2018-00239143-CU-PT

City of Sacramento vs. Shirley George

Nature of Proceeding: Motion to Appoint Receiver

Filed By: Benner, Michael J.

The City of Sacramento’s motion for appointment of receiver pursuant to Health & Safety Code § 17980.7 is granted as set forth below.

Respondent Shirley George’s request for judicial notice is granted.

Health & Safety Code § 17980.7 authorizes the appointment of a receiver over substandard property to oversee the rehabilitation of the property where the property owner fails to comply with a notice and order issued by a local agency after having a reasonable opportunity to do so. Specifically, subdivision (c) authorizes this Court to appoint a receiver over the property if the property owner has failed to comply with a notice or order to repair issued by a local agency and the property continues to remain in substandard condition. The City claims that the subject property located at 3925 May Street (“Property”) in Sacramento, CA has a history of substandard conditions dating back to 2014. The City asserts that the garage at the property is dilapidated and has extensive damage due to dry rot. The City has determined that the property is a Dangerous and Substandard Building.

On August 27, 2014, the Sacramento Police Department contacted City;s Community Development Department regarding the Property. (Schranz Decl. ¶ 2.) On August 28, 2014, the City’s Building Inspector visited the Property. He noted that the garage was in poor condition due to massive dry rot. The dry rot had severely damaged the interior and exterior walls, the foundation and roof of the garage, including a water shed behind the garage thereby compromising the integrity of the structure. (Id. ¶ 3.) Mr. Schranz determined that the Property was a Dangerous and Substandard Building under the City Code and was dangerous to the health and safety of the general public. (Id.) On August 29, 2014, the City issued a residential permit to Bonney Plumbing to relocate the gas on the Property. (Id. ¶ 4.) On September 2, 2014, Mr. Schranz spoke with Shirley George the Property owner regarding the conditions at the Property and advised her to obtain a permit to demolish the garage. (Id. ¶ 5.) On September 5, 2014, Mr. Schranz spoke with PG&E regarding the City’s plan to relocate the gas due to the dangerous and unsafe condition of the garage. (Id. ¶ 6.) On November 4, 2014, the City issued a final permit to relocate the gas on the Property. (Id. ¶ 7.) On

November 18, 2014, Mr. Schranz again requested that Ms. George obtain a permit to demolish the garage. (Id. ¶ 8.) Mr Schranz spoke with Ms. George on December 8, 2014 and January 9, 2015 regarding a need to obtain a permit to demolish the Property.

On February 3, 2015, the City mailed a Notice and Order to Repair or Demolish the Property with the accompanying list of violations. The Notice and Order was also posted on the Property. (Schranz Decl. ¶ 11, Exh. 2.) Mr. Schranz also published the Notice and Order in the Sacramento Bulletin. (Id. ¶ 12, Exh. 3.) The City recorded a Notice of Pending Enforcement Action on the Property on March 17, 2015. (Id. ¶ 13, Exh. 4.) On August 28, 2015, the City re-issued and re-served a Notice and Order to Repair or Demolish the Property. (Id. ¶ 14, Exh. 5.) On November 19, 2015 the City mailed a letter to Ms. George’s attorney indicating that there was a January 1, 2016 deadline to obtain a permit to demolish the garage and that the failure to obtain a permit would result in administrative penalties. (Id. ¶ 15.)

On July 17, 2018, the City’s counsel wrote a letter to Ms. George’s counsel setting forth an estimate of the cost for repairing or demolishing the garage and also reiterating an offer to front the costs of the demolition of the garage. (Benner Decl. Exh. 7.)

On August 16, 2018, Mr. Schranz visited the Property and noted that the garage remained in a state of disrepair and was in a dangerous condition. (Schranz Decl. ¶ 4, Exh. 6.) Mr. Schranz checked the City’s records and determined that a permit to repair/demolish the garage had not been obtained. (Id.) Ms. George has never appealed any of the Notices and Orders issued which required the garage to be fixed or demolished.

