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Daniel J. Bramzon, State Bar No. 214324

R. Paul Katrinak, State Bar No. 164057

BASTA, Inc.1

2500 Wilshire Blvd., Suite 1111

Los Angeles, California 90057

Telephone: (213) 736-5050

Facsimile: (213) 736-5055

Attorneys for Plaintiffs

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iOS ANGELES SUPERIOR COURT

MAY.1 1 2011

JahnAXlarku, j-^c^uuve Officer/Clerk

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.Deputy

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

SERGIO GONZALEZ, an individual,

and ALL OTHERS SIMILARLY

SITUATED,

Plaintiffs,

v.

JP MORGAN CHASE BANK, NATIONAL

ASSOCIATION, and DOES 1 through

10,000,

Defendants.

LASCCaseN|C4 6l4 04

CLASS ACTION

COMPLAINT FOR:

1. FAILURE TO PAY RELOCATION;

2. VIOLATION OF BUSINESS AND

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PROFESSIONS CODE, §17200; AND

NEGLIGENCE

[JURY TRIAL DEMANDED]

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Plaintiff, on behalf of himself and all others similarly situated (collectively, "Tenants" or

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'Plaintiffs"), alleges as follows:

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1.

NATURE OF THE A<ITTON

This case arises from a clash between the rent control laws established to protect

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24 tenants in the City of Los Angeles and Defendant JP Morgan Chase Bank, National AssgciatroijTsS .t

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(hereinafter "JP Morgan Chase Bank") "evict and sell" business model being applied to its?

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foreclosed properties. Incredibly, every bank that obtains rental property through foreclosure -o

 

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BASTA, Inc., is a California public benefit corporation and federally registered non-profit organization tha^g

28 advocates fortenants' rights and fights to eliminate substandard housing.

COMPLAINT

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employs the same illegal tactics in violation of the Los Angeles Rent Stabilization Ordinance

("LARSO") as set forth in this Complaint and as evidenced in the multiple Complaints against other

banksthat have been concurrently filed withthis Complaint.

2. JP Morgan Chase Bank's "evict and sell" business model, in summary, goes as

follows: When JP Morgan Chase Bank becomes the owner of a foreclosed property, JP Morgan

Chase Bankchoosesto evict whatever tenantsresideat the property in order to enhance the

property's sale prospects. JP Morgan Chase Bank has no intent in becoming a landlord of the

property or to comply with the law asit concerns the innocent tenants residing on the property.

3. In furtherance of JP Morgan Chase Bank's scheme, JP Morgan Chase Bank uses

realtors to sell the properties and "handle" the tenants prior to eviction. The realtors only get paid if

the property is sold, so the realtors do everything possible to force the tenants off the property. They

12 have no incentiveor desire to complywith LARSOand help the respective foreclosing bank manage

13 the rental property as a landlord.

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4. When JP Morgan Chase Bank cannot force tenants to vacate properties by deception

and intimidation, JP Morgan Chase Bank resorts to high volume, "evictionmill" attorneys to handle

16 the preparation and service of eviction notices andthe filing of Unlawful Detainer complaints. The

17 attorneys' job is not difficult and is to illegally force the tenantoff the property in violation of

18 LARSO by serving a notice to quit, wait the notice period (whether 30, 60, or 90 days), and then file

19 a Judicial Council form unlawful detainer lawsuit. Under general State law, no reason is required

20 for an eviction as long as the bank provides the proper notice period. As far as JP Morgan Chase

21 Bank is concerned, the "evict and sell" business model is efficient, quick, and cheap.

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5. The "evict and sell" business model, though, is not legal in the City of Los Angeles,

23 where an entire body of rent control laws protecting tenants - LARSO, protects tenants and

24 promotes stable communities. Evictions must be supported by "good cause," rather than at the

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25 owner's whim.

Moreover, landlords are required to pay tenants fixed relocation assistance when

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they intend on taking the rental unit off the market, which is the intent of all the banks, including JP

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Morgan Chase Bank, when foreclosing upon the subject properties, especially when the tenant

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resides in an "illegal unit."

COMPLAINT

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Previously, LARSO applied only to multi-family dwellings, but in 2008, in the face

2 || of this continuing foreclosure crisis impacting innocent tenants, the Los Angeles City Council

3 || expanded the applicability of the "good cause" eviction requirements to basically all rental

4| properties, including single family homes. LAMC, §49.90, et sea, Abank foreclosure of a

5 landlord's property is not listed by LARSO as a "good cause" ground for eviction. The City Council

6 attempted to address the problem of tenants being victimized by foreclosing banks by bringing

7 virtually all tenants in Los Angeles within the protections of LARSO. Notwithstanding the "good

8Icause" eviction requirement of LARSO or its expansion by the Los Angeles City Council, the banks,

9 Iincluding JP Morgan Chase Bank, have continued business as usual. The Defendants continue

10 1applying the "evict and sell" business model while ignoring the tenant protections under the City of

11 | Los Angeles' rent control laws.

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Many ofthese tenants that are being subjected to JP Morgan Chase Bank's "evict and

13 sell" model are the poorest of the poor and live in intolerable conditions. Also, they do not know

14 their rights or cannot defend themselves against these multi-billion dollar institutions bent on

15 throwing them out of their homes.

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When the banks, including JP Morgan Chase Bank, become the landlords, they

17 continue to further neglect the tenants residing on their properties in order to pursue their "evict and

18 sell" business model. The banksnever intended to be a landlord and the bank does become a

19 I landlord through a foreclosure, the banks want to rid themselves of the obligation as soon as

20 1possible. However, in order to facilitate the sale of the property, the property must be empty of the

21 rent controlled tenants that this lawsuit is indeed to protect. The banks employ various illegal means

22 I to force the tenants from their homes. Some of the illegal tactics employed by banks including

23 I peppering the tenants with illegal notices, threatening the tenants to force them from their homes,

24 threatening to pursue eviction actions in order to force tenants from their homes and employing

25 eviction actions in violation of LARSO to evict tenants from their homes. To further expedite the

s vacating of the units, JP Morgan Chase Bank generally refuses to undertake the necessary repairs or

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\ 27 Hcuts the tenant's utilities.

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COMPLAINT

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9. Within the broader group of Los Angeles tenants falling victim to the JP Morgan

Chase Bank's "evict and sell" model, there is a subset ofthe poorest, often minority residents of Los

Angeles living in basements, attics, garages, storage rooms, in corners ofa house that have been

haphazardly separated by drywall - all ofwhich have been illegally converted into living quarters

with varied levels of bathroom, kitchen, and entrance. These converted spaces share the same basis

of illegality in that these now-dwelling units have been constructed without permits, without the

watchful eye of local regulatory agencies, and not in conformity with the laws intended to protect the

illegal unit's human habitants. Thus, these illegal units have not been granted a Certificate of

Occupancy issued by the City of Los Angeles Department of Building and Safety ("LADBS").

10. Because of the inherent danger of these illegal units, the City of Los Angeles deems

11 them "unapproved" for occupancy. Inother words, their existence for the purpose of human

12 habitation is illegal. In such situations, landlords are required to either (a) sufficiently remediate the

 

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illegal unit soas to obtain a Certificate of Occupancy and make it habitable, which the banks

 

steadfastly refuse to do, or (b) relocate the tenant and

pay the tenant a relocation fee fixed by

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LARSO.

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Notwithstanding JP Morgan Chase Bank's legal obligations as landlords under rent

17 control, JP Morgan Chase Bank has instead chosen to steadfastly continue with its "evictandsell"

18 model without paying the tenants relocation fees as mandated by LARSO. In addition, in order to

19 force the tenants from their homes, the banks, including JP Morgan Chase Bank, "abandon" the

20 tenants and all responsibility for the property. The banks, includingJP Morgan Chase Bank, neither

21 repair dilapidations or pay utilities thereby leaving the tenants to fend for themselves and live in

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22 inhumane conditions.

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12. The tenantsbeing subjected to the banks' blatant LARSO violations are, as one may

24 guess, the poorest ofthe poor and most disenfranchised residents ofthe community - persons who

25 are in most need of protection. Banks, such as JP Morgan Chase Bank, however, treat these tenants

26 that are protectedby LARSO like any other normal foreclosure and apply their "evict and sell"

27 business model as usual, which they cannot do. This lawsuit hopes to bring JP Morgan Chase Bank

28 into compliance with its legal obligations under LARSO.

COMPLAINT

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JURISDICTION

13. The Court has jurisdiction of this matter as the property at issue iswithin the City of

Los Angeles, State

of California. In addition, JP Morgan Chase Bank waived any right to remove

this action to Federal Court, in among other ways, by proceeding with multiple Unlawful Detainer

actions in StateCourt against members ofthe class, including Plaintiffherein.

