Much To Tenants’ Dismay, This Case Clearly Demonstrates That A Successful JNOV Can Create A Significant Reversal Of Fortune.
A San Francisco apartment owner (landlord) served his tenants with an eviction notice, under section 37.9 of the San Francisco Residential Rent Stabilization and Arbitration Ordinance, when he sought to regain possession to allow him and his then-fiancé to move in – later filing an unlawful detainer action against tenants.
Tenants also filed their own action for wrongful eviction against landlord in Reynolds v. Lau, Case No. A153597 (1st Dist., Div. 1 August 7, 2020) (unpublished). Meanwhile, the parties settled the unlawful detainer action – with the settlement including a clause providing that the parties would each bear their own attorney fees and costs.
More than a year later, the jury found in favor of tenants in their wrongful eviction action and awarded them $223,858 in damages – which were trebled under the rent ordinance resulting in a judgment against landlord in the amount of $671,574. Tenants’ victory was short-lived, however, as landlord successfully moved for judgment notwithstanding the verdict. Afterward, landlord moved to recover costs and attorney fees as the prevailing party under the rent ordinance – with the trial court awarding him $42,871 in costs and $243,557 in fees.
Tenants appealed – arguing the trial court was required but failed to address the financial hardship the fee award would cause them; the trial court failed to deduct fees for time landlord’s counsel spent addressing the tenant harassment claim; and that the trial court failed to reduce the fee award for the amount of time landlord’s counsel spent attending depositions in the unlawful detainer action wherein the parties had settled with an agreement to pay their own fees.
The 1/1 DCA disagreed with tenants’ arguments and affirmed. The trial court was under no obligation to address the financial impact of the fee award on the tenants, and the tenants had failed to raise this argument in opposition to landlord’s fee motion – thereby waiving it on appeal. There was no abuse in discretion in the trial court’s award as the tenant harassment claim did not play a significant or independent role in the litigation – with only 6 of the 1,396 hours billed by landlord’s counsel for the tenant harassment claim which was based on landlord’s alleged failure to follow requirements for a valid owner move-in eviction under section 37.9, with the principal cause of action in the litigation being the owner move-in eviction. Finally, as to tenants’ argument re the unlawful detainer depositions, the appellate panel again found no abuse of discretion. Although the settlement agreement in the UD action provided that each party pay their own fees, the depositions taken in that action were also relevant in the wrongful eviction action. Therefore, the fees incurred were a necessary litigation expense and recoverable notwithstanding the UD settlement agreement.
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