Former Bocana Tenant Receives $400,000 in Settlement With Landlord

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The awful tale of the Bernal Heights resident who was forced from her home at 355 Bocana after receiving a $6500-per-month rent increase came to a conclusion yesterday, as lawyers agreed to settle a lawsuit stemming from the incident.

As you may recall, back in March 2015, Bernal renter Deborah Follingstad  was hit with a shocking315% rent increase by property owner and lifelong Bernal resident Nadia Lama.  At the time, Lama was receiving legal counsel from lawyer Denise A. Ledbetter.

The 315% rent increase forced Follingstad to move from 355 Bocana, and Lama moved in. Yet in August 2015, Follingstad filed a wrongful eviction lawsuit,  and yesterday the matter was put to rest, shortly before the case was set to go to trial. The result: Lama will pay Follingstad a $400,000 settlement to end the lawsuit.

Reporter Dan Brekke from KQED writes:

In the August 2015 lawsuit, Follingstad and her lawyer, Joe Tobener, accused Lama of trying to get around a city ordinance that requires payments for tenants displaced in an “owner-move-in” eviction.

That litigation proceeded without gaining much attention — until now.

Tobener announced Tuesday that, with a jury trial scheduled to begin next week, Lama had settled for the staggering-sounding sum of $400,000.

Tobener said the high settlement amount reflected both what he called Lama’s “egregious” behavior in raising the rent and the risk Lama ran in allowing the case to go to trial, where a jury could award triple damages for his client’s emotional distress claims.

“It’s the highest constructive-eviction-by-rent-increase case we’ve ever had,” Tobener said, adding that such cases typically settle for amounts “in the high five figures.”

Tobener said that under the city’s owner-move-in ordinance, Lama would have been required to pay Follingstad $9,522 for forcing her to move.

Lamar Anderson from San Francisco Magazine spoke to former Bernal neighbor Deb Follingstad, and he reports she’s had a difficult odyssey:

After [Follingstad moved out], Lama moved in. Follingstad spent the next year bouncing from place to place, house-sitting and staying with friends. As an independent contractor, she had a hard time applying for apartments, because she lacked the paystubs landlords frequently ask for. The places she could rent easily were too much of a compromise. “I was looking at efficiencies with no kitchen, just a hot plate,” she says. And sometimes her story followed her: “I had landlords be like, when they found out who I was, they hated me. They’d never even met me, but I represented this class of person who got evicted. It was weird, the way they looked at me.”

Last May, a year after her displacement, Follingstad was diagnosed with breast cancer. In July she moved in with her boyfriend. She went through months of litigation while undergoing radiation treatments. “I looked like the Michelin tire man, I had so many coats on, and drinking hot tea,” she says. “I was there because I had to be, but I was basically curled up in an office chair, in these meetings that went on for, like, eight hours.” Last month, she finished her radiation treatments. Her hair is coming back, and she’s styling it to look like leopard spots.

San Francisco Magazine adds that after lawyer fees, Follingstad will receive about $280,000, which will then be taxed. Much of the remaining funds, she says, will likely be used to pay medical expenses.

PHOTO: 355 Bocana in 2015, by Telstar Logistics

30 thoughts on “Former Bocana Tenant Receives $400,000 in Settlement With Landlord

  1. Why didn’t Lama just move into her own property if there was no active lease? You have to know that raising someone’s rent 3,4,5x’s in this climate is not going to play well and there is nearly no chance the existing tenant was going to pay it. It was a ridiculous way to get the person out.
    Amazed by the settlement amount. Probably only $150k after taxes. Sad.

      • Or you can look at it another way: The lawyer(s) took the case on contingency, with no up-front money. How many of us would take a job based on whether we felt we could get some money out of it at the end? Still, it seems that the attorneys’ fees are a bit excessive. Isn’t the rule of thumb 1/3?

    • Legally, tenants on month-to-month agreements in SF have the same protections as people with “active leases”. There is no legal distinction, if the landlord is accepting rent checks, they are a tenant.

  2. Seems like an excessive sum of money for someone who was living in an illegal unit in the first place and operating a business out of her home (I assume without a business license) and besides that illegally renting out her place on Airbnb.

    • This is San Francisco – the law and property rights don’t matter. Only optics and emotions matter. Let’s not discuss whether a tenant can pay the rent or who owns a building – it’s too factual and boring.

      • Hi, actually the law does matter. This case was settled legally, like in a law court, by lawyers in a trial. I guess the optics and emotions might all that matter to YOU, but the law in this city has very strong protections for renters. Thank god, because with the limited housing available, exploding rents, and entitled attitudes of many landlords, every single “poor” person (which by SF standards includes basically every single person in the public sector) would be evicted tomorrow.

    • Hi, did you read this article, or other good reporting about the case? Where did it say that her unit was illegal? As far as I’ve read, it wasn’t. The settlement is large, and should be- Lama had a clear route to take for a fair, legal eviction for owner move-in. She didn’t want to pay the costs that go along with this, and so took the course she did. These are the legal consequences, the product of lawyers and evidence and such, in a trial.

      • You keep mentioning a trial. Did I read this wrong? It says this was settled before going to trial.

        This just makes you look kin you scanned an article you already have an option on.

      • Lestorian….If you had followed this issue from the beginning you would know that the previous owner had built this additional unit in the home without the necessary permits.

        The new owner who inherited the property wanted to remove the illegal unit and choose to raise the rent as a way of getting the renter out who was not cooperating.

        This city has to make it fair for homeowners and renters. But since the renters make up the majority of the residents in this city, City Hall and the BOS cater to the renters to get their votes.

        I’ve been a renter and a homeowner in San Francisco. I think I have a balanced perspective of these issues than most.

