Cardenas v. Seven Palms Apartments

Cardenas v. Seven Palms Apartments

Filed 9/10/08 Cardenas v. Seven Palms Apartments CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

GLADIS CARDENAS et al., Plaintiffs and Appellants, v. SEVEN PALMS APARTMENTS et al., Defendants and Appellants.

B193241 (Los Angeles County Super. Ct. No. BC306746)

APPEALS from a judgment of the Superior Court of Los Angeles County, Morris Bruce Jones, Judge. Reversed in part and affirmed in part.

Law Offices of Odion Leslie Okojie and Odion Leslie Okojie for Plaintiffs and Appellants.

Pollak, Vida & Fisher and Michael M. Pollak for Defendants and Appellants.

_

In this fair housing action, Gladis De La Cruz^[1](for herself and her minor children, Eduardo, Daisy, and Juan), her husband Juan Pablo De La Cruz, and the Fair Housing Council of San Fernando Valley (FHC) allege that defendants Seven Palms Apartments (Seven Palms), Olde Pasadena Realty (OPR), John Holman, Sonia Holman, Thomas Maple, and Fred Hartman discriminated against plaintiffs on the basis of their familial status. Plaintiffs allege that Mrs. De La Cruz complained to Seven Palms management about mistreatment of her children and enforcement of apartment rules that discriminated against children, and the family was then evicted from Seven Palms, purportedly for exceeding occupancy limits. Before trial, the court ruled in favor of plaintiffs on summary adjudication that the apartment rules were discriminatory on their face. Following the bench trial, the court found in favor of defendants and against the FHC and the individual plaintiffs on the discrimination and ancillary causes of action, with one exception: the trial court found in favor of Mrs. De La Cruz and against Seven Palms and Mr. Hartman for breach of the covenant of quiet enjoyment and emotional distress, awarding her $8,250, plus $10,000 in punitive damages.^[2] On the parties posttrial motions for attorneys fees, the court found defendants were the prevailing parties under Civil Code section 1717 and the rental agreement, and awarded defendants $39,725 in attorneys fees against all plaintiffs, including the FHC.

On appeal, plaintiffs contend the trial court (1) erred and abused its discretion in finding for defendants on plaintiffs claim of retaliatory eviction, (2) improperly refused to include in the final judgment the pretrial adjudication that the apartment rules were facially discriminatory, (3) erred in failing to award plaintiffs monetary damages, (4) erred and abused its discretion in awarding attorneys fees against all plaintiffs despite the fact the FHC was not a signatory to the rental agreement, (5) erred and abused its discretion in finding Mrs. De La Cruz was not the prevailing party, and (6) erred and abused its discretion in denying plaintiffs prayer for an injunction to prevent publication of facially discriminatory apartment rules. Defendants cross-appeal, contending the trial court abused its discretion in awarding them less than their full attorneys fees. We reverse the trial courts judgment awarding defendants their attorneys fees against the FHC and Mrs. De La Cruz. In all other respects, we affirm the judgment.

RELEVANT FACTUAL BACKGROUND

The testimony at trial was as follows.

In the summer of 1999, Juan Pablo de la Cruz leased a one bedroom unit in the Seven Palms Apartments and moved in with his wife, Gladis, and their three children, Eduardo, Daisy, and Juan. In 2000, Mrs. De La Cruz gave birth to Jorge, and the family moved into a two-bedroom apartment in the same complex.

In November 2001, John Holman, a friend of the former resident manager, was doing some maintenance work at Seven Palms when he noticed four-year-old Juan De La Cruz playing near some tools. Juan appeared about to fall on them, so Holman picked up the boy and moved him out of the way. Juan was not injured and did not tell his mother about the incident. When Mrs. De La Cruz eventually learned about it several days later, she called the police, who suggested that she call the Fair Housing Council. Mrs. De La Cruz did not call the FHC at that point. Mrs. De La Cruz also did not discuss the incident with either John Holman or his wife Sonia (also a friend of the resident manager), Fred Hartman (the property manager), or the then-resident manager (not a party here).

In January 2002, Hartman hired Sonia and John Holman as the resident manager and assistant manager, respectively, of Seven Palms. Hartman supervised the Holmans. During this time period, approximately 90 percent of the 68 units at Seven Palms were occupied by families with children.

Shortly after the Holmans became managers in early 2002, Mrs. De La Cruz requested a meeting with Mr. Hartman to discuss a rent credit. The meeting took place in the Holmans apartment, and Mr. Hartman agreed to the rent credit. Mrs. De La Cruz did not mention the November 2001 incident between her son and John Holman during this meeting.

When the Holmans became the resident managers of Seven Palms, Mrs. Holman learned that Seven Palms had written house rules, dealing in part with children because space was limited and there were no specific play areas. Mrs. Holman distributed the existing rules to the tenants, and added a few of her own. When she did receive complaints, these often related to noise. Mrs. Holman responded to complaints regardless of whether a child or adult was involved.

On June 23, 2002, Mr. Holman was tending to a broken pipe and a resulting water leak at about 9:00 p.m. From a distance of 25-30 feet, he saw one of the De La Cruz children pushing a younger sibling in a cart out through the gate of the complex.^[3] The complex faced a busy street, and it was dark outside. Holman did not see the parents, so he called to the children (in Spanish) to come back inside the gate because it was very dangerous.