THE PARTIES

A. Plaintiffs and the Class Members' Standing

14. The Plaintiffand every member ofthe classhas standing because they livein a rental

unit subject to LARSO that was obtained by JP Morgan Chase Bank through foreclosure. JP

Morgan Chase Bank is violating its legal obligations as a landlord under LARSO. JP Morgan Chase

Bankhas attempted and is attempting to evict tenants based solelyon obtaining the property through

12 foreclosure (e.g., 3/60/90 day notices to quit), which is not a legal basis to evict tenantsin Los

 

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13 Angeles. Finally,if the banks, includingJP Bank, desire to evict the tenants for purposes of taking

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the rental units off the market, which appears to be the bank's motivation, then the banks are

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required to pay the tenants relocation under LARSO, which the banks also refuse to do.

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Among other things, the Court should enjoin JP Morgan Chase Bank from its

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continuing pattern and practice of violating LARSO, by among other things, (a) evicting tenants

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based solely on the fact that JP Morgan Chase Bank obtained possession ofthe property through

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foreclosure, (b) giving improper notices to "trick" the tenants into vacating the property in violation

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of LARSO, (c) failing to pay relocation to tenants entitled to relocation, (d) filing and pursuing

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Unlawful Detainer actions without paying relocation, (e) illegally intimidating and harassing tenants,

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and (f) failing to comply with local laws and ordinances.

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Plaintiffs' proposed injunction will force JP Morgan Chase Bank to comply with its

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legal obligations under LARSO.

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B.

Plaintiff Class Representative

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Sergio Gonzalez resides at 3608 Vi Adair Street, Los Angeles, CA 90011. Sergio

27 Gonzalez is a male tenant living in a dwelling unit that is owned, managed, and/or otherwise

28 administered or operated by Defendant JP Morgan Chase Bank in the City of Los Angeles. Plaintiff

COMPLAINT

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1 is a resident ofthe City and County ofLos Angeles. The residence Sergio Gonzalez lives in was

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constructed before October 1,1978. Therefore, the unit is subject to LARSO.

18. Sergio Gonzalez's unit is also an illegal unit that has been cited by the City of Los

4 Angeles as an illegal unit. The illegal units involved in this matter concern dwelling units that are

5 unapproved for occupancy. Basically, the issue is one of what the current use ofa multi-family

6 dwelling structure is and what the authorized use is. Many ofthe units involved concern structures

7 thatwere builtbefore Certificates of Occupancy were required; however, there are other documents

8 maintained by the City, which are

a matter of public record and which establish what the

authorized

9 useofthe dwelling structure is and how many dwelling units are authorized to be within the

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10 structure.

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19. Among other documents, the permits associated with a structure would establish

12 what the authorizeduse of a structureis. There were buildingpermits required, and saved by the

13 City, going back decades before the Certificates of Occupancy were required. These old building

14 permits describe the number of dwelling units authorized in a structure and ona particular piece of

15 property. In addition, they also reveal when additional dwelling units are added and authorized and

16 which are not.

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20. The documentation maintained by the City, Certificatesof Occupancy and building

18 permits will establish the number of dwelling units authorized on a particularproperty.

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19 Additionally, JP Morgan Chase Bank's own records would establish the number dwelling units on

20 J the foreclosed property when JP Morgan Chase Bank gained possession. The practice and

21 procedure employed by all Banks universally is to have a realtor inspect the Property being

22 foreclosed upon both pre- and post-foreclosure. The realtor then reports back to the Bank. This

23 information is then entered in the Bank's computer system. Also, sometimes the Banks send

24 "Surveys" or "Questionnaires" to the tenants on the Property owned by the Bank and many tenants

25 fill out the surveys and return them to the Banks and the information is imputed into the Bank's

26 computer system. Once a Bank determines that there are tenants living on a Property obtained by

27 the Bank, the Bank then refers the Property to an eviction attorney to remove the tenants from the

28 Property.

COMPLAINT

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Defendant Financial Institution

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Defendant JP Morgan

Chase Bank National Trust Company ("JP Morgan Chase

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Bank") is a National Banking Association, that, based upon information and belief, conducts

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substantial business in the Cityand County of Los Angeles, including purchasing, owning,

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managing, and/or otherwise administering or operating real property in the City of Los Angeles. JP

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Morgan Chase Bank, through the foreclosure , has become the ownerand, in turn, the landlord of

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PlaintiffSergio Gonzalez, as wellas all class members who are tenants livingin rent controlled

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dwelling units and "illegal units" owned and/or managed by JP Morgan Chase Bank. JP Morgan

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Chase Bank is legally authorized to act, and required to act, as the landlord ofthe property. JP

10 Morgan Chase Bank is responsible for repairs and maintenance ofthe property and is the entity

11 named as the Plaintiff in legal proceedings as the property owner with the right to evict a given

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12 tenant.

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22. The true names and capacities of Defendants sued as Does 1 through 1000 are

14 unknown to the Plaintiffs at this time. Plaintiffs therefore sue said Defendants by such fictitious

15 names. Plaintiffs will amend this action to allege the true names and capacities of Does 1 through

16 10,000 when ascertained. Nevertheless, the Plaintiffs are informed and believe, and based thereon

17 allege, that each ofthe Doe Defendants, jointly and severally, are in some manner responsible for the

18 wrongdoing and damages alleged herein.

Defendants JP Morgan Chase Bank and Does 1 through

19 10,000 will sometimes be collectively referred to herein as. "JP Morgan Chase Bank" or

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20 "Defendants."

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23. Plaintiffs are informed and believe, and based thereon allege, that each Defendant

22 was the employee, agent, servant, partner, beneficiary, executor, fictitious business name,

23 administrator, member, and/or joint venturer of each ofthe remaining Defendants and was acting

24 within the scope of said employment, agency, trust relationship, beneficiary status, service,

25 partnership, membership, fictitious business name, and/or joint venture. Plaintiffs are further

26 informed and believe that each act on the part of each defendant was substantially ratified by each of

27 the remaining Defendants.

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COMPLAINT

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24. JP Morgan Chase Bank employs the same tactics and strategies employed by all the

Banks concerning attempting to remove tenants from rent controlled properties. Counsel for the

Plaintiffs have been involved in hundreds of Unlawful Detainer actions and every single financial

institution employs the sametacticsin removing tenants.

25. The first step in the process is that the Bank sends a computer notification to a realtor

assigning the foreclosed property to the realtor. Many Banks use the same nationwide realtors, such

as Coldwell Banker. This notice is generated by a shared computer system. Some ofthe Banks'

foreclosure programs and computer systems have been set up by a nationwide foreclosure processing

company and foreclosure company called First Services Corporation, with most ofits operations and

related entitiesout of Dallas, Texas. There are no oral communications, just electronic

communications.

26. The next step in the process is that itis the policy of every Bank that the realtor visit

13 the property and determine if the property is occupied. Normally, there is no contact with the

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occupants by the realtor, justa determination isto be made that the property is occupied.

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The realtor is then required to report backto the Bank, by entering comments into the

16 shared computer system that the property isoccupied.

Ifthe realtor does obtain information ofthe

17 occupants ofthe property, then that information is also entered into the shared computer system to

18 the Bank. No communications are oral. All communications are by e-mail or by way of typing

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comments into a shared computer system. Substantial testimony has been provided of many realtors

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and not one has ever testified about speakingto a live person at any Bank.

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Afterthe realtor reports backto the Bank that the property is occupied, oneof a

22 handful of eviction firms are assigned to remove the tenantsfrom the property. The first

23 communication that most tenants receive, if any, is a three-day notice to the former owner, who does

24 not reside on the property.

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29. There are no communications with the tenants about their tenancies, if any

26 maintenance is needed, or to collect the rent. In fact, as the realtor only gets paid if the propertyis

27 sold, the realtors normally refuse to accept any rent and employ various tactics to remove the tenants

28 from the property. Someof those tactics include, but are not limited to, refusing to perform any

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COMPLAINT

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maintenance, refusing to pay the utilities that the former owner was paying which was included in

rent.

30. Subsequent to the filing of this class action, last year, a new entity appeared

concerning tenants in the City of Los Angeles called Tenant Access. Another shell company of First

Services Corporation outof Dallas, Texas. This company allegedly provides services to tenants on

properties concerning maintenance issues in Los Angeles out of Dallas, Texas. Thecompany

appears to be yet another subterfuge by the Banks to feign compliance with local laws and

ordinances while attempting to remove tenants from properties so that theycan be sold.

31. All ofthe Banks, includingJP MorganChase Bank, employ the same realtors, same

computer programs, same policies and procedures concerning attempting to remove tenants from

11 properties. They also employ the same handful of eviction firms as well. Thecoordination of

12 tactics occurs due to the factthat all the Banks employthe same entities for purposes of disposing of

13 tenants on properties, so the properties can be sold bythe realtors and the realtors can get paid.

 

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FACTUAL BACKGROUND

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Plaintiff SergioGonzalez lives at 3608 V* Adair Street, Los Angeles, CA 90011. He

 

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rentedthe property from September2008 until today, and paid rent until June 2009. However, the

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unit does not have a door covering the front entrance to the residence, and is currently covered by a

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sheet of plastic. The unit does not have functioning heat or hot water, there are vermin on the

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premises. These conditions continue to today. Sergio Gonzalez lives in a rental unit subject to

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LARSO, which has been cited by the City of Los Angeles as an illegal unit.

