Palm Woodlake, LLC v. City of Los Angeles CA2/3

Filed 9/1/15 Palm Woodlake, LLC v. City of Los Angeles CA2/3 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 THREE

PALM WOODLAKE, LLC, B254502

Plaintiff and Appellant, (Los Angeles County Super. Ct. No. BC468109) v.

CITY OF LOS ANGELES et al.,

Defendants and Respondents.

APPEAL from judgment of the Superior Court of Los Angeles County, Kevin C. Brazile, Judge. Judgment reversed.

Tritt & Tritt, James F. Tritt; William Hancock, Jr., APLC and William F. Hancock, Jr., for Plaintiff and Appellant.

Michael N. Feuer, City Attorney, Amy Jo Field, Assistant City Attorney, and Juliann Anderson, Deputy City Attorney, for Defendants and Respondents.

_____________________

INTRODUCTION Plaintiff and Appellant Palm Woodlake, LLC, appeals from the trial court’s finding that Defendant and Respondent City of Los Angeles’s lien on the property pursuant to Government Code section 54988 survived Woodlake’s foreclosure sale of the property. Palm Woodlake asserts that its deed of trust on the property had priority over the City’s lien, and foreclosure on the deed of trust extinguished the City’s lien. We agree and reverse the judgment of the trial court. We conclude that the City’s lien had the priority of a judgment lien pursuant to statute, and as a junior encumbrance, was extinguished by Palm Woodlake’s foreclosure sale. FACTS AND PROCEDURAL BACKGROUND Hilario F. Espinosa purchased a 32-unit apartment building located at 5119 Avalon Boulevard, Los Angeles, California, in 2009 with a loan for $1.2 million from Mid Valley Services, Inc. As consideration for the loan, Espinosa executed a promissory note secured by a deed of trust for the property, recorded on July 9, 2009. On July 21, 2009, Mid Valley assigned its interest in the Espinosa note and deed of trust to a group of individual investors in exchange for $1.2 million. The individual investors recorded the assignment on August 25, 2009. In the latter part of 2010, Espinosa allowed the property to fall into disrepair and failed to correct code violations that the City of Los Angeles listed in a letter to him. In November 2010, the Los Angeles Fire Department issued Espinosa and the tenants a notice to vacate, informing them that they had to quit the property due to fire hazards. The notice to vacate informed Espinosa that he was responsible for tenant relocation costs pursuant to Health and Safety Code section 17975. Health and Safety Code section 17975 provides that “[a]ny tenant who is displaced or subject to displacement from a residential rental unit as a result of an order to vacate or an order requiring the vacation of a residential unit by a local enforcement agency as a result of a violation so extensive and of such a nature that the immediate health and safety of the residents is endangered, shall be entitled to receive relocation benefits from the owner.” Because Espinosa failed to pay these relocation benefits to the tenants, the City advanced relocation payments