Approximately 20 to 30 minutes later, Mrs. De La Cruz confronted Mr. Holman, yelling at him for telling anything to her children. Mr. De La Cruz approached Mr. Holman and his wife and at first tried to calm her. Mr. De La Cruz then pointed his finger in Mr. Holmans face and said that if Holman had anything to say to Mr. De La Cruzs children, Holman should tell him. Mr. Holman told Mr. De La Cruz to stop pointing his finger at him, then turned and walked away. A number of people were gathered around Holman and De La Cruz during the heated exchange. Neither Mr. Holman nor Mr. De La Cruz raised their voices, however, Mrs. De La Cruz did. Mr. Holman was embarrassed and humiliated. The next day, Mrs. Holman prepared a Warning Notice^[4]regarding the incident, which she gave to Mrs. De La Cruz the same morning.^[5]

Several days later, Mrs. De La Cruz told Mrs. Holman she wanted to meet with Mr. Hartman again. On July 5, 2002, the Holmans, Mr. Hartman, and Mrs. De La Cruz met at the Holmans apartment. Mr. Hartman began by asking Mrs. De La Cruz for her version of the incident. Mrs. De La Cruz said (for the first time) that her children had been mistreated and that Mr. Holman had pulled or grabbed her son in November 2001. Hartman asked Mrs. De La Cruz why she waited seven months to tell him if it was so important.^[6] Mrs. De La Cruz did not complain about the rules or say anything about her children being prohibited from playing outside. She told Mr. Hartman she wanted the Holmans fired.

Mr. Hartman asked Mr. Holman for his version, which Hartman said differed a lot. Mr. Hartman told Mrs. De La Cruz he did not know how to reconcile the versions. Mrs. De La Cruz became very angry and began yelling at Mr. Hartman. The Holmans then told Mr. Hartman about the incident on June 23rd, when Mr. and Mrs. De La Cruz had threatened the Holmans and yelled at them in front of other tenants[.] Mr. Hartman was concerned that Mrs. De La Cruz had been disrespectful and threatening to the Holmans.^[7] Mr. Hartman told Mrs. De La Cruz that it was obvious that she was very unhappy living there, and he decided to ask her to move. Mr. Hartman informed Mrs. De La Cruz that he would have Mrs. Holman give her a 60-day notice, but he was flexible if she needed more time.

During the meeting, Mr. Hartman and Mrs. Holman learned for the first time that six people were living in the De La Cruzs apartment unit.^[8] Mr. Hartman told Mrs. De La Cruz you lied to us, you misrepresented the number of people that are living in your apartment. Mrs. De La Cruz responded that there were other units in the complex that had exceeded the limits.^[9] Mr. Hartman told Mrs. Holman to begin enforcement. Mr. Hartman directed Mrs. Holman to write tenant exceeded legal occupancy as the basis for the eviction because with her limited English, [t]he threats, the disrespect and things of that [sic] were a little difficult to put down something short for her to write.

Mrs. Holman gave Mrs. De La Cruz a 60-day notice immediately after the meeting and then gave her a second one. When Mrs. Holman thought she had lost the notice, she gave Mrs. De La Cruz yet another 60-day notice.

The Fair Housing Councils Role

Several days after the July 5th meeting, Mrs. De La Cruz called the Fair Housing Council for the first time and spoke with investigator Reinaldo Avila. She told him about the November 2001 incident. Mr. Avila did not recall Mrs. De La Cruz saying anything about rules. Mrs. De La Cruz did not recall telling Avila that John Holman grabbed her son Juan in June 2002, but Mr. Avilas notes of the conversation indicate that she did so.^[10]

On August 1, 2002, Mr. Avila sent a letter to Sonia Holman stating his office had received a complaint and was conducting an investigation into alleged housing discrimination by the resident manager based on familial status. He requested copies of the current house rules, regulations and information regarding her policies and procedures. Mr. Avila wrote that [o]ur office has been asked to intervene and is currently investigating these allegations on behalf of your tenant[.] Also, because of the nature of the complaints, as well as peculiarities observed in several of the tenants documents, we have advised the complainant of their enforcement options under state and federal fair housing laws[.] Mr. Avila asked to interview Mrs. Holman and enclosed copies of the federal and state housing laws for her review. He added that the information you provide will help our agency determine the facts and perhaps mediate a resolution to this matter. Mr. Avila encouraged her to contact the office so that they could discuss an amicable resolution to this matter. Mr. Avila acknowledged at trial that nothing in his letter said that the FHC may side with the complainant and should not be considered to be a neutral party in this matter.

Sonia Holman received the letter from Mr. Avila approximately one month after she had served the De La Cruz family with the 60-day notice(s). She faxed the letter to Fred Hartman and called Mr. Avila. Mr. Avila told Mrs. Holman he wanted the 60-day notice rescinded. Mrs. Holman said she had to have the approval of her boss (Mr. Hartman) because he had told her to serve the notice. Mr. Avila said she could be sued for $50,000. Mrs. Holman said she would try to rescind the eviction notice, but it was Mr. Hartmans decision. Mr. Avila told Mrs. Holman the apartment rules discriminated against children. In response, Mrs. Holman promptly changed the rules and gave the new neutral rules (hereafter, the September 2002 rules) to all the tenants.

On August 30, 2002, Sonia Holman faxed a letter in Spanish and a newspaper article^[11]about occupancy standards to Mr. Avila. Mrs. Holman stated the 60-day notice would not be rescinded because the De La Cruz family exceeded the allowable occupancy limit.

Mr. Avila wrote to Mr. Hartman on August 31, 2002, reiterating that Mr. Avila represent[ed] the Fair Housing Council of the San Fernando Valley. Mr. Avila wrote that on July 8, 2002, in retaliation, a 60-day notice to vacate was issued to the complainant after she complained to the Management Company Representative and Supervisor Fred Harmond [sic] for objecting to the Mangers [sic] Husband (maintenance man) alleged discriminating behavior of grabbing complainants child by his shirt and harassing her children in an attempt to enforce discriminatory apartment rules. Avila stated that a survey^[[12]] conducted at the apartment complex revealed that your apt complex showed occupancy in excess of the two-plus-one rule in several units including the Residential Manager. In addition, Mr. Avila further wrote that the complainant notified the manager when her child was born and had lived at the complex for two years

without incident. The attempt to enforce the occupancy standards at that point would appear to support the complainant[s] allegations of retaliation. Mr. Avila said attempts to mediate had not succeeded (evidently referring to his communications with Mrs. Holman), so the FHC ha[d] no choice but to initiate a formal investigation[.] Mr. Avila requested numerous documents in addition to the house rules, including the apartment policy concerning occupancy standards.

