Filed 7/28/26 Lackey v. Zohoury CA2/1
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
TOM LACKEY et al., B343870
Plaintiffs and Appellants, (Los Angeles County
v. Super. Ct. No. SC126845)
ROBERT BAHRAM ZOHOURY
et al.,
Defendants and Appellants.
APPEALS from judgments and orders of the Superior
Court of Los Angeles County, David J. Cowan, Judge. Affirmed
in part and reversed in part.
Vivoli Saccuzzo, Michael W. Vivoli, Jason P. Saccuzzo;
Cooksey, Toolen, Gage, Duffy & Woog, Phil Woog and Matthew R.
Pahl for Defendants and Appellants Robert Bahram Zohoury,
SBZ LP, and SIDMA, Inc.
Vivoli Saccuzzo, Michael W. Vivoli, Jason P. Saccuzzo;
Greines, Martin, Stein & Richland, Cynthia E. Tobisman and
Gary J. Wax for Defendant and Appellant Siamak Michael
Rahimi.
Mesisca Riley & Kreitenberg, Dennis P. Riley and Rena E.
Kreitenberg for Plaintiffs and Appellants.
_________________________
INTRODUCTION
Tom Lackey, Sergio Camacho, Chris Crosby, Marianna
(Janell) Pillarella, Bernard Yin, Rebecca Ramirez, and Paul
Campbell (collectively, the tenants) leased rent-controlled units
in a Santa Monica apartment building (the Property). They sued
Robert Bahram Zohoury, Siamak Michael Rahimi, and others for
an alleged scheme to drive them from their units by undertaking
wide-ranging construction at the Property while the tenants lived
there.
The tenants asserted tort and contract causes of action and
claims under the Civil Code and the Santa Monica Municipal
Code (SMMC). Trial proceeded against Zohoury, Rahimi, and
two business entities related to Zohoury called SBZ, LP (SBZ)
and SIDMA, Inc. (SIDMA). A jury awarded the tenants
approximately $19 million in compensatory damages, civil
penalties, and punitive damages. Finding the damage award
excessive, the trial court granted a conditional new trial as to
damages unless the tenants accepted a remittitur to $9 million.
The tenants accepted the remittitur.
Zohoury, Rahimi, SBZ, and SIDMA (defendants) now
appeal the judgment. Rahimi additionally appeals the denial of
his motion for judgment notwithstanding the verdict (JNOV).
The tenants cross-appeal the order granting a new trial.
2
We find no merit to the appeal by Zohoury, SBZ, and
SIDMA, and affirm the judgment as to them. We conclude no
substantial evidence supports the jury’s finding of liability on
some of the claims against Rahimi, and that the trial court
prejudicially erred in instructing the jury as to the remaining
claims against him. We therefore reverse the judgment against
Rahimi, direct the trial court to grant JNOV on those claims not
supported by substantial evidence, and order a new trial on the
remaining claims against him.
We also conclude the trial court did not err in granting a
conditional new trial and thus reject the tenants’ cross-appeal.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Property and the Parties
The Property is located at 1647 Ocean Front Walk in Santa
Monica. It has three floors and 17 units.1 The Property is
subject to Santa Monica’s rent control ordinance (City of Santa
Monica Charter, art. XVIII), which limits the rent paid by
tenants.
Zohoury purchased the Property in August or September
2013 and placed title with SBZ. SBZ was a limited partnership;
SIDMA, a California corporation owned by Zohoury and his
sister, was the general partner and Zohoury was a limited
partner.
1 Units 1 through 6 are on the first floor, units 7 through 12
are on the second floor, and units 14 through 18 are on the third
floor; there was no unit 13.
3
When Zohoury purchased the property, eight of the units
were unoccupied and the tenants lived in five of the units.2
Lackey was in unit 8, Campbell3 in unit 9, Crosby and Pillarella
in unit 7, Camacho in unit 14, and Yin and Ramirez in unit 17.
In November 2013, Zohoury and Rahimi created a limited
partnership, 1647 Ocean Front, L.P. (1647 OFLP); the general
partner was Platinum Holdings, LLC, which Zohoury owned, and
Zohoury and Rahimi were limited partners. Zohoury and Rahimi
testified at trial that they planned to transfer ownership of the
Property to 1647 OFLP. As discussed further below, there was
conflicting evidence whether 1647 OFLP ever actually obtained
title to the Property.
At the same time 1647 OFLP was formed, it entered a
“[m]anagement [a]greement” with Rahimi related to the
Property. Rahimi testified that he assigned his right to manage
the Property to his company, Westside Investments, Inc.
(Westside). He also testified that 1647 OFLP “later on was pretty
much handling all the transactions day-to-day, collecting rents,
and spending the money,” and that 1647 OFLP managed the
Property utilizing Westside employees. Michelle Hohman and
Barbara Ertefai were two of those employees.
2 The residents of the remaining four units are not party to
this appeal.
3 Campbell passed away during the litigation and his wife,
Linda Delp, was substituted in as his successor.
4
B. The Construction
1. A handyman works on one unit and a contractor is
later hired
In late December 2013 or early January 2014, Zohoury
hired an unlicensed handyman to renovate unit 6. Unit 6 is on
the first floor of the Property and at the time this construction
began none of the units on the first floor was occupied.
In about February of 2014, Rahimi negotiated a contract
with Victor Westin to demolish and renovate unit 3. In early
April 2014, the City of Santa Monica (city) found out that Westin
was working without a permit and cited SBZ. On April 24, 2014,
Zohoury obtained a permit for Westin’s work in unit 3.
Rahimi negotiated a second contract with Westin in April
2014 to replace all the windows at the Property, including for the
occupied units. Zohoury obtained a permit for this work.
Rahimi negotiated another contract with Westin in April
2014 to renovate vacant units 5 and 12. The city issued a permit
to Westin on April 25, 2014 for work in unit 12.
On May 27, 2014, Lackey took photographs of unit 5 which
showed it had been stripped down to the framing, the flooring
had been removed, and wood debris was strewn about. On
June 2, 2014, Westin obtained a permit for work in unit 5.
On June 3, 2014, after the city found out that Westin had
been working in units 2, 6, and 10 without a permit, Zohoury
obtained permits for the work. That same day, Rahimi
negotiated a contract with Westin to plaster the walls in the
hallways and install LED lights. The plaster started cracking, so
Westin later put up drywall.
On June 12, 2014, Zohoury obtained a permit for replacing
the exterior stucco. On June 20, 2014, the city building and
5
safety division issued a stop work notice. The city ordered that
the Property be tested for asbestos, and that permits be obtained
for various aspects of the construction, including for scaffolding
which had been erected on the outside of the building. In
addition, the city building and safety division determined that
the building was undergoing more than 50 percent renovation,
which meant that sprinklers needed to be installed throughout
the interior.
2. Asbestos, lead, and mold are found at the Property
A city inspector informed Zohoury that he needed to test for
mold, lead, and asbestos. Zohoury hired Jonathan Massey to do
the testing.
Massey issued reports in early July 2014 which found
dangerous levels of lead dust in units 2, 5, 10, and 12, and in the
hallways on each floor. Massey concluded that renovation work
in units 5 and 12 disturbed lead-containing paint, and workers
tracked the lead dust from those units into units 2 and 10, which
had been used for construction storage.
Massey found that the disturbed stucco and plaster in the
building tested negative for asbestos. He did find asbestos in
insulation for a vent pipe in unit 5 and in linoleum flooring in one
of the other unoccupied units. Massey recommended a plan to
abate the asbestos in unit 5 because asbestos-containing material
had been disturbed within the unit; the plan had to be submitted
to the Air Quality Management District (AQMD) for approval.
Massey found elevated moisture levels in units 5 and 12 in
the ceiling joists, wood framing on the walls, and the subfloors,
and recommended that a licensed contractor certified for mold
remediation address the issue. Massey also found elevated
6
fungal spore concentrations in unit 10, and in the second and
third floor hallways.
Zohoury hired a company to clean up the asbestos. Massey
monitored the abatement. The abatement process utilized HEPA
vacuums, negative air machines, and decontamination chambers.
Massey concluded that there was no observable asbestos in the
property as of July 11, 2014.
3. A second contractor is hired
In January 2015, Rahimi negotiated a contract with Hugh
Construction & Development (Hugh Construction) to remodel
four units.4
On July 23, 2015, Hugh Construction obtained separate
permits to remodel units 1 and 18 to add a washer/dryer and
upgrade the electrical panel.
4. The city orders the tenants to be relocated due to
compromised fire safety
On October 9, 2015, the city division of building and safety
ordered SBZ to temporarily relocate the tenants because
construction had compromised fire security in the building. The
tenants were relocated for about 30 days.
While the tenants were relocated, Massey tested for
asbestos, lead, and mold, and the test results were provided to
the city. Massey found lead-contaminated dust in unit 16 on
October 19, 2015.
4 The contract originally called for Hugh Construction to
renovate six units and work on the interior hallways; the scope of
the contract may have been reduced because Westin returned to
do some of the work.
7
5. A third contractor is hired
In June 2016, Rahimi negotiated a contract with V10
Construction. On June 21, 2016, V10 Construction obtained
permits to remodel units 4 and 15.
6. A fourth contractor is hired
Zohoury hired Mighty Contractors in October 2019 to
remodel unit 16; the contractor obtained a permit for the work on
October 23, 2019. Mighty Contractors also worked on unit 9,
which was adjacent to Pillarella’s and Crosby’s unit, and a
portion of the drywall in their unit was punctured during the
work.
C. The Santa Monica Rent Control Board Grants the
Tenants’ Petitions to Reduce their Rents
Between June 30 and September 4, 2014, each of the
tenants filed a petition with the Santa Monica Rent Control
Board (Board) seeking reduction of their rent under the city’s
rent control law.5 A Board hearing officer held nine hearings
from July 2015 through January 2016.
On August 16, 2016, the hearing officer issued a lengthy
written decision ordering the tenants’ rent to be reduced due to
construction-related impacts on the tenants’ units and the
Property as a whole.
Zohoury himself appealed the hearing officer’s decision to
the Board, which upheld the decision. We provide additional
details of the Board’s proceeding in our discussion below of the
role its decision played in the trial.
5 Yin filed a petition for the unit he shared with Ramirez;
Ramirez did not file her own petition.
8
D. The Tenants Sue
On December 20, 2016, the tenants sued Zohoury, Rahimi,
SBZ, 1647 OFLP, SIDMA, Westside, Hohman, Westin, and Hugh
Construction. Because this appeal involves only Zohoury,
Rahimi, SBZ, and SIDMA, we do not summarize the proceedings
involving others except as necessary for context. The tenants
asserted various claims including, as relevant here, nuisance,
premises liability, negligence, breach of lease, tortious breach of
the warranty of habitability, violations of SMMC parts 4.36.100
and 4.56.020, intentional influence to vacate in violation of Civil
Code section 1940.2, and intentional infliction of emotional
distress (IIED). The tenants sought statutory, economic, and
noneconomic damages; civil penalties; restitution; punitive
damages; and attorney’s fees.
The tenants alleged that their rents were below market
because they were subject to the rent control ordinance. Zohoury
and Rahimi devised a plan to purchase the Property and then
“drive the tenants from [it], rehabilitate [it] and” obtain higher
rental income or sell the Property at a profit because of the
higher rental income stream. To remove the tenants, Zohoury
and Rahimi, along with the other defendants, engaged in
construction activities which created “deplorable” and “extremely
unhealthful conditions.”
E. The Court Holds that 20 Findings Made by the Board
Would be Given Preclusive Effect
Before trial began, the parties litigated whether findings
made by the Board hearing officer in her decision granting the
tenants’ rent reduction petitions would be deemed established at
9
trial under the doctrine of issue preclusion.6 That litigation
began when Rahimi and Zohoury filed a motion in limine to
exclude on hearsay grounds evidence of the Board decision. They
contended that issue preclusion did not apply to the hearing
officer’s findings because the Board proceeding did not follow
formal evidentiary rules, involved a limited claim with different
elements and remedies than the claims in the litigation, and did
not provide them with a full and fair opportunity to defend
against the tenants’ claims because of a lack of discovery and
testimony from retained expert witnesses.
The tenants opposed the motion and argued that issue
preclusion did apply. They disputed that defendants were unable
to obtain discovery and contended that the Board proceeding
included testimony under oath, cross-examination of witnesses,
documentary evidence, and the right to be represented by
counsel. The tenants contended that their claims for rent
6 The terms “issue preclusion” and “collateral estoppel” are
interchangeable; the parties and trial court used “collateral
estoppel” but we will use “issue preclusion.” (Castillo v. City of
Los Angeles (2001) 92 Cal.App.4th 477, 481.) The doctrine
“precludes relitigation of issues argued and decided in prior
proceedings” if five elements are present: “First, the issue sought
to be precluded from relitigation must be identical to that decided
in a former proceeding. Second, this issue must have been
actually litigated in the former proceeding. Third, it must have
been necessarily decided in the former proceeding. Fourth, the
decision in the former proceeding must be final and on the
merits. Finally, the party against whom preclusion is sought
must be the same as, or in privity with, the party to the former
proceeding.” (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341,
fn. omitted.)
10
abatement before the Board “involve[d] alleged illegal
construction and . . . the effect it had on the conditions of the
tenants’ units.” The tenants also filed their own motion in limine
for an order that 65 specific findings by the Board “ha[d] been
proven” and could not be controverted. They relied on the
hearing officer’s decision and transcripts of the hearings.
