Any legal document must be prepared with care, but some are likely to be scrutinized especially closely by courts that are sensitive to the impact they can have, especially if one party has far greater resources than the other.
This kind of careful scrutiny was key to an unlawful detainer action that was reviewed by the California Court of Appeal (City of Alameda v Sheehan).
In 2017, Shelby Sheehan leased an apartment owned by the City of Alameda. Sheehan stopped paying rent in December of 2020 and did not pay rent for more than 17 months.
On April 5, 2022, the City served Sheehan with a three-day notice to pay rent or vacate the apartment. The notice said payment “must be made by cash or check, payable to City of Alameda and must be delivered to City of Alameda c/o River Rock Real Estate Group” at its office address.
After Sheehan failed to pay the rent or vacate the apartment, the City initiated an unlawful detainer action asking the court for permission to evict her.
Sheehan argued that the City’s lawsuit was defective, because the notice the City sent failed to provide the name of a “natural person” to whom she could pay the rent, and included only a “vague demand for unspecified sums of rent” rather than the precise amount of rent she owed.
She also said the notice was confusing because one sentence said she could only pay by cash or check, but the next paragraph specified that she could “pay by personal check, cashier’s check, money order or cash.”
The trial court agreed with Sheehan’s arguments, concluding that the refence to “person” in California Code of Civil Procedure section 1161(2) meant only a natural person – that is, a living human being rather than a corporation or other legal entity. It also agreed that the wording about methods of payment was ambiguous. For these reasons, it said, the three-day notice was defective, halting the eviction proceedings.
The City then appealed.
The primary focus of the Court of Appeal’s review of the case was whether the “person” to whom rent was to be paid means only a natural person, as Sheehan contended, or whether it includes corporations and other entities, as the City argued.
The justices concluded that the City’s position was correct.
They noted that prior to 2001, California only required a three-day notice to state the amount of rent that was due, without providing any information about how payment was to be made. The law was amended in that year to require notices to “include the name, telephone number, and address of the person to whom the rent shall be made.”
The statute does not define “person,” the justices noted, but California’s Code of Civil Procedure does: “As used in this code …‘Person’ includes a corporation as well as a natural person.”
They noted that another section of the unlawful detainer statute says, “As used in this section … ‘Tenant’ includes any person who hires real property…” and “common sense and case law both recognize that the unlawful statutes apply to corporate tenants.” In this context, they concluded, “person” includes both human beings and legal entities such as corporations.
They note that one section of the statute allows for rental payments to be made directly to a financial institution or via electronic funds transfer. To accept Sheehan’s logic, they said, they would have to allow leases to provide for payments to an “entity” such as a bank or website, but prohibit a similar corporate “entity” from being named as a payee in a three-day notice.
The City did not achieve a full victory from the Court of Appeal, however. The justices noted that a three-day notice “is valid only if the lessor strictly complies with the statutorily mandated notice requirements.”
One of those requirements is that if a notice names a corporation or entity, the name must be correct and complete. The notice sent by the City told Sheehan to send payment to “River Rock Real Estate Group,” when the correct name of the company was “RiverRock Real Estate Group, Inc.” and several other unrelated firms had similar names.
Failing to identify the company correctly created “ambiguity and confusion,” the justices said. Because the notice failed to strictly comply with the statute, it could not support an unlawful detainer action.
For that reason, despite disagreeing with the trial court’s definition of “person,” the appellate court ruled that the confusion in the company name meant the three-day notice did not comply with the law. It affirmed the trial court’s order granting Sheehan’s motion to dismiss the notice, and ordered the parties to bear their own costs.
By Robert C. Weiss