On October 16, 2002, Mr. Avila again wrote to Mrs. Holman and Mr. Hartman with the preliminary results of the FHCs investigation. The letter purported to set forth the bases for the FHCs finding of probable cause that the eviction was issued in retaliation for the filing of a complaint of familial status discrimination and assault and battery against [Mr. Holman]. The reasons included the lack of evidence that the Company had established a reasonable occupancy standard during the relevant time period, the lack of notice to tenants of the occupancy standard, the timing of the 60-day notice based on the occupancy standard (i.e., although the violation of the occupancy standard had existed for two years, it was not until the complainant filed a familial status complaint that an eviction notice was served, supporting the retaliation claim), and other tenants, including the resident manager (Mrs. Holman), exceeded the occupancy limit but were not served with notices to vacate. Mr. Avila requested cooperation in resolving the matter, and again requested rules, regulations, names, race/sex/ethnicity of any former tenants evicted for occupancy violations during the last 12 months, and other documents.

Mr. Hartman thought the FHC looked like some governmental agency of some kind. He thought the FHCs role was to help mediate a dispute between a tenant and a landlord. As a result, in November 2002, Mr. Hartman initiated a meeting with the FHC. Mr. Hartman explained that the tenants had been evicted and he wanted to see if they had moved out as quickly as possible. Mr. Hartman was prepared to offer the tenants some money for moving expenses. Although he had already prevailed in the unlawful detainer action, Mr. Hartman decided to take this next step [b]ased on the meeting I had with [Mrs. De La Cruz] in early July, seeing her demeanor and knowing her attitude, I didnt want her as a tenant in there any longer. She had already been disrespectful to the managers, I wanted her out as quickly as possible.

The meeting took place on November 14, 2002 with FHC attorney Michelle White acting as mediator. No one told Mr. Hartman before the meeting that the FHC would be a plaintiff in this case against him. Indeed, Mrs. De La Cruz thought White was her attorney. Defendants later learned that Ms. White had been supervising Mr. Avila. Only in December 2002 did Ms. White identify herself (in a letter to defendants) as an attorney for the individual plaintiffs.

After their eviction, the De La Cruz family moved out of Seven Palms to a house in Palmdale.

This Lawsuit

Plaintiffs filed this action on November 25, 2003. The Second Amended Complaint, the operative pleading here, was filed in January 2005. Plaintiffs assert causes of action for violation of state and federal fair housing laws, violation of Californias Unruh Act, assault and battery, breach of the covenant of quiet enjoyment,^[13]unfair business practices,^[14]negligent hiring and supervision, and intentional infliction of emotional distress.

Before trial, plaintiffs moved for summary adjudication of the first and third causes of action (violation of Californias Fair Employment and Housing Act [FEHA], Gov. Code, 12955, subd. (c), and the federal Fair Housing Act [FHA], 42 U.S.C.  3604(c), respectively).^[15] They sought an adjudication that defendants oral and written rules and regulations restricted or denied access to facilities or areas on the basis of age and familial status in violation of FEHA and FHA. Focusing on the rules Mrs. Holman circulated after becoming the apartment manager in January 2002, rather than the September 2002 rules in effect for over three years, plaintiffs challenged the following rules:

        2: Children must be escorted on and off of the property

        4: Children must not climb trees on the property, play on the grass, or play in stairwells

        5: Children are not permitted to take out the trash. The bins are high and children cannot reach the top to assure the proper disposal of the trash

        6: Children are only permitted in the Laundry Room with an adult resident. They are not permitted to do laundry on their own

        8: the apartment complex does not permit babysitting on the property, on a regular basis

Plaintiffs also challenged a Spanish-language set of apartment rules Mrs. Holman issued, particularly number 10, which prohibited children from being outside after 8:00 p.m.

Defendants opposed the motion on the grounds that the January 2002 apartment rules regarding childrens play were never enforced against the De La Cruz family, that the rules were necessary to safeguard unattended children, that Mr. and Mrs. De La Cruz initiated the argument on June 23, 2002, that Mrs. De La Cruz did not mention the rules when she complained to management, and that when the FHC told Mrs. Holman the rules were discriminatory, she rescinded them in September 2002.

The court heard the motion on April 5, 2006, approximately six weeks before trial, and found plaintiffs had made out a prima facie case of discrimination by showing facially discriminatory rules that treated children (and thus families with children) different from and less favorably than adults-only households. The only justification defendants offered for the rules was to protect childrens safety. Citing Llanos v. Estate of Coehlo (E.D. Cal. 1998) 24 F.Supp.2d 1052, the court found a blanket assertion that these [rules] were for the safety of the tenants is not sufficient to justify these broad-sweeping rules, i.e., not allowing children outside after 8:00 p.m., not allowing them in the laundry room and not allowing them to take out the trash. The court concluded that plaintiffs had met their burden, and defendants had not met theirs, and on that basis granted the motion on the first and third causes of action.

Trial

The court trial began on May 15, 2006 and ended May 19, 2006. The facts as summarized above were established at trial.

The trial court issued its minute order on May 23, 2006, ruling as follows:

[] The court finds in favor of defendants and against plaintiff Fair Housing Council. The court finds that the expended funds were, in general, not based on the complaint. In that, contentions were not verified by investigation.

[] The court finds in favor of plaintiff Gladis [De La Cruz] and against defendants Seven Palms Apartment[s] and Fred Hartman, for violation of quiet enjoyment and emotional distress, in the amount of $8,250.00, and punitive damages in the amount of $10,000.00.^[[16]]

[] The court finds that all other members of the family take nothing. Evidence sufficiently dispels their claims. Thus, the causes of action related to them are ruled in favor of defendants. . . .

