KTS Legal Alert- California Courts in Crisis: What Every Landlord and Foreclosing Party Needs to Know

Kimball, Tirey & St. John LLP

Legal Alert May, 2012


California Courts in Crisis: What Every Landlord and Foreclosing Party Needs to Know


Ever since the recession began, the judiciary branch of our government has been subject to
major changes through lay-offs, new and onerous local court rules, and court closures and
consolidations, all negatively affecting the speed unlawful detainer actions go through the court
system. The state’s budget crisis has resulted in a reduction to the California judicial branch of
652 million. Added to that is the recently implemented the Sargent Shriver Civil Counsel Act,
which gives indigent residents the right to an attorney in unlawful detainer actions.
Unfortunately, these major changes are already revealing a new wave of backlogs, delays and
further burden on court budgets. The result: the unlawful detainer (eviction) process takes
longer to process than ever before.

This article will inform you of the present court environment so that you can better anticipate
what can/will occur in today’s unlawful detainer process.

Court Lay-offs and Consolidation

Many courts have been unable to sustain the number of clerks and commissioners to handle the
increased volume of unlawful detainer actions filed. Evictions in California have been and
continue to be on the rise, not just because the recession and unemployment has created
hardships on tenants to pay their rent, but also due to the large number of evictions following
foreclosure.

As an example, as recent as April, 2012, the Los Angeles Superior Court announced the most
significant reduction of services in its history. By June 30, 2012, the Court will reduce its staff by
nearly 350 workers and close 56 courtrooms. This amounts to a 24% reduction in staff, all while
case filings continue to increase. In addition, the courthouses in Santa Clarita, Beverly Hills and
Simi Valley have shut down their unlawful detainer departments and transferred their workloads
to other already overburdened courthouses. All of this has created incredible pressures on
California courts to keep up with their work. According to the Los Angeles Presiding Judge, they
cannot endure these pressures for much longer. Similar reductions of court staff have been
made throughout California. For instance, San Francisco recently announced over 200 lay-offs
of court personnel.

As a result, the timing of unlawful detainer cases flowing through the court system has slowed
down. For uncontested cases, the time line from filing the unlawful detainer to a Sheriff lock-out
has been delayed two to four weeks depending upon the court. The average number of days
for an unlawful detainer case to be processed from the initial filing to the Sheriff lock-out used to
average approximately 25 to 35 days, depending upon the court. Now the average time frame
is 35 to 45 days. For contested cases, the time frame jumped from 35 to 45 days to 55 to 75
days, again depending upon the court. For the most part, the courts in Los Angeles and San
Francisco take the longest to process unlawful detainer actions.

The Sargent Shriver Civil Counsel Act

The Sargent Shriver Civil Counsel Act (“Shriver Act”) was signed into law in the fall of 2009 and
gives poor residents the right to an attorney in unlawful detainer actions. The funding for the Act
was through increases in court filing fees (currently at $240.00 per case). The Shriver Act was
implemented in San Diego and Los Angeles Counties this year as their pilot programs. The
implementation of the Act has produced a much larger number of attorneys representing
indigent tenants. For instance the number of Legal Aid attorneys in San Diego County increased
from 2 to 7 at the beginning of this year. In Los Angeles there are at least five separate tenant
firms that have benefited either directly or indirectly from Shriver funding: Legal Aid, Eviction
Defense Network, Public Counsel, Inner City Law and BASTA. The result is that about 80% of
evictions that go to trial in the downtown LA courthouse are attorney contested. In other Los
Angeles county courtrooms where Shriver funding is not present the percentage of attorney
contested cases is about 30%.

Under the provisions of the Act, the court sends a letter to all defendants of unlawful detainer
who have decided to contest the case advising them of their “right” to counsel, listing the phone
numbers of counsel participating in the Shriver program. Keep in mind that the courts have
already sent the defendants to an unlawful detainer action a letter giving them the name and
phone number of legal aid attorneys who can represent indigent defendants. If the tenants don’t
sign up, they are approached at the time of trial and retained on the spot.

Once retained, the Shriver Act attorneys file an answer to contest the case which is frequently
accompanied by a jury demand. Note that in Los Angeles a jury trial is demanded across the
board on every matter regardless of the merits of the case. Accompanying the answer is
typically “discovery” which is the fact finding process of a lawsuit requiring depositions, written
interrogatories, or request for production of documents, previously rarely used in unlawful
detainer actions. They also consider filing delaying motions including motions to quash and
demurrers. The mere filing of these extraordinary actions gains leverage for the tenant and puts
the landlord at jeopardy for the defendants’ attorneys’ fees, especially if they lose the case in
front of a jury.

Because jury trial demands are on the rise, we advise residential landlords to consider putting a
cap on their attorneys’ fees provision in their lease. We suggest $1000.00 as the amount of the
cap. If you do not have a cap on your attorneys’ fees provision and lose a jury trial, the Shriver
Act attorneys are demanding huge amounts of attorneys’ fees to be awarded. If you are
considering a cap, please consult with our firm to ensure that your lease language is
appropriate.

It is important to keep in mind that there are statutory fees available in some unlawful detainer
actions notwithstanding whether or not the lease provides for an attorneys’ fee award. For
instance, if the tenant prevails on a habitability claim, the court can award attorneys’ fees
whether or not the lease provides for the same. In these cases, the cap would not affect the
amount of the award.

Some attorneys are advising their clients to remove the attorneys’ fee award in its entirety.
Although this would also give you protection from a high award of attorneys’ fees, it may be a
situation where you are throwing out the baby with the bath. Having an attorneys’ fee provision
with a cap allows you to use the award of attorneys’ fees as leverage to persuade a struggling
tenant to prioritize their payments by paying the delinquent rent to avoid the eviction which ends
up in a monetary judgment including rent, attorneys’ fees and court costs. Moreover, the
attorneys’ fees and costs award as part of your judgment can be recovered in the collection
process. Keep in mind, attorneys’ fees and court costs are not legally owed unless a judge
awards them in the case before them.

The results of the Shriver Act so far this year have been an increase in the number of contested
unlawful detainer cases. According to our firm’s statistics, in 2010 and 2011, the percentage of
contested cases in San Diego County was 27%, and Los Angeles, 31%. So far in 2012, due to
the Shriver Act, the number of contested cases in San Diego County jumped to 39% and in Los
Angeles to 40%.

Changes in Local Court Rules
The reduction of court personnel has also had a negative impact on some of the local court’s
rules that heretofore helped expedite the unlawful detainer process. For instance, a court order
allowing the plaintiff of an unlawful detainer action to serve the lawsuit by posting a copy on the
door and sending another certified mail. In some courts, the order was stamped by the clerk to
expedite the process. This is no longer happening because of the reduction in court personnel.

In addition, some local courts have beefed up their requirements of due diligence in serving
unlawful detainer cases, requiring landlords and lenders to conduct an investigation as to where
the defendants work, and whether or not they are in the military. This all ends up delaying the
already lengthy unlawful detainer process in California.

In conclusion, prudent landlords and lenders filing unlawful detainer actions need to be prepared
for the increase in delays and in the number of contested cases as we enter this new era of
court reductions and the Shriver Act.

For more information on this article, please contact any of our offices. You can find the office
location nearest to you by going on our website: www.kts-law.com, or by calling 800-338-6039.

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