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Linda Vista Village San Diego Homeowners Association, Inc. v. Tecolote Investors, LLC

California Court of Appeals, Fourth District, First Division

January 27, 2015

TECOLOTE INVESTORS, LLC, et al., Defendants and Respondents.

APPEAL from a judgment of the Superior Court of San Diego County No. 37-2012-00085269- CU-MC-CTL, Judith F. Hayes, Judge.

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Tatro & Zamoyski, Peter A. Zamoyski; Boudreau Williams and Jon R. Williams for Plaintiff and Appellant.

Duckor Spradling Metzger & Wynne, Anna F. Roppo, Douglas W. Lytle and Robert M. Shaughnessy for Defendants and Respondents Tecolote Investors, LLC, C.H. Harp and Joan E. Harp (deceased), trustees of the C.H. Harp Family Trust; River Paradise Partnership; Stephen Leonard Fox and Lynda K. Fox, trustees of Fox Revocable Trust and Matthew Follett.

Jan I. Goldsmith, City Attorney, Daniel F. Bamberg, Assistant City Attorney and Carmen A. Brock, Deputy City Attorney, for Defendant and Respondent City of San Diego.


HUFFMAN, Acting P. J.

This matter comes to us on a judgment of dismissal of a complaint for declaratory and other relief, brought by plaintiff and appellant Linda Vista Village San Diego Homeowners Association, Inc. (Appellant). Its members are sublessees of mobilehome park lots on a real property site (the park site) that is subject to a 1979 master lease between the landowner defendant and respondent, the City of San Diego (the City), and the predecessors of defendants and Respondents Tecolote Investors, LLC (Landlord Defendants).[1] The master lease for the park site was entered into after the City negotiated with developers to provide low income housing opportunities there.

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Appellant's complaint was filed in 2012 against the Landlord Defendants and the City (together Respondents), and alleges that the park site is located on and should be properly characterized as "Pueblo lands, " within the meaning of San Diego City Charter section 219 (section 219). This section and its predecessors since 1909 have been applied to certain Pueblo lands north of the San Diego River to require approval by City Council ordinance and City voters for any sale or lease of them for more than 15 years.[2] (See DeYoung v. City of San Diego (1983) 147 Cal.App.3d 11, 15, 21 [194 Cal.Rptr. 722] (DeYoung) [terms "sell or convey" impliedly include the power to lease].)

Since no voter approval was sought or obtained for this transaction, Appellant alleges the City was without power to enter into the existing 55-year master lease of the park site with the Landlord Defendants (or their predecessors). As a consequence, Appellant seeks decrees to invalidate the master lease and consequently its subleases, specifically attacking the 1983 City-approved provisions allowing periodic rent increases. Appellant also claims entitlement to various other types of relief, such as damages.

Following demurrer proceedings and a hearing on Appellant's motion for preliminary injunction, the trial court sustained the Landlord Defendants' demurrer without leave to amend, and denied the requested injunctive relief. At the joint hearing on the motions, Respondents presented to the trial court extensive historical documentation of the chain of title of the park site and its vicinity, through judicial notice requests and also by lodgment of exhibits in connection with authenticating declarations. According to the recorded ownership history of the park site and surrounding areas, at the close of the California Spanish-Mexican period and under the treaty of Guadalupe Hidalgo (Treaty of Peace, Friendship, Limits, and Settlement with Mexico, Feb. 2, 1948, 9 Stat. 922 T.S. No. 207), the United States came into ownership in 1847 of many parcels of "Pueblo lands, " including numbers 1190 and 1196, where this 74-acre park site is contained (designated here "the parcels"). (See Richert v. City of San Diego (1930) 109 Cal.App. 548, 555-556 [293 P. 673] (Richert).) By the 1850's and as confirmed by an 1874 patent deed, the United States recognized the claim of the City to all property rights in those historic Pueblo lands.