Motions for Attorneys Fees

On June 26, 2006, defendants filed a motion seeking $109,700 in attorneys fees under Civil Code section 1717, FEHA, FHA, and Code of Civil Procedure section 2033.420, subdivision (b).^[17] On July 3, 2006, Mrs. De La Cruz filed a motion for attorneys fees, seeking a declaration that she was the prevailing party under Civil Code section 1717, FEHA, and FHA, and requesting $213,170.96 in attorneys fees and $6,125 in costs.^[18]

By Minute Order on July 25, 2006, the trial court denied plaintiffs motion and found Mrs. De La Cruz was not a prevailing party pursuant to Civil Code section 1717. No explanation was provided. The court granted defendants motion for fees pursuant [to] Civil Code Section 1717 and the rental agreement and awarded fees in the amount of $39,725 and $6,820.55 in costs. Other grounds asserted for attorneys fees were rejected. The court gave no explanation of its ruling. On August 17, 2006, the court denied defendants motion to strike or tax plaintiffs costs and ordered that plaintiffs recover the sum of $5,975 as their costs of suit.

DISCUSSION

A. Plaintiffs Appeal

1. Substantial Evidence Supports the Trial Courts Judgment in Favor of Defendants on Plaintiffs Claim of Retaliatory Eviction

Plaintiffs argue the De La Cruz family was evicted from Seven Palms because Mrs. De La Cruz complained that defendants did not allow the De La Cruz children to play outside and complained about Mr. Holmans mistreatment of her young son. They maintain their eviction was retaliatory and prohibited under both state and federal fair housing laws, and the trial court erred when it failed to rule accordingly.^[19]

When an appellant argues there is no substantial evidence to sustain the trial courts findings of fact, our role begins and ends with the determination of whether any substantial evidence, contradicted or not, supports the findings below. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053.) Ordinarily, we look to the statement of decision to ascertain what those findings were, but where, as here, the plaintiffs failed to request a statement, we presume the court found in favor of the prevailing party on all disputed factual issues. (Responsible Citizens v. Superior Court (1993) 16 Cal.App.4th 1717, 1734; In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134.) Thus, to the extent plaintiffs rely on facts that defendants dispute, California law has long dictated that this court may not reweigh either the trial courts credibility findings or the evidence. (Estate of Teel (1944) 25 Cal.2d 520, 527.) And, given plaintiffs failure to seek a statement of decision, we must in any event presume the trial court found for defendants on all disputed factual issues related to the claims on which they prevailed.

Congress amended the Fair Housing Act in 1988 to prohibit discrimination on the basis of familial status, including discrimination against families with children. (42 U.S.C. 3604.) The statute makes it unlawful to discriminate against any person in the . . . provision of services or facilities in connection [with the sale or rental of a dwelling], because of . . . familial status[.] (42 U.S.C. 3604(b).) Familial status is defined, in brief, as one or more children (under the age of 18) living with a parent or legal guardian. (42 U.S.C. 3602(k)(1).) Section 3604(b) . . . operates to prohibit landlords from refusing to rent to (or from evicting) a person because that person has children living with them. (Woodard v. Fanboy, L.L.C. (11th Cir. 2002) 298 F.3d 1261, 1265.)

The Fair Housing Act also prohibits coercion, intimidation, threats, or interference with the exercise of rights under the federal fair housing laws. (42 U.S.C. 3617.) To establish retaliatory eviction under the FHA, the tenant must prove^[20](1) the tenant engaged in a protected activity, (2) an adverse housing consequence causally linked to that activity, and (3) resulting damage. (San Pedro Hotel Co., Inc. v. City of Los Angeles (9th Cir. 1998) 159 F.3d 470, 477.) Once plaintiff establishes her prima facie case of retaliation, defendant must proffer a legitimate, nonretaliatory justification for the adverse action. (Tarin v. County of Los Angeles (9th Cir. 1997) 123 F.3d 1259, 1264; Pfaff v. HUD, supra, 88 F.3d at p. 749 [defendants reasons for implementing facially discriminatory rules must be reviewed under a reasonableness standard].) When defendants satisfy this requirement, the presumption of intentional discrimination drops out of the case. (Reeves v. Sanderson Plumbing Products, Inc. (2000) 530 U.S. 133, 143 [120 S.Ct. 2097, 2106] [employment discrimination].) The burden of production then shifts back to plaintiff to show defendants reason is pretextual. (Woodard v. Fanboy, L.L.C., supra,298 F.3d at p. 1265 [Plaintiff needed to produce evidence sufficient to prove by a preponderance that [defendant] was actually motived [sic] by discriminatory animus on the basis of familial status].) Plaintiff can prove intentional discrimination either directly by persuading the trier of fact that a discriminatory reason more likely motivated the [defendant], or indirectly by showing that the [defendants] proffered explanation is unworthy of credence. (Friedman et al., Cal. Practice Guide: Landlord-Tenant (The Rutter Group 2008) 2:640.5, p. 2C-98.1-99, citing Reeves v. Sanderson Plumbing Products, Inc., supra,530 U.S. at p. 143, and Harris v. Itzhaki (9th Cir. 1999) 183 F.3d 1043, 1051; see also Tarin v. County of Los Angeles, supra, 123 F.3d at p. 1264.)

Californias Fair Employment and Housing Act similarly makes it unlawful for the owner of a housing accommodation to harass, evict, or otherwise discriminate against a tenant where the owners dominant purpose is retaliation against a person who has opposed practices unlawful under this section. . . . (Gov. Code, 12955, subd. (f); Department of Fair Employment and Housing v. McWay Family Trust (1996) (FEHC Dec. No. 96-07) [1996 WL 774922, p. *11].) Complaining about discriminatory actions is a protected activity under both Acts. (Yanowitz v. LOreal USA, Inc. (2005) 36 Cal.4th 1028, 1043 [It is well established that a retaliation claim may be brought by an employee who has complained of or opposed conduct that the employee reasonably believes to be discriminatory]; Brooks v. City of San Mateo (9th Cir. 2000) 229 F.3d 917, 928.)

