Category Archives: First District Court of Appeals

Golden State Ventures, LLC v. City of Oakland Rent Board – (Unpublished) Clarity on the “Sold Separately” Requirement for Condominium Decontrol under Costa-Hawkins

“The Rent Board contends the “sold separately” exception does apply under our facts because plaintiff “admits that it has control of and owns the entire building at 840 55th Street, Oakland, California.” The Rent Board also notes the building’s four units are all connected within the structure, there are no units in the building that were not converted to condominiums, plaintiff negotiated to purchase all the units together, none of the units were sold to new occupants, and the complaining tenants continued to reside in their units just as they had prior to the conversion. Essentially, the Rent Board asserts plaintiff did not meet the “sold separately” requirement because it purchased the entire apartment building, regardless of how the transaction was structured. Plaintiff counters that the “sold separately” exception “applies rent control only to condominium subdividers [like Kolevzon], not to subsequent purchasers like Golden State.” Plaintiff is correct.”

In Golden State Ventures, LLC v. City of Oakland Rent Board, a landlord purchased four out of four of the condominium units in a single building in Oakland, and then increased the tenants’ rents by 125%. Apparently quite proud of this purchase, “In a blog posting discussing the acquisition of the building, plaintiff’s principal, Arlen Chou, stated: ‘The best part of the property is that as they are condominiums, they are EXEMPT from rent control! I will soon own a little island of rent control free property in a rising neighborhood in Oakland. Who said there are no deals in the Bay Area???’.”

However, while Costa-Hawkins decontrols “separately alienable” units (like single family homes) from rent control, a 2002 amendment “closed the loophole” where condominium subdividers obtained final map approval for sale, but then kept entire buildings – formerly apartments – as rent-control-exempt property, exalting form over function. As noted by the court in Golden State Ventures, LLC, “Such conduct was entirely legal at that time”, until the 2002 amendment required that the units be “sold separately to a bona fide purchaser” before decontrol applied.

Continue reading Golden State Ventures, LLC v. City of Oakland Rent Board – (Unpublished) Clarity on the “Sold Separately” Requirement for Condominium Decontrol under Costa-Hawkins

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Rosemary Court Properties, LLC v. Walker (Unpublished) – “Gatekeeper Duty” Justifies Reversal of Unlawful Detainer Judgment upon Failure To State Cause of Action

“Rosemary Court’s allegations that Parsi moved out of the premises and lived elsewhere for a time do not constitute termination under the lease or any law that we are aware of and, therefore, do not support Rosemary Court’s legal conclusion that Parsi terminated her leasehold interest. Rosemary Court relied on Walker’s purportedly unauthorized assignment of the lease to Parsi for its unlawful detainer cause of action, but regardless of any such assignment, by Rosemary Court’s own allegations, including the terms of the lease incorporated into the complaint by reference, Parsi was a colessee of a month-to-month tenancy who had moved out of the premises for a time, which remained occupied by Walker, and then moved back into the premises around the time that Walker moved out. These allegations establish only that Parsi was a colessee of the premises with an ongoing right to a month-to-month tenancy. Therefore, Rosemary Court did not state an unlawful detainer cause of action against Parsi.”

In Rosemary Court Properties, LLC v. Walker (unpublished), the First District Court of Appeal reversed the appellate division of the superior court decision upholding a default judgment in an unlawful detainer case against a co-lessee (Parsi) who, while temporarily out of occupancy, had resumed occupancy prior to the attempted termination of the tenancy. In so doing, the Court determined that the “gatekeeper duty” of the trial court required that it not enter a default judgment where the complaint is insufficient to state a cause of action.
Continue reading Rosemary Court Properties, LLC v. Walker (Unpublished) – “Gatekeeper Duty” Justifies Reversal of Unlawful Detainer Judgment upon Failure To State Cause of Action

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Ayala v. Dawson – First District Court of Appeal Finds Would-Be Buyer Collaterally Estopped To Claim Interest in Property Following Unsuccessful Eviction Defense

“Ayala could have moved to consolidate the unlawful detainer proceeding with this action, thus requiring the court to determine whether the issues presented were so complex and so intertwined with the issue of title that ‘the entire case [should be] treated as an ordinary civil action, not as a summary proceeding’ (Martin-Bragg v. Moore (2013) 219 Cal.App.4th 367, 387), but he did not do so. Instead, he ‘acceded to the summary and expedited procedures of unlawful detainer with respect to’ his claim to equitable title.”

