California Legal Brief

The Rule of De Paolo is that a terminated resident manager whose occupancy was contingent solely upon employment has no right to continue possession after employment termination and is not entitled to Tenant Protection Act protections, under circumstances where the resident manager's agreement explicitly conditioned occupancy on continued employment and required vacation within 30 days of termination.

Appeal from judgment after bench trial in Superior Court, Los Angeles County.

Defendant Appellants were Jenny Rosales and Richard A. Charlemagne — the former resident manager and her partner who occupied the premises as additional occupant under the manager's agreement.

Plaintiff Respondent was John R. De Paolo, as Trustee — the property owner who terminated the resident manager and sought possession through unlawful detainer.

The suit sounded in unlawful detainer based on termination of employment relationship. No cross-claims.

The key substantive facts leading to the suit were Rosales signed a resident manager's agreement in December 2020 that explicitly made her occupancy contingent on employment and required vacation within 30 days of termination; plaintiff terminated her employment in August 2023; Rosales refused to vacate and attempted to force rent payments which plaintiff returned; Charlemagne occupied the premises only as Rosales's additional occupant without any independent lease.

The procedural result leading to the Appeal: The trial court granted judgment for plaintiff after bench trial, ruling that defendants had no independent right to possession separate from the employment relationship and that Rosales failed to prove the employment termination was retaliatory or unlawful.

The key question(s) on Appeal: 1) Whether terminated resident managers whose occupancy was contingent on employment are entitled to Tenant Protection Act protections; 2) Whether defendants had independent tenant rights; 3) Whether the employment termination was retaliatory; 4) Whether proper notice was given.

The Appellate Court held that terminated resident managers become tenants at sufferance or licensees with no tenant rights, that the Tenant Protection Act does not apply to unlawful occupancy following employment termination, and that defendants failed to establish retaliatory termination where the resident manager's agreement explicitly conditioned occupancy on continued employment.

The case is inapplicable when the resident manager has an independent lease separate from the employment agreement, when subsequent events create a new tenancy after employment termination, or when the employment termination is proven to be retaliatory or unlawful.

The case leaves open the distinction between when terminated employee-occupants are classified as tenants at sufferance versus licensees, and what specific "subsequent events" might create a new tenancy after employment termination.