People v. Beaumont Inv., Ltd., No. H021971.

CourtCalifornia Court of Appeals
Writing for the CourtWunderlich
Citation111 Cal.App.4th 102,3 Cal.Rptr.3d 429
PartiesThe PEOPLE, Plaintiff and Respondent, v. BEAUMONT INVESTMENT, LTD. et al., Defendants and Appellants.
Docket NumberNo. H021971.
Decision Date11 August 2003
3 Cal.Rptr.3d 429
111 Cal.App.4th 102
The PEOPLE, Plaintiff and Respondent,
v.
BEAUMONT INVESTMENT, LTD. et al., Defendants and Appellants.
No. H021971.
Court of Appeal, Sixth District.
August 11, 2003.
As Modified on Denial of Rehearing September 9, 2003.
Review Denied November 25, 2003.

[3 Cal.Rptr.3d 434]

[111 Cal.App.4th 108]

Frederik A. Jacobsen, Law Office of Frederik A. Jacobsen, Diane Wilkens Medina, Law Office of Diane Wilkens Medina, Attorneys for Defendants and Appellants.

George Kennedy, District Attorney, Kenneth Rosenblatt, Deputy District Attorney, Office of the District Attorney, Attorneys for Plaintiff and Respondent.

WUNDERLICH, J.


This civil appeal follows judicial proceedings involving San Jose's mobilehome rent control ordinance.

The Parties: Appellants are Beaumont Investments, Ltd., which owns Lamplighter Mobilehome Park, and San Jose Investments, Ltd., which owns Casa Del Lago Mobilehome Park (collectively, defendants). Respondent is the People of the State of California (plaintiff).

The Ordinance: The City of San Jose (the City) has enacted and administers a mobilehome rent control ordinance (the Ordinance). (San Jose Municipal Code, tit. 17, ch. 17.22.)1 The Ordinance seeks to protect mobilehome park residents from unreasonable rent increases. (§ 17.22.020.) Residents may forgo those protections by voluntarily entering long-terms leases, which are exempt from rent control. (§ 17.22.370, subd. A.)

Summary of Proceedings Below: Plaintiff's complaint for unfair business practices alleged that defendants violated the Ordinance by unlawfully forcing mobilehome park tenants to accept long-term leases in order to avoid rent control. Following a lengthy bench trial, the court concluded that defendants had violated the Ordinance and that those violations constituted unfair business practices. The court entered judgment against defendants, which requires them to pay $525,000 in restitution and $525,000 in civil penalties.

The Appeal: On appeal, defendants dispute the trial court's determination that they violated the Ordinance. Defendants challenge both the restitution order and the award of civil penalties on other grounds as well.

111 Cal.App.4th 109

As we explain below, we affirm the judgment.

BACKGROUND

For context, we begin with a brief overview of mobilehome tenancies. Against

3 Cal.Rptr.3d 435

that backdrop, we set forth the factual and procedural history relevant to this appeal.

I. Mobilehome Tenancies

In California, mobilehome tenancies are governed by the Mobilehome Residency Law. (Civ.Code, § 798 et seq.) The law "extensively regulates the landlord-tenant relationship between mobilehome park owners and residents." (Greening v. Johnson (1997) 53 Cal.App.4th 1223, 1226, 62 Cal.Rptr.2d 214.)

The protections afforded by the Mobilehome Residency Law reflect legislative recognition of the unique nature of mobilehome tenancies. (See Civ.Code, § 798.55, subd. (a).) Ordinarily, mobilehome park tenants own their homes but rent the spaces they occupy. (See, e.g., § 17.22.010, subd. C.) Once a mobilehome is in place in a park, it is difficult to relocate. (§ 17.22.010, subd. D; Yee v. Escondido (1992) 503 U.S. 519, 523, 112 S.Ct. 1522, 118 L.Ed.2d 153; Greening v. Johnson, supra, 53 Cal.App.4th at p. 1226, 62 Cal.Rptr.2d 214; Rancho Santa Paula Mobilehome Park, Ltd. v. Evans (1994) 26 Cal.App.4th 1139, 1147, 32 Cal.Rptr.2d 464.) Its owner thus "is more likely to be a long-term resident." (Rancho Santa Paula Mobilehome Park, Ltd. v. Evans, supra, 26 Cal.App.4th at p. 1147, 32 Cal. Rptr.2d 464.) In many cases, mobilehome park tenants have limited and undesirable options if they find "living in the park no longer desirable, practical, or possible. ..." (Ibid.)