In Ayala v. Dawson, the First District Court of Appeal navigated the collateral estoppel created by an unlawful detainer defendant’s litigation of his ownership of the property while simultaneously seeking to litigate his own breach of contract claims.
Continue reading Ayala v. Dawson – First District Court of Appeal Finds Would-Be Buyer Collaterally Estopped To Claim Interest in Property Following Unsuccessful Eviction Defense

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Danger Panda v. Launiu – First District Court of Appeal Defines “Tenant” under the Rent Ordinance To Exclude Minors

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“Insisting that a ‘tenant’s child may be a tenant protected under the Rent Ordinance,’ defendants direct our attention to Mosser Companies v. San Francisco Rent Stabilization & Arbitration Bd. (2015) 233 Cal.App.4th 505 (Mosser Companies) and T & A Drolapas & Sons, LP v. San Francisco Residential Rent Stabilization & Arbitration Bd. (2015) 238 Cal.App.4th 646 (Drolapas) . . . Defendants mistakenly rely on Mosser Companies and Drolapas. The primary issue in both of these cases was how to interpret statutory language in the Costa-Hawkins Act, specifically, the words ‘occupant’ and ‘possession’ in Civil Code section 1954.53(d)(2). (Mosser Companies, supra, 233 Cal.App.4th at pp. 512-513; Drolapas, supra, 238 Cal.App.4th at pp. 652-653.) The present case does not involve a proposed rent increase under the Costa-Hawkins Act. Beyond that, the question we address is not whether David is an occupant or in possession of Unit 308A. The issue here is whether David’s status as a minor precludes him from being a ‘tenant’ for all purposes under section 37.2(t) of the Rent Ordinance.”

Danger Panda, LLC is the owner of a residential property in the Mission District. Over three years ago, it begin the process of invoking the Ellis Act to terminate all residential tenancies in the building. The Ellis Act is a state law that allows property owners to “go out of the rental business” and evict their tenants, so long as they comply with local eviction control ordinances. San Francisco’s ordinance requires property owners to pay “relocation assistance”, to help displaced tenants with moving expenses and deposits for their new home.
Continue reading Danger Panda v. Launiu – First District Court of Appeal Defines “Tenant” under the Rent Ordinance To Exclude Minors

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First District Affirms San Francisco Housing Court on Small Property Owners’ Challenge to Enhanced Relocation Assistance Payment Ordinance: Coyne v. CCSF

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“We conclude the prohibitive price standard is the appropriate standard to determine conflict preemption under the Ellis Act. It is the measure appellate courts consistently adopt to determine if a challenged ordinance contradicts the state law.”

Today, Division Five of the First District Court of Appeal affirmed Judge Quidachay of the San Francisco Housing Court, who previously held that San Francisco’s enhanced relocation assistance payment ordinance was not a “reasonable” means of mitigating the impact of tenant displacement by the Ellis Act. In 2015, plaintiffs, including individual landlords and the Small Property Owners of San Francisco, argued in Coyne v. CCSF that an enhanced relocation assistance payment regime was preempted by the Ellis Act. The payment amounted to a subsidy of a tenant’s new rent for two years after displacement under the Ellis Act.

Division Five affirmed the ruling, but determined that the correct standard was whether a local ordinance places a “prohibitive price” on a landlord’s ability to exit the rental market. “Like provisions in past City-enacted ordinances which have been invalidated, the City’s Rental Payment Differential obligation places conditions on a landlord’s right to go out of business that are not found in the Ellis Act. The Ellis Act contains no requirement that obliges a landlord to pay their former tenants future rental subsidies so that they can leave the residential rental business.” Division Five agreed with its colleagues in Division Three, which recently applied the “prohibitive price” standard to invalidate San Francisco’s prohibition on the merger of rental units for 10 years after an owner has invoked the Ellis Act.

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Geraghty v. Shalizi (2017) – Landlord-Tenant “Buyout Agreements” Are Not “Non-Fault Evictions” and Tenants May Waive Rent Ordinance Rights To Settle Disputes

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“Looking at the history of the city’s legislation concerning landlord-tenant buyout agreements and the case law concerning these agreements, the conclusion is inescapable that these agreements have been utilized and honored for decades. The city has plainly taken this view of its rent ordinance.”

UPDATE: The First District has certified Geraghty v. Shalizi for publication.

In the landmark case, Kaufman v. Goldman (2011) 195 Cal. App. 4th 734, Division One of the First District Court of Appeal resolved that, even though the San Francisco Rent Ordinance purports to void any waiver of tenant rights under the Rent Ordinance, the settlement of a lawsuit will suffice to circumvent that rule. It reasoned that, “Parties frequently settle landlord-tenant disputes, and move-out provisions are not uncommon. If [the anti-waiver provision] were deemed to apply to such move-out provisions, this would have a chilling effect on future settlements of unlawful detainer actions as landlords would have little incentive to enter into pre-litigation negotiations”.

