Wormser v. Santa Monica Rent Control Bd.

• Decision Date: 28 February 2018
• Docket Number: B279166
• Court: California Court of Appeals Court of Appeals
• Parties: RONALD WORMSER, as Trustee, etc., Plaintiff and Appellant, v. SANTA MONICA RENT CONTROL BOARD, Defendant and Respondent.

RONALD WORMSER,as Trustee, etc., Plaintiff and Appellant, v. SANTA MONICA RENTCONTROL BOARD, Defendant and Respondent.

B279166

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN

February 28, 2018

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. SS025108)

APPEAL from a judgment of the Superior Court of Los Angeles County, Nancy L. Newman, Judge. Reversed and remanded with directions.

Rosario Perry for Plaintiff and Appellant.

Santa Monica Rent Control Board, J. Stephen Lewis, General Counsel, and Rebecca F. Sherman, Senior Litigation Attorney, for Defendant and Respondent.

____________________

INTRODUCTION

Ronald Wormser, as trustee of the Wormser Revocable Trust, filed a petition for writ of mandate and inverse condemnation against the Santa Monica Rent Control Board, seeking reversal of the Board's decision to deny Wormser's application in 2014 for an exemption from the rent control law for owner-occupied properties that contained three or fewer units on April 10, 1979, the determinative date. Wormser argued the Board's denial was an abuse of discretion, and factually and legally unsupported, because the Board had granted Wormser's property the exemption in August 1979 and October 1985. Wormser contended the Board was bound by, and precluded from contradicting, its previous decisions that there were only three residential units on the property as of April 10, 1979.

The trial court sustained the Board's demurrer to the petition without leave to amend, and Wormser appeals from the ensuing judgment of dismissal. Because Wormser's petition stated a cause of action for writ of administrative mandate, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

Ronald Wormser owns and resides in a multi-unit residential property in Santa Monica. The Board administers the Santa Monica Rent Control Charter and its regulations. In August 1979 the Board granted the previous owner of Wormser's property an owner-occupied exemption from the rent control law under Santa Monica Rent Control Charter Amendment section 1801, subdivision (c)(4), which exempts "owner-occupieddwellings with no more than three (3) units." The exemption automatically expired when Wormser purchased the property in 1984 because the previous owner no longer owned and occupied the property.

Wormser applied for the same exemption, but in November 1984 the Board denied his application. The Board's written notice of decision stated Wormser and his co-owner "did not meet their burden of proof in establishing that the subject property consists of no more than three residential units since at least April 10, 1979, the date of adoption of the Rent Control Charter Amendment," and noted "[c]onflicting evidence as to whether the property has consisted of three or four residential units was not resolved." The notice of decision, however, did not indicate whether the Board made a finding on whether the property actually contained three or fewer units on April 10, 1979.

In August 1985 the Board issued Wormser a permit to remove an alleged fourth unit on the property. In October 1985 the Board granted Wormser's second application for an exemption. According to Wormser, the Board's October 1985 decision included a finding the property contained only three residential units as of April 10, 1979. The Board's notice of decision, however, states only that "[s]ince August 1, 1985, the property has consisted of three (3) residential rental units." Wormser's 1985 exemption lapsed when he moved from the property in the early 1990's, although Wormser moved back in 2012.

In August 2014 Wormser filed the application that is the subject of this action, again asking for an owner-occupied exemption from rent control. The Board set the matter for hearing.

The hearing officer recommended denial of the application because Wormser had failed to establish the property contained three units or fewer on April 10, 1979. Wormser appealed the hearing officer's decision to the Board.

In November 2014 the Board denied Wormser's application. The Board's written notice of decision stated the Board had considered all the evidence in the matter, "including evidence presented before its hearing officer and the written and oral presentation of its staff."

