Peter J. BULLOCK, Plaintiff and Appellant, v. CITY AND COUNTY OF SAN FRANCISCO et al., Defendants and Respondents,
Abigail Tenants Association et al., Intervenors and Respondents. CITY AND COUNTY OF SAN FRANCISCO, Plaintiff and Respondent, v. Peter J. BULLOCK, Defendant and Appellant.
Beginning in 1979, defendant City and County of San Francisco (the City) adopted a number of measures intended to preserve the supply of hotel units available for residential use, by limiting conversion of such units for use by tourists. Frustrated in his efforts to remove his hotel from the reach of the San Francisco Residential Hotel Unit Conversion and Demolition Ordinance (the Conversion Ordinance), plaintiff Peter J. Bullock appeals from a judgment, a preliminary injunction, and several orders in favor of the City.1 We will affirm the judgment except to the extent it holds that plaintiff has no civil rights damage action (42 U.S.C. § 1983) against the City. We will also affirm the order granting the injunction and the other orders.
The issues raised on these appeals require that the record of salient events be summarized in some detail.
Located in central San Francisco, the Abigail Hotel was purchased by plaintiff in May of 1980 for $591,000. Plaintiff continued the previous owner's efforts to renovate the hotel, which had been condemned by the City in 1974. Plaintiff expended more than $500,000 toward this end. In November of 1980 plaintiff applied for, and the Bureau granted, a “Permit of Occupancy” authorizing “the operation of a[ ] hotel of 66 Rooms.” 2 The permit did not specify any uses to which the rooms could or could not be devoted.
Prior to plaintiff's purchase of the hotel, the City's Board of Supervisors in 1979 enacted an ordinance providing (among other things) that “The conversion of any residential hotel unit into a unit intended for the primary use of tourists or other transient overnight guests or to any other use or the demolition of the unit shall be prohibited for the duration of this ordinance.” Although this moratorium in its original form was to expire at the end of six months, the conversion ban was extended to May 31, 1981.
In January of 1981 the Board of Supervisors adopted Ordinance No. 15–81, the first version of the Conversion Ordinance, whose aim was “to end the moratorium on conversion of residential hotel units and apartment units and instead regulate residential hotel unit and apartment unit conversion.” Two additional measures (Ord. Nos. 106–81, 330–81), also enacted in 1981, refined and amended the original ordinance.
The 1981 Ordinance (our collective designation of the three ordinances adopted in that year) constituted Chapter 41 of the San Francisco Administrative Code.3 The general provisions of the ordinance have been summarized thusly: “Its stated objective is to alleviate the ‘adverse impact on the housing supply and on displaced low income, elderly and disabled persons resulting from the loss of residential hotel units through their conversion and demolition.’ (Ord., § 41.2.) Findings were made by the Board in support of the ordinance: a study indicated that residential housing units in the city had decreased dramatically since 1975 due to ‘vacation, conversion or demolition’ of such housing; residential hotel units were declared an endangered housing resource in need of preservation. (§ 41.3.)
“The ordinance provides that owners of residential hotel units must obtain a permit from the City ․ prior to conversion of the property to any other use. A permit will be granted only if the property owner provides relocation assistance to hotel residents and makes a ‘one-for-one replacement’ for the residential hotel units being converted by one of the following methods: 1) constructing the replacement units, 2) rehabilitating an equal number of residential hotel units, or 3) contributing an ‘in lieu’ fee to the City's Residential Hotel Preservation Fund Account in the amount of 40 percent of the construction costs of the number of units converted. [§ 41.10.]
“The ordinance defines ‘residential unit’ as a hotel guest room occupied by a permanent resident as of September 23, 1979; a ‘permanent resident’ for purposes of the ordinance is a person who occupied a hotel guest room for at least 32 consecutive days on that date. A ‘residential hotel’ is any building containing a ‘residential unit’ as of September 23, 1979. (§ 41.4.)
“Exemptions and exceptions are provided in the ordinance. It does not apply to residential hotels which had commenced substantial capital improvements or rehabilitation work prior to the effective date of the ordinance for the purpose of converting the hotel to another use; it also specifically permits a residential hotel to rent any vacant residential unit to tourists during the designated tourist season, May 1 to September 30. (§ 41.16.)
“According to the terms of the ordinance, hotel owners and operators are required to submit to the ․ Bureau ․ information on the number of units falling within the residential classification. Then, the number of units the owner is required to maintain for residential use is certified. (§ 41.6.)” (Terminal Plaza Corp. v. City and County of San Francisco (1986) 177 Cal.App.3d 892, 898–899, 223 Cal.Rptr. 379 [original emphasis; footnote omitted].)
In October of 1981 plaintiff filed in a claim for exemption from the 1981 Ordinance on the ground that the hotel's conversion had been partially completed. A hearing officer issued a decision denying plaintiff's claim in February of 1983. The Bureau adopted this decision. Plaintiff thereupon filed a petition seeking a writ of administrative mandamus. In November of 1983 plaintiff amended his pleading to allege causes of action for (1) declaratory relief to the effect that the 1981 Ordinance was “invalid ․ under the Federal and State Constitution[s] and Federal, State and local laws” in 21 particulars, and injunctive relief restraining the City from enforcing the 1981 Ordinance (2) a taxpayer's action seeking to enjoin the City from expending money to enforce the 1981 Ordinance (3) damages pursuant to Code of Civil Procedure section 1095, and (4) attorneys' fees pursuant to Code of Civil Procedure section 1021.5.
In April of 1984 Judge Pollak denied the petition for a writ of administrative mandamus, finding merit in none of plaintiff's complaints against the administrative decision. In November of that year the trial court issued a preliminary injunction restraining the City from enforcing those provisions of the 1981 Ordinance which prohibited plaintiff from renting or offering to rent hotel rooms for “non-residential ․ or tourist use.” The court's order specified: “It is the intent of this preliminary injunction to allow plaintiff to continue to rent rooms in the ABIGAIL HOTEL to tourists which the City has designated as residential units. For plaintiff to rent such units as tourist units shall not constitute an unlawful conversion during the life of this Preliminary Injunction.”
The following month, pursuant to a stipulation by the parties, the court ordered that the preliminary injunction would “remain valid and in full force and effect until entry of a final binding judgment in this action.” Also in May of 1984 the Bureau issued plaintiff a “Certificate of Use” which “authorize[d] the operation of 42 residential rooms [and] 20 tourist rooms” at the hotel.
In May of 1985 leave to intervene was granted the Abigail Hotel Tenants Association and the North of Market Planning Coalition.
In September of 1985 the Board of Supervisors enacted an ordinance which changed the zoning classification of plaintiff's hotel and specified its inclusion within the North of Market Residential Special Use District.
In January of 1986 plaintiff filed a supplemental complaint and second amended petition which included a number of common law causes of action in addition to the entirety of his first amended petition and complaint. Nor was this all; the most notable new feature was plaintiff's addition of causes of action based upon 42 U.S.C. sections 1983, 1985, and 1986.