Discrimination generally is established if familial status was a motivating factor for the landlords provision of inferior terms, conditions, privileges, facilities, or services in connection with the housing accommodation, even though other factors may have also motivated the conduct. (Gov. Code, 12927, subd. (c)(1).) The causation burden on plaintiffs in California retaliation cases, however, is heavier than for other types of housing discrimination claims. (Gov. Code, 12955, subd. (f); Friedman et al., Cal. Practice Guide: Landlord-Tenant, supra, 2:633, p. 2C-94 [plaintiffs must show the landlords dominant purpose in acting adversely was retaliation], citing Department of Fair Employment & Housing v. Atlantic North Apartments (1983) Dec. No. 83-12 [1983 WL 36461].)^[21] Causality may be established by evidence which indicates that the timing of the adverse action in relation to the owners notification of the protected activity is such that we can infer retaliatory motivation . . . or may be established by the non-existence of another plausible purpose for the owners inimical actions. (Department of Fair Employment and Housing v. McWay Family Trust, supra, 1996 WL 774922, p. *11.)

Plaintiffs maintain the family was evicted in retaliation for the complaints Mrs. De La Cruz made to Mr. and Mrs. Holman and Mr. Hartman at the July 5, 2002 meeting. The evidence as to whether Mrs. De La Cruz complained about apartment rules is in dispute: The Holmans^[22]and Mr. Hartman said she did not mention the rules; Mrs. De La Cruz said she did. All participants testified at trial. Mrs. De La Cruz testified that she requested the meeting with Mr. Hartman and the Holmans. She told Mr. Hartman that the kids were not allowed to play outside, that Mr. Holman was always yelling at the children. Mrs. De La Cruz said that Mr. Hartman became angry and said, Look Gladis, I dont have to be here . . . . If they are telling you the kids are not allowed to play then

they are the managers. She asked Mr. Hartman how he would feel if they were his children. Mrs. De La Cruz testified that things were getting out of control[, that Mr. Hartman] was screaming. Mrs. De La Cruz said Mr. Hartman asked her how many people were in her apartment, and she said six. Mrs. De La Cruz had told Mrs. Holman there were five people living in the apartment. It was the first time Mrs. De La Cruz had heard that having six people in the apartment was a problem. Shortly after Mrs. De La Cruz left the meeting, she received a 60-day notice to quit the premises. Within the next hour, she received another 60-day notice Several days later, a third such notice was served. All three notices indicated that the tenant exceeded the legal occupancy limit. The De La Cruz family was subsequently evicted.

Mrs. Holmans testimony differed from Mrs. De La Cruzs account. Mrs. Holman did confirm that Mr. Hartman asked Mrs. De La Cruz to speak first. Mrs. Holman said Mrs. De La Cruz complained about the November 2001 incident, when Mr. Holman allegedly pulled one of the De La Cruz children by the T-shirt. This was the first Mrs. Holman had heard of it. Mrs. Holman testified that, other than requests for repairs, Mrs. De La Cruz had not complained to apartment management about anything. Mrs. Holman then described the June 23rd altercation between the De La Cruzes and the Holmans. Mrs. Holman had been in the laundry room when she heard someone screaming. Mrs. De La Cruz was yelling at [Mr. Holman] . . . that he had . . . no business yelling at her children. Mrs. Holman tried to calm Mrs. De La Cruz down, but she would not listen: [Mrs. De La Cruz] was telling [Mr. Holman] to fight like a man to fight with her husband. Mr. De La Cruz pointed his finger in Mr. Holmans face and said, if you have any problems with my children dont talk to them, come and tell me. A lot of people were gathered outside. Mrs. Holman testified that the next morning, she wrote a warning notice about the incident and gave it to Mrs. De La Cruz.

Mr. Holman testified similarly about the July meeting, notably, Mrs. De La Cruz only complained that her children had been mistreated and that Mr. Holman had pulled or grabbed her son in November 2001. She did not complain about the more recent June incident or any of the rules, and did not complain about her children being prevented from playing outside.

Mr. Hartman testified that he had wanted to hear what Mrs. De La Cruz had to say, and he asked for her account first and then for the Holmans version. Mr. Hartman could not resolve the conflicting accounts, and Mrs. De La Cruz became angry when Mr. Hartman refused to fire the Holmans. At that point, the Holmans told him about the June 23rd incident, when the De La Cruzes yelled at the Holmans in front of other tenants. During the meeting, the subject of the number of people living in the apartment came up. Mr. Hartman said that Mrs. De La Cruz had lied to them, misrepresenting the number of people living in the apartment. Mrs. De La Cruz admitted that she had not listed one of her sons. She pointed out that a lot of people had more than six people living in their apartments.

Mr. Hartman said Mrs. De La Cruz was obviously unhappy living at the Seven Palms Apartments, and told her that she would receive a 60-day notice because she was disrespecting of the management. For the sake of convenience and because they did not need a reason for the notice, Mr. Hartman told Mrs. Holman to write tenant exceeds legal occupancy on the eviction notice. Mrs. Holman testified that she had not known of the occupancy limit until the July 2002 meeting.

Substantial evidence supports the trial courts presumed finding that Mrs. De La Cruz did not complain about the rules at the meeting on July 5th. Indeed, even when she called the FHC several days after the meeting, Mrs. De La Cruz does not appear to have complained about the apartment rules.

Assuming, however, that Mrs. De La Cruz did complain about one or more of the rules at the meeting, the record shows that, at least with respect to restrictions on children playing outside, the experience of other Seven Palms tenants with children contradicted her own. Isrrel Quezada testified that he did not know of any restrictions placed on his boys and that children played outside all the time. Evelia Gutierrez testified that she had lived at Seven Palms for nine years, and she saw and heard children playing outside. Esperanza Herrera testified that children played outside, girls sat outside on benches talking on the phone, and the landlords never restricted her childrens activities. Helder Avila testified that he had lived at Seven Palms for five years, that his children had never been restricted from playing at the building, and although he was aware of written rules, they had not been enforced against him. The trial court could reasonably find the facially discriminatory rules were not enforced and that children regularly played outside.