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33.

On or about April 28,2009, JP Morgan Chase Bank obtained the property where

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Sergio Gonzalez resides through a foreclosure. JP Morgan Chase Bank became Sergio Gonzalez's

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landlord. When JP Morgan Chase Bank took over as Sergio Gonzalez's landlord, JP Morgan Chase

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Bank ceased maintaining the property.

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JP Morgan Chase Bank began demanding increased rent from Sergio Gonzalez

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starting June 15, 2009. Defendant refused to pay this increased rent. JP Morgan Chase Bank was

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not, and is not, legally entitled to collect rent from Sergio Gonzalez, because Sergio Gonzalez lives

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COMPLAINT

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35. Shortly afterward, JP Morgan Chase Bank initiated Unlawful Detainer proceedings to

remove Sergio Gonzalez from his home. Attached hereto as Exhibit "A" isa true and correct copy

of JP Morgan Chase Bank National Association v. Mr. Gonzalez et. al„ LASC Case No. 09U09308

Complaint filed on July 2,2009, against Sergio Gonzalez.

36. JP Morgan Chase Bank did not have a permitted cause for eviction under LAMC.

Attached hereto as Exhibit "B" is a trueand correct copy of Sergio Gonzalez's Answer in JP

Morgan Chase BankNational Associationv. Mr. Gonzalezet. al., LASC Case No. 09U09308 filed

on July 9,2009.

37. Throughout the entire time since JP Morgan Chase Bank took over as the landlord of

10 Sergio Gonzalez, JP Morgan Chase Bank has repeatedly continued to harass and intimidate Sergio

11 Gonzalez to vacate his home. JP Morgan Chase Bank has subjected Sergio Gonzalez and his family

12 to notices which made no senseor had no legal basis,threats,-as opposed to either bringing his

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"illegal unit" to Code or paying Sergio Gonzalez to relocate from his home as required by LARSO.

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The conduct of JP Morgan Chase Bank toward Sergio Gonzalez is typical ofthe

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15 conduct of JP Morgan Chase Bank toward tenants in propertiessubject to LARSO throughout Los

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CLASS ACTION ALLEGATIONS

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A.

Class Allegations for the Class Generally

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39.

Pursuant to Section 382 ofthe Code of Civil Procedure, Plaintiff brings this action on

20 behalf of himself and a similarly situated class defined as: any person who is, or within the last

21 three years has been, a tenant in any dwelling unit or residential dwelling structure in the City

22 of Los Angeles that is/was owned, managed, or otherwise administered or operated by the

23 Defendants (the "Class"). Excluded from the Class are the Defendants and their officers, affiliates,

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directors, members, employees, shareholders, independent contractors, onsite managers and

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supervisors, offsite managersand supervisors, real estate agents and brokers, other agentshowever

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denominated, and the immediate family members of any ofthe above.

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40. The members of the Class are sufficiently numerous that joinder of all members

28 would be unfeasible and not practicable. Although the Plaintiffs are presently unaware ofthe exact

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COMPLAINT

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number of Class members, the Defendants, basedon infonnationand belief,eitherown, manage, or

otherwise administer oroperate at least hundreds of relevant foreclosed properties inthe City of Los

Angeles. Based onlocal demographics and residential statistics, each foreclosed property shelters,

on average, approximately four persons. Thus, the Class contains hundreds, if not thousands, of

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people.

41. The Class is ascertainable and shares a well-defined community of interest in

questions of law and fact. Defendants infringed upon and violated, in similar fashion, the rights of

each Class member based upon Defendants' uniform conduct in the regularly practiced, unfair, and

unlawful circumvention ofthe rights intended to protect tenants underLARSO. Such questions of

10 law and fact include, but are not limited to:

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(a) Whether Defendants own, manage, or otherwise administer or operate

 

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dwelling units or residential dwelling structures on foreclosed properties rented to tenants

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who are protected by LARSO;

 

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Whether Defendants have, as policy and regular operating procedure,

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undertaken unfair and unlawful business practices in circumventing the rights granted to

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tenants under LARSO;

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(c)

Whether Defendants have, as policy and regular operating procedure,

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generally abused the judicial process to vacate foreclosed properties and rid themselves of

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tenants protected by LARSO (without proper payment of relocation fees);

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(d)

Whether Defendants have, as policy and regular operating procedure,

21 undertaken illicit tactics and business practices for the purpose of, in part, facilitating the sale

22 ofthe foreclosed properties and selling the rent-controlled, foreclosed properties at a higher

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sale price;2 and

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(e)

Whether Defendants' conduct was undertaken intentionally or negligently.

25 The Plaintiff suffered from the same general illicit tactics and "evict and sell" business model used

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26 by Defendants to circumvent the same rights applicable to the entire Class.

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2 Plaintiff has divided the broader victimized Class into Subclasses that correlate with the most common

28 means used by Defendants to circumvent LARSO and avoid their obligation to pay required relocation fees

to the displaced tenants. The relocation fees are required and fixed by municipal ordinance.

COMPLAINT

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42. Theclaims of the named Plaintiff are typical of the claims of all members ofthe

Class becausethe named Plaintiff is a tenant in a dwelling unit or residential dwelling structurein

the City of Los Angeles that is owned, managed, or otherwise administered or operated by the

Defendants and which was obtained by Defendants through a foreclosure. The Plaintiffhas been

victimized by the same illegal and unfair business practices uniformly applied by Defendants

throughout Los Angeles. In addition, thePlaintiff resides in a dwelling unit or residential dwelling

structure thatdoesnot havea Certificate of Occupancy (commonly known as an "illegal unit").

43. Plaintiff, as representative party, will fairly and adequately protect the interests of the

Class byvigorously pursuing the lawsuit through the Plaintiff's attorneys who are sufficiently skilled

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and experienced. The individually named Plaintiff has no interest antagonistic to those interests of

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other Class members.

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44.

Defendants have acted or refused to act on grounds that apply generally to the Class

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by systematically and as a business practice refusingto comply with local ordinances, such as

14 LARSO. More specifically, Defendants have abused process to vacate tenants protected by LARSO

 

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in order to remove these dwelling units from the rental market (in order to enhance a foreclosed

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property's marketability and value), but Defendants have clone so without first payingthe displaced

17 tenants the relocation fees as required and fixed by LARSO. The Defendants' common practice of

18 ignoring local housing ordinances designed to ensure the safety ofthe general public applies, by

19 definition, to all members ofthe Class. This common practice of ignoring local housing ordinances

20 is appropriate for injunctive and declaratory relief that, among other things, prohibits the Defendants

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from removing members ofthe Class from their homes altogether without a "good cause" as

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required by LARSO, or at a minimum, without paying relocation benefits to the displaced tenants as

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fixed by LARSO.

 

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45.

Common questions of law and fact applicable to the Class predominate over

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questions affecting only individual Class members. Those questions include, but are not limited to:

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(a)

Whether Defendants own, manage, or otherwise administer or operate

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dwelling units or residential dwelling structures on foreclosed properties rented to tenants

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COMPLAINT

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(b)

Whether Defendants have, as policy and regular operating procedure,

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undertaken unfair and unlawful business practices in circumventing the rights granted to

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tenants under LARSO;

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(c)

Whether Defendants have, as policy and regular operating procedure,

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generally abused the judicial process to vacate foreclosed properties and rid themselves of

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tenants protected by LARSO (without proper payment of relocation fees);

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(d)

Whether Defendants have, as policy and regular operating procedure,

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undertaken illicit tactics and business practices for the purpose of, in part, facilitating

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the sale ofthe foreclosed properties and selling the rent-controlled, foreclosed properties at a

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higher sale price; and

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(e) Whether, as a common and regular practice, Defendants have, through illicit

means (including Unlawful Detainer actions based on unauthorized and invalid notices),

generally avoided their obligation to pay relocation, fees to displaced tenants as required by

LARSO;

(f) Whether Defendants' conduct was undertaken intentionally or negligently;

(g) Whether Defendants should cease prosecuting all Unlawful Detainer actions

in the City of Los Angelespendingthe outcome of this litigation so as to prevent the

18 piecemeal litigationcurrently happening in the form of Unlawful Detaineractionsthat allow

19

20

21

22

23

the Defendants to take advantage of those members ofthe Class who cannot individually

obtain counsel; and

(h) Whether a Special Master should be appointed to approve - prior to service

thereof- any notices that Defendants wish to serveon a tenant in the Cityof Los Angeles.

46. This case can and should be concentrated in a single forum because all ofthe claims

24 arise from the laws of a single municipality, the Cityof Los Angeles. Further, the Federal court has

CD

01

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26

already issued instructions to file this action in State court.

47. There are no difficulties that will arise in managing this case as a class action. Notice

27 to membersofthe Class can be providedthrough Defendants' records, distributionof notices posted

28

13

COMPLAINT

1

at the properties that the Defendants own, manage, or otherwise administer or operate, and by

2

targeted publication (the cost of whichshould be properly imposed on Defendants).

3

48.