The following month Division One of this Court determined that the 1981 Ordinance was “illegal” because its enactment was not preceded by an environmental impact report as required by the California Environmental Quality Act. (Terminal Plaza Corp. v. City and County of San Francisco, supra, 177 Cal.App.3d 892 at pp. 902–905, 223 Cal.Rptr. 379.) The court noted that “[t]he defect was cured, however, by reenactment of the ordinance following an environment evaluation and issuance of a negative declaration.” (Id. at p. 905, fn. 7, 223 Cal.Rptr. 379.)
The City moved to strike certain portions of plaintiff's latest pleading (e.g., the petition already decided by Judge Pollak, and various portions relative to damages), and demurred to the rest. Judge McCabe granted the motion to strike and sustained the demurrer, but plaintiff was granted leave to amend.
Plaintiff thereafter filed an amended supplemental complaint, this time attempting to state a single cause of action founded upon section 1983. Again the City demurred. This time Judge McCabe sustained the demurrer without granting leave to amend.
In May of 1988 motions for judgment on the pleadings were filed by both plaintiff and intervenors. Accepting intervenors' argument that Judge Pollak's administrative mandamus denial was res judicata as to the remainder of plaintiff's outstanding causes of action, Judge Dearman granted their motion. A judgment denying plaintiff all relief on the ground that his “complaint is barred by res judicata” was entered in due course. Among its other provisions the judgment: (1) denied plaintiff's “claim for exemption from the Residential Hotel Unit Conversion and Demolition Ordinance” (2) denied plaintiff's “challenge to the Certificate of Use” and (3) dissolved the preliminary injunction previously granted to plaintiff. Thereafter Judge Dearman made an order awarding intervenors attorneys' fees of $39,477 pursuant to Code of Civil Procedure section 1021.5. Plaintiff filed timely notices of appeal from the judgment and the order.
On October 27, 1988, less than a month after plaintiff filed his notice of appeal from the attorneys' fee order, the City filed a “Complaint For Injunctive Relief And Civil Penalties.” Alleging that as of August of that year plaintiff had “been renting up to 58 rooms to tourists and only 4 rooms to permanent residents,” the City asked to have plaintiff's “continuing” violations of the conversion ordinance enjoined. The City also sought injunctive relief against plaintiff's operating “the premises as a tourist hotel” in violation of “the North of Market Residential Special Use District as set forth in City Planning Code section 249.5 and the Zoning Map of the City and County of San Francisco.” 4
In his opposition to the City's request for a temporary restraining order, plaintiff submitted a declaration in which he stated in pertinent part as follows:
“I have invoked the rights afforded to me by the Ellis Act (Govt.Code [§] 7060 et seq.), controlling state law, which forbids the City ․ from requiring me to remain in the business of residential rentals.
“I have thus tendered to the San Francisco Residential Rent Stabilization and Arbitration Board (‘Rent Board’) the Ellis Act filing mandated by its Rules (on the Rent Board form Notice of Intent to Withdraw Residential Rental Units from the Rent Market) and recorded with the County Recorder my Memorandum of Notice Regarding Withdrawal of Rental Unit from Rent or Lease․
“I intend to go out of the business of residential rentals entirely and in complete good faith, in reliance on my rights under state law to do so once I have made the requisite filings noted above, and I have operated the Abigail Hotel as I have in reliance on my legal and equitable right to cease renting any residential rooms and thereafter to operate entirely as a transient hotel․”
The trial court denied the City's request for a temporary restraining order, but directed plaintiff to show cause why a preliminary injunction should not issue.
Plaintiff opposed the proposed injunction with a wealth of materials supporting two lines of argument. Plaintiff's first objection was based on the relative hardship of granting or denying an injunction. He produced evidence showing that he had refinanced the hotel five times, the most recent being for $1,600,000. Approximately $350,000 had been spent in litigation with the City. None of the $1,077,000 he had expended on “his capital improvement/rehabilitation work” had been recovered. At present the hotel had only 4 residential tenants, paying $236.92, $240, $110.04, and $111.96 per month. Based upon these statistics plaintiff stated that a preliminary injunction “will put the Hotel out of business, and lead to foreclosure and Federal Bankruptcy proceedings, because the debt service on the hotel is about $190,000 per year ․ and operation requires another $500,000 ․, and operation as a residential hotel ․ will generate at most $312,480 a year. Even reducing expenses drastically could not make the hotel a profitable enterprise as residential ․ housing. I will be deprived of any reasonable investment backed use of my property.” Plaintiff further declared that if the injunction issued “the Hotel and the restaurant in it will have to close, putting 33 people out of work, destroying two businesses, and distressing forty or more present and future Abigail Hotel guests who will be denied, or be put out of, hotel accommodations for which they have contracted and in many instances, presently occupy.” Plaintiff thus submitted that the City's request should be denied because “[a] preliminary injunction is supposed to preserve, not destroy, the status quo.”
The second aspect of plaintiff's presentation attacked the legal basis for the City's request for the injunction. Plaintiff reiterated that his invocation of the Ellis Act in effect mooted the claimed violations of the Conversion Ordinance. Using the declarations of observers, plaintiff also claimed that the alleged Planning Code violation would not support an injunction because the October 1985 inclusion of the Abigail Hotel in the North of Market Residential Special Use District was in fact the result of an illegal and discriminatory “spot-zoning” decision made by the Board of Supervisors in retaliation for his litigation efforts to remove his hotel from the reach of the Conversion Ordinance.
Judge Pollak was not persuaded by these arguments and, at the conclusion of a hearing conducted on December 1, 1988, issued a preliminary injunction restraining plaintiff (among other things) from renting more than 20 rooms to tourists except during the designated tourist season.
In April of 1989 citing increasing personal, financial, and administrative difficulties, plaintiff moved for an order modifying the injunction “to allow summer tourist rental of an additional 25 hotel rooms in the Abigail Hotel.” 5 Plaintiff advised the court that, in response to his administrative request to modify the provisions of the “Certificate of Use” (which had established the figure of 42 residential rooms that the City insisted on plaintiff operating) the City now took the position that because plaintiff had invoked the Ellis Act the City “would nevertheless exercise no jurisdiction to hear an appeal of the Certificate of Use.” At the same time the City maintained that plaintiff still had to comply with the “one for one replacement” provision of the Conversion Ordinance. The City opposed modification on the ground that the change would contravene the Conversion Ordinance. In May Judge Pollak conducted a hearing on plaintiff's motion and made an order denying it.
Plaintiff filed timely notices of appeal from the injunction and the order denying his motion for modification.
We shall discuss the parties' contentions in the chronological sequence of their targets.
The Appeal From the Judgment
Hoping to short-circuit plaintiff's arguments, the City and intervenors present an elaborate contention founded on the theory that Judge Pollak's denial of plaintiff's administrative mandamus claim supported Judge Dearman's subsequent conclusion that the denial was res judicata as to the causes of action plaintiff had outstanding at the time the opposing motions for judgment on the pleadings were submitted. The heart of this argument is that Judge Pollak's ruling qualifies as a final judgment because plaintiff could have appealed from it, but failed to do so.
