Truth is stranger than fiction in the legal world. Then again this is San Francisco. Anything is possible politically and legally, no matter how outrageous. Translation. Money, power and connected attorneys take precedenc over the rules of procedure and legal doctrine. Anything goes if you can get away with it, particularly in the often tawdry world of housing law.
Mission Local by Joe Eskenazi 9.9.2019
Anne Kihagi, (pictured below) the notorious landlord who has been successfully sued by the city and a bevy of illegally evicted former tenants, can add one more litigant to the battalion of people and entities pursuing her legally: Her own longtime attorney.
Karen Uchiyama, the lawyer who for years defended Kihagi, served as her muscle in attempting to evict or otherwise dislodge tenants — oftentimes elderly and/or disabled — from her many buildings, and chauvinistically advocated for the woman known as “San Francisco’s cruelest landlord” last week turned against her erstwhile client.
On Sept. 4, Uchiyama filed suit against Kihagi — as well as some of her alphabet soup of LLCs, including Zoriall, Xelan Prop 1, Renka Prop, and Nozari 2 — seeking $158,501.66.
“Defendants failed to pay for legal services per contract after benefits from Plaintiff’s services,” sums up Uchiyama’s filing.
Confoundingly, a substitution-of-attorney document dated Sept. 6 — two days after Uchiyama filed suit against Kihagi and her LLCs — reveals Uchiyama to be the new counsel defending Kihagi’s Xelan Prop 1 LLC against claims by Umpqua Bank.
Uchiyama is, per court documents, simultaneously suing and defending Xelan Prop 1 LLC. Calls and e-mails to her have not been returned.
This setup is, to put it mildly, unconventional. “A red flag would go up for me as a legal ethicist,” says Josh Davis, a law professor at the University of San Francisco and the director of the USF Center for Law and Ethics. “The general rule would be that you can’t simultaneously be adverse to a party and also represent that party.”
Added Davis’ fellow USF law professor and legal ethicist Lara Bazelon, “that seems like a classic conflict of interest. If that’s not a conflict of interest, I don’t know what is.”
If Uchiyama’s client doesn’t take action, Davis says, both the state bar and the judge might see fit to do so.
This is the latest bizarre twist in a case replete with them. Kihagi burst onto the San Francisco scene in 2013; over the next two-and-a-half years she, her sisters, and a web of LLCs obtained at least 11 San Francisco buildings for just shy of $30 million. Between 2006 and 2013, she had bought at least 14 properties in Southern California.
There as here, she systematically targeted rent-controlled structures, often inhabited by longtime, elderly and/or disabled tenants. These buildings have an ostensibly limited income stream — but not if you eject the longstanding tenants and bring in new, market-rate renters, as she repeatedly did. She could then borrow against this enhanced revenue stream and leverage that into obtaining a next building and a next building.
And that worked out great. Until it didn’t. In May 2017, Judge Angela Bradstreet sided with the city in its suit vs. Kihagi, hitting her with 1,612 separate violations. In October 2017, a jury awarded illegally evicted tenants Dale Duncan and his wife Marta Muñoz $3.5 million — purportedly the largest award in state history for a single unit.
This year, the Court of Appeal declined to overturn the 2017 ruling against Kihagi, putting her on the spot for millions in fines and setting in motion a series of court orders. All 11 of her known city properties have been placed into receivership and three of those have been sold already. A procession of people and entities are jockeying for their share of that money — and, now, Uchiyama appears to be getting in that line. At the end.
Kihagi currently owes the city some $4.5 million; the city in May collected around $3 million from a bond it insisted she obtain. To get that bond, Kihagi had to put up collateral — possibly some of her Southern California properties but, truly, it’s difficult to know. Kihagi tends to shuffle ownership of buildings among her many family members and her web of LLCs.
While comparisons to Trump are often facile, Kihagi has amassed an impressively Trump-like collection of series of stiffed employees – flooring guys, surveyors, contractors, and, yes, lawyers She paid for their work only when a judge ordered they be paid. Or didn’t.
In a profoundly on-the-nose moment, a PR maven earlier this year hired to soften Kihagi’s image claimed she promptly stiffed him $2,000.
Another mistreated workman, a surveyor named Richard Langford, sued her in what he calls an “open-and-shut” case of nonpayment. He told San Francisco Magazine that he was mystified when Kihagi appealed the judge’s ruling, and still more mystified when, he said, she threatened to sue him in small-claims court in Los Angeles for the amount she owed him.
“I told her, ‘If I have to show up in Los Angeles, I’m bringing your ex-husband who can’t find you and I’m bringing all the tenants who can’t find you,’” he told the magazine. “I got calls — constantly — from people who saw I had some dealings with her.”
Langford told the magazine that he ended up recovering most of his $6,855 ruling, but it required nearly two years to do so.
Kihagi has both sued and been sued by multiple attorneys. Others, who did not opt to make their case in court, have also claimed she stiffed them. One, Daniel Bornstein, purportedly complained loudly enough in public about Kihagi’s nonpayment that other attorneys overheard him doing so. When queried about this, he told me “I can only say I am relieved to not be representing her anymore.”
The endgame for Kihagi is as difficult to grasp as the property structure of her many buildings. Whether Uchiyama’s suit is the beginning of the end or end of the beginning is hard to say. But this legal move comes not from an aggrieved tenant but the lawyer working to evict those tenants — and a vocal Kihagi defender.
“Kihagi’s attorneys are going to get the receivership withdrawn,” Uchiyama wrote in an e-mail last year.
This year the receivership was, as noted above, extended to all 11 of Kihagi’s known San Francisco properties. As also noted above, three of them have been sold already by the court-appointed receiver.
“Keep believing everything you hear,” Uchiyama continued in that 2018 e-mail. “It creates an illusion that the tenants are winning in court when they are not.”
The millions in fines owed by Kihagi are compounding at an annual rate of 10 percent, which roughly comes out to $850 a day.
When asked his thoughts on the lawyer who cross-examined him in court — and cast him as the villain persecuting Anne Kihagi — joining him in line for compensation from Kihagi, Duncan laughed.
“It just shows how crazy the world is,” he said.