Case Number: BS139207    Hearing Date: August 13, 2014    Dept: 46

Case Number: BS139207
DEBORAH SIDENBERG ET AL VS RENT CONTROL BOARD OF THE CITY OF
Filing Date: 09/21/2012
Case Type: Writ – Administrative Mandamus (General Jurisdiction)
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This tentative ruling is posted at 12:45 p.m. on 8-12-2014 and the matter is set for hearing on 8-13-2014 at 8:30 a.m.

If there are no parties other than Plaintiff/Petitioner, then Plaintiff/Petitioner may submit to the tentative without appearance by telephonic notification to the clerk of Dept. 46 between 8:00 a.m. and 4:30 p.m. on a date prior to the hearing or morning prior to the hearing by calling (213) 974-5665, and the court will issue the tentative ruling as the final ruling. If the other parties have appeared in the action, then the parties must first confer and all agree that the tentative ruling will be the final ruling on the matter. If the parties to the matter before the court all agree, a representative of the parties may call the clerk and submit without an appearance, and the court will issue the tentative ruling as the final ruling. If an order is required, it should be lodged directly in Dept. 46 with a copy to adverse/other parties, if any.

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08/13/2014 at 08:32 am in department 46 at 111 North Hill Street, Los Angeles, CA 90012
Motion for Summary Judgment

TENTATIVE RULING ON REQUEST FOR JUDICIAL NOTICE: Plaintiff/Petitioner’s request for judicial notice is granted in full. Moving Party/Respondent’s request for judicial notice is denied as to Exhibit A (permit history) but is otherwise granted.

TENTATIVE RULING: Motion for Summary Judgment is GRANTED per CCP §437c. Writ is ordered to be dismissed. Trial and FSC dates are vacated. Respondent/Defendant to prepare order/judgment of dismissal.

Although the motion alternatively seeks summary adjudication of issues, as the separate statement in support of the motion for summary adjudication does not comply with CRC 3.1350(b) it is treated as a motion for summary judgment only.

Plaintiff/Petitioner’s disputed claims all depend on the assertion that the so-called Costa-Hawkins Rental Housing Act (Civil Code 1954.50 et. seq.) invalidated the contractual deed restriction on the Plaintiffs’ property. (Second Amended Complaint, Paragraphs 43, 47, 52, 64, and 73.) As it is undisputed that the 1994 permit agreement was valid at the time of execution (Undisputed Material Fact #41), the other claim in the SAC as stated in paragraph 41 that relates to the permit agreement is not in issue.

Plaintiff challenges the deed restrictions on their property negotiated by Plaintiff/Petitioner’s predecessors in interest, the Hughes which restricts Plaintiff/Petitioner’s ability to set the rental rates on the units. That restriction is included in a document called a Removal Permit Agreement and it states in part that the deed is subject to a permanent restriction to the effect that Plaintiffs must maintain 2 of their 10 units as permanently affordable to low-income households. Exhibit “I” to the Request for Judicial Notice indicates that the ”Removal Permit Agreement” was entered into as of November 10, 1994. Although Plaintiff/Petitioner contests the interpretation of the statute, it is clear to the court that CC §1954.53(d)(1) does not apply to this agreement. The clear meaning to the court of the language: “nothing in this section shall be construed to impair the obligations of contracts entered into prior to January 1, 1996” includes the 11/10/1994 agreement. Plaintiff/Petitioner argues that the quoted language of CC §1954.53 is limited to the preceding sentence in the statute. The pertinent portions state:

§1954.53. (a) Notwithstanding any other provision of law, an owner of residential real property may establish the initial rental rate for a dwelling or unit, except where any of the following applies …

(d) (1) Nothing in this section or any other provision of law shall be construed to preclude express establishment in a lease or rental agreement of the rental rates to be applicable in the event the rental unit subject thereto is sublet. Nothing in this section shall be construed to impair the obligations of contracts entered into prior to January 1, 1996.

The court interprets this statute means what it says – that obligations that are established under pre-1996 contracts are unaffected by the statute and that nothing in the statutory scheme of the Costa-Hawkins Rental Housing Act (Civil Code 1954.50 et. seq.) applies to contracts entered into before 1-1-1996. The limitation of the language in the last sentence of (d)(1) to the prior sentence is not appropriate.