Defendants opposed the tenants’ motion. They reiterated
their previous arguments against issue preclusion and contended
that applying the doctrine would be unfair because they lacked a
strong incentive to defend the tenants’ claims for rent abatement.
Defendants further pointed out that the tenants were seeking
punitive damages in the civil action, which were required to be
proven by clear and convincing evidence, but the Board’s findings
were made under the preponderance of the evidence standard.
Lastly, the defendants other than SBZ contended that the Board
only had jurisdiction over the “landlord” of Property, which was
SBZ, and they were not in privity with SBZ.
On February 24, 2022, the trial court (Hon. Mark H.
Epstein) issued a tentative ruling granting the tenants’ motion to
apply issue preclusion. The court found that “[the Board’s]
decision had a sufficiently ‘judicial’ character,” noting that the
Board received testimony under oath, “[t]he parties could also
subpoena, call, examine, and cross-examine witnesses,” “[t]he
hearing’s purpose was to determine certain historic facts . . . and
then apply the law to those facts to determine the ultimate
question concerning rent,” the parties could submit documentary
evidence, there was a record of the proceeding, “and a well-
reasoned and thoughtful decision by the [h]earing [o]fficer that
addresse[d] the wealth of submitted evidence and applie[d] it to
the controlling legal standards.” The tentative ruling solicited
11
further briefing from the parties as to which specific findings by
the Board the court should afford preclusive effect. Lastly, the
tentative ruling concluded that Zohoury and Rahimi were in
privity with 1647 OFLP, which the court found to be the
respondent in the Board proceeding.
On March 7, 2022, the tenants filed a brief identifying 48
specific Board findings they contended were subject to issue
preclusion.
After hearing argument and receiving further briefing, the
court issued an order that issue preclusion would apply to 20
specific findings made by the Board. The court further held that
Zohoury, Rahimi, SBZ, and SIDMA would be bound by the
Board’s findings. The court concluded that Zohoury and Rahimi
were in privity because “both seem to have a current or past
ownership interest in [1647 OFLP] such that the [Board]’s
determination would have a financial impact on both and they
may well have worked together in the decision-making process
and (by extension) in the defense of the administrative action.”
The court also found that Rahimi had an “ownership interest” for
purposes of privity by virtue of the management agreement for
the Property.
On November 28, 2023, the court reassigned the case to
Judge David J. Cowan for trial.
On January 5, 2024, the defense filed a renewed motion in
limine to exclude evidence of the Board’s decision. The
defendants contended that the newly assigned trial court was not
bound by the prior ruling applying issue preclusion and
reiterated the arguments they had previously made. On
February 9, 2024, the trial court denied the motion, primarily on
12
the ground that an in limine ruling could only be reconsidered
based on new information presented at trial.
F. Trial
Trial commenced on July 9, 2024.
1. Jury instruction on facts deemed proven
Zohoury, Rahimi, SBZ, and SIDMA objected to instructing
the jury that the 20 Board findings were true as to all
defendants. Rahimi contended such an instruction was improper
because “[he] ha[d] actually never held an interest in the
property.” The court overruled the objection. Before opening
statements, the court instructed the jury that 20 “facts have been
deemed proven already” and that the jury “must accept these
facts as true.”
The 20 Board findings, which we set forth in full in an
Appendix, established the following:
“[T]he owner” failed to test for asbestos until June 23, 2014,
after being ordered to do so by the AQMD. “The asbestos was not
cleared until July 11, 2014.” “The owner did not conduct testing
for the presence of lead until July 1, 2014.” Testing found
“ ‘dangerous levels of lead dust’ in various units and common
areas and recommended remediation and decontamination” and
“also found lead-based paint and dangerous levels of lead-bearing
substances in various units and common areas and recommended
remediation and decontamination.” “Lead testing was done again
on May 28, 2015 by the [Los Angeles] County Public Health
Department [(County)] based on a complaint by tenants. Dust
samples were again found to contain hazardous levels of lead
although no hazardous levels were found in soil or deteriorated
paint. Dust hazards were found in vacant Unit 2 and in the first
floor hallway. After cleaning, the Unit 2 interior floor failed
13
clearance and the owner was ordered to clean it again. Clearance
was passed the second time and the complaint was closed on
August 13, 2015.” “In September 2015, the County received
another complaint about unsafe lead work practices causing
excessive dust in the building. An inspector observed visible dust
in the common areas and took samples from the common areas
and from all the occupied units. Testing showed dust hazards
above the regulatory limit in Unit 16.”
Because of “the owner’s” failure to obtain permits, do
testing and “use safe work practices,” the tenants were exposed to
“hazardous levels of asbestos” and lead dust, which “put the
tenants at risk of respiratory and other ailments”; these
exposures “[were] caused by unnecessary upgrades to the vacant
units and common areas rather than by necessary repairs or
maintenance.” “The dust at the property was primarily
generated by the work in the common-area hallways and by the
demolition of the eight vacant units.” Because the new floors in
the hallways were higher than the floors inside the units and
nothing had been installed to close the gap under the unit doors,
dust blew into the units. “[D]ust and odors significantly affected
tenants’ ability to breathe and spend time in their units and
negatively affected their health. The dust impacted and
continued to impact the tenants from June 30, 2014 through the
completion date for the construction.” “The negative impact of
noise and vibrations on the tenants was significant, affecting
their ability to sleep, concentrate and work, and sometimes
driving them out of their units.” All of these conditions
“interfered with the habitability of [the tenants’] units.”
14
2. Zohoury
Zohoury testified he asked Rahimi “to take over and
manage the property” and Rahimi “was in charge of construction
and in charge of the building.” Westside directed Westin’s work,
although Zohoury would also give direction if he saw an issue.
Gabriella Majoros, who worked for Rahimi, prepared plans for
Westin to follow. Zohoury understood the plan for each of the
units being renovated was to take out the wall separating the
kitchen to make the kitchen and living room one open space.
Zohoury acknowledged personally obtaining several construction
permits, as summarized above.
Zohoury understood that if he relocated the tenants during
construction, it would involve extra expense and the tenants
would be entitled to the prior rent schedule when they moved
back in.
Westin contracted in April 2014 with Westside to sandblast
the building and apply stucco. The sandblasting never took
place. The city told them that they would have to relocate the
tenants if they sandblasted away the old stucco.
Rahimi fired Westin after Rahimi and Zohoury talked
about it; they decided to fire Westin because of his poor
performance and failing to obtain permits.
One plan in March 2014 was to turn the Property into short
term Airbnb rentals, but there were other plans as well.
In April 2015, Zohoury signed escrow instructions to sell
the Property. The agreement required remodeling of the
Property (including all its units) and stated, “Property shall be
delivered vacant with exception to short term lodging agreements
not subject to Santa Monica Rent Control.” The buyer did not
follow through with the transaction. Rahimi was not involved in
15
this proposed deal because he was out of town but Zohoury
probably called him about the price.
When 1647 OFLP was formed Zohoury considered himself
to be partners with Rahimi on the Property. Zohoury testified
that 1647 OFLP acquired title to the Property and that he
recalled seeing a deed.7 About two months after Zohoury
purchased the Property, Rahimi took over managing the property
through Westside.
3. Peter Savino
Peter Savino was retired from the city rent control
department where he had worked for 33 years, mostly as a
hearing investigator. Savino visited the Property 13 times from
June 22, 2014 through July 20, 2016 and documented his
observations of the construction in reports to the Board’s hearing
officer. In June and July 2014, Savino observed there was no
containment of dust from the areas under construction and the
Property was dusty. Savino authenticated photographs he took
which depicted the ongoing construction, including construction
debris in a patio area, hallways with bare drywall, stairways with
damaged railings and exposed nails, and holes in walls, floors,
and ceilings.
4. Rahimi
On November 18, 2013, Rahimi entered a management
agreement with 1647 OFLP regarding the Property, which
provided that “Rahimi or his assignee will have the sole right to
manage the [P]roperty,” which “will only terminate upon the sale
7 As noted below, Rahimi testified that 1647 OFLP never
owned the Property. No deed was put into evidence showing that
1647 OFLP ever acquired title to the Property.
16
of the [P]roperty to an entity or person that is in no way
associated with [1647 OFLP] and/or its partners. Neither the
general partner nor a majority vote will have the authority to
terminate Rahimi’s right to manage the Property.” Under the
agreement, Rahimi or his assignee was entitled to 10 percent of
the net operating income as well as 10 percent “of the profit” from
any sale of the Property, “calculated as . . . selling price minus
acquisition price minus depreciation.” The agreement stated that
1647 OFLP “owns” the Property.
Rahimi is the sole shareholder of Westside. When asked
whether Westside was his assignee of the management
agreement, Rahimi responded, “In a way” and clarified that 1647
OFLP “later on was pretty much handling all the transactions
day-to-day, collecting rents, and spending the money.” 1647
OFLP managed the Property, utilizing Westside employees.
Rents from the Property were deposited into a bank account
owned by 1647 OFLP.
Rahimi testified that 1647 OFLP never acquired title to the
Property as he and Zohoury had planned. Rahimi authenticated
his signature on a change of ownership registration form
submitted to the Board on May 7, 2014, indicating that 1647
OFLP was 100 percent owner of the Property as of November 13,
2013. The same form was submitted to the Board on June 11,
2014, to add that Rahimi was a limited partner in the
partnership and include the date of his signature. Rahimi also
authenticated his signature on an August 28, 2015 change of
mailing address form filed with the Board for the Property
indicating that Zohoury was a 75 percent owner and Rahimi was
a 25 percent owner; these percentages matched the shares each
held in 1647 OFLP.
17
Rahimi testified it was not his decision to demolish and
redo the vacant units, stating, “[he] was a limited partner . . . in
an operating company” and would follow whatever the owner
wanted to do.
Rahimi recommended “to the owner” that all of the tenants
be relocated during the construction. Rahimi also recommended
to Zohoury to “Ellis” the building, by which Rahimi meant to get
out of the rental business for two years and remodel the building,
and then be obligated to rent the units to the former tenants at
the previous rates. Rahimi understood Zohoury did not want to
take that approach because he could not afford to go without rent
for two years.
Before the renovation project began in 2014, Majoros had
prepared floor plans for the work. Rahimi approved the plans
and then “confirm[ed] it with [the] owner.” The proposed plan for
each unit was to move the bathroom and make it smaller.
Majoros was an employee of O Hotel, Inc. but would work for
Rahimi on other projects.
Rahimi found three contractors for the construction at the
Property and negotiated the contracts with them, although the
scope of work “[had] to be confirmed with the ownership,” which
was SBZ and its general partner, Zohoury. It was Zohoury’s
obligation to have the Property tested for asbestos. Rahimi
understood that the city was in control and would ensure that
dust from the construction would be limited; the city was very
involved in the project and Rahimi relied on that and the
contractor. Rahimi did not look at any of the permits.
Unoccupied units at the Property were rented out through
Airbnb for at least a month at a time in accordance with Santa
18
Monica law; Westside had an Airbnb account so it received the
money from Airbnb and then paid 1647 OFLP.
Rahimi found out about the possible sale of the Property in
April 2015 after the contract had been signed.
5. Pillarella
Pillarella was 84 years old. She and Crosby moved into the
building in around 2004. After about a year on the first floor in
unit 4, they moved to unit 7 on the second floor.
On June 18, 2014, Pillarella submitted a letter to the Board
complaining about conditions at the Property; she copied
Westside. Pillarella indicated there was scaffolding outside her
unit which interfered with her privacy, the hallways were “being
torn up,” water was turned off “many times every month,” and
there was “dirt and dust . . . everywhere.” (Capitalization
omitted.) Pillarella had earlier complained to Hohman that the
Property was “in total disarray” (capitalization omitted) and
stated she was experiencing respiratory problems because of the
dust. Pillarella demanded compensation and for her unit to be
cleaned.
Pillarella, who had a lung removed years earlier, was
having trouble breathing because of the construction dust. The
workers left debris and trash on the porch of unit 12 which the
tenants had to pass to enter the building.
In late April 2014, Pillarella and Crosby were starting to
have headaches and nausea, and she was having stomach
problems. Crosby’s health had been good, but he started shaking
and having respiratory problems. Pillarella would go to her son’s
house during the weekends to get away from the Property.
The workers left the doors to the Property open, which
concerned Pillarella because someone might come in. Scaffolding
19
was still up in September 2014. Pillarella saw people using the
scaffolding to get into the building. People peered into her unit
from the scaffolding, and she was afraid that someone might
enter her unit.
By June 2014, the water would go off in the morning or
there would be no hot water.
Pillarella took photos on June 1 and 19, 2014, which show
construction in the hallways. The work in the hallways created
dust and an unpleasant smell.
Pillarella noticed bugs and mice at the Property which she
had not noticed before.
During the construction of the unit below hers, Pillarella
noticed nails coming up through the floor of her unit. Dust also
came through the floor into her unit.
In around September 2015, Pillarella met with Zohoury
and asked to be relocated during construction, but Zohoury
refused.
In November 2019, during construction on unit 9, next to
Pillarella’s unit, a part of the ceiling from Pillarella’s unit fell into
the bathroom sink and there was dust in Pillarella’s unit. At this
time Pillarella experienced pest problems again.
Crosby moved out in December 2019.
6. Yin
Yin lived in unit 17; he moved into that unit in 1995. He
and Ramirez met in 2005, and Ramirez moved in with Yin
around May or June of 2014 after they married.
