Lim v. Villa Garfield CA2/2 ( 2014 )

Filed 6/3/14 Lim v. Villa Garfield CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
ANN LIM et al., B247618
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. GC045112)
v.
VILLA GARFIELD, INC.,
Defendant and Appellant.
APPEAL from orders of the Superior Court of Los Angeles County.
Anthony J. Mohr, Judge. Reversed.
Steiner & Libo, Leonard Steiner, and Jason Carter for Defendant and Appellant.
Michael T. Chulak & Associates and Andrea Breuer for Plaintiffs and
Respondents.
_________________________
Villa Garfield, Inc. (Developer) appeals from orders granting prejudgment
attachments and attorney fees to Ann Lim, Maria Zepeda, Tak Wong, Helen Wong, Lily
Yeung, Fat Ki Yeung, Ping Tu, Petrina Ho, and Mae Young (collectively Lim Parties) in
an action alleging, inter alia, financial abuse of elders. (Welf. & Inst. Code, §§ 15610.30,
15657.5.)1 We reverse the attachment orders because they are not supported by sufficient
admissible evidence of the Lim Parties’ claims. The issues pertaining to the award of
attorney fees are moot.
FACTS
The Developer entered into a contract styled “Master Agreement And Covenant
Concerning Use and Resale of Residential Units” (Master Agreement) with the City of
Monterey Park (City) regarding the development of condos (Villa Garfield). The recitals
stated that the approvals “allow the construction of a senior affordable housing/
commercial mixed-use project at the Property, with all 87 residential condominium units
(affordable homes) to be sold and/or leased at non-market rates.” In its covenants, the
Developer agreed to sell a Low Income Affordable Unit only to a Low Income Qualified
Household and a Moderate Income Affordable Unit only to a Moderate Income Qualified
Household. It also agreed that the units had to be sold for a price that did not exceed the
Affordable Housing Cost.
The definitions section stated: “‘Affordable Housing Cost’ means for Qualified
Households, the purchase price (with 75% loan to value financing) for which the income
of a Low Income Qualified Household or a Moderate Income Qualified Household will
qualify for the purchase of a Low Income Affordable Unit or a Moderate Income
Affordable Unit, respectively, and shall be computed so that the total mortgage payment,
insurance, property taxes, association fees for the Affordable Unit does not exceed 35%
of the gross income of the Qualified Household.” A Low Income Qualified Household
was defined to mean a household earning up to 80 percent of the median area income for
Los Angeles County “as defined by [the United States Department of Housing and Urban
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All further statutory references are to the Welfare and Institutions Code unless
otherwise indicated.
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Development (HUD)], as adjusted for household size by the City in accordance with the
City’s policies and procedures, provided that the prospective buyer or tenant is otherwise
qualified for the purchase of the Affordable Unit under the City’s policies and
procedures[.]” A Moderate Income Qualified Household was similarly defined, except
the household earning had to be between 80 percent and 120 percent of the median area
income.
Setting an absolute ceiling on prices, the Developer’s covenants provided: “The
parties hereby agree that the initial purchase price for a Low Income Affordable Unit
shall not exceed $249,770; the initial purchase price for a one (1) bedroom Moderate
Income Affordable Unit shall not exceed $299,670; and the initial price for a two
(2) bedroom Moderate Income Affordable Unit shall not exceed $369,599. If any
Affordable Unit is sold by the Developer after April 30, 2007, the foregoing initial
purchase prices shall be adjusted by a factor equal to the percentage increase in the
Consumer Price Index for the 2006 calendar year; and on April 30 of each year thereafter,
such prices shall be adjusted by a factor equal to the percentage increase in the Consumer
Price Index for the preceding calendar year.”
In June 2006, Maria Zepeda purchased a one-bedroom Low Income Affordable
Unit for $249,770 and paid a mandatory consulting fee of $30,000 to the Developer’s
principals and managers. On April 30, 2007, Tak Wong and Helen Wong entered into an
agreement to purchase a two-bedroom Moderate Income Affordable Unit for $430,000.
Later in 2007, Ann Lim purchased a one-bedroom Low Income Affordable Unit for
$270,000, Lily Yeung and Fat Ki Yeung purchased a one-bedroom Low Income
Affordable Unit for $280,000, Ping Tu purchased a one-bedroom Low Income
Affordable Unit for $281,200, Petrina Ho purchased a one-bedroom Low Income
Affordable Unit for $280,000, and Mae Young purchased a two-bedroom Moderate
Income Affordable Unit for $429,000.
