A $2500 Security Deposit Dispute Between A Landlord And A Tenant Can Turn Into A $30,000 One..... Ouch! Law Offices of Kenny Tan Attorneys Diamond Bar California

A $2500 Security Deposit Dispute Between A Landlord And A Tenant Can Turn Into A $30,000 One..... Ouch! No kidding.

Posted by: Kenny Tan
September 07, 2010
Topic: Security Deposit

Here's the true story...

Tenant gave Landlord $2500 in security deposit when she moved in. Before her lease expired and her moving out, she requested a final walkthrough to make sure the parties were in agreement on the conditions of the property. The request fell on deaf ears.

After Tenant vacated the rental unit, she asked for her deposit back. Once again, no response from the landlord. She waited for 21 days and wrote the Landlord about it. Still no response.

Tenant then had an Attorney write her a letter to demand mediation under the terms of the lease. The Attorney sent the letter to her last known address, the same one indicated on the lease for service of notices. Again no response.

Finally the Attorney managed to get a hold of Landlord on the phone. Landlord claimed she never received Attorney's letter. Attorney asked for mediation which Landlord refused and stated that a statement for the security deposit had been mailed to Tenant and "there's noting to mediate." Tenant denied having received the statement.

Not getting anywhere with the Landlord, Attorney filed a Limited Civil action.

Attorney had a very difficult time serving Landlord who's been evasive. Over the next 4 to 6 months, Attorney tried different ways to serve Landlord, hiring 3 different process servers and 2 local sheriffs to serve her, all to no avail. They would report that there were people in the house because they could see shadows darting across the room but after they had banged on the door hard many times, no one would come to the door. In a desperate move to serve her, Attorney ordered an 8-hour stake-out. During the stake-out, process server saw someone leaving the house that fit Landlord's description. But she denied that was her. Another person came out of the house who confirmed that was her that just drove away. Process server sub-served the co-occupant.

After the time to respond to the summons and complaint expired and with no response filed, Attorney entered default against Landlord. First the notice of entry of default, and later the notice of entry of default judgment, were served at the last known address. The default judgment which included attorney's fees, costs and penalty for bad faith withholding of security deposit which doubles the amount of security deposit, was over $11,000.

For over 6 months after service of notice of entry of judgment was served at the last known address, and having received no contacts from the Landlord, Attorney located Landlord's bank accounts and levied on it. The levy was successful over $2,000.

Suddenly Landlord filed a motion to set aside the default judgment, claiming she was never properly served and in any case she had not been living at that address even though she received mails at that location.

The trial court heard and granted her motion over Tenant's objection that it had no jurisdiction because the time to seek relief had expired since it had been over 6 months since the notice of entry of judgment was served on her. Trial court also ordered Tenant to return the $2000 she successfully levied to Landlord.

An appeal ensued. Agreeing with Tenant's position, the appellate court had tentatively ruled that the trial court didn't have jurisdiction. If the order setting aside the default judgment is reversed and the default judgment is reinstated, another $18,000 will tack onto it since more attorney's fees were incurred to litigate this claim while the matter was appealed.

Ouch!