MORRIS v. GREEN RIVER VILLAGE MOBILEHOME COMMUNITY (1986)

OPINION

Plaintiff rented a space in a mobilehome park owned by defendant.   She ran a foster care facility in her mobilehome.   Defendant served plaintiff with a seven day notice to cure violations of park rules.  (Civ.Code § 798.56, subd. (c).)  When plaintiff took no steps to cure the alleged violations, defendant served her with a 60 day notice to terminate possession of the rental space and remove her coach from the park.  (Civ.Code § 798.55, subd. (b).)  The park rules plaintiff allegedly violated were those prohibiting business or commercial activity and limiting residency to adults only.   After receiving these notices, plaintiff filed a complaint for declaratory and injunctive relief, intentional infliction of emotional distress, and unfair business practices, seeking, among other things, to enjoin defendant from filing an unlawful detainer action against her.   The causes of action requiring equitable remedies were severed from the other counts and tried first (Code of Civ.Proc. § 1048, subd. (b)), and the parties stipulated to place in issue only the question of whether plaintiff was conducting a business or commercial activity in violation of the park rules.¹  The trial court found that the rule prohibiting business or commercial activity in the park was reasonable and that plaintiff's activities had violated the rule.   Plaintiffs' request for injunctive relief was denied and judgment entered in favor of defendant.

On appeal, plaintiff contends:  (1) pursuant to the provisions of the Community Care Facilities Act (Health & Saf. Code § 1500 et seq.), her foster care activity cannot legally be characterized as a business or commercial activity;  (2) characterizing her activity as a business violates the constitutional right to privacy afforded her by article I, section 1 of the California Constitution;  and (3) the case should be remanded for determination of whether plaintiff is being discriminated against in violation of the Unruh Civil Rights Act.  (Civ.Code § 51 et seq.)   Defendant contends that the prohibition of business or commercial activity in the park is a “reasonable rule or regulation” pursuant to the section of the Mobilehome Residence Law governing termination of tenancy.  (Civ.Code § 798.56, subd. (c)).

FACTS

The trial court found the fact statements set forth in the two parties' trial briefs to be true, and did not hear other evidence on the factual circumstances surrounding the dispute.   Consequently, we base our description of the facts in part on those statements.

Plaintiff and her then husband began renting a space in defendant's mobilehome park in 1976, pursuant to a month-to-month rental agreement.   The rental agreement contained the following park rule:  “[t]he Home and Homesite shall be used only for the private residential purposes and no business or commercial activity of any nature shall be conducted thereon.”

Plaintiff's husband had two children by a former marriage.   These children apparently resided with the plaintiff until 1980.   Shortly after plaintiff moved in, the park changed its rules to prohibit persons under 18 years old from living there.   Plaintiff was told this rule would not affect her, because she was a tenant when children were permitted.   Since that time, park officials have assured plaintiff repeatedly that she may adopt children and raise them as her own within the park.

In 1982 plaintiff was licensed as a foster parent by the County of Riverside.   Since then plaintiff has had numerous foster children move in and out of her home;  she has never had more than five foster children residing with her.   Plaintiff has a large four bedroom mobilehome with a grassy yard in which the children play.   There are approximately 19 or 20 other children living in the park whose parents were tenants before the park's conversion to an adults only facility.   There are 330 mobilehomes in the park.

In May of 1983 defendant served on plaintiff a seven day notice to cure violations of the park rules and regulations set out in the rental agreement.   The notice stated that by running a foster home plaintiff had violated the rule against business or commercial activity and the rule prohibiting residency of minor children in the park.   The notice also informed plaintiff that she would be given a 60 day notice to remove herself and her coach from the park if she did not desist from her violations of the rules.   Plaintiff took no steps to cure the violations;  she was served with the 60 day notice to terminate possession.

