United States v. Fritz Properties

• Decision Date: 13 March 1950
• Docket Number: No. 29079-E,29113-E.,29079-E
• Citation: 89 F. Supp. 772
• Court: U.S. District Court — Northern District of California
• Parties: UNITED STATES v. FRITZ PROPERTIES, Inc. COBLENTZ v. FRITZ PROPERTIES, Inc.

89 F. Supp. 772

UNITED STATES v. FRITZ PROPERTIES, Inc.

COBLENTZ v. FRITZ PROPERTIES, Inc.

Nos. 29079-E, 29113-E.

United States District Court N. D. California, S. D.

March 13, 1950.

Sidney Feinberg, William B. Spohn, San Francisco, Cal., for the United States.

Richard Coblentz, San Francisco, Cal., for plaintiff Coblentz.

Philip S. Ehrlich, Albert Axelrod, San Francisco, Cal., for defendant.

ERSKINE, District Judge.

This action charges a violation of the Housing and Rent Act of 1947, as amended by the Housing and Rent Act of 1949. The defendant maintains that the accommodations concerned are decontrolled by virtue of Section 202(c) (1) (A) of the 1949 Act, 50 U.S.C.A.Appendix, § 1892, which reads as follows:

"The term `controlled housing accommodations' means housing accommodations in any defense-rental area, except that it does not include —

"(1) (A) those housing accommodations, in any establishment * * * which is commonly known as a hotel in the community in which it is located * * *."

As a preliminary question, this Court decided, contrary to defendant's contention, that the critical test date to be used in determining whether an establishment is "commonly known as a hotel" and hence decontrolled, is June 30, 1947, as was true under the 1947 Act. There appears to be a conflict in the appellate courts as to the issue. Compare Koepke v. Fontecchio, 9 Cir., 177 F.2d 125, with Woods v. Oak Park Chateu Corp., 7 Cir., 1950, 179 F.2d 611. However, in view of this Court's decision on the remaining issues in the case, further discussion of this preliminary issue is unnecessary, since a contrary holding thereon would not alter the ultimate decision.

Two issues were argued at length before the Court and will be discussed separately. (1) Were the defendant's housing accomodations commonly known as a hotel on June 30, 1947 and thereafter? (2) As a matter of law, is defendant barred from raising this defense because of a failure to exhaust its administrative remedies?

Defendant's Housing Accommodations Were Commonly Known as a Hotel on June 30, 1947.

At the commencement of the trial of this action counsel for plaintiff stated that the sole issue of fact was whether or not on June 30, 1947 the premises involved were "commonly known as a hotel in the community in which it is located." At that time it was conceded these premises on that date furnished the services of a hotel as set forth in the Act. Subsequently during the trial, despite the said concession made by plaintiff at the beginning of the proceedings, there was some attempt made to show that the premises involved did not furnish sufficient services required by the Act to make it a hotel. The evidence abundantly showed that at the effective date of June 30, 1947 these premises were furnishing customary hotel service, including maid service, furnishing and laundering linen, telephone, and secretarial or desk service, bellboy service, and use and upkeep of furniture and fixtures. There was some dispute as to whether or not there was a regular night clerk employed, but it was clear that the services of a night clerk were performed by an employee occupying such a designated position or by some other employee, such as a manager or assistant manager, who assumed the duties of such a night clerk. Similar disputes developed during the trial respecting whether or not other hotel services were performed, but in each instance it appeared that the service was performed even though those who rendered it were not primarily employed for that purpose. In my opinion there is no question that at the effective date the premises involved gave customary hotel service, and that plaintiff's concession that this was so, made at the inception of the trial, was in accordance with the facts.

Accordingly the only issue of fact to be resolved is whether or not on June 30, 1947 the premises involved were "commonly known as a hotel in the community in which it is located". In this respect plaintiff contends that inasmuch as the Housing Expediter has control over the rental charged by a landlord unless such landlord comes within an exception provided for in the statute, the burden of proof is upon the defendant to show that it comes within such exception. There is no reason for me to determine upon whom the burden of proof lies in this case because I have determined from the facts submitted to me that on June 30, 1947 the premises involved were "commonly known as a hotel."

