A Tenant’s Claim For Breach Of A Settlement Agreement Is Not A SLAPP.

Oakland, CA (Originally published, December 7, 2014). A scenario repeats itself regularly in landlord tenant law. A new owner purchases a building with rent-controlled units. The new owner, who has paid a lot for the new building, wants to phase out the rent-controlled units with new, higher paying tenants. The new owner serves a notice to vacate and a rent controlled tenant fights back with a wrongful eviction case.

In Ben-Shahar v. Pickart, 2014 Cal. App. LEXIS 1071 (Cal. App. 2d Dist. Oct. 31, 2014), the tenants clearly won the fight. In the process, they added to a line of case slowly limiting the reach of the Anti-SLAPP Statute to unlawful detainer proceedings.

Some background is in order. In Ben-Shahar the tenant of a penthouse apartment in Santa Monica spent approximately $70,000 to remodel the penthouse. The first owner memorialized in writing an agreement to pay the tenant approximately $200,000 for the remodeling that had been performed upon the sale of the building.

When the new owner came along, he served the tenant with a 60 day notice to quit. A provision of the Santa Monica Rent Control Ordinance allows landlords to evict tenants so long as they occupy the unit within 30 days. If the landlord does not move in within 30 days, the landlord must offer the unit to the displaced tenant.

The tenant in the penthouse did not leave and an unlawful detainer proceeding was initiated. The court in the unlawful detainer proceeding was prepared to rule in favor of the new landlord. As a result, the parties entered into a settlement agreement stating that the tenant would vacate and the owner would move in within 30 days.

The tenant then sued the landlord for breach of the settlement agreement. The trial court denied the landlord’s Special Motion to Strike. The trial court also denied the tenant’s motion for attorney’s fees for the filing of a frivolous lawsuit.

The 2d District affirmed the denial of the Special Motion to Strike. It reasoned:

Plaintiff’s complaint is not directed at the act of defendants’ filing the unlawful detainer proceedings or the parties’ act of settling the matter. Rather, it is directed the Pickarts’ acts constituting a purported breach of the settlement agreements based on their conduct in failing to occupy plaintiff’s apartment in a timely fashion as required by the SMCC.

Slip Op., at 16. The 2d District remanded the case for a determination of whether the landlord’s appeal of the denial of the motion was frivolous. Id. at 17. The 2d District’s decision is just one of the latest of decisions applying the Anti-SLAPP Statute to unlawful detainer sparingly. In light of the remand for a determination of frivolousness, counsel representing landlords defending wrongful eviction lawsuits would be well-advised to avoid filing them at all “[u]nless the sole basis of liability asserted in the tenant’s complaint is the filing and prosecution of the unlawful detainer action. . . .” Id.

John Claassen, an experienced Anti-SLAPP litigator, practices civil litigation from the offices of Claassen, P.C. in Oakland, California. Please click here if you have questions about the firm’s Anti-SLAPP practice. Copyright Claassen, Professional Corporation, 2014-15. All rights reserved. While this blog entry is intended for informational purposes only, portions of it may constitute “communications” within the meaning of Cal. R. of Prof. Conduct 1-400. No statement made in this Advertisement constitutes legal advice. Similarly, no statement made herein is intended to guarantee, serve as a warranty, or serve as a prediction of the outcome of any particular matter. This Advertisement is not intended for any matter that would require the rendition of legal services outside of the State of California under the laws of any jurisdiction other than the State of California.

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