After receiving the 60 day notice plaintiff filed a complaint for declaratory relief, injunction, intentional infliction of emotional distress, and unfair business practices.   She sought, among other things, to enjoin defendant from filing an unlawful detainer action against her.   The issue of whether plaintiff had violated the rule against business or commercial activity was severed from the rest of the case and tried.  (See procedural history, supra.)   The trial court declared in pertinent part:  (1) the factual statements in the parties' trial briefs were true;  (2) plaintiff received compensation for her foster parenting;  (3) the rule prohibiting business or commercial activity in the park was reasonable “in that it satisfies the reasonable expectancy of the other tenants of the Park that the residential character will be preserved;”  (4) plaintiff's operation of a foster home constituted a business or commercial activity;  (5) the case did not involve a contract for transfer of real property;  and (6) enforcement of the rule against business activity was not a violation of plaintiff's right to privacy under article I, section 1 of the California Constitution.   Judgment was entered on defendant's behalf.

DISCUSSION

IFOSTER CARE AS A RESIDENTIAL USE OF PROPERTY UNDER HEALTH AND SAFETY CODE SECTION 1566.5

Plaintiff contends that under the terms of Health and Safety Code section 1566.5, a part of the Community Care Facilities Act, her foster care activity cannot legally be characterized as a business or commercial activity.

The Community Care Facilities Act (Health & Saf. Code § 1500, et seq.) was enacted in 1973 to provide children and adults in need of nonmedical care with community care in residential and nonresidential facilities as an alternative to institutionalization.  (Health & Saf. Code § 1501.)   A foster home is a residential facility covered by the Act.  (Health & Saf. Code § 1502, subd. (a)(5).)   In 1978 article 7, entitled “Local Regulation” (Health & Saf. Code §§ 1566–1566.7) was added to the Act to carry out “the policy of this state that each county and city shall permit and encourage the development of sufficient numbers and types of residential care facilities as are commensurate with local need.”  (Health & Saf. Code § 1566.)   In furtherance of this policy, article 7 provides that “a residential facility which serves six or fewer persons shall be considered a residential use of property for the purposes of this article․ [and that] ․ the residents and operators of such a facility shall be considered a family for the purposes of any law or zoning ordinance which relates to the residential use of property pursuant to this article.”  (Health & Saf. Code § 1566.3.)   The article further provides:  “[f]or the purpose of all local ordinances, a residential facility which serves six or fewer persons shall not be included within the definition of a boarding house, rooming house, institution or home for the care of minors, the aged, or the mentally infirm, foster care home, guest home, rest home, sanitarium, mental hygiene home, or other similar term which implies that the residential facility is a business run for profit or differs in any other way from a single family residence.”  (Ibid.)  The article also requires that “[n]o conditional use permit, zoning variance, or other zoning clearance shall be required of ․ [such a residential facility] ․ which is not required of a single family residence in the same zone,” (ibid.), and prohibits subjection of such facilities “to any business taxes, local registration fees, use permit fees, or other fees to which other single family dwellings are not likewise subject.”  (Health & Saf. Code § 1566.2.)   Thus, such facilities may not be barred from single family residential neighborhoods by local governmental action.

Health and Safety Code section 1566.5, also part of article 7, provides that residential care facilities shall be considered a residential use of property by a single family under certain private agreements:  “For the purposes of any contract, deed, or covenant for the transfer of real property executed on or after January 1, 1979, a residential facility which serves six or fewer persons shall be considered a residential use of property and a use of property by a single family, notwithstanding any disclaimers to the contrary.”   Plaintiff argues that her month-to-month lease with defendant is “a contract ․ for the transfer of real property” within the purview of Health and Safety Code section 1566.5, so that her foster care activity cannot be characterized as a business or prohibited by the terms of the lease.   In order to decide whether this provision applies to plaintiff's month-to-month tenancy, we need to interpret the meaning of the phrase “for the transfer of real property.”