Geraghty v. Shalizi featured such an agreement, and once again, Division One was faced with the question of whether to enforce the protections of the Rent Ordinance against a landlord, in light of the anti-waiver provisions, or to give deference to an agreement for possession that was freely negotiated between the parties.

Ultimately, Geraghty v. Shalizi applied the same rule as Kaufman v. Goldman – the settlement of a lawsuit is the exception to the rule against voiding a waiver of rights – and it did so, despite several different circumstances.
Continue reading Geraghty v. Shalizi (2017) – Landlord-Tenant “Buyout Agreements” Are Not “Non-Fault Evictions” and Tenants May Waive Rent Ordinance Rights To Settle Disputes

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Contreras v. Dowling (2016) – Anti-SLAPP Protection for Attorney-Client Relationships in the Face of “Unadorned” Allegations of Attorney-Client Conspiracy

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“We decline to infer Dowling’s concurrence in his clients’ acts from the mere existence of their attorney-client relationship. Contreras cites no authority holding that an attorney-client relationship is evidence of a conspiracy between the attorney and client, and our own research discloses none. Moreover, we share Dowling’s expressed concern about the implications of such a holding. He contends there will be a chilling effect on attorneys if their communicative acts can be placed outside the protection of section 425.16 by the unadorned allegation that they conspired in their clients’ torts. Contreras airily dismisses this concern, arguing ‘any chilling effect that conclusion may have on conspiracies between lawyers and their clients must be counted an unalloyed benefit.’ We are not so sanguine. ‘The fears of chilled speech and hindered justice are too much a part of our case law to be disregarded as unproved.’ . . . We refuse Contreras’s invitation to infer an attorney-client conspiracy from the mere existence of an attorney-client relationship.”

California’s Anti-SLAPP Law (Cal. Code Civ. Proc., §425.16) is designed to question, at an early stage of litigation, whether certain claims that arise from a defendant’s petitioning conduct has sufficient, minimal merit to proceed. If not, the defendant may use a special motion to strike to eliminate certain claims that the plaintiff cannot prevail on.

“Petitioning conduct” can refer to a fairly wide-range of a defendant’s exercises of free speech rights. When that defendant is also an attorney, and the conduct is closely connected with her provision of legal advise in the context of an attorney-client relationship, this activity should fall squarely within the ambit of the anti-SLAPP statute.

Nonetheless, the landlords in the controversy underlying Contreras v. Dowling engaged in activity that allegedly constituted wrongful eviction. And, because they had counsel at the time of the alleged tort, the tenant sued the landlords for the wrongful eviction and sued the attorney, Dowling, for “conspiracy” to commit the tort.

Continue reading Contreras v. Dowling (2016) – Anti-SLAPP Protection for Attorney-Client Relationships in the Face of “Unadorned” Allegations of Attorney-Client Conspiracy

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Tom v. City & County of San Francisco (2004) 120 Cal. App. 4th 674 – Constitutionally Protected Right to Privacy for TIC Agreements with Exclusive Rights of Occupancy

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Multiple owners of a multi-unit, tenant-occupied building will sometimes invoke the Ellis Act in order to terminate tenancies so that each owner can live in a particular unit in the building. While each owner would own a percentage of the entire parcel/building, each will enter a contract (known as a “TIC” or “tenancy-in-common” agreement), which will allow them to designate a specified unit to a particular owner.

In 2001, San Francisco sought to prohibit this practice by adopting Ordinance 161-01, amending the Subdivision Code to eliminate “exclusive rights to occupancy” (i.e., designating that a particular owner was allowed to use a particular unit) and requiring that TIC agreements be recorded for purposes of enforcement/regulation. The logic of the amendment was that, if multiple owners cannot exclude other owners from their own units, the TIC rights would essentially be valueless, and maintaining buildings as rental units would be the preferred use.

Then Mayor Willie Brown vetoed Ordinance 161-01, citing concerns as to its validity and wisdom, but the Board of Supervisors overrode his veto. TIC owners challenged Ordinance 161-01, alleging that it violated the Ellis Act, as well as their rights to privacy.

The First District Court of Appeals affirmed, in the published decision Tom v. City & County of San Francisco (2004) 120 Cal. App. 4th 674, finding a protected “autonomy privacy” interest in “choosing the persons with whom a person will reside, and in excluding others from one’s private residence”. Meanwhile, it found that the City’s choice to preclude homeowners from going out of the landlord business under the Ellis Act was not a sufficient countervailing interest justifying such an extreme privacy violation.

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