A class action is superior to other available methods for the fair and efficient

4

adjudication of this controversy for at least the following reasons:

5

(a)

Based upon information and belief, the case will require substantial

6

management and oversight by the Courtdue to the potential for an excessively large number

7

of Class members;

8

(b)

Based upon information and belief, the case will require substantial

9

management and ongoing oversight by the Court due to the necessary injunctive relief

10 requested by the Plaintiffs related to Defendants' illegal business practices;

II

(c) Based upon information and belief, the case will require substantial

12 management and oversight by the Court due to a multiplicity of inter-connected, related, and

13 affiliated entities that may be involved in the wrongs alleged, which the Defendants use as

<

3-

14 "fronts" and cover in an effort to avoid liability;

15

16

(d) Based upon information and belief, this action will promote an orderly and

expeditious administration and adjudication ofthe claims herein, foster economies of time,

17 effort, and resources, and ensure uniformity of decisions, especially with respect to

18 Defendants' uniform business practices that violate local laws;

19

(e) Based upon information and belief, the equitable relief sought should be

20 imposed on the Defendants consistently, and a class action is superior to individual actions

21 because a series of individual lawsuits would risk compelling the Defendants to meet

22 inconsistent standards of conduct;

23

(f) Based upon information and belief, handling this case as a class action will

24 potentially alleviate the heavy burden currently being imposed on the judicial districts where

25 City of Los Angeles Unlawful Detainers are being filed that should never have been filed in

S

26

27

the first place except for Defendants' illicit business practices; and

(g) Based upon information and belief, the unnamed members ofthe Class are

28 frightened of retributionfrom the Defendantsfor invokingtheir rights to seek the judicial

14

COMPLAINT

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1

2

3

4

5

6

7

8

9

10

reliefcontained herein, so proceeding in unity as a group will alleviate such fears and

concerns as well as protect the rights of those victimized Class members who arenot

individually named herein.

B. Class Allegations for the Notice to Quit Subclass

49. The Class includes a subclass defined as: any Class member who has received an

illegal or unauthorized Notice to Quit suchasa 3/60/90-day notice to quit/vacate (the "Notice to

Quit Subclass").

50. The number of Class members within the Notice to Quit Subclass are sufficiently

numerous that joinder of all members would be unfeasible and not practicable. Although the

Plaintiffs are presently unaware ofthe exact number of Subclass members, the Defendants, based on

II

information and belief, either own, manage, or otherwise administer or operate at least hundreds of

12

relevant foreclosed properties in the Cityof LosAngeles where a Notice to Quithas been issued that

13

was not authorized by statute or ordinance. Based on local demographics and residential statistics,

each relevant property provides shelter to at least an estimated four persons. Thus, the Notice to

15

Quit Subclass contains hundreds, if not thousands, of people.

16

51. The Subclass is ascertainable and shares a well-defined community of interest in

17 questions of law and fact, because Defendants infringed and violated, in similar fashion, the rights of

18 each Subclass member based upon Defendants' uniform conduct in the regularly practiced, unfair,

19 and unlawful circumvention ofthe rights intended to protect tenants under LARSO. Such questions

\

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20 of law and fact include but are not limited to:

21

22

23

24

25

(a) Whether Defendants own, manage, or otherwise administer or operate

dwelling units or residential dwelling structures on foreclosed properties that are being

rented to tenants protected by LARSO;

(b) Whether Defendants, as a common practice and regular policy, issued notices

to tenants commanding them to "quit" and vacate their homes when such notices were per se

26 not supported by the "good cause" eviction requirements of LARSO (e.g., 3/60/90-day

27 notices to quit);

28

(c) Whether Defendants, as a common practice and regular policy, issued such

15

COMPLAINT

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3

4

5

6

7

8

9

10

per se unauthorized Notices to Quit for purposes ofvacating the tenants from their rent-

controlled homes in order to permanently remove the property from the rental market,

thereby facilitating the sale ofthe foreclosed properties and selling such properties ata

higher sale price;

(d) Whether Defendants, asa common practice and regular policy, failed to pay

relocation fees to the displaced tenants in the amounts fixed byLARSO, notwithstanding

Defendants' demand that the tenants vacate the foreclosed properties (i.e., through the

Notices to Quit) with the intent of permanently removing the foreclosed properties from the

rental market to improve the properties' marketability and sale price;

(e) Whether Defendants, as a common practice and regular policy, abused

11

process by issuing theseper se unauthorized Notices to Quit upon tenants who were

12

otherwise protected by LARSO's "goodcause"eviction requirements and then proceeding to

13

file Unlawful Detainer actions based upon these unauthorized Notices to Quit (e.g., 3/60/90-

14

day notices to quit); and

15

(f) Whether Defendants' conduct was undertaken intentionally or negligently.

16 The Plaintiff suffered from the same general illicit tactics and "evict and sell" business model used

17

by Defendants to circumvent the same rights applicable to the entire Subclass.

18

52.

The claims ofthe named Plaintiff are typical ofthe claims of all members ofthe

19 Subclass because the named Plaintiff is a tenant in a dwelling unit or residential dwelling structure

20 in the City of Los Angeles that is owned, managed, or otherwise administered or operated by

21 Defendants and obtained by Defendants through a foreclosure. The Plaintiff has been victimized by

22 Defendants' illegal and unfair business practices uniformly practiced by Defendants throughout Los

23 Angeles. In addition, the Plaintiff lives in a rent-controlled property but nevertheless received a

24 Notice to Quit from Defendants commanding Plaintiff to vacate the property without a "good cause"

01

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as required by LARSO.

26

53.

Plaintiff, as representative party, will fairly and adequately protect the interests ofthe

27

Notice to Quit Subclass by vigorously pursuing the lawsuit through the Plaintiff's attorneys, who are

28

16

COMPLAINT

1

2

3

4

5

6

7

8

9

Isufficiently skilled and experienced. The individually named Plaintiff has no interest antagonistic to

those interests of other Subclass members.

54. Defendants have acted or refused to act on grounds that apply generallyto the

Subclass by systematically and as a business practice refusing to generally comply with local

ordinances, such as LARSO. More specifically, Defendants have abused process to vacate rent-

controlled tenants from foreclosed properties in order to remove dwelling units from the rental

market but without first paying the displaced tenants relocation fees as required and fixed by

LARSO. The Defendants' common practice of ignoring local housing ordinances designed to

ensure the safety ofthe general public applies, by definition, toall members ofthe Subclass. This

10 common practice of ignoring local housing ordinances is appropriate for injunctive and declaratory

11 reliefthat, among other things, prohibits the Defendants from removing members ofthe Subclass

12 from their rent-controlled homes without paying relocation benefits as required and fixed by

13 LARSO.

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55. The common questions of lawand fact as to the Notice

to Quit Subclass predominate

15 overquestions affecting only individual Subclass members. Thosequestions include, butare not

16

limited to:

17

(a)

WhetherDefendantsown, manage,or otherwise administer or operate

18 dwelling units or residential dwelling structures on foreclosed properties that are being

19

rented to tenants protected by LARSO;

20

(b)

Whether Defendants, as policyand regular operating procedure,have

21 undertaken unlawful and unfair business practices intended to circumvent LARSO,

22 specifically by issuing Notices to Quitcommanding the tenants to "quit" and vacate their

23 rent controlled homes without a "good cause" as listed in, and required by, LARSO (e.g.,

24

3/60/90-day notices to quit);

25

(c)

Whether Defendants, as common practice and regular policy, vacated tenants

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26 from rent controlledproperties in order to remove the properties from the rental market to,

27 in turn, facilitate the sale ofthe rent-controlled investments and increase the sale price;

28

(d) Whether Defendants- when intending to remove a property from the rental

17

COMPLAINT

2

3

4

5

6

7

8

market for sale purposes - initiated eviction proceedings based onNotices to Quit that were

per se invalid under LARSO rather than pay the tenants the required relocation fees as fixed

by LARSO;

(e) Whether Defendants' conduct was undertaken intentionally or negligently;

(f) Whether Defendants should cease prosecuting all Unlawful Detainer actions

in the Cityof Los Angeles pending the outcome of this litigation so as to prevent the current

piecemeal litigation happening in the form of Unlawful Detainer actions that allow the

Defendants to take advantage of Subclass members who cannot individually obtain counsel;

9

and

10

(g)

Whether a Special Master should be appointed to approve - prior to service

II

thereof- any noticesthat Defendants wish to serve on a tenant in the Cityof Los Angeles.

12

56.

The extent and nature of any litigation concerning the controversy already begun by

13 or against Subclass members should not preclude thecertification ofthe Subclass because a certified

 

14

Subclass would end the piecemeal litigation in the form of Unlawful Detaineractions that allowthe

"

3

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Defendants to take advantage of those members ofthe Subclass who cannot individually obtain

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15

 

16

counsel.

17

57.

There are no difficulties that will arise in managing this case with the proposed

18

Subclass. Notice to members ofthe Subclass can be provided through Defendants' records,

19

distribution of notices posted at the properties that the Defendants own, manage, or otherwise

20

administer or operate, and by targeted publication (the cost of which should be properly imposed on

21

Defendants).