Even if the trial court did find that plaintiffs had established a prima facie case of retaliation, defendants established they had two reasons for evicting Mrs. De La Cruz: (1) exceeding the occupancy limit, and (2) disrespecting management. There is no question that occupancy standards can constitute FHA or FEHA violations. (U.S. v. Badgett (8th Cir. 1992) 976 F.2d 1176, 1180 [occupancy standards violate section 3604(a)-(d) of Fair Housing Act]; Fair Housing Council of Orange County v. Ayres (C.D. Cal. 1994) 855 F.Supp. 315, 318 [two persons per unit occupancy restriction had disparate impact on families with children]; HUD v. Ineichen (1995) HUD ALJ 05-93-0143-1, Fair Housing-Fair Lending (P-H) 25,099 [1995 WL 152740]; see also Schwemm, Housing Discrimination Law and Litigation (2008)  11E:3.) Mrs. Holman testified she had not known Seven Palms had such occupancy limits until the July 5th meeting.

The other reason given for the eviction finds ample support in the record. There is no dispute that the De La Cruzes confronted the Holmans on June 23rd and had a heated exchange. Mr. Hartman testified he was concerned about the public confrontation and felt it would lead to bad feelings within the apartment complex. Mr. Holman testified how upsetting he found the incident. Mrs. Holman testified that she was embarrassed. She prepared a warning notice on this violation of the rental agreement and delivered it to Mrs. De La Cruz. Substantial evidence thus supports the trial courts implied finding that disrespect for management was the dominant reason for the eviction.

At this point, plaintiffs needed to show by a preponderance of the evidence that defendants reason for evicting them was a pretext, that their familial status was the real reason. Plaintiffs proffered no evidence of such a discriminatory animus or evidence that defendants sought to rid the complex of families. To the contrary, the record contains evidence that Seven Palms was overwhelmingly populated by families and that children played outside as a matter of course. The trial courts implied finding that the eviction was not retaliatory is supported by substantial evidence, and we find no error in the courts determination that plaintiffs failed to establish a violation of either the Fair Housing Act or Fair Employment and Housing Act. The trial courts finding of no discrimination is affirmed.

2. The Trial Court Did Not Err in Not Awarding Damages to

the Individual Plaintiffs or the FHC After Finding the January 2002

Apartment Rules Facially Discriminatory

Plaintiffs contend the trial court committed reversible error by failing to award plaintiffs, particularly the FHC, monetary damages after granting their motion for summary adjudication on the January 2002 apartment rules. Plaintiffs further contend that the FHCs involvement in the case resulted in the trial courts conclusion that defendants violated 42 U.S.C. 3604(c), and Government Code section 12955, subdivision (c). Plaintiffs argue that the FHC could and should recover damages for diversion of its resources and costs of future monitoring of records and testing of practices. Having found discrimination, plaintiffs argue, the trial court should have awarded greater damages.

Section 437c of the Code of Civil Procedure sets forth the procedure at trial with regard to a courts pretrial summary adjudication: If a motion for summary adjudication is granted, at the trial of the action, the . . . claim for damages . . . which has been granted shall be deemed to be established . . . . (Code Civ. Proc., 437c, subd. (n)(1).) The statute further provides: In the trial of the action, the fact that a motion for summary adjudication is granted as to one or more . . . claims for damages, . . . within the action shall not operate to bar any cause of action, affirmative defense, claim for damages, or issue of duty as to which summary adjudication was either not sought or denied. (Code Civ. Proc., 437c, subd. (n)(2); Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) 10:347, p. 10-126 [grant of summary adjudication motion does not bar any . . . defense as to which . . . summary adjudication was not sought or was denied].) Contrary to plaintiffs assumption, defendants could and did later offer evidence at trial in their defense.

Plaintiffs are correct that both FHA and FEHA prohibit facially discriminatory rules. (Llanos v. Coehlo, supra, 24 F.Supp.2d at p. 1060; U.S. v. Plaza Mobile Estates (C.D. Cal. 2003) 273 F.Supp.2d 1084, 1091; Fair Housing Congress v. Weber (C.D. Cal. 1997) 993 F.Supp. 1286, 1292; HUD v. Paradise Gardens, 25,037 at p. *11 [1992 WL 406531] [rules that would, in effect, deny or unduly limit the use of facilities based on familial status. . . violate the Fair Housing Act].) Having prevailed on this issue through summary adjudication, plaintiffs were entitled to a presumption of illegality. (Llanos v. Coehlo, supra,24 F.Supp.2d at p. 1060, quoting Fair Housing Council of Orange County, Inc. v. Ayres, supra, 855 F.Supp. at p. 318.) Defendants then had the burden of articulating a legitimate, nondiscriminatory justification for the challenged policy. (Ibid.) Defendants failure at the motion stage to persuade the court that they had safety reasons for the apartment rules did not preclude them from asserting the defense at the subsequent trial. (Code Civ. Proc., 437c, subd. (n)(2).)

At trial, though, plaintiffs changed course. Rather than pursue the theory asserted in their motion for summary adjudication in which the existence and enforcement of the rules themselves were the cause of plaintiffs harm, they argued, as they do on appeal, that their rights under the fair housing statutes were violated because defendants evicted them in retaliation for complaining about the rules. Defendants defended accordingly, offering evidence that the discriminatory rules were never enforced, were superseded by a new set of rules in September 2002, and, in any event, played no part in the eviction decision. In addition, defendants offered evidence that Mrs. De La Cruz never even complained about the rules. As substantial evidence supports the trial courts determination that retaliation was not the dominant reason for the De La Cruzes eviction, we find no error in the trial courts decision not to award damages to plaintiffs on these causes of action. We affirm the trial court.

