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Friday
Feb162018

Court Confirms Landlord’s Right to Seek Damages in Unlawful Detainer Action and Separate Civil Action 

Business LitigationReal Estate Litigation Attorney

by Nicholas Kanter
818-907-3289

 

The Court of Appeal just confirmed that a landlord is not barred from recovering rent owed by a tenant in a civil action for breach of contract, even after obtaining a judgment for unlawful detainer against the tenant, so long as the landlord did not seek to recover the same rent in the unlawful detainer action.

Commercial Building Rent SignIn Hong Sang Market, Inc. v. Vivien Peng, Peng (the tenant) failed to pay rent for the period September 2009 through February 2011, as well as for the month of May 2011. Hong Sang (the landlord) filed an unlawful detainer lawsuit (UD) against Peng pursuant to a 3-day notice to pay rent or quit that was based on Peng’s failure to pay rent for the month of May 2011. Hong Sang obtained summary judgment against Peng in the UD and was awarded $4,725 in back-due rent for the month of May 2011.

Hong Sang filed a separate lawsuit for breach of contract based on Peng’s failure to pay rent for the period September 2009 through February 2011. The breach of contract lawsuit sought a damages in the amount of $85,040 for back-due rent. Before trial, Peng asked the court to dismiss the lawsuit on the grounds that it was barred by the doctrine of res judicata and collateral estoppel.

Peng claimed that the UD judgment awarding Hong Sang back-due rent for the month of May 2011 precluded Hong Sang from recovering in a separate lawsuit, the rent owed for the period September 2009 through February 2011. The trial court ruled in favor of Hong Sang, and Peng appealed.

The Court of Appeal affirmed the trial court’s ruling, holding that the UD judgment did not bar Hong Sang from seeking additional damages in a separate civil action on a number of grounds.

Among other reasons, the Court found that an UD judgment has limited res judicata effect “because the claim preclusion aspect of the res judicata doctrine applies only to matters that were raised or could have been raised, in the earlier action on matters that were litigated or litigable.”  Since Hong Sang’s UD was based on a 3-day notice to pay or quit for the month of May 2011 only, Hong Sang’s recovery of back-due rent in the UD was limited to the month of May 2011 – he could not have litigated or recovered rent for the period September 2009 through February 2011 in the UD action.

In addition, the Court of Appeal confirmed that a landlord is not required to litigate back-due rent in an UD action. Rather, when a landlord files a UD based on a 3-day notice to pay rent or quit, the landlord may seek to recover possession only, and later sue the tenant for the back-due rent in a separate civil action.

While the holding in Hong Sang is not novel, it confirms that a landlord has a number of options when it comes to recovering possession of its property and obtaining damages resulting from the breach of a lease.

Nicholas Kanter is a Shareholder in our Real Estate and Employment Practice Groups.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Monday
Jan292018

Su-PERFLUO-us? More Chemicals Added to Prop 65 List

Environmental Litigation AttorneyEnvironmental Litigation Defense Attorney

 

Stephen T. Holzer

818.907.3299

 

Business owners manufacturing, buying, selling, or importing products in California already know about the state’s Prop 65 law. But do they also know every single chemical or substance that is on that list?

They couldn’t possibly unless gifted with total recall, and even then they would have to keep up with numerous revisions made by the state’s Office of Environmental Health Hazard Assessment (OEHHA). As of December, nearly 1,000 contaminants have been added over the past 30 or so years – substances that are known to the State of California “to cause cancer or reproductive toxicity.”

Some recent additions to the list are perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), members of the perfluoroalkyl substances (PFASs) family of chemicals.

As of now, the State has not determined a Maximum Allowable Dose Level. The federal Environmental Protection Agency however, established a drinking water health advisory level at 70 parts per trillion. Nevertheless, California businesses with 10 or more employees must provide warning labels on products that contain these PFOs, and in buildings where PFOA or PFOS may exist.

The chemicals are widely used to protect products from moisture and potential stains and to reduce friction in mechanical industries. So which businesses will most likely be affected?

  • Food Manufacturers & Packagers (packaged foods with coated paper);

  • Restaurants & Other Food Vendors (seafood or fish from water contaminated by PFOS, take-out containers, pizza boxes, popcorn bags, etc.);

  • Manufacturers (cosmetics, camping equipment, water/stain resistant clothing, water/stain resistant treatment products for clothing or furniture, carpeting, etc.);

  • Commercial Building owners and managers;

  • Retailers and Distributors dealing with any of the above.

According to the EPA, the contaminants aren’t made in the U.S. anymore – but PFOAs and PFOSs still show up in many imported products. And they don’t biodegrade well, thus the recent concerns regarding their presence in groundwater, fish, etc.

Anyone dealing in these and other products that contain PFOAs or PFOSs in California should post a Prop 65 warning label on products that contain these contaminants, and in buildings where employees or consumers may be exposed to the chemicals. 

Stephen T. Holzer is a Business Litigation Attorney and Chair of our Environmental Practice Group. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
Jan172018

Employment Defense: It’s Raining Complaints 

Lawyer for EmployersEmployment Defense

 

by Tal Burnovski Yeyni

818-907-3224

 

If you missed recent news regarding the #MeToo movement – welcome back from outer space! The Me Too movement has been sweeping the U.S. and the world since October 2017, encouraging women and men to speak up about sexual harassment incidents.   