Before Judge Pollak ruled on it, plaintiff's mandamus claim had been joined in plaintiff's first amended complaint with causes of action for declaratory and injunctive relief. That joinder was clearly permissible. (See Highland Development Co. v. City of Los Angeles (1985) 170 Cal.App.3d 169, 179, 215 Cal.Rptr. 881.) It is true that denials of administrative mandamus claims have been treated as appealable final judgments within the meaning of Code of Civil Procedure section 1064, notwithstanding the fact that additional claims have not yet been resolved by the trial court. (See id. at pp. 178–179, 215 Cal.Rptr. 881; Elmore v. Imperial Irrigation Dist. (1984) 159 Cal.App.3d 185, 190–192, 205 Cal.Rptr. 433; California Teachers Assn. v. Board of Education (1980) 109 Cal.App.3d 738, 750–752, 167 Cal.Rptr. 429.) Plaintiff chose not to appeal from Judge Pollak's “Order Denying Petition And Statement Of Decision,” which all parties treat as intended to be the final determination on the merits of plaintiff's mandamus claim. Judge Pollak's ruling thus qualifies as a final judgment, and one that is res judicata. (See Hollywood Circle, Inc. v. Dept. of Alcoholic Beverage Control (1961) 55 Cal.2d 728, 733, 13 Cal.Rptr. 104, 361 P.2d 712; Wolford v. Thomas (1987) 190 Cal.App.3d 347, 357, 235 Cal.Rptr. 422; Rest.2d Judgments, § 13, com. e.)
That judgment is, moreover, broader than may appear at first glance. In his cause of action for declaratory and injunctive relief in his first amended petition and complaint (the most current pleading at the time of Judge Pollak's ruling) plaintiff alleged as follows: “An actual controversy has arisen and now exists between Petitioner Peter J. Bullock and the respondents in that Petitioner claims that the San Francisco Residential Hotel Unit Conversion and Demolition Ordinance and Moritorium [sic ] are invalid and do not and cannot apply to Petitioner and that Petitioner may lawfully operate his hotel business as a tourist or transient Hotel and may engage in such endeavor without first obtaining a transient hotel license, or alternatively cannot be denied such license under the subject ordinance. Whereas Respondents contest and dispute Petitioner's contentions and maintain that the subject ordinance is in all respects valid and must be complied with by plaintiff.” These allegations were incorporated in plaintiff's cause of action which he entitled “Taxpayers Suit for Injunctive Relief.” Because these causes of action clearly put at issue the question of whether the Conversion Ordinance could be lawfully applied to plaintiff, they should have been litigated in connection with plaintiff's administrative mandamus claim. (See Agins v. City of Tiburon (1979) 24 Cal.3d 266, 272–273, 157 Cal.Rptr. 372, 598 P.2d 25; State of California v. Superior Court (1974) 12 Cal.3d 237, 250–251, 115 Cal.Rptr. 497, 524 P.2d 1281; Taylor v. Swanson (1982) 137 Cal.App.3d 416, 418, 187 Cal.Rptr. 111.) Like plaintiff's administrative mandamus claim, they too are settled as res judicata. (See Takahashi v. Board of Education (1988) 202 Cal.App.3d 1464, 1481–1484, 249 Cal.Rptr. 578; Mattson v. City of Costa Mesa (1980) 106 Cal.App.3d 441, 446, 164 Cal.Rptr. 913.)
Plaintiff first attacks the denial of his claim for relief in administrative mandamus because Judge Pollak applied the substantial evidence test instead of the independent judgment test.6
As discussed in part I, ante, plaintiff's failure to appeal from Judge Pollak's ruling on the administrative mandamus claim makes that ruling a final judgment. We therefore have no authority to review that ruling. (Code Civ.Proc., § 906; Kinoshita v. Horio (1986) 186 Cal.App.3d 959, 967, 231 Cal.Rptr. 241 and authorities cited.)
Plaintiff next attacks Judge McCabe's order sustaining without leave the City's general demurrer to his amended supplemental complaint, because he sees his pleading as adequate to state grounds for vindication of various constitutional rights pursuant to 42 United States Code section 1983.
Section 1983 provides in pertinent part: “Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State ․ subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress․”
“To state a claim under § 1983, a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law.” (West v. Atkins (1988) 487 U.S. 42, 48 [108 S.Ct. 2250, 2255, 101 L.Ed.2d 40].) Municipalities are within the scope of section 1983. (Monell v. New York City Dept. of Social Services (1978) 436 U.S. 658, 690, 98 S.Ct. 2018, 2035, 56 L.Ed.2d 611.) Violations of state law, unless they also trench upon federal rights, are not. (See Williams v. Treen (5th Cir.1982) 671 F.2d 892, 900.)
“California state courts should apply federal law to determine whether a complaint pleads a cause of action under section 1983 sufficient to survive a general demurrer.” (Greene v. Zank (1984) 158 Cal.App.3d 497, 503, 204 Cal.Rptr. 770; accord Bach v. County of Butte (1983) 147 Cal.App.3d 554, 563, 195 Cal.Rptr. 268.) According to federal law, “we are required to construe complaints under [section 1983] liberally.” (Morrison v. Jones (9th Cir.1979) 607 F.2d 1269, 1275.) “To uphold [a dismissal for failure to state a claim for relief, the federal counterpart of our general demurrer], it must appear to a certainty that the plaintiff would not be entitled to relief under any set of facts that could be proved.” (King v. Atiyeh (9th Cir.1987) 814 F.2d 565, 567.) In line with California practice, federal law requires that the factual allegations of the complaint be accepted as true. (Hall v. City of Santa Barbara (9th Cir.1986) 797 F.2d 1493, 1496, fn. 9.) Unlike California, federal courts reviewing a dismissed section 1983 claim look to the entire record assembled in the trial court. (See Manning v. Lockhart (8th Cir.1980) 623 F.2d 536, 538; Hurney v. Carver (1st Cir.1979) 602 F.2d 993, 996.)
The cause of action that plaintiff attempted to plead appears in his first amended complaint and his amended supplemental complaint. The matters for which he seeks damages pursuant to section 1983 may be grouped into two classifications.
