Petition for Writ of Certiorari — Sandpiper Mobile Village v. City of Carpinteria

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92°1418 (ES

IN THE ee OE CLES

SUPREME COURT

OF THE UNITED STATES

October Term, 1992

SANDPIPER MOBILE VILLAGE,

a Limited Partnership, Petitioner

Vs.

THE CITY OF CARPINTERIA, Respondent

ON PETITION FOR WRIT OF CERTIORARI TO THE

SECOND APPELLATE DISTRICT, DIVISION SIX,

COURT OF APPEAL FOR THE STATE OF CALIFORNIA

PETITION FOR WRIT OF CERTIORARI

ROBERT J. JAGIELLO, ESQUIRE

P.O. Box 879

26620 Kings Court

Lake Arrowhead, CA 92352

(909) 336-5345

Attorney for Petitioner,

Sandpiper Mobile Village,

a Limited Partnership

orraine Mitchell Legal Briefs

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QUESTIONS PRESENTED

1. After an adverse decision by this

Court in Yee v. City of Escondido (1990)

224 Cal.App.3d 1349, 274 Cal.Rptr. 551, in

which this Court suggested that the

California courts address (the regulatory

taking issue in the first instance),

whether the California Court of Appeals

and Supreme Court decision upholding a

city Ordinance imposing rent control in a

mobilehome park setting without vacancy

decontrol, which causes a transfer of a

premium value to the departing mobilehome

tenant at the time of sale, against a

challenge that it constitutes a regulatory

taking is error.

2. Is there a violation of

substantive due process under local rent

controls for mobilehome parks, which do

not provide for vacancy decontrol, where

the effect of the ordinance is to merely

transfer the value of the right to occupy

at a reduced rate from the parkowner to

the departing tenant, and in no way

protects the present tenants in their

tenancy from rent increases or decreases,

and increases the cost to incoming tenants

by the amount of the "premium" paid by

said tenant to the departing tenant for

the right to occupy at a reduced rate?

LI8sT OF PARTIES

The caption of the case contains the

names of all parties to the proceedings in

the state court.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED

LIST OF PARTIES

INDEX TO APPENDIX

TABLE OF AUTHORITIES

OPINIONS BELOW

JURISDICTION

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

California Constitution

The Carpinteria Ordinance

California Statutes

STATEMENT OF CASE

PROCEDURAL BACKGROUND AND HOW THE

FEDERAL QUESTIONS AROSE

The Complaint

Subsequent Proceedings at Trial

Court Level

The Appeal

THE STATE COURT OF APPEAL

DECISION, THAT THE FORCED

TRANSFER OF THE “PREMIUM

VALUE" FROM LANDLORD TO

TENANT, WHICH PREMIUM

REPRESENTS THE RIGHT TO

OCCUPY THE SPACE AT REDUCED

RENT, DOES NOT CONSTITUTE

A TAKING, IS IN ERROR.

THE GOVERNMENTAL REGULATION

OF PROPERTY RIGHTS MUST

SUBSTANTIALLY ADVANCE A

LEGITIMATE STATE INTEREST;

OTHERWISE, THE REGULATION

CONSTITUTES A TAKING.

THERE IS NO LEGITIMATE

GOVERNMENTAL INTEREST SERVED

BY THE VACANCY CONTROL PORTION

OF THIS STATUTE.

The Transfer of the Right From

The Appellant To The Tenants

To Receive Compensation For

Selling The Right to Occupy in

Perpetuity at Reduced Rates

Does Not Serve a Legitimate

Governmental Interest.

The Alleged Purpose of

Protecting a Tenant's Investment

in a Depreciating Mobilehome

By Creating for the Tenants an

Alienable Interest in Appellant's

Land to Make Up for the Loss

Experienced by Way of Depreciation

is Not a Legitimate Governmental

Interest.

It is Not Possible to Stop a

Wasting Asset Froz Depreciating.

There is No More "Investment" in

a Used Coach than There is ina

Used Car.

(1) Mobilehomes Depreciate.

(2) Loss of Value of a

Depreciating Coach Should

Fall on the Coach Owner and

Not the Parkowner.

THIS ORDINANCE DOES NOT

SUBSTANTIALLY ADVANCE A LEGITIMATE

GOVERNMENTAL INTEREST.

The Purpose is Not Public.

The Purpose of Preserving Low and

Moderate Income Housing

Opportunities is Not Served By

Vacancy Control.

Vacancy Control Overburdens Park

Owners and Does Not Substantially

Advance the Governmental Purpose

of Protecting Present or

Prospective Tenants Against

Predatory Landlords or Forced

Sales at Distressed Prices.

The Carpinteria Ordinance Does

Not Protect Prospective

Purchasers.

The Ordinance Assumes the

Existence of Predatory Landlords,

a Question of Fact Which Remains

to be Decided and Will Not

Withstand Analysis.

There Are Other Remedies.

II.

The Ordinance Does Not

Substantially Advance the

Posited Governmental Purpose

of Protecting the Tenant's

Investment in a Wasting Asset

in That it Lacks the Requisite

"Close Fit" to Satisfy

Constitutional Standards.

(a) The Conduct of the

Landlord is Unrelated

to the Decline of a

Depreciating Personal

Asset.

(b) The Ordinance Works an

Unduly Oppressive Result

Upon the Landowner by

Creating Estates in Land

to Protect Against an

Occasional (And Hypothetical

Predatory Landlord.

THE WHOLESALE TRANSFER BY

REGULATION OF THE PARKOWNER'S

RIGHTS IS A REGULATORY TAKING

UNDER TRADITIONAL REGULATORY

TAKINGS ANALYSIS.

THE CHARACTER OF THE GOVERNMENTAL

ACTION IS TO CREATE AN ALIENABLE

ESTATE IN THE PARKOWNER'S LAND

ON BEHALF OF TENANTS WHICH

SLICES THROUGH THE ENTIRE BUNDLE

OF RIGHTS OF USE, POSSESSION AND

DISPOSITION.

Use of the Property is Lost.

Possession is Lost.

vii

The Right of Disposition Has

Been Lost. 30

B. THE ECONOMIC IMPACT OF THE

ORDINANCE IS A FORCED TRANSFER

TO THE TENANTS COLLECTIVELY OF,

AMONG OTHER PROPERTY INTERESTS,

ALL THE APPRECIATION IN THE

LAND FROM TIME OF THE PASSAGE

OF THE ORDINANCE UNTIL SALE OF

OF A COACH, AND ALL THE

APPRECIATION OF THE POTENTIAL

OF THE LAND FROM THE TIME OF

SALE TO INFINITY. 31

Cc. INVESTMENT BACKED EXPECTATIONS,

BASED IN SUBSTANTIAL PART ON

APPRECIATION AS A COMPONENT OF

RETURN, ARE EVISCERATED BY THE

TRANSFER OF ALL APPRECIATION

TO TENANTS. 32

III. THE ORDINANCE FAILS TO SATISFY

SUBSTANTIVE DUE PROCESS IN THAT:

(1) IT DOES NOT SERVE A VALID

PUBLIC PURPOSE; (2) THE MEANS

CHOSEN TO ACCOMPLISH THE

DECLARED ENDS ARE NOT

REASONABLY NECESSARY; AND (3)

THE ORDINANCE WORKS AN UNDULY

OPPRESSIVE RESULT UPON A

MINORITY OF LANDOWNERS IN THE

CITY OF CARPINTERIA. 33

A. THE MEANS CHOSEN TO ACCOMPLISH

THE DECLARED ENDS ARE NOT

REASONABLY NECESSARY AND WORK

AN UNDULY OPPRESSIVE RESULT

UPON APFELLANT. 34

WHY THIS WRIT SHOULD BE GRANTED. ao

IN CONCLUSION 36

viii

INDEX TO APPENDIZ

A. OPINION of the Court of Appeal,

Second Appellate District, Division

Six, filed October 15, 1992.

B. ORDER of the California Supreme

Court In Bank denying Petitjon for

Review, filed February 11, 1993.

C. REMITTITUR NOTICE of the Court of

Appeal of the State of California

For the Second Appellate District,

Division Six, filed February 16,

1993.

D. ORDER of the Superior Court of the

State of California for the County

Santa Barbara, granting judgment

on the pleadings, filed March 19,

1991.

E. City of Carpinteria ORDINANCE No.

371 (EXCERPTS).

F. California Mobilehome Residency

Laws (Cal. Civ. Code §§ 798 et seq.)

(EXCERPTS)

TABLE OF AUTHORITIES

CASES PAGE

Agins v. Tiburon, 447 U.S. 255

(1980) 26

Armstrong v. United States, 364 U.S.

