Roth v. Rhodes

• Citation: 30 Cal.Rptr.2d 706,25 Cal.App.4th 530
• Decision Date: 31 May 1994
• Docket Number: No. G013651,G013651
• Court: California Court of Appeals
• Parties: , 1994-1 Trade Cases P 70,612 Ivar ROTH et al., Plaintiffs and Appellants, v. Frank A. RHODES et al., Defendants and Respondents.

Page 706

30 Cal.Rptr.2d 706

25 Cal.App.4th 530, 1994-1 Trade Cases P 70,612

Ivar ROTH et al., Plaintiffs and Appellants, v. Frank A. RHODES et al., Defendants and Respondents.

No. G013651.

Court of Appeal, Fourth District, Division 3, California.

May 31, 1994.

[25 Cal.App.4th 535] James F. McGee, Irvine, for plaintiffs and appellants.

Layman, Jones & Dye, Kevin P. Bjerregaard and Robert B. Beauchamp, Irvine, for defendants and respondents.

OPINION

RYLAARSDAM, Justice (Assigned). ^*

May operators of medical buildings limit acceptable tenants to medical doctors or do statutory or common law prohibitions require them to lease space to other health care practitioners, in this instance, a podiatrist, or even the world at large? We conclude under the facts presented here, no legal requirement compels landlords to accept tenants who are not medical doctors.

Respondents Frank A. Rhodes, Gene Rhodes, Susan Rhodes, Rhodes Development Company, and Newport Center Medical Buildings (Rhodes or the Rhodes respondents) operate medical buildings in Newport Beach. According to the allegations of the complaint and as acknowledged by them, the Rhodes respondents only lease space to persons holding M.D. degrees. Appellants Ivar Roth and Ivar E. Roth, Podiatric Corporation (Roth) predicate all causes of action asserted in the complaint upon a refusal of Rhodes to rent space to Roth because of Rhodes' policy only to lease space to holders of M.D. degrees. Roth is not a medical doctor; he holds the degree of doctor of podiatric medicine. Roth appeals from a judgment entered following the granting of motions for summary adjudication and judgment on the pleadings which disposed of all causes of action asserted in the complaint. ¹

I FACTS AND CONTENTIONS

In his third amended complaint, Roth attacked Rhodes' policy limiting tenants to medical doctors as violations of the Cartwright Act (Bus. & Prof.Code, §§ 16700, et seq.) and common law prohibitions on restraint of trade, unfair competition, interference with prospective business advantage, intentional interference with the right to practice a profession, and violations of the Unruh Civil Rights Act. (Civ.Code, § 51, et seq.) The trial court granted summary adjudication on all causes of action except the cause of action for interference with prospective business advantage. Roth argues his opposition to the motion presented triable issues of material fact which require resolution by a fact finder as to each of these causes of action. The trial court granted judgment on the pleadings on the cause of action for interference with prospective business advantage. Roth argues the complaint states sufficient facts to constitute a cause of action. We disagree on all counts.

At the hearing on the motions, Roth's counsel presented the court with a declaration requesting a continuance. The declaration stated Roth needed further discovery and time to obtain expert opinions. The court denied the continuance on grounds the request was untimely and the declaration was insufficient to support a continuance. Roth argues the court had a mandatory duty to continue the hearing. There was no such mandatory duty under the facts of this case, and we hold the trial court did not abuse its discretion.

Roth's factual allegations may be summarized as follows: (1) Rhodes operates medical buildings in the Fashion Island section of Newport Beach, including a building at 1401 Avocado. (2) This building, as well as the others operated by Rhodes in the area, is prestigious and offers a uniquely comprehensive range of medical services. (3) Tenancy in the Avocado building offers unique opportunities for professional referrals. (4) The Rhodes respondents conspired among themselves and with the (since dismissed) medical doctors to deny Roth's civil rights, restrain his trade, interfere with his prospective economic advantage, and prevent Roth from successfully practicing his profession by prohibiting podiatrists, including Roth, from practicing in the medical building to prevent competition with these medical doctors. (5) In furtherance of this conspiracy, Rhodes refuses to rent space to Roth in the Avocado building. (6) As a result, Roth lost potential referrals and potential direct patient contacts which would have benefited him economically.

