(1) is SUSTAINED WITHOUT LEAVE TO AMEND regarding the claims about charging for water, sewage, and garbage services. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street Property, LLC to Second (TPO) cause of action is OVERRULED regarding the claims related to habitability of the premises. See Yen v. Mosser Omnibus order. The plaintiffs in Rogashevsky allege construction nuisance, utility shut offs, improper access t units, elevator outages, and safety issues. These do not relate to the RAO issue regarding billing of water, ORDER re: Ruling on Submitted Matter Page 15 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse sewer, and garbage in the omnibus briefing. These do support a TPO claim. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street Property, LLC to Second (TPO) cause of action is SUSTAINED WITH LEAVE TO AMEND regarding the OMC 8.22.640(A)(22) claims about practices that substantially interfere with or disturb the comfort, repose, peace or quiet” of tenants. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street Property, LLC to Third (RAO) cause of action is OVERRULED. The plaintiffs in Rogashevsky allege decreases in “housing services” without corresponding decrease in rent. These do not relate to the RAO issue regarding billing of water, sewer, and garbage in the omnibus briefing. These do support a RAO claim. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street Property, LLC to Seventh (UCL) cause of action is OVERRULED. See omnibus order. The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street Property, LLC to Eighth (Unrun Civil Rights Act, Civil Code 51(b)) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must at a minimum for each plaintiff allege facts that would support a conclusion that defendants knew that they were disabled and thereafter failed to provide appropriate accommodations. Plaintiff should for each plaintiff allege fact that track the elements of the claim. (CACI 3060.) The demurrer of Nuevo Mosser, The Mosser Companies, Inc., OAK 1425 Harrison Street Property, LLC to Ninth (FEHA) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs appropriately added the claim because it related to the court’s reason for sustaining the prior demurrer. (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.) Plaintiffs must at a minimum for each plaintiff allege facts that would support a conclusion that defendants knew that they were disabled and thereafter failed to provide appropriate accommodations . DEMURRER OF FPI FPI is a property manager. The demurrer of FPI to Eighth (Unrun Civil Rights Act, Civil Code 51(b)) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs must at a minimum for each plaintiff allege facts that would support a conclusion that defendants knew that they were disabled and thereafter failed to provide appropriate accommodations. Plaintiff should for each plaintiff allege fact that track the elements of the claim. (CACI 3060.) The demurrer of FPI to Ninth (FEHA) cause of action is SUSTAINED WITH LEAVE TO AMEND. Plaintiffs appropriately added the claim because it related to the court’s reason for sustaining the prior demurrer. (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.) Plaintiffs must at a minimum for each plaintiff allege facts that would support a conclusion that defendants knew that they were disabled and thereafter failed to provide appropriate accommodations. Plaintiff should for each plaintiff allege fact that track the elements of the ORDER re: Ruling on Submitted Matter Page 16 of 18 SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA Rene C. Davidson Courthouse claim. (CACI 2548, 2549) DEMURRER OF YES AND YARDI The demurrer of Yes Energy Management, Inc. and Yardi Systems, Inc. to Seventh (UCL) cause of action is OVERRULED. See Yen v. Mosser Omnibus order. DEMURRER OF CONSERVICE The Demurrer of Conservice to Seventh (UCL) cause of action is O