The phenomenon was not missed by California legislators, who introduced the following two new bills:  

AB 1867 would require employers with 50 or more employees to maintain records of employee complaints of sexual harassment for 10 years from the date of filing.  

AB 1870 would extend the period to file a complaint of unlawful employment practice with the Department of Fair Employment and Housing for one to three years from the date of the alleged unlawful practice.

Though too soon to tell whether these bills will find their way into California’s Government Code, they demonstrate the legislature’s intent to crack down on harassment in the workplace.

Meanwhile, be sure you have a written, compliant, anti-harassment policy as well as an open door policy in place. Procedures for reporting harassment should be outlined in an employee handbook or distributed to all employees in some written format.

Those with 50 or more employees should also provide training to supervisors regarding harassment, discrimination, and bullying prevention every two years, as mandated by state law.

Now, more than ever, eradicating harassment in the workplace should be a priority.

Tal Burnovski Yeyni is an Employment Defense Attorney.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Dec202017

Divorce Planning: How Tax Reform Could Affect Your Decisions

Encino Tarzana Divorce LawyerCertified Family Law Specialist

 

by Vanessa Soto Nellis

818.907.3274

  

 

 

Under the current tax law, individuals making spousal support payments may deduct the payments on their tax returns. Conversely, the individual receiving alimony must count those payments in his or her gross income.

These rules provide a financial benefit for both parties during an otherwise difficult time. Spousal support payors could agree to higher alimony payments knowing the deductions help reduce taxable income. Recipients therefore, generally receive more spousal support, and are generally taxed on the income at a lower rate.

These benefits go away as of January 1, 2019 under the latest version of H.R.1 Tax Cuts and Jobs Act (H.R.1).

So what does tax reform mean for couples who are already divorced, expect to finalize a dissolution next year, or may separate and divorce later? If the President signs the current version of H.R.1:

  1. Individuals paying spousal support pursuant to a court order executed before December 31, 2018 will continue to deduct those payments; individuals receiving spousal support will continue to count the alimony as income – so long as there are no changes.  

  2. Couples who finalize divorces or separation agreements in 2018 will follow the above-rules. 

  3. Divorced couples seeking modifications to their dissolution or separation agreements should consider doing so in 2018 if the alimony payment deduction is of importance. 

  4. Couples with a pending divorce should consider settling the alimony question in 2018 to take advantage of the deduction. 

  5. Tax reform will also impact child support, as family law courts base the amounts paid here on combined income of both parents – changes to the tax rates, and standard or itemized deductions will impact the calculations.

For more information, see Section 11051. Repeal of the Deduction for Alimony Payments.

Vanessa Soto Nellis is the Chair of our Family Law Practice Group.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
Dec202017

Full Speed Ahead: SBA Directory May Hasten Franchisee Lending Process

Franchise & Distribution Practice Group Chair

 

by Barry Kurtz

818-907-3006

 

As of January 1, 2018, the U.S. Small Business Administration (SBA) will begin implementing new rules that will affect franchisors, entrepreneurs wishing to join a franchise system, and lenders or CDCs (Certified Development Companies). Lenders who want to make SBA-backed loans will be responsible for certifying that a franchisee-borrower is eligible for an SBA loan.

The new rules call for the SBA to create and maintain a directory of approved franchisors eligible for government-backed loans for their franchisees. Franchisors whose franchisees apply for the government-backed business loans– specifically 7(a) and 504 loans to open franchises – will want to ensure their franchise system is registered with the SBA.  

To obtain approval, franchisors will need to submit their Franchise Disclosure Documents, franchise agreements and other paperwork franchisors may require franchisees to sign.

Once a franchise system appears on the registry, lenders will know that franchisees of the franchisor will be eligible for SBA loans. In addition, franchisors may be eligible for automatic renewal in the directory each year, if the franchise documents have not substantially changed.).

Before January 2017, a private company called FRANdata maintained a similar registry, but the SBA banned use of that in favor of a more cumbersome process:

Franchisors had to provide blanket approvals for all franchise agreements they were going to sign with SBA funded franchisees, or negotiate and get approvals for individual franchisee agreements and use an SBA approved addendum every time an SBA borrower wanted to buy a franchise.

Those choices were either time-consuming or ill-fitting of circumstances.

SBA Approved Franchisors

The 2018 process seems to be more hybridized, incorporating the documents review system and the above-referenced SBA addendum, with a new registry system.

As mentioned, the approvals process to gain initial entry on the registry means submitting the FDD, agreements and other documentation provided to potential franchise buyers. The SBA reviews these to pre-approve for SBA financing – which doesn’t serve to endorse a system in any way, it just makes financing easier for qualified loan seekers.

The Franchise Directory will include those companies that have met all SBA criteria, some that meet the Federal Trade Commission’s definition of a franchise, and certain brands that do not meet the FTC definition but are otherwise eligible.

Franchisors that want to apply for a listing on the SBA Franchise Directory should email franchise@sba.gov.

Barry Kurtz is a State Bar of California Certified Specialist in Franchise & Distribution Law.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

LEWITT HACKMAN | 16633 Ventura Boulevard, Eleventh Floor, Encino, California 91436-1865 | 818.990.2120