The first grouping comprises the substantive flaws plaintiff purports to detect in the Conversion Ordinance. Insofar as they involve federal rights made actionable by section 1983, these flaws include plaintiff's charges that the ordinance effects a taking of his property without compensation; is vague and ambiguous; interferes with interstate commerce; violates the Sherman Antitrust Act; deprives him of equal protection; and that he “has been denied due process of law in the enactment ․ of the Ordinance.” In California there is an extensive body of precedent rejecting such claims and displaying a generally tolerant attitude to municipal ordinances in this area. (See Griffin Development Co. v. City of Oxnard (1985) 39 Cal.3d 256, 262–267, 217 Cal.Rptr. 1, 703 P.2d 339; Fisher v. City of Berkeley (1984) 37 Cal.3d 644, 679–704, 209 Cal.Rptr. 682, 693 P.2d 261, affd. (1986) 475 U.S. 260, 106 S.Ct. 1045, 89 L.Ed.2d 206; Nash v. City of Santa Monica (1984) 37 Cal.3d 97, 102–109, 207 Cal.Rptr. 285, 688 P.2d 894, app. dism. (1985) 470 U.S. 1046, 105 S.Ct. 1740, 84 L.Ed.2d 807; Agins v. City of Tiburon, supra, 24 Cal.3d 266, 157 Cal.Rptr. 372, 598 P.2d 25, affd. (1980) 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106; Terminal Plaza Corp. v. City and County of San Francisco, supra, 177 Cal.App.3d 892 at pp. 907–912, 223 Cal.Rptr. 379; see also Pennell v. City of San Jose (1986) 42 Cal.3d 365, 228 Cal.Rptr. 726, 721 P.2d 1111, affd. (1988) 485 U.S. 1, 108 S.Ct. 849, 99 L.Ed.2d 1; Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 130 Cal.Rptr. 465, 550 P.2d 1001; cf. Gov.Code, § 65590; McHugh v. Santa Monica Rent Control Bd. (1989) 49 Cal.3d 348, 261 Cal.Rptr. 318, 777 P.2d 91.) We are obliged to conform to these constructions of federal constitutional requirements. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.) If a change is to be made, it must come from a higher court.
The second grouping of plaintiff's complaint deals not with the substance of the conversion ordinances, but with the means and practices attending their administration. The specifics are retaliation, biased tribunals evidencing a denial of procedural due process, and unequal application. Each of these points will be considered in turn.
The most egregious of the instances of retaliation alleged by plaintiff concerns the so-called “spot-zoning” of his property. The City established the North of Market Residential Special Use District in March of 1985.7 This enactment occurred during the period when plaintiff was challenging the constitutionality of the 1981 Ordinance and was protected by the injunction restraining the City from applying that ordinance to plaintiff. Plaintiff's hotel was not within the original boundaries of the district. In September of 1985 the Board of Supervisors was considering an ordinance whose sole effect would be to amend the zoning map of the district to include plaintiff's hotel. One of the supervisors questioned the merits of this action as “spot-zoning” and discriminatory, and also because another hotel located one block away was not included. In response to a question from the supervisor whether there was any pending litigation regarding plaintiff's hotel, a deputy city attorney stated: “There is a suit against the City and it would be in the best interests of the City if the Abigail Hotel be rezoned to residential as there is a chance that the Abigail might win the suit based upon the Courts' interpretation of the Ordinance's constitutionality.” The rezoning ordinance was then adopted by a divided vote.8 Plaintiff alleged that this action was “retaliatory” and violated his constitutional rights “by making him an individual target of a municipal ordinance to punish him for the exercise of his First Amendment rights.”
“The right of access to the courts is subsumed under the first amendment right to petition the government for redress of grievances. [Citations.] Deliberate retaliation by state actors against an individual's exercise of this right is actionable under section 1983.” (Soranno's Gasco, Inc. v. Morgan (9th Cir.1989) 874 F.2d 1310, 1314.) Because we must assume the truth of plaintiff's allegation that the rezoning was retaliatory (see Hall v. City of Santa Barbara, supra, 797 F.2d 1493 at p. 1496, fn. 9), this portion alone will save plaintiff's cause of action.
Such a firm conclusion cannot be extended to the other retaliatory particulars cited by plaintiff. Plaintiff further alleged that “in retaliation for his exercise of his First Amendment rights” (presumably the litigation mentioned above), the City (1) “applied a policy of recommendation of landlords for criminal prosecution to plaintiff, first by giving plaintiff erroneous advice upon which he relied, and then having him prosecuted and convicted of criminal contempt to make an example of him” and (2) “refuses to do its ministerial duty to remove liens against the ABIGAIL HOTEL for satisfied obligations in connection with various Code inspections.” A violation of section 1983 does not occur if municipal action is merely vigorous or overzealous law enforcement. (See Chalfy v. Turoff (2d Cir.1986) 804 F.2d 20, 22–23.) On the other hand, if the conduct is unjustified harassment it becomes actionable. (See id. at p. 21; Espanola Way Corp. v. Meyerson (11th Cir.1982) 690 F.2d 827, 829.) Even under the more relaxed federal standards of notice pleading, these allegations are striking for the absence of factual specifics (e.g., What was the “erroneous advice” given to plaintiff? Who gave it him? When was it given to him? When should the City have done “its ministerial duty to remove liens”? Did plaintiff request that these liens be removed? If he did, when did he do so? Did the City refuse? Were the liens ever removed?) There is nothing in the record which augments these naked allegations. Nevertheless, plaintiff should be afforded at least one more opportunity to supply the requisite details before a court can state “it ․ appear[s] to a certainty that the plaintiff would not be entitled to relief under any set of facts that could be proved.” (King v. Atiyeh, supra, 814 F.2d 565 at p. 567.) In light of plaintiff's ability to substantiate his claim of retaliation in the City's “spot-zoning” action, his additional allegations of retaliation do not appear totally fanciful as a matter of law.
“[A] ‘fair trial in a fair tribunal is a basic requirement of due process.’ [Citation.] This applies to administrative agencies which adjudicate as well as to courts. [Citation.] Not only is a biased decisionmaker constitutionally unacceptable but ‘our system of law has always endeavored to prevent even the probability of unfairness.’ ” (Withrow v. Larkin (1975) 421 U.S. 35, 46–47, 95 S.Ct. 1456, 1464, 43 L.Ed.2d 712.) The Ninth Circuit has described “the assurance of a central fairness” at administrative hearings as “[t]he key component of due process.” (Vanelli v. Reynolds School Dist. No. 7 (9th Cir.1982) 667 F.2d 773, 779.) “[A] deprivation of procedural due process is an independent constitutional tort, actionable under § 1983 with or without proof of actual injury.” (Burt v. Abel (4th Cir.1978) 585 F.2d 613, 616.)
With respect to the administrative agency responsible for the Conversion Ordinance plaintiff alleged as follows: “As its custom and policy ․ [the agency] established and employed a biased and unqualified corps of arbitrators (called Hearing Officers) some of whom were tenants' rights activists and dominant among whom were a group of [agency] staff ideologically committed to tenants' interests at the expense of landlords who appeared before the [agency]”; that the agency staff “made and implemented against landlords ․ a policy that in adjudications between tenants and landlords, the tenants should win, and ․ which policy included imposition, without notice, of retroactive monetary sanctions upon landlords who sought to exercise their rights under the said Ordinances”; that as a consequence of the agency having “established and continued inadequate procedures and facilities for its hearings and appeals” in that the agency “denied appellate rights to landlords (who lost 90% of the adjudications and 75% of the appeals) ․ by establishing and continuing a policy of making inadequate, erroneous and incomplete records of adjudicatory proceedings by electronic means (tape recorders) [[[[[[9 ] ․ all the while holding out to the public the appearance of adequacy of the recordings.”