In June 2014, the floors in the hallways were dusty and the
walls were in “disrepair.” Yin heard “[e]xtremely loud” noise
from a tile saw used by the workers. Yin was fearful during the
construction because people would enter the building due to lack
20
of security. Noise, dust, and construction materials strewn about
made it unpleasant to live at the Property. Rodents were in his
unit after the construction began. Water was frequently shut off
during the construction; power was sometimes shut off or
unreliable.
On March 19, 2016, Yin e-mailed Hohman to complain
about noxious fumes which made it difficult to breathe. Yin
experienced these types of fumes on more than one occasion.
Yin authenticated a video recording from August 2016
which included noise from the construction which he could hear
from his apartment.
Renovation work in unit 9 in 2019 and in unit 11 in 2020
caused noise and dust. In December 2019, Yin complained to
management about dust and water being shut off. On
February 24, 2020, Yin complained again about the workers
failing to clean up the dust before leaving.
As a result of the construction, Yin and Ramirez suffered
from eye irritation, respiratory problems, and stress.
7. Lackey
Lackey was born in 1952. Lackey moved into unit 8 in
1991.
Before the construction Lackey was healthy. Lackey first
noticed the construction by the dust. Dust was coming up from
unit 2 through the floor of his unit. On May 27, 2014, Lackey
took photographs of the construction in unit 5, which showed that
the unit had been completely stripped to the framing. Lackey did
not see any plastic sheeting or other efforts to contain the dust.
The dust was so bad that Lackey moved out in June or July
2014. He stayed out of his unit for two and a half years but
21
continued to pay rent. He did not want to return because his
carpet was full of dust. The management did not replace the
carpet until 2017, after the city ordered it to be done.
Lackey moved out of his unit again in 2019 because the
construction was creating dust. Lackey experienced respiratory
and sinus problems. Lackey was out of his unit for about another
six months.
8. Crosby
Crosby was 82 years old at the time of trial. He moved out
around 2019. When the construction workers were cutting tile
for the hallway there was a lot of dust. Dust could come into his
unit underneath the door. Homeless people slept on the
scaffolding and broke into apartments. Before the construction
there had never been problems with vermin or insects, but that
changed after the construction began.
In September 2015, Crosby obtained a letter from his
doctor stating it would be in his best interest health-wise to live
somewhere else during the construction; Crosby handed the letter
to Zohoury at a Board hearing.
In June 2014, Crosby’s lungs and sinuses were bothering
him, and he “had colonies of dust mites in [his] eyes.” In 2015,
Crosby was coughing and having trouble breathing, and twice
had pneumonia; he was seeing a pulmonary doctor. In December
2015, Crosby suffered a heart attack.
In 2019, during the construction in unit 9, the workers
broke into the back of Crosby’s closet. In addition, a piece of
ceiling fell into the sink while Crosby was on the toilet.
9. Ramirez
Ramirez moved into Yin’s unit in late May or early June
2014. It was stressful being in the building during the
22
construction. Ramirez was scared because the building was not
secure, and she was concerned about people using the scaffolding
to enter the building. It was impossible to keep the dust out of
their unit during the construction. Ramirez was concerned
because the building was very old and might contain hazardous
materials such as asbestos and lead. When Ramirez learned that
the tenants had been exposed to lead and asbestos it caused her
stress, anxiety, and anger.
10. Delp
Delp married Campbell in 1998. Campbell had moved into
the building in 1987 and lived in unit 9. Delp did not live at the
Property because she and Campbell maintained separate
residences.
Campbell was an acupuncturist and stayed in his unit
during the construction because he had a library of acupuncture
books which he consulted; he would sometimes stay at Delp’s
apartment.
During the construction Delp noticed that Campbell had
more nosebleeds and nose congestion, and throat and eye
irritation. Campbell started taking allergy medication.
Campbell suffered a cardiac arrest in December 2014. He
died on August 24, 2017.
11. Camacho
Camacho moved into unit 14 in May 2012.
The construction was very loud and created a lot of dust.
Camacho suffered from anxiety and had to leave his apartment
during the day to avoid the construction.
Camacho developed a throat infection in 2015. When the
infection did not go away, he was put on a course of steroids and
antibiotics for 12 or 13 days and then had surgery to remove his
23
tonsils and adenoids. Camacho paid $10,000 out of pocket for the
treatment. Camacho’s doctor told him he needed his tonsils and
adenoids removed because of severe obstructive sleep apnea,
which was caused by his weight. Camacho did not ask his
medical providers whether conditions at the Property caused his
throat condition.
12. Franco Seif
Franco Seif, the tenants’ hazardous materials expert,
opined that the construction did not follow proper practices to
contain hazardous materials.
Seif noted that Massey’s results showed a wide variation in
lead levels and Seif “suspect[ed]” that Massey did not include all
of the layers of paint in his samples, which can fail to detect lead
present in interior layers of paint. In older buildings such as the
Property, the paint almost surely contains lead because lead-free
paint was not available.
Based on Massey’s test results, Seif testified, “if [the] walls
[in the first floor hallway] were scraped without using proper
engineering controls, with the levels of lead found in the paint, it
[was his] expert opinion that . . . people who walked around these
hallways were being exposed to lead.”
Seif “probably would have recommended” relocating the
tenants at the beginning of construction had he been consulted.
13. Dr. Gary Richwald
The tenants’ medical expert, Dr. Gary Richwald, is an
expert on health issues related to substandard housing. He
interviewed tenants from four of the units in August 2020,
viewed the Property, and reviewed materials related to the
construction, deposition transcripts, and the tenants’ medical
records. He opined that conditions at the Property caused health
24
problems experienced by the tenants. For all tenants, this
included eye irritation, sinusitis, frequent sore throats and upper
respiratory tract infections, coughing, allergies, sleep problems,
anxiety, anger, and fear. Some of the tenants also suffered from
additional problems such as rashes, nausea from odors,
bronchitis, asthma, headaches, heartburn, loss of appetite,
weight loss, and depression. Lackey suffered from memory loss.
Camacho suffered from ear problems, and Richwald opined that
the surgery to remove Camacho’s tonsils and adenoids “had to do
with exposures and immune response,” explaining that “the dust
and other – and cockroaches, other sorts of things” would cause
inflammation in the tonsils and adenoids “and one approach to
handling that is to surgically remove them.” Crosby suffered
from pneumonia.
Richwald developed a model for determining average
health costs for various ailments over a 10-year period. Based on
his model, Richwald opined that the 10-year medical cost for
conditions caused by the construction was $31,000 for Lackey,
$22,000 for Yin, $20,000 for Ramirez, $45,000 for Crosby, $36,000
for Pillarella, and $33,000 for Camacho.
On cross-examination, Richwald agreed that he had not
physically examined any of the tenants, that his medical costs
model was “theoretical by definition,” and that he did not review
any medical billing records.
14. Larry Gliko
Larry Gliko, the tenants’ construction expert, testified that
for a project like the one undertaken at the Property he would
have advised the owner to hire an industrial hygienist to test for
mold, lead, and asbestos and to prepare a hazardous substance
abatement protocol for the construction contractor to follow. An
25
industrial hygienist might have recommended relocating tenants
during construction. Gliko opined that he would have
recommended the tenants be relocated during the construction,
stating, “They never should have allowed these people to stay in
these units and go through that on a daily basis with all the dust
and debris and contaminated air.” Gliko testified that
contractors have to be certified to deal with mold, lead, and
asbestos. Based on his documentary review, Gliko opined that
the contractors failed to follow proper procedures to contain dust.
15. Massey
Defendants’ expert Massey testified about the testing he
performed at the Property for asbestos, lead, and mold, and the
abatement process utilized to remove the hazardous materials he
had found, as described above.
16. Dr. Harry Skalsky
Defendants’ toxicology expert, Dr. Harry Skalsky, testified
that because Massey’s testing did not reveal any asbestos in dust
“it would be unlikely that exposures would take place of any
consequence” and he did not believe that any asbestos fibers were
released into the air. Skalsky opined that Massey’s testing
revealed a “very low amount of lead” and “even though some were
over regulatory limits, those limits are set with a very
conservative, by a very conservative methodology that would say
exposure probably is not going to be of consequence.”
G. The Verdict Form and Damages Sought by the
Tenants
If jurors found liability, the verdict form asked them to
indicate, for each tenant, the amount of three types of awards:
26
“[p]ast economic loss,” “[p]ast non-economic loss,” and
“[p]enalties.”
With regard to penalties, as previously stated, the tenants’
claims included ones for violations of SMMC parts 4.36.100 and
4.56.020, and Civil Code section 1940.2.
Under SMMC part 4.36, “Any landlord who fails to provide
[required] relocation assistance . . . shall be . . . liable in a civil
action to the tenant to whom such assistance is due for damages
in the amount of the relocation fee the landlord has failed to pay,
a civil penalty in the amount of five hundred dollars and
reasonable attorneys’ fees and costs as determined by the court.”
(Id., pt. 4.36.090, subd. (b).)
SMMC part 4.56.020 prohibits a “landlord” from engaging
in various conduct “in bad faith,” including, “[i]nfluenc[ing] or
attempt[ing] to influence a tenant to vacate a rental housing unit
through fraud, intimidation or coercion,” and “[i]nterfer[ing] with
a tenant’s right to quiet use and enjoyment of a rental housing
unit as that right is defined by California law.” (Id., subds. (f),
(j).) At the time of trial, SMMC part 4.56.040, subdivision (d)
provided, in relevant part, “Any person who violates or aids or
incites another person to violate the provisions of [SMMC part
4.56.020] is liable for each and every such offense for the actual
damages suffered by an aggrieved party or for statutory damages
in the sum of between one thousand dollars and ten thousand
dollars, whichever is greater . . . . Any violator shall be liable for
an additional civil penalty of up to five thousand dollars for each
offense committed against a person who is disabled or aged sixty-
five or over.”
As relevant here, Civil Code section 1940.2, subdivision
(a)(3) provides that a “landlord” can be held liable for “menacing
27
conduct constituting a course of conduct that interferes with the
tenant’s quiet enjoyment of the premises . . . that would create an
apprehension of harm in a reasonable person.” A tenant who
prevails under the statute “is entitled to a civil penalty in an
amount not to exceed two thousand dollars ($2,000) for each
violation.” (Id., subd. (b).)
H. The Jury’s Verdict
On August 5, 2024, the jury rendered verdicts in favor of
each of the tenants, finding Zohoury, Rahimi, SBZ, and SIDMA
liable on all claims. The jury awarded the tenants a total of
$5,789,939 in damages, comprised of $2,000,939 in past economic
loss, $1,525,000 in past non-economic damages and emotional
distress, and $2,264,000 in civil penalties.8
8 The award was broken down among the individual
tenants as follows: $701,440 for Yin ($229,440 for past economic
loss, $250,000 for past non-economic loss, and $222,000 in civil
penalties); $960,653 for Crosby ($203,653 for past economic loss,
$350,000 for past non-economic loss, and $407,000 in civil
penalties); $1,035,243 for Pillarella ($228,243 for past economic
loss, $400,000 for past non-economic loss, and $407,000 in civil
penalties); $770,526 for Campell ($363,526 for past economic loss
and $407,000 in civil penalties); $614,449 for Ramirez ($172,449
for past economic loss, $250,000 for past non-economic loss, and
$192,000 in civil penalties); $849,870 for Camacho ($427,870 for
past economic loss, $200,000 for past non-economic loss, and
$222,000 in civil penalties); and $857,758 for Lackey ($375,758
for past economic loss, $75,000 for past non-economic loss, and
$407,000 in civil penalties). A minute order stating the jury’s
verdicts incorrectly reflected $228,243 for Campbell’s past
economic loss; this was actually the amount of Pillarella’s
damages and was evidently included in the statement of
Campbell’s verdict due to a typographical error.
28
The jury also found all four defendants liable for punitive
damages. It ultimately imposed punitive damages of $5,000,002
against Zohoury, $8,999,998 against Rahimi, $3,500 against SBZ,
and $3,500 against SIDMA, divided equally among the seven
tenants.
On September 23, 2024, the court entered judgment
consistent with the jury’s verdict.
I. The Court Denies Defendants’ Motion for JNOV and
Conditionally Grants Their New Trial Motion on
Damages
Defendants timely moved for a new trial and for JNOV.
On November 25, 2024, the court conditionally granted the
motion for new trial as to damages, subject to the issuance of a
remittitur, and denied the motion for JNOV. As relevant here,
the court concluded as follows in granting the new trial on
damages. Under SMMC part 4.36.100, relocation benefits were
only recoverable where a city official had ordered relocation; if
the ordinance was read not to require such an order, it was
preempted by Health and Safety Code section 17975.1, which did
require an order. The city did not issue any relocation order
(except for a 30-day period for which relocation benefits were
paid), and thus the tenants could not recover relocation benefits.
A new trial was “further warrant[ed]” because the statutory
damages and penalties awarded under Civil Code section 1940.2
and SMMC part 4.56.040 were excessive as the evidence did not
show daily or continuous violations of the statute or ordinance
during the construction. In addition, the court (and not the jury)
was responsible for assessing any penalty awarded under Civil
Code section 1940.2, subdivision (b). Furthermore, the tenants
could not recover both statutory damages under SMMC part
29
4.56.040 and actual damages for the same conduct under other
causes of action. Punitive damages “overlapped” with the
penalties awarded under Civil Code section 1940.2 and SMMC
part 4.56.040 (for those tenants aged 65 or older) “constituting
impermissible double punishment.” Even if the punitive
damages and penalties may have been based on different specific
conduct, the “[jury] instructions did not make clear that punitive
damages could not cover conduct that was already the subject of
[a] penalty” and “lack of instructions in this regard did not meet
the due process requirement that a jury be advised of the
circumstances under which they might award punitive damages.”
