Foster v. Britton

• Decision Date: 01 December 2015
• Docket Number: A139892
• Citation: 242 Cal.App.4th 920,195 Cal.Rptr.3d 800
• Court: California Court of Appeals Court of Appeals
• Parties: Margaret D. FOSTER, Plaintiff and Respondent, v. John F. BRITTON et al., Defendants, Cross–Complainants, and Appellants; San Francisco Rent Stabilization & Arbitration Board, Intervener, Cross–defendant, and Respondent

242 Cal.App.4th 920

195 Cal.Rptr.3d 800

Margaret D. FOSTER, Plaintiff and Respondent,

v.John F. BRITTON et al., Defendants, Cross–Complainants, and Appellants;

San Francisco Rent Stabilization & Arbitration Board, Intervener, Cross–defendant, and Respondent

A139892

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

Filed December 1, 2015

Law Offices of Karen Y. Uchiyama, Karen Y. Uchiyama, for Defendants, Cross–complainants, and Appellants.

Tenderloin Housing Clinic, Inc., Matt McFarland, for Plaintiff and Respondent.

Offices of the City Attorney, Dennis J. Herrera, City Attorney, and Wayne K. Snodgrass and Tara M. Steeley, Deputy City Attorneys, for Intervenor, Cross–defendant, and Respondent.

Rivera, J.State law provides that a landlord may change the terms of a month-to-month lease after giving 30 days' notice and that the new terms become part of the lease if the tenant continues to hold the premises after the notice takes effect. (Civ.Code,¹ § 827, subd. (a).) A regulation promulgated by San Francisco's Rent Board provides that notwithstanding any changes to the terms of a tenancy under section 827, a tenant may not be evicted for violating an obligation that was not included in the tenant's original rental agreement unless the change is authorized by San Francisco's rent control ordinance,² is required by law, or is accepted by the tenant in writing. (Rule 12.20.) The primary question in this appeal is whether section 827 preempts Rule 12.20. The remaining questions are (1) whether the Rent Board exceeded its powers when it adopted Rule 12.20, and (2) whether it exceeded its powers when it adopted Rule 6.15C, which limits the rent a master tenant may charge to a subtenant but provides that a violation of that limitation is not a basis for eviction.

We conclude that section 827 does not preempt Rule 12.20 and that the Rent Board did not exceed its powers in adopting the challenged regulations. Accordingly, we shall affirm the judgment of the trial court.

I. THE RENT ORDINANCE AND RENT BOARD

"In 1979, the San Francisco Board of Supervisors (Supervisors) adopted a comprehensive rental-housing ordinance known as the San Francisco Residential Rent Stabilization and Arbitration Ordinance. [Citation.] The Supervisors adopted 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 Rent Ordinance mandated that the Rent Board be comprised of two landlord commissioners, two tenant commissioners, and one member who would be neither a landlord nor a tenant. (Rent. Ord., § 37.4, subds.(a) & (b).) 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. Ord., § 37.6, subd. (a).) The purposes of the Rent Ordinance included, among others, the limitation of rent increases for tenants in occupancy (Rent Ord., § 37.3), the arbitration of rental increase adjustments (Rent. Ord., §§ 37.8–378B), and the restriction of the grounds on which landlords could evict tenants from their rental units (Rent. Ord., §§ 37.9–37.9B)." (Danekas v. San Francisco Residential Rent Stabilization & Arbitration Bd. (2001) 95 Cal.App.4th 638, 641–642, 115 Cal.Rptr.2d 694 (Danekas ).)

II. BACKGROUND

Plaintiff Margaret D. Foster³ has lived for more than 40 years in an apartment in a multi-unit building (the building) now owned by defendant and cross-complainant John F. Britton and managed by defendant and cross-complainant W.J. Britton & Co., Inc. (collectively, "Britton"). After buying the building in 2011, Britton served the tenants, including plaintiff, with "House Rules." Among other provisions, the house rules required tenants to share the back yard equally, unless all tenants agreed otherwise; to maintain their own garbage service; to keep all property inside the unit, out of view; and to use an outside laundromat rather than washing clothes in the sinks or tubs in their units. It also prohibited tenants from having pets and from storing their belongings anywhere except in their rental units or areas designated by the landlord. The document setting forth the new "House Rules" stated that the rules superseded all previous house rules, that they went into effect 30 days from receipt, and that "Tenant accepts the House Rules by remaining in possession after they come into effect and paying rent each month. If Tenant does not accept the House Rules, Tenant may opt to give 30 days' written notice to Landlord to terminate his or her tenancy and move out." Britton informed plaintiff that, under the new house rules, she would no longer be able to store personal property outside her unit. Plaintiff responded that the longstanding terms of her tenancy included garbage service, two parking spaces, an assigned area in the back yard, specific storage spaces, and the use of her service porch for laundry and storage. She informed Britton she did not agree to any unilateral changes to her rental agreement. In the ensuing dispute, Britton took the position that section 827, subdivision (a) preempted Rule 12.20.

