Landlord/Tenant, Section 998, Special Fee Shifting Statute: In Two Related Opinions, 1/2 DCA Explores San Francisco Eviction Ordinance Fee-Shifting Provision, Determining Owners Were Properly Awarded Attorney’s Fees Against Two Tenants

In One Case, Section 998 Offer Was Not Beat Even Though Two Plaintiff Tenants Did Get Positive Damages Under The San Francisco Residential Rent Stabilization And Arbitration Ordinance.

            The 1/2 DCA in two opinions, Pitre v. Lam and Wong, Case No. A151061 (1^st Dist., Div. 2 Aug. 7, 2019) (unpublished) and Randt v. Lam, Case No. A151062 (1^st Dist., Div. 2 Aug. 7, 2019) (unpublished), faced an appeal from two tenants after the trial judge awarded apartment owners attorney’s fees under a specific provision of the San Francisco Residential Rent Stabilization and Arbitration Ordinance (Rent Ordinance).  The appellate court affirmed the fee awards.

            In Pitre, one of the plaintiff tenants rejected a CCP § 998 offer for $50,000, including waiver of unknown claims arising from the theories in his complaint, but only recovered $32,250 from apartment owners after a jury trial.  The complaint was predicated on the theory that owners interfered with tenant’s right to quiet use and enjoyment by unlawfully evicting him through an improper relative move-in.  The trial judge awarded tenant pre-offer fees of $5,857.19, as well as awarding owners $47,564 in post-offer attorney’s fees under a fee-shifting provision of the Rent Ordinance.  Tenant appealed, but the fee award remained intact.  First of all, the section 998 offer was valid because requesting waiver of derivative claims relating to the theories in the complaint was proper (Ignacio v. Caracciolo, 2 Cal.App.5^th 81, 84, 89-90 (2016)), and the offer was made deep enough in the case such that the tenant had enough information to reasonably evaluate it.  Second, tenant’s theory was grounded in a section of the Rent Ordinance having a bilateral fee provision allowing fee recovery by a prevailing defendant, such that it was distinct from fee recovery under another Rent Ordinance provision which was unilateral in favor of only a prevailing plaintiff.  This was not a situation where the defense prevailed on claims which were intertwined with unilateral attorney’s fees provisions, where fee recovery is not allowed.  (Compare with Turner v. Association of American Medical Colleges, 193 Cal.App.4^th 1047, 1071 (2011); Carver v. Chevron U.S.A., Inc., 119 Cal.App.4^th 498, 504 (2004); Wood v. Santa Monica Escrow Co., 151 Cal.App.4^th 1186, 1191 (2007).)

            Randt involved a suit against the same apartment owners by a tenant who was defensed (finding tenant was evicted in good faith), which prompted the lower court to award owners $51,318 in attorney’s fees under the Rent Ordinance provision at issue in Pitre and $19,279 in costs.  Those awards, too, stood on appeal.  The parties’ discussion of a CCP § 998 offer was puzzling to the appellate court, because owners outright prevailed so as to be entitled to fees and costs based on the Rent Stabilization provision given that tenant’s theory arose under a section where there was a bilateral fee-shifting provision.