Lastly, “even were the [c]ourt to strike the penalties, and leave
the punitive damages, the punitive damages then would be at a
ratio with compensatory damages exceeding that permitted as a
matter of due process.” Given the reprehensibility of defendants’
conduct, the ratio between punitive damages and compensatory
damages “should be in the [one]-to-[one] to [two]-to-[one] range.”
A lower ratio was warranted because the compensatory damages
were “ ‘substantial’ ” and contained “ ‘a punitive element’ ” given
that they included a “significant” award for emotional distress
and statutory damages. In addition, the “award of over $14
million in punitive damages seem[ed] to bear no rational relation
to the actual harm suffered by [the tenants],” in part because
“there was little evidence [that any exposure to lead and
asbestos] directly caused them physical injury.”
Pursuant to Code of Civil Procedure9 section 662.5,
subdivision (a)(2), the court issued a conditional order reducing
9 Unspecified statutory references are to the Code of Civil
Procedure.
30
the judgment to $9 million against Zohoury and Rahimi jointly
and severally, with $4.501 million of that amount also against
SBZ and SIDMA jointly and severally, divided among the tenants
“in the same proportion as the [original] judgment.” If the
tenants accepted the remittitur within 20 days, then the motion
for new trial would be denied.
The court denied the JNOV motion. It found, as relevant
here, that the jury could have found Rahimi personally liable
because “there was some evidence from which a jury could have
found that Rahimi effectively managed or controlled [SBZ and
1647 OFLP], for purposes of Corporations Code [s]ec[tion]
15903.03, such that the [c]ourt cannot rule as a matter of law
that he cannot be deemed the true principal, the corporate
formalities notwithstanding.”
The tenants accepted the reduction of damages on
December 11, 2024, and the court accordingly denied the motion
for new trial.
J. The Amended Judgment
The court entered an amended judgment on January 17,
2025, which awarded the tenants $4.5 million in “[c]ompensatory
[d]amages and [p]enalties” against the four defendants jointly
and severally,10 $1,606,143 in punitive damages against Zohoury
($229,449 to each tenant), $2,892,856.96 in punitive damages
against Rahimi ($413,265.28 to each tenant), $500 in punitive
10 These damages were apportioned as follows among the
tenants: $544,950 to Yin, $746,550 to Crosby, $804,600 to
Pillarella, $598,950 to Campbell, $477,900 to Ramirez, $660,600
to Camacho, and $666,450 to Lackey.
31
damages against SBZ (roughly $71 to each tenant) and $500 in
punitive damages against SIDMA (roughly $71 to each tenant).
The amended judgment also included awards of $3,209,160
in attorney’s fees and $59,464.17 in costs in favor of the tenants.
K. The Parties’ Appeals
Defendants filed timely notices of appeal as to the
September 23, 2024 judgment, the November 25, 2024 “denial of
motion for JNOV,” the January 17, 2025 amended judgment, and
the January 17, 2025 order awarding attorney’s fees.11
The tenants filed a timely notice of cross-appeal on
February 4, 2025, appealing the September 23, 2024 judgment,
the November 25, 2024 order “conditionally granting defendants’
motion for a new trial,” and the January 17, 2025 judgment.
DISCUSSION
The issues raised by the parties overlap in various ways.
To avoid unnecessary repetition, we first address Zohoury, SBZ,
and SIDMA’s arguments regarding the tenants’ use of the Board
proceedings against them. We then address Rahimi’s arguments
that he should not be held liable. We address next the tenants’
cross-appeal of the court’s new trial order. We conclude by
addressing Zohoury, SBZ, and SIDMA’s arguments regarding the
damages award against them.
11 Zohoury, SBZ, and SIDMA do not address the attorney’s
fee award against them in their brief. Accordingly, we deem their
challenge forfeited. (Jogani v. Jogani (2026) 118 Cal.App.5th
823, 839.) We address Rahimi’s challenge in the Discussion, post.
32
A. The Court Did Not Err in Applying Issue Preclusion
as to Zohoury, SBZ, and SIDMA
Zohoury, SBZ, and SIDMA argue the trial court erred in
giving the 20 Board findings preclusive effect.12 Zohoury and
SIDMA do not deny they were in privity with SBZ, who evidence
showed owned the Property and was thus a party to the Board
proceeding. Nor could they—there was evidence that SBZ owned
the Property, SIDMA was SBZ’s general partner, and Zohoury
(along with his sister) owned SIDMA and held all of the interest
in SBZ. There was also evidence that Zohoury controlled the
defense of the Board proceeding, including retaining attorneys,
personally appealing the hearing officer’s decision, and being
listed as a party in the Board’s affirmance of that decision on
appeal.
Zohoury, SBZ, and SIDMA instead argue (1) the Board
proceeding involved different issues, burdens of proof, evidentiary
standards, and available remedies; (2) the Board’s hearing officer
was not an impartial decisionmaker; (3) issue preclusion was
inappropriate because there was a “limited” right to appeal the
decision; and (4) applying issue preclusion was unfair because
12 Zohoury, SBZ, and SIDMA advance these arguments by
joining in ones made by Rahimi. We reject the tenants’
contention that the defendants cannot do so. The tenants rely on
People v. Bryant, Smith and Wheeler (2014) 60 Cal.4th 335, but in
that case the Supreme Court criticized the practice of joining all
arguments raised by another party and distinguished the
situation, present here, where a party “identif[ied] with
particularity the specific claims they wished to join.” (Id. at
p. 363)
33
defendants did not have sufficient incentive to litigate the Board
proceeding.
1. Legal principles and standard of review
Issue preclusion “precludes relitigation of issues argued
and decided in prior proceedings.” (Lucido v. Superior Court,
supra, 51 Cal.3d at p. 341.) It “applies (1) after final adjudication
(2) of an identical issue (3) actually litigated and necessarily
decided in the first suit and (4) asserted against one who was a
party in the first suit or one in privity with that party.” (DKN
Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 825.) “The party
asserting [issue preclusion] bears the burden of establishing
these requirements.” (Lucido, supra, at p. 341.) In addition,
courts must consider “the public policies underlying [issue
preclusion]—preservation of the integrity of the judicial system,
promotion of judicial economy, and protection of litigants from
harassment by vexatious litigation” before “appl[ying issue
preclusion] in a particular setting.” (Id. at p. 343; accord, Gikas
v. Zolin (1993) 6 Cal.4th 841, 849.)
Issue preclusion is a legal question we review de novo.
(Smith v. ExxonMobil Oil Corp. (2007) 153 Cal.App.4th 1407,
1415.)
2. The relevant factors weigh in favor of issue preclusion
a. Different issues, burdens of proof, evidentiary
standards and remedies
Zohoury, SBZ, and SIDMA contend that the Board
proceeding involved different issues than the lawsuit because the
claims and remedies were different. But “[t]he ‘identical issue’
requirement addresses whether ‘identical factual allegations’ are
at stake in the two proceedings, not whether the ultimate issues
or dispositions are the same.” (Lucido v. Superior Court, supra,
34
51 Cal.3d at p. 342; see also Vandenberg v. Superior Court (1999)
21 Cal.4th 815, 828 [“[issue preclusion] . . . may . . . preclude a
party to prior litigation from redisputing issues therein decided
against him, even when those issues bear on different claims
raised in a later case”].) Here, the trial court applied issue
preclusion to 20 findings made by the Board on specific issues
which the court concluded were relevant to the lawsuit. Zohoury,
SBZ, and SIDMA do not contend that any of the 20 findings was
irrelevant to the lawsuit.
Zohoury, SBZ, and SIDMA also complain that the
evidentiary rules applied in the Board proceeding were less
formal than those governing civil litigation. This argument fails
because issue preclusion can apply to administrative proceedings
with less formal evidentiary rules such as the Board proceeding.
“It is settled that the doctrine of . . . issue preclusion is applicable
to final decisions of administrative agencies acting in a judicial or
quasi-judicial capacity.” (Murray v. Alaska Airlines, Inc. (2010)
50 Cal.4th 860, 867; see id. at p. 866 [findings made by federal
agency in determining a terminated employee’s claim he was
entitled to federal whistleblower protections were properly given
issue-preclusive effect in the employee’s later civil wrongful
termination lawsuit]; see also Imen v. Glassford (1988) 201
Cal.App.3d 898, 908 [findings made in administrative real estate
license revocation proceeding were properly given preclusive
effect in a later civil fraud lawsuit].)
Zohoury, SBZ, and SIDMA lastly contend that the Board
applied a different burden of proof in that, for repairs the Board
deemed “upgrades”—as opposed to “ ‘reasonably necessary repair
or maintenance to existing amenities or housing services’ ”—the
tenant would be entitled to a rent reduction if they “prove[d] that
35
the work significantly impacted the habitability of their unit,
interfered with the occupancy of their unit, or reduced or
removed housing services for more than 24 hours,” and “[did] not
need to prove that the work was done in an unreasonable manner
or took too long.” But Zohoury, SBZ, and SIDMA fail to identify
any of the 20 Board findings which established that construction
at the Property was done in an unreasonable manner or took too
long based on a presumption or failure of proof on the part of the
landlord.
b. Impartiality of the Board’s hearing officer
Zohoury, SBZ, and SIDMA contend that the Board’s
decision cannot be given preclusive effect against them because
the Board’s hearing officer was not “impartial.” (Pacific Lumber
Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 921,
943.) We disagree. There is no evidence that the hearing officer
was biased. Defendants rely solely on the fact that the hearing
officer was a Board employee, but this circumstance did not
render her biased. Zohoury, SBZ, and SIDMA cite California
DUI Lawyers Assn. v. Department of Motor Vehicles (2022) 77
Cal.App.5th 517, 532, but in that case the hearing officer also
represented the agency in the matter. Here, there is no evidence
that the hearing officer advocated for or otherwise acted on
behalf of the tenants. Each party to the Board proceeding had
the opportunity to be represented by counsel or other individuals
of their own choosing.
c. Appellate rights
Zohoury, SBZ, and SIDMA argue that it was error to apply
issue preclusion to the Board’s decision because appellate review
of the decision “was limited.” We are not persuaded.
36
Issue preclusion can be applied to decisions of
administrative agencies, which are generally subject to more
limited appellate review than civil cases. “For an administrative
decision to have [preclusive] effect, it and its prior proceedings
must possess a judicial character. [Citation.] Indicia of
proceedings undertaken in a judicial capacity include a hearing
before an impartial decision maker; testimony given under oath
or affirmation; a party’s ability to subpoena, call, examine, and
cross-examine witnesses, to introduce documentary evidence, and
to make oral and written argument; the taking of a record of the
proceeding; and a written statement of reasons for the decision.”
(Pacific Lumber Co. v. State Water Resources Control Bd., supra,
37 Cal.4th at p. 944.) In addition, “courts consider . . . the
opportunity for judicial review of adverse rulings.” (Vandenberg
v. Superior Court, supra, 21 Cal.4th at p. 829.)
Witnesses at the Board proceeding testified under oath,
and the parties could subpoena testimony and documents, cross-
examine witnesses, introduce documentary evidence, and be
represented by counsel. The hearings were transcribed and the
hearing officer issued a detailed decision which was 134 pages in
length not including attachments. There was a right of appeal
from the hearing officer’s decision to the Board, which Zohoury
exercised.
After all this process, any aggrieved party could have
sought judicial review by way of a petition for writ of
administrative mandate under section 1094.5. (See Ocean Park
Associates v. Santa Monica Rent Control Bd. (2004) 114
Cal.App.4th 1050, 1061 [describing scope of review in an
administrative mandate proceeding challenging a Board decision
reducing rent].) In deciding such a petition, the superior court
37
decides whether the Board acted without or in excess of
jurisdiction, afforded a fair trial, and prejudicially abused its
discretion. (§ 1094.5, subd. (b).) An abuse of discretion is shown
if the agency did not proceed in the manner required by law, the
decision is not supported by the findings, or the findings are not
supported by the evidence. (Ibid.) In addition, a superior court’s
decision on such a petition can be appealed to the Court of
Appeal, which “ ‘ “must examine the findings made by the
[agency] itself to determine whether they were supported by
substantial evidence.” ’ ” (Ocean Park Associates v. Santa Monica
Rent Control Bd., supra, 114 Cal.App.4th at p. 1062.) Such
judicial review, including whether substantial evidence supported
the Board’s findings, is sufficient for issue preclusion purposes.
(See People v. Sims (1982) 32 Cal.3d 468, 480 [issue preclusion
can be applied to Department of Social Services decision which
was subject to judicial review through writ of administrative
mandate].)
Defendants rely on Vandenberg v. Superior Court, supra,
21 Cal.4th 815, where our Supreme Court held that nonmutual
issue preclusion could not be premised on an arbitration award,
in part because of the very limited judicial review of arbitration
decisions, which was “inherent in the nature of the arbitral forum
as an informal, expeditious, and efficient alternative means of
dispute resolution.” (Id. at pp. 831, 836-837.) The court
observed, “By choosing private arbitration, the parties ‘evince
[their] intent to bypass the judicial system and thus avoid
potential delays at the trial and appellate levels.’ [Citation.]
Judicial interference with the arbitrator’s decision would thus
defeat the very advantages the arbitral parties sought to
achieve.” (Id. at p. 831.) Vandenberg is distinguishable because
38
the scope of review of an arbitration award is, as noted by the
court, very limited, whereas judicial review of the Board’s
decision via a petition for writ of administrative mandate
encompasses consideration of whether the Board’s findings were
supported by substantial evidence, as well as whether the
findings supported the Board’s ruling.
