Bayscene Resident Negotiators v. Bayscene Mobilehome Park

• Decision Date: 23 April 1993
• Docket Number: No. D014430,D014430
• Citation: 15 Cal.App.4th 119,18 Cal.Rptr.2d 626
• Court: California Court of Appeals Court of Appeals
• Parties: BAYSCENE RESIDENT NEGOTIATORS, Plaintiff and Appellant, v. BAYSCENE MOBILEHOME PARK et al., Defendants and Respondents.

Page 626

18 Cal.Rptr.2d 626

15 Cal.App.4th 119

BAYSCENE RESIDENT NEGOTIATORS, Plaintiff and Appellant, v. BAYSCENE MOBILEHOME PARK et al., Defendants and Respondents.

No. D014430.

Court of Appeal, Fourth District, Division 1, California.

April 23, 1993.

[15 Cal.App.4th 121] Stanley F. Zubel, San Diego, for plaintiff and appellant.

Swanson and Dowdall, Terry R. Dowdall and Kathryn L. Brunner, Santa Ana, for defendants and respondents.

Pacific Legal Foundation, Ronald A. Zumbrun, Anthony T. Caso and Victor J. Wolski, Sacramento, as amici curiae, upon the request of the Court of Appeal, on behalf of defendants and respondents.

HUFFMAN, Justice.

Bayscene Resident Negotiators (Negotiators) appeals from an order dismissing its petition to correct and confirm an arbitration award against the Bayscene Mobilehome Park (the Park) and its owners (collectively, the owners). The court dismissed the petition, finding a provision of the city ordinance mandating binding arbitration of mobilehome rent disputes unconstitutional. The court specifically found the provision unconstitutional because it deprived the parties of their rights to litigate rent control-related issues in a court of law. We agree with the court that the ordinance violates due process. Accordingly, we affirm.

BACKGROUND

In June 1987 Elena Maldonado-Hanson (Maldonado-Hanson) and Hal R. Heywood (Heywood) purchased the Park. On or about July 15, 1987, they notified the tenants of a rent increase.

The tenants and the owners entered into negotiation pursuant to the Chula Vista Municipal Code as enacted in 1982 by Ordinance No. 1997 and amended in 1986 by Ordinance No. 2163. Ordinance No. 1997 added a new chapter 9.50 to the Chula Vista Municipal Code entitled "MOBILEHOME PARK SPACE RENT MEDIATION." The new chapter provided for non-binding negotiation and mediation of disputes arising from proposed rent increases. (Chula Vista Mun.Code, §§ 9.50.070, 9.50.080, as then in effect.) In the event the dispute was not resolved by the negotiation and mediation process, both parties retained all legal rights under the law. (Chula Vista Mun.Code, § 9.50.80, subd. (9), as then in effect.)

Negotiations failed and the parties entered into mediation. According to Maldonado-Hanson, the mediators recommended that the tenants accept the 1987 rent increase on the condition there be no increase in 1988, followed by a 1989 increase not to exceed the consumer price index. Maldonado-Hanson contends the resident leaders rejected the mediators' proposal. According to the findings of the arbitrator, mediation was still pending when on August 23, 1988, the Chula Vista City Council amended chapter 9.50 by Ordinance No. 2282. Ordinance No. 2282, which was effective September 23, 1988, substituted negotiation and binding arbitration in lieu of the previously mandated negotiation and mediation. (Chula Vista Mun.Code, §§ 9.50.010, 9.50.040-9.50.085.) The ordinance referred to a dispute involving one park where pending mediation had not been resolved and specifically subjected that dispute to binding arbitration under the amended provisions. Bayscene Mobilehome Park was the park subjected to binding arbitration.

On January 16, 1989, Douglas H. Hanson (Hanson) signed a document entitled "Agreement to Submit Bayscene Rental Dispute to Binding Arbitration" (Agreement to Arbitrate) purportedly on behalf of Maldonado-Hanson and Heywood. For several years prior to Maldonado-Hanson and Heywood's purchase of the park, Hanson was co-operator of the Park with Maldonado-Hanson. Additionally, Hanson had been one of the negotiators designated to represent the park in the earlier negotiations. Hanson purportedly signed the Agreement to Arbitrate under threat of criminal prosecution by the Chula Vista City Attorney.

On February 3, 1989, Maldonado-Hanson and Heywood sold the park to Richard and Karen Hall.

In March 1990 arbitration proceedings were conducted under the auspices of the American Arbitration Association. Maldonado-Hanson, Heywood, both Halls and Hanson (the owner-participants) participated in the proceedings along with Negotiators. On multiple occasions both before and during the proceedings the owner-participants objected to the proceedings on multiple grounds, including the constitutionality of Ordinance No. 2282's binding arbitration provision. Testimony both oral and documentary was received into evidence. The parties declined to have the proceedings reported at their own expense.

