March 6, 2013

FDN attorney Douglas E. Klein, Esq. has scored a major victory in the course of an appeal in the California Second Appellate District (Los Angeles) for his clients, who are tenants. The landlord signed a California Board of Realtors lease in which he warranted that there were no loans encumbering the property which were delinquent. In truth and in fact, a second mortgage on the house was and had been delinquent prior to the time that the landlord signed the lease, which second mortgage was in favor of the landlord’s broker.

The landlord had told the second mortgage holder that he (the landlord) would pay the delinquent second mortgage when the property was rented, which he told the second mortgage holder before the lease was signed. Despite the property being rented and the tenants paying significant deposits and rent to the landlord, the landlord did not pay the second mortgage holder, who filed a Notice of Default on August 12, 2012 to foreclose on the house. The landlord waited until after Labor Day (September) and after he received the September rent from the tenants to tell the tenants that the house was in foreclosure.

The landlord also lied about the condition the house would be in upon his leaving it, which was left in a detestable condition when he and his wife left the United States to live in Canada after taking the tenants’ money (the landlord had 13 people living in the house). The landlord had promised to clean the property in order to induce the tenants to sign the lease, but did not do so, leaving garbage and trash throughout the property and failing to clean the grease, grime, and dirt from the property, leaving the property with a foul odor, all of which required the tenants to expend significant sums to clean the property.

The tenants sued the landlord for fraud, breach of contract, unjust enrichment, and violations of CA Civil Code 17200 (unfair business practices). As a protest, the tenants withheld payment of the rent pursuant to California’s anti-SLAPP law. The landlord then sued for unlawful detainer. The tenants’ anti-SLAPP Motion was denied. Appellants appealed the denial, and the landlord filed a motion to have the appeal dismissed or given calendar preference (accelerated disposition).

Today, the California appellate court denied the landlord’s Motion. Pursuant to California law, the tenants’ lawsuit and the landlord’s claim for unlawful detainer (which were consolidated by prior court order) are stayed pending the full disposition of the appeal. We believe that this is the first decision by a California appellate court to uphold the appealability of the denial of an anti-SLAPP Motion filed in protest to paying rent pending an unlawful detainer action where the landlord has breached the lease prior to filing the unlawful detainer.

Mr. Klein represents the tenants in both the trial court actions and the appeal. He may be contacted directly at [email protected].

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com