Lastly, Zohoury and SIDMA’s argument that since they
were not parties to the Board proceeding they had no appellate
rights is unavailing because SBZ, a party to the proceeding, had
appellate rights. Plus, Zohoury himself did appeal to the Board.
In any event, as long as Zohoury and SIDMA were in privity with
SBZ (which they were), issue preclusion can apply if SBZ’s
appellate rights were adequate.
d. Zohoury and SIDMA’s incentive to fully defend
the Board proceeding
Zohoury, SBZ and SIDMA contend that it is improper to
give the Board’s findings preclusive effect because they lacked
sufficient incentive to vigorously defend against the Board
proceedings. They rely on Parklane Hosiery Co., Inc. v. Shore
(1979) 439 U.S. 322 [99 S.Ct. 645, 58 L.Ed.2d 552] (Parklane),
where the United States Supreme Court held that issue
preclusion should not be applied against a defendant where it
would be “unfair,” including when the first action involved “small
or nominal damages” so that the defendant “may have [had] little
incentive to defend vigorously, particularly if future suits [were]
not foreseeable.” (Id. at p. 330.)13 It further held that trial
13 The Parklane court articulated this rule in the context of
the “offensive” use of issue preclusion, i.e., where “a litigant who
39
courts should be “grant[ed] . . . broad discretion” to decide
whether “the application of offensive estoppel would be unfair to
a defendant” under the circumstances. (Id. at p. 331; see Rest.2d
Judgments, § 28, com. j [a court can refuse to apply issue
preclusion where “the amount in controversy in the first action
[was] so small in relation to the amount in controversy in the
second that preclusion would be plainly unfair” but “[s]uch a
refusal to give the first judgment preclusive effect should not
occur without a compelling showing of unfairness”].)
Here, it was not unfair for the trial court to give preclusive
effect to the Board’s 20 findings because the stakes in the Board
proceeding were high enough to incentivize SBZ to defend its
interest. If the tenants’ rents were significantly reduced it would
greatly decrease SBZ’s stream of income from the Property.
Evidence adduced at trial showed that Zohoury decided to go
forward with renovations of the vacant units while the tenants
were still residing at the Property because he felt the project
could not afford to go without rental income. (See Imen v.
Glassford, supra, 201 Cal.App.3d at p. 907 [the defendant in a
was not a party to a prior judgment [seeks to] use that judgment
‘offensively’ to prevent a defendant from relitigating issues
resolved in the earlier proceeding.” (Parklane, 439 U.S. at p. 326,
fn. omitted.) Such “offensive” application of issue preclusion is
not at issue here, where the tenants were party to the Board
proceeding. We assume, without deciding, that the Parklane rule
also applies where the plaintiff was also a party in the initial
proceeding. (See Roos v. Red (2005) 130 Cal.App.4th 870, 880 [in
case involving issue preclusion arising from prior litigation
between the same parties, stating the Parklane rule regarding a
defendant’s possible lack of “incentive to vigorously litigate the
issue in the prior action”].)
40
civil fraud lawsuit had sufficient motivation to oppose a prior
administrative proceeding against his real estate license to
support application of issue preclusion in the later fraud
lawsuit].) Furthermore, the amount at issue was substantial.
Ultimately, the Board awarded rent reductions totaling more
than $338,000.14 In addition, SBZ actively defended against the
tenants’ petitions. Zohoury personally attended some of the
hearings and retained an attorney to appeal the hearing officer’s
decision to the Board. Lastly, it was foreseeable that the tenants
would eventually sue the defendants, raising the distinct
possibility that the prevailing side in the Board proceeding could
later invoke issue preclusion. (See Parklane, supra, 439 U.S. at
p. 332 [finding the defendants had sufficient incentive to defend
against a prior lawsuit by the Securities and Exchange
Commission in part because of “the foreseeability of subsequent
private suits that typically follow a successful [g]overnment
judgment”].)
Zohoury and SIDMA also contend they had no incentive to
defend against the Board proceeding because they were not
exposed to any personal liability in that proceeding. This
argument conflates the concepts of privity and incentive to
litigate. Zohoury and SIDMA do not contest they were in privity
with SBZ. Thus, the issue is whether SBZ had sufficient
incentive to defend against the tenants’ rent reduction claims.
We conclude it did for the reasons discussed.
14 This includes rent reductions awarded to two individuals
who rented units in the building but were not parties to the trial.
41
3. Punitive damages
Zohoury, SBZ, and SIDMA claim the trial court erred in
allowing the Board’s findings of fact, which were made on the
basis of a preponderance of the evidence, to be binding for
purposes of the tenants’ claim for punitive damages, which
required “[proof] by clear and convincing evidence that the
defendant has been guilty of oppression, fraud, or malice.” (Civ.
Code, § 3294, subd. (a).) Issue preclusion “does not apply when
the factual finding in the prior proceeding was arrived at based
on a lower standard of proof than the one required in the
subsequent proceeding.” (The Grubb Co., Inc. v. Department of
Real Estate (2011) 194 Cal.App.4th 1494, 1503.)
Defendants contend that most of the Board’s findings
tended to prove two factors relevant to punitive damages—the
existence of physical harm, and indifference to or reckless
disregard for the health and safety of others. The findings on
which defendants focus stated that because of “the owner’s”
failure to test for asbestos and lead and to use proper
construction practices, the tenants were “exposed to” “hazardous
levels of” asbestos and lead dust which put them “at risk of
respiratory and other ailments” and “interfered with the
occupancy of their units.” Noise and vibrations from the
construction “was significant” and “affect[ed the tenants’] ability
to sleep, concentrate and work, and sometimes [drove] them out
of their units.” “[D]ust and odors significantly affected tenants’
ability to breathe and spend time in their units and negatively
affected their health.”
Zohoury, SBZ, and SIDMA have forfeited this challenge
because they failed to seek a jury instruction on the subject.
Defendants made a general argument to the court that it was
42
inappropriate for the Board’s findings to be used to establish
liability for punitive damages because of the different standards
of proof, but they never sought an instruction explaining to the
jury that it should use those findings only for purposes of
determining liability for things other than punitive damages. As
just discussed, the use of issue preclusion in determining liability
for compensatory damages was proper. That the tenants also
sought punitive damages did not mean that the Board findings
became inadmissible for all purposes. If defendants believed the
jury should not consider the Board findings in connection with
punitive damages, they were obligated to seek an instruction
saying so. “ ‘ “ ‘ “The purpose of the general doctrine of waiver [or
forfeiture] is to encourage a defendant to bring errors to the
attention of the trial court, so that they may be corrected or
avoided and a fair trial had . . . .” ’ [Citation.] ‘ “No procedural
principle is more familiar to this Court than that a constitutional
right,” or a right of any other sort, “may be forfeited in criminal
as well as civil cases by the failure to make timely assertion of
the right before a tribunal having jurisdiction to determine
it.” ’ ” ’ ” (Keener v. Jeld–Wen, Inc. (2009) 46 Cal.4th 247, 264.)
B. Rahimi’s Appeal
Rahimi raises issues about the sufficiency of the evidence
supporting the judgment against him, including the application
of issue preclusion as to him. He further claims error in certain
jury instructions. We first analyze his issue preclusion claim and
conclude it has merit on the issue of privity. Next, we consider
his sufficiency claims and hold that insufficient evidence supports
the liability findings against Rahimi for breach of lease, tortious
breach of the warranty of habitability, menacing conduct in
violation of Civil Code section 1940.2, relocation benefits under
43
SMMC part 4.36.100, IIED, and punitive damages. As to those
claims, the court erred in denying Rahimi’s JNOV motion and we
remand for the trial court to grant judgment in his favor.
As to the remaining claims against Rahimi for negligence,
nuisance, premises liability, and tenant harassment under
SMMC part 4.56.040, we hold the evidence was sufficient to
support liability but conclude the court prejudicially erred in
instructing the jury regarding them. As to those four claims, we
reverse for a new trial.
1. Issue preclusion
Rahimi makes the same arguments as Zohoury regarding
issue preclusion, with the additional argument that Rahimi was
not in privity with the owner of the Property, be it SBZ or 1647
OFLP.15 As we have already addressed and rejected above the
arguments against issue preclusion other than privity, we focus
here solely on Rahimi’s privity argument.
“As applied to questions of preclusion, privity requires the
sharing of ‘an identity or community of interest,’ with ‘adequate
representation’ of that interest in the first suit, and
circumstances such that the nonparty ‘should reasonably have
expected to be bound’ by the first suit. [Citation.] A nonparty
alleged to be in privity must have an interest so similar to the
party’s interest that the party acted as the nonparty’s ‘ “ ‘virtual
representative’ ” ’ in the first action.” (DKN Holdings LLC v.
Faerber, supra, 61 Cal.4th at p. 826.) We need not address
15 The Board concluded it was unclear whether SBZ or
1647 OFLP owned the Property due to conflicts in Zohoury’s
testimony and contradictory documents filed by Zohoury and
Rahimi with the Board and other governmental entities.
44
whether Rahimi had “ ‘an identity or community of interest’ ”
with either of the entities who potentially owned the Property
(SBZ or 1647 OFLP) because, under the circumstances, Rahimi
did not have a “ ‘ “reasonable expectation” ’ ” he would be bound
by the Board proceeding. (Gottlieb v. Kest (2006) 141 Cal.App.4th
110, 156.)
The Board proceeding addressed only the Property owner’s
right to receive rent from the tenants, not any of Rahimi’s
individual rights or obligations. “ ‘The “reasonable expectation”
requirement is satisfied if the party to be estopped had a
proprietary [or financial] interest in and control of the prior
action, or if the unsuccessful party in the first action might fairly
be treated as acting in a representative capacity for the party to
be estopped.’ ” (Gottlieb v. Kest, supra, 141 Cal.App.4th at
p. 156.) Although Rahimi had a financial interest in the Board
proceeding, the evidence did not establish that he personally
controlled the defense. To the contrary, the evidence showed that
Zohoury had control as he retained an attorney to represent the
Property owner’s interests during the proceeding, retained a
separate attorney to pursue an administrative appeal, and
appeared at and testified in the Board proceeding. Rahimi
neither attended nor testified; although Westside employees did
attend, they appeared as representatives of the Property owner
and not Rahimi individually. Nor was the Property owner acting
in a “representative capacity” for Rahimi in the Board
proceeding. (Ibid.; compare Lewis v. County of Sacramento (1990)
218 Cal.App.3d 214, 218 [employer sought to be held vicariously
45
liable for employee’s tort could “fairly be treated as acting in a
representative capacity” for the employee].)16
2. Substantial evidence
a. Legal principles and standard of review
Rahimi contends that he is entitled to judgment in his favor
on all claims because there was no substantial evidence to
support liability against him. “In reviewing the sufficiency of
evidence to support the jury’s finding, we review the record in the
light most favorable to the prevailing party, resolving in favor of
the prevailing party all conflicts in either the evidence or the
reasonable inferences to be drawn therefrom, to determine
whether the record contains substantial evidence, contradicted or
uncontradicted, supporting the finding. [Citations.]
‘ “Substantial evidence” is evidence of ponderable legal
significance, evidence that is reasonable, credible and of solid
value.’ [Citation.] ‘The focus is on the quality, rather than the
quantity, of the evidence.’ [Citation.] ‘Inferences may constitute
substantial evidence, but they must be the product of logic and
reason. Speculation or conjecture alone is not substantial
evidence.’ [Citation.] ‘The ultimate test is whether it is
reasonable for a trier of fact to make the ruling in question in
light of the whole record.’ [Citation.] The testimony of a single
witness may be sufficient.” (Markow v. Rosner (2016) 3
Cal.App.5th 1027, 1045.)
16 We need not decide whether the erroneous application of
issue preclusion prejudiced Rahimi because, as discussed below,
we conclude the judgment against him must be reversed on other
grounds.
46
“Since the standard employed by an appellate court
reviewing the sufficiency of the evidence is essentially the same
as that used by a trial court considering a motion for . . . [JNOV]
[citations], . . . [a] reversal of the judgment for insufficiency of the
evidence effectively determine[s] that the trial court should have
granted the [appellant’s] motion for [JNOV].” (Bank of America
v. Superior Court (1990) 220 Cal.App.3d 613, 623-624.) Thus,
where the trial court denies an appellant’s motion for JNOV, “a
reversal on appeal for insufficiency of the evidence concludes the
litigation just as it would have been concluded if the trial court
had correctly entered judgment notwithstanding the verdict.”
(Id. at p. 624.)
“[A] trial court may grant a motion for [JNOV] on some but
not all issues or causes of action in a case.” (Beavers v. Allstate
Ins. Co. (1990) 225 Cal.App.3d 310, 332; accord, Dell’Oca v. Bank
of New York Trust Co., N.A. (2008) 159 Cal.App.4th 531, 553.)
b. Negligence and nuisance
“To establish a cause of action for negligence, the plaintiff
must show that the ‘defendant had a duty to use due care, that he
breached that duty, and that the breach was the proximate or
legal cause of the resulting injury.’ [Citation.] Recovery for
negligence depends as a threshold matter on the existence of a
legal duty of care.” (Brown v. USA Taekwondo (2021) 11 Cal.5th
204, 213.) As to duty, Civil Code section 1714 provides,
“Everyone is responsible, not only for the result of his or her
willful acts, but also for an injury occasioned to another by his or
her want of ordinary care or skill in the management of his or her
property or person . . . .” (Id., subd. (a).) Civil Code section 3479
defines a nuisance to include “[a]nything which is injurious to
health . . . , or is indecent or offensive to the senses, or an
47
obstruction to the free use of property, so as to interfere with the
comfortable enjoyment of life or property . . . .” Where a
negligence claim based on the creation of a nuisance is viable, a
nuisance claim is also viable. (El Escorial Owners’ Assn. v. DLC
Plastering, Inc. (2007) 154 Cal.App.4th 1337, 1349.)