Any deficiencies on the face of the pleading in this regard are more than remedied by the entire record produced before Judge McCabe. That record shows that between 1982 and 1986 plaintiff commenced numerous actions in the trial court involving challenges to the agency's procedures and decisions. The record also includes a 1985 final judgment of the trial court criticizing the agency's “[p]rocedures for safeguarding transcripts” and noting that “about 90% of the petitions before the [agency] result in a decision in favor of tenants” which “raises a strong and very uncomfortable suspicion of bias in favor of tenants” (Hozz v. City & County of San Francisco, et al., San Francisco Super.Ct. No. 817495); a declaration of the agency's former president attesting to a pervasive anti-landlord bias among agency staff and hearing officers; testimony by the same official to the same effect in a federal district court trial (Campbell v. City & County of San Francisco, et al. (N.C.Cal.1986) No. C 80–4463 MHP); testimony by a former hearing officer in the same trial also detailing anti-landlord bias among agency staff; and an order made during the course of that federal action denying the City's motion for summary judgment, the district court finding triable issues of fact concerning the impartiality of the hearing officers and the substantially identical hearing and appeal procedural defects alleged by plaintiff.10 The totality of plaintiff's allegations and the record cure any possible insufficiency of his complaint.
Finally, there is the claimed denial of equal protection of the laws. Plaintiff alleged that the City's treatment of his application for a permit to operate his hotel for exclusively tourist use denied him equal protection “in that he was treated differently than other hotel owners similarly situated.” Once again, this is a allegation bereft of factual underpinnings establishing disparate treatment. There is nothing in either the complaint or the record which shows how other property owners similarly situated were dealt with differently than plaintiff. Of all plaintiff's claims this one comes closest to being an appropriate target for a general demurrer. Two factors counsel otherwise. The first is plaintiff's allegation that the City “proceeded to deny specifically to plaintiff ․ fair treatment” (emphasis added), which raises the possibility that the treatment he received from the City with respect to his request for a permit to operate a tourist hotel was simply another form of retaliation or harassment that went beyond acceptable enforcement of the Conversion Ordinance. (See Chalfy v. Turoff, supra, 804 F.2d 20 at p. 21; Espanola Way Corp. v. Meyerson, supra, 690 F.2d 827 at p. 829.) The second is that plaintiff may be able to substantiate how other hotels were accorded more lenient treatment. In either event, plaintiff should be granted leave to amend his complaint in order that these possibilities may be settled.
In many respects plaintiff's complaint is long on conclusionary allegations but woefully short of the requisite factual allegations. Other materials produced before the trial court are, however, more than adequate to remedy the deficiencies of the actual complaint. (See Manning v. Lockhart, supra, 623 F.2d 536 at p. 538; Hurney v. Carver, supra, 602 F.2d 993 at p. 996.) Accordingly, we conclude that it was error to sustain the City's general demurrer without granting leave to amend.
Plaintiff has two objections to Judge Dearman's rulings on the opposing motions for judgment on the pleadings made by intervenors and himself. Plaintiff argues in effect that the correct rulings were made on the wrong motions—intervenors' motion should have been denied and his motion should have been granted.
The first part of plaintiff's contention must be rejected for the reasons stated in part I, ante; as matters stood at the time he had to rule on intervenors' motion, Judge Dearman was correct in granting it. For the reasons stated in part III, plaintiff's claim for damages pursuant to 42 United States Code section 1983 must be counted among those causes of action which were still outstanding at the time the motions for judgment on the pleadings were made. Because a motion for judgment on the pleadings is the functional equivalent of a general demurrer (see Nunn v. State of California (1984) 35 Cal.3d 616, 620–621, 200 Cal.Rptr. 440, 677 P.2d 846), because plaintiff's section 1983 cause of action has been held sufficient to withstand the general demurrer interposed by the City, and because that cause of action was never addressed as part of intervenors' motion, the judgment based upon the granting of that motion must be reversed in part.
The same reasoning requires that the second part of plaintiff's contention must be rejected. It is fundamentally unfair to fault a trial court for a reason it never had an opportunity to consider. In light of the fact that the City's demurrer to plaintiff's cause of action based on section 1983 had been sustained, Judge Dearman was completely justified in not considering that cause of action in connection with the opposing motions for judgment on the pleadings. Accordingly, it was not reversible error to deny plaintiff's motion.
The attack pressed by plaintiff on the attorneys' fee award made by Judge Dearman pursuant to Code of Civil Procedure section 1021.5 need not detain us long. That statute provides in pertinent part: “Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any․” It is a fair reading of the statutory language regarding “a successful party” and “any action which has resulted” that an award of attorneys' fees pursuant to this statute is premature if the action is still unresolved. Our reversal of the judgment puts much of plaintiff's action at large again. Because the judgment must be reversed, so must the award order.
The only real dispute between the parties regarding the propriety of the preliminary injunction which we find necessary to decide concerns the operation of the Ellis Act, enacted to alleviate the plight of landlords presumably caused by Nash v. City of Santa Monica, supra, 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894.11 The core of the Ellis Act is this prohibition: “No public entity ․ shall, by statute, ordinance, or regulation, or by administrative action implementing any statute, ordinance or regulation, compel the owner of any residential real property to offer, or to continue to offer, accommodations in the property for rent or lease.” (Gov.Code, § 7060, subd. (a).)
Plaintiff, having provided the formal notification invoking the protections of the Ellis Act and the City, having apparently accepted plaintiff's notification,12 are at one in their willingness to have the soundness of the injunction adjudicated on the basis of the Ellis Act. The City seems willing to see plaintiff quit the residential hotel business, but only for a price plaintiff is unwilling to pay. According to the City, plaintiff can bid adieu to the Conversion Ordinance if he complies with its “one-for-one replacement” provision,13 which the City views as a mitigation measure expressly permitted by the Ellis Act.14 Until there is such compliance, the only options the City sees open to plaintiff are to conform to the Conversion Ordinance or to keep the hotel's rooms vacant. Plaintiff contends that requiring compliance with the “one-for-one replacement” provision is nothing short of a form of extortion forbidden by the Ellis Act, which he views as granting him the absolute right to go out of the residential hotel business and into the tourist hotel business.
With the assistance of the parties' letter briefs submitted after oral argument, we have examined the premise for these arguments—that the Ellis Act does apply to the change of use which plaintiff proposes to implement—and find it to be unsound.
The exact focus of the Ellis Act is somewhat imprecise, but the Legislature did declare its intent “to supersede any holding or portion of any holding in Nash v. City of Santa Monica, supra, 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894 to the extent that the holding, or portion of the holding, ․ so as to permit landlords to go out of business.” (Gov.Code, § 7060.7.) It is clear that the Legislature was not addressing every species of commercial operations. The repeated use of certain words and phrases, such as “residential real property” (Gov.Code, §§ 7060, subd. (a), 7060.1, subd. (a)), “residential hotels” (Gov.Code, § 7060.1, subd. (c)), “residential rental units” (Gov.Code, §§ 7060.4, subd. (a), 7060, subd. (b)), “accommodations ․ offered ․ for rent or lease for residential purposes” (Gov.Code, § 7060.2, subd. (a); see also § 7060.7, subd. (4)), “landlord” (Gov.Code, §§ 7060.2, subds. (a), (b), 7060.7), as well as “tenant or lessee” (Gov.Code, §§ 7060.2, subds. (a), (b), 7060.4, subds. (a), (b), 7060.6, 7060.7), leaves no doubt that the Legislature was directing its attention to real property used for human habitation. Fairly read, the Ellis Act authorizes parties in the business of offering dwelling accommodations to “go out of [that] business.” (Gov.Code, § 7060.7.)