Another area of statutory construction deals with CC 1954.52(a), which states in pertinent part:

1954.52. (a) Notwithstanding any other provision of law, an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit about which any of the following is true:

(1) It has a certificate of occupancy issued after February 1, 1995.

CC 1954.52(a) does not apply to properties as to which a certificate of occupancy should have been issued, but only to properties as to which one was actually issued. Exhibit A to the Fuss declaration, which is adequately authenticated by Ms. Fuss, reflects that only one certificate of occupancy was issued and that this was on 9/3/1969. Thus, 1952.52 clearly is inapplicable.

CCP §338 applies to this case since the “right sued upon” by Plaintiff/Petitioner is the right under the Costa-Hawkins Rental Housing Act (Civil Code §1954.50 et. seq.) to charge market level rents notwithstanding a contract requiring them to make two rental units available to low income households. Furthermore, it is clear that the claim is barred by the 3-year limitations/statute of limitations of CCP §338 as the causes of action in the SAC accrued when the Costa-Hawkins Act came into effect on 1/1/96. Even though the case dealt with an ordinance and not a statute, the case of Travis v. County of Santa Cruz (2004) 33 Cal.4th 757 is authority to the effect that the 3-year limitation applies. Travis held at page 773:

Plaintiffs’ petition for declaratory and injunctive relief against the Ordinance’s future enforcement is, nevertheless, untimely. The newest of the state statutes upon which plaintiffs rely for their preemption claim, the Costa-Hawkins Act, came into effect on January 1, 1996, more than three years before the petition was filed. Assuming the Costa-Hawkins Act subjects the County to a duty to repeal or amend the Ordinance to conform to state law, that duty first arose—and was first violated by the County’s inaction—when the Costa-Hawkins Act became effective. As the period in Code of Civil Procedure section 338 begins running on accrual of the cause of action (id., § 312), an action to enforce the County’s asserted statutory duty had to be brought within three years of its initial violation, i.e., three years from the effective date of the assertedly preemptive statute.

Plaintiffs argue their action was brought “fewer than 3 years following the January 1, 1999, fully-effective date of Costa-Hawkins,” apparently alluding to provisions of that law phasing in, between January 1, 1996, and January 1, 1999, vacancy decontrol on existing units already subject to local rent control ordinances. (See Civ. Code, § 1954.52, subd. (a)(3)(C).) But the conflict plaintiffs perceive between the Costa-Hawkins Act, which mandated immediate exemption of new units and eventual vacancy decontrol on all units, and the Ordinance, which restricted indefinitely rents on newly constructed second units, if it ever existed, existed as of the effective date of the Costa-Hawkins Act, January 1, 1996. If, as claimed, the County has, and is violating, a duty to repeal or amend the Ordinance to avoid a conflict with the state law, it had, and violated, that duty as of the day the state law came into effect. Plaintiffs’ action to enforce a statutory obligation thus accrued on January 1, 1996; under Code of Civil Procedure section 338, they had three years from that date to bring it. [Emphasis added]

Embassy LLC v. City of Santa Monica (2010) 185 Cal.App.4th 771 is distinguishable. This case had to do with an express waiver of law (the Ellis At) that existed at the time of the agreement and was contemplated by the agreement, whereas here, the subject contract was entered into prior to the existence of a later-enacted law. Further, the Plaintiff/Petitioner’s cause of action in Embassy accrued when the City refused to process their notice of intent to withdraw units from the rental market – a notice which the Ellis Act permitted the Plaintiff to file – and imposed on the City the ministerial duty of accepting it – which the City failed to do and the Plaintiff sued within 3 years after the City’s failure to fulfil their duty. Contrary to the facts in Embassy, there is no claim or entitlement here to recission of the deed restriction that required the Defendant to act.

The other case cited by Plaintiff/Petitioner is Shelly v. Kraemer (1948) 334 U.S. 1 which is wholly inapplicable and does not mention the statute of limitations issue at all.

For the foregoing reasons the court finds that summary judgment is appropriate and therefore orders that judgment be entered in favor of Defendants and against Plaintiffs.

IT IS SO ORDERED:

Frederick C. Shaller, Judge