22

58.

A class action, with the proposed Subclass, is superior to other available methods for

23

the fair and efficient adjudication of this controversy for at least the following reasons:

24

(a)

Based upon information and belief, the case will require substantial

25

management and oversight by the Court due to the potential for an excessively large number

a

26 of Subclass members;

27

(b) Based upon information and belief, the case will require substantial

28

18

COMPLAINT

1

management and ongoing oversight bytheCourt due to the necessary injunctive relief

2

requested by the Plaintiffs related to Defendants' illegal business practices;

3

(c)

Based upon information and belief, the case will require substantial

4

management and oversightby the Court due to a multiplicityof inter-connected, related, and

5

affiliated entities that may be involved in the wrongs alleged, which the Defendants use as

6

"fronts" and cover in an effort to avoid liability;

7

(d)

Based upon information and belief, this action will promote an orderlyand

8

expeditious administration and adjudication ofthe claims herein, foster economiesof time,

9

effort, and resources, and ensure uniformity of decisions,

especially with respect to

10

Defendants' uniform business practices that violate local laws;

II

(e) Based upon information and belief, the equitable relief sought should be

12 imposed on the Defendants consistently, and a class action, with the proposed Subclass, is

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14

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16

superior to individual actions because a series of individual lawsuits would risk compelling

the Defendants to meet inconsistent standards of conduct;

(f) Based upon information and belief, handling this case as a class action, with

the proposed Subclass, will potentially alleviate the heavy burden being imposed on the

17 judicial districts where City of Los Angeles Unlawful Detainers are being filed that should

18

never have been filed in the first place except for Defendants' illicit business practices; and

19

(g)

Based upon information and belief, the unnamed members ofthe Subclass are

20

frightened of retribution from the Defendants for invoking their rights to seek the judicial

21

relief contained herein, so proceeding in unity as a group will alleviate such fears and

22

concerns as well as protect the rights of those victimized Subclass members not individually

23

named herein.

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24

25

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C. Class Allegations for the Non-Payment of Rent Subclass

59. The Class also includes a subclass defined as: any Class member who has received

a Notice to Pay Rent or Quit (the "Notice to Pay Subclass").

60. The number of Class members within the Notice to Pay Subclass are sufficiently

28 numerousthat joinder of all members would be unfeasible and not practicable. Although the

19

COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

Plaintiffs are presently unaware ofthe exact number of Subclass members, the Defendants, based on

information and belief, either own, manage, or otherwise

relevant foreclosed properties in the City of Los Angeles where a Notice to Pay Rent or Quit has

been issued. Based on local demographics and residential statistics, each relevant property provides

shelter to at least an estimated four persons. Thus, the Notice to Pay Subclass contains hundreds, if

administer or operate at least hundreds of

not thousands, of people.

61. The Subclassis ascertainable and shares a well-definedcommunity of interestin

questions oflaw and fact, because Defendants infringed and violated, in similar fashion, the rights of

each Subclass member based upon Defendants' uniform conduct in the regularly practiced, unfair,

and unlawful circumvention ofthe rights intended to protect tenants under LARSO. Such questions

of law and fact include but are not limited to:

(a) Whether Defendants own, manage, or otherwise administer or operate

13 dwelling units or residential dwelling structures on foreclosed properties thatare being

14 rented to tenants protected by LARSO;

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18

19

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21

22

23

24

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(b) Whether Defendants, as a common practice and regular policy, issued notices

to tenants for alleged non-payment of rent as a subterfuge to intimidate tenants into vacating

their rent-controlled properties in order for Defendants to permanently remove the properties

from the rental market - without paying relocation fees as required and fixed by LARSO -

for the purpose of facilitating the saleand increasing the price ofthe foreclosed properties;

(c) Whether Defendants, as a common practice and regular policy, issued notices

to tenantscommanding them to pay rentor quit, when Defendants did not have any intention

to collect rent and indeed refused to accept rent parents, in order to proceed with

Unlawful Detaineractions and evict tenants without paying relocationfees per LARSO;

(d) Whether Defendants' conductwas undertaken intentionally or negligently.

The Plaintiffsuffered from the same general illicit tactics and "evict and sell" business model used

by Defendants to circumvent the same rights applicable to the entire Subclass.

62. The claims of the named Plaintiff are typical of the claims of all members of the

28 Subclass because the named Plaintiff is a tenant in a dwelling unit or residential dwelling structure

20

COMPLAINT

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2

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4

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6

7

8

9

in the City of Los Angeles that is owned, managed, or otherwise administered or

operated by

Defendants and obtained by Defendants through a foreclosure. The Plaintiff has been victimized by

Defendants' illegal and unfair business practices uniformly practiced by Defendants throughout Los

Angeles. In addition, the Defendants refused to accept Plaintiff's rent after issuing a Notice to Pay

Rent orQuit and instead initiated an Unlawful Detainer action against Plaintiff in order to

implement Defendants' "evictand sell" business model.

63. Plaintiff, as representative party, will fairly and adequately protect the interests ofthe

Notice to Quit Subclass byvigorously pursuing the lawsuit through the Plaintiff's attorneys, who are

sufficiently skilled and experienced. The individually named Plaintiff hasno interest antagonistic to

10 those interests of other Subclass members.

11

64.

Defendants have acted or refusedto act on grounds that apply generally to the

12

Subclass by systematically and as a business practice refusing to generally comply with local

13

ordinances, such as LARSO. More specifically, Defendants have abused process to vacate rent-

14

controlledtenants from foreclosed propertiesin order to removedwelling units from the rental

15

market but without first payingthe displacedtenants relocation fees as required and fixed by

16

LARSO. The Defendants' common practice of ignoring local housing ordinances designed to

17

ensure the safety ofthe general public applies, by definition, to all members ofthe Subclass. This

18

common practice of ignoring local housing ordinances is expropriate for injunctive and declaratory

19 relief that, among other things, prohibits the Defendants from removing members ofthe Subclass

20 from their rent-controlled homes without paying relocation benefits as required and fixed by

21

LARSO.

22

65.

The common questions of law and fact as to the Notice to Quit Subclass predominate

23

over questions affecting only individual Subclass members. Those questions include, but are not

24

limited to:

(9

Ul

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\

25

(a) Whether Defendants own, manage, or otherwise administer or operate

26 dwelling units or residential dwelling structures on foreclosed properties that are being

27 rented to tenants protected by LARSO;

28

(b) Whether Defendants, as a common practice and regular policy, issued notices

21

COMPLAINT

1

2

3

4

5

6

7

8

9

to tenants for alleged non-payment ofrent as a subterfuge to intimidate tenants into vacating

their rent-controlled properties in order for Defendants to permanently remove the properties

from the rental market - without paying relocation fees as required and fixed by LARSO -

for the purpose offacilitating the sale and increasing the price ofthe foreclosed properties;

(c) Whether Defendants, as a common practice and regular policy, issued notices

to tenants for alleged non-payment of rent when Defendants did not have any intention

or a procedural mechanism to collect rents;

(d) Whether Defendants, as a common practice and regular policy, issued notices

to tenants for alleged non-payment of rent yet refused to accept rent payments in order to

10 proceed with Unlawful Detainer actions for purposes of, in part, removing the rent

11 controlled properties from the rental

market without paying relocation fees perLARSO;

12

(e) Whether Defendants, as policy and regular operating procedure, through

13

illicit tactics and unfair business practices, vacated tenants from rent controlled properties in

14 order to remove the properties from the rental market to, in turn,

facilitate the sale ofthe

 

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15

rent-controlled investments and increase the sale price;

 

16

(f)

Whether Defendants - when intending to remove a property from the rental

17

market for salepurposes - initiated eviction proceedings based on notices of non-payment of

18 rent when Defendants had no intention or mechanism of collecting the demanded rents (and

19 indeed often refused such demanded rents) for the purpose of, in part, circumventing the

20

relocation fees requirement fixed by LARSO;

21

(g)

Whether Defendants' conduct was undertaken intentionally or negligently;

22

(h)

Whether Defendants should cease prosecuting all Unlawful Detaineractions

23

in the Cityof Los Angeles pending the outcomeof this litigation so as to prevent the current

24

piecemeal litigation happening in the form of Unlawful Detainer actions that allow the

25

Defendants to take advantage of Subclass members who cannot individually obtain counsel;

\

26

and

\

27

(i)

Whether a Special Mastershouldbe appointed to approve - prior to service

28

thereof- any notices that Defendants wish to serve on a tenant in the City of Los Angeles

22

COMPLAINT

1

2

3

4

5

6

7

8

9

66. The extent and nature of any litigation concerning the controversy already begun by

or against Subclass members should not preclude the certification ofthe Subclass because a certified

Subclass would end the piecemeal litigation in the form of Unlawful Detainer actions that allow the

Defendants to take advantage of those members ofthe Subclass who cannot individually obtain

counsel.