It is clear that plaintiff desires to cease renting “residential hotel units” and rent only “tourist units,” as those terms are defined in the Conversion Ordinance. Regardless of which classification attaches to his units, the materials submitted by plaintiff in connection with the injunctive proceedings unambiguously evidenced his intention to continue in the business of offering accommodations for human habitation. There can be no doubt that he has no intention “to go out of [that] business” within the meaning of the Ellis Act. Accordingly, there is no basis for plaintiff to invoke the Ellis Act as a means of evading the provisions of the Conversion Ordinance.
Any other conclusion would violate the Ellis Act's stated intent not to “[i]nterfere with local governmental authority over land use․” (Gov.Code, § 7060.7, subd. (1).) By enacting the Conversion Ordinance and the ordinance establishing the North of Market Residential Special Use District, the City has twice determined that land devoted to a particular portion of the private housing sector shall be limited in the uses to which the land may be employed. If—as the dissenting opinion would allow—plaintiff prevails in his contention, he would be clothed with the unilateral power to effect what amounts to a rezoning of his property. This do-it-yourself rezoning cannot be harmonized with the Legislature's expansive and express declaration that nothing in the Ellis Act “[d]iminishes ․ any power which currently exists or which may hereafter exist in any public entity to grant or deny any entitlement to the use of real property, including, but not limited to, planning, zoning, and subdivision map approvals.” (Gov.Code, § 7060.1, subd. (b).)
The Conversion Ordinance specifically authorizes the City to enjoin violations of its provisions. (San Francisco Admin.Code, § 41.16, subd. (e).) Plaintiff's intent to continue acting as if the Conversion Ordinance had no application to him appears with more than reasonable clarity from the City's application for the injunction. Moreover, the City's showing was not genuinely contradicted by plaintiff, who simply argued that (1) the Ellis Act in effect immunized him from the Conversion Ordinance, and (2) greater hardship to him would result from the granting of the injunction than would inure to the City if the injunction were to be denied. The first of plaintiff's arguments has already been shown to lack foundation. As to the second, plaintiff has presented no authority for his implicit premise that a person can declare himself exempt from a statute merely because it causes hardship, even grave hardship. If plaintiff did take such a position, we do not think there is any legitimate ground for accepting it. Just about every law enacted for the public benefit results in difficulties for some individuals, but the law is not set aside as to them. The threat of impending insolvency does not absolve persons from complying with duties imposed by laws regulating their businesses. With the City very likely to prevail on the merits, the trial court did not abuse its discretion in either granting the preliminary injunction or declining to modify it. (See King v. Meese (1987) 43 Cal.3d 1217, 1226–1227, 240 Cal.Rptr. 829, 743 P.2d 889.) 15
Our dispositions are as follows:
In AO43073, with respect to 42 United States Code section 1983, the judgment is reversed and the cause is remanded to the trial court with directions to vacate its order of September 9, 1987, sustaining the general demurrer without leave to amend, and to make a new order in conformity with part III of this opinion. In all other respects the judgment is affirmed. The order awarding intervenors attorneys' fees pursuant to Code of Civil Procedure section 1021.5 is reversed. Plaintiff shall recover his costs of this appeal. In A044386 and A046047, the order granting the preliminary injunction, and the order denying plaintiff's motion to modify that injunction, are affirmed. The City shall recover its costs of these appeals.
I dissent from part VI of the majority opinion holding the Ellis Act (Gov.Code, § 7060 et seq.) 1 to be inapplicable (AO44386, A046047).
The majority interprets the Ellis Act as authorizing parties in the business of offering dwelling accommodations for human habitation, in their broadest sense, to go out of that business. Since Bullock desires to cease renting “residential hotel units” and to rent only “tourist units,” the majority reasons that Bullock “has no intention ‘to go out of [that] business' within the meaning of the Ellis Act. Accordingly, there is no basis for [Bullock] to invoke the Ellis Act as a means of evading the provisions of the Conversion Ordinance.” (Maj. opn. p. 136.)
I believe that both the unambiguous language and the legislative history of the Ellis Act demonstrate its purpose is to allow a landlord who complies with its terms the freedom to choose to go out of the residential rental business. (See City of Santa Monica v. Yarmark (1988) 203 Cal.App.3d 153, 165, 249 Cal.Rptr. 732.) As so interpreted, Bullock's plan to go out of the residential hotel business and into the tourist hotel business would fall within the protections of the Act.
When construing statutes, “[w]e begin with the fundamental rule that a court ‘should ascertain the intent of the Legislature so as to effectuate the purpose of the law.’ [Citation.] In determining such intent ‘[t]he court turns first to the words themselves for the answer.’ [Citation.] We are required to give effect to statutes ‘according to the usual, ordinary import of the language employed in framing them.’ [Citations.] ‘If possible, significance should be given to every word, phrase, sentence and part of an act in pursuance of the legislative purpose.’ [Citations.] ‘When used in a statute [words] must be construed in context, keeping in mind the nature and obvious purpose of the statute where they appear.’ [Citations.] Moreover, the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole. [Citations.]” (Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230–231, 110 Cal.Rptr. 144, 514 P.2d 1224.)
In seeking to ascertain the intent of the Legislature so as to effectuate the purpose of the Ellis Act, we look first to the words of the Act itself for the answer. In section 7060.7, the Legislature expressly stated its intention was “to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894 to the extent that the holding, or portion of the holding, conflicts with this chapter, so as to permit landlords to go out of business.”
In Nash v. City of Santa Monica (1984) 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894, the California Supreme Court had upheld the validity of a municipal rent control ordinance which prohibited removal of rental units from the housing market by conversion or demolition absent a removal permit from the local rent control board. In so doing, the court rejected a landlord's contention that the ordinance unconstitutionally prevented him from deciding to go out of the business of renting residential apartment units.2 (Id., at p. 100, 207 Cal.Rptr. 285, 688 P.2d 894.)
In response to Nash, the Legislature passed the Ellis Act. In determining whether the Act protects landlords only when they go out of the business of renting “real property used for human habitation” altogether, or whether it also protects one like Bullock who desires only to go out of the business of renting “residential hotel units” and to rent only “tourist units,” I note that throughout the Ellis Act, the Legislature uses the adjective “residential” to modify such phrases as “residential real property,” “residential rental units,” and “residential hotel.”
Looking at the “usual, ordinary import of the language employed” by the Legislature, the word “residential” connotes something “used, serving, or designed as a residence or for occupation by residents .” (Webster's New Internat. Dict. (3d ed. 1965) p. 1931.) A “residence” includes: “(1): the place where one actually lives or has his home as distinguished from his technical domicile” and “(2): a temporary or permanent dwelling place, abode, or habitation to which one intends to return as distinguished from a place of temporary sojourn or transient visit.” (Ibid.) A “resident” is “one who resides in a place: one who dwells in a place for a period of some duration․” (Ibid.) These dictionary definitions suggest that use of the word “residential” implies a place used for something more than a temporary stay or a transient visit, but something less than what may be required for a domicile.