The arbitrator dismissed the case as to Hanson. With respect to the Halls the Negotiators petitioned the superior court to confirm the arbitration award. In addition Negotiators sought to have the award "corrected" to identify the Halls as liable for the award. At the hearing on the petition the court found the Halls had been dismissed from arbitration. The court dismissed the petition in its entirety upon its finding section 9.50.085 of Chula Vista City Ordinance No. 2282 was unconstitutional.

                arbitrator stated, "The case is dismissed as to Respondents RICHARD A. HALL and KAREN HALL without prejudice with respect to any claims arising between the Respondents HANSON-HEYWOOD and Respondents HALL in connection with the sales agreement of BAYSCENE MOBILEHOME PARK between the respective Respondents."   The arbitrator found in Negotiators' favor and awarded recovery in excess of $40,000.  The award was made against the Park, Maldonado-Hanson and Heywood
                

Negotiators appealed from the court's order dismissing the petition. After briefing was completed by the parties, this court requested the City of Chula Vista (the City) and the Pacific Legal Foundation (the Foundation) to submit amicus curiae briefs on whether a city has authority to enact an ordinance compelling binding arbitration in the manner set forth in Ordinance No. 2282. The City declined to submit a brief, but the Foundation complied. The parties were provided with an opportunity to respond to the Foundation's brief, but declined to do so.

DISCUSSION

I

Before reaching the primary issue on the constitutionality of the binding arbitration requirement of Ordinance No. 2282, we address three preliminary issues: 1) Negotiators' continued attempt to bind the Halls by the arbitrator's award, 2) Negotiators' claim constitutionality of the ordinance is irrelevant because the arbitration proceeded pursuant to a submission agreement, and 3) Negotiators' claim the owner-participants waived their right to attack the arbitration process on any grounds by having participated in the proceedings.

Halls' Status

In the petition to confirm and correct the award Negotiators contended the award was incomplete in that the Halls were not named as being jointly and severally responsible for the award. Negotiators contended it was clear the arbitrator had intended to include the Halls and sought to have the order "corrected" to identify them as liable for the award. At the hearing the court initially addressed the "correction" issue as follows:

"THE COURT: Let me get clear one thing. First of all, the Halls were clearly dismissed from the action and you can't add them in and the arbitrator couldn't make [an] award as to them; Right?

"[Negotiators' Counsel]: Admittedly the language is ambiguous.

"THE COURT: I don't care if [it's] ambiguous or not, they were dismissed from the action."

Negotiators' counsel then argued he did not believe they were dismissed as to the whole action, but rather only as to those matters between the Halls as purchasers and Maldonado-Hanson and Heywood as sellers. At the close of the hearing when the court found the ordinance unconstitutional, the court again reiterated the Halls were dismissed. The order prepared by counsel did not specifically address the court's finding as to the Halls' dismissal. It is clear from the reporter's transcript however that the court did not grant Negotiators' request to add the Halls to the award, but rather found they had been dismissed from the arbitration.

Negotiators ignores the court's finding as to the Halls' dismissal and instead presents argument as to why the Halls should be bound by the arbitration award. Not having challenged them, Negotiators is bound by the court's findings.

Additionally the findings are supported by substantial evidence. The dismissal paragraph in the arbitration award is ambiguous and could be interpreted to dismiss only those claims arising out of the sale of The court's findings the Halls were dismissed from the arbitration will not be disturbed on appeal.

the Park or to dismiss all claims without prejudice to future actions between the Halls and Maldonado-Hanson and Heywood as to claims arising out of the sale. However, there is considerable evidence within the award indicating the arbitrator's omission of the Halls from liability was intentional. The arbitrator specifically included the Halls when he intended they should bear responsibility as for attorney's fees, costs, and administrative fees and expenses. The arbitrator provided Maldonado-Hanson and Heywood alone with an opportunity to approve Negotiators' computation of the amounts due each tenant for incorporation in a final award. Additionally, the award covered the rental period between October 1987 and February 1989. In supplemental findings the arbitrator explained the award covered that period because it was based on the Agreement to Arbitrate by which the Halls refused to be bound and resisted in all respects.

Consent Issue

The arbitrator in making his findings and award stated he was proceeding in accordance with the Agreement to Arbitrate. Negotiators takes the position the constitutionality of Ordinance No. 2282 is irrelevant because the arbitration proceeded pursuant to "a valid enforceable contract to submit the rent increase dispute to binding arbitration." Negotiators argues the court therefore erred when it "dismissed" Maldonado-Hanson and Heywood ¹ based upon the alleged unconstitutionality...