Danger Panda, LLC v. Launiu

• Decision Date: 04 April 2017
• Docket Number: A149062
• Citation: 216 Cal.Rptr.3d 231,10 Cal.App.5th 502
• Court: California Court of Appeals Court of Appeals
• Parties: DANGER PANDA, LLC etc., Plaintiff and Appellant, v. Nancy Ann LAUNIU et al., Defendants and Respondents.

10 Cal.App.5th 502

216 Cal.Rptr.3d 231

DANGER PANDA, LLC etc., Plaintiff and Appellant,

v.Nancy Ann LAUNIU et al., Defendants and Respondents.

A149062

Court of Appeal, First District, Division 4, California.

Filed April 4, 2017

Law Office of Paul J. Katz and Paul J. Katz, San Francisco, Zacks & Freedman, Andrew Zacks, San Francisco, Counsel for Appellant.

Dowling & Marquez, Curtis F. Dowling, Counsel for Amicus Curiae San Francisco Apartment Association on behalf of Appellant.

Tenderloin Housing Clinic, Inc., Stephen L. Collier, San Francisco, Raquel Fox, Counsel for Respondents.

RUVOLO, P.J.

I. INTRODUCTION

Danger Panda, LLC (plaintiff) filed this unlawful detainer action against Nancy Launiu, Nancy's adult son Donn, and Donn's wife Olga (collectively, defendants).¹ Plaintiff alleged the defendants have refused to vacate a unit in a building that plaintiff withdrew from residential rental use pursuant the Ellis Act. (Gov. Code, § 7060 et seq. ) The trial court granted defendants' motion to quash the unlawful detainer complaint, finding that plaintiff failed to tender a relocation payment to Donn and Olga's minor son David, as required by section 37.9A, subdivision (e) (section 37.9A(e)) of the San Francisco Residential Rent Stabilization and Arbitration Ordinance, San Francisco Administrative Code, chapter 37 (the Rent Ordinance).²

The appellate division of the superior court affirmed the trial court's order, but then certified the matter for transfer to the Court of Appeal to settle the following question of law: "whether a minor displaced by an Ellis Act eviction is a ‘tenant’ under the San Francisco Rent Ordinance and, therefore, entitled to a relocation payment pursuant to section 37.9A(e)(3)(A) of the San Francisco Rent Ordinance." We accepted transfer of this case and now hold that a minor is not a tenant under the Rent Ordinance provisions that pertain to Ellis Act evictions.

II. STATUTORY OVERVIEW

A. Two Statutory Schemes

In 1979, the San Francisco Board of Supervisors enacted the Rent Ordinance " ‘because the lack of affordable rental housing in San Francisco was creating hardships on senior citizens, persons on fixed incomes, and low- and moderate-income households. [¶] When adopting the Rent Ordinance, the Supervisors created a five-member Rent Board charged with safeguarding tenants from excessive rent increases, while also assuring landlords fair and adequate rents consistent with federal anti-inflation guidelines.... The Supervisors conferred on the Rent Board a range of powers and duties, including the power to "Promulgate policies, rules and regulations to effectuate the purposes of this Chapter." (Rent [Ordinance], § 37.6, subd. (a).) The purposes of the Rent Ordinance included, among others, the limitation of rent increases for tenants in occupancy (Rent [Ordinance], § 37.3), the arbitration of rental increase adjustments (Rent [Ordinance], §§ 37.8-37.8B), and the restriction of the grounds on which landlords could evict tenants from their rental units (Rent [Ordinance], §§ 37.9–37.9B).’ [Citation.]" (Foster v. Britton (2015) 242 Cal.App.4th 920, 925, 195 Cal.Rptr.3d 800.) To achieve this last purpose, the Rent Ordinance delineates discrete circumstances under which a landlord may "endeavor to recover possession of a rental unit." (Rent Ordinance, § 37.9, subd. (a).)

In 1985, the California Legislature passed the Ellis Act, which provides that no public entity may "compel the owner of any residential real property to offer, or to continue to offer, accommodations in the property for rent or lease, except for [certain] guestrooms or efficiency units within a residential hotel...." (Gov. Code, § 7060, subd. (a).)

"The Legislature enacted the Ellis Act following the California Supreme Court's opinion in Nash v. City of Santa Monica (1984) 37 Cal.3d 97 [207 Cal.Rptr. 285, 688 P.2d 894]..., upholding a city ordinance that required owners of residential rental property to obtain a permit before they could remove property from the rental market. [Citation.] ‘[T]he Act was intended to overrule the Nash decision so as to permit landlords the unfettered right to remove all residential rental units from the market, consistent, of course, with guidelines as set forth in the Act and adopted by local governments in accordance thereto.’ [Citations.]" (Johnson v. City and County of San Francisco (2006) 137 Cal.App.4th 7, 12-13, 40 Cal.Rptr.3d 8 (Johnson ).)