Plaintiff produced the testimony of several hotel owners, operators and real estate men to the effect that on the effective date said premises were "commonly known as an apartment house and not a hotel." An example of how inconclusive is the evidence of experts is the fact that the owner of a well known hotel approximately a block from the premises involved said they were commonly known as a hotel, whereas the general manager of such hotel testified to the contrary.

In my opinion the testimony of each of these witnesses was his honest and conscientious belief. However, any expert's testimony respecting whether a certain establishment is "commonly known as a hotel" is more or less colored by his own impressions. As plaintiff's witness de Golia pointed out, when the premises here involved were built they were intended to be de luxe apartments furnishing some accommodations hotels furnished. This was undoubtedly true. But, since the time of de Golia's connection with the premises, conditions have changed, and though he may retain in his mind the impression that the premises are still an apartment building, as he intended them to be, by changes made in operations and by advertising they may have become "commonly known as a hotel."

After all, the question of common knowledge or reputation is not a matter of expert statement alone, but is a matter for the Court to determine from all of the circumstances of the case. Here the expert testimony is evenly divided. But the testimony of defendant's experts is supported by other facts and circumstances which compel the conclusion that, regardless of what the experts say, the premises involved on the effective date June 30, 1947 were "commonly known as a hotel." These facts and circumstances include a volume of documentary evidence which shows that in many ways before June 30, 1947 the premises were held out to the public as a hotel or an apartment hotel. In view of this documentary evidence it is difficult to conceive that they could have had a reputation to the contrary.

The defendant and present owner acquired the premises sometime in 1944. Long before this date a brochure had been issued and circulated among the public by a former owner describing the premises as "an apartment hotel which caters to both transient and permanent guests." This brochure was used in 1942 and prior thereto, and was distributed to travel agencies and persons inquiring as to the accommodations to be afforded at said premises. The telephone directory of San Francisco shows that prior to the effective date the premises were listed as a hotel apartment or hotel. The American Hotel Association's official Red Book, which is a recognized standard published directory for hotel men and traveling men, lists the premises as an apartment hotel in its 1947 edition. For many years past and prior to 1947 the Playgoer magazine has been published and circulated among the audiences of the theatre going public of San Francisco. Approximately 7,000 of these magazines are issued weekly. The advertisements which appeared in this magazine many years before the effective date advertised the premises here involved as a hotel apartment or apartment hotel. Since 1943 the Zebra Room, a so-called cocktail room, maintained and operated on the said premises, has been advertised in said Playgoer as being situated or located in or on the Hotel Huntington. The official Apartment House Association publication contained advertisements about the Zebra Room for several years before 1947 stating that it was located in the "Huntington Apartment Hotel." For a long period prior to June 30, 1947 there were issued and circulated among the public patronizing said Zebra Room match folders upon which were printed the words "located in the Huntington Apartment Hotel." Hat and Coat checks use by the public check room on the premises were printed "Hotel Huntington". Menus used in the dining rooms and printed annoucements of special dinner events designated the premises as the Hotel Huntington. Tickets issued to the public for admission to the Zebra Room for New Year's Eve 1944-1945 called the premises "Hotel Huntington". Announcements distributed by mail and otherwise to the San Francisco public announcing the opening of the Zebra Room stated that it was located in the Huntington Hotel or the Huntington Apartment Hotel.

A billboard sign adjoining the premises on California Street advertised the Zebra Room and stated it was located in the Hotel Huntington. The awning in front of the building prior to 1947 bore the designation Huntington Hotel Apartments.

For a considerable period prior to June 30, 1947 the establishment issued to its employees in payment of their services and to other parties with whom they had business transactions checks which bore in large type the words "Huntington Apartment Hotel." The registration cards for guests to sign upon registering which were printed prior to June 30, 1947 bore a similar designation. All this printed matter such as brochures, advertisements in magazines, announcements, match folders, registration cards, checks, and hat checks were printed, published and issued prior to June 30, 1947. The important factor to note is that for some time prior to the effective date the establishment had continuously and consistently held itself out to the public generally by various means of advertising as an apartment hotel, where transient as well as permanent guests would be afforded accommodations and...