Jack Wong, a consultant for the City who works with the planning department,
attended a public meeting at Villa Garfield on June 24, 2010. He gave a power point
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presentation regarding the Master Agreement, and explained that it contained price
restrictions for all units.
Subsequently, the Lim Parties sued the Developer for, inter alia, financial abuse of
elders on the theory that they had been overcharged for their units. Pursuant to section
15657.01, the Lim Parties filed applications for prejudgment attachment orders.
The Developer opposed and filed evidentiary objections. It argued that the
applications were not supported by sufficient admissible evidence, and the Lim Parties
had not established the probable validity of their claims or the amounts that they were
seeking by way of attachment.
The trial court overruled the Developer’s objections, granted the applications and
awarded costs and attorney fees. The amounts of the attachments, which included $1,000
in attorney fees and $40 in costs, were these: Maria Zepeda ($262,040); Tak Wong and
Helen Wong ($463,590); Ann Lim ($247,540); Lily Yeung and Fat Ki Yeung
($262,040); Ping Tu ($191,280); Petrina Ho ($262,040); and Mae Young ($217,090).
This timely appeal followed.
DISCUSSION
The question presented is whether the Lim Parties submitted sufficient admissible
evidence to support their claims. We review the trial court’s evidentiary rulings for an
abuse of discretion (Pannu v. Land Rover North America, Inc. (2011) 191 Cal.App.4th
1298, 1317), and we examine its factual findings under the substantial evidence test.
(Series AGI West Linn of Appian Group Investors DE, LLC v. Eves (2013) 217
Cal.App.4th 156, 162 (Series).)
I. Elder Abuse.
Under the elder abuse laws, an elder is any person residing in California who is 65
years of age or older. (§ 15610.27.)
Section 15610.30 provides, in part: “(a) ‘Financial abuse’ of an elder or
dependent adult occurs when a person or entity does any of the following: [¶] (1) Takes,
secretes, appropriates, obtains, or retains real or personal property of an elder or
dependent adult for a wrongful use or with intent to defraud, or both. [¶] (2) Assists in
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taking, secreting, appropriating, obtaining, or retaining real or personal property of an
elder or dependent adult for a wrongful use or with intent to defraud, or both. [¶]
(3) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting,
appropriating, obtaining, or retaining, real or personal property of an elder or dependent
adult by undue influence, as defined in Section 15610.70. [¶] (b) A person or entity shall
be deemed to have taken, secreted, appropriated, obtained, or retained property for a
wrongful use if, among other things, the person or entity takes, secretes, appropriates,
obtains, or retains the property and the person or entity knew or should have known that
this conduct is likely to be harmful to the elder or dependent adult.”
Pursuant to section 15657.5, an elder may sue a perpetrator of financial abuse for
damages and recover attorney fees and costs.
II. The Relevant Attachment Law.
“Notwithstanding Section 483.010 of the Code of Civil Procedure, an attachment
may be issued in any action for damages pursuant to Section 15657.5 for financial abuse
of an elder or dependent adult, as defined in Section 15610.30. The other provisions of
the Code of Civil Procedure not inconsistent with this article shall govern the issuance of
an attachment pursuant to this section.” (§ 15657.01.)
“The application shall be supported by an affidavit showing that the plaintiff on
the facts presented would be entitled to a judgment on the claim upon which the
attachment is based.” (Code Civ. Proc., § 484.030.) “The facts stated in each affidavit
filed pursuant to this title shall be set forth with particularity.” (Code Civ. Proc.,
§ 482.040.) To obtain an attachment, a plaintiff must demonstrate the probable validity
of the claim. (Series, supra, 217 Cal.App.4th at p. 162.) “A claim has probable validity
when it is more likely than not that the plaintiff will obtain a judgment against the
defendant on that claim.” (Code Civ. Proc., § 481.190.)
III. Low or Moderate Income Qualified Household.
The Developer contends that the Lim Parties failed to prove that they were low or
moderate income households. We agree.