Health & Safety Code § 17980.7 authorizes the appointment of a receiver over substandard property to oversee the rehabilitation of the property where the property owner fails to comply with a notice and order issued by a local agency after having reasonable opportunity to do so. Pursuant to H&S § 17980.6, “an enforcement agency may issue notice to an owner to repair or abate property conditions that violate state or local building standards and substantially endanger the health and safety of residents or the public.” (City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905, 912.) If the property owner fails to correct the conditions within a “reasonable time” after the Notice of Order is issued, the enforcement agency may seek appointment of a receiver to “assume control over the property and remediate the violations or take appropriate action.” (Id. at 912; H&S § 17908.7(c)(4).)

Ms. George has opposed the instant petition on a number of grounds, some of which are difficult to follow at best.

Ms. George argues that the motion “is an attempt to use a statute available for tenants to compel landlords to repair dwellings [ ], and is in the nature of a summary judgment motion. (Oppo. 2:17-19.) This argument, even if given credence, is no basis to deny the motion. The City is seeking appointment of a receiver pursuant to Health & Safety Code § 17980.7 which is specifically provided as a remedy for an enforcement agency when a property owner fails to comply with an order or notice to repair. (H&S Code § 17980.7.) It is not a statute for tenants to obtain relief from landlords. The statute merely references Civil Code § 1942.5 to make clear that a proceeding under the relevant Health & Safety Code provisions is a proceeding for purposes of Civil Code §

1942.5 which prohibits certain retaliatory acts by a lessor against a lessee for exercising certain rights. (Id. § 17980.7(e).) The instant petition is specifically permitted by Health & Safety Code § 17980.7. Indeed, under Health & Safety Code § 17980.7, if an owner fails to comply within a reasonable time with the terms of the order or notice to repair, the enforcement agency may seek, and the court may order, imposition of the penalties provided for in Health & Safety Code § 17995 et seq.

Ms. George also argues that City failed to comply with the statute because City failed to provide notice to all persons with a recorded interest in the Property as required by Health & Safety Code § 17980.7(c). Ms. George points out that the judgment from her 2007 civil trial to quiet title to the Property in her name indicates that title was adjudged to be in her name, and that the other defendants had no interest “other than that as set forth in their respective settlement agreements with plaintiff.” (RJN Exh. B.) But, as pointed out by City, the judgment quieting title in Ms. George’s name gave her title as “fee-simple absolute owner.” Simply listing unknown and unspecified settlement agreements in the recorded judgment does not make any unspecified interest in that settlement agreement a “recorded interest.” These settlement agreements are not recorded documents and there is no indication on record showing what unrecorded interests the defendants from the 2007 civil trial have in the Property, if any. At most she cites to “notes” from the City indicating that Ms. George’s counsel indicated that there may be others with an interest in the Property and that the City may have spoken with at least one such individual. (Pruner Decl. ¶ 6, Exh. A.) Ms. George provides no evidence of any recorded interest held by anyone other than herself. City complied with the statue for notice purposes.

Ms. George also argues that the instant petition is precluded by the fact that the City has a pending action in City of Sacramento v. George, et al., Case No. 34-2018-00232188 which involves the same subject matter (“Case 1”). (RJN Exh. C.) In that action which was filed prior to the instant matter, City filed a complaint for a preliminary injunction, abatement, civil penalties, and other equitable relief. (Id.) City asserts causes of action for Public Nuisance and Nuisance Per Se based on allegations that the garage on the Property is in a substandard condition. (Id.) The City seeks to obtain orders requiring Ms. George to abate the nuisance and also for orders allowing demolition of the garage in the event it is not repaired. Ms. George argues that the instant petition seeks substantially the same relief as requested in Case 1. She provides little analysis on this point other than citing to In re Conservatorship of Pacheco (1990) 224 Cal.App.3d 171. It appears that Ms. George is arguing that this petition should be abated. A plea in abatement requires a showing “(1) That both suits are predicated upon the same cause of action; (2) that both suits are pending in the same jurisdiction; and (3) that both suits are contested by the same parties.” (Id. at 176.) Here, however, while the two actions involve the same subject matter, they are not between the same parties as Case 1 includes additional defendants not present in the instant action. Ms. George has failed to show that this matter should be abated.

