Factual and procedural background
Keisa Williams signed a lease in March 2014 to rent an apartment located at 3620 W. 102nd Street in Los Angeles with Rubin Womack. The two lived in the apartment with Williams’ two children and another person. In 2015, the lease was renewed. The tenants filed a lawsuit against the owners in Oct. 2016 claiming that they had violated the warranty of habitability and had engaged in negligence because of a lack of pest control in their apartment and in the building’s common areas. The tenants alleged that their apartment was infested with bed bugs and had several other problems that the owners had failed to correct. Because of the bed bugs, the tenants alleged that they had suffered personal injuries and property damages.
In March 2019, the owners filed a motion to compel arbitration based on an arbitration clause in the tenants’ residential lease. The clause stated that issues that might arise between the tenants and the owners would be settled in arbitration rather than being litigated in court. The tenants opposed the motion, arguing that they could not have validly signed an arbitration agreement within a residential lease under California law. The lease referred to the arbitration agreement in Addendum B, which had spaces for the landlords and the tenants to sign. However, the spaces were blank. The court denied the owners’ motion to compel arbitration, finding that the owners had not shown that they had a valid arbitration agreement and that the owners had waived arbitration. The owners filed an appeal.
Issue: Whether the arbitration clause in the tenants’ lease compelled arbitration or was void?
The issue on appeal was whether the arbitration clause that was referenced in the tenants’ residential lease should have compelled the parties to arbitrate their dispute rather than to litigate it. The tenants argued that the arbitration clause was not enforceable under state law. The owners argued that the clause was valid and should have compelled the tenants to arbitrate the dispute rather than pursuing litigation in court.
Rule: Under California law, arbitration agreements contained inside of residential leases are not enforceable.
Under Cal. Civ. Code § 1953(a)(4), any agreement in a residential lease in California through which a tenant waives his or her procedural rights in litigation about the tenants’ rights are considered to be void. The owners argued that this section did not apply because the tenants were not waiving their right to a jury trial when they signed the arbitration agreement compelling arbitration of any disputes that might arise between the tenants and owners.
Under California law, landlords are expected to maintain and repair their properties to keep them in a reasonably safe and hazard-free condition for their tenants. Slumlords who do not adequately maintain their properties may violate county ordinances and state laws. Tenants have a right to file lawsuits against their landlords when their properties are in disrepair and are unsafe. However, this case looked at whether the dispute should be litigated in court or could be sent to arbitration.
The court began by noting that the case fell under state rather than federal law. The owners did not try to claim that the Federal Arbitration Act applied to the case in the trial court, and the appeals court also found that the lease did not involve interstate commerce. This meant that state law applied. It then looked at two court decisions that had interpreted Civ. Code § 1953(a)(4).
The court first considered Jaramillo v. JH Real Estate Partners, Inc., 194 Cal.App.4th 394 (2003). In this case, the appeals court affirmed the trial court’s denial of a motion to compel arbitration. The plaintiffs had filed a claim against their landlords based on mold in their apartment. In that case, the court found that the tenants’ procedural rights to litigation in cases involving tenant rights applied because compelling arbitration necessarily prevents the tenants from taking their cases to trial before a jury. The court did find that tenants could waive their rights in agreements that were separate from their residential leases but could not do so within a residential lease.
The court then reviewed the decision in Harris v. University Village Thousand Oaks CCRC, LLC, 49 Cal.App.5th 847 (2020).[5} In that case, several residents of a continuing care facility sued because of alleged misrepresentations about fees and security. The continuing care retirement community filed a motion to compel arbitration based on an arbitration agreement in the contract. The trial court ordered the parties into arbitration. However, the appeals court found that the arbitration agreement was void because the residents were arguing about their rights as tenants. The court also noted that the state’s legislature enacted Civ. Code § 1953 to prevent tenants from waiving important rights unknowingly.
In comparing the instant case to Jaramillo, the appeals court stated that both were dealing with conditions inside of their apartments and in common areas. The claims dealt with violations of their rights as tenants, and the arbitration agreement would have waived their right to a jury trial. The owners tried to argue that Civ. Code § 1953(a)(4) did not apply to the right to a jury trial. However, the courts in Harris and Jaramillo both found that waiving procedural rights would necessarily include waiving the right to a jury trial since arbitration forecloses the ability to pursue litigation in the courts. The owners argued that Jaramillo allows arbitration of claims involving habitability. However, the appeals court noted that arbitration of disputes over the warranty of habitability is only enforceable when the agreement is in a standalone document, and the agreement in the instant case was contained within the residential lease.
The court affirmed the trial court’s decision but on different grounds. It found that the arbitration agreement contained inside of the tenants’ lease violated public policy. The case was returned to the trial court for further proceedings, and Williams and the other tenants were awarded their costs on appeal.
Contact the Steven M. Sweat Personal Injury Lawyers
Slumlords should not be allowed to get away with leaving their apartments and other properties in a state of disrepair. When tenants are living in dangerous conditions that their landlords refuse to correct, they may have legal rights to file lawsuits against their landlords. If your landlord has failed to correct dangerous conditions in your apartment or in the common areas of your building, you may want to consult with the personal injury attorneys at the Steven M. Sweat Personal Injury Lawyers firm in Los Angeles. Contact us today to learn about your legal options and the remedies that might be available to you by calling us at (866) 966-5240 or by submitting your case details to us on our online contact form.