Given the singular nature of mobilehome tenancies, mobilehome park tenants are particularly vulnerable both to eviction and to rent increases. For that reason, California's Mobilehome Residency Law protects mobilehome owners against arbitrary evictions. (See, e.g., Civ.Code, § 798.55; Yee v. Escondido, supra, 503 U.S. at p. 524, 112 S.Ct. 1522.) The state law affords these protections even to mobilehome park residents in month-to-month tenancies. Locally, the Ordinance offers such residents protection from unreasonable rent increases. (See, e.g., §§ 17.22.450-17.22.590.) Residents may forgo the Ordinance's rent safeguards by voluntarily entering rental agreements with terms longer than one year, which are exempt from rent control under the local act. (§ 17.22.370, subd. A. See also, Civ.Code, § 798.17.)

II. Factual Background

Starting in 1987, defendants entered into a number of long-term leases for lots in their respective mobilehome parks. Some of the leases included

111 Cal.App.4th 110

renewal provisions that resulted in effective terms as long as 25 years. Defendants' long-term leases fell into two categories.

One category of long-term leases consists of those that defendants made directly with residents of their parks (direct leases).2

In the second category are long-term leases that defendants made with mobilehome dealers (dealer leases). Two dealers were parties to the dealer leases at issue here: New Horizon Mobile Homes and United Mobile Homes. Consistent with common practice, the dealers placed new mobilehomes for sale in spaces in defendants' parks. The dealers signed long-term leases for those spaces. Upon sale of the mobilehome sited there, the purchaser (the prospective resident of the park) was required to assume the dealer lease or to sign a new long-term lease with similar

3 Cal.Rptr.3d 436

terms. As long-term lessees, the dealers' customers were not protected by the rent control provisions of the Ordinance.

III. Procedural History

Acting through the Santa Clara County District Attorney, plaintiff filed this civil action for unfair business practices in December 1995. In addition to defendants, the complaint named a mobilehome dealership, New Horizon Mobile Homes, and its owner, Faramarz (John) Naimi.3 In August 1998, plaintiff filed an amended and supplemental complaint.

In May 1999, defendants demurred to the amended complaint and also moved to strike part of its prayer. In July 1999, the court overruled defendants' demurrer, denied their motion to strike, and ordered them to answer the complaint.4

In July 1999, defendants cross-complained against the City, asserting that the Ordinance effected an unconstitutional taking. The trial court bifurcated proceedings on the cross-complaint.5

In December 1999, plaintiff moved for leave to further amend its complaint by adjusting the dates in the third and fourth causes of action and by revising

111 Cal.App.4th 111

the prayer. The court later granted the motion, when plaintiff renewed it during trial. As amended, the complaint asserted nine causes of action, all alleging unfair business practices in violation of state statutes. (Bus. & Prof.Code, § 17200 et seq.)

The matter proceeded to court trial. Opening statements were heard on January 4, 2000. In the ensuing weeks, dozens of witnesses testified, and more than 100 exhibits were received in evidence. Closing arguments were made on February 25, 2000.

The court issued its notice of intended decision shortly thereafter. The court announced its intent to render judgment for plaintiff and against defendants on the third and fourth causes of action of the amended complaint, concluding: "None of the other claims set forth in the complaint were proved."

Both parties requested a statement of decision. In May 2000, the court issued two statements of decision, one in response to each side's request.6

As relevant here, the court concluded that "the dealer leases were not exempt from the Ordinance. Defendants nonetheless required prospective tenants purchasing new mobile homes from United Mobilehomes and New Horizon to assume dealer leases or sign new long-term leases with the identical terms." By thus enforcing the dealer leases against consumers, the court explained, defendants violated Ordinance provisions that "prohibit park owners from requiring prospective tenants to sign long-term leases as a condition of tenancy." The court further determined: "Those violations of the Ordinance constituted separate and independent violations" of the unfair practices law. The court also found that defendants conspired with the dealers to violate the Ordinance and the statute.

3 Cal.Rptr.3d 437

The court determined that violations occurring as early as January 1, 1987, were actionable. It first explained: "Those long-term leases were never exempt. Defendants committed an unlawful business practice each time they collected above-Ordinance rents on those leases." It further explained: "The statute of limitations does not begin to run on wrongful acts committed pursuant to a civil conspiracy until the completion of the last overt act of that conspiracy. [Citation.] ... Therefore, the statute of limitations has not begun to run on defendants' violations of [Business and Professions Code section] 17200 because defendants are still enforcing their unlawful long-term leases."