      • I typed so quickly my reply was full of typos. Thank you, iPad. Like my name “no bueno”.

        Take two:

        You keep mentioning a trial. Did I read this wrong? It says this was settled before going to trial. This just makes you look like you scanned the article without really reading it.

      • DERP! My bad, gotta take a dose of my own medicine, thanks for the catch No Bueno- you’re right, this was a settlement, not a trial, and i did indeed have a strong opinion on the case beforehand based on reading up on it when it was going down.

        SFJazzer- you’re wrong, and I have followed this from the beginning (better than i followed it today!). Lama removed an illegally built unit, but that was not the one where Follingstad lived, it was downstairs. They did that so that the property would be considered a single-unit house, which would then mean no rent protections, and make it easier for Lama to do an owner move-in eviction. She legally could have done that, but it would have cost her the fair, legal amount that that costs. Instead she chose this shady route, and the articles I (finally 😉 read today on the followup suggest that her lawyers were fully aware of her wrongdoing, and how that would look to a jury. That’s why they settled.

        And regarding your first comment, it doesn’t matter if she inherited it and wanted to live there, if she had a legal tenant (she did, Follingstad), she would need to evict her legally.

        I am a homeowner who rents a space out, btw, and I would NEVER take an unethical route to get a tenant out. When we got our place, there was a person paying WAY below market in a unit. Guess what, we let him keep paying his rent with fair, small, legal increases, and waited until he wanted to move to do anything with the space, because that was his home, and we knew he was there when we bought it. This is totally fair system for renters and homeowners, because renters and homeowners are often such dramatically different income brackets in a town where every property costs over a million dollars. I wonder what your alternative would be- with the rate of evictions what it is even with these protections in place, what would the city look like without the current laws? Oh yeah- rich and boring. Abuse of the owner move-in laws (cough cough Jack Halperin) is one of the main reasons that this city is getting whitewashed. Anyway, I’m glad Follingstad is getting something for her troubles, and I wish her well, and hope she ends up in a neighborhood that she can call home.

      • Lestorian, If you check the records for the address, that address is listed as a single family home. It was never officially a multi-unit building. If a new owner wants to remove an illegal unit built by a previous owner, that is the new owner’s right to do so.

      • Sorry, SFJazzer, what’s the truth, your first version of the story (that Follingstad was in an illegal unit, which she wasn’t) or your more recent one? Admittedly, this is a murky situation, but according to the law, a single family home with an illegal in-law unit counts as a 2-unit building. Additionally, a tenant does not have to sign a new rental agreement that is significantly different than their current one- if the tenant is month to month, the current implied agreement is based on their current terms. Changing ownership does not affect this at all. So why should Lama have carte blanche to redefine the nature of the building, and then expect a longtime tenant to sacrifice their rent control accordingly?
        I’m not a lawyer, but as a longtime renter and fairly recent landlord I have done my homework on this. More importantly than my perspective, though, is that her own lawyers thought she was in the wrong enough to settle this for a staggering sum of money. Again, there was a perfectly legal way that she could have evicted Follingstad if she truly wanted to move into the building, but she decided to play it fast and loose, and now has serious consequences (although as someone who has inherited a pile of real estate in Bernal Heights, her consequences will most likely affect her way less than the consequences her former tenant has had to endure on account of this).
        Hard to believe, but I’m not trying to give you a hard time, and I actually hate getting in arguments on the internet, but I’m just kind of flabbergasted at your diehard stance here; maybe you know these people and have information that I do not; i don’t know either one and so there may be more to this story. Either way, I’m done talking, I respect your opinion, but only to the extent that facts back it up. Again, I would love to hear your ideas for a more fair system that would still protect poor and middle class people in the the current environment of dangerous income inequality in our city.

  3. Is this why landlords are leaving there houses empty and abandoned in our neighborhood? Fear of renting out and being sued by a tenant? I feel for the tenant and the landlord definitely could have used a better approach, but isn’t that the risk you take when renting? Knowing the landlords may want to move back into their own home eventually? I rented an apartment but if my landlords wanted to move back in I wouldnt think twice. It’s their home at the end of the day. I guess there is no easy solution except for both parties to be kind and civil when dealing with these matters.

    • I think that the solution is knowing and obeying the law. You chose to not worry about your rent control protections, but that doesn’t mean other people should have to. Many times, in these moments, a tenant would be forced to leave the city entirely, maybe leave their job, their proximity to family, etc.

    • Yup, all she needed was to spend a few grand on a competent lawyer, pay the tenant a relocation fee, and all this would have been settled a year ago for about $10k.

      • Yup…I agree. That would have been the wisest path to take. But more than likely the lump sum is being paid by the homeowner’s insurance company. When I sued my previous landlord for a truly illegal eviction, the landlord had homeowner’s insurance that covered lawsuits and it was the insurance company that paid up, not the homeowner. Of course, the homeowner may eventually pay the price because the insurance rates may increase.

  4. Good for the tenant! Our landlord used Costa Hawkins in this same way to get us out (aka constructive eviction) but the building was truly a single family home so she’s all good with the law. When this case happened my family was looking for housing and it seemed like Bernal was the eye of the greed storm. Still kinda does at times, but I’m glad rents are coming down city wide. We’re the sort of tenants who have to root for tech slumps, Trump tanking the stock market and big effing earthquakes: Barely hanging on in this city.

  5. SOME POINTS people fail to grasp: (1) Whether the unit was built legally or illegally, the fact that the owner receives rent makes it a valid residential tenancy subject to all the laws that apply to a valid residential tenancy. (2) When a person rents out a room or an apartment they are IN BUSINESS, and thus they are subject to all the business laws that apply. Period. End of story. If you don’t want to be in business, don’t accept money!

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