 Civil Code section 1039 defines transfer as “an act of the parties, or of the law, by which the title to property is conveyed from one living person to another.”  (See 2 Miller & Starr, Current Law of California Real Estate (1977) § 14:1, p. 491.)   Our Supreme Court has held that the word “transferred,” when used in its legal sense by a person skilled in the law, refers to the passing of title to property from one person to another.   (Commercial Discount Co. v. Cowen (1941) 18 Cal.2d 610, 615, 116 P.2d 599, citing Skousen v. Herz (1933) 135 Cal.App. 116, 26 P.2d 498.)   It is an established rule of statutory construction that a phrase or word having a definite and well-known legal meaning is “construed to have the same meaning when used in a statute.”  (Plotitsa v. Superior Court (1983) 140 Cal.App.3d 755, 762, 189 Cal.Rptr. 769;  Handlery v. Franchise Tax Board (1972) 26 Cal.App.3d 970, 981, 103 Cal.Rptr 465;  Westphal v. Westphal (1932) 122 Cal.App. 379, 382, 10 P.2d 119.)   Execution of a lease passes to the lessee only possession and use of real property, not title to that property.   (Stone v. City of Los Angeles (1931) 114 Cal.App. 192, 198–199, 299 P. 838;  see Smith v. Royal Ins. Co. (9th Cir.1940) 111 F.2d 667, 671;  4 Miller & Starr, supra, § 27:1, p. 234.)

 Even if “transfer” were construed to include the execution of a lease, the words “real property” would normally not refer to a leasehold.   An owner of a fee simple or life interest in land owns “real property” while the owner of a leasehold, or estate for years, owns, not “real property,” but a “chattel real,” which is personalty.  (Civ.Code § 765;  Callahan v. Martin (1935) 3 Cal.2d 110, 118, 43 P.2d 788;  see Parker v. Superior Court (1970) 9 Cal.App.3d 397, 399–400, 88 Cal.Rptr. 352;  4 Miller & Starr, supra, § 27:1, p. 234.)   This was so at common law, and remains so under our statutes and case law.  (Civ.Code § 765;  Dabney v. Edwards (1935) 5 Cal.2d 1, 6–7, 53 P.2d 962.)   A “chattel real” is governed by the rules which apply to personal property.  (See Id., at pp. 6–11, 53 P.2d 962;  4 Miller & Starr, supra, § 27:1, p. 234.)   The foregoing analysis leads to the conclusion that execution of a short term lease such as the month-to-month rental agreement in this case does not constitute a transfer of real property within the contemplation of Health and Safety Code section 1566.5.

 Examination of the legislative history of article 7 reveals that its provisions were probably not directed at mobilehome parks as such.   The purpose of article 7 (Health & Saf. Code §§ 1566–1566.7) was to stop overconcentration of facilities for the handicapped and others in need of community care in certain cities or specific areas of cities where it was easiest to obtain zoning clearances;  i.e., to prevent those in community care from being forced to live in ghettoes for the handicapped rather than in “normal residential surroundings.”  (Health and Welfare Agency, Rehabilitation Dept., Enrolled Bill Report, Senate Bill No. 2093 (9/18/78);  Senate Committee on Health and Welfare, Staff Analysis, Senate Bill No. 2093 (Roberti), as amended 5/4/78, pp. 1–2.)   The statutory provisions prohibiting zoning, use permits, and fee requirements that would exclude residential care facilities housing six or fewer people from single family residential neighborhoods were intended to carry out this purpose.  (Senate Committee on Health and Welfare, Staff Analysis, supra, p. 4;  Health and Welfare Agency, Dept. of Social Services, Enrolled Bill Report, Senate Bill No. 2093, 9/18/78, pp. 1–2.)   While the legislative history provides no specific gloss on the meaning of Health and Safety Code section 1566.5, it is to be inferred from its context that it was designed to prevent exclusion of residential care facilities from single family neighborhoods through such devices as developers' recording restrictive covenants for a subdivision tract or neighbors' covenanting that they will not sell their homes without putting exclusionary clauses in their sales contracts.   Because of the language employed in Health and Safety Code section 1566.5 and the legislative history of article 7 (Health & Saf. Code §§ 1566–1566.7), we conclude the statute does not require that a foster care operation carried out in a mobilehome held under a month-to-month tenancy be considered a “residential”, as opposed to a business use of property.²

II

APPLICATION OF CIVIL CODE SECTION 798.56, SUBDIVISION (c) TO THE MOBILEHOME PARK RULE AGAINST BUSINESS OR COMMERCIAL ACTIVITY

 Civil Code section 798.56, subdivision (c) provides in pertinent part that a tenancy in a mobilehome park can be terminated for “[f]ailure of the homeowner or resident to comply with a reasonable rule or regulation of the park as set forth in the rental agreement or any amendment thereto.”  (Emphasis added.)   Because we have concluded that Health and Safety Code section 1566.5 does not require plaintiff's foster care activities to be classified as a residential use of property, we must decide whether the park's rule prohibiting business or commercial activity is a “reasonable” regulation, and whether plaintiff's foster care operation is a “business or commercial activity.”