On February 13, 2015 Wormser filed this action. The Board demurred. The Board also asked the trial court to take judicial notice of the Board's 1984, 1985, and 2014 notices of decision, the hearing officer's written recommendation, the staff report on the hearing officer's 2014 recommendation, and a 1994 staff report on a proposed amendment to the rent control regulations. The trial court granted the Board's request for judicial notice in part (i.e., not for the truth of the contents of the documents) and sustained the demurrer to the petition without leave to amend. Wormser appealed, challenging the trial court's order sustaining the Board's demurrer to his cause of action for administrative mandate.¹

DISCUSSION

A. Standard of Review

"In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it allegesfacts sufficient to state a cause of action under any legal theory." (T.H. v. Novartis Pharmaceuticals Corporation (2017) 4 Cal.5th 145, 162; accord, Association of Irritated Residents v. Department of Conservation (2017) 11 Cal.App.5th 1202, 1218; see Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1162 ["we exercise our independent judgment as to whether a cause of action has been stated under any legal theory when the allegations are liberally construed"].) "The facts alleged in the pleading are deemed to be true, but contentions, deductions, and conclusions of law are not. [Citation.] In addition to the complaint, we also may consider matters subject to judicial notice." (Daniels, supra, 246 Cal.App.4th at p. 1162; see Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924; Mendoza v. JPMorgan Chase Bank, N.A. (2016) 6 Cal.App.5th 802, 809 ["[w]e must assume the truth of all properly pleaded facts as well as those that are judicially noticeable"].) "Whether a plaintiff will be able to prove its allegations is not relevant." (Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1057; see Mendoza, at p. 809 ["[w]e are not concerned with plaintiff's ability to prove the allegations or with any possible difficulties in making such proof"].)

B. Wormser's Appeal Is Not Moot

The Board argues Wormser's appeal is moot because, shortly after filing his opening brief, Wormser filed with the Board a notice of intent to remove the property from the rental housing market pursuant to the Ellis Act (Gov. Code, § 7060 et seq.).² The Board contends that, because Wormser has"elect[ed] to pursue relief under the Ellis Act," "it is impossible for this Court to grant him any effective relief." Wormser's action, however, has not mooted this appeal.

"'California courts will decide only justiciable controversies."' (Cuenca v. Cohen (2017) 8 Cal.App.5th 200, 216; see Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4th 161, 174.) "'The concept of justiciability is a tenet of common law jurisprudence and embodies "[t]he principle that courts will not entertain an action which is not founded on an actual controversy. . . ." [Citations.] Justiciability thus "involves the intertwined criteria of ripeness and standing. A controversy is 'ripe' when it has reached, but has not passed, the point that the facts have sufficiently congealed to permit an intelligent and useful decision to be made." [Citation.] But "ripeness is not a static state" [citation], and a case that presents a true controversy at its inception becomes moot '"if before decision it has, through act of the parties or other cause, occurring after the commencement of the action, lost that essential character.'"" (Cuenca, at p. 216; see Lockway Storage, at p. 174; DeSilva Gates Construction, LP v. Department of Transportation (2015) 242 Cal.App.4th 1409, 1416; Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1573.)

"'The pivotal question in determining if a case is moot is . . . whether the court can grant the plaintiff any effectual relief. [Citations.] If events have made such relief impracticable, the controversy has become "overripe" and is therefore moot."' (Cuenca v. Cohen, supra, 8 Cal.App.5th at p. 217; see Panoche Energy Center, LLC v. Pacific Gas and Electric Company (2016) 1 Cal.App.5th 68, 95; Lockway Storage v. County of Alameda, supra, 216 Cal.App.4th at pp. 174-175.) "An appeal is moot when a decision of 'the reviewing court "can have no practical impact or provide the parties effectual relief."'" (DeSilva Gates Construction, LP v. Department of Transportation, supra, 242 Cal.App.4th at p. 1416; accord Santa Monica Baykeeper v. City of Malibu (2011) 193 Cal.App.4th 1538, 1547.)

The Ellis Act allows Wormser to return the property to the rental market after two years (or earlier, but subject to certain restrictions and potential liabilities). (See Gov. Code, § 7060.2.) If Wormser decides to pursue this option, the rent control law, and its exemptions, will again apply to the property, depending on the outcome of this action. (See Santa Monica Rent Control Board Regulations, § 1630, subd. (a) ["If the accommodations are offered for rent or lease after two years of the date on they were withdrawn from rent or lease: [¶] (a) The accommodations shall be subject to the Rent Control Law in the same manner and to the same extent as if the accommodations had not been withdrawn from rent or lease."].) Moreover, according to Wormser's ...