Larson v. City

• Decision Date: 23 February 2011
• Docket Number: No. A125887.,A125887.
• Citation: 2011 Daily Journal D.A.R. 28,192 Cal.App.4th 1263,123 Cal.Rptr.3d 40,11 Cal. Daily Op. Serv. 2384
• Court: California Court of Appeals
• Parties: Norman T. LARSON et al., Plaintiffs and Appellants, v. CITY AND COUNTY OF SAN FRANCISCO, Defendant and Appellant.

192 Cal.App.4th 1263

123 Cal.Rptr.3d 40

11 Cal. Daily Op. Serv. 2384

2011 Daily Journal D.A.R. 2857

Norman T. LARSON et al., Plaintiffs and Appellants,

v.CITY AND COUNTY OF SAN FRANCISCO, Defendant and Appellant.

No. A125887.

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

Feb. 23, 2011.

**47 Wiegel & Fried, John Peara Baba; Nielsen, Merksamer, Parrinello, Mueller & Naylor, James R. Parrinello, Sacramento, and Christopher E. Skinnell for Plaintiffs and Appellants.

Dennis J. Herrera, City Attorney, Wayne Snodgrass, Deputy City Attorney, and Tara Michelle Steeley, Deputy City Attorney, for Defendant and Appellant.

BANKE, J.

*1271 I. Introduction

Appellants Norman T. Larson, San Francisco Apartment Association, San Francisco Association of Realtors, Coalition for Better Housing, Round Hill Pacific, and John Zanghi (appellants) challenge provisions of Proposition M, a voter-approved initiative amending San Francisco's Residential Rent Stabilization and Arbitration Ordinance (hereafter, the Rent Ordinance). Proposition M augmented the antiharassment provisions of the ordinance by *1272 expanding the definition of "decrease in [housing] services" to include a list of "bad faith" acts by landlords and their agents—ranging from violating any state or local antidiscrimination law, to failing to cash a rent check within 30 days, to interfering with a tenant's right to privacy. Upon finding any such harassment and thereby a "decrease in [housing] services," the San Francisco Rent Board (Board) can order a reduction in rent. By how much and for how long is not specified in the proposition, nor are any criteria provided for making such determinations. Proposition M also added an attorney fees provision to the Rent Ordinance, mandating an award of fees to a prevailing tenant in an unlawful detainer case brought under state law.

The trial court upheld the decrease in housing services provisions of Proposition M, except for one phrase which is no longer at issue, but invalidated the attorney fees provision. Appellants appeal as to the decrease in housing services provisions of the proposition. The City and County of San Francisco (City) cross-appeals as to the attorney fees provision. We reverse, in part, and affirm, in part.

II. Factual and Procedural Background

In November 2008, San Francisco voters approved Proposition M, an initiative measure that amended the City's Rent **48 Ordinance (S.F. Admin. Code, § 37.1 et seq.).¹ The voter materials stated the amendments were necessary to ensure property owners do not abuse their statutory rights under the Costa-Hawkins Rental Housing Act (hereafter Costa-Hawkins Act; Civ.Code, § 1954.50 et seq.), which was enacted in 1995, to raise rent to market rates on vacated units. The voter materials described several reports of harassing conduct aimed at getting tenants to move.

Prior to the passage of Proposition M, the City's Rent Ordinance defined "housing services" as follows: "services provided by the landlord connected with the use or occupancy of a rental unit including, but not limited to: repairs, replacement, maintenance; painting; light; heat; water; elevator service; laundry facilities and privileges; janitor service; refuse removal; furnishings; telephone; parking; rights permitted the tenant by agreement, including the right to have a specific number of occupants ... and any other benefits, privileges or facilities." ² (Former § 37, subd. (g).)

*1273 Proposition M added to this definition of "Housing Services," the " quiet enjoyment of the premises, without harassment by the landlord as provided in Section 10B." (§ 37.2, subd. (g).)