40 (1960) 25

Calder v. Bull, 3 U.S. (3 Dall.) 386,

1 L.Ed. 648 (1798) 13

Chastleton v. Sinclair, 264 U.S. 542

(1924) 20

leburne v. Cleburne Vv e >

413 U.S. 432 (1985) 34

Goldblatt v. Hempstead, 369 U.S. 590

(1962) 18, 23, 35

Hawaii Housing Authority v. Midkiff,

467 U.S. 229 (1984) 13

Lawton v. Steele, 152 U.S. 133

(1894) 27, 35

etto v e ™m a n

Corp,., 458 U.S. 419 (1982) 29

Moore v. East Cleveland, 431 U.S. 494

(1977) 34

Nollan v. California Coastal Comn,

(1987) 483 U.S. 825

11, 12, 13, 15,

19, 25, 26, 28

Penn Central v. New York City,

438 U.S. 104 (1978) 28, 29

Pennell v. City of San Jose,

485 U.S. 1 (1988) 14, 34

Pennsylvania Coal Co. v. Mahon,

260 U.S. 393 (1922) i8, 29

Ruckelshaus v. Monsanto Company,

467 U.S. 986 (1984) 32

United States v. General Motors Corp.,

323 U.S. 373 (1945) 29

Yee v. City of Escondido (1990) 224

Cal.App.3d 1349, 274 Cal.Rptr. 551 9

STATUTES

Fifth Amendment to the U.S.

Constitution 4, 9, 10, 25

Fourteenth Amendment to the U.S.

Constitution 10

California Constitution,

Article I, Sec. 19 4, 10

California Mobilehome Residency

Law (Cal. Civ. Code §§ 798 et seq.) 6

City of Carpinteria Ordinance No.

371 3, 23, 22

California Code of Civil Procedure,

§1036 8

TREATISES

Hirsch & Hirsch, Legal-Economic Analysis

of Rent controls in a Mobilehome Context:

Placement Values and Vacancy Decontro],

35 UCLA L.Rev. 399 (1988) 16, 17, 20 22

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IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1992

SANOPIPER MOBILE VILLAGE,

a Limited Partnership, Petitioner

vs.

THE CITY OF CARPINTERIA, Respondent

ON PETITION FOR WRIT OF CERTIORARI TO THE

SECOND APPELLATE DISTRICT, DIVISION SIX,

COURT OF APPEAL FOR THE STATE OF CALIFORNIA

PETITION FOR WRIT OF CERTIORARI

Petitioner, SANDPIPER MOBILE VILLAGE, a

Limited Partnership, prays that a writ of

certiorari issue to review the decision and

judgment of the Second Appellate District,

Division Six, Court of Appeals for the State

of California, filed on October 15, 1992, in

the case of Sand er Mobjle Village v. Ci

f Car te , 2nd Civ. App. B-058435. A

timely petition for the discretionary review

of the Supreme Court of the State of

California was denied on February i11, 1993.

OPINIONS BELOW

The decision of the Second Appellate

District, Division Six, Court of Appeal for

the State of California, whose Judgment is

here sought to be reviewed, was issued on

October 15, 1992, and is reported at 10

Cal.App.4d 542, 12 Cal.Rptr.2d 623 (1992),

a copy of which appears in Appendix A to

this Petition.

The discretionary review of the

California Supreme Court was sought by

Petitioner, and denied on February 11, 1993.

A copy of the Order of the California

Supreme Court denying the Petition for

Review in this case appears in Appendix B to

this Petition, and Remittitur Notice was

issued on February 16, 1993, finalizing the

decision, a copy of which appears in

Appendix C to this Petition.

The Superior Court of the State of

California for the County of Santa Barbara,

dismissed said case pursuant to a Motion for

Judgment on the Pleadings, filed by the

defendant City on or about November 12,

1990, issuing its ruling by Minute Order,

and an Order Granting Judgment on the

Pleadings was entered on March 19, 1991. A

copy of this court's Order is located in

Appendix D to this Petition.

JURISDICTION

The jurisdiction of this court is

invoked under 28 U.S.C. Sec. 1257, The

action of the California Supreme Court on

the timely Petition for Discretionary Review

resulting in a denial of said review on or

about February 11, 1993, forms the basis for

this Petition.

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

The Fifth Amendment to the _ U.S.

Constitution provides in pertinent part:

No person shall .. . be deprived

of... . property, without due process

of law; nor shall private property be

taken for public use, without just

compensation.

California Constitution

The California Constitution, Article I,

Sec. 19, provides:

Private property may be taken or

damaged for public use only when just

compensation, ascertained by a jury

unless waived, has first been paid to,

or into court for, the owner. The

Legislature may provide for possession

by the condemnor following commencement

of eminent domain proceedings upon

deposit in court and prompt release to

the owner of money determined by the

court to be the probable amount of just

compensation.

The Carpinteria Ordinance

On or about April of 1985, the City of

Carpinteria passed a rent control Ordinance,

incorporating prior Ordinances, a copy of

which Ordinance was attached to Petitioner's

Complaint, and a copy of which appears in

Appendix E to this Petition. The Ordinance

became effective as to the Petitioner after

the City annexed the property upon which the

mobilehome park was located in 1987. The

Ordinance precludes spaces rental increases

at the time of the sale or transfer of a

mobilehome located within the park. The

Ordinance has been amended several times

since first enacted, and was specifically

amended to apply to annexed mobilehome parks

on October 26, 1987. The most recent

amendment to the Ordinance occurred on

August 28, 1989.

This restriction on rent increases at

the time of transfer of ownership of a

mobilehome park remaining in place in a park

——

is referred to as "vacancy control."

California Statutes

The California Mobilehome Residency Law

(Cal. Civ. Code §§ 798 et 6¢eq.),

specifically §§ 798.55, 798.56 & 798.74,

protect tenants from eviction from a

mobilehome park and require the approval of

a purchaser of a mobilehome that will remain

in the park if the purchaser has the

financial ability to pay the rent and does

not have a prior tenancy history indicating

he or she will not comply with the rules and

regulations of the park. (Pertinent

portions of Cal. Civ. Code §§ 798 et seq.

are set forth in Appendix F to this

Petition).

7 .

STATEMENT OF CASE

This Petition seeks review of the

California Court of Appeal, Second Appellate

District, Division Six's Opinion denying an

unconstitutional regulatory taking of

property results from vacancy control in

mobilehome park rent control ordinances, and

further denied Petitioner's claim that the

Ordinance violated substantive due process.

PROCEDURAL BACKGROUND

AND HOW THE FEDERAL QUESTIONS AROSE

The Complaint

The Petitioner filed suit in Santa

Barbara County Superior Court on or about

July 21, 1989, challenging the

constitutionality of City of Carpinteria's

mobilehome rent control Ordinance on the

basis that the inability of the plaintiff

parkowner to raise rents on a space at the

time a mobilehome is sold in-place effects

a taking of property by allowing the

outgoing tenant to sell along with his or

her trailer the right to occupy the space at

less than market rents, for which a

quantifiable premium is received by the

outgoing tenant representing the value of

the right to occupy and for which the

landlord parkowner receives nothing. The

Complaint sought compensation for’ the

alleged taking under California State

Constitution, Article 1, Section 19.

Plaintiff also sought declaratory and

injunctive relief against further

enforcement of the Ordinance, attorney's

fees under California Code of Civil

Procedure, §1036. (Comp. Santa Barbara

Superior Court Case No. 177809).

Subsequent Proceedings at Trial

Court Level

After an unsuccessful demurrer and

motion to strike, the City of Carpinteria

filed its Answer to the Complaint on or

about December 29, 1989. The case proceeded

with discovery and was "at issue" when the

California Fourth Appellate District,

Division One, filed its decision on October

31, 1990, in the case of Yee v. City of

Escondido (1990) 224 Cal.App.3d 1349, 274

Cal.Rptr. 551.

Thereafter the City filed and served its

Motion for Judgment on the Pleadings which

was ultimately granted as aforesaid.

The Appeal

Petitioner timely appealed the adverse

judgment to the Second Appellate District

Court of Appeals of the State of California.

On appeal, the appellate court, after

decision by the United States Supreme Court

in Yee v. City of Escondido, (1990) 224

Cal.App.3d 1349, 274 Cal.Rptr. 551,

permitted rebriefing to argue the issue of

regulatory taking and violation of

substantive due process under the Fifth and

Dictate

Fourteenth Amendments to the United States

Constitution. Petitioner argued that the

effect of the rent control Ordinance with

vacancy control was an unconstitutional

taking under both the California

Constitution and the Fifth and Fourteenth

Amendments to the United States Constitution

and that this taking was a _ regulatory

taking, and at one and the same time further

violated the substantive due _ process

requirements of the Fourteenth Amendment.

- 10 -

THE STATE COURT OF APPEAL DECISION, THAT

THE FORCED TRANSFER OF THE "PREMIUM VALUE"

FROM LANDLORD TO TENANT, WHICH PREMIUM

REPRESENTS THE RIGHT TO OCCUPY THE SPACE

AT REDUCED RENT, DOES NOT CONSTITUTE A

TAKING, I8 IN ERROR.

A. THE GOVERNMENTAL REGULATION OF PROPERTY

RIGHTS MUST SUBSTANTIALLY ADVANCE A

LEGITIMATE STATE INTEREST: OTHERWISE,

THE REGULATION CONSTI Es AKING.

we have required that the

regulation "substantially advance” the

"legitimate state interest" sought to

be achieved, not that "the State ‘could

ationa av e ' the measure

adopted might achieve the State's

objective."

Nollan v. California Coastal] Comm. (1987),

483 U.S. 825, 835, fn. 3 (internal citations

omitted; emphasis in original).

: -il-

The substantial advancement test is more

than a pleading requirement. (Nollan,

supra, 483 U.S. at 841). It means, at the

least, that as a matter of fact the

Ordinance substantially advance the end

intended, not that some hypothetical

legislator can posit a scenario in which it

might accomplish the stated purpose.

B. THERE I8 NO LEGITIMATE GOVERNMENTAL

NTERES RVE VACANC ONTRO

PORTION OF THIS STATUTE.

The vacancy control provisions of the

Ordinance serve no legitimate governmental

interest. To the extent that rents are not

allowed to be raised at the time of the sale

of a coach, the logic of a rent control

scheme within the context of a mobilehome

park setting demonstrates that there are

three potential justifications: (1) to

preserve low and moderate housing

opportunities; (2) to protect the tenant's

- 12 -

investment in a depreciating asset; (3) to

protect the tenant from "distress sales"

caused by rent gouging.

Ze The Transfer Of The Right From The

Appellant To The Tenants To Receive

Compensation For Selling The Right to Occupy

in Perpetuity at Reduced Rates Does Not

Serve a Legitimate Governmental Interest.

In a string of consistent decisions, the

Court has held in effect that it is illegal

to take from A to give to B. Calder v.

Bul], 3 U.S. (3 Dall.) 386, 388, 1 L.Ed. 648

(1798), Hawaii Housing Authority v. Midkiff,

467 U.S. 229 (1984).

This massive, gratuitous, transfer of

wealth from parkowners to tenants without

compensation to the parkowners is precisely

a demonstration of that kind of "out and out

plan of extortion" condemned in Nollan v.

California Coastal Comm,, 107 S.Ct. at 3148.

-13-<

As the dissent recognized in Pennell v.

City of San Jose, 485 U.S. 1 (1988):

The politically attractive feature

of regulation is not that it permits

wealth transfers to be achieved that

could not be achieved otherwise; but

rather that it permits them to be

achieved "off budget", with relative

invisibility and thus relative immunity

from normal democratic processes.

Pennell], supra, 485 U.S. 1, 22 (1988).

The wholesale transfer of the

parkowner's rights to tenants in this case

goes "beyond the verge of the law" and

constitutes a taking.

=- 14 -

2. The Alleged Purpose of Protecting

a Tenant's Investment in a Depreciating

Hobilehome by Creating for the Tenants an

Alienable Interest in Appellant's Land to

Make Up for the Loss Experienced by Way of

Depreciatio a Not a Legitimate

Governmental Interest.

a. It is Not Possible to Stop A

Wasting Asset From Depreciating.

Appellant is prepared to prove at trial,

through the use of expert testimony, that

the coaches, which are wasting assets,

inevitably must depreciate in value. Since

the Nollan test is that a given governmental

regulation must "substantially advance 4&4

legitimate governmental purpose," the

underlying assumption has to be that the

urpos actua chieved. It is not

economically possible to eliminate

depreciation of a wasting asset, thus, the

goal cannot be achieved. The claim that

- 15 -

the Ordinance is protecting the tenant's

"investment" is nothing but a disguised call

for expropriation of the underlying land

values to compel the parkowner to act as an

insurer, to insure that the tenant will

recover every dollar that the tenant put

into an unwise investment choice, i.e., a

depreciating asset.

b. There Is No More "Investment" in a

Used Coach than There is in a Used Car.

(1) Mobilehomes Deprecijate.

What the City Ordinance seeks to

accomplish is to reverse the law of

economics with respect to personal property

and somehow protect an alleged “investment”

in an asset that depreciates year by year.

An observation by Hirsch’ that

mobilehomes depreciate with age simply

, Hirsch & Hirsch, Legal-Economic

Analysis of Rent Controls in a Mobilehome

Context: Placement Values and Vacancy

Decontro], 35 UCLA L.Rev. 399 (1988)

- 16 -

confirms the inescapable economic

conclusion--personal property (except for

collectibles) is a wasting asset that

depreciates with age.

While mobilehomes, in place in a park,

can frequently rise in price, they do s0 as

Hirsch notes, "due to the rising value of

the landlord's property."

Coaches do not increase in price over

time, but land appreciates, and:

[Wjhen rent controls are imposed,

the value of coaches owned by sitting

tenants increases. This increase

results from the capitalization of the

rent control ordinance which has reduced

pad rents for the foreseeable future.

Supra, 35 U.C.L.A. L.Rev. 399, at 425.

(2) Loss of Value of a Depreciating

Coach Should Fall on the Coach Owner and

—_——-

Not the Parkowner.

As recognized by J. Holmes:

- i7 «

——— ees”:

In general it is not plain that

a man's misfortunes or necessities

will justify his shifting the damages

to his neighbor's shoulders...

The question at bottom is upon whom

the loss .. . should fall.

Pennsylvania Coal Co. v. Mahon, 260 U.S.

393, 416 (1922).

Here the conduct of the parkowner is

unrelated to the depreciation being

experienced by the coach. There is simply

no basis for imposing upon the parkowner

the obligation to cure a problem for which

the parkowner is not responsible.

Only those burdens caused by some aspect

of property or its use can be allocated

fairly to the owner. By the rationale of

the harms test, when the property itself

causes harm, regulation may be undertaken to

ameliorate the harm caused. (See Goldblatt

v. Hempstead, 369 U.S. 590, 594-95 (1962)).

- 18 -

C. THIS ORDINANCE DOES NOT SUBSTANTIALLY

ADVANCE A LEGITIMATE GOVERNMENTAL

INTEREST.

i. The Purpose is Not Public:

The only people who benefit under the

rent control Ordinance to the extent that

it prohibits vacancy decontrol, are those

residents present in the mobilehome park at

the time that the Ordinance is enacted.

The purpose of the legislation is, thus, a

private purpose.

Within the taking context, any exercise

of the police power must "substantially

advance" a legitimate state interest.

(Nollan and Keystone Coa], cited supra).

There must be a close fit between the

measure's objective and the means chosen to

implement it. When there is a lack of nexus

between the condition imposed and the

purpose of the legislation, it will be

- 19 -

constitutionally deficient. (Nollan, supra,

483 U.S. 825, 834-37.

2. The Purpose of Preserving Low and

Moderate Income Housing Opportunities is

Not Served by Vacancy Control.

The Court’ will look beyond the

legislative reference to its purpose, and

determine if the purpose is actually served.

(See Chastleton v. Sinclair, 264 U.S. 542

(1924)).

Hirsch opined that the actual cost of

occupancy to the incoming tenant could be

more than it would be under free market

conditions or with the existence of vacancy

dGecontrol. (Supra, 35 U.C.L.A. L.Rev. 399,

at 448, and fn. 140).

- 20 -

3. Vacancy Control Overburdens Park

Owners and Does Not Substantially Advance

the Governmental Purpose _ of Protecting

Present or Prospective Tenants Against

Predatory Landlords or Forced Sales at

Distressed Prices.

The operative effect of the Carpinteria

Ordinance can be written thusly:

In order to protect some present tenants

against rent gouging by some parkowners

which would reduce the sales price of their

coach below Blue Book value, al] tenants are

hereby given a possessory estate in their

respective pads which they can sell for a

multiple of the worth of their coach, and

thereafter forever burden the space with the

additional cost of the premium value thus

received by the departing tenant.

- 21 -

a. The Carpinteria Ordinance Does

Not Protect Prospective Purchasers.

The evil against which the Ordinance

presumably protects is the gouging of some

tenants by some parkowners. The Ordinance

does nothing, however, to prevent price

gouging by present tenants to the harm and

disadvantage of incoming tenants.

b. The Ordinance Assumes the

Existence of Predatory Landlords, a Question

of Fact Which Remains to be Decided and Will

Not Withstand Analysis.

While there are anecdotal speculations

on the subject, the only economic analysis

of the actual operation of rent controls in

a mobilehome context is that conducted by

the authors Hirsch, supra.

In that study, which examined 40

California cities, and included information

on over 344 coach sales of which 40% were

located in municipalities covered by rent

- 22 ~

control, the authors examined the phenomenon

of "placement value." Placement value is

the excess of the sales price of a coach on

the pad over the combined cost of an

equivalent coach in a _ showroom, plus

transportation and hookup costs. (Supra, 35

U.C.L.A. L.Rev. 399, at 426, 440).

4. There Are Other Remedies.

We therefore need to know

. « . the availability and effectiveness

of other less drastic protective steps.

Goldblatt v. Town of Hempstead, 360 U.S.

590.

To protect the tenants against distress

sales, the Ordinance can simply provide that

if the owner is the purchaser, the owner

shall pay no less than the Blue Book value

(which represents the only value owned by

the tenant).

Further, the end can be achieved by

simply establishing that rents will not

- 23 -

exceed fair market rents in non-rent-

controlled jurisdictions at the time of

turnover and the real harm is isolated,

subjected to the focus of the legislation,

and will not be the functional equivalent

of shooting at a flea with an elephant gun.

5. The Ordinance Does Not

Substantially _Advance the Posited

Governmental Purpose of Protecting the

Tenant's Investment in a Wasting Asset in

hat acks the Re "Close Fit" to

Satisfy Constitutional Standards.

(a) The Conduct of the Landlord Is

Unrelated to the Decline a Deprecia

Personal Property Asset.

There is a lack of nexus between the

perceived harm, i.e., loss on a wasting

asset and the remedy - wholesale transfer

of rights in Appellant's real property. It

lacks the requisite "close fit."

The Ordinance has the effect of

compelling the landowner to act as an

insurer of the tenant's decision to invest

in a wasting asset. The conduct of the

landlord is unrelated to the decline that

the coach will inevitably experience, and

the lack of that relationship precludes the

imposition of the substantial property

burdens that the Ordinance effects.

The Court has repeatedly observed that

the purpose of the Fifth Amendment is:

{T]o bar government from forcing

some people alone to bear a public

burden which, -in all fairness and

justice, should be borne by the public

as a whole.

Armstrong v. United States, 364 U.S. 40, 49

(1960).

Nollan proclaims that certain methods

may not be employed to achieve even the

worthiest of government goals.

- 25 -

The Commission may well be right

that [acquiring coastal access) is a

good idea, but that does not establish

that the Nollans (and other coastal

residents) alone can be compelled to

contribute to its realization.

Nollan, supra, 483 U.S. at 841.

(b) The Ordinance Works An Unduly

Oppressive Result Upon the Landowner By

Creating Estates in Land to Protect Against

an Occasional (And Hypothetical) Predatory

Landlord.

It is, of course, implicit in

Goldblatt that a use restriction on

real property may constitute a taking

- « « dif it has an unduly hareh

impact upon the owner's use of the

property.

Penn Centra] at 128.

The Court in Agins v. Tiburon, 447 U.S.

255 (1980) cited Euclid as the "seminal

- 26 -

decision" on the need to balance public

benefit against private loss. (447 U.S. 255

at 261).

Lawton v. Steele condemns as violative

of due process an Ordinance which is "unduly

oppressive upon individuals." (152 U.S. 133

(1894) at 137).

The "too far" test provides an

independent measure of when a regulation

becomes a taking. The “unduly

oppressive" phrase in the substantive

due process test, on the other hand, is

an important part of the means analysis.

The regulation is only "unduly

oppressive" if it uses means that are

more restrictive than necessary to

accomplish the purpose.

57 Wash. L. Rev. 715, fn. 15.7.

- 27 =

II.

THE WHOLESALE TRANSFER BY REGULATION OF

THE PARKOWNER'S RIGHTS I8 A REGULATORY

TAKING UNDER TRADITIONAL REGULATORY

TAKINGS ANALYSIS.

In evaluating the constitutional

propriety of a regulation within a taking

context, the Court will employ a standard

of review of "heightened scrutiny." Nollan

4 a ° a_ Coasta ommiss °

A. THE CHARACTER OF THE GOVERNMENTAL ACTION

EAT LIENAB H

PARKOWNER'S LAND ON BEHALF OF TENANTS

WHICH SLICES THROUGH THE ENTIRE BUNDLE

OF RIGHTS OF USE, POSSESSION AND

8POS8 °

A tri-part test was established by the

Court in Penn Centra] v. New York City, 438

U.S. 104 (1978). The Court in conducting

its ad hoc inquiry to determine if there is

a regulatory taking will consider: (1) the

- 28 -

character of the governmental action; (2)

the economic impact; and (3) whether the

regulation has interfered with distinct

investment-backed expectations. Penn

Central, supra, at 123-24.

Property ownership carries with it a

bundle of rights, including the right to

"possess, use and dispose of it." United

States v. General Motors Corp., 323 U.S.

373 (1945) and Loretto v. Teleprompter

Manhattan CATV Corp,., 458 U.S. 419 (1982).

Each of those basic rights is

compromised by the Ordinance, either acting

alone, or in concert with the State

Mobilehome Park Residency Law.

se © oper s Lost:

As noted by Justice Holmes in

Pennsylvania Coal _v. Mahon, what makes the

right to mine coal valuable is that can be

exercised with a profit. Equally, what

makes the right to own a mobilehome park

- 29 -

valuable, is that it can be exercised with

a profit in the nature of rents. The use

of the property, as income property, is the

ability to collect the rents. The outgoing

tenant collects a substantial portion of the

rents in advance.

Possession is Lost:

The Ordinance, in conjunction with the

state law, effectively transfers possession

to the present tenants for as long as they

choose to remain, and to the designated

purchaser of that tenant's interest at the

time of the sale of the coach. |

The Right of Disposition Has Been Lost:

There has been an effective transfer of

control over the reversionary interest of

the Appellant and, as noted by Chief Justice

Rehnquist in Fresh Pond, supra, 464 U.S.

875:

What has taken place is a

transfer of control over the

- 30 -

reversionary interest retained by

appellant. This power to exclude is

"one of the most treasured strands

in an owner's bundle of property

rights."

B. THE ECONOMIC IMPACT OF THE ORDINANCE I8

A FORCED TRANSFER TO THE TENANTS

COLLECTIVELY OF, AMONG OTHER PROPERTY

INTERESTS, ALL THE APPRECIATION IN THE

FROM TIME OF THE PASSAGE OF

ORDINANCE UNTIL SALE OF A COACH, AND ALL

THE APPRECIATION OF THE POTENTIAL OF THE

OM THE TIME OF SALE INITY.

In this case the City's Ordinance,

either standing alone or in conjunction with

state law, transferred the right to all

appreciation, the right to enter into a

long-term lease at a reduced rate for

compensation, the right to determine who

will be the lessee, the right to determine

the length of the lease, the right to

= 31 -

iii

determine the amount of rental under the

lease to present tenants. Effectively, the

remainder interest has been expropriated in

favor of the tenants, and they can cash in

on it.

C. INVESTMENT BACKED EXPECTATIONS, BASED

IN SUBSTANTIAL PART ON APPRECIATION AS

A_COMPONENT OF RETURN, ARE EVISCERATED

BY THE TRANSFER OF ALL APPRECIATION TO

TENANTS.

The Supreme Court has long held that the

frustration of an owner's "distinct

investment-backed expectations" is

sufficient grounds for finding regulatory

takings. (See Kaiser Aetna, 444 U.S. 164,

(1979); Ruckelshaus v. Monsanto Company, 467

U.S. 986 (1984); Hodel v , 41 U.S.

704).

The Appellant has suffered substantial

interference with its reasonable investment-

backed expectations. Appellant's rents have

- 32 <-

been fixed at below market rates, and all of

the appreciation of the property from the

time of the enactment of the Ordinance has

been effectively transferred to the tenant

or the tenant's successor, which the

departing tenant is empowered to fully

realize by way of a premium received upon

the sale of a coach.

IItI.

THE ORDINANCE FAILS TO SATISFY

SUBSTANTIVE DUE PROCESS IN THAT:

(1) IT DOES NOT SERVE A VALID PUBLIC

PURPOSE; (2) THE MEANS CHOSEN TO

ACCOMPLISH THE DECLARED ENDS ARE

NOT REASONABLY NECESSARY; AND (3)

THE ORDINANCE WORKS AN UNDULY

OPPRESSIVE RESULT UPON A MINORITY

OF LANDOWNERS IN THE CITY OF

CARPINTERIA.

- 33 -

A. THE MEANS CHOSEN TO ACCOMPLISH THE

ECLARED NDS RE oT ASONAB

NECESSARY AND WORK AN UNDULY OPPRESSIVE

RESULT UPON APPELLANT.

While it is correct that the Court

grants great deference to legislative

decisions in economic matters in general

and in rent control in particular, see,

e.g., Pennell v. City of San Jose, supra,

if the action is arbitrary the due process

Clause will be invoked when validate

provisions of an Ordinance that are

rationally related to a legitimate

governmental purpose. See, e.g., Cleburne

v. Cleburne Living Center, 413 U.S. 432

(1985), Moore ast veland, 431 U.S.

494 (1977).

It is plain that the purpose of

preserving low and moderate income housing

is not served by the Ordinance. Equally,

the means chosen, i.e., to preserve the

- 34 -

| oe

tenant's "investment" in a depreciating

asset by granting the tenant an alienable

interest in the land is not reasonably

necessary to the accomplishment of the goal

of protecting the investment. Rather, as

Goldblatt v. Hempstead and Lawton v. Steele

hold, the massive transfers of wealth in the

land of the Appellant to serve at best a

marginal loss of "investment" by the tenants

(in the case of vacancy decontrol, the

tenant has already made the decision to

move, his maximum loss is the cost of moving

the coach deducted from its value as a coach

off the pad) works an unduly oppressive

result upon the minority of landowners.

WHY THIS WRIT SHOULD BE GRANTED

This Court invited the California courts

to first address the issue of regulatory

taking within this context. The California

courts have done so and failed to find a

regulatory taking in violation of federal

- 35 -

constitutional principles. The important

questions of federal law presented here have

never been ruled on by this Court. (Rule

10(c)).

IN CONCLUSION

Petitioner requests this Court to grant

their Petition for Review.

Respectfully submitted,

ROBERT J. JAGIELLO, ESQ.

BERT J

Attorney

IELLO,

Petitioner

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE

OF CALIFORNIA, SECOND APPELLATE

DISTRICT, DIVISION SIX

SANDPIPER MOBILE VILLAGE, 2nd Civ. No.

etc., B058435

Plaintiff-Appellant, (Super. Ct.

No. 177809)

Vv. (Santa

Barbara

CITY OF CARPINTERIA, etc., County)

Defendant-Respondent.

