SMALL PROPERTY OWNERS OF SAN FRANCISCO v. CITY AND COUNTY OF SAN FRANCISCO
Filed 8/9/06
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
| SMALL PROPERTY OWNERS OF SAN FRANCISCO et al., Plaintiffs and Appellants, v. CITY AND COUNTY OF SAN FRANCISCO, Defendant and Respondent. |
A108924
(San Francisco County Super. Ct. No. 406692)
|
Small Property Owners of San Francisco, Jess Pacias, Dan A. Evans, and John Lockley, on behalf of themselves and a class of San Francisco landlords, appeal from a judgment entered after trial. The trial court ruled that an ordinance of respondent City and County of San Francisco (City), which required landlords to pay tenants interest on security deposits at a rate of 5 percent, did not effect a taking under the California Constitution or the United States Constitution. Appellants contend that the court erred in this conclusion and, in reaching its decision, erred in taking judicial notice of credit card interest rates. In addition, appellants argue that the court abused its discretion in requiring them to provide notice of the adverse judgment to class members by mail.
In the published portion of this opinion, we conclude that the ordinance did not effect a taking. In the unpublished portion, we determine that the judgment should be modified in regard to the notice of the judgment to the class. As so modified, the judgment will be affirmed.
I. FACTS AND PROCEDURAL HISTORY Beginning in September 1983, San Francisco Administrative Code section 49.2 (Ordinance) required landlords to pay 5 percent interest to their tenants on tenant security deposits held for more than one year. After interest rates on money market accounts dipped below 5 percent, appellants sued the City.
A. The Complaint
Appellants filed their complaint on April 15, 2002, as a class action on behalf of the owners of one to six residential rental units who, pursuant to the Ordinance, were required to pay tenants 5 percent annual interest on their security deposits. They alleged that, due to state law requiring them to return security deposits within three weeks after termination of the tenancy, landlords had to keep the deposits in money market accounts. The interest rate paid by money market accounts beginning in April 2001 was less than 5 percent. On this basis, appellants contended, the Ordinance worked a taking within the meaning of article I, section 19 of the California Constitution and the Fