APPEAL from the Superior Court of San Bernardino County. Joseph R. Brisco, Judge. (Super.Ct.No. CIVRS1007615)
The opinion of the court was delivered by: Richli J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
Chino MHC, LP (the Owner) owns Lamplighter Chino Mobile Home Park in Chino. It applied to the City of Chino (the City) to convert the park to resident ownership. This is analogous to converting an apartment building into a condominium; it would mean subdividing the park into individual lots, which would be offered for sale to the residents.
Resident ownership conversions are governed by Government Code section 66427.5 (section 66427.5). Three provisions of section 66427.5 are crucial in this case. First, section 66427.5 requires the park owner to conduct a "survey of support" to determine how many residents support the proposed conversion. (Id., subd. (d)(1).) The survey must be "conducted in accordance with an agreement between the subdivider and a resident homeowners' association, if any . . . ." (Id., subd. (d)(2).) Second, it prohibits a local agency from denying a conversion application for any reason other than the park owner's noncompliance with the requirements of section 66427.5 (including the survey requirement). (Id., subd. (e).) Third, it provides that, once the conversion goes into effect, the park owner obtains partial immunity from local rent control. (Id., subd. (f).)
Here, the Owner conducted a survey, but not pursuant to any agreement with any homeowners association; there is a dispute as to whether there was a homeowners association at the time. The vast bulk of the residents simply did not respond, but of the handful who did, 58 percent opposed the conversion.
The City found that the Owner's application was incomplete, because, among other things, it did not show that the survey had been properly conducted (i.e., that it had been conducted pursuant to an agreement with a homeowners association, or, alternatively, that there was no homeowners association).
The Owner's response was twofold. It sued the City, seeking a declaration that its application was complete. Meanwhile, however, it asked Lamplighter Chino Homeowners Association (the Association), which had been identified as the homeowners association for the park, to enter into an agreement regarding another survey. The second prong of this strategy failed; the Association was evasive, and eventually it refused to agree to any survey. The first prong, however, succeeded, at least in the short run; the City stipulated to a judgment requiring it to accept the application as complete. The planning commission even approved the application. The residents of one lot, however, appealed to the city council. The city council then denied the application, citing (1) the results of the survey, and (2) the lack of evidence that the survey had been properly conducted.
The Owner then filed this mandate proceeding, naming the City and the city council as defendants. The Association intervened. The trial court granted the Owner's petition. It ruled that:
1. Section 66427.5 prohibited the City from denying the application based on the results of the survey.
2. The stipulated judgment collaterally estopped the City from finding that the survey had not been properly conducted.
The City, the city council, and the Association (collectively appellants) appealed. The Owner cross-appealed, raising a relatively minor issue.
We will conclude that the trial court reached the right result, although we get there via different reasoning.
First, we will hold that the City was entitled to consider the survey results. However, it could not deny the application based on the survey results unless they showed that the conversion was a sham -- intended solely to avoid rent control and not to transfer ownership to residents. The results of the Owner's survey showed that the conversion, although it did not have majority support, was not a sham.
Second, even aside from collateral estoppel, under the Permit Streamlining Act, once the City accepted the Owner's application as complete, it could not deny the application based on lack of evidence that the survey had been properly conducted.
Accordingly, we will affirm.
A. The Owner Conducts a Survey.
In December 2007, the Owner held a meeting of the residents to discuss the proposed conversion. Out of the 260 households, at least 140 people attended. A representative of the Owner asked how many of those present were aware of a functioning homeowners association in the park; 25 people raised their hands. Then she asked how many were members of the homeowners association; 10 people raised their hands.
On April 3, 2008, the Owner held another residents' meeting. This time, approximately 60 people attended. One was George Klotz. Klotz stated that he "ran" the homeowners association and that it was "'legitimate.'" Approximately eight people present indicated that they were members of Klotz's association. Others, however, said that Klotz's association was "radical" and "unreasonable" and that very few residents were affiliated with it.
On April 19, 2008, the Owner held a third residents' meeting. Approximately 40 people showed up, including Klotz. Some of the residents commented that Klotz's association was a "self-appointed" group of perhaps four or five people and that they were not affiliated with it.
In August 2008, representatives of the Owner contacted residents individually and asked them about the existence of a homeowners association. Apparently for reasons of time, however, they contacted only 83 households. Of these, 35 said they were members of a homeowners association, 13 said they had voted for representatives, and only eight were able to name any of the representatives. The representatives named were George Klotz, Lisa Blandino, and Kathy Morgan.*fn2
At this point, the Owner decided that there was no "resident homeowners' association" within the meaning of section 66427.5, subdivision (d)(2).*fn3
Earlier, however, on April 18, 2008, an attorney named Eduardo Madrid had written to the City (with a copy to the Owner), asserting that his client, the Association, was "the one and only bona fide homeowners association representing all of the residents at this park" and that its officers were Klotz, Blandino, and Morgan.
The Owner proceeded to prepare a survey, based on a standard form provided by the State Department of Housing and Community Development. It provided five check boxes:
1. "I support the [conversion] if the purchase price . . . is affordable to me."
2. "I support the [conversion], but I am low income/moderate income and will need financial assistance to be able to purchase my unit."
3. "I support the [conversion], but at this time I believe that I would remain and rent."
4. "I decline to respond at this time."
5. "I do not support the [conversion]."
On September 18, 2008, the Owner distributed the survey to residents, with a self-addressed stamped envelope; it set a deadline to respond of October 1, 2008. Out of the 260 households, only 36 returned the survey. Fourteen supported the conversion, of which seven checked box one, eight checked box two, and two checked box three;*fn4 19 did not support the conversion; and three declined to respond.