FILED OCTOBER 15, 1992, JOSEPH A. LANE,

CLERK.

Here we uphold the’ rent’ control

ordinance of the City of Carpinteria

because: (1) it does not exect a

compensable physical taking of the property

of appellant, Sandpiper Mobile Village (Yee

v. Escondido (1992) 503 U.S. (118

L.Ed.2d 153, 112 S.Ct. }), (2) it is

rational and serves a legitimate public

purpose and therefore does not violate

substantive due process, and (3) on its face

it validy regulates mobilehome rent.’

We do not consider its validity as

applied because Sandpiper did not allege

requisite facts in its complaint to raise

this issue.

BACKGROUND AND CONTENTIONS

Sandpiper owns and operates a mobilehome

park in Carpinteria. By judgment on the

pleadings, the trial court denied

Sandpiper's challenge to the

constitutionality of Carpinteria's

mobilehome park rent stabilization

Ordinance. We affirn.

We review this judgment by the same

standards we use to review a judgment

All future references to the rent

control ordinance are to City of

Carpinteria's Ordinance No. 371 readopting

its Ordinance No. 287 which readopts

chapter 5.69 of the Carpinteria Municipal

Code.

entered after the sustaining of a demurrer

without leave to amend. (See 6 Witkin, Cal.

Procedure (3d ed. 1985) Proceedings Without

Trial, § 263, pp. 564-565.)

We deem true all material and properly

pleaded facts, however we may not consider

opinions, contentions, deductions or

conclusions’) of fact or law alleged.

(Casella v. City of Morgan Hil] (1991) 230

Cal.App.3d 43, 48, cert. den. ___ U.S.

(118 L.Ed.2d 387, 112 S.Ct. 1665); Agins v.

Tiburon (1980) 447 U.S. 255, 259, fn. 6.)

The maximum site rent allowed under the

ordinance is the sum of the rent in effect

on July 1, 1979, increased by 75 percent of

the ratio of change in the Consumer Price

Index. The ordinance permits a park owner

to apply for additional rent increases to

ensure a just and reasonable return on

investment. No provision in the ordinance

permits park owners to immediately increase

rent charged to incoming residents.

Sandpiper alleges that the ordinance

unconstitutionally "prevents plaintiff from

raising rents to market levels upon sale or

other transfer of a unit .. ." Sandpiper

states: "The application of the Rent

Control Ordinance to plaintiff results in

enabling the tenants to monetize the rent

savings upon the sale of their mobile homes

to third parties," which "constitutes an

impermissible transfer of wealth by the

defendant to the departing tenants in

violation of California Constitution,

Article I, § 19.°

Sandpiper also asserts the ordinance is

irrational and serves no legitimate

Article I, section 19 reads, in

pertinent part, that "[p)rivate property

may be taken or damaged for public use

only when just compensation .. . has

first been paid to... the owner."

—

governmental purpose to preserve low or

affordable housing because it enables

departing tenants to sell their mobilehome

for a premiun.

Sandpiper alleges that City's ordinance

"has had the effect of depriving the

plaintiff of all use and occupancy of its

real property in the spaces occupied by

tenants, except a greatly reduced income

stream, and granting to the tenants. . .

the right to physically permanently occupy

and use the real property of plaintiff at

reduced rentals." Sandpiper cites Hall v.

City of Santa Barbara (9th Cir. 1986) 833

F.2d 1270, to support its position that the

ordinance exacts a physical taking of its

property.

Sandpiper states that "(t]he tenants

. . . have used [their] power and ability on

many occasions, to sell the rights of use

and occupancy of plaintiff's real property

A-5

at reduced rentals, which have been

transferred to .. . tenants by operation

and enforcement of the Rent Control Law."

DISCUSSION

Sandpiper argues that enforcement of

this ordinance constitutes a physical taking

of its property because it transfers the

right to market rents from the park owner to

the tenants who obtain a premium for the

sale of their coaches in the rent controlled

park. (Hall v. City of Santa Barbara,

supra, 833 F.2d 1270; accord Pinewood

Estates v. Barnegat Tp. Levelling Bd. (3d

Cir. 1990) 898 F.2d 347.) Carpinteria

contends that its rent control ordinance is

a constitutional economic regulation which

does not exact a per se physical taking.

(Yee v. City of Escondido (1990) 224

Cal.App.3d 1349, affd. Yee v. Escondido,

supra, 118 L.Ed.2d 153; Casella v. City of

Morgan Hill, supra, 230 Cal.App.3d 43.)

During the pendency of this appeal, the

United States Supreme Court issued its

opinion in Yee, supra, a case very similar

to this one. The Supreme Court held that

"(Tojn their face, the state and local laws

at issue here merely regulate petitioners'

use of their land..." (Yee v. Escondido,

supra, 118 L.Ed.2d at p. 166.) The High

Court stated that "no government has

required any physical invasion" of a park

owner's property. (Id., at p. 165.) The

Supreme Court stated that "[t)he government

effects a physical taking only where it

requires the landowner to submit to the

physical occupation of his land." (Ibid.,

emphasis in text.) On their face, these

laws do not compel a park owner to continue

renting his or her property to tenants,

therefore they do not require compensation,

per se. (Ibid.)

A-7

The Yee court also rejected the

contention that because the ordinance

transfers wealth from park owners to

incumbent tenants a physical invasion

occurs. (Yee v. Escondido, supra, 118

L.Ed.2d at p. 167.) The High Court

explained that no physical taking occurs

regardless of "[w)jhether the ordinance

benefits only current mobile home owners or

all mobile home owners..." (Ibid. )

| Furthermore, a park owner is not

entitled to compensation for a physical

taking because of the inability to choose

incoming tenants. (Yee v. Escondido, supra,

118 L.Ed.2d at p. 167.) The landowner still

retains a number or choices. As in Yee,

Sandpiper voluntarily rents its land to

tenants. (Ibid.) Under the _ State

Mobilehome Residency Law, a park owner is

entitled to change the use of his land by

evicting his tenants with six or twelve

months' notice. (Id., at p. 165; Civ. Code

§ 798.56, subd. (g).)

Sandpiper, like Yee, fails to establish

a physical taking "because there has simply

been no compelled physical occupation giving

rise to a right to compensation..." (Yee

v. Escondido, supra, 118 L.Ed.2d at p. 168;

FCC v. Florida Power Corp. (1987) 480 U.S.

245).

Substantive Due Process

Sandpiper alleges that "the Ordinance 5

irrational and . . . does not serve a

legitimate governmental purpose of

preserving low or affordable housing,"

because it enables tenants to sell their

mobilehomes at premiums thereby "burdening

the space with the need to pay the

additional premiun."

California courts have previously upheld

such rent control provisions as legitimate,

rational exercises of the police power

A-9

because they are "'reasonably calculated to

eliminate excessive rents and at the same

time provide landlords with a just and

reasonable return on their property.'

(Citation.]" (Casella v. City of Morgan

Hill, supra, 230 Cal.App.3d at p. 56.)

In readopting its 1980 rent

Stabilization ordinance, the extending

ordinance stated that "said Chapter...

has proven to be an effective and beneficial

program for the people of Carpinteria..."

(City of Carpinteria Ord. No. 371.) It is

not our role to second-guess this

legislative determination. (Casella v. City

of Morgan Hill, supra, 230 Cal.App.3d at p.

52, and see pp. 51-54, 56-67.)

Sandpiper argues that the premium

received by tenants upon the sale of their

mobilehomes "is one that otherwise could be

sold by the park owner plaintiffs, in the

process of negotiating a liong-term lease

A-10

with a new tenant..." It further argues

that although this premium is exempt from

rent control, it provides the tenant with a

long-term security and usually a reduced

rent. California property law, however,

"considers leasehold value the property of

the tenant, not the landlord. [Citations.)"

(Casella v. City of Morgan Hill, supra, 230

Cal.App.3d at p. 55.)

The regulation of rent in a_ scarce

housing market is a public policy matter to

be determined by the Legislature. (Casella

v. City of Morgan Hill, supra, 230

Cal.App.3d at p. 57; see also Carson

Mobilehome Park Owners' Assn. v. City of

Carson (1983) 35 Cal.3d 184, 189, fn. 4.)

The ordinance here is constitutional.

Requlatory Taking As Applied

"On their face, the state and local laws

at issue here merely regulate petitioners'

use of their land by regulating the

A-1l

relationship between landlord and tenant."

(Yee v. Escondido, supra, 118 L.Ed.2d at p.

166, emphasis in text.) The Supreme Court

has admonished that "'the constitutionality

of statutes ought not be decided except in

an actual factual setting that makes such a

decision necessary..'" (Pennel] v. San Jose

(1988) 485 U.S. 1, 10; and see Williamson

Planning Comm'n v. Hamilton Bank (1985) 473

U.S. 172, 190, referring to Hodel v.

Virginia Surface Min. & Recl. Assn. (1981)

452 U.S. 264, Agins v. Tiburon, supra, 447

U.S. 255, and Penn Central Transp. Co. v.

