Elderly tenant wins in appeal of his eviction

A state appeals court has blocked the eviction of an elderly San Francisco tenant and said the jury in his case should have heard evidence that might have undermined his landlord’s claim that he planned to go out of the rental business.

Diego De Leo, 83, has rented a unit at the four-unit North Beach property on Chestnut Street since 1989. The owner, Martin Coyne, asked him to move into an upstairs apartment for a reduced rent in 2012 so that Coyne could move into his three-bedroom cottage, but De Leo refused, saying the one-bedroom apartment lacked space for his son, who was also his caretaker.

Coyne then invoked the Ellis Act, a 1985 state law that allows owners to evict all tenants in order to remove their property from the rental market.

De Leo, represented by the Tenderloin Housing Clinic, challenged the proposed eviction, arguing that Coyne was hiding the fact that he was still in the rental business by falsely labeling the building’s remaining occupants as co-owners. After a trial in 2016, a jury found by a 9-3 vote that Coyne had acted in good faith and upheld the eviction. De Leo has continued to rent a downstairs, one-bedroom apartment in the building during his appeal.

In a ruling Monday, the First District Court of

Appeal in San Francisco said jurors should have heard evidence that might have shown an effort by Coyne to conceal the true status of another occupant.

Maria Esclamado, an employee of Coyne’s company, had rented a unit of the building before Coyne sold her a 10 percent ownership interest for $500,000 in 2013. The court said the terms were unusual: Coyne financed the entire sale himself with no down payment, paid virtually all closing costs, and required Esclamado to pay only monthly interest of $1,583.33, slightly less than the rent she had been paying. She stopped making those payments and moved out in 2015, and Coyne then took over the unit, the court said.

Superior Court Judge Leslie Nichols barred evidence of Coyne’s transactions with Esclamado, saying they had only “slight” relevance to De Leo’s case. The appeals court disagreed.

If Esclamado was actually a tenant rather than a co-owner, and Coyne “actively sought to obscure” her tenancy, “it would certainly tend to suggest (Coyne) did not have a good-faith intent to exit the residential rental market” when he filed the eviction notice, Justice Terence Bruiniers said in the 3-0 ruling. He said the evidence Nichols excluded “suggests the transaction was a sham.”

The decision overturns the jury verdict and allows the case to be retried. Justin Goodman, a lawyer for Coyne, predicted Tuesday that Coyne would prevail at a retrial even with the evidence that was previously barred.

Esclamado “received title to the property and had all the benefits of title,” Goodman said. “Martin (Coyne) took all the risks.”

Steve Collier, a Tenderloin Housing Clinic attorney, said the ruling “should stand as a warning to unscrupulous landlords who use the Ellis Act as a pretext to evict tenants they don’t like.”