Ever wonder what happens when a new property owner uses a demand to vacate served by the previous owner? Or to state it differently, if property is sold while evictions are pending, may the new owner succeed to the previous owner’s position or does the new owner have to restart?
No? Well Ok, but I have wondered . . .
Plaintiffs Johnny Ki Lee and Un Joong Lee sought to evict Defendant Sean Kotyluk for selling marijuana without a license. Sean claimed that Plaintiffs’ three-day notice was defective because it was served on June 4, 2019, but Plaintiffs did not become owners of the property until June 20, 2019 and the eviction litigation was started the following week.
There was no landlord-tenant relationship between Plaintiffs and Defendant on June 4, the date the notice was furnished.
In response to Sean’s defense regarding defective notice, Lee and Lee explained that the prior owner, Rosemarie Haynes, had served the notice before transferring ownership of the property to Plaintiffs. And that as direct successors to Haynes, Lee and Lee had the right to continue the eviction instead of being forced to start over with a new three-day notice.
After the trial court examined the notice defect and made Plaintiffs aware that it was fatal to their eviction case since none of this sequencing was adequately explained in the litigation petition, Plaintiffs requested that the trial court allow Plaintiffs an opportunity to amend their pleadings. The revised pleadings, if permitted, would state that, sequentially, Haynes served the notice, Plaintiffs bought the property from Haynes, and thereafter Plaintiffs started the eviction lawsuit.
The trial court rejected Plaintiffs’ request, and instead granted judgment for Defendant. Plaintiffs were not entitled to evict due to defective notice; Plaintiffs were not entitled to amend their pleadings to cure the procedural defect; Defendant wins the case and is entitled to recover $25,794 in attorney’s fees from Plaintiffs.
The Appellate Court reviewed a copy of the Lease was attached to the pleadings, which identified the landlord as the Living Trust of Rosemarie S. Haynes. The original petition further alleged that Sean was served with a three-day notice on June 4, 2019, and that Sean failed to vacate by June 7.
Nothing in the pleadings stated that the eviction notice was served by the previous owner – Rosemarie Haynes. Further, the notice itself did not state that it was signed by Haynes. All Plaintiffs needed was a statement in the litigation pleadings to the effect that Haynes had served the notice (or an authorized agent for Haynes did so). Then, an appeal likely would not have been necessary.
On appeal, the Court determined that Lee and Lee should have been allowed to fix this mistake at trial and doing so would have allowed the trial court to issue eviction Judgment for Plaintiffs.
The trial court’s judgment was reversed; the lower court should have allowed Plaintiffs the opportunity to amend their pleadings to provide the sequencing of: (1) eviction notice by Haynes, (2) purchase by Lee and Lee, and (3) eviction lawsuit, which facts would have proven a satisfactory explanation.
Plaintiffs Lee and Lee are ultimately victorious; Defendant Kotyluk loses.
See Johnny Ki Lee v. Sean Kotyluk; Case G058631; 4th Appellate District Court of California; Division Three; January 7, 2021: https://scholar.google.com/scholar_case?case=10858927393993309984&hl=en&as_sdt=6&as_vis=1&oi=scholarr.
Lessons / Questions:
- Question: How many times have property professionals taken over the management of commercial income-producing properties with not only demand and eviction notices pending, but also with litigation in process? And how many Defendants know to raise this defense?
Have you been asked to complete the prosecution of a pending lawsuit on behalf
of an incoming landlord, because the property was sold before Judgment? Are
you and your lawyers aware of the case management issues that can arise if
not handled properly with the Courts, and Pleadings amended or drafted
properly to identify and fix this issue?
- Lesson: Landlords may tell their story in Pleadings. Do so. To limit surprises at trial, make the judge aware of the background and context in your litigation Petition, as well as what you are asking the court to do. Be specific. And if the judge questions your case, then ask for permission to amend the pleadings before judgment is rendered for your opponent. Sometimes even oral amendments are allowed – but only if you ask!
Stuart A. Lautin, Esq.*
* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law, Texas Board of Legal Specialization
Licensed in the States of Texas and New York
Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.