The rental agreement between plaintiff and defendant provides that “[t]he Home and Homesite shall be used only for the private residential purposes and no business or commercial activity of any nature shall be conducted thereon.”   The trial court found “that the provisions of the contract that prohibit any business or commercial activity on the premises is [sic ] reasonable, and that the same satisfies the reasonable expectancy of the other tenants of the park that the residential character thereof will be preserved.”   We agree.   Residents of a mobilehome park are entitled to be free of “substantial annoyance” caused by the conduct of other park residents, i.e., to have quiet enjoyment of their homes.  (See Civ.Code § 798.56, subd. (b).)  Protection of the right to quiet enjoyment of one's home would seem to be especially important in the mobilehome park setting, considering the unusually close proximity of the homes, the need to share limited facilities and the unusual efforts and costs involved in moving one's coach from one park to another to escape deteriorating living conditions.  (See Civ.Code § 798.55.)   In the instant case, plaintiff's mobilehome is one of 330 residences in the park.   Plaintiff and all the other homeowners in the park entered their tenancies with the understanding, based on the terms of the rental agreement, that no business or commercial activity would take place there.   Such a limitation is reasonable to protect the other park residents' right to quiet enjoyment of their homes and their expectations that the park will retain its residential character.

 Next we consider whether plaintiff's foster care activities constitute business or commercial activity.   A “business” has been defined under state tax laws as “ ‘any activity engaged in by any person or caused to be engaged in by him with the object of gain, benefit or advantage, either direct or indirect.’ ”  (Union League Club v. Johnson (1941) 18 Cal.2d 275, 277, 115 P.2d 425, quoting the Retail Sales Tax Act (Stats. 1935, p. 1256.);  L.A. etc. Sch. Dist. v. St. Bd. Equalization (1945) 71 Cal.App.2d 486, 488, 163 P.2d 45.)   Such an activity need not return a profit.  (Union League Club v. Johnson, supra, 18 Cal.2d at p. 278, 115 P.2d 425.)   Business has also been generally defined as “[t]hat which habitually busies or occupies or engages the time, attention, labor, and effort of persons as a principal serious concern or interest or for livelihood or profit.”  (Blacks Law Dictionary (5th ed. 1979) p. 179.)

In Seaton v. Clifford (1972) 24 Cal.App.3d 46, 100 Cal.Rptr. 779, the appellate court held that the operation of a facility in a single family home for the care of six mentally retarded adults was a business activity in violation of a covenant restricting the property to residential use.  (Id., at pp. 50–51, 100 Cal.Rptr. 779.)   Among “the indicia of a business enterprise” identified in Seaton were that the operators were licensed and received income for their services and that the facility was of a transient character in that the residents were a frequently changing group.  (Ibid.)  In this case, plaintiff is licensed as a foster parent and apparently has no other employment;  she receives compensation or reimbursement for her services (though there was an offer of proof that she does not make a profit), and she has had many different children in her home since becoming licensed.   These are sufficient indicia of a business enterprise for the trial court to have found that plaintiff was carrying on a business or commercial activity in the context of a mobilehome park rule prohibiting such activity.

We hold that the trial court did not err in finding and declaring that plaintiff had violated the rules and regulations of defendant mobilehome park by carrying on a commercial activity.   Having agreed to the ban on business and commercial activity set out in her month-to-month rental agreement, in the absence of law making such an agreement illegal, plaintiff cannot now assert that her activities should not be subject to her agreement.

III

PLAINTIFF'S RIGHT TO PRIVACY UNDER ARTICLE I, SECTION 1 OF THE CALIFORNIA CONSTITUTION

 Plaintiff contends that the rule prohibiting business and commercial activity, as it has been applied to her, is a violation of the right to privacy provided by article I, section 1 of the California Constitution.   She argues that enforcement of the rule will deny her the right of choosing her living companions and pursuing the lifestyle she has chosen without any interference.