3. The Trial Court Did Not Err in Not Awarding Damages to the

FHC for Diversion of Resources or Frustration of Mission

Plaintiffs contend the trial court further erred in not awarding damages to the FHC because the FHCs role in the case led the trial court to find that defendants violated 42 U.S.C. 3604(c) and Government Code section 12955, subdivision (c), and thus to rule in plaintiffs favor on the summary adjudication motion. Plaintiffs contend the FHC properly and correctly determined that Defendants violated fair housing laws, which required the FHC to engage in remedial and education outreach to counteract these discriminatory acts in the community. As a result, the FHC should be compensated for the diversion of its resources and should recover out-of-pocket expenses, such as the salaries of staff spent on litigation, telephone costs, postage and other costs.

Plaintiffs argument fails not only because the summary adjudication on the January 2002 apartment rules did not include either causation or damages, but because the FHCs role here was not like that of similar organizations which have been awarded the type of damages the FHC seeks. In Chicago v. Matchmaker Real Estate Sales Center (7th Cir. 1992) 982 F.2d 1086, for example, a nonprofit fair housing corporation suspected the defendants were engaging in the illegal practice of racial steering and therefore arranged for pairs of Black and White testers^[23] individuals who posed as home seekers to inquire of defendant about buying homes on the southwest side of Chicago. Following a bench trial, the lower court found defendants liable for damages. The court of appeal upheld the lower courts award to the housing group for its expected costs in monitoring defendants records and auditing its sales practices, as well as for the costs of training seminars. (Id. at p. 1099.) In Fair Housing of Marin v. Combs (9th Cir. 2002) 285 F.3d 899, a nonprofit fair housing organization arranged for testers to investigate whether an apartment complex owner was discriminating against Black tenants and potential tenants. The court of appeal affirmed the trial courts award of damages for diversion of resources and frustration of mission. (Id. at p. 906.)

Here, no one at the FHC investigated Mrs. De La Cruzs complaint. The organization did not arrange for any testers or conduct studies along the lines of those in cases where damages for diversion of resources and frustration of mission have been awarded. The investigator (Mr. Avila) did not even visit the complex until the lawsuit had been pending over two years. The one letter Mr. Avila sent to the Seven Palms tenants, well after this litigation began, received a single response supporting the Holmans. In its dealings with defendants, the FHC actively fostered the impression that it was a neutral arbiter, even purporting to conduct a mediation. Without any notice to defendants, the FHC had its own attorney serve as mediator. Whether or not the trial court found these types of damages awardable in this case, FHC fails to demonstrate the court abused its discretion in electing under the circumstances not to award damages to the FHC. We affirm the trial courts decision.

4. The Trial Court Erred in Awarding Attorneys Fees Against

Mrs. De La Cruz and the FHC Pursuant to Civil Code Section

1717 and the Rental Agreement

Plaintiffs contend the trial court erred and abused its discretion in awarding defendants their attorneys fees as the prevailing parties under California Civil Code section [1717, subdivision] (a) and under the rental agreement between the parties. Plaintiffs argue that only the signatory to the lease, Mr. De La Cruz, could be ordered to pay attorneys fees to the defendants. Plaintiffs further contend that none of their causes of action were even based on the rental agreement, and the nonsignatories cannot be liable for the fees. We agree in part with plaintiffs contentions.

Section 1717, subdivision (a) provides, In any action on a contract, where the contract specifically provides that attorneys fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorneys fees in addition to other costs. Section 1717 was enacted to establish mutuality of remedy where a contractual provision makes recovery of attorney fees available for only one party and to prevent oppressive use of one-sided attorney fees provisions. (Milman v. Shukhat (1994) 22 Cal.App.4th 538, 543.) As long as an action involves a contract, and one of the parties would be entitled to recover attorney fees under the contract if that party prevails in its lawsuit, the other party should also be entitled to attorney fees if it prevails, even if it does so by successfully arguing the inapplicability, invalidity, unenforceability, or nonexistence of the same contract. (North Associates v. Bell (1986) 184 Cal.App.3d 860, 865.) The rental agreement here contained the following attorneys fees provision, in relevant part: If any legal action or proceeding be brought by either party to this agreement, the prevailing party shall be reimbursed for all reasonable attorneys fees and costs in addition to other damages awarded.

Under some circumstances . . . the reciprocity principles of Civil Code section 1717 will be applied in actions involving signatory and nonsignatory parties. . . . [] . . . [] . . . [I]n cases involving nonsignatories to a contract with an attorney fee provision, the following rule may be distilled from the applicable cases: A party is entitled to recover its attorney fees pursuant to a contractual provision only when the party would have been liable for the fees of the opposing party if the opposing party had prevailed. Where a nonsignatory plaintiff sues a signatory defendant in an action on a contract and the signatory defendant prevails, the signatory defendant is entitled to attorney fees only if the nonsignatory plaintiff would have been entitled to its fees if the plaintiff had prevailed. (Real Property Services Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375, 380, 382, citations omitted.) Cases in which a nonsignatory to a contract was permitted to recover, or was found liable for, attorney fees have involved a nonsignatory who was (1) an alter ego, assignee, or guarantor of a signatory or (2) a third party beneficiary of the contract. (See Wilsons Heating & Air Conditioning v. Wells Fargo Bank (1988) 202 Cal.App.3d 1326, 1332-1334, fns. 6, 7; Niederer v. Ferreira (1987) 189 Cal.App.3d 1485, 1505-1506; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, 1:250 to 1:273, pp. 1-41 to 1-45.)

[I]n deciding whether there is a party prevailing on the contract, [under Civil Code section 1717], the trial court is to compare the relief awarded on the contract claim or claims with the parties demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made only upon final resolution of the contract claims and only by a comparison of the extent to which each party ha[s] succeeded or failed to succeed in its contentions. [Citation .] (Hsu v. Abbara (1995) 9 Cal.4th 863, 876, emphasis added.) The prevailing party equation [should be] . . . a relatively uncomplicated evaluation of the parties comparative litigation success . . . . (Id. at p. 877.) [T]he party recovering greater relief in the action on the contract under [Civil Code] section 1717, subdivision (b)(1) does not necessarily mean the party receiving the greater monetary judgment. (Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 1154.)