67. There are no difficulties that will arise in managing this case withthe proposed

Subclass. Notice to members ofthe Subclass can be provided through Defendants' records,

distribution of notices posted at the properties that the Defendants own, manage, or otherwise

administer or operate, and by targeted publication (the cost of which should be properly imposed on

10 Defendants).

II

68. A class action, with the proposed Subclass, is superior to other available methods for

12 the fair and efficient adjudication of this controversy for at leastthe following reasons:

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(a) Based upon information and belief, the case will require substantial

14 management and oversight by the Court due to the potential for an excessively large number

15 of Subclass members;

16

(b) Based upon information and belief, the case will require substantial

17 management andongoing oversight bythe Court due to the necessary injunctive relief

18

requested by the Plaintiffs related to Defendants' illegal businesspractices;

19

(c)

Based upon information and belief, the casewill require substantial

20

management and oversight bythe Court dueto a multiplicity of inter-connected, related, and

21

affiliated entities that may be involvedin the wrongs alleged, which the Defendants use as

22

"fronts" and cover in an effort to avoid liability;

23

(d)

Based upon information and belief, this action will promote an orderly and

24 expeditious administration andadjudication ofthe claims herein, foster economies of time,

s

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25 effort, and resources, and ensure uniformity of decisions,

especially with respect to

26 Defendants' uniform business practices that violate local laws;

27

(e) Based upon information and belief, the equitable relief sought should be

28 imposed on the Defendants consistently, and a class action, with the proposed Subclass, is

23

COMPLAINT

I

2

3

4

5

6

7

8

9

superior to individual actions because a series of individual lawsuits would risk compelling

the Defendants to meet inconsistent standards of conduct;

(f) Based upon information and belief, handling this case as a class action, with

the proposed Subclass, will potentially alleviate the heavy burden being imposed on the

judicial districts where City of Los Angeles Unlawful Detainers arebeing filed that should

neverhave been filed in the first placeexceptfor Defendants' illicit business practices; and

(g) Based upon information and belief, the unnamed members ofthe Subclass are

frightened of retribution from the Defendants for invoking their rights to seek the judicial

relief contained herein, so proceeding in unityas a groupwill alleviate such fears and

10

concerns as well as protect the rights of those victimized Subclass members not individually

11

named herein.

12

D.

Class Allegations for the Illegal Unit Subclass

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13

69. The Class also includes a subclass defined as: any Class member whose dwelling

14 unit or residential dwelling structure is unapproved for its current residential use or

15

occupancy (the "Illegal Unit Subclass").

16

70.

The number of Class members within the Illegal Unit Subclass are sufficiently

17 numerous that joinder of all members would be unfeasible and not practicable. Although the

18 Plaintiffs are presently unaware of the exact number of Subclass members, the Defendants, based on

19 information and belief, either own, manage, or otherwise administer or operate at least hundreds of

20 relevant foreclosed properties in the City of Los Angeles where a Class member resides in a

21 dwelling unit or residential dwelling structure that is unapproved for its current use (commonly

22 known as an "illegal unit"). Based on local demographics and residential statistics, each relevant

23 property provides shelter to at least an estimated four persons. Thus, the Illegal Unit Subclass

24 contains hundreds, if not thousands, of people.

5)

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25

71.

The Subclass is ascertainable and shares a well-defined community of interest in

26

questionsof law and fact, because Defendants infringed and violated, in similar fashion, the rightsof

27

each Subclass member based upon Defendants' uniform conduct in the regularly practiced, unfair,

28

24

COMPLAINT

1

and unlawful circumvention ofthe rights intended toprotect tenants under LARSO. Such questions

2

of law and fact include but are not limited to:

3

(a)

Whether Defendants own, manage, orotherwise administer or operate

4

dwelling units or residential dwelling structures on foreclosed properties that are being

5

rented to tenants protectedby LARSO;

6

(b)

Whether such properties include a unit unapproved for itscurrent use or

7

occupancy (e.g., as a dwelling or structure where humans can live);

8 (c)

Whether Defendants, asa common practice and regular policy, have failed to

9 abate the per se violation of law and substandard condition by failing to relocate tenants who

10 reside in illegal units and failing to pay the relocation fees required and fixed by LARSO;

11

(d)

Whether Defendants, as a common practice and regular policy, have

12

intimidated tenants to vacate illegal units without first paying these tenants the required

i_

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-•

13 relocation fees, specifically, in part,by issuing unauthorized notices uponthese tenants

14 (whether notices to quit or notices to pay rent);

15

(e)

Whether Defendants, as a common practice and regularpolicy,have

16 intimidated tenants to vacate illegal units without first paying these tenants the required

17 relocation fees, specifically, in part, by initiating unauthorized Unlawful Detainer actions

18 against them;

19

(f)

Whether Defendants abused process by initiating Unlawful Detainer actions

20 (rightfully or wrongfully) againsttenants residing in other dwelling structures on a property

21 lot and then using anyjudgment obtained as a basis for obtaining a writ of possession to

22 forcefully (and wrongfully) evict tenants from an illegal uniton the same property lot;and

23

(g)

Whether Defendants' conduct was undertaken intentionally or negligently.

24 | The Plaintiff suffered from the same general illicit tactics used by Defendants to circumvent the

25 | same rights applicable to the entire Subclass.

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3Such dwelling unitsare easily identifiable, at leastin part, by the lackof a Certificate of Occupancy for the

27

unit that is required by LAMC, §91.109, and issued by the Cityof Los Angeles Department of Building and Safety ("LADBS"). Such a lackof certificatequalifies these dwellings as inherently substandard by the

28

relevant regulatory agencies because Certificates of Occupancy are required"[i]n order to safeguard life and

limb, health, property and public welfare[.]" LAMC, ^1.109

COMPLAINT

72. The claims ofthe named Plaintiffare typical ofthe claims ofall members ofthe

2

Subclass because the named Plaintiff is a tenant in a dwelling unit or residential dwelling structure

3

in the City of Los Angeles that is owned, managed, or otherwise administered or operated by

4

Defendants and obtained by Defendants through a foreclosure. The Plaintiff has been victimized by

5 IDefendants' illegal and unfair business practices uniformly practiced by Defendants throughout Los

6

Angeles. In addition, the Plaintiff lives in an "illegal unit," yet Defendants: failed to relocate

7

Plaintiff, failed to pay Plaintiff relocation fees as required by LARSO, issued notices upon Plaintiff

8

that are not applicable to illegal units, and filed an Unlawful Detainer action against Plaintiff

9

(notwithstanding that Plaintiff lives in an illegal unit and cannot be evicted without payment of

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10 | relocation fees beforehand).

11 II

73.

Plaintiff, as representative party, will fairly and adequately protect the interests of the

12 I Illegal Unit Subclass by vigorously pursuing the lawsuit through the Plaintiffs attorneys, who are

13 I sufficiently skilled and experienced. The individually named Plaintiff has no interest antagonistic to

14 those interests of other Subclass members.

15 |

74.

Defendants have acted or refused to act on grounds that apply generally to the

16 Subclass by systematically and as a business practice refusing to generally comply with local

17 ordinances. Specifically, Defendants have, as a common practice, refused and failed to pay

18 relocation fees to tenants for the purpose of relocating them out from illegal units, which would

19 abate the per se substandard condition of having persons living in such illegal units. Instead,

20 Defendants have abused process to vacate these rent-controlled tenants from the illegal units (as

21 described above) in order to circumvent local laws and avoid the Defendants' obligation to pay

22 relocation fees. The Defendants' common practice of ignoring local housing ordinances designed to

23 ensure the safety ofthe general public applies, by definition, to all members ofthe Subclass. This

24 common practice of ignoring local housing ordinances is appropriate for injunctive and declaratory

25 relief that, among other things, prohibits the Defendants from removing members of the Subclass

\

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26 from their rent-controlled homes and illegal units without paying relocation benefits.

27

28

26

COMPLAINT

1

2

3

4

5

6

7

8

9

10

75. The common questions oflaw and fact as to the Illegal Unit Subclass predominate

over questions affecting only individual Subclass members;. Those questions include, but are not

limited to:

(a) Whether Defendants own, manage, orotherwise administer oroperate

dwelling units or residential dwelling structures on foreclosed properties that are being

rented to tenants protected by LARSO;

(b) Whether such properties include a unit unapproved for its current use or

occupancy (e.g., as a dwelling or structure where humans can live);

(c) Whether Defendants, asa common practice and regular policy, have failed to

abate the per se violation of law and substandard condition by failing to relocate tenants who

11 reside in illegal units and failing to pay the relocation fees required and fixed by LARSO;

12

(d) Whether Defendants, as a common practice and regular policy, have

13 intimidated tenants to vacate illegal units without first paying these tenantsthe required

14 relocation fees, specifically, in part, by issuing unauthorized notices upon these tenants

15

(whether notices to quit or notices to pay rent);

16

(e)

Whether Defendants, as a common practice and regular policy, have

17 intimidated tenants to vacate illegal units withoutfirst paying these tenantsthe required

18 relocation fees, specifically, in part, by initiating unauthorized Unlawful Detainer actions

19 against them;

20

(f) Whether Defendants abused process by initiating Unlawful Detainer actions

21 (rightfully or wrongfully) against tenants residing in other dwelling structures on a property

22 lot and then using anyjudgment obtained as a basisfor obtaining a writof possession to

23 forcefully (and wrongfully) evict tenants from an illegal unit on the same property lot;

8

24

25

26

(g) Whether Defendants' conduct was undertaken intentionally or negligently;

(h) Whether Defendants shouldcease prosecuting all Unlawful Detainer actions

in the City of Los Angeles pending the outcome of this litigation so as to prevent the current

27 piecemeal litigation happening in the form of Unlawful Detaineractionsthat allowthe

28

27

COMPLAINT

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1

2

3

4

5

6

7

8

9

10

11

Defendants to take advantage of Subclass members who cannot individually obtain counsel;

and

(i) Whether a Special Master should be appointed to approve - prior to service

thereof- any notices that Defendants wish to serve on a tenant in the City of Los Angeles to,

in part, determine whether the notice is being served upon tenants ofan illegal unit.