New York City (1978) 438 U.S. 104.) Whether

a regulation constitutes a taking depends on

such factors as the "economic impact of the

challenged action and the extent to which it

interferes with reasonable investment-backed

expectations. ([Citations.}) Those factors

Simply cannot be evaluated until the

administrative agency has arrived at a

A-12

ial 7

final, definitive position regarding how it

will apply the regulations at issue to the

particular land in question." (Williamson

Planning, supra, at pp. 190-191.) To

determine whether a regulatory taking has

occurred, statutory regulations must be

analyzed by engaging in “'essentially ad

hoc, factual inquiries.'" (Yee v.

Escondido, supra, 118 L.Ed.2d at p. 166,

quoting Kaiser Aetna v. United States (1979)

444 U.S. 164, 175.) Because Sandpiper has

not alleged that it has attempted to change

the use of its park or to apply for rent

increases, its regulatory taking claim is

not ripe. (Yee, supra, at p. 169.)

Facial Challenge

Sandpiper's complaint does not challenge

the ordinance on its. face. In its

supplemental brief to this court filed after

the United States Supreme Court decided Yee,

Sandpiper argues that the ordinance does not

A-13

substantially advance a legitimate

governmental interest no matter how the

ordinance is’ applied. Because this

assertion "does not depend on the extent to

which petitioners are deprived of the

economic use of their particular pieces of

property or the extent to which these

particular petitioners are compensated,

petitioners' facial challenge is ripe."

(Yee v. Escondido, supra, 118 L.Ed.2d at p.

169; see also Fisher v. City of Berkeley

(1984) 37 Cal.3d 644, 654, fn. 3, affd.

Fisher v. Berkeley (1986) 475 U.S. 260.)

City claims that even if the issue is

ripe for adjudication, the statute of

limitations has run. We disagree. City

passed the ordinance at issue in April 1985

and filed its complaint on July 21, 1989.

Sandpiper filed its complaint within the

five-year statute of limitat ons applicable

to the question of whether real property has

A-14

been taken. (Garden Water Corp. Vv.

Fambrough (1966) 245 Cal.App.2d 324, 327-

328; Code Civ. Proc., § 319.)

The Supreme Court "'. ° . has

consistently affirmed that States have broad

power to regulate housing conditions in

general and the landlord-tenant relationship

in particular without paying compensation

for all economic injuries that such

regulation entails.' ([Citations.] When a

landowner decides to rent his land to

tenants, the government may place ceilings

on the rents the landowner can charge, (see,

e.g., Pennell [(v. San Jose), supra, (485

¥.8. at p.) 12, fn. 6) « 2 o®™ (Yee v.

Escondido, supra, 118 L.Ed.2d at p. 166.)

In evaluating whether an ordinance on

its face constitutes the taking of a

landowner's property, the question is

whether the ordinance substantially advances

a legitimate state interest in the public

A-15

welfare. (Nollan v. alifornia

comm'n (1987) 483 U.S. 825; 834; Agins v.

Tiburon, supra, 447 U.S. at p. 261; Euclid

v. Ambler Realty Co. (1926) 272 U.S. 365,

395-397.)

Vacancy control precludes park owners

form raising rents immediately to new

tenants. It is a form of rent control which

courts have held to be legitimate

regulation. (Casella v. City of Morgan

Hill, supra, 230 Cal.App.3d at p. 52.)

Sandpiper contends, however, that under

the ordinance it "has no legal right to

receive any compensation for the rights now

enjoyed by the tenants of the park [i.e.,

the right to obtain a premium on sales)

other than the stream of income from rents

as regulated by the Rent Control Law."

Unless the regulatory ordinance denies

the——property owner substantially all

economically “viable use of [the]) land,"

A-16

there is no compensable taking. Agins v.

Tiburon, supra, 447 U.S. at p. 260; Long

Beach Equities, Inc. v. County of Ventura

(1991) 231 Cal.App.3d 1016, 1038.) Assuming

that Sandpiper's profit is severely reduced,

the complaint fails to meet this test.

"Even where the is a very substantial

diminution in the value of land, there is no

taking." (Long Beach Equities, supra, at p.

1036.)

The instant ordinance recognizes the

need "to provide for a just and reasonable

return to management in all foreseeable

cases" and provides the means to ensure

this. (Carpinteria Mun. Code § 5.600.050.)

In addition to the calculated automatic

annual rent increases, the rent

stabilization board "may adopt an adjustment

to the effective rent schedule up to that

required for a just and reasonable return

- ." (Ibid.)

A-17

The management of a mobilehome park may,

by verified petition, "also apply for a

summary adjustment in the maximum rent based

upon new added substantial cost for a

specific service, tax or assessment or for

a rapidly accelerating and _ substantial

specific cost which has been imposed upon

the mobile home park..." (Carpinteria

Mun. Code § 5.60.050.) The ordinance

provides, inter alia, for non-contested

determinations, joint agreements for maximum

rent, contested hearing and judicial review

of its rent provisions.

California courts have previously upheld

such rent control provisions as legitimate,

rational exercises of the police power,

because they are "'reasonably calculated to

eliminate excessive rents and at the same

time provide landlords with a just and

reasonable return on their property.'

A-18

[Citations.)" (Casella v. City of Morgan

Hill, supra, 230 Cal.App.3d at p. 56.)

Sandpiper argues that under the Nollan

test, supra, this ordinance does. not

substantially advance its purpose of

maintaining low to moderate income housing.

Sandpiper opines that vacancy’ control

improperly shifts to tenants the owner's

"right" to increase rents by enabling

tenants to obtain premium prices for the

sale of their coaches.

This ordinance meets the Nollan test.

It substantially advances a legitimate state

interest. It seeks to remedy an inequitable

market situation caused by the scarcity of

mobilehome sites. It seeks to protect

mobilehome owners' investments, and also to

provide park owners with a reasonable return

on their investment.

Sandpiper argues that the ordinance does

not accomplish its purpose because the high

A-19

Jcisimeseiiiasil

prices a new tenant pays for a mobilehome

coach exceed the benefits the tenant derives

from rent control.

In readopting its 1980 rent

stabilization ordinance, however, the

extending ordinance stated that "said

Chapter . . . has proven to be an effective

and beneficial program for the people of

Carpinteria ..." (City of Carpinteria

Ord. No. 371.)

This legislative determination states a

sufficient nexus between the effect of the

ordinance and the objectives it seeks to

advance. (See Nollan v. California Coastal

Comm'n. supra, 483 U.S. at p. 837.) Under

such circumstances, the manner in which the

City desires to achieve its goal is a

legislative question, not a judicial one.

A-20

The judgment is affirmed. Each side to

bear its own costs.

CERTIFIED FOR PUBLICATIO

We concur:

STONE, P.J.

YEGAN, J.

A-21

Second Appellate District, Division Six,

d No. B058435

S029800

IN THE SUPREME COURT OF THE

STATE OF CALIFORNIA

IN BANK

SANDPIPER MOBILE VILLAGE,

Appellant

¥.

CITY OF CARPINTERIA,

Respondent

SUPREME COURT FILED FEB. 11, 1993, ROBERT

WANORUN, CLERK.

Appellant's petition for review DENIED.

Lucas, C.J. and Panelli, J. are of the

opinion the petition should be granted.

Baxter, J. did not participate.

S/Lucas

Chief Justice

B-22

COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOR THE SECOND APPELLATE DISTRICT

DIVISION SIX

FILED FEBRUARY 16, 1993

Robert J. Jagiello

P.O. Box 879

26620 Kings Court

Lake Arrowhead, CA $2352

Re: Sandpiper Mobile Village

vs.

Carpinteria, City of

2 Civil No. BO058435

Santa Barbara No. 177809

* * REMITTITUR NOTICE * *

Notice is hereby given that_ the

Remittitur Mas been issued this date and

that the opinion, decision and order entered

in the above-entitled cause on 10-15-93 is

now final.

** AFFIRMED IN FULL. **

Each side to bear its own costs.

Joseph A. Lane, Clerk

By: James L. Terry

Deputy Clerk

C-23

APPENDIX )D

eRe gen, Oe Sa ene ae ey ee ae eee

ki dud

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF SANTA BARBARA

SANDPIPER MOBILE VILLAGE, CASE NO.

a Limited Partnership, 177809

Plaintiff, ORDER

GRANTING

Vv. JUDGMENT ON

THE PLEADINGS

CITY OF CARPINTERIA, a

Municipal Corporation, and

DOES 1 through 10,

inclusive,

FILED SUPERIOR COURT OF SANTA BARBARA MARCH

19, 1991, MARY SANDOVAL, DEPUTY CLERK.

The Motion of Defendant City of

Carpinteria for Judgment on the Pleadings

came on regularly for hearing before the

Honorable Bruce WM. Dodds, Judge of the

Santa Barbara Superior Court on November

30, 1990. Phillip Kramer of Jagiello and

Pech appeared as counsel for Plaintiff

Sandpiper Mobile Village and Donald R.

Lincoln of Endeman, Lincoln, Turek & Heater

appeared as counsel for Defendant City of

Carpinteria.

The matter having been argued and

submitted and the Court having determired

that. the Complaint fails to state facts

sufficient to constitute a cause of action

and good cause appearing,

IT IS ORDERED AND ADJUDGED THAT:

(1) The Motion be and hereby is

granted;

(2) The above entitled action is hereby

dismissed with prejudice; and

(3) Defendant City of Carpinteria

recover its costs herein incurred in the

sum of §$ .

