Nourafchan v. Miner

• Decision Date: 25 June 1985
• Citation: 169 Cal.App.3d 746,215 Cal.Rptr. 450
• Court: California Court of Appeals Court of Appeals
• Parties: Elis NOURAFCHAN, Plaintiff and Respondent, v. James P. MINER, Defendant and Appellant. B006018.

Page 450

215 Cal.Rptr. 450

169 Cal.App.3d 746

Elis NOURAFCHAN, Plaintiff and Respondent, v. James P. MINER, Defendant and Appellant.

B006018.

Court of Appeal, Second District, Division 7, California.

June 25, 1985.

Review Denied Sept. 12, 1985.

Franzen & Associates, and Don Erik Franzen, Los Angeles, for defendant and appellant.

Gordon P. Gitlen, and David C. Burkenroad, Santa Monica, for plaintiff and respondent.

Santa Monica Rent Control Bd., Joel Martin Levy, Acting Sr. Atty., Barbara O'Hearn, Staff Atty., Santa Monica, as amicus curiae on behalf of defendant and appellant.

THOMPSON, Associate Justice.

Defendant James P. Miner appeals from the adverse judgment in this unlawful detainer action for failure to pay rent after service of a three-day notice to pay or quit. (Code Civ.Proc., § 1161.) After unsuccessfully seeking a stay of execution pending appeal, defendant was evicted from his penthouse apartment. The issues raised on appeal are (1) the validity of service of the three-day notice by posting and mailing (Code Civ.Proc., § 1162, subd. 3), and (2) whether the past payments of rent in excess of the rent ceiling imposed by the Santa Monica Rent Control Law constitute a valid defense to an unlawful detainer action for failure to pay rent. For the reasons discussed below, we agree that defendant's payment of rent in excess of the rent ceiling, without the approval of the Santa Monica Rent Control Board, constitutes a valid defense to this unlawful detainer action, and shall reverse the judgment.

FACTS

Plaintiff Elis Nourafchan, together with his wife, is a 50% owner of the apartment building known as the Embassy Hotel, located at 1001 3rd Street, Santa Monica. Plaintiff and defendant entered into an oral lease agreement for the penthouse apartment on March 9, 1977, for $850 per month to be paid in advance on the first of each month. When defendant moved into the penthouse, it was partially furnished without charge to defendant.

The record indicates the following monthly rents were paid by defendant for the penthouse: $850 from March 1977 through December 1978; $950 from January 1979 through May 1981; $972.51 from June 1981 through August 1981; $1,067 from September 1981 through July 1982; $1,090 from August 1982 through December 1982; and $1,097 from January 1983 through August 1983.

It is undisputed that defendant was away on business during August 1983, and that he did not tender the August rent until his return on August 25. Marjorie Haskell, manager of the Embassy Hotel, testified that during defendant's absence, she served the instant three-day notice to pay or quit on August 14, 1983, by posting it on defendant's door, slipping one under the door, and mailing a copy. Defendant testified that he first learned of the three-day notice by reading it upon his return to the penthouse on August 24. On August 25, defendant slipped a cashier's check in the sum of $1,097 under the manager's door, but the check was returned to defendant on the 26th. Thereafter, defendant opened a bank account in which he deposited the rent checks in trust for plaintiff.

This was not the first time that defendant had failed to pay the rent on time. Plaintiff introduced as exhibits at trial approximately one dozen prior three-day notices to pay or quit. Defendant testified that while he had often failed to pay the rent on the first of the month, plaintiff had always accepted his late payments. As an affirmative defense, defendant claims that "by reason of the past practices of Plaintiff, and the custom and agreement of the parties, to allow Defendant to tender rent to Plaintiff more than three (3) days after service" of a notice to pay or quit, plaintiff waived the right to refuse tender of the August rent on the 25th, more than three days after service of the instant notice.

Following service of the instant three-day notice, plaintiff also served a 30-day notice of termination of tenancy, for the purpose of installing plaintiff's then pregnant daughter and her husband in the penthouse. Prior to service of the 30-day notice on August 30, 1983, plaintiff had unsuccessfully asked defendant to move into three other available units in the building so that his pregnant daughter and her husband could move into the larger penthouse unit.