Foster brought this action, alleging she was a long-term resident of the building and that the house rules conflicted with terms and conditions that had always been included in her rental agreement, including exclusive use of two parking spaces, use of a service porch for storage and laundry facilities, exclusive use of assigned garden areas, use of storage spaces, and inclusion of garbage service in her rental payments. She sought a declaration that (1) section 827 did not preempt Rule 12.20, and (2) Rule 12.20 barred the eviction of any tenant based on unilaterally-imposed house rules. She also sought an injunction prohibiting defendants from attempting to evict her based on a violation of the house rules. The Rent Board intervened in the action, seeking a declaration that Rule 12.20 was not preempted by section 827.

Britton cross-complained against the Rent Board, seeking injunctive relief and a declaration that (1) section 827 preempted Rule 12.20, and (2) Rules 12.20 and 6.15C modified, conflicted with, or provided exceptions to the grounds for eviction found in the Rent Ordinance and the Rent Board exceeded its authority it enacting them.

Plaintiff moved for summary judgment or summary adjudication on the grounds that section 827 did not preempt Rule 12.20 and that Rule 12.20 barred the eviction of a tenant for violating unilaterally-imposed house rules that contradicted a pre-existing rental agreement.⁴ The trial court ruled that plaintiff was entitled to a declaration that section 827 did not preempt Rule 12.20 and that the Rent Board did not exceed its powers when it adopted Rule 12.20. The court found the issue of whether Rule 12.20 barred the eviction of a tenant for violating unilaterally-imposed house rules not ripe for review, because there was no eviction action pending, and therefore plaintiff was not entitled to declaratory relief on this claim. Accordingly, the court granted summary adjudication to plaintiff as to the first issue only. Plaintiff subsequently dismissed the second issue without prejudice.

The Rent Board demurred to Britton's cross-complaint and moved for judgment on the pleadings as to the complaint in intervention on the grounds that Rule 12.20 was a valid exercise of the police power, that section 827 did not preempt Rule 12.20, and that the Board did not exceed its powers when adopting Rule 12.20. The trial court granted the Rent Board's motion for judgment on the pleadings, ruling it was entitled to a declaration that that section 827 did not preempt Rule 12.20. It also sustained the Rent Board's demurrer to the cross-complaint's causes of action concerning Rule 12.20.

The Rent Board and Britton then litigated the question of whether the Rent Board had exceeded its powers when it enacted Rule 6.15C. The Rent Board moved for judgment on the pleadings as to the cross-complaint on the grounds that Britton lacked standing to challenge Rule 6.15C, subd. (3) and that the Rent Board did not exceed its powers in adopting it. The trial court granted the motion with leave to amend to allege standing. Britton amended the cross-complaint to allege that W.J. Britton & Co., Inc. was an unincorporated association of landlords and owners of rental property, that it managed and represented the rights of numerous landlords in San Francisco, and that it brought suit in its representative capacity on behalf of its members to challenge the Rent Board's action. The Rent Board demurred to the amended cross-complaint on the ground that it did not exceed its powers in adopted Rule 6:15C, subd. (3), but it did not argue that Britton lacked standing to challenge the regulation. The trial court granted the demurrer with leave to amend to allege facts showing Rule 6.15C, subd. (3) was not reasonably necessary to effectuate the purpose of the Rent Ordinance and that it was arbitrary, capricious, or without reasonable basis. Britton filed a second amended cross-complaint, to which the Rent Board demurred, again on the sole ground that it did not exceed its powers in enacting Rule 6.15C, subd. (3). The trial court granted the demurrer without leave to amend. The court then entered judgment in favor of Foster and the Rent Board in accordance with its previous orders.⁵

III. DISCUSSION

A. Preemption

The first question before us is whether the trial court correctly ruled that section 827 does not preempt Rule 12.20.⁶ Whether Rule 12.20 is preempted by state law is a question of law that we review de novo. (Roble Vista Associates v. Bacon (...