Next, Ms. George appears to argue that there is no basis for a receiver because the underlying Notices and Orders were not orders but simply advised her of the “City’s opinion that her garage was sub-standard and dangerous.” (Oppo. 6:5-7.) This argument lacks merit. Mr. Schranz’s declaration attached two Notices and Orders, each of which are clearly labeled as orders and make clear that the City declared the Property to be substandard and/or dangerous and that the garage needed to be repaired or demolished. (Schranz Decl. Exhs. 2, 5.) The Notice and Orders indicated that the City could proceed to take action if Ms. George did not repair/demolish the

garage and also provided notice on how to appeal the Notices and Orders. (Id.) The Notices and Orders were actual determinations that the garage at the Property was substandard and dangerous which could be, but were not appealed by Ms. George and are a basis upon which the City can seek the remedy of a receiver under the Health & Safety Code. (City of Santa Monica, supra, 43 Cal.4th at 912; H&S § 17908.7 (c)(4).) Ms. George’s argument that the Notices and Orders were something other than orders is rejected.

Ms. George also argues that she was not given a reasonable opportunity to correct the conditions as required by Health & Safety Code § 17980.7(c). To that end she argues that she has limited financial resources and while she has applied for financial assistance to remedy the Property, she has been turned down and that she has informed City of these attempts. However, even if this is true, this does not show that City has not given her a reasonable opportunity to remedy the garage. Indeed, the City has been in contact with Ms. George regarding the garage since at least 2014 and even offered as recently as July 2018 to front the costs for the demolition of the garage. There is no evidence to show that Ms. George was not given a reasonable opportunity to remedy the garage.

Ms. George also points to a criminal case that the City filed against her in 2014 apparently based on similar violations which the City dismissed prior to trial. While she does not explicitly appear to argue that the case has some bearing on the instant petition, it does not. Ms. George does point to documents obtained in the discovery of that criminal matter which appear to consist of the City’s notes regarding the Property. She cites to a statement in the notes in February 2015 indicating that the garage was not in “immediately dangerous” condition. (Pruner Decl. ¶ 6 Exh. A.) This does not, however, undercut the City’s determination that the garage was determined to be substandard and in need of being rehabilitated or demolished. In fact, the statute simply requires that the building for which a receiver is sought be “substandard” and that the owner have been given a “reasonable opportunity to correct the conditions cited in the notice of violation.” (H&S Code § 17980.7(c)(1).) The City has made such a showing.

Finally Ms. George suggests that the City is seeking to evict her. The Court does not perceive that the City is seeking to do so, as it is concerned only with the garage on the Property which is detached from the residence. Indeed, the proposed order makes clear that lawful occupants may remain occupants unless the receiver determines that relocation is required to effectuate the Property’s rehabilitation.

The City has shown that the Property is substandard, and in a dangerous condition, at least with respect to the garage and that the property owner was given ample opportunity to correct the problems. In short, under the circumstances and given the nature of the violations, the history of the property and Ms. George’s failure to remedy the violations despite having a reasonable time to do so, the Court finds that appointment of a receiver pursuant to H&S Code § 17980.7 is appropriate.

The motion to appoint Michael Brumbaugh of MBI Consulting Group, Inc. as receiver is granted. The receiver is granted the powers requested in the motion. However, to the extent that the Receiver desires issuance of receiver certificates, it must separately apply to the Court at the relevant time.

In addition, the Defendant is enjoined from interfering with the receiver’s rehabilitative

work. (Health & Safety Code § 17980.7(c)(3).)

The City shall file an undertaking in the amount of $25,000. (CCP § 567(b).)

In addition, the Defendant is enjoined from interfering with the receiver’s rehabilitative work. (Health & Safety Code § 17980.7(c)(3).)

The Court however, will require the City to submit a revised proposed order pursuant to CRC 3.1312 consistent with the above which makes clear that the Receiver’s work is limited to rehabilitating the garage at the Property and is limited to that portion of the Property only as City only made a sufficient showing with respect to the garage. Finally, the Court will also require the order to be revised to require the Receiver to specifically seek a later order from the Court regarding retaining an attorney. The Court declines to sign an order at this time automatically authorizing the Receiver to appoint an attorney. Such a request shall be made on separate application.