Landlord accused of antagonizing, wrongfully evicting California couple must pay $2.7M

A San Francisco couple was awarded a hefty settlement after filing a lawsuit accusing their landlord of antagonizing tenants in rent-controlled apartments in an effort to drive them out.

Dale Duncan and Marta Munoz Mendoza first filed a lawsuit against Anne Kihagi in May 2015, alleging months of erratic behavior and harassment.

A jury ruled in their favor in 2017, at first issuing Kihagi with a judgment of over $3.5 million, the largest sum “in a single-unit landlord-tenant case not involving personal injury claims in the nation” at the time, SFGATE reported. However, a trial court later reduced the charges to $2.7 million, the amount upheld by the appeals court this week, The San Francisco Chronicle reported.

The ruling is only the latest legal battle involving Kihagi, who at one point owned over 50 rent-controlled units in San Francisco, Curbed reported. She has previously been sued by other tenants, multiple lawyers who have represented her, and Umpqua Bank for defaulting on loans associated with three San Francisco properties, according to Curbed and Mission Local.

A lawyer representing Kihagi did not immediately respond to McClatchy News’ request for comment Friday.

The legal battle between Duncan and Mendoza and their landlord began in 2015, nearly a year after Kihagi purchased the five-unit building the couple had lived in for years prior.

When Duncan first moved into the five-unit complex in 1994, his two-bedroom apartment was subject to San Francisco’s rent-control ordinance, meaning his rent was raised about 1.5% per year, or about 31% during his tenancy. The market rent for a two-bedroom, one-bathroom apartment in the city increased by 254% during that time, the ruling said.

Mendoza moved into the unit in 2010, and the married couple lived there together with their young daughter. They never missed a rent payment or paid one late, according to the ruling.

But the couple said they noticed a steep decline in the quality of the building and its maintenance in June 2014, when Kihagi purchased the building under the limited liability corporation Zoriall, which she co-owned with her sister, Christina Mwangi.

Recycling bins were removed, a leaky water heater went unrepaired, utilities were shut off due to unpaid bills, and access to the laundry room was blocked, the ruling said. Duncan tried to communicate with Kihagi about issues in the building on multiple occasions, according to the ruling, but found she often ignored or delayed responding to maintenance issues, becoming “uncommunicative and uncooperative” and “increasingly hostile” when asked to attend to tenants’ needs.

In April 2015, Duncan and Mendoza formed a tenants’ union with other residents in the building and filed a notice of wrongful eviction citing fear they would be evicted. The day after the couple filed the notice, Kihagi issued them a 60-day eviction notice under the guise of an “owner move-in,” claiming that Mwangi would live in the apartment despite already having a nearby rental unit and home, according to the ruling.

Another apartment in the building had recently been vacated, but Kihagi told the couple that it was too big for Mwangi and “lack[ed] aesthetic charm and potential” compared to Duncan and Mendoza’s apartment.

Kihagi also did not offer the recently vacated apartment to the couple and claimed it would be months before the apartment would be available to rent, the ruling said.

The couple filed a lawsuit in May 2015, around which time the city of San Francisco also sued Kihagi, Mwangi, Zoriall and other LLCs connected to Kihagi for tenant harassment, the ruling states.

Duncan, Mendoza and their daughter moved out of the apartment in August 2015, moving into a two-bedroom, one-bathroom house with a rent nearly triple what they had paid in their rent-controlled apartment. For about a year afterward, Duncan noticed that no one had moved into the family’s former unit, the ruling said.

In 2017, a jury ruled in Duncan and Mendoza’s favor, saying that Kihagi had harassed the couple and violated the state’s owner move-in law, which only allows a property owner to evict rent-controlled tenants as long as the landlord uses or occupies the unit for 36 continuous months, The San Francisco Chronicle reported.

“The jury determined that [Mwangi] never moved in and never intended to move in,” Steven McDonald, an attorney for Duncan and Mendoza’s family, said at a 2017 news conference, according to SFGATE.

Also at the time, Superior Court Judge Angela Bradstreet criticized Kihagi and her codefendants for their “persistent pattern of bad faith harassment, retaliation and fraud” directed at renters, as well as their “complete lack of understanding of the unlawfulness of their conduct,” the San Francisco Chronicle reported.

“I’ve gone after a lot of lawless landlords in my time, but Anne Kihagi has a special place reserved for her in San Francisco’s abusive landlord hall of fame,” City Attorney Dennis Herrera told The San Francisco Chronicle.

Bradstreet said that Kihagi had committed “outrageous, unlawful and fraudulent violations that were specifically targeted against often long-term tenants who were protected by San Francisco’s rent control laws,” Curbed reported. Bradstreet found that Kihagi had 1,612 violations total, Mission Local reported.

Bradstreet originally ordered Kihagi to pay the city $2.7 million in damages, as well as about $2.7 million more in legal fees and costs, bringing the total charges to nearly $5.5 million, SFGATE reported.

The trial court in Duncan and Mendoza’s case ruled 3-0 in the couple’s favor, ultimately upholding the decision to award the couple $2.7 million in damages on Tuesday.

“The jury in this case came to the same conclusion that the judge did in our case: that Ms. Kihagi and her accomplices unlawfully harassed and evicted tenants,” City Attorney spokesman John Cote told The San Francisco Chronicle. “We’re pleased that the Court of Appeal has now affirmed both of these cases. The people of San Francisco have had enough of Ms. Kihagi’s lies, predatory practices, and legal trickery.”

This story was originally published September 3, 2021 at 2:15 PM with the headline "Landlord accused of antagonizing, wrongfully evicting California couple must pay $2.7M."