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Sarah Morrison v. Vineyard Creek et al

March 29, 2011


Trial Court Sonoma County Superior Court Trial Judge Honorable Elaine Rushing (Sonoma County Super. Ct. No. SCV-240627)

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


Sarah Morrison appeals from a post-judgment order denying her motion for attorney's fees under Civil Code section 1942.5 and Government Code section 12989.2 after the parties had resolved their dispute by settlement. We will affirm the order.


On January 8, 2007, Morrison signed a lease and moved into an apartment at Vineyard Creek Apartments in Santa Rosa, California. The lease agreement provided on the first page, which Morrison initialed, that the apartment would "be used as a private residence and for no other purpose." Morrison did not disclose her intention to operate a family child care home in the apartment.

On January 22, 2007, Morrison delivered "Notice" to respondent Vineyard Creek L.P., pursuant to Health and Safety Code section 1597.40, subdivision (d)(1) of the California Child Day Care Facilities Act (Child Day Care Act). (Health & Saf. Code, § 1596.70 et seq.) In the Notice, Morrison declared her intent to operate a family child day care facility in her apartment beginning March 1, 2007.

Toward the end of January 2007, after passing the required home inspection, Morrison received her state license to operate a family child care home. She arranged to provide child care for three families in her apartment.

The Child Day Care Act (including chapters 3.4, 3.5 and 3.6 of Division 2 of the Health and Safety Code) was enacted "to provide a comprehensive, quality system for licensing child day care facilities to ensure a quality day care environment" because child day care facilities contribute positively to children and because good quality child day care services are an essential service for working parents. (Health & Saf. Code, §§ 1596.72, 1596.73.) While the Child Day Care Act is primarily focused on licensing and quality of care, Health and Safety Code section 1597.40 precludes property owners from prohibiting or restricting the use of "single-family residences" as child day care homes.*fn1

On January 22, 2007, Vineyard Creek's attorney, Jeffrey Breithaupt, responded to Morrison's Notice. He stated that the operation of a day care business in her apartment would constitute a breach of the lease provision that required only private residential use of the premises. In his view, the protections of the Child Day Care Act applied to "single-family residences," not a multi-family apartment complex like Vineyard Creek. Breithaupt further notified Morrison that "[a]ny attempts by you to operate a family child care home out of your apartment is a breach of the residential lease/rental agreement and will result in litigation against you." Breithaupt invited Morrison or her attorney to contact him if she had any questions.

Morrison delayed the opening of her family child care business and retained legal counsel at the Child Care Law Center.

By letter dated February 1, 2007, attorney Claire Ramsey of the Child Care Law Center responded to Breithaupt. Ramsey opined that the Child Day Care Act did apply to multi-family apartment buildings.

Breithaupt replied to Ramsey by letter dated February 12, 2007. Breithaupt remained unconvinced that the Child Day Care Act, which specifically references "single-family residences," applied to apartment complexes, but invited Ramsey to provide any law to the contrary. Otherwise, he would "continue to advise [his] client to enjoin Mrs. Morrison from maintaining a family child care home at the Vineyard Creek Apartments[.]"

More than two months later, on April 16, 2007, Morrison's attorneys responded that, after further research, they still believed that the Child Day Care Act applied to multi-family apartment complexes (or, perhaps more accurately, to apartments in a multi-family apartment complex). Ramsey "look[ed] forward to [Vineyard Creek's] favorable response by April 30, 2007." Otherwise, Ramsey threatened, Morrison would pursue litigation seeking equitable relief as well as damages for loss of income and retaliatory eviction.

On April 30, 2007, Breithaupt answered that the statute was "not suited to multi-family complexes." He noted: "As stated in the dicta of Barrett v. Dawson (1998) 61 Cal.App.4th 1048 1055, 'The statute is tailored to the promotion of family day care homes appropriate to lots zoned for single-family dwelling (see [Health & Saf. Code,] § 1597.46) not commercial kindergartens.' "*fn2 Breithaupt asserted that the "issue is of primary importance to the owners of the apartments and they are willing to vigorously defend against any suit your Center or Sarah Morrison may bring." (Italics added.)

A. The Lawsuit

On May 1, 2007, Morrison filed a verified complaint against Vineyard Creek, L.P. and numerous other defendants (collectively, Vineyard Creek), alleging violations of the Child Day Care Act (specifically, Health & Saf. Code, § 1597.40), California's anti-retaliation statute (Civ. Code, § 1942.5), California's Fair Employment and Housing Act (Govt. Code, § 12955), and Business and Professions Code section 17200, as well as breach of the implied covenant of quiet enjoyment, negligence, and negligent infliction of emotional distress.*fn3

In her complaint, Morrison sought an injunction enjoining the defendants from evicting, discriminating against, or retaliating against Morrison. She also requested declaratory relief, damages for lost income and emotional distress, and "[c]osts of suit and reasonable attorneys fees."

On the same day she filed her complaint, Morrison opened her family day care home in her apartment. Vineyard Creek did not take any action against her.

In mid-May 2007, shortly after the lawsuit was filed, Vineyard Creek retained new counsel. By the end of May, counsel reviewed the legislative history of the Child Day Care Act and concluded it was, in fact, intended to apply to apartments. On June 7, barely a month after the lawsuit was served, Vineyard Creek's counsel called Morrison's attorney and informed her that Vineyard Creek withdrew its opposition to Morrison's day care home and agreed to compensate her for her actual damages. At this point, the parties had not engaged in any discovery or court hearings.

By letter dated June 29, 2007, Ramsey acknowledged Vineyard Creek's agreement that the Child Day Care Act applied to Morrison's situation, but requested 10 concessions to resolve the case: (1) amend Morrison's lease to reflect her right to operate a family child care home without fear of eviction or retaliation; (2) not harass Morrison, discriminate against her, or violate her right to operate a family child care home; (3) give Morrison a right to renew her lease; (4) provide Morrison a positive letter of reference if she chose to vacate the apartment; (5) pay Morrison $12,500 in damages; (6) reimburse her for all costs she incurred in pursuing her legal rights in court; (7) include provisions in other Vineyard Creek leases reflecting the right to operate a family child care home; (8) comply with all applicable fair housing laws; (9) enter into a stipulated judgment with continuing jurisdiction; and (10) agree that Morrison is entitled to recover her attorney fees.

On September 6, 2007, having not received a response to the settlement proposal, Morrison's attorneys sent to Vineyard Creek's attorney a letter and proposed settlement agreement. The letter clarified that Morrison's demand for $12,500 in damages included $6,000 for her actual damages, $4,000 for statutory damages "based on Ms. Morrison's discrimination and retaliation claims," and $2,500 for emotional distress. The letter warned that Morrison would commence discovery if the parties could not resolve the outstanding settlement issues soon.

In October 2007, Morrison's attorneys served 11 discovery demands, including form interrogatories, special interrogatories, and requests for production of documents, on five of the six defendants. Morrison also noticed the deposition of property manager Alkire and Vineyard Creek's former attorney, Breithaupt. Vineyard Creek requested extensions of time to respond to the discovery requests and ultimately provided responses that Morrison deemed insufficient.

Meanwhile, Vineyard Creek's attorneys sent a counteroffer on November 8, 2007, proposing a settlement of $7,000. The parties continued to negotiate.

In January 2008, Morrison's attorneys threatened to file a motion to compel further discovery responses from Vineyard Creek. Vineyard Creek asserted that the motion was unnecessary because further responses were "en route" and the discovery was needless anyway since the only remaining issue was proof of Morrison's damages. In February 2008, Morrison nonetheless filed a motion to compel production of ...

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