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Beginning in the 1850's, the City transferred its ownership of many of the Pueblo lands properties to various private landowners, starting with railroad companies, which in turn made additional conveyances. In the 1940's, all existing private landowners of approximately 297 acres around and including the parcels became subject to judgments of eminent domain takings by the federal government. In 1959, the federal government recorded a quitclaim deed back to the City of all those holdings. In the 1970's, after the Landlord defendants' predecessor agreed to provide low income housing opportunities on the parcels, the 1979 master lease was signed.[3]

Against this historic backdrop, Appellant argues on appeal that the trial court utilized the wrong legal standards in sustaining the demurrer, and abused its discretion in denying leave to amend the pleading. Appellant contends the master lease entered into between the Respondents, as amended and assigned, was invalid, void, or voidable, for lack of compliance with the voter approval term of section 219. Based on Appellant's broad interpretation of this charter provision for voter approval of transfer of Pueblo lands, it argues that regardless of the history of the title of the parcels, it can successfully amend to allege that the "reacquired" parcels retained "the nature of Pueblo lands" and should still be "classified" or characterized as Pueblo lands that are subject to these charter restrictions on transfers.

Appellant thus contends these parcels remain within the protections and prohibitions of section 219, even though they were released from City ownership for years but were then returned to it. Appellant seems to argue that the charter requirement of voter approval survived all transfers of the parcels, including the eminent domain proceedings, even if the Pueblo lands regulation became dormant or " 'quiescent' " at times. (U.S. v. 32.42 Acres of Land, More or Less, Located in San Diego County, Cal. (9th Cir. 2012) 683 F.3d 1030, 1034(U.S. v. 32.42 Acres of Land).)

On review, we apply the rule that a complaint may be subject to demurrer where facts that can be judicially noticed render it defective. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6 [40 Cal.Rptr.3d 205, 129 P.3d 394] (Evans).) Before oral argument, we gave notice to the parties that we proposed to take judicial notice on appeal of certain recorded title documents in the record,

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showing the mid-19th century transfers of the parcels out of City ownership to private landowners, followed by a federal exercise of eminent domain that took the parcels by judgments recorded in the 1940's. In 1959, a quitclaim deed returned the parcels to the City. (Evid. Code, §§ 452, subd. (d); 455, subd. (a); 459, subd. (c).)

In response to the notice we gave, the Landlord Defendants submitted a motion for judicial notice of their previously lodged documents containing that same chain of title information, as well as other documents submitted with their opposition to the preliminary injunction request. Opposition has been received and considered and the matter discussed at oral argument. As explained in part III., post, the judicial notice motion is granted in part and denied in part.

In light of the applicable authorities, the recorded title documents for the parcels demonstrate as a matter of law that on this record, the restrictions of section 219 do not apply, the face of the pleading fails to state its causes of action, and the Landlord Defendants' demurrer was correctly sustained without leave to amend. Based on de novo analysis that is akin to judgment on the pleadings, the record fully supports the dismissal of all causes of action as to the City as well. (See Coshow v. City of Escondido (2005) 132 Cal.App.4th 687, 701-703 [34 Cal.Rptr.3d 19] (Coshow); pt. III., post.) We affirm.



A. Complaint

In analyzing the challenged demurrer ruling, we take the facts properly pleaded to assess, as a matter of law, whether they state their causes of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [216 Cal.Rptr. 718, 703 P.2d 58].) In ruling on demurrers, courts appropriately " 'consider matters which may be judicially noticed, ' " as if they had been pled. (Evans, supra, 38 Cal.4th 1, 6; see Helix Land Co. v. City of San Diego (1978) 82 Cal.App.3d 932, 937 [147 Cal.Rptr. 683] (Helix Land Co.) [where demurrers were sustained without leave to amend, the reviewing court may consider other relevant matters of which the trial court could have taken notice, if relevant, as having been pleaded]; Weil v. Barthel (1955) 45 Cal.2d 835, 837 [291 P.2d 30].) The courts accept the plaintiff's properly pleaded facts as true, but a demurrer is not deemed to admit any conclusions of law or fact, or any mere contentions. (People ex rel Lungren v. Superior Court (1996) 14 Cal.4th 294, 300-301 [58 Cal.Rptr.2d 855, 926 P.2d 1042].)