DATED: 3-19-91

S/Bruce WM. Dodds

Judge of the Superior Court

APPROVED AS TO FORM:

S/Richard Pech

Richard Pech

Attorneys for Plaintiff

D-25

ORDINANCE NO. 371

AN ORDINANCE OF THE CARPINTERIA

CITY COUNCIL RE-ADOPTING AND

EXTENDING CHAPTER 5.69, AS AMENDED,

OF THE CARPINTERIA MUNICIPAL CODE

RELATING TO MOBILE HOME PARK RENT

STABILIZATION, FOR AN ADDITIONAL

FIVE-YEAR PERIOD

(EXCERPTS)

5.69.040 Maximum rent. ee Formula.

Except as otherwise expressly provided in

this chapter, the maximum rent for each

mobile home space that management of a

mobile home park shall be permitted to

charge shall be as set forth in an effective

rent schedule determined as follows:

The maximum allowable rent shall be

calculated annually and shall be the sum of

the following:

1. The July 1, 1979, rent; and

2. The July 1, 1979 rent times 75% of

the ratio of change in the Consumer Price

Index (C.P.I.).

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B. Effective Rent Schedule. Annually

and as soon as practical after the release

of the C.P.I. for May of each year and using

the July 1, 1979 rent schedules previously

filed for each mobile home park, the city

manager shall make the calculations for each

mobile home park, as provided by Paragraph

A of this Section 5.69.040, and shall file

the same in the city clerk's office as a

rent schedule and mail a copy of the

applicable rent schedule to the management

of each mobile home park, specifying the

maximum rent for each mobile home space.

The rent schedule, if filed before July 1 of

that year shall become effective as of July

1 of that year, or, if not filed until after

July 1, shall become effective as of filing.

5§.69.050 Adjustments. A. ageme

Adjustment. The rents provided by Section

5.69.040 are intended to provide for a just

and reasonable return to management in all

E-27

foreseeable cases. In the event that

management of any mobile home park contends

that the maximum rent as provided by Section

5.69.040 shall not provide a "just and

reasonable" return, management shall file

with the rent stabilization board a verified

petition showing that the strict application

of the formula specified in Paragraph A of

Section 5.69.040 prevents a just and

reasonable return to management and request

for an adjustment of the rent schedule up to

a “just and reasonable" return for that

mobile home park. In the event that the

rent stabilization board finds the strict

application of the formula specified in

Section 5.60.040 does not allow for a "Just

and reasonable" return, then notwithstanding

Paragraph A of Section 5.60.040, it may

adopt an adjustment to the effective rent

schedule up to that required for a just and

E-28

reasonable return pursuant to procedures set

forth in this chapter.

The management of a mobile home park by

verified petition may also apply for a

summary adjustment in the maximum rent based

upon new added substantial cost for a

specific service, tax or assessment or for

a rapidly accelerating and _ substantial

specific cost which has been imposed upon

the mobile home park and which are beyond

the reasonable control of management so as

to allow management to pass through such

cost to the respective tenants of the mobile

home park. In the event such petition is

filed, the rent stabilization board may

allow an adjustment to be based thereon

pursuant to the procedures set forth herein,

or alternatively, it may require management

to file a petition to show that the

presently permitted maximum rent does not

provide a "just and reasonable return."

E-29

B. Tenant Adjustment. Any tenant may

petition the rent stabilization board to

reduce the maximum permitted rent in the

event that management has reduced or limited

any service to a tenant (including any

change in policy with respect to children or

pets), or the tenants of the mobile home

park as a whole that were in effect on July

1, 1979. Such petition shall be verified.

The amount of the reduction shall be the

cost savings to management resulting from

such reduction or elimination of services.

In the event that the rent stabilization

board finds that there has been a reduction

or elimination of service to the tenant or

tenants from and after July 1, 1979, then

notwithstanding Paragraph A of Section

5.60.040, it may adopt an adjustment of the

effective rent schedule to decrease the

amount of the maximum rent allowable in an

amount equal to management's savings by the

reduction of or elimination of such

services.

Any tenant of a mobile home park by

verified petition may also apply for a

summary adjustment of the maximum rent based

upon a deleted substantial cost for a

specific service, tax or assessment or for

a rapidly decreasing and_- substantial

specific operating cost of the mobile home

park s0 as to require management to pass

through the savings of such cost to the

respective tenants of the mobile home park.

In the event such petition is filed, the

rent stabilization board may allow the

adjustment to be made based thereon pursuant

to the procedures set forth herein.

C. Cross Adjustment. In the event that

a petition for an adjustment is filed

pursuant to this Section 5.69.050, the rent

stabilization board may make adjustment in

accordance with both Paragraphs A and B of

this Section 5.69.050 that are brought out

in the hearing and in consideration of the

petition. In the event that any adjustment

shall be made pursuant to this Paragraph C

to this Section 5.69.050, such adjustment

shall not reduce the maximum allowable rent

below a "just and reasonable" return under

all the facts.

D. Conditions of Adjustment. In the

event that the rent stabilization board

shall determine that any adjustment shall be

made pursuant to this Section 5.60.050 then,

in that event, the rent stabilization board

may impose conditions to the adjustment and,

where appropriate, may limit the period of

time of such adjustment. Should an

adjustment be made pursuant to this Section

5.69.050, the rent stabilization board shall

adopt a new effective rent schedule for the

mobile home park giving effect to such

adjustment.

5 .69.130 Maximum rent. Management

shall not request, demand or receive from a

tenant more than the maximum rent set forth

in an effective rent schedule including any

adjustment thereof fixed by the rent

stabilization board.

E-33

CALIFORNIA MOBILEHOME RESIDENCY LAWS

(EXCERPTS)

ARTICLE 6. TERMINATION OF TENANCY

§ 798.55. Protection from actual or

constructive eviction; termination or

refusal to renew; reasons; notice; time:

(a) The Legislature finds and declares,

that because of the high cost of moving

mobilehomes, the potential for damage

resulting therefron, the requirements

relating to the installation of mobilehomes,

and the cost of landscaping or lot

preparation, it is necessary that the owners

of mobilehomes occupied within mobilehome

parks be provided with the unique protection

from actual or constructive eviction afford

by the provisions of this chapter.

(b) The management shall not terminate

or refuse to renew a tenancy, except for a

reason specified in this article and upon

the giving of written notice to the

homeowner in the manner. prescribed by

Section 1162 of the Code of Civil Procedure,

to remove the mobilehome from the park

within a period of not less than 60 days,

which period shall be specified in the

notice. A copy of this notice shall be sent

to the legal owner, as defined in Section

18005.8 of the Health and Safety Code, each

junior lienholder, as defined in Section

18005.3 of the Health and Safety Code, and

the registered owner of the mobilehome, if

other than the homeowner, by United States

mail within 10 days after notice to the

homeowner addressed to the legal owner and

junior lienholder, and the registered owner

at their addresses, as set forth in the

registration card specified in Section

18091.5 of the Health and Safety Code.

§ 798.56. Authorized reasons’ for

termination:

F-35

A tenancy shall be terminated by the

management only for one or more of the

following reasons:

(a) Failure of the homeowner or

resident to comply with a local ordinance

or state law or regulation relating to

mobilehomes within a reasonable time after

the homeowner receives a notice of

noncompliance from the appropriate

governmental agency.

(b) Conduct by the homeowner or

resident, upon the park premises, which

constitutes a substantial annoyance to other

homeowners or residents.

resident for prostitution or a _ felony

controlled substance offense if the act

resulting in the conviction was committed

anywhere on the premises of the mobilehome

park, including, but not limited to, within

the homeowner's mobilehome.

F-36

However, the tenancy may not. be

terminated for the reason specified in this

subdivision if the person convicted of the

offense has permanently vacated, and does

not subsequently reoccupy, the mobilehome.

(da) Failure of the homeowner or

resident to comply with a reasonable rule

or regulation of the park which is part of

the rental agreement or any amendment

thereto.

No act or omission of the homeowner or

resident shall constitute a failure to

comply with a reasonable rule or regulation

unless and until the management has given

the homeowner written notice of the alleged

rule or regulation violation and_ the

homeowner or resident has failed to adhere

to the rule or regulation within seven days.

However, if a homeowner has been given a

written notice of an alleged violation of

the same rule or regulation, on three or

more occasions within a 12-month period

after the homeowner or resident has violated

that rule or regulation, no written notice

shall be required for a subsequent violation

of the same rule or regulation.

Nothing in this subdivision’ shall

relieve the management from its obligation

to demonstrate that a rule or regulation

has in fact been violated.

(e) (1) Nonpayment of rent, utility

charges, or reasonable incidental service

charges; provided that the amount due has

been unpaid for a period of at least five

days from its due date, and provided, that

the homeowner shall be given a three-day

written notice subsequent to that five-day

period to pay the amount due or to vacate

the tenancy. For purposes of this

subdivision, the five-day period does not

include the date the payment is due. The

three-day written notice snall be given to

F-38

the homeowner in the manner prescribed by

Section 1162 of the Code of Civil Procedure.

A copy of this notice shall be sent to the

persons or entities specified in subdivision

(b) of Section 798.55 within 10 days after

notice is delivered to the homeowner. If

the homeowner cures the default, the notice

need not be sent. The notice may be given

at the same time as the 60 days' notice

required for termination of the tenancy.