In May 1986, following the passage of the Ellis Act, the Rent Ordinance was amended to add section 37.9, subdivision (a), subsection (13) (section 37.9(a)(13)), which recognizes a landlord's right to withdraw a residential unit from the rental market. (Ord. No. 193-86, File No. 109863 (May 19, 1986), p. 8.) In its current form, section 37.9(a)(13) states in pertinent part: "(a) A landlord shall not endeavor to recover possession of a rental unit unless: [¶] ... (13) The landlord wishes to withdraw from rent or lease all rental units within any detached physical structure and, in addition, in the case of any detached physical structure containing three or fewer rental units, any other rental units on the same lot, and complies in full with Section 37.9A with respect to each such unit, provided, however, that guestrooms or efficiency units within a residential hotel" are subject to different rules.³ (Rent Ordinance, § 37.9(a)(13).)

Section 37.9A of the Rent Ordinance was enacted at the same time as section 37.9(a)(13) in order to confer rights on certain tenants displaced by the Ellis Act. (Ord. No. 193-86, File No. 109863, supra , pp. 10-19.) In its current form, section 37.9A(e) requires owners of residential rental properties who seek to withdraw from the rental market pursuant to the Ellis Act to provide monetary relocation assistance to their tenants.

There is no dispute in this case that the board of supervisors has the authority to require landlords to provide financial relocation assistance to tenants displaced by an Ellis Act eviction under Government Code section 7060.1, subdivision (c), which states: "Notwithstanding Section 7060, nothing in this chapter does any of the following: ... (c) Diminishes or enhances any power in any public entity to mitigate any adverse impact on persons displaced by reason of the withdrawal from rent or lease of any accommodations." (See generally Pieri v. City and County of San Francisco (2006) 137 Cal.App.4th 886, 40 Cal.Rptr.3d 629 (Pieri ).) The present appeal arises out of a dispute about who is entitled to receive a relocation assistance payment under Rent Ordinance, section 37.9A(e).

B. Relocation Assistance for Ellis Act Evictions

The nature and scope of the relocation assistance benefit conferred by section 37.9A has evolved over time pursuant to multiple Rent Ordinance amendments, of which we highlight only a few. As originally enacted, subdivision (f) of section 37.9A (former section 37.9A(f)) provided that the "tenants of any rental unit" who were evicted under section 37.9(a)(13) were entitled to payment of a fixed sum before they vacated the unit. (Ord. No. 193-86, File No. 109863, supra , p. 14.) The amount of the payment the landlord was required to make depended on the size of the rental unit, although units with elderly or disabled renters were entitled to a higher payment. (Ibid .)

In September 1994, the board of supervisors approved an amendment to former section 37.9A(f) that limited "payment of relocation assistance to tenants in lower income households." (Ord. No. 320-94, File No. 979413 (Sept. 7, 1994), p. 1, capitalization omitted.) Payments under this version of former section 37.9A(f) were expressly referred to as "relocation payments" and were expressly limited to "tenants who are members of lower income households, who are elderly, or who are disabled...." (Id . at p. 5.) An elderly or disabled tenant was entitled to a higher fixed payment. Payments that were due for a unit that was occupied by more than one tenant were to "be divided equally among all the occupying tenants, excluding those tenants" who were entitled to separate payments due to their elderly or disabled status. (Id . at pp. 6-7.)

In December 1999, the board of supervisors passed an ordinance that increased "the amount of relocation payments made by landlords to low-income tenants evicted pursuant to the Ellis Act...." (Ord. No. 5-00, File No. 992236 (Dec. 20, 1999), p. 1, capitalization omitted.) Pertinent provisions were amended to provide that "Tenants who are members of lower income households ... and who receive a notice to quit based upon Section 37.9(a)(13), in addition to all rights under any other provisions of law, shall be entitled to receive $4,500 before vacating the premises." (Id . at p. 5.) As before, landlords were required to make separate fixed payments to elderly or disabled tenants. This version of the relocation assistance benefit required that payments due "for any unit which is occupied by more than one tenant shall be divided equally among all the occupying tenants excluding those tenants" who were separately entitled to payments because of their elderly or disabled status. (Id . at p. 5.)⁴

In December 2004, the board of supervisors amended section 39.9A to eliminate the limitation restricting payment of relocation assistance to low income, elderly and disabled tenants. (Ord. No. 21-05, File No. 041151 (Dec. 14, 2004), p. 15.)⁵ For Ellis Act evictions commenced after the effective date of these amendments (February 20, 2005), relocation payments were required to be paid in accordance with section 37.9A(e) subsection (3) (section 37.9A(e)(3)), the terms of which are at issue in this appeal. (Id. at p. 17; see also Rent Ordinance, § 37.9A(e)(3).)

Under section 37.9A(e)(3), "each tenant shall be entitled to receive $4,500.00, one-half of which shall be paid at the time of the service of the notice of termination of tenancy, and one-half of which shall be paid when the tenant vacates the unit." (Rent Ordinance, § 37.9A...