Rahimi argues that he could not be held personally liable
for negligence because his only involvement in the Property was
as an owner of Westside and a limited partner in 1647 OFLP.
This ignores that Rahimi could be held liable for his acts taken as
an agent of Westside. “ ‘ “An agent or employee is always liable
for his own torts, whether his employer is liable or not.” ’
[Citations.] ‘In other words, when the agent commits a tort, . . .
the agent [is] subject to liability in a civil suit for such wrongful
conduct.’ ” (Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon
& Gladstone (2003) 107 Cal.App.4th 54, 68.) This concept applies
to corporate officers, which “like any other employee, . . .
individually owe a duty of care, independent of the corporate
entity’s own duty, to refrain from acting in a manner that creates
an unreasonable risk of personal injury to third parties.”
(Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490,
505; see Michaelis v. Benavides (1998) 61 Cal.App.4th 681, 686
[president, director, and stockholder of construction company
could be held personally liable for negligence based on “his direct
participation and decisionmaking in the construction of [a] patio
and driveway”].)
Considered in the light most favorable to the tenants, there
was evidence sufficient for the jury to conclude that Rahimi acted
negligently by personally planning and directing the construction
at the Property, which he knew might create a nuisance—that is,
conditions indecent or offensive to the senses of the tenants who
48
would be staying at the Property during the construction, so as to
interfere with the comfortable enjoyment of their units. Rahimi
was personally involved in the construction and was aware of its
scope. Zohoury testified that Rahimi “was in charge of
construction and in charge of the building.” Rahimi hired
Majoros to prepare plans to remodel units at the Property and
provided input on the plans. Rahimi also personally negotiated
contracts for the construction work by Westin, Hugh
Construction, and V10 Construction. Rahimi communicated with
Zohoury, Majoros, Hohman, and the contractors concerning the
construction.17 During the construction Rahimi went to the
Property “once in a while” and the tenants adduced evidence that
unhealthy conditions at the Property, including dust, were
evident. Rahimi was aware that the city had stopped
construction in June 2014 due to problems with the construction,
including the lack of asbestos testing. Zohoury testified that he
and Rahimi decided to fire Westin because of his poor
performance, failing to obtain permits, “and creating a lot of
issues with the tenants,” and that Rahimi communicated this to
Westin. In addition, Rahimi testified that he recommended “to
17 Rahimi acknowledges that he “generally had something
to do at some point with the construction,” but argues this cannot
establish he individually owed any legal duty. We disagree for
the reasons discussed. Rahimi relies on United States Liab. Ins.
Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, but the court in
that case held, “Directors or officers of a corporation do not incur
personal liability for torts of the corporation merely by reason of
their official position, unless they participate in the wrong or
authorize or direct that it be done.” (Id. at p. 595, italics added.)
This is consistent with Frances T. v. Village Green Owners Assn.,
supra, 42 Cal.3d at page 505, and the other cases cited above.
49
the owner” that the tenants be relocated during the construction,
from which the jury could reasonably infer that he believed the
construction would create unpleasant and possibly unhealthy
conditions for the tenants.18
c. Premises liability
For the reasons just discussed regarding negligence and
nuisance, there is also substantial evidence supporting the
tenants’ claim for premises liability against Rahimi personally.
Premises liability requires that the defendant owed the plaintiff a
legal duty of care based on ownership, possession, or control of
property. (Alcaraz v. Vece (1997) 14 Cal.4th 1149, 1162.) There
is no evidence that Rahimi personally owned the Property or
possessed it. But there is substantial evidence that Rahimi had
some control over the Property through his control over the
construction and exercised that control in ways that created
unremediated dangerous conditions at the property sufficient to
hold him individually liable.
d. Breach of lease and tortious breach of the
warranty of habitability
No substantial evidence supports the tenants’ claims
against Rahimi individually for breach of the lease or tortious
breach of the warranty of habitability. To prevail on those two
18 To establish liability for negligence, as well as for
premises liability and nuisance, the tenants were required to
show that they were harmed and that each defendant’s conduct
caused the harm. Rahimi does not challenge the sufficiency of
the evidence showing the construction created unpleasant and
unhealthy conditions at the Property and that the tenants were
harmed.
50
claims, the tenants had to adduce evidence they entered leases
with Rahimi. (Richman v. Hartley (2014) 224 Cal.App.4th 1182,
1186 [breach of lease]; Stoiber v. Honeychuck (1980) 101
Cal.App.3d 903, 913 [tortious breach of warranty of habitability].)
But the evidence at trial was that the tenants did not sign new
leases when SBZ acquired the Property (or at any point after
that) and the jury was instructed that in such a situation the
owner of the Property became bound under the leases by
operation of law. There is no substantial evidence that Rahimi
ever signed any lease with any tenant, was assigned such a lease,
assumed any obligations under a lease, or personally owned the
Property.
e. Menacing conduct under Civil Code section
1940.2
Civil Code section 1940.2 imposes liability only on “a
landlord.” (Id., subd. (a)(3).) There was no substantial evidence
that Rahimi was a “landlord” or owned the Property, and thus he
could not be held liable under the statute. (Otanez v. Blue Skies
Mobile Home Park (1991) 1 Cal.App.4th 1521, 1526 [concluding
property manager could not be held liable under statute which
“does not apply to persons other than landlords”].)
f. Tenant harassment under SMMC part 4.56.040
SMMC part 4.56.020 prohibits “landlord[s]” from
undertaking various types of conduct “in bad faith.” Unlike Civil
Code section 1940.2, however, the ordinance elsewhere provides
that damages can be awarded against “[a]ny person who violates
or aids or incites another person to violate” SMMC part 4.56.020.
(SMMC, pt. 4.56.040, subd. (d), italics added.) Rahimi does not
argue that there is no substantial evidence he aided the landlord
in violating the ordinance. (See Benach v. County of Los Angeles
51
(2007) 149 Cal.App.4th 836, 852, fn. 10 [appellate court may
“treat [an] issue as abandoned” where a party makes a
“conclusory presentation, without pertinent argument or an
attempt to apply the law to the circumstances of this case”].)
g. Relocation benefits under SMMC part 4.36.100
In Santa Monica, “[a] landlord is required to provide
temporary relocation benefits” under specified circumstances.
(SMMC, pt. 4.36.100, subd. (a).) Rahimi contends he cannot be
held liable under this ordinance because there is no evidence he
was a landlord or owned the Property. The tenants respond that,
under the ordinance’s definition of “[l]andlord,” Rahimi can be
held liable as an “agent” or “representative” of the landlord.19
(Id., pt. 4.36.010.) In particular, the tenants argue that Rahimi
could be held liable under the theory he personally entered the
management agreement and did not in fact assign it to Westside
as he claimed.
The tenants did not argue at trial that Rahimi was liable
for relocation benefits as a property manager.20 Further,
although there was evidence that Westside acted as the property
manager, there was no substantial evidence that Rahimi
personally acted as the manager with regard to any decision
19 The ordinance defines “[l]andlord” as, “Any owner,
lessor, sublessor, or any other person entitled to receive rent for
the use and occupancy of a rental housing unit, or any agent,
representative or successor of any of the foregoing.” (SMMC,
pt. 4.36.010.)
20 In closing, the tenants argued the Property was titled in
SBZ but “in reality” was owned by 1647 OFLP, which meant that
Zohoury and Rahimi “both owned the property.”
52
regarding relocation.21 Because there is no substantial evidence
that Rahimi acted as an agent or representative of the landlord
in this regard, no substantial evidence supports personal liability
against Rahimi for relocation benefits.
h. IIED
“The elements of the tort for intentional infliction of mental
distress are: (1) outrageous conduct by the defendant,
(2) intention to cause or reckless disregard of the probability of
causing emotional distress, (3) severe emotional suffering and
(4) actual and proximate causation of emotional distress.”
(Stoiber v. Honeychuck, supra, 101 Cal.App.3d at p. 921.)
Rahimi contends substantial evidence does not support the
tenants’ IIED claim because “there[ was] no evidence Rahimi
intended to harm anyone . . . [¶] [n]or . . . that Rahimi knew that
tenants were being harmed.” He points to his testimony that he
was unaware of the tenants’ complaints about the construction,
was not involved in discussions with the city or in submitting
plans, and assumed the “owner” tested for hazardous materials
before undertaking construction.
As discussed above in connection with the negligence claim,
there was substantial evidence that Rahimi was involved in
planning the construction and was aware of what work would be
done. There was also substantial evidence that Rahimi was
aware of the actual conditions at the Property during the
construction resulting at least in part from his actions. As
discussed previously this evidence could support a conclusion
21 The tenants point out that Rahimi signed construction
contracts, but those contracts identified Westside as the
contracting party.
53
that Rahimi was negligent, but it is not sufficient to support the
conclusion that he acted with the intention to cause, or in
reckless disregard of the probability of causing, emotional
distress.
Among other things, there was no evidence as to when or
how many times Rahimi went to the property during construction
or what specific conditions he saw, or that he was aware of
specific complaints by the tenants. There was no substantial
evidence that he intended, or acted in reckless disregard of
whether, the contractors would take inadequate precautions to
avoid the release of hazardous substances or dust. There was no
evidence that Rahimi was personally involved in obtaining
permits for the construction, as was the case for Zohoury. There
was no substantial evidence that Rahimi planned to use the
construction to make life unpleasant for the tenants to induce
them to terminate their tenancies, i.e., that he intended to harm
the tenants.22
i. Punitive damages
Rahimi contends there is no substantial evidence under the
applicable clear and convincing evidence standard that he acted
22 The tenants did adduce evidence that in April 2015
Zohoury signed escrow instructions to sell the Property without
any tenants subject to the rent control law. The jury could infer
that, in order to proceed with the sale, Zohoury would have to
induce the tenants to move out very quickly, which might give
him a motive to make conditions at the Property unpleasant.
However, there was no evidence as to Rahimi’s role in the
proposed transaction or even that Rahimi was aware of it before
Zohoury agreed.
54
with the state of mind required to establish liability for punitive
damages. We agree.
Under Civil Code section 3294, punitive damages can only
be imposed based on clear and convincing evidence the defendant
“has been guilty of oppression, fraud, or malice.” (Id., subd. (a).)
“ ‘Malice’ means conduct which is intended by the defendant to
cause injury to the plaintiff or despicable conduct which is carried
on by the defendant with a willful and conscious disregard of the
rights or safety of others. [¶] . . . ‘Oppression’ means despicable
conduct that subjects a person to cruel and unjust hardship in
conscious disregard of that person’s rights. [¶] . . . ‘Fraud’ means
an intentional misrepresentation, deceit, or concealment of a
material fact known to the defendant with the intention on the
part of the defendant of thereby depriving a person of property or
legal rights or otherwise causing injury.” (Id., subd. (c).) “Under
the clear and convincing standard, the evidence must be ‘ “ ‘ “so
clear as to leave no substantial doubt” ’ ” ’ and ‘ “ ‘ “sufficiently
strong to command the unhesitating assent of every reasonable
mind.” ’ ” ’ ” (Butte Fire Cases (2018) 24 Cal.App.5th 1150, 1158.)
For the reasons just discussed with regard to the IIED
claim, there was no substantial evidence meeting the clear and
convincing threshold that Rahimi intended to cause injury to the
tenants, or acted in conscious disregard of the tenants’ safety or
rights, sufficient to support a finding that he acted with malice or
oppression. Nor was there any evidence that Rahimi committed
any fraud against the tenants.
The tenants do not identify any contrary evidence to
support the jury’s finding that Rahimi was guilty of malice,
oppression, or fraud. The tenants instead contend that the JNOV
motion did not include a substantial evidence challenge to the
55
jury’s verdict on liability for punitive damages, but this is not
accurate.
3. Erroneous jury instruction
a. Standard of review
“A party may . . . challenge on appeal an erroneous
instruction without objecting at trial.” (Lund v. San Joaquin
Valley Railroad (2003) 31 Cal.4th 1, 7; Carrau v. Marvin Lumber
& Cedar Co. (2001) 93 Cal.App.4th 281, 296-297 [no appellate
waiver when party did not object to a jury instruction containing
“ ‘an incorrect statement of the law’ ”].)
“Instructional error is subject to a de novo standard of
review. [Citation.] It is primarily a legal inquiry in which we
need not give deference to the trial court’s decision. [Citation.]
‘Where it is contended that the trial judge gave an erroneous
instruction,’ we must ‘view the evidence in the light most
favorable to the claim of instructional error.’ [Citation.] [¶]
However, the giving of an erroneous jury instruction should not
be disturbed unless, ‘ “after an examination of the entire cause,
including the evidence, the court shall be of the opinion that the
error complained of has resulted in a miscarriage of justice.” ’
[Citation.] Instructional error is prejudicial in a civil case where
‘ “ ‘ “it seems probable” that the error “prejudicially affected the
verdict.” ’ ” ’ ” (Suffolk Construction Co., Inc. v. Los Angeles
Unified School Dist. (2023) 90 Cal.App.5th 849, 869-870.)