111 Cal.App.4th 112

In June 2000, the court entered judgment, which it modified later that month. The judgment includes a permanent injunction that prohibits defendants from charging rents in excess of permissible amounts under the rent control provisions of the Ordinance. The judgment also requires defendants to pay $525,000 in restitution, divided among more than 150 affected tenants in specified amounts. In addition, the judgment imposes civil penalties totaling $525,000: $420,000 against defendant Beaumont Investments and $105,000 against defendant San Jose Investments.

In August 2000, the court denied defendants' motions to vacate the judgment and for a new trial.

In September 2000, defendants filed their notice of appeal from the modified judgment and from the denial of their posttrial motions. In October 2000, this court denied...

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88 practice notes
  • SkinMedica, Inc. v. Histogen Inc., Case No. 09–CV–122 JLS (RBB).
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • April 23, 2012
    ...interest in future profits or value, not actual or committed sales or measurable loss in value. [Redacted] In People v. Beaumont, 111 Cal.App.4th 102, 135, 3 Cal.Rptr.3d 429 (2003). cited by Histogen, the California Court of Appeal upheld the trial court's order requiring defendants to disg......
  • COACHELLA VALLEY MOSQUITO CONTROL v. PERB, No. S122060.
    • United States
    • United States State Supreme Court (California)
    • June 9, 2005
    ...849, 94 P.3d 1055 [exhaustion requires agency decision of "`entire controversy'"]; People v. Beaumont Investment, Ltd. (2003) 111 Cal.App.4th 102, 124, 3 Cal.Rptr.3d 429 [administrative process must "`"run its course"'"]; Bleeck v. State Board of Optometry (1971) 18 Cal. App.3d 415, 432, 95......
  • Simon v. San Paolo U.S. Holding Co., Inc., No. B121917.
    • United States
    • California Court of Appeals
    • December 2, 2003
    ...fraudulent; it may be any business practice undertaken by any unlawful means. (See People v. Beaumont Investment, Ltd. (2003) 111 Cal.App.4th 102, 120-121.) There are other California statutes that provide penalties or additional damages for fraudulent practices. Examples include Civil Code......
  • Madrid v. Perot Systems Corp., No. C046683.
    • United States
    • California Court of Appeals
    • May 26, 2005
    ...has been taken and sometimes referring to compensation for injury done. (People ex rel. Kennedy v. Beaumont Investment, Ltd. (2003) 111 Cal. App.4th 102 at p. 134, 3 Cal.Rptr.3d 429 (Beaumont).) However, in the context of the UCL, "restitution" is limited to the return of property or funds ......
  • Request a trial to view additional results
89 cases
  • SkinMedica, Inc. v. Histogen Inc., Case No. 09–CV–122 JLS (RBB).
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • April 23, 2012
    ...interest in future profits or value, not actual or committed sales or measurable loss in value. [Redacted] In People v. Beaumont, 111 Cal.App.4th 102, 135, 3 Cal.Rptr.3d 429 (2003). cited by Histogen, the California Court of Appeal upheld the trial court's order requiring defendants to disg......
  • COACHELLA VALLEY MOSQUITO CONTROL v. PERB, No. S122060.
    • United States
    • United States State Supreme Court (California)
    • June 9, 2005
    ...849, 94 P.3d 1055 [exhaustion requires agency decision of "`entire controversy'"]; People v. Beaumont Investment, Ltd. (2003) 111 Cal.App.4th 102, 124, 3 Cal.Rptr.3d 429 [administrative process must "`"run its course"'"]; Bleeck v. State Board of Optometry (1971) 18 Cal. App.3d 415, 432, 95......
  • Simon v. San Paolo U.S. Holding Co., Inc., No. B121917.
    • United States
    • California Court of Appeals
    • December 2, 2003
    ...fraudulent; it may be any business practice undertaken by any unlawful means. (See People v. Beaumont Investment, Ltd. (2003) 111 Cal.App.4th 102, 120-121.) There are other California statutes that provide penalties or additional damages for fraudulent practices. Examples include Civil Code......
  • Madrid v. Perot Systems Corp., No. C046683.
    • United States
    • California Court of Appeals
    • May 26, 2005
    ...has been taken and sometimes referring to compensation for injury done. (People ex rel. Kennedy v. Beaumont Investment, Ltd. (2003) 111 Cal. App.4th 102 at p. 134, 3 Cal.Rptr.3d 429 (Beaumont).) However, in the context of the UCL, "restitution" is limited to the return of property or funds ......
  • Request a trial to view additional results

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