Drouet v. Superior Court

73 P.3d 1185, 3 Cal. Rptr. 3d 205, 31 Cal. 4th 583, 2003 Cal. Daily Op. Serv. 7131, 2003 Daily Journal DAR 8914, 2003 Cal. LEXIS 5687
CourtCalifornia Supreme Court
DecidedAugust 11, 2003
DocketS096161
StatusPublished
Cited by31 cases

This text of 73 P.3d 1185 (Drouet v. Superior Court) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drouet v. Superior Court, 73 P.3d 1185, 3 Cal. Rptr. 3d 205, 31 Cal. 4th 583, 2003 Cal. Daily Op. Serv. 7131, 2003 Daily Journal DAR 8914, 2003 Cal. LEXIS 5687 (Cal. 2003).

Opinions

Opinion

BAXTER, J.

The Ellis Act (Gov. Code, § 7060 et seq.) provides that no statute, ordinance, regulation, or administrative action “shall . . . compel the owner of any residential real property to offer, or to continue to offer, accommodations in the property for rent or lease.” (Gov. Code, § 7060, subd. (a).) A landlord who complies with the Ellis Act may therefore go out of the residential rental business by withdrawing the rental property from the market. (Los Angeles Lincoln Place Investors, Ltd. v. City of Los Angeles (1997) 54 Cal.App.4th 53, 61 [62 Cal.Rptr.2d 600].) If necessary, the landlord may institute an action for unlawful detainer to evict the tenants and recover possession of the property. (Gov. Code, § 7060.6.)

In unlawful detainer actions, tenants generally may assert legal or equitable defenses that “directly relate to the issue of possession and which, if established, would result in the tenant’s retention of the premises.” (Green v. Superior Court (1974) 10 Cal.3d 616, 633 [111 Cal.Rptr. 704, 517 P.2d 1168].) The defense of retaliatory eviction, codified at Civil Code section 1942.5 (section 1942.5), is one such defense. This defense bars a landlord from recovering possession of the dwelling in an unlawful detainer action where recovery is “for the purpose of retaliating” against the tenant because of his or her lawful and peaceable exercise of any rights under the law (§ 1942.5, subd. (c)) or “because of’ his or her complaints regarding tenant-ability (id., subd. (a)).

In this case, the tenants have asserted the statutory defense of retaliatory eviction in an unlawful detainer proceeding instituted by the landlord under the Ellis Act. In their view, section 1942.5 can force a landlord to continue to offer the property for rent or lease if the landlord’s decision to withdraw the property is motivated by a desire to retaliate against the tenants in the ways [588]*588prohibited by subdivisions (a) and (c). The landlord, on the other hand, counters that he is entitled to exit the rental business, notwithstanding an allegation of retaliation for tenant conduct, under section 1942.5, subdivision (d), which provides that “[njothing in this section shall be construed as limiting in any way the exercise by the lessor of his rights under . . . any law pertaining to the hiring of property or his right to do any of the acts described in subdivision (a) or (c) for any lawful cause.”

We find that the Ellis Act qualifies as a “law pertaining to the hiring of property” under section 1942.5, subdivision (d), and that a landlord’s withdrawal of the property from the market is an exercise of “ ‘the right to go out of the rental business’ ” (First Presbyterian Church v. City of Berkeley (1997) 59 Cal.App.4th 1241, 1253 [69 Cal.Rptr.2d 710]) under that law. We further conclude, in accordance with subdivisions (d) and (e) of section 1942.5, that a landlord’s bona fide intent to withdraw the property from the rental market under the Ellis Act will defeat the statutory defense of retaliatory eviction. Because the trial court did not consider the landlord’s motion for summary adjudication under this standard, we reverse the Court of Appeal, which had issued a writ of mandate directing the superior court to grant the landlord’s motion for summary adjudication, with directions to remand the matter to the superior court for further proceedings consistent with this opinion.

BACKGROUND

Petitioner Joel Drouet (Landlord) owns a two-unit apartment building at 378-380 San Carlos Street in San Francisco. Real parties Jim Broustis and Ivy McClelland (Tenants) occupy the unit at 378 San Carlos Street on a month-to-month basis. Broustis has lived in the unit since 1988; McClelland joined him in early 1999. Over the years, Landlord and Broustis have had several conflicts involving the tenancy. Tenants have alleged, for example, that Landlord illegally attempted to raise the rent, overcharged for utilities, refused to pay interest on security deposits, and violated the lease by refusing to permit Broustis to have a roommate. In April 1999, when Tenants discovered Landlord had failed to pay his share of the garbage bill, they informed him they planned to deduct this amount from their rent. Around the same time, they notified Landlord of a leaking sewage drain and shower wall.

Landlord did not make the requested repairs. Instead, on August 5, 1999, Landlord commenced Ellis Act proceedings on the San Carlos Street units by filing a “Notice of Intent to Withdraw Residential Units from the Rental Market” with the San Francisco Residential Rent Stabilization and Arbitration Board. (Gov. Code, § 7060.4; S.F. Admin. Code, § 37.9A, subd. (f).) That same day, Landlord served Tenants with written notice terminating the tenancy [589]*589(Civ. Code, § 1946) and requiring them to quit the premises and deliver up possession within 60 days. The notice of intent and a memorandum regarding withdrawal of the units from rent were attached to the notice.

The parties do not dispute that Landlord complied with all Ellis Act procedures. Nonetheless, Tenants did not quit the premises.

Consequently, on October 6, 1999, Landlord filed a complaint for unlawful detainer in the Superior Court for the City and County of San Francisco. Tenants answered the complaint and alleged four affirmative defenses, including retaliatory eviction. Landlord moved for summary adjudication on each of the defenses. The superior court granted the motion in part but, without considering whether Landlord’s invocation of the Ellis Act was bona fide, denied it with respect to the defense of retaliatory eviction.

Landlord sought a writ of mandate in the appellate division of the superior court to compel the trial court to set aside the denial of summary adjudication, alleging that the defense of retaliatory eviction is unavailable as a matter of law in unlawful detainer proceedings under the Ellis Act. After briefing and oral argument, the appellate division agreed with Landlord and granted the petition for writ of mandate. It said: “When a landlord has complied with all procedures for withdrawing his rental units from the rental market, his motive for withdrawing the units is irrelevant.” The Court of Appeal ordered the case transferred on its own motion (Cal. Rules of Court, rule 62(a)) and, in a published opinion, agreed with the appellate division: “[I]n unlawful detainer proceedings properly commenced under the Ellis Act, a tenant may not raise an affirmative defense of retaliatory eviction to prevent displacement.”

DISCUSSION

In a writ proceeding challenging the denial of summary adjudication, we review the trial court’s ruling de novo. (Buss v. Superior Court (2001) 16 Cal.4th 35, 60 [65 Cal.Rptr.2d 366, 939 P.2d 766].) Since there are no disputed issues of fact, we consider only the legal effect of Civil Code section 1942.5 in an unlawful detainer proceeding under the Ellis Act. We examine each statutory scheme in turn.

A. The Ellis Act

The Ellis Act (Act) sets forth the procedure by which a landlord may go out of business by removing rental units from the market. Its intent is “to supersede any holding or portion of any holding” in Nash v. City of Santa Monica (1984) 37 Cal.3d 97 [207 Cal.Rptr. 285, 688 P.2d 894

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73 P.3d 1185, 3 Cal. Rptr. 3d 205, 31 Cal. 4th 583, 2003 Cal. Daily Op. Serv. 7131, 2003 Daily Journal DAR 8914, 2003 Cal. LEXIS 5687, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drouet-v-superior-court-cal-2003.