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In their declarations, the Lim Parties stated their approximate annual incomes, and
that they qualified as low/moderate income households. The Developer objected that the
declarations lacked foundation. The trial court overruled the objections. As to the
averments that the Lim Parties qualified as low/moderate income households, the trial
court abused its discretion. Per Evidence Code section 403, subdivision (a), the
proponent of evidence must prove the existence of a preliminary fact2—i.e., lay a proper
foundation—when: the relevance of the evidence depends on the existence of the
preliminary fact. The relevance, and therefore the admissibility, of the Lim Parties’
qualification statements was dependent upon the following preliminary facts: (1) the
median area income for Los Angeles County as defined by HUD; (2) how the median
area income was adjusted for household size by the City in accordance with its policies
and procedures; (3) each of the Lim Parties was otherwise qualified for the purchase or
lease under the City’s policies and procedures; and (4) based on their annual incomes,
they fell within the range of a low or moderate income qualified household. The Lim
Parties’ declarations made no attempt to establish any of these preliminary facts.
As additional proof that they qualified, the Lim Parties offered the declaration of
Jack Wong. Exhibit B to that declaration contained slides he showed at the public
meeting on June 24, 2010. Page 11 set forth “Income Limits.” It identified “Low
Income 80% AMI” and “Moderate Income 120% AMI” for households that had one to
five occupants. For example, “Low Income 80% AMI” for a household of one was
identified at $46,400 and “Moderate Income 120% AMI” for a household of one was
identified as $52,900. The bottom of the slide stated: “Source: CA Housing and
Community Development Department for LA/LB SMSA 2010.” In his declaration, Jack
Wong does not mention, authenticate, verify or provide a foundation for any of the
information in the slide. The trial court overruled an objection based on lack of
2
Evidence Code section 400 provides: “As used in this article, ‘preliminary fact’
means a fact upon the existence or nonexistence of which depends the admissibility or
inadmissibility of evidence. The phrase ‘the admissibility or inadmissibility of evidence’
includes the qualification or disqualification of a person to be a witness and the existence
or nonexistence of a privilege.”
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foundation. Once again, we find error. To be relevant, and therefore admissible, the
slide had to establish the median area income for Los Angeles County, as defined by
HUD. The slide did not cite HUD as a source, so the figures it provided lacked
foundation. Moreover, the source cited by the slide was from 2010, which is irrelevant.
Although the Master Agreement does not state that the median area income must come
from the statistics of a particular year, it is reasonable to assume that a purchase in 2006
and a purchase in 2007, respectively, had to be assessed based on the most recent median
area income statistics. Presumably, the most recent statistics from those years came from
2005 and 2006.
IV. The Overcharges.
The Developer assigns error to the finding that the Lim Parties established
overcharges. This position is well taken.
The Lim Parties declared that they were overcharged in the following amounts:
Maria Zepeda ($180,000); Tak Wong and Helen Wong ($319,000); Ann Lim ($170,000);
Lily Yeung and Fat Ki Yeung ($180,000); Ping Tu ($131,200); Petrina Ho ($180,000);
and Mae Young ($149,000). The Developer objected, inter alia, based on lack of
foundation.
To prevail, the Lim Parties had to: (1) calculate 35 percent of their gross incomes
at the time each person or couple purchased a unit; (2) for each person or couple,
establish a housing cost (mortgage payment plus the cost of insurance, property taxes,
and association fees) that did not exceed 35 percent of their gross incomes; (3) reverse
engineer the mortgage payment into a purchase price with 75 percent loan to value
financing; and (4) subtract the proper purchase prices from the actual purchase prices to
arrive at their damages.
The evidence of the alleged overcharges lacked foundation, and the trial court
should have sustained the Developer’s objections. None of the Lim Parties calculated 35
percent of their gross incomes. In addition, they did not break down their mortgage
payments—including their interest rates, how much of each payment pertained to
principal and interest, and how the payments were amortized—nor did they identify the
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specific cost of their insurance, property taxes, and association fees. Rather, they simply
stated what their total monthly housing costs should be. Moreover, they skewed their
purported monthly housing costs by improperly adding in the cost of utilities. Thus, the
Lim Parties failed to establish the preliminary facts essential to identifying overcharges.
Even if the total monthly housing costs were supported by the evidence, the Lim
Parties failed to explain how those costs translated into a purchase price. Without an
explanation of how the Lim Parties derived the purchase prices they claim would have
been appropriate, they cannot prevail.
All other issues are moot.
DISPOSITION
The orders are reversed.
The Developer shall recover its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
__________________________, J.
ASHMANN-GERST
We concur:
_____________________________, P. J.
BOREN
______________________________, J.*
FERNS
*
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
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