This is borne out in the case law. There, the concept of “residence” varies depending upon the context, but the variations usually concern how that concept is equated with or distinguished from that of “domicile.” In some instances, the statutory terms “residence” and “domicile” are synonymous. (Walters v. Weed (1988) 45 Cal.3d 1, 7, 246 Cal.Rptr. 5, 752 P.2d 443 [elections]; Whealton v. Whealton (1967) 67 Cal.2d 656, 660, 63 Cal.Rptr. 291, 432 P.2d 979 [divorce].) For purposes of other laws, the terms have been distinguished. (Hanson v. Graham (1890) 82 Cal. 631, 632–633, 23 P. 56 [attachment law]; see Smith v. Smith (1955) 45 Cal.2d 235, 239–240, 288 P.2d 497.) At the very least, “residence” generally connotes a “factual place of abode of some permanency, more than a mere temporary sojourn.” (Id., at p. 239, 288 P.2d 497.)
But when words are used in a statute, they must be construed in context, keeping in mind the nature and obvious purpose of the statute in which they appeared. (Moyer v. Workmen's Comp. Appeals Bd., supra, 10 Cal.3d at p. 230, 110 Cal.Rptr. 144, 514 P.2d 1224.) As was stated in one case, “Residence, as used in the law, is a most elusive and indefinite term. It has been variously defined․ [¶] To determine its meaning, it is necessary to consider the purpose of the act.” Briggs v. Superior Court (1947) 81 Cal.App.2d 240, 245, 183 P.2d 758.)
Looking more closely at how these words are used in the context of the Ellis Act itself, we first note that the heading of the Government Code chapter encompassing the Ellis Act is entitled “Residential Real Property.” While a chapter heading alone is not determinative, the title is a useful guide in determining the intended scope of legislation. (People v. Garfield (1985) 40 Cal.3d 192, 199–200, 219 Cal.Rptr. 196, 707 P.2d 258.)
Next, we look to section 7060, subdivision (a), which the majority recognizes as “[t]he core of the Ellis Act.” (Maj. opn. p. 135.) It reads: “No public entity ․ shall, by statute, ordinance, or regulation, or by administrative action implementing any statute, ordinance or regulation, compel the owner of any residential real property to offer, or to continue to offer, accommodations in the property for rent or lease.” (Emphasis added.) Then, in subdivision (b), the word “accommodations” is defined for purposes of the Ellis Act in terms of “residential rental units.” 3 If we were to substitute the phrase “residential rental units” wherever the word “accommodations” appears throughout the Act, the scope of the Ellis Act becomes quite clear.4
Looking further into the act, it authorizes a local government to provide that “[i]f the accommodations are offered again for rent or lease for residential purposes within one year of the date the accommodations were withdrawn from rent or lease,” the owner may be required to “first offer the unit for rent or lease to the tenant or lessee displaced from that unit by the withdrawal․” (§ 7060.2, subd. (a)(4).) In addition to the definitional clues to which I have already referred, the substance of this provision can only have been intended to apply to persons interested in an occupancy of some duration, and not the casual tourist. Moreover, violations of this provision subject the owner to damages in an amount “not [to] exceed the contract rent for six months for any unit or units from which a tenant or lessee was displaced by withdrawal of the unit from rent or lease․” (§ 7060.2, subd. (a)(3).) The obvious predicate is a tenancy whose length was intended by the parties to the contract to be measured by the month.
Elsewhere in the Ellis Act, there are references to, and allowances for, municipal rent control. (§§ 7060.2, 7060.4, subd. (a), 7060.7, subd. (4).) 5 The Act also integrates its provisions with those governing unlawful detainer proceedings. (§ 7060.6.) These references, too, are consistent with the idea of a durational occupancy rather than short term stays by a tourist.
Finally, there is proof that the concept of residential hotels was not unknown to the Legislature. It declared that nothing in the Ellis Act “[d]iminishes or enhances any power which currently exists or which may hereafter exist in any public entity to mitigate any adverse impact on persons displaced by reason of the withdrawal from rent or lease of any accommodations in any residential hotel, as defined by Section 50519 of the Health and Safety Code․” (Gov.Code, § 7060.1, subd. (c)(1).) 6
The net effect of these portions of the Ellis Act leads inevitably to the conclusion that the Legislature's use of the word “residential” to modify such phrases as “residential real property,” “residential rental units,” and “residential hotel” is consistent with the usual, ordinary import of that word, that is, it implies a place where one dwells for a period of some duration, and not for a temporary or transient stay.
Accordingly, I can only conclude that Bullock's plan to go out of the residential hotel business and into the tourist hotel business does enjoy the protection of the Ellis Act.
In A044386 and A046047, I would reverse the order granting the preliminary injunction and the order denying Bullock's motion to modify that injunction.
1. For purposes of simplicity we refer to Mr. Bullock throughout this opinion as “plaintiff” and to the City of San Francisco and its Bureau of Building Inspection (the Bureau) as “the City.” James Parodi, a former tenant of plaintiff's hotel, was originally named as a defendant in San Francisco Action No. 809721, but plaintiff later dismissed this action as to Parodi. Parodi is not a party to these appeals.
2. The Bureau issued a “Certificate of Final Completion and Occupancy” attesting to the building's compliance with state and local laws, three months before plaintiff's purchase.
3. During the pendency of these appeals, the 1987 Ordinance was repealed and replaced with a version of the Conversion Ordinance which has not yet become effective. It bears emphasis that nothing in this opinion should be understood as expressing any opinion with respect to the latest version of the Conversion Ordinance.
4. Injunctive relief was sought on the additional grounds that plaintiff's operation of the Abigail constituted a public nuisance and an unfair business practice, the latter being alleged to justify the appointment of a receiver pursuant to Business and Professions Code section 17203. These portions of the City's complaint, and its claim for civil penalties for plaintiff's violation of the City's Planning Code as well as Business and Professions Code section 17206, need not be summarized as they are not involved in these appeals.
5. Plaintiff stated in a declaration that the City had “purported to revoke” his “Ellis Act filing” the day after the preliminary injunction was issued by Judge Pollak. Thereafter plaintiff submitted a new filing and the City on April 19, 1989, provided plaintiff a “Notice of Sufficiency of AMENDED Notice of Intent to Withdraw Residential Units from the Rent Market.”
6. This contention proceeds on the premise that plaintiff possessed a fundamental vested right to operate his hotel for exclusive tourist use. Whether or not the “Permit of Occupancy” issued by the City and plaintiff's renovation efforts establish the existence of a vested right appears to be a close question (see Russ Bldg. Partnership v. City and County of San Francisco (1988) 44 Cal.3d 839, 853–854, 244 Cal.Rptr. 682, 750 P.2d 324; Santa Monica Pines, Ltd. v. Rent Control Board (1984) 35 Cal.3d 858, 864–867, 201 Cal.Rptr. 593, 679 P.2d 27; Hock Investment Co. v. City and County of San Francisco (1989) 215 Cal.App.3d 438, 444–449, 263 Cal.Rptr. 665), but it is not one which we are compelled to decide.It should be noted that Judge Pollak's ruling was made before the provisions of the Ellis Act, discussed in part VI, post, became operative on July 1, 1986. We consequently express no opinion on how the Ellis Act would affect such a ruling if made after that date.