76. The extent and nature of any litigation already begun byor against Subclass

members, concerning the controversy herein, should not preclude the certification ofthe Subclass,

because a certified Subclass would end the piecemeal litigation in the form of Unlawful Detainer

actions that allow the Defendants to take advantage of those members ofthe Subclass who cannot

individually obtain counsel.

77. There are no difficulties that will arise in managing this case with the proposed

12 Subclass. Notice to members ofthe Subclass can be provided through Defendants' records,

13 distribution of notices posted at the properties that the Defendants own, manage, or otherwise

14 administer or operate, and by targeted publication (the cost of which should be properly imposed on

15

16

17

18

Defendants).

78. A classaction, with the proposed Subclass, is superior to otheravailable methods for

the fair and efficient adjudication of this controversy for at least the following reasons:

(a) Based upon information and belief, the case will require substantial

19 management and oversight by the Court due to the potential foran excessively large number

20

21

of Subclass members;

(b) Based upon information and belief, the case will require substantial

22 management and ongoing oversight by the Court due to the necessary injunctive relief

23 requested by the Plaintiffs related to Defendants' illegal business practices;

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(c) Based upon information and belief, the case will require substantial

25 management and oversight by theCourt dueto a multiplicity of inter-connected, related, and

26 affiliated entities that may be involved in the wrongs alleged, which the Defendantsuse as

27 "fronts" and cover in an effort to avoid liability;

28

28

COMPLAINT

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1

2

3

4

5

6

7

8

9

10

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12

13

14

(d) Based upon information and belief, this action will promote an orderly and

expeditious administration and adjudication ofthe claims herein, foster economies oftime,

effort, and resources, and ensure uniformity ofdecisions, especially with respect to

Defendants' uniform business practices that violate local laws;

(e) Based upon information and belief, the equitable relief sought should be

imposed on the Defendants consistently, and a class action, with the proposed Subclass, is

superior to individual actions because a series of individual

the Defendants to meet inconsistent standards of conduct;

lawsuits would risk compelling

(f) Based upon information and belief, handling this case as a class action, with

the proposed Subclass, will potentially alleviate the heavy burden being imposed on the

judicial districts where City of Los Angeles Unlawful Detainers are being filed that should

never have been filed in the first place except for Defendants' illicit business practices; and

(g) Based upon infonnation and belief, the unnamed members oftheSubclass

frightened ofretribution from the Defendants for invoking their rights to seek the judicial

are

15 reliefcontained herein, so proceeding in unity as a group will alleviate such fears and

16 concerns as well as protect the rights of those victimized Subclass members not individually

17 named herein.

18

19

20

E. Class Allegations for the Citation Subclass

79. The Class also includes a subclassdefined as: any Class member whose dwelling

unit or residential dwelling structurehasbeen citedby either the City of Los Angeles Housing

21 Department ("LAHD") or the City of LosAngeles Department of Building and Safety

22

("LADBS") forunapproved use,occupancy, construction, or similar violation (the "Citation

23

Subclass").

24

80.

The number of Class members within the Citation Subclass are sufficiently numerous

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25 I that joinder of all members

26 presently unaware ofthe exact number of Subclass members, the Defendants, based oninformation

27 and belief, eitherown, manage, or otherwise administer or operateat least hundreds of relevant

28 foreclosed properties in the City of Los Angeles where a relevant citation has been has been issued

would be unfeasible and not practicable. Although the Plaintiffs are

29

COMPLAINT

I by either the LAHD or LADBS. Based on local demographics and residential statistics, each

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3

4

5

6

7

8

9

10

11

12

13

14

15

relevant i property provides shelter to at least an estimated four persons. Thus, the Citation Subclass

contains hundreds, if not thousands, of people.

81. The Subclass is ascertainable and shares a well-defined community of interest in

questions of law and fact, because Defendants infringed and violated, in similar fashion, the rights of

each Subclass member based upon Defendants' uniform conduct inthe regularly practiced, unfair,

and unlawful circumvention ofthe rights intended to protect tenants under LARSO. Such questions

of law and fact include but are not limited to:

(a) Whether Defendants own, manage, or otherwise administer or operate

dwelling units or residential dwelling structures on foreclosed properties that are being

rented to tenants protected by LARSO;

(b) Whether such properties include a unit unapproved for its current use or

occupancy (e.g., as a dwelling or structure where humans can live)4 where the LAHD or

LADBS has issued a citation for unapproved use, occupancy, or similar violation;

(c) Whether Defendants, as a common practiceand regular policy, have failed to

16 abate theper se violation of law and substandard condition by failing to relocate tenants

17 residing in units cited by the LAHDor LADBS for unapproved use, occupancy, or similar

18 violation (including the failure to pay relocation fees);

19

(d) Whether Defendants, as a common practice and regular policy, have

20 intimidated tenants to vacate units that have been cited by LAHD and LADBS for

21 unapproved use or occupancy, specifically, in part, by issuing unauthorized notices upon

22 these tenants (whether notices to quit or notices to pay rent) yet failing to pay relocation fees;

23

 

24

25

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27

(e) Whether Defendants, as a common practice and regular policy, have

4Such dwelling units are easily identifiable, at least in part, by the lackof a Certificate of Occupancy for the

unit that is required by LAMC, §91.109, and issued by the City of Los Angeles Department of Building and

H Safety ("LADBS"). Such a lack of certificate qualifies these dwellings as inherently substandard by the

28 relevant regulatory agencies because Certificates of Occupancy are required "[i]n order to safeguard life and

limb, health, property and public welfare[.]" LAMC,-&91.109.

COMPLAINT

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3

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5

6

7

8

9

10

intimidated tenants to vacate units that have beencitedby the LAHD and LADBS for

unapproved use or occupancy, specifically, in part, by initiating unauthorized Unlawful

Detainer actions against them - yetfailing to pay relocation fees;

(f) Whether Defendants abused process by initiating Unlawful Detainer actions

(rightfully or wrongfully) against tenants residing in other dwelling structures on a property

lotand then using any judgment obtained asa basis for obtaining a writ of possession to

forcefully (and wrongfully) evict tenants from a unit on the same property lotthat has been

cited by the LAHD and LADBS for unapproved residential use or occupancy;

(g) Whether Defendants' conduct was undertaken intentionally or negligently.

ThePlaintiffsuffered from the same general illicittactics used by Defendants to circumvent the

11 same rights applicable to the entire Subclass.

12

82. The claims ofthe named Plaintiff are typical ofthe claims of all members ofthe

13

Subclass because the named Plaintiff is a tenant in a dwelling unit or residential dwelling structure

14

in the Cityof LosAngeles that is owned, managed, or otherwise administered or operated by

15

Defendants and obtained by Defendants through a foreclosure. The Plaintiffhas been victimized by

16

Defendants' illegal and unfair business practices uniformly practiced by Defendants throughout Los

17

Angeles. In addition, the Plaintifflives in a residential dwelling citedby eitherLAHD or LADBS

18

for unapproved residential use or occupancy, yet Defendants: failed to relocate Plaintiff, failed to

19 pay Plaintiffrelocation fees as required by LARSO, issued noticesupon Plaintiffnot applicable to a

20 cited dwelling unit, and filed an Unlawful Detaineraction against Plaintiff.

21

83. Plaintiff, as representative party, will fairly and adequately protect the interests ofthe

22 Citation Subclassby vigorously pursuing the lawsuitthrough the Plaintiff's attorneys, whoare

23 sufficiently skilled and experienced. The individually named Plaintiff has no interest antagonistic to

24 those interests of other Subclass members

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84. Defendants have acted or refused to act on grounds that apply generally to the

Subclass by systematically and as a business practice refusing to generally comply with local

27 ordinances. Specifically, Defendants have, as a common practice, refused and failed to pay

28 relocation fees to tenants occupying illegal units that have been cited by the LAHD or LADBS,

31

COMPLAINT

which would abate the/?er se substandard condition of having persons living in such units

unapproved for residential use or occupancy. Instead, Defendants have abused process to vacate

these rent-controlled tenants from the illegal units (as described above) that have been cited bythe

LAHD or LADBS, in orderfor Defendants to circumvent locallawsand avoidthe Defendants'

obligation to pay relocation fees. The Defendants' common practice of ignoring local housing

6 Jordinances designed to ensure the safety ofthe general put'lic applies, by definition, to all members

7

ofthe Subclass. This common practice of ignoring local housing ordinances is appropriate for

8

injunctive and declaratory reliefthat, among other things, prohibits the Defendants from removing

9

members ofthe Subclass from their rent-controlled homes and illegal units cited by the LAHD or

10 | LADBS - without first paying relocation benefits as described in LARSO.

ill

85.

