Pacific Sands LLC vs. Smith

law. (Code Civ. Proc. § 437c(p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-51.)

The Cross-Complaint filed by Ms. Smith asserts causes of action for 1) quiet title based on adverse possession, 2) unjust enrichment, and 3) declaratory relief.

Adverse Possession

To obtain title through adverse possession, Ms. Smith must establish that: (1) she actually occupied the Property “under such circumstances as to constitute reasonable notice to the owner,” (2) her possession was “hostile to the owner's title,” (3) she claimed the Property as her own “under either color of title or claim of right,” (4) her possession was “continuous and uninterrupted for five years,” and (5) she paid “all the taxes levied and assessed upon the property during the period.” (Preciado v. Wilde (2006) 139 Cal.App.4th 321, 325; Dimmick v. Dimmick (1962) 58 Cal.2d 417, 421; see also Code Civ. Proc. §§ 322– 325.)

Pacific Sands contends the first cause of action for quiet title based on adverse possession fails for two reasons: 1) Ms. Smith cannot establish the element of adverse and continuous use for the required five-year time period, and 2) Ms. Smith cannot properly establish the element of payment of property taxes as she was making such payments as required by the terms of her Sublease.

Pacific Sands is the fee owner of 8041 Ebbtide Circle, Huntington Beach, CA 92646 (the (“Property”). (Cross-Defendant’s Material Fact (“CDMF”) 1.) Pacific Sands developed the Property with a home and subleased it to a sublessee in 1963, together with a purchase option. (CDMF 3.) On July 14, 2022, Pacific Sands exercised its own option and acquired the fee interest to the Property. (CDMF 5.) After purchasing the Property, Pacific Sands continued to sublease it to third parties, who remained bound by the terms of the Sublease and the terms of the Land Purchase Option Agreement. (CDMF 6.)

On December 2, 1986, the then sublessees of the Property assigned their interest in the Sublease and the Land Purchase Option Agreement to Stephen Smith (“Mr. Smith”) and Ms. Smith. (CDMF 7.) The Land Purchase Option Agreement provides that Pacific Sands can terminate the option based on payment defaults. (CDMF 8.)

Based on Ms. Smith’s material breaches by not paying amounts owed under the Sublease and Land Purchase Option, on April 30, 2008, Pacific Sands recorded a Notice of Termination of Land Purchase Option Agreement. (CDMF 9.)

Pacific Sands mailed a copy of the recorded Notice of Termination of Land Purchase Option Agreement to Ms. Smith by letter dated August 26, 2008. (CDMF 10.) Since that termination, Pacific Sands never billed Mr. or Ms. Smith for any option payments and the Smiths never attempted to pay any option payments. (CDMF 11.) Ms. Smith continued to default on her Sublease obligations even after Pacific Sands terminated the Land Purchase Option Agreement. (Ibid.) Ms. Smith disputes this fact by pointing to the dissolution of her marriage to Mr. Smith on November 3, 2022, but this does not negate the fact. On August 6, 2020, Ms. Smith’s Sublease expired and she failed to vacate. (CDMF 12.)

Ms. Smith lost the purchase option due to the breach confirmed in the recorded Notice of Termination of Land Purchase Option Agreement. (CDMF 13.) At the time the Sublease expired, Pacific Sands could not evict Ms. Smith due to eviction restrictions in place due to the COVID- 19 pandemic. (CDMF 14.) Ms. Smith has continued to occupy the Property. (CDMF 17.) On August 6, 2024, Pacific Sands filed this action to recover possession of the Property. (CDMF 18.)

Ms. Smith contends that her adverse possession of the Property began in June 2019, the effective date of her last payment. Ms. Smith points out that her last payment of $699.51 was made on May 16, 2019. (Cross- Complainant’s Material Fact (“CCMF”) 14.)