Here, the only cause of action based on a contract was for breach of the covenant of quiet enjoyment implied in the rental agreement. The covenant, which runs between the landlord and tenant, protects tenants from any action that interrupts the tenants beneficial enjoyment. (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 588, 590, fn. 9; Civ. Code, 1927.)

The trial court ordered Mr. Hartman and Seven Palms Apartments to pay Mrs. De La Cruz damages on the covenant of quiet enjoyment claim,^[24]yet ruled she was not a prevailing party. As between Mrs. De La Cruz (for herself and on behalf of the children) and defendants on the sole contract cause of action, she prevailed. We reverse the trial courts finding that Mrs. De La Cruz was not the prevailing party and the attorneys fees award against her in both her individual and representative capacities.

Defendants did prevail against the signatory, Mr. De La Cruz, and the nonsignatory minor plaintiffs. We note that plaintiffs concede that defendants can obtain their attorneys fees from Mr. De La Cruz.

The FHC was not a party to the rental agreement, and because it was not a tenant, it did not benefit from the covenant of quiet enjoyment. (Marchese v. Standard Realty & Dev. Co. (1977) 74 Cal.App.3d 142, 147-148.) Applying the reciprocity test, the FHC had no claim under the covenant of quiet enjoyment in the rental agreement as a nonsignatory to that contract and could not have prevailed on the fifth cause of action. Defendants thus cannot recover their attorneys fees from the FHC on this claim. (Real PropertyServices Corp. v. City of Pasadena, supra, 25 Cal.App.4th at p. 382.) We therefore reverse the trial courts ruling that the FHC is liable for attorneys fees under Civil Code section 1717, subdivision (a) or the rental agreement.

5. Substantial Evidence Supports the Trial Courts Presumed Finding

That Mrs. De La Cruz Was Not the Prevailing Party Under the Fair

Housing Statutes and Was Not Entitled to Attorneys Fees

Plaintiffs argue that Mrs. De La Cruz was the prevailing party under the FHA and FEHA and was entitled to recover her attorneys fees. Under the FHA, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorneys fee and costs. (42 U.S.C. 3613(c)(2), italics added.) FEHA similarly provides: The court may, at its discretion, award the prevailing party, other than the state, reasonable attorneys fees and costs. (Gov. Code, 12989.2, italics added.) A prevailing plaintiff should recover attorneys fees unless special circumstances would make an award of fees unjust. (Hensley v. Eckerhart (1983) 461 U.S. 424, 429 [103 S.Ct. 1933].) [A] trial court . . . has broad discretion to adjust the fee downward or deny an unreasonable fee altogether. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138.) [T]he definition of what is a reasonable fee applies uniformly to all federal fee-shifting statutes. (Anderson v. Dir., Office of Workers Comp. Programs (9th Cir. 1996) 91 F.3d 1322, 1325.) The predicate for any award under the fair housing statutes is that the applicant be the prevailing party.

As discussed above, substantial evidence supports the trial courts judgment that plaintiffs were not evicted in retaliation for Mrs. De La Cruz complaining at the July 5th meeting about discriminatory apartment rules. While the court had ruled the January 2002 rules (or at least some of them) facially discriminatory, the evidence at trial did not establish Mrs. De La Cruz in fact complained about any of these rules. To the contrary, the record contains substantial evidence showing that on July 5th, Mrs. De La Cruz complained about an incident that had occurred seven months earlier, before the Holmans were even managers of Seven Palms. When Mr. Hartman rejected Mrs. De La Cruzs account of what occurred and refused to fire the Holmans, the conversation grew heated. Once Mr. Hartman learned about the more recent public confrontation between his managers and Mr. and Mrs. De La Cruz, he decided to evict the De La Cruzes. Substantial evidence supports the trial courts finding that plaintiffs were not evicted in retaliation for engaging in a protected activity. As a result, none of the plaintiffs were prevailing parties under the FHA or FEHA and thus not entitled to fees. The trial court did not abuse its discretion, and we affirm.

6. The Trial Court Did Not Err or Abuse Its Discretion in Denying

Plaintiffs Request for an Injunction

A permanent injunction is one of the forms of relief authorized by the Fair Housing Act (42 U.S.C. 3613(c)(1)) and FEHA (Gov. Code, 12989.2, subd. (a)). Where a fair housing violation has been shown, a district court has broad and flexible equitable powers to fashion a remedy that will fully correct past wrongs. [Citation.] (Atkins v. Robinson (E.D. Va. 1982) 545 F. Supp. 852, 889, judgment affd (4th Cir. 1984) 733 F.2d 318.) FEHA similarly authorizes courts to issue injunctions. (Gibson v. County of Riverside (C.D. Cal. 2002) 181 F.Supp.2d 1057, 1096; Kahn and Links, Cal. Civil Practice Civil Rights Litigation (2008) 13:14; Friedman et al., Cal. Practice Guide: Landlord-Tenant, supra, at 2:673.1, p. 2C-122.)

Even though there was evidence to support the trial courts judgment against plaintiffs on their housing discrimination claims, plaintiffs fail to demonstrate the need for injunctive relief where the record contains no evidence that the facially discriminatory rules (that is, the January 2002 rules) were ever enforced. To the contrary, the record contains substantial evidence that the rules were not enforced and that the many children who lived at Seven Palms played freely around the complex. The record also contains uncontroverted evidence that the January 2002 rules were superseded by new neutral rules issued in September 2002 and that Mrs. Holman informed tenants in writing as recently as May 23, 2006 that the new September 2002 rules remained in effect. Accordingly, there was no need for an injunction, and we affirm the trial court on this issue.

B. Defendants Appeal

Defendants contend the trial court erred in awarding them $39,725 in attorneys fees rather than the $109,700 they sought. They argue their hourly rates ($145-$155) were low, the number of hours they worked (650) were necessary to defend the case, and plaintiffs recorded comparable hours but sought nearly twice as much in fees, making defendants request reasonable by compar