(2) Payment by the homeowner prior to

the expiration of the three-day notice

period shall cure a default under this

subdivision. In the event the homeowner

does not pay prior to the expiration of the

three-day notice period, the homeowner shall

remain liable for all payments due up until

the time the tenancy is vacated.

(3) Payment by the legal owner, as

defined in Section 18005.8 of the Health

and Safety Code, any junior lienholder, as

F-39

defined in Section 18005.3 of the Health

and Safety Code, or the registered owner,

as defined in Section 18009.5 of the Health

and Safety Code, if other than the

homeowner, on behalf of the homeowner prior

to the expiration of 30 calendar days

following the mailing of the notice to the

legal owner, each junior lienholder, and the

registered owner provided in subdivision (b)

of Section 798.55, shall cure a default

under this subdivision with respect to that

payment.

(4) Cure of a default of rent, utility

charges, or reasonable incidental service

charges by the legal owner, any junior

lienholder, or the registered owner, if

other than the homeowner, as provided by

this subdivision, may not be exercised more

than twice during a 12-month period.

(5) If a homeowner has been given a

three-day notice to pay the amount due or

to vacate the tenancy on three or more

occasions within the preceding 12-month

period, no written three-day notice shall

be required in the case of a subsequent

nonpayment of rent, utility charges, or

reasonable incidental service charges.

In that event the management shall give

written notice to the homeowner in the

manner prescribed by Section 1162 of the

Code of Civil Procedure to remove the

mobilehome from the park within a period of

not less than 60 days, which period shall be

specified in the notice. A copy of this

notice shall be sent to the legal owner,

each junior lienholder, and the registered

owner of the mobilehome, if other than the

homeowner, as specified in paragraph (b) of

Section 798.55, by certified or registered

mail return receipt requested within 10 days

after notice is sent to the homeowner.

(f) Condemnation of the park.

F-41

(g) Change of use of the park or any

portion thereof, provided:

(1) The management gives the homeowners

at least 15 days' written notice that the

management will be appearing before a local

governmental board, commission, or body to

request permits for a change of use of the

mobilehome park.

(2) After all required permits

requesting a change of use have been

approved by the local governmental board,

commission, or body, the management shall

give the homeowners six months' or more

written notice of termination of tenancy.

If the change of use requires no local

governmental permits, then notice shall be

given 12 months or more prior to the

management's determination that a change of

use will occur. The management in the

notice shall disclose and describe in detail

the nature of the change of use.

F-42

(3) The management gives each proposed

homeowner written notice thereof prior to

the inception of his or her tenancy that the

Management is requesting a change of use

before local governmental bodies or that a

change of use requested has been granted.

(4) The notice requirements’ for

termination of tenancy set forth in Section

798.56 and 798.57 shall be followed if the

proposed change actually occurs.

(5) A notice of a proposed change of

use given prior to January 1, 1980, which

conforms to the requirements in effect at

that time shall be valid. The requirements

for a notice of a proposed change of use

imposed by this subdivision shall be

governed by the law in effect at the time

the notice was given.

(h) The report required pursuant to

subdivisions (b) and (i) of Section 65863.7

of the Government code shall be given to the

F-43

homeowners or residents at the same time

that notice is required pursuant to

subdivision (g) of this notice.

§ 798.56a. Notice to management after

receipt of notice of termination by legal

owner and each junior lienholder; right to

sell mobilehome within park:

(a) Within 60 days following receipt,

or not later than 65 days after the mailing,

of the notice of termination of tenancy for

nonpayment, or rent or other charges, the

legal owner and each junior lienholder shall

notify the management in writing of at least

one of the following:

(1) Its offer to sell the obligation

secured by the mobilehome to the management

for the amount specified in its written

offer. In that event, the management shall

have 15 days following receipt of the offer

to accept or reject the offer in writing.

If the offer is rejected, the person or

F-44

icetearreeseeeeeen einen

entity shall have 10 days in which to

exercise one of the other options contained

in this section and shall notify management

in writing of its choice.

(2) Its intention to foreclose on its

security interest in the mobilehome.

(3) Its request that the management

pursue the termination of tenancy against

the homecewner and its offer to reimburse

management for the reasonable attorney's

fees and court costs incurred by the

management in that action.

(b) In the event that the legal owner

or junior lienholder exercises any option

described in paragraph (2) or (3) of

subdivision (a), and has the right to sell

the mobilehome within the park to a third

party in accordance with this article, that

person or entity shall have the right to

keep the mobilehome on the site within the

mobilehome park until it is resold as long

F-45

as the person or entity performs all of the

following acts:

(a) (A) Satisfies, within the time

period specified in subdivision (a), all of

the homeowner's responsibilities and

liabilities owing to the management for the

90 days preceding the mailing of the notice

of termination of tenancy and then continue

to satisfy them as they accrue from the date

of the mailing of that notice until the date

the mobilehome is resold.

(B) Performance under this paragraph

does not cure the default of the homeowner.

"homeowner's responsibilities and

liabilities" means all rents, utilities,

reasonable maintenance charges of the

mobilehome and its premises, and reasonable

maintenance of the mobilehome and its

premises pursuant to existing park rules and

regulations.

F-46

(2) Within the time period specified

in subdivision (a), commences all repairs

and necessary corrective actions so that

the mobilehome complies with park rules and

regulations in existence at the time the

notice of termination of tenancy was given

as well as the health and safety standards

specified in Sections 18550, 18552, and

18605 of the Health and Safety Code, and

completes these repairs and _ corrective

actions within 90 calendar days of that

notice, or before the date the mobilehome is

resold, whichever is earlier.

(3) Complies with the requirements of

Article 7 (commencing with Section 798.70)

as it relates to the transfer of a

mobilehome to a third party.

junior lienholder does not respond to the

notice provided by management by notifying

management in writing of its election

F-47

pursuant to subdivision (a), or does not

satisfy the requirements of subdivision (b),

that person or entity shall have no rights

to sell the mobilehome within the park to a

third party.

(d) In the event the homeowner files

for bankruptcy, the periods set forth in

this section are tolled until the mobilehome

is released from bankruptcy.

(e) Notwithstanding any other provision

of law, including, but not limited to,

Section 18099.5 of the Health and Safety

Code, in the event neither the legal owner

nor a junior lienholder, if any, notifies

the management of its decision pursuant to

subdivision (a) within the period allowed,

or performs as agreed within 30 days, the

management may either remove the mobilehome

from the premises and place it in storage or

store it on its site. In this case,

notwithstanding any other provision of law,

the management shall have a warehouseman's

lien in accordance with Section 7209 of the

Commercial Code against the mobilehome for

the costs of dismantling and moving, if

appropriate, as well as storage, which shall

be superior to all other liens, except the

lien provided for in Section 18116.1 of the

Health and Safety Code, and may enforce the

lien pursuant to Section 7210 of the

commercial code.

(f) All written notices required by

this section shall be sent to the other

party by certified or registered mail with

return receipt requested.

ARTICLE 7. TRANSFER OF MOBILEHOME OR

MOBILEHOME PARK

§ 798.74. Prior approval of purchaser;

grounds for withholding; financial

information; notice of acceptance or

rejection; interview; fee; credit or refund:

F-49

(a) The management may require the

right of prior approval of a purchaser of

a mobilehome that will remain in the park

and that the selling homeowner or his or

her agent gives notice of the sale to the

management before the close of the sale.

Approval cannot be withheld if the purchaser

has the financial ability to pay the rent

and charges of the park unless’ the

management reasonably determines that, based

on the purchaser's prior tenancies, he or

she will not comply with the rules and

regulations of the park. In determining

whether the purchaser has the financial

ability to pay the rent and charges of the

park, the management shall not require the

purchaser to submit copies of any personal

income tax returns in order to obtain

approval for residency in the park.

However, management may require the

purchaser to document the amount and source

F-50

of his or her gross monthly income or means

of financial support.

Upon request of any prospective

homeowner who proposes to purchase a

mobilehome that will remain in the park,

management shall inform that person of the

information management will require in order

to determine if the person will be

acceptable as a homeowner in the park.

Within 15 business days of receiving all

of the information requested from the

prospective homeowner, the management shall

notify the seller and the _ prospective

homeowner. in writing, of either acceptance

or rejection of the application, and the

reason if rejected. During this 15-day

period the prospective homeowner’ shall

comply with the management's request, if

any, for a personal interview. If the

approval of a prospective homeowner is

withheld for any reason other than those

F-51

cman

stated in this article, the management or

Owner may be held liable for all damages

proximately resulting therefrom.

(b) If the management collects a fee

or charge from a prospective purchaser of

a mobilehome in order to obtain a financial

report or credit rating, the full amount of

the fee or charge shall be credited toward

payment of the first month's rent for that

mobilehome purchaser. If, for whatever

reason, the prospective purchaser is

rejected by the management, the management

shall refund to the prospective purchaser

the full amount of that fee or charge within

30 days from the date of rejection. If the

prospective purchaser is approved by the

management, but, for whatever reason, the

prospective purchaser elects not to purchase

the mobilehome, the management may retain

the fee, or a portion thereof, to defray its

administrative costs under this section.

F-52

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.