Article I, section 1 of the California Constitution provides that all people have certain inalienable rights, among which is the right to privacy.³  Our courts have held that “[t]he basic test of whether there has been a violation of the constitutional right to privacy is whether a person's personal and objectively reasonable expectation of privacy has been infringed by unreasonable governmental intrusion.”  (People ex rel. Franchise Tax Bd. v. Superior Court (1985) 164 Cal.App.3d 526, 540–541, 210 Cal.Rptr. 695;  Armenta v. Superior Court (1976) 61 Cal.App.3d 584, 588, 132 Cal.Rptr. 586;  see City of Santa Barbara v. Adamson (1980) 27 Cal.3d 123, 132, 164 Cal.Rptr. 539, 610 P.2d 436;  emphasis added.)   This case deals with a private contract between plaintiff and defendant, not with a zoning ordinance or any other governmental action.   Moreover, this case does not concern plaintiff's privacy right to choose her living companions.  (Ibid.)  The record reflects the park has never sought to prohibit plaintiff's stepchildren from living with her, and has advised her repeatedly that, should she adopt children, she has the right to raise them in the park.   The park's objection is to plaintiff's operation of a foster care business within the mobilehome park.

IV

PROTECTION FROM DISCRIMINATION UNDER THE UNRUH CIVIL RIGHTS ACT.  (CIV. CODE § 51, ET SEQ.)

 Plaintiff maintains that in enforcing the rule against business or commercial activity, defendant is discriminating against her under the Unruh Civil Rights Act.  (Civ.Code § 51, et seq.)   She argues that defendant has allowed many other people to conduct business activities in the park without enforcing the park rule against them, so that enforcement against her is a discriminatory application.

Section 51 of the Civil Code provides in pertinent part:  “All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, or national origin are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.”   In enacting this statute, the Legislature intended to prohibit all arbitrary discrimination by business establishments.  (In re Cox, (1970) 3 Cal.3d 205, 216, 90 Cal.Rptr. 24, 474 P.2d 992.)   There was no evidence before the trial court that defendant enforced the park rule banning business or commercial activity selectively against plaintiff.   Even if there were, enforcement of the rental contract against plaintiff would not constitute the “arbitrary discrimination” prohibited by the Unruh Act.   Plaintiff agreed in her contract with the park not to carry out any business or commercial activity in her mobilehome.   The Unruh Act does not relieve persons of valid contractual obligations which are not in contravention of public policy.

DISPOSITION

The judgment is affirmed.

      THE COURT:

      Rickles

      Acting Presiding Justice

      Kaufman

      Justice

      Dorr

      Justice ^*

FOOTNOTES

1.   The parties stipulated that the question of the “adults only” violation not be put in issue because the Supreme Court was at that time in process of deciding whether to review three conflicting appellate court cases concerning the legality of excluding children from residence in mobilehome parks.   The court subsequently decided to take up the cases and its decision on the “adults only” issue is still pending.

2.   In her opening brief, plaintiff advances the theory that our Legislature, by prohibiting eviction from a mobilehome park except under limited circumstances in Civil Code section 798.56, has created a life estate subject to conditions subsequent for tenants of mobilehomes.   Life estates are freehold estates;  they convey upon the owner all of those rights enjoyed by an owner in fee, except that the property must be preserved for the remainderman.  (Civ.Code §§ 765, 818.)   Thus, the owner of a life estate is subject to no qualifications on the use or occupancy of the property.  (Civ.Code § 818;  Horstmann v. Sheldon (1962) 202 Cal.App.2d 184, 190, 20 Cal.Rptr. 735.)   The possessor of a month-to-month tenancy in a mobilehome is subject to both use and occupancy restrictions, and thus is not the owner of a life estate.  (See Civ.Code § 798.56;  cf. Hall v. City of Santa Barbara (9th Cir.1986) 797 F.2d 1493.)

3.   Article I, section 1 of the California Constitution provides in full:  “All people are by nature free and independent and have inalienable rights.   Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.”

FOOTNOTE.   Assigned by the Chairperson of the Judicial Council.