7. The purposes for establishing the district are generally similar to those of the Conversion and Demolition Ordinances. (See San Francisco Planning Code, § 249.5, subd. (b).)
8. The record on appeal also includes two declarations by former supervisors who were present at the time. These declarations have not figured in our analysis because they were not produced before the trial court; their substance only replicates material which the trial court did have in front of it.
9. We note in passing, and without it constituting any part of our analysis, that we have this day reversed a judgment dismissing one of the actions filed by plaintiff against the City for this very reason. (Bullock v. San Francisco Rent Stabilization & Arbitration Bd., AO44385.) We further note that Division One of this court has criticized the procedures of the City's designated administrative agency and intimated that an agency decision “was based in part on passion or prejudice.” (Campbell v. Residential Rent Stabilization & Arbitration Bd. (1983) 142 Cal.App.3d 123, 129–130 [text & fn. 3], 190 Cal.Rptr. 829.)
10. The district court took judicial notice of the Hozz decision and made reference to the comments of the Court of Appeal in Campbell v. Residential Rent Stabilization & Arbitration Bd., supra, 142 Cal.App.3d 123, cited at note 9, ante, 190 Cal.Rptr. 829.
11. The Legislature's stated intent for the Ellis Act was “to supersede any holding or portion of any holding in Nash v. City of Santa Monica, supra, 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894 to the extent that the holding, or portion of any holding, conflicts with this chapter, so as to permit landlords to go out of business.” (Gov.Code, § 7060.7.) The Legislature had the apparent impression that in Nash our Supreme Court had denied the existence of a “ ‘fundamental right’ to cease doing business as a landlord.” (Id. at pp. 103–108, 207 Cal.Rptr. 285, 688 P.2d 894.)
12. As previously mentioned, the City revoked its acceptance of plaintiff's “Ellis Act filing” the day after issuance of the preliminary injunction, but the City accepted a subsequent filing by plaintiff before he moved to have the injunction modified. (See note 5, ante.) The City will consequently be deemed to have been on notice at all relevant times that plaintiff was invoking the Ellis Act.
13. Section 41.10 of the San Francisco Administrative Code provides in pertinent part:“ONE–FOR–ONE REPLACEMENT. (a) Prior to the issuance of a permit to convert, the owner or operator shall provide for one-for-one replacement of the units to be converted by one of the following methods:“(1) Construct or cause to be constructed a substantially comparable-sized unit to be made available at comparable rent to replace each of the units to be converted; or“(2) Cause to be brought back into the housing market a comparable unit from any building which was not subject to the provisions of this Chapter [i.e., the Conversion Ordinance] to be offered at comparable rent to replace each unit to be converted; or“(3) Construct or cause to be constructed or rehabilitated apartment units for elderly, disabled or low-income persons or households at a ratio of less than one-to-one to be determined by the City Planning Commission․“(4) Pay to the City and County of San Francisco an amount equal to 40 percent of the cost of construction of an equal number of comparable units plus site acquisition cost. All such payments shall go into a San Francisco Residential Hotel Preservation Fund Account. The Department of Real Estate shall determine this amount based upon two independent appraisals․”
14. “Notwithstanding Section 7060, nothing in this chapter does any of the following: [¶] ․ (c)(1) Diminishes or enhances any power which currently exists or which may hereafter exist in any public entity to mitigate any adverse impact on persons displaced by reason by reason of the withdrawal from rent or lease of any accommodations in any residential hotel ․ which is expressly reserved, or generally used, for occupancy by lower income households․” (Gov.Code, § 7060.1.)
15. The parties are unable to agree whether plaintiff's alleged zoning violation served as a basis for either the injunction or the decision not to modify it. The record does not resolve this question. In light of our conclusion that plaintiff has alleged a prima facie basis for the invalidity of the rezoning of his hotel (see part III, ante ), we do not assume that the trial court based its decisions on what appears to be an illegal act by the City. Accordingly, we do not address the rezoning as a basis for the trial court's decisions.
1. Unless otherwise indicated, all further statutory references are to the Government Code.
2. Nash concluded, “[w]hile the challenged provision may be said to implicate interests which are entitled to a high degree of constitutional protection—including one's choice whether to remain in a particular business or occupation—the actual limitation upon those interests posed by the challenged provision is minimal and not significantly different from other, constitutionally permissible, limitations upon the use of private property imposed by government regulation. At the same time, the provision, by protecting existing tenants against eviction and the scarce supply of residential housing in Santa Monica against further erosion, clearly serves important public objectives.” (Nash v. City of Santa Monica, supra, 37 Cal.3d at p. 100, 207 Cal.Rptr. 285, 688 P.2d 894.)
3. “(b) For the purposes of this chapter, ‘accommodations' means the following: [¶] (1) The residential rental units in any detached physical structure containing four or more residential rental units. [¶] (2) With respect to a detached physical structure containing three or fewer residential rental units, the residential rental units in that structure and in any other structure located on the same parcel of land, including any detached physical structure specified in paragraph (1).” (Gov.Code, § 7060, subd. (b), emphasis added.)
4. Indeed, if we substituted the statutorily prescribed phrase “residential rental units” for “accommodations” in key portions of the majority opinion, the fallacy in the majority's statutory construction becomes evident. For example, in a preliminary conclusion, the majority states: “Fairly read, the Ellis Act authorizes parties in the business of offering dwelling accommodations [residential rental units] to ‘go out of [that] business.’ (Gov.Code, § 7060.7.)” (Maj. opn. p. 136.)
5. For example, section 7060.2 relates to the notice procedures to be used by a landlord seeking to withdraw accommodations (i.e., residential rental units) from the market in a community with municipal rent controls. It commences: “If a public entity, by valid exercise of its police power, has in effect any control or system of control on the price at which accommodations may be offered for rent or lease, that entity may, notwithstanding any provision of this chapter, provide by statute or ordinance, or by regulation ․ that any accommodations which have been offered for rent or lease and which were subject to that control or system of control at the time the accommodations were withdrawn from rent or lease, shall be subject to the following:․”
6. As defined in Health and Safety Code section 50519, subdivision (b)(1): “ ‘Residential hotel’ means any building containing six or more guestrooms intended or designed to be used, or which are used, rented, or hired out, to be occupied, or which are occupied, for sleeping purposes by guests, which is also the primary residence of such guests, but does not mean any hotel which is primarily used by transient guests who do not occupy such hotel as their primary residence.”Although this section was amended in 1989 (Stats.1989, ch. 184, § 1, effective July 20, 1989), those amendments do not affect the basic distinction between residential hotel buildings used as a primary residence and other buildings used by transient guests.
POCHÉ, Acting Presiding Justice.
PERLEY, J., concurs.