56
b. Analysis
Rahimi contends the trial court erred in giving the jury a
“nondelegable duty” instruction.23 The instruction stated that
Rahimi, along with Zohoury, SBZ, and SIDMA, “[had] a duty that
cannot be delegated to another person arising from the landlord-
tenant relationship.” It further stated, “Under this duty, the
landlord must maintain the premises intended for occupation of
human beings in a condition fit for such occupation, and repair
all subsequent dilapidations thereof, which render it
untenantable.” It also stated that Rahimi and the other
defendants were liable for the failure of their “employees,
contractors and/or vendors . . . to properly maintain and repair
the premises in violation of landlord’s duty.”
Rahimi argues this instruction was erroneous because he
“was not a landlord” and “even if there were some set of facts
whereby Rahimi might be deemed a landlord, the jury received
no instruction as to what it would have to find to so conclude.”
(Italics omitted.)
We agree. As relevant here, a landlord’s nondelegable duty
is based on the rule that a property owner owes a nondelegable
duty to maintain the property in a reasonably safe condition and
can thus be held liable when his independent contractor is
negligent in maintaining or repairing the property. (Srithong v.
Total Investment Co. (1994) 23 Cal.App.4th 721, 726.) As to
23 Rahimi also contends the court erred in giving an
instruction relating to the liability of a general partner without
clarifying the protections against liability afforded to a limited
partner. In ruling on the JNOV motion, the court acknowledged
this error. We need not address this claim because the
nondelegable duty instructional error alone mandates reversal.
57
Rahimi, the instruction at issue was erroneous because it
established Rahimi himself was a “landlord,” i.e., owned the
Property, when there was no evidence to support such a
conclusion. Viewing the evidence in the light most favorable to
Rahimi’s challenge, SBZ or 1647 OFLP owned the Property, not
Rahimi. Furthermore, Rahimi held no interest in SBZ, which
was a limited partnership with SIDMA being the general partner
and Zohoury a limited partner; Rahimi did have an interest in
1647 OFLP but only as a limited partner. Rahimi was the sole
shareholder of Westside, which managed the Property but held
no ownership interest in the Property itself.
The tenants do not argue that the nondelegable duty
instruction was proper. They contend only that Rahimi forfeited
his challenge by failing to object in the trial court. This
argument fails because, as already noted, a party can challenge
on appeal an instruction as legally erroneous without objecting to
it in the trial court, and the instruction at issue was in fact
legally erroneous as to Rahimi.24
It was reasonably probable that, had the jury not been
improperly instructed Rahimi was a landlord, it would have
reached a different verdict. First, the 20 Board findings involved
the “owner” of the Property, meaning the jury likely considered
them established against Rahimi individually based on the
erroneous instruction even though he was not an owner. The
other evidence, viewed most favorably to Rahimi, showed that
24 The tenants assert that the challenged instructions
“stated the law correctly” and refer to another section of their
brief, but that section does not address the nondelegable duty
instruction.
58
Zohoury was in charge of the Property and Rahimi’s role was to
assist and implement Zohoury’s decisions. Rahimi testified, “[i]t
was not [his] decision” to demolish and renovate the vacant units
and he was following Zohoury’s directions. The scope of the
construction work “[had] to be confirmed with the ownership,”
which was SBZ and Zohoury. Rahimi recommended “to the
owner” that all of the tenants be relocated during the
construction. However, being instructed that Rahimi was an
owner likely suggested to the jury that Rahimi was responsible
for such decisions, or that he was being untruthful about Zohoury
having more responsibility.
Furthermore, it is reasonably probable the erroneous
nondelegable duty instruction prejudicially affected the jury’s
verdicts on the tenants’ claims for negligence, nuisance, premises
liability, and violation of SMMC part 4.56.020. There is a
reasonable probability the erroneous instruction prejudicially
affected the verdicts for nuisance, negligence, and premises
liability because the jury was instructed that Rahimi personally
owed a duty of care with respect to the conditions at the Property
and, in addition, that he was vicariously liable for the negligent
conduct of those who did the construction work.
SMMC part 4.56.020 prohibits various types of conduct
undertaken by a “landlord . . . in bad faith.” Although the jury
was instructed, consistent with the ordinance (id., pt. 4.56.040,
subd. (d)), that “any person who violates or aids or incites another
person to engage in tenant harassment as defined in [the
ordinance]” could be held liable for the specified damages, it is
reasonably probable the erroneous instruction that Rahimi was a
landlord was prejudicial. Even if the verdict on this claim was
not tainted by the erroneous jury instruction, reversal of the
59
judgment is required because it is not possible to separate out
any damages awarded under this theory given the structure of
the verdict form. (Bevis v. Terrace View Partners, LP (2019) 33
Cal.App.5th 230, 262 [reversal was required where the court
“[could not] conclude the entire award of compensatory damages
reasonably could have been based on a viable legal theory”].)
4. Attorney’s fees
Because we reverse the judgment as to Rahimi, we also
reverse the order awarding attorney fees as against him.
(California Grocers Assn. v. Bank of America (1994) 22
Cal.App.4th 205, 220 [order awarding attorney fees “ ‘falls with a
reversal of the judgment on which it is based’ ”].)
C. The Tenants’ Appeal
The tenants contend the trial court abused its discretion in
ordering a conditional new trial on excessive damages as to all
defendants because (1) it erroneously concluded that relocation
damages were recoverable under SMMC part 4.36.100 only after
relocation had been ordered by the city, (2) there was no
instructional error as to Rahimi’s liability, (3) the compensatory
damages were not excessive because substantial evidence
supported damages under SMMC part 4.56.040 and penalties
under Civil Code section 1940.2, and (4) the punitive damages
awarded were not excessive because the award was not
duplicative of the penalties and non-economic damages and the
ratio between punitive and compensatory damages was
constitutional.
1. Legal principles and standard of review
A trial court may grant a motion for new trial for any of the
grounds listed in section 657 materially affecting the substantial
60
rights of a party. As relevant here, those grounds include
“[e]xcessive or inadequate damages,” “[i]nsufficiency of the
evidence to justify the verdict . . . or the verdict . . . is against
law,” and “[e]rror in law, occurring at the trial and excepted to by
the party making the application.” (§ 657.) “When a new trial is
granted, on all or part of the issues, the court shall specify the
ground or grounds upon which it is granted and the court’s
reason or reasons for granting the new trial upon each ground
stated.” (Ibid.)
“The determination of a motion for a new trial rests so
completely within the court’s discretion that its action will not be
disturbed unless a manifest and unmistakable abuse of discretion
clearly appears. This is particularly true when the discretion is
exercised in favor of awarding a new trial, for this action does not
finally dispose of the matter. So long as a reasonable or even
fairly debatable justification under the law is shown for the order
granting the new trial, the order will not be set aside.” (Jiminez
v. Sears, Roebuck & Co. (1971) 4 Cal.3d 379, 387.) “In sharp
contrast to appellate considerations of a claim of excessive
damages on a cold record, the trial court ‘see[s] and hear[s] the
witnesses’ and can ascertain for itself ‘the injury and the
impairment that has resulted therefrom.’ [Citations.]
Accordingly, when a trial court grants a new trial on the issue of
excessive damages, whether or not the order is conditioned by a
demand for reduction, ‘the presumption of correctness normally
accorded on appeal to the jury’s verdict is replaced by a
presumption in favor of the order.’ ” (Pearl v. City of Los Angeles
(2019) 36 Cal.App.5th 475, 485-486.)
“An order granting a new trial must be affirmed on appeal
if a new trial ‘should have been granted upon any ground stated
61
in the motion, whether or not specified in the order or
specification of reasons,’ except that an order can be affirmed on
the ground of insufficiency of the evidence to justify the verdict or
excessive or inadequate damages only if such ground was stated
in the order and can be affirmed on those grounds only for the
reasons specified in the order or specification of reasons.” (Bell v.
Bayerische Motoren Werke Aktiengesellschaft (2010) 181
Cal.App.4th 1108, 1121, quoting § 657.)
2. The trial court did not err in concluding damages
were excessive
The trial court did not err in concluding that the jury
awarded excessive damages and penalties under SMMC part
4.56.040 and Civil Code section 1940.2. Because this is sufficient
to affirm the new trial order given the general verdict, we do not
discuss the tenants’ other arguments.
The tenants asked the jury to find defendants violated
SMMC part 4.56.040 and Civil Code section 1940.2 every day
during two periods of construction (1) beginning in January 2014
and lasting 1,111 days (approximately 37 months), and
(2) beginning in October 2019 and lasting 344 days. The tenants
asked the jury to multiply the statutory damages and penalties
for tenant harassment by 1,455 days, the total of these two
periods. The court found that the jury awarded such damages
and penalties for the total period of construction. Substantial
evidence supports this conclusion. The award of “[p]enalties” for
each tenant was a multiple of 37—the number of months in the
first period of construction argued by the tenants. The lone
exception was Ramirez, who was not residing at the Property for
the first five months of that period, and her award was divisible
by 32, i.e., the number of months in the first construction period
62
when she was residing at the Property. Furthermore, each
tenant aged under 65 was awarded penalties of $6,000 times 37
(or 32 for Ramirez), while the four tenants aged 65 or over
(Crosby, Pillarella, Campbell, and Lackey25) were awarded
$11,000 times 37, which is consistent with their being awarded
37 times the sum of $6,000 (consistent with the awards to the
other tenants) and the “[a]dditional civil penalty of $5,000” under
SMMC part 4.56.040.
The court concluded that such an award was excessive
because “[t]here was no evidence offered of a continuing violation
of the statute and ordinance or that there was an ongoing daily
violation for the two time[ ]periods, even if there was continuing
impact from [d]efendants’ wrongful conduct.” The court also
concluded that the tenants “recovered actual damages based on
the same conduct they asserted was based on harassment (by
way of conduct that was the basis for other causes of action[]).”
The tenants argue the court’s finding was error because
there was “substantial evidence of ongoing and wholly
unnecessary construction that rendered the property
uninhabitable for over four years.” This argument fails because
SMMC parts 4.56.020 and 4.56.040 together impose liability for
specific instances of conduct, not ongoing conditions resulting
from that conduct. Substantial evidence supports the trial court’s
conclusion that the evidence adduced at trial did not show that
defendants engaged in acts of “bad faith” conduct under SMMC
part 4.56.020 or “menacing conduct” under Civil Code section
25 Lackey turned 65 in 2017.
63
1940.2, subdivision (a)(3) on each and every day of the
construction periods.26
Substantial evidence also supports the trial court’s finding
that the tenants’ recovery of damages under SMMC part 4.56.040
duplicated the damages they recovered under other claims. (See
Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158 [a plaintiff “is
not entitled to more than a single recovery for each distinct item
of compensable damage supported by the evidence”].) One basis
for recovery under the ordinance was “[i]nterfere[nce] with a
tenant’s right to quiet use and enjoyment of a rental housing
unit”27 (SMMC, pt. 4.56.020, subd. (j)), and damages awarded
under this theory would duplicate whatever damages the tenants
recovered for discomfort and annoyance under their nuisance
claim or overlap with the amounts they recovered for emotional
distress under their other claims, such as negligence.
26 The cases the tenants rely upon are inapposite. In both
People v. Braum (2020) 49 Cal.App.5th 342, 350, footnote 11, 354
and City and County of San Francisco v. Sainez (2000) 77
Cal.App.4th 1302, 1308, 1310, the trial courts imposed daily civil
penalties on the defendants based on ordinances which expressly
provided for daily penalties. In People v. Overstock.com. Inc.
(2017) 12 Cal.App.5th 1064, the trial court imposed daily civil
penalties for the defendant’s use of untrue and misleading
advertising statements on its website based on its finding that
separate violations occurred every day. (Id. at pp. 1074, 1087-
1088; see id. at p. 1088 [“the offending practices were numerous
and persistent in that they occurred daily, on thousands of
product pages”].)
27 This was one of the two bases for liability under SMMC
part 4.56.040 the tenants focused on in their closing argument.
64
3. The new trial order complied with the requirements of
section 657
The tenants contend we must reverse because the court’s
new trial order failed to provide the information required by
section 657 concerning the reasons for the order. We disagree.
“When a new trial is granted, on all or part of the issues,
the court shall specify the ground or grounds upon which it is
granted and the court’s reason or reasons for granting the new
trial upon each ground stated.” (§ 657.) “ ‘The statement of
“reasons” . . . should be specific enough to facilitate appellate
review and avoid any need for the appellate court to rely on
inference or speculation.’ [Citation.] ‘ “[T]he trial judge is not
necessarily required to cite page and line of the record, or discuss
the testimony of particular witnesses,” nor need he [or she]
undertake “a discussion of the weight to be given, and the
inferences to be drawn from each item of evidence supporting, or
impeaching, the judgment,” ’ but the ‘trial judge [is required] to
briefly identify the deficiencies he [or she] finds in “the evidence”
or “the record” or [citation] “the proof”—rather than merely in
“the issues” or “the ultimate facts.” ’ ” (King v. U.S. Bank
National Assn. (2020) 53 Cal.App.5th 675, 716.)
The new trial order satisfies this standard. The order
contained a lengthy analysis which separately addressed each of
the court’s reasons for granting a new trial and thoroughly
articulated the legal and evidentiary bases for those reasons
sufficient to facilitate appellate review. The tenants assert, “the
court did not set forth witnesses the court believed or disbelieved,
what testimony it disregarded or the value of any impeachment,”
but such specific evidentiary issues were not implicated in the
court’s reasons for granting a new trial. We reject the tenants’
65
unsupported assertion that the trial court failed to explain why it
found the evidence insufficient to support damages; the order
adequately explains the court’s reasoning.