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The complaint sets forth five causes of action, initially seeking declaratory relief against all Respondents, on the basis that the park site is "located... on Pueblo Lands. . . ." As against the Landlord Defendants, Appellant brings related claims for setting aside the master lease or subleases through rescission, or for recovering damages for statutory violations or negligent misrepresentation. All claims are based on the premise that this portion of the City's parcels could not be leased to the Landlord Defendants without voter approval. (Unfair Business Practices, Bus. & Prof. Code, § 17200 et seq.; Mobilehome Residency Law, Civ. Code, § 798, et seq.) All causes of action were pled in terms of a class or representative action, on the basis that there were numerous residents who had typical claims, based on common issues of law and fact regarding the validity of the lease and subleases under section 219.

In paragraph 38 of the complaint, Appellant originally pled that the site of the park within the parcels had been maintained in the City's ownership since January 19, 1909 (the date of an important charter amendment to the predecessor of § 219), through the date of the master lease in 1979. (See pt. III.C, post.) However, Appellant now concedes that in other transactions beginning in the 1850's, the City transferred the parcels into private ownership, beginning with various railroad enterprises.[4] The parcels remained in private hands until 1941, when the federal government took them for World War II defense housing. In 1959, the federal government returned the entire 297.3437 acres in the two parcels to City ownership by a quitclaim deed.

The complaint sets forth the history of the 1979 master lease arrangements, including a 1977 City resolution to enable a portion of the parcels to be developed as mobilehome properties and leased to low or moderate income tenants for the term of the lease. Other City resolutions continued to require low or moderate income housing to be provided there. The mobilehome park began operating in late 1980, and the Master Lease was amended several times.

In 1983, negotiations were held on disputes among the parties about preserving the low income status of the property. Only the Landlord Defendants and the City remained parties to the lease, but they consulted a committee of Appellant homeowners' association. The 1983 amendments changed the base rent provisions in the master lease to allow a yearly

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minimum increase in space rent and to provide for reduction of rent for subsidized tenants, among other things. In 1997, the Landlord Defendants took the master lease by assignment.

In all its causes of action, Appellant claims that due to the alleged voidness or invalidity of the master lease for noncompliance with section 219, the Landlord Defendants and their predecessors had no power to impose rent increases, and that Appellant's members were being constructively evicted through such conduct. Appellant sought a preliminary injunction to restrict the Landlord Defendants from raising rents or dissipating services, pending the outcome of these claims.

B. Responses and Motions

The City filed an answer to the complaint, asserting as affirmative defenses that the City's conduct was legal and that Appellant had failed to state any of its causes of action, as well as numerous other defenses.

The Landlord Defendants demurred, asserting failure to adequately state any of the causes of action, and a lack of standing in Appellant to pursue any such claims.

After a temporary restraining order was granted, Respondents each opposed Appellant's motion for a preliminary injunction, and joined in each other's opposition. In the moving and opposing papers for both the demurrer and the injunction, the parties discussed the effect of the ownership history of these parcels. The lodged defense exhibits included copies of judgments from the eminent domain takings of the parcels by the federal government in the 1940's and the quitclaim deed returning the parcels to City ownership in 1959.

With respect to the Landlord Defendants' demurrer proceedings, held concurrently with Appellant's preliminary injunction request, the record does not indicate that the trial court was requested to take judicial notice of those historic private transfer deeds, or the recorded eminent domain judgments, or the quitclaim deed to the City. In opposition to the preliminary injunction motion, the Landlord Defendants requested judicial notice of maps associated with the quitclaim deed from the federal government to the City, but did not do so for the deed itself, or the 1940's condemnation judgments.[5]

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C. Hearing and Rulings

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