B. The Owner Submits a Conversion Application.
In October 2008, the Owner applied to the City to convert the park to resident ownership. In November 2008, the City notified the Owner that it deemed the application incomplete, for a number of reasons,*fn5 including that the Owner had not provided proof that the survey had been conducted in accordance with an agreement with an independent resident homeowners association, "if any."
C. The Owner Appeals Incompleteness to Planning Commission.
The Owner appealed the incompleteness determination to the planning commission. In May 2009, the planning commission held a hearing on the appeal. At that hearing, the Owner submitted the declaration of Susy Forbath, which described the Owner's efforts to determine whether there was a homeowners association. (See part I.A., ante.)
Joe Diaz and Lisa Blandino appeared at the hearing. Diaz stated that he was president of the homeowners association; Blandino stated that she was vice-president. They added that the homeowners association had been in existence since 1973 and that it had bylaws, minutes, and a bank account.
The planning commission denied the appeal.
D. The Owner Appeals the Incompleteness Determination to the City Council.
The Owner then appealed to the city council. In June 2009, the city council held a hearing on the appeal. Once again, Diaz and Blandino appeared and vouched for the existence of a homeowners association. The mayor even claimed to have personal knowledge of a homeowners association:
"MAYOR DENNIS YATES: . . . That homeowner association, I have on many occasions . . . through the years been up there and in fact, the trailer park owners used to -- like Thanksgiving, they would supply the turkey and I remember Christmas, they'd supply the turkey for the homeowner's association and the Christmas tree. Do they still do that?[*fn6 ]
"MR. JOSEPH DIAZ: Yes, they do.
"MAYOR DENNIS YATES: Okay.
"MR. JOSEPH DIAZ: Christmas and Thanksgiving, they put out a turkey dinner or whatever. The social club does honor it and the park --
"MAYOR DENNIS YATES: Yeah, because I remember going to some of the meetings up there with, with the homeowner's association, but it's news to me that, I guess, obviously, you haven't disbanded, have you?
"MR. JOSEPH DIAZ: No, we --
"MAYOR DENNIS YATES: Okay.
"MR. JOSEPH DIAZ: -- 1974.
"MAYOR DENNIS YATES: Yeah, I know. It's been years. Seventeen years that I know."
At the end of the hearing, the city council denied the appeal.
E. Owner Attempts to Work with Association.
Meanwhile, the Owner attempted to obviate the City's concerns about the survey by conducting another survey, this time in cooperation with the homeowners association.
Accordingly, on May 8, 2009, an attorney for the Owner sent Diaz a proposed survey form and asked him to comment by May 22. Diaz did not respond.
On May 28, 2009, the Owner's attorney phoned Diaz. Diaz offered some comments, but he indicated that there had been "difficulty getting a group consensus." The attorney revised the survey form in accordance with Diaz's comments, mailed it to him, and asked him either to request further revisions or to approve it by June 4.
Diaz did not respond. Instead, on June 5, 2009, Madrid wrote to the Owner's attorney (with a copy to Diaz). He objected to the fact that the Owner's attorneys had contacted the Association directly and insisted that they communicate with it only through him. He also stated: "You and your client are fully cognizant that the residents are opposed to this conversion plan. In our view, your survey constitutes steadfast harassment, pure and simple. This harassment must come to an end, whether voluntarily or judicially. [¶] . . . [¶] Please govern yourself accordingly."
On June 16, 2009, Blandino wrote to the Owner's attorney. She stated that on June 9, Diaz had been removed as president. She added that Diaz had never had the authority "to communicate . . . regarding matters that were the business of the Executive Board and Association Membership." Contradicting the earlier letter from the Association's attorney, she stated that "[a]ny further communication regarding the Association must be in writing and sent to" Kathleen Morgan, as secretary.
On June 23, 2009, the Owner's attorney wrote back to Madrid. He noted that Madrid's letter "seems to indicate a refusal to participate in any further [s]urvey." Nevertheless, he asked that the Association either request further revisions to the proposed survey or approve it by June 30. Moreover, noting that Madrid's letter had been copied to Diaz, and that Diaz had allegedly been removed as president, he asked Madrid to provide evidence that he still represented the Association. Madrid did not respond.
On July 2, 2009, the Owner's attorney wrote to Morgan and asked her to respond to the letters previously sent to Diaz. He asked whether Madrid represented the Association; he also asked for the name of the current president of the Association. In addition, he requested a copy of the Association's bylaws, membership roster, and minutes, as well as documentation about how Diaz had been removed. He requested a response by July 10. The Association did not respond.
On July 17, 2009, the Owner's attorney wrote to Morgan again. He noted that the Association had not responded to any of his requests regarding the survey. He stated, "Please feel free to call or write to me to discuss this matter further. However, we now consider this issue closed."
On July 31, 2009, Blandino emailed the Owner's attorney. She identified herself as "acting president." She refused to provide any Association documents. She also stated: "You have failed to comply with the [City C]ouncil[']s request that you meet with us to discuss the survey. We are eager to negotiate those terms with you but will not respond further to anything other [than] to do with the conduct of the survey."
That same day, the Owner's attorney emailed Blandino. Noting, however, that he had been instructed to communicate with the Association only through Morgan, he asked her to copy Morgan on future emails. Yet again, he requested the Association's written comments on the proposed survey. He indicated that he was willing to meet with the Association in person to discuss any ...