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Apartment Association of Los Angeles County, Inc. v. City of Los Angeles

April 17, 2009

APARTMENT ASSOCIATION OF LOS ANGELES COUNTY, INC., PLAINTIFF AND APPELLANT,
v.
CITY OF LOS ANGELES, DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Los Angeles County, Elizabeth A. Grimes, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC373209).

The opinion of the court was delivered by: Kitching, J.

CERTIFIED FOR PUBLICATION

INTRODUCTION

Plaintiff and appellant Apartment Association of Los Angeles County, Inc. challenges the lawfulness of an ordinance enacted by defendant and respondent City of Los Angeles (City). The ordinance provides that if a landlord demolishes residential property subject to City‟s rent control law, and builds new residential rental units on the same property within five years, the newly constructed units are also subject to the rent control law. The trial court sustained City‟s demurrer to plaintiff‟s complaint for declaratory relief without leave to amend and entered judgment in favor of City. Plaintiff appeals from the judgment.

This case requires us to interpret two statutory schemes. The first is the Ellis Act, Government Code section 7060 et seq.*fn1 The Ellis Act permits owners of property subject to rent control to evict their tenants and go out of business if they comply with certain procedural requirements. It also includes recontrol provisions designed to thwart efforts by landlords to circumvent rent control by evicting tenants under the false pretense that they intend to go out of the rental business, and then re-leasing their property at market rental rates. One such provision, section 7060.2, subdivision (d), specifically authorizes City to enact the ordinance at issue in this case.

The second statutory scheme is the Costa-Hawkins Rental Housing Act, Civil Code section 1954.50 et seq. (Costa-Hawkins), which was enacted after the Ellis Act. A provision of Costa-Hawkins, Civil Code section 1954.52, subdivision (a), generally exempts newly constructed residential units from rent control. Specifically, it provides: "(a) Notwithstanding any other provision of law, an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit about which any of the following is true: [¶] (1) It has a certificate of occupancy issued after February 1, 1995." (Italics added.)

Plaintiff argues that Civil Code section 1954.52, subdivision (a)(1) preempts City‟s ordinance because the ordinance was enacted pursuant to section 7060.2, subdivision (d), which plaintiff contends was impliedly repealed by Costa-Hawkins. Absent an express declaration of legislative intent, however, we presume that a statute was not impliedly repealed by a subsequent statute unless there is no rational way to harmonize the two potentially conflicting statutes. As we will explain, plaintiff cannot meet its burden of overcoming the presumption against the implied repeal of section 7060.2, subdivision (d).

Section 7060.2, subdivision (d) and Civil Code section 1954.52, subdivision (a)(1) can and should be harmonized in a manner that does not preempt City‟s ordinance. This can be done by interpreting section 7060.2, subdivision (d) as an exception to Civil Code section 1954.52, subdivision (a)(1).

Costa-Hawkins specifically provides that it does not "affect the authority of a public entity that may otherwise exist to regulate or monitor the basis for eviction." (Civ. Code § 1954.52, subd. (c).) Section 7060.2, subdivision (d) is, in essence, a statute that allows local entities to enact ordinances that discourage landlords from evicting tenants under the false pretense that they are going out of business pursuant to the Ellis Act. Thus, by its terms, Costa-Hawkins does not override section 7060.2, subdivision (d), or "affect" City‟s authority to enact the ordinance at issue here.

Our interpretation of the statutes in question is consistent with the principle of reconciling statutes by giving a more specific provision precedence over a more general provision. Civil Code section 1954.52, subdivision (a)(1) generally governs all newly constructed rental units that were issued a certificate of occupancy after February 1, 1995. Section 7060.2, subdivision (d) governs a relatively small subset of such rental units, namely accommodations that replace rental units withdrawn under the Ellis Act.

The legislative history of the Ellis Act and Costa-Hawkins also supports our holding. Section 7060.2, subdivision (d) was amended after the enactment of Costa-Hawkins. If section 7060.2, subdivision (d) had been repealed by Costa-Hawkins, as plaintiff contends, the Legislature would not have engaged in the idle act of amending a repealed statute. Further, Costa-Hawkins expressly repealed a host of statutes but did not do the same with respect to section 7060.2, subdivision (d). This indicates that the Legislature did not intend to repeal the latter.

For all of these reasons, we conclude that the City ordinance promulgated pursuant to section 7060.2, subdivision (d) was not barred or preempted by Costa-Hawkins. We thus affirm the judgment in favor of City.

BACKGROUND

1. Plaintiff

Plaintiff is a trade association representing owners of rental housing.*fn2 The majority of plaintiff‟s members own property subject to the Rent Stabilization Ordinance of the City of Los Angeles (RSO), Los Angeles Municipal Code section 151.00 et seq. The RSO places limitations on the amount of rent landlords may charge for certain residential rental units. (See L.A. Mun. Code, §§ 151.04, 151.06, 151.07.)

2. The Ordinance

As we explain, section 7060.2, subdivision (d), a provision of the Ellis Act, authorizes local governmental entities to enact certain ordinances. Although the Ellis Act was enacted in 1985, City did not promulgate an ordinance pursuant to section 7060.2, subdivision (d) for approximately 22 years. On June 5, 2007, however, City adopted Ordinance No. 178848 (Ordinance), which was codified as Los Angeles Municipal Code section 151.28. Subsection A. of this section provides, in pertinent part: "If a building containing a rental unit that was the subject of a Notice of Intent to Withdraw pursuant to the provisions of Subsection A. of Section 151.23*fn3 is demolished and rental units are constructed on the same property and offered for rent or lease within five years of the date the rental unit that was the subject of the Notice of Intent to Withdraw was withdrawn from rent or lease, the owner may establish the initial rental rate of the newly constructed rental units. The provisions of the Rent Stabilization Ordinance, Section 151.00, et seq., and other provisions of this chapter shall apply to the newly constructed rental units."*fn4

3. Plaintiff's Complaint

On June 22, 2007, plaintiff filed a complaint for declaratory relief against City. Plaintiff alleged that the Ordinance is preempted by a provision of Costa-Hawkins, Civil Code section 1954.52, subdivision (a)(1).*fn5 Plaintiff prayed for a declaration that the Ordinance is invalid "to the extent that it attempts to extend coverage of the RSO to rental housing constructed after February 1, 1995[.]"

4. City's Demurrer

City demurred to the complaint on the ground that it failed to state facts sufficient to constitute a cause of action. City argued that the Ordinance was not preempted by Costa-Hawkins, and that the Ordinance was specifically authorized under section 7060.2, subdivision (d). The trial court sustained the demurrer without leave to ...


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