Lastly, the tenants contend that the trial court did not
adequately explain how it arrived at the reduced damages it
incorporated into the remittitur, but this does not affect the
adequacy of the court’s order granting a new trial. (Schelbauer v.
Butler Manufacturing Co. (1984) 35 Cal.3d 442, 455 [“[t]he
invalidation of the conditional remittitur does not . . . invalidate
the trial court’s [new trial] order”].)
D. Zohoury’s Appeal on Damages
Zohoury, SBZ, and SIDMA contend that we should reverse
the amended judgment as to them and order a new trial on
damages because the amended judgment is inconsistent with the
trial court’s new trial order in that it includes elements of
damage which the trial court had ruled were improper.28
As authorized by section 662.5, subdivision (a)(2), the trial
court made its new trial order subject to the condition that the
motion would be denied if the tenants consented to an amended
judgment in a reduced amount which the court independently
determined was “fair and reasonable.” As stated in the order,
“the total amount of [the amended judgment would be] $9
million, as against Zohoury and Rahimi, jointly and severally, to
be divided between the different [p]laintiffs in the same
proportion as the [original] judgment, and in the total amount of
28 Rahimi also challenges the damages awarded in the trial
court’s amended judgment. His arguments are moot in light of
our conclusions that Rahimi is entitled to judgment on several
claims and a new trial on the remaining claims.
66
$4.501 million, as against SBZ and SIDMA, jointly and severally,
to be divided between the different [p]laintiffs in the same
proportion as the [original] judgment.”
As relevant here, the court’s order explained that the
tenants were entitled to the same amount of noneconomic
damages as included in the original judgment and defendants
were liable for punitive damages. It further explained, “Even if
civil penalties were still allowed, the punitive damages would
have to reflect that it was not for the conduct that was already
the subject of penalties. Plaintiffs cannot recover statutory
damages as well as actual damages for the same conduct covered
by the SMMC. . . . [I]njury from unlawful intent to force tenants
to vacate cannot be sought as a civil penalty and as harassment
as statutory damages.”
As to Zohoury, SBZ, and SIDMA, the court eventually
entered an amended judgment which awarded the tenants a total
of $4.5 million as “[c]ompensatory [d]amages and [p]enalties”
against the defendants jointly and severally, as well as punitive
damages of $1,606,143 against Zohoury and $500 each against
SBZ and SIDMA.29
1. Applicable legal principles and standard of review
A court exercising its authority under section 662.5,
subdivision (a)(2) “acts as an independent trier of fact.” (Bullock
v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 688.)
“ ‘[W]here the trial court has required a remission as a condition
29 Correcting its error in the new trial order, the trial court
made defendants’ liability for punitive damages severable; the
punitive damages were apportioned in equal shares among the
tenants.
67
to denying a new trial “a verdict is reviewed on appeal as if it had
been returned in the first instance by the jury in the reduced
amount.” ’ ” (West v. Johnson & Johnson Products, Inc. (1985)
174 Cal.App.3d 831, 877.)
2. Analysis
Zohoury, SBZ, and SIDMA contend that the amended
judgment is inconsistent with the trial court’s reasons for
granting a new trial. We disagree.
The trial court ruled as follows: the tenants could not
recover damages for relocation benefits under SMMC part
4.36.100; the damages awarded for tenant harassment under
SMMC part 4.56.040 and the civil penalties awarded under Civil
Code section 1940.2 were excessive; the tenants could not recover
both statutory damages under SMMC part 4.56.040 and damages
under other claims “based on the same conduct”; punitive
damages “overlapped” with the civil penalties awarded under
Civil Code section 1940.2 and SMMC part 4.56.040 (for those
tenants aged 65 or older), and to the extent the punitive damages
and penalties were based on the same conduct the tenants could
not recover both.
Zohoury, SBZ, and SIDMA contend that the trial court
must have included in the amended judgment some amount for
civil penalties or “a combination of actual and statutory
damages,” which was inconsistent with the court’s new trial
order. We agree as a matter of arithmetic that the amended
judgment necessarily includes some civil penalties, a combination
68
of actual and statutory damages, or both.30 We disagree,
however, that this is inconsistent with the new trial order. The
order permitted penalties under Civil Code section 1940.2 and
SMMC part 4.56.040 (for those tenants aged 65 or over) in
addition to punitive damages as long as the awards were based
on different conduct.31 Similarly, the order permitted both an
award of statutory damages under SMMC part 4.56.040 and
actual damages as long as the two types of damages were not
“based on the same conduct.”
The trial court could have reasonably concluded that the
conduct supporting the penalties did not completely overlap with
the conduct supporting punitive damages because the applicable
standards differ. Punitive damages must be supported by clear
and convincing evidence of malice or oppression. (Civ. Code,
§ 3294, subds. (a), (c)(1) & (2).) In contrast, penalties are
30 As Zohoury points out, the amended judgment was to
include $1,525,000 in noneconomic damages (the same amount as
in the original judgment), which means that the total amount of
damages awarded not including noneconomic and punitive
damages was $2,975,000. The original judgment included a
lower total amount ($2,000,939) for “past economic loss,” so some
damages included in the original judgment under the
“[p]enalties” category must have been included in the amended
judgment since the original judgment included only the four
categories: “[p]enalties,” “past economic loss,” noneconomic, and
punitive.
31 The trial court held that civil penalties under Civil Code
section 1940.2 were to be determined by the court, not by the
jury. Thus, in calculating damages for the amended judgment we
infer the trial court determined itself what civil penalties should
be included under the statute.
69
recoverable under Civil Code section 1940.2, subdivision (a)(3) for
“menacing conduct” to “influenc[e] a tenant to vacate,” and under
SMMC part 4.56.040 for various types of “bad faith” conduct,
including “[i]nfluenc[ing] or attempt[ing] to influence a tenant to
vacate a rental housing unit through fraud, intimidation or
coercion” (id., pt. 4.56.020, subd. (f)) and “[i]nterfer[ing] with a
tenant’s right to quiet use and enjoyment of a rental housing
unit” (id., subd. (j)). Thus, the awards of punitive damages could
have been at least partially based on different conduct than were
the awards under Civil Code section 1940.2 and SMMC part
4.56.040.
The court also could have reasonably concluded that the
conduct underlying the statutory damages did not completely
overlap with the conduct supporting actual damages under other
claims. For example, statutory damages awarded for
“[i]nfluenc[ing] or attempt[ing] to influence a tenant to vacate a
rental housing unit through fraud, intimidation or coercion”
(SMMC, pt. 4.56.020, subd. (f)) would not necessarily be based on
the same conduct supporting actual damages under other claims.
Zohoury, SBZ, and SIDMA also contend “it is obvious that
the new compensatory damages award is likely to include some
undetermined amount of improper relocation expenses.” We
disagree. The amount included in the amended judgment for
“[c]ompensatory [d]amages and [p]enalties” is fully supported by
damages recoverable under the other theories the trial court
concluded were valid, and nothing in the amended judgment
suggests the trial court included a recovery for relocation benefits
despite finding it was contrary to law. Defendants fail to show
70
that the amended judgment must have included relocation
benefits.32
Defendants’ reliance on Bevis v. Terrace View Partners, LP,
supra, 33 Cal.App.5th 230 is misplaced. Bevis held that a
judgment must be reversed where a portion of an unsegregated
award is clearly for an improper form of compensatory damages
(id. at p. 262), but Zohoury, SBZ, and SIDMA have not shown the
amended judgment includes any improper damages.
Lastly, Zohoury, SBZ, and SIDMA argue that the amount
of punitive damages in the amended judgment must be re-
evaluated if we conclude the court included improper
compensatory damages in the amended judgment. Because the
trial court did not err in the amount of compensatory damages it
included in the amended judgment, this argument fails.
32 Zohoury contends it is unclear from the trial court’s new
trial order how the $9 million total award was broken down into
compensatory and punitive damages. Not so. The order set forth
different amounts of total damages as to Zohoury/Rahimi and
SBZ/SIDMA, and the difference could only be explained by
different punitive damage awards. In addition, the punitive
damage awards against SBZ and SIDMA were to remain the
same. This means the compensatory damages could be calculated
at $4.5 million by subtracting the punitive damages against SBZ
and SIDMA from the total award against them. The court
acknowledged that its order had included incorrect punitive
damages awards against SBZ and SIDMA. The awards should
have been $3,500 each but the order reflected only $500 each;
ultimately, the court left the lower amounts in the amended
judgment.
71
DISPOSITION
The amended judgment is affirmed as to Zohoury, SBZ, and
SIDMA. The trial court’s order denying Rahimi’s motion for
JNOV is reversed as to the tenants’ claims for breach of lease,
tortious breach of the warranty of habitability, violation of Civil
Code section 1940.2, violation of SMMC part 4.36.100, IIED, and
punitive damages; the trial court is instructed to grant the
motion as to those claims. The JNOV order in all other respects
is affirmed. Judgment against Rahimi on the remaining claims
against him as well as for attorney’s fees and costs as against him
is reversed for a new trial. Each party is to bear its own costs in
this appeal.
NOT TO BE PUBLISHED
WEINGART, J.
We concur:
BENDIX, Acting P. J.
M. KIM, J.
72
APPENDIX
BOARD FINDINGS AS TO WHICH ISSUE PRECLUSION
APPLIED
1. “Testing for and remediation of asbestos, lead and mold
were required at various times as part of the construction.”
2. “Despite the major work starting in January 2014, the
owner did not test for asbestos until June 23, 2014 and the Air
Quality Management District ordered the owner to stop work and
hire a certified asbestos consultant to test for asbestos in Units 2,
3, 5, 6, 10, 12 and any other units in which renovations had taken
place.”
3. “The asbestos was not cleared until July 11, 2014 and the
disturbing of asbestos was caused by unnecessary upgrades to
the vacant units and common areas rather than by necessary
repairs or maintenance.”
4. “The tenants were exposed to asbestos that was not
properly contained, handled or disposed of and put the tenants at
risk of respiratory and other ailments.”
5. “The tenants’ exposure to hazardous levels of asbestos
resulted from the owner’s failure to obtain permits to test for
asbestos and to use safe work practices.”
6. “The tenants’ exposure to asbestos significantly impacted
the habitability of their units and interfered with the occupancy
of their units.
7. “The owner did not conduct testing for the presence of lead
until July 1, 2014.”
8. “The owner’s expert . . . tested every unit and the common
areas, both interior and exterior. The dust [wipe] survey found
. . . ‘dangerous levels of lead dust’ . . . in various units and
common areas and recommended remediation and
decontamination. The lead bulk survey also found lead-based
paint and dangerous levels of lead-bearing substances in various
units and common areas and recommended remediation and
decontamination.”
9. “Lead testing was done again on May 28, 2015 by the [Los
Angeles] County Public Health Department [(County Health)]
based on a complaint by tenants. Dust samples were again found
to contain hazardous levels of lead although no hazardous levels
were found in soil or deteriorated paint. Dust hazards were
found in vacant Unit 2 and in the first floor hallway. After
cleaning, the Unit 2 interior . . . floor . . . failed clearance and the
owner was ordered to clean it again. Clearance was passed the
second time and the complaint was closed on August 13, 2015.”
10. “In September[] 2015 the county received another
complaint about unsafe lead work practices causing extensive
dust in the building. An inspector observed visible dust in the
common areas and took samples from the common areas and
from all the occupied units. Testing showed dust hazards above
the regulatory limit in Unit 16.”
11. “ ‘County Health found that renovation activities are
conducted unsafely without the required containment and worker
protection and occupant protection[]’ . . . . They required Mr.
Zohoury to attend an office hearing, which is part of a progressive
enforcement process that can ultimately lead to criminal
charges.”
2
12. “John Guerrero of Building and Safety found construction
work had been started without any testing for lead. Improper
practices had been followed. The owner would have needed
clearance from County Health before demolishing the vacant
units and peeling the surface off the hallway walls.”
13. “The owner’s failure to test for lead and to use lead-safe
work practices, LSWP, put tenants at risk. The contractor did
not use LSWP to remove or dispose of the paint that was
disturbed in the vacant units and the hallways prior to testing.”
14. “The negative impacts of the lead dust was significant. The
dust put the adult tenants at risk of respiratory and other
ailments. The lead dust was caused by unnecessary upgrades to
the vacant units and common areas rather than by necessary
repairs or maintenance. The tenants’ exposure to hazardous
levels of lead dust resulted from the owner’s failure to obtain
permits, to test for lead and to use lead-safe work practices.”
15. “The tenants’ exposure to lead dust significantly impacted
the habitability of their units and interfered with the occupancy
of their units.”
16. “The health effects from the construction significantly
impacted the habitability of their units and interfered with the
occupancy of their units.”
17. “The negative impact of noise and vibration on the tenants
was significant, affecting their ability to sleep, concentrate and
work and sometimes driving them out of their units. The noise
and vibrations significantly impacted the habitability of their
units and interfered with occupancy of their units.”
3
18. “The dust at the property was primarily generated by the
work in the common area hallways and by the demolition of the
eight vacant units.”
19. “The new limestone floors in the hallways are higher than
the floors inside the tenants’ units. No threshold or other edging
had been installed to bridge this gap. As a result, construction
dust from the hallways blows under their doors and into their
units.”
20. “The dust and odors significantly affected the tenants’
ability to breathe and spend time in their units and negatively
affected their health. The dust impacted and continued to impact
the tenants from June 30, 2014 through the completion date of
the construction.”
4