Risks Associated with Proceeding with Eviction While Appeal is Pending

When a landlord who has secured a writ of possession evicts a tenant before the appellate rights of the tenant have been exhausted, the landlord assumes the risk it will be subject to a full accounting and restitution if the judgment granting the writ of possession is reversed on appeal. That principal was again highlighted in the recent case of Beach Break Equities v. Martin Lowell (decided December 14, 2016).

This case concerned a single family home that had been leased to a tenant, Lowell, under a five year lease with multiple five-year options. The owner of the property defaulted on the loan and the lender foreclosed.  Beach Break acquired the property at the trustee's sale and then filed an eviction action against Lowell.  The trial court granted Beach Break's motion for summary judgment. While Lowell appealed the judgment, Beach Break obtained a writ and proceeded with the eviction.  After it evicted Lowell, Beach Break sold the property to a third party.

In a major development, the appellate court reversed Beach Break’s victory on summary judgment, and also ordered the trial court to grant Lowell a hearing for potential restitution. However, in later proceedings, the trial court refused to grant Lowell a restitution hearing because Lowell had not sought such relief in his answer or by a separate Cross-Complaint. The trial court then allowed Beach Break to dismiss the action.  The case looked over again; but again Lowell appealed.  The appellate court reversed and held that Lowell was entitled to a restitution hearing, including because the prior appellate court had ordered it.  The court explained that receiving such a hearing is an equitable right that exists independently of whether the party had actually requested restitution in its pleadings.  Moreover, Beach Break was not allowed to avoid the potential of a restitutionary remedy by dismissing the case. In reversing the dismissal, the appellate court noted that it was not holding that Lowell was entitled to restitution, only that he was entitled to a hearing on the issue.  The actual right to restitution following reversal on appeal is left to the trial court's judicial discretion.

For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website: www.rwclegal.com.

The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

© 2016 Ruzicka, Wallace & Coughlin, LLP.