At trial, the court bifurcated the two causes of action based on the three-day notice for failure to pay rent and the 30-day notice to evict in order to install plaintiff's daughter in the penthouse. After the parties introduced evidence solely on the first cause of action based on failure to pay rent, the court entered judgment for plaintiff. This appeal was then duly filed.

DISCUSSION

1. Service of the Three-Day Notice to Pay or Quit

Defendant challenges the use of the alternate method of service of the three-day notice by posting and mailing on the ground that plaintiff should have first attempted to serve him at his place of business where he employed a full-time secretary. Subdivision 3 of section 1162 of the Code of Civil Procedure states that if the tenant's "place of residence and business cannot be ascertained, or a person of suitable age or discretion there cannot be found," service can be accomplished by the alternate method of posting the notice on a conspicuous place on the property, and also delivering a copy to a person there residing if such a person can be found, and also sending a copy through the mail addressed to the tenant at the place where the property is situated. Defendant claims that because plaintiff did not attempt to serve him at his place of business, the alternate method of service was void.

However, the trial court found that plaintiff properly utilized the alternate method of service because plaintiff's manager reasonably believed that defendant was operating his business out of his home. The parties presented conflicting evidence on this point, but sufficient evidence exists in the record to support the trial court's finding. The manager testified that she did not attempt service of the notice at defendant's business address because she believed that defendant had moved from that address and was working out of his home. She testified that she believed defendant was working out of his apartment because he had turned the den into an office and kept numerous files in the apartment. Moreover, she saw women whom she believed were his secretaries coming and going from his apartment. Further, she testified that she believed defendant had moved from his business address because defendant told her in late 1980 or in 1981 that he was moving from that address to a new office on Seventh and Wilshire; and when she went to the new office she found that defendant's office had again moved to an unknown location. She testified that when she called the number that she had for the Geyser, defendant's business, the operator said that the number had been disconnected.

The provisions for service under section 1162 do "not require a showing of reasonable diligence in attempting personal service before utilizing the substituted service provisions, as required in section 415.20, subdivision (b)." (Highland Plastics, Inc. v. Enders (1980) 109 Cal.App.3d Supp. 1, 6, 167 Cal.Rptr. 353.) Here, the trial court's finding that the manager reasonably believed that defendant was operating his business out of his home is supported by substantial evidence and does not constitute an abuse of the trial court's discretion. Therefore the use of the alternate method of service by posting and mailing was justified under the facts of this case.

2. Payment of Rent in Excess of the Base Rent Ceiling

The second issue before us is whether the statutory remedies for recovery of possession and of unpaid rent (see Code Civ.Proc., §§ 1159-1179a; Civ.Code, § 1951, et seq.) preclude a defense based on municipal rent control legislation enacted pursuant to the police power imposing rent ceilings and limiting the grounds for eviction for the purpose of enforcing those rent ceilings. We conclude that they do not. (See Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 149, 130 Cal.Rptr. 465, 550 P.2d 1001; People v. Little (1983) 143 Cal.App.3d Supp. 14, 18-19, 192 Cal.Rptr. 619.)

On April 10, 1979, the voters of the city of Santa Monica adopted a rent control charter amendment by initiative measure. (Art. XVIII, Santa Monica City Charter.) The charter amendment states that its purpose is to "alleviate the hardship caused by [the] serious housing shortage by establishing a Rent Control Board empowered to regulate rentals in the City of Santa Monica so that rents will not be increased unreasonably and so that landlords will receive no more than a fair return on their investment." ( § 1800.) ¹ The charter amendment provides for the establishment of maximum rents for all controlled units, and for general and individual adjustments of those rents. ( §§ 1804, 1805.) It also limits evictions to enumerated situations constituting sufficient cause. ( § 1806.)

Defendant both below and on appeal challenges the validity of the three-day notice on the grounds that plaintiff violated the charter amendment by failing to roll back the rent on the penthouse from $950 to the base rent ceiling of $850. According to subsection (b) of section 1804, the base rent ceiling, which serves as the reference point from which rents shall be adjusted upward or downward in accordance with section 1805, is the rent that was in effect on the date one year prior to the adoption of the charter amendment. While the parties stipulated at trial that the base rent ceiling for the penthouse would normally have been $850, plaintiff's position is that he orally agreed with defendant to increase the base rent ceiling to $950 in return for additional furniture in the penthouse. Defendant disagrees with this testimony and claims no such oral agreement was made and that no additional furniture was put in the penthouse.

Plaintiff...