Ms. Smith claims that the August 6, 2020 expiration date of the Sublease should not apply to her because she is not a party to that Sublease. Not quite. On December 2, 1986, Ms. Smith signed an Assignment and Acceptance Agreement, stating that the Smiths purchased all rights, title, and interest under the Sublease, and that Ms. Smith agrees to keep, perform, and be bound by all of its terms, covenants, and conditions. (Brock Dec., Ex. 3.) Ms. Smith’s failure to pay rent beginning in June 2019 did not terminate the Sublease or end Ms. Smith’s right to possession of the Property.

Code Civ. Proc., § 326 is instructive. Under that state: When the relation of landlord and tenant has existed between any persons, the possession of the tenant is deemed the possession of the landlord until the expiration of five years from the termination of the tenancy, or, where there has been no written lease, until the expiration of five years from the time of the last payment of rent, notwithstanding that such tenant may have acquired another title, or may have claimed to hold adversely to his landlord. But such presumptions cannot be made after the periods herein limited.

Here, there is a written lease and sublease. (Brock Dec., Ex. 1.) Thus, the time of the last payment of rent is not determinative. (Code Civ. Proc. § 326.) Ms. Smith cannot establish the element of adverse and continuous use of the property for the required five-year time period.

Unjust Enrichment

The second cause of action for unjust enrichment alleges: Whereas the Land Lease calls for forfeiture of not only the land upon which Cross-Complainant’s Property is situated, but also all its structural improvements, the purchase price paid for the Property, and its appreciated value, the cumulative value of which approximates $1,500,000, enforcement of the forfeiture provisions of the Land Lease would create an unconscionable windfall and an unjust enrichment in favor of Cross-Defendant Pacific Sands LLC to the detriment of Cross-Complainant. Accordingly, allowing Cross-Defendant to retain these benefits without compensating Cross-Complainant for their reasonable value would be inequitable. (Cross-Complaint, ¶ 15.)

The Sublease explicitly provides that, upon expiration of the lease, the lessee shall have the right to remove all buildings and other improvements from the premises until 60 days after the expiration of the lease. (CDMF 16; Brock Dec., Ex. 1.) However, if any such building or improvement is not removed within that timeframe, it shall became part of the land and shall belong to the lessor without any payment. (Ibid.)

Pacific Sands is correct that the second cause of action for unjust enrichment is negated by the express terms of the Sublease.

Declaratory Relief

The third cause of action for declaratory relief alleges: 18. An actual controversy has arisen between Cross-Complainant and Cross Defendant Pacific Sands LLC regarding Cross- Complainant's right to compensation for improvements on land associated with the Property.

19. Cross-Complainant seeks a judicial declaration that Cross- Defendant is required to compensate Cross-Complainant for the fair value of the improvements, or that Cross-Complainant has an equitable interest therein. (Cross-Complaint, ¶¶ 18-19.)

Code Civ. Proc. § 1060 permits a party to seek a declaration of that party's rights or duties with respect to another. However, Code Civ. Proc. § 1061 permits a trial court to refuse to grant, in its discretion, declaratory relief “where its declaration or determination is not necessary or proper at the time under all the circumstances.” (See also C.J.L. Construction, Inc. v. Universal Plumbing (1993) 18 Cal.App.4th 376, 389-390.) “A complaint for declaratory relief is legally 33 sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a written instrument and requests that these rights and duties be adjudged by the court.” (Maguire v.

Hibernia Savings & Loan Soc. (1944) 23 Cal.2d 719, 728.) Here, Ms. Smith’s request for declaratory relief is duplicative of and entirely coextensive with the second cause of action, which, as discussed previously, fails as a matter of law. (See Stockton Citizens for Sensible Planning v. City of Stockton (2012) 210 Cal.App.4th 1484, 1500 [declaratory relief derivative of barred claims fails as a matter of law]; Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1055, n. 12 [same].)

Pacific Sands shall give notice of this ruling. 7 Nemmer vs. Renegade Plaintiffs Richard Nemmar’s and Kathleen Nemmer’s motion for RV attorney’s fees, costs, and expenses is GRANTED in part and DENIED in part.

The court awards Plaintiffs a total fees, costs, and expenses award of $30,453.81, consisting of $25,710 in attorney fees plus $4,743.81 in costs, to be paid by Defendant Rev Renegade, LLC only.