Common questions of law and fact as to the: Citation Subclass predominate over

12 I questions affecting individual Subclass members. Those questions include, but are not limited to:

13

(a) Whether Defendants own, manage, or otherwise administer or operate

 

14

dwelling units or residential dwelling structures on foreclosed properties that are being

 

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rented to tenants protected by LARSO;

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(b)

Whether such properties include a dwelling unit unapproved for its current

17

use or occupancy (e.g., as a structure where humans can live) and cited by either the

18

LAHD or LADBS;

19

(c)

Whether Defendants, as a common practice and regular policy, have failed to

20 abate the per se violation of law and

substandard condition by failing to relocate tenants who

21 reside in illegal units cited by either the LAHD or LADBS, as well as failing to pay the

22

relocation fees required and fixed by LARSO;

23

(d)

Whether Defendants, as a common practice and regular policy, have

24

intimidated tenants to vacate illegal units cited by the LAHD or LADBS, specifically, in part,

25 by issuing unauthorized notices upon these tenants (whether notices to quit or notices to pay

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26 rent);

 

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(e) Whether Defendants, as a common practice and regular policy, have

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27

28

32

COMPLAINT

1

2

3

4

5

6

7

8

9

10

intimidated tenants to vacate illegal units cited by the LAHD or LADBS without first paying

these tenants the required relocation fees, specifically, in part, by initiating unauthorized

Unlawful Detainer actions against them;

(f) Whether Defendants abused process; by initiating Unlawful Detainer actions

(rightfully or wrongfully) against tenants residing in other dwelling structures ona property

lot and then using any judgment obtained asa basis for obtaining a writ of possession to

forcefully (and wrongfully) evict tenants from a unit on the same property lot that had been

cited by either the LAHD or LADBS forunapproved residential use or occupancy;

(g) Whether Defendants' conduct was undertaken intentionally ornegligently;

(j) Whether Defendants should cease prosecuting all Unlawful Detainer actions

11 inthe City of Los Angeles pending the outcome of this litigation so as to prevent the current

12 piecemeal litigation happening inthe form of Unlawful Detainer actions that allow the

13 Defendants to take advantage of Subclass members who cannot individually obtain counsel;

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and

(k) Whether a Special Master should be appointed to approve - prior to service

16 thereof- any notices that Defendants wishto serve on a tenant in the City of Los Angeles in

17

orderto, in part, determine whether the notice is being served upontenants of a unitcitedby

18

the LAHD or LADBS for unapproved residential use or occupancy.

19

86.

The extent and nature of any litigation already begun by or against Subclass

20

members, concerningthe controversy herein, should not preclude the certification ofthe Subclass,

21

becausea certified Subclasswould end the piecemeallitigation in the form of Unlawful Detainer

22

actions that allow the Defendants to take advantage of those members ofthe Subclass who cannot

23 individually obtain counsel.

24

87.

There are no difficulties that will arise in managing this case with the proposed

25

Subclass. Notice to members ofthe Subclass can be provided through Defendants' records,

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distribution of notices posted at the properties that the Defendants own, manage, or otherwise

administeror operate,and by targeted publication (the cost of which should be properly imposedon

28 Defendants).

33

COMPLAINT

1

2

3

4

5

6

7

8

9

88. A class action, with theproposed Subclass, is superior to other available methods for

the fair and efficient adjudication of this controversy for at leastthe following reasons:

(a) Based upon information and belief, thecasewill require substantial

management and oversight bythe Court dueto the potential foran excessively large number

of Subclass members;

(b) Based uponinformation and belief, the case will require substantial

management and ongoing oversight bythe Court dueto the necessary injunctive relief

requested by the Plaintiffs related to Defendants' illegal business practices;

(c) Based upon informationand belief, the case will require substantial

10 management and oversight by the Courtdueto a multiplicity of inter-connected, related, and

11 affiliated entities that may be involved in the wrongs alleged, which the Defendants use as

12

"fronts" and cover in an effort to avoid liability;

13

(d)

Based upon information and belief, this action will promote an orderly and

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14 expeditious administration

and adjudication ofthe claims herein, foster economiesof time,

15 effort, and resources, and ensure uniformity of decisions, especially with respect to

16 Defendants' uniform business practices that violate local laws;

17

(e) Based upon information and belief, i:he equitable relief sought should be

18 imposed on the Defendants consistently, and a class action, with the proposed Subclass, is

19 superior to individual actions because a series of individual lawsuits would risk compelling

20 the Defendants to meet inconsistent standards of conduct;

21

(f) Based upon information and belief, handling this case as a class action, with

22

the proposed Subclass, will potentially alleviate the heavy burden being imposed on the

23

judicial districts where City of Los Angeles UnlawJiil Detainers are being filed that should

24

never have been filed in the first place except for Defendants' illicit business practices; and

25

(g) Based upon information and belief, ihe unnamed members ofthe Subclass are

26 frightened of retribution from the Defendants for invoking their rights to seek the judicial

27 relief contained herein, so proceeding in unity as a group will alleviate such fears and

28

34

COMPLAINT

concerns as well as protect the rights ofthose victimized Subclass members not individually

named herein.

89. In summary, Defendants have acted or refused to acton grounds thatapply generally

to the Subclass bysystematically and as a business practice refusing to comply withlocal ordinances

5Jthat require them to either (a) restore the dwellings ofthe Citation Subclass to their approved use,

6

(b)obtain Certificates of Occupancy for those dwellings, or (c) pay the tenants the relocation fees

7

pursuant to LARSO. The Defendants' common practice of ignoring local housing ordinances

8

designed to ensure the safety ofthe general public applies, bydefinition, to all members ofthe

9

Citation Subclass.

This commonpractice of ignoringlocal housing ordinancesis also appropriate

10

for injunctive and declaratory relief that, among other things,prohibitsthe Defendants from

11 collecting rent, declares that the members ofthe Citation Subclass are not obligated to pay rent,

12 prohibits the Defendants from removing members ofthe Citation Subclass from theirhomes without

13 first paying relocation benefits as required by LARSO, and compels the Defendants to obtain

14 Certificates of Occupancyfor all dwelling units pursuant to Section 91.109 ofthe Los Angeles

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15 Municipal Code.

16

F.

Class Allegations for the Article 14 Subclass

17

90.

The Class includes a subclass defined as: any Class member evicted or forced to

18

vacate after December 23,2008 ("Article 14 Subclass").'

19

91.

The number of Class members within the Article 14 Subclass are sufficiently

20

numerous that joinder of all members would be unfeasible and not practicable. Although the

21

Plaintiffs are presently unaware ofthe exact number of Subclass members, the Defendants, based on

22

information and belief, either own, manage, or otherwise administer or operate at least hundreds of

23

relevant foreclosed properties in the City of Los Angeles where a Subclass member was either

24

evicted or otherwise forced to vacate after December 23, 2008. Based on local demographics and

25

residential statistics, each relevant property provides shelter to at least an estimated four persons.

26

Thus, the Article 14 Subclass contains hundreds, if not thousands, of people.

27

28

5This Subclass is intended to encompass all Class members benefiting from LAMC, 49.90-49.95 (Article

14.1 ofthe LAMC), which went into effect on December 23, 2008.

COMPLAINT

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2

3

4

5

6

7

8

9

92. The Subclass is ascertainable and shares a well-defined communityof interestin

questions oflaw and fact, because Defendants infringed and violated, insimilar fashion, the rights of

each Subclass member based upon Defendants' uniform conduct in the regularly practiced, unfair,

and unlawful circumvention ofthe rights intended to protecttenantsunderthe LAMC (particularly

Article 14.1). Such questions of law and fact include but Eire not limited to:

(a) Whether Defendants own, manage, or otherwise administer or operate

dwelling units or residential dwelling structures on foreclosed properties thatarebeing

rentedto tenants protected by the temporary expansion of LARSO;

(b) Whether Defendants, as a common practice and regular policy, issued notices

10 to tenants between December 23,2008 and December 31,2010, commanding them to "quit"

11 and vacate their homes when such notices were per se not supported by the "good cause"

12 eviction requirements of LARSO (e.g., 3/60/90-day notices to quit);

13

(c) WhetherDefendants, as a common practice and regular policy, issued such

14 per se unauthorized Notices to Quit for purposes of vacating the tenants from their rent

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15 controlled homes in order to permanently remove the property from the rental market,

 

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16 thereby facilitating the sale ofthe foreclosed properties and selling such properties at a

17 higher sale price;

 

18

(d)

Whether Defendants, as a common practice and regular policy, failed to pay

19

relocation fees t