New section 37.10B lists more than a dozen prohibited acts of "harassment." It provides: "No landlord, and no agent, contractor, subcontractor or employee of the landlord shall do any of the following, bad faith or with ulterior motive or without honest intent. [¶] (1) Interrupt, terminate or fail to provide housing services required by contract or by State, County or local housing health or safety laws; [¶] (2) Fail to perform repairs and maintenance required by contract or by State, County or local housing, health or safety laws. [¶] (3) Fail to exercise due diligence in completing repairs and maintenance once undertaken or fail to follow appropriate industry repair containment or remediation protocols designed to minimize exposure to noise, dust, lead paint, mold, asbestos, or other building materials with potentially harmful health impacts. [¶] (4) Abuse the landlord's right of access into a rental housing unit as that right is provided by law; [¶] (5) Influence or attempt to influence a tenant to vacate a rental housing unit through fraud, intimidation or coercion; [¶] (6) Attempts to coerce the tenant to vacate with offer(s) of payments to vacate which are accompanied with threats or intimidation; [¶] (7) Continue to offer payments to vacate after tenant has notified the landlord in writing that they no longer wish to receive further offers of payments to vacate; [¶] (8) Threaten the tenant, by word or gesture, with physical harm; [¶] (9) Violate any law which prohibits discrimination based on actual or perceived race, gender, sexual preference, sexual orientation, ethnic background, nationality, place of birth, immigration or citizenship status, religion, age, parenthood, marriage, pregnancy, disability, AIDS or occupancy by a minor child. [¶] (10) Interfere with a tenants right to quiet use and enjoyment of a rental housing unit **49 as that right is defined by California law; [¶] (11) Refuse to accept or acknowledge receipt of a tenant's lawful rent payment; [¶] (12) Refuse to cash a rent check for over 30 days; [¶] (13) Interfere with a tenant's right to privacy. [¶] (14) Request information that violates a tenant's right to privacy, including but not limited to residence or citizenship status or social security number. [¶] (15) Other repeated acts or omissions of such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet of any person lawfully entitled to occupancy of such dwelling unit and that cause, are likely to cause, or are intended to cause any person lawfully entitled to occupancy of a dwelling unit to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy." (§ 37.10B, subd. (a).)

The proposition further specified any conduct violating new section 37.10B constitutes a "substantial and significant decrease in services as defined in Section 37.2[, subdivision] (g) and tenants may file a petition with the Rent Board for a reduction in rent." (§ 37.10B, *1274 subd. (c)(1).) According to the voter materials, Proposition M thus provided tenants "a simple mechanism to stop harassment at the Rent Board, without lawyers or lawsuits."

Proposition M also provided for a civil remedy. A lawsuit can be initiated by "any person, including the City" against "[a]ny person who violates or aids or incites another person to violate" the provisions of section 37.10B. (§ 37.10B, subd. (c)(5).) In such action, "[a]ny person who violates or aids or incites another person to violate the provisions of this Section is liable for each and every offense for money damages of not less than three times actual damages suffered ... (including damages for mental or emotional distress)...." ( Ibid.) In addition, the proposition provided any violation of section 37.10B is a misdemeanor, punishable by a fine of up to $1,000 and six months in the county jail. ( Id., subd. (c)(2).)

Proposition M also added a mandatory cost and attorney fees provision to the Rent Ordinance, which states: "In any action to recover possession of a rental unit subject to the Chapter, unless the sole basis of the notice to quit is Section 37.9[, subdivision] (b),^[3] the court shall award the tenant reasonable attorney fees and costs incurred in defending the action upon a finding that the tenant is the prevailing party under Code of Civil Procedure section 1032[, subdivision] (a)(4)." (§ 37.10B, subd. (c)(6).)

Appellants filed a combined petition for writ of ordinary mandamus and complaint for declaratory relief challenging Proposition M on a number of grounds, including that the expanded decrease in housing services provisions violate the judicial powers clause of the California Constitution (Cal. Const., art. VI, § 1) and infringe on constitutionally protected speech rights, and the mandatory, tenant-only cost and attorney fees provision violates equal protection rights.

The trial court granted the petition and complaint in part. The court struck from new section 37.10B the prefatory phrase "with ulterior motive or without honest intent" on the ground it was undefined and failed to give adequate notice as to the nature of the conduct prohibited. In all other respects, the court upheld the decrease in housing services provisions. The court invalidated the cost and attorney fees provision on the ground it violated the **50 equal protection clause. Appellants filed a timely notice of appeal as to all adverse portions of the judgment. The City filed a cross-appeal as to that portion of the judgment invalidating the cost and attorney fees provision.

*1275 III. Discussion

A. The Judicial Powers Clause

Appellants contend Proposition M unlawfully invested the Board with judicial power in violation of the judicial powers clause of the California Constitution (Cal. Const., art. VI, § 1.) Specifically, they assert the expanded definition of "decrease in [housing] services" embracing the list of prohibited acts set forth in new section 37.10B, combined with the authority of the Board to order a reduction in rent of an unspecified amount and for an unspecified duration, effectively invests the Board with the power reserved to the judiciary to adjudicate tortious conduct and award general damages. We agree in part.⁴ As to section 37.10B, subdivisions (a)(1), (2) and (3), we conclude a facial challenge fails. As to ...