II ISSUES SUMMARIZED

The issue whether Rhodes can refuse to lease space to podiatrists is analytically no different from the question of whether the law requires a department store which caters to the high end of the market to purchase shoes from a manufacturer who makes less expensive, lower quality shoes. Or we could ask, does the law prohibit a landlord from limiting his tenancies to lawyers, merchants, or any specific trade or profession? If managers of stores or office buildings adopt such policies, may a disappointed supplier or prospective tenant claim the right to a jury trial under the civil rights acts because such discrimination against inferior or superior merchandise or between various types of tenancies may constitute arbitrary discrimination by a business establishment? Does such discrimination constitute a violation of the antitrust laws? We answer these questions in the negative.

III DO THE CALIFORNIA CIVIL RIGHTS STATUTES PROHIBIT DISCRIMINATION BETWEEN MEDICAL DOCTORS AND DOCTORS OF PODIATRY IN THE LEASING OF OFFICE SPACE?

May operators of office buildings limit their tenants to tinkers, tailors, physicians, or podiatrists? Do such restrictions violate the statutory civil rights of prospective tenants who fail to meet the landlord's occupational or professional qualifications? Do such restrictions at least raise questions of fact as to whether the exclusion constitutes arbitrary discrimination? Unless the landlord uses such restrictions as a pretext to exclude persons having the types of personal characteristics protected by the civil rights statutes (such as race, gender, or religion), they do not.

Roth claims Rhodes, who as a commercial landlord operates a business establishment, violated the Unruh Civil Rights Act (Civ.Code, § 51 et seq.). Section 51 prohibits discrimination by business establishments based on "sex, color, race, religion, ancestry, national origin, or disability." A number of cases hold that the classifications of section 51 are not exclusive but illustrative only; they note the statute prohibits all arbitrary discrimination by business establishments. (See, e.g., O'Connor v. Village Green Owners Assn. (1983) 33 Cal.3d 790, 191 Cal.Rptr. 320, 662 P.2d 427 [age]; Marina Point, Ltd. v. Wolfson (1982) 30 Cal.3d 721, 744, 180 Cal.Rptr. 496, 640 P.2d 115 [family status]; In re Cox (1970) 3 Cal.3d 205, 218, 90 Cal.Rptr. 24, 474 P.2d 992 [personal appearance]; Pines v. Tomson (1984) 160 Cal.App.3d 370, 206 Cal.Rptr. 866 [religion]; Rolon v. Kulwitzky (1984) 153 Cal.App.3d 289, 200 Cal.Rptr. 217 [homosexuality].) Section 51.5 expands on section 51 by, inter alia, specifying forms of discrimination, including refusal to deal. The rationale of Cox and Marina Point compels the conclusion that the classifications specified in section 51.5, which are identical to those of section 51, are likewise not exclusive and encompass other personal characteristics identified in earlier cases.

How expansive is the prohibition on arbitrary discrimination under these statutes? All economic decisions involve choices and hence require decision makers to discriminate between alternatives in making these choices. If the issue whether or not discrimination is arbitrary may require a determination in a trial before a fact finder, are all discriminators to be subjected to such a trial to defend the rational basis for their discrimination? If law firms adopt policies not to hire associates who failed to do well in law school or only those who graduated from certain highly rated law schools, may they be put in the dock for a jury to determine whether the services offered by the firm could only be performed by excellent law students? If a university insists it will only hire holders of a Ph.D. as assistant professors, would a fact finder be permitted to determine the policy represents arbitrary discrimination, and therefore violates the civil rights statutes, because many persons not holding such a degree would be able to teach as well or better?

If such policies are subterfuges for invidious discrimination, the answer is yes. A policy or a classification, in itself permissible, may nevertheless be illegal if it is merely a device employed to accomplish prohibited discrimination. For example, a case decided under title VII of the Civil Rights Act of 1964 (42 U.S.C.A., § 2000e, et seq.), involving policies similar to those in the Unruh Civil Rights Act, held an employer rule prohibiting law school attendance, which was applied to female employees but not to males, violated the act. (Chesheir v. Liberty Mut. Ins. Co. (5th Cir.1983) 713 F.2d 1142.) There is no suggestion in the case that the discrimination against law students, in and of itself, violated title VII. Similarly, Griggs v. Duke Power Company (1971) 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158, another title VII case, held an employer could not use the requirement of a high school diploma as a pretext to exclude a racial group, where the possession of such a diploma was unrelated to the skills required for the performance of the work.

Roth makes no allegation that Rhodes' policy had any such ulterior purpose. He does not suggest the true reason for his exclusion was his membership in any of the classes enumerated in the statute or within the penumbra of categories identified in case law as being protected by the civil rights laws. There is no hint that the policy adopted by Rhodes was applied in light of the prospective tenant's race, sex, religion, or any other personal characteristic. Indeed, we have nothing in the record to suggest that Rhodes was a member of any minority group other than...