Legal Standard for Attorney Fee Awards

On a motion for attorney’s fees, the moving party has the burden of: (1) establishing entitlement to an award, and (2) documenting the appropriate hours expended and hourly rates. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1020.)

The Song-Beverly Act provides for the recovery of attorney’s fees, costs, and expenses. (Civ. Code, § 1794(d).) Courts use the lodestar adjustment method to determine the amount of attorney’s fees to award in Song- Beverly actions. (Reynolds v. Ford Motor Co. (2020) 47 Cal.App.5th 1105, 1112.) “[T]he lodestar is the basic fee for comparable legal services in the community.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) It is “based on the ‘careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.’ [Citation.] [The California Supreme Court] expressly approved the use of prevailing hourly rates as a basis for the lodestar...

In referring to ‘reasonable’ compensation, [the Court] indicated that trial courts must carefully review attorney documentation of hours expended; ‘padding’ in the form of inefficient or duplicative efforts is not subject to compensation. (Id. at 1131-1132.)

When determining a reasonable attorneys’ fees award using the lodestar method, the court begins by deciding the reasonable hours the prevailing party’s attorney spent on the case and multiplies that number by the reasonable hourly compensation of each attorney. (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 998; see also Environmental Protection Info. Ctr. v. California Dep’t of Forestry & Fire 34 Protection (2010) 190 Cal.App.4th 217, 248.) “The reasonable hourly rate is that prevailing in the community for similar work.” (PLCM Group v.

Drexler (2000) 22 Cal.4th 1084, 1095.) The court may rely on personal knowledge and familiarity with the legal market in setting a reasonable hourly rate. (Heritage Pac. Fin., LLC v. Monroy (2013) 215 Cal.App.4th 972, 1009; 569 E. County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal. App. 5th 426, 437.) The court then has the discretion to increase or decrease the lodestar figure by applying a positive or negative multiplier; “such an adjustment is commonly referred to as a ‘fee enhancement’ or ‘multiplier.’ [Citation.]” (Mikhaeilpoor v.

BMW of North America, LLC (2020) 48 Cal.App.5th 240, 247 (“Mikhaeilpoor”).) The lodestar may be adjusted based on factors which include the novelty and difficulty of issues presented, complexity of the case, the attorney’s skills, the results achieved, and the extent to which taking the case on a contingent fee basis has precluded the attorney from taking other fee-generating work. (Ketchum, 24 Cal.4th at 1132-1134; Mikhaeilpoor, 48 Cal.App.5th at 247.) “The purpose of [the] adjustment is to fix a fee at the fair market value for the particular action.

In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services.” (Ketchum, 24 Cal.4th at 1132.)

The court is not required to impose a multiplier; the decision is discretionary. (Mikhaeilpoor, 48 Cal.App.5th at 247; Galbiso, 167 Cal.App.4th at 1089; Nichols v. City of Taft (2007) 155 Cal.App.4th 1233, 1241.)

“‘[T]he lodestar method vests the trial court with the discretion to decide which of the hours expended by the attorneys were “reasonably spent” on the litigation’ [Citation] and to determine the hourly rates that should be used in the lodestar calculus. [Citation.]” (Mikhaeilpoor, 48 Cal.App.5th at 246-247.) “The experienced trial judge is the best judge of the value of professional services rendered in his court . . . . [Citation.]” (Ketchum, 24 Cal.4th at 1132.)

Here, it is undisputed that the Song-Beverly Act provides for the recovery of attorney’s fees and that Plaintiffs is the prevailing party. Plaintiffs incredibly request an award of request an order awarding $172,972.56, in a straight forward lemon law case with no law and motion, no substantive motions, no expert discovery, one deposition, and no trial. This amount consists of (1) $112,152.50 in attorney fees; (2) $4,743.61 in costs, and (3) a 1.5 multiplier enhancement.

Lodestar Calculation: Reasonable Rates

This is a straightforward lemon law case that did not involve any challenges to the pleadings, any dispositive motions, any complex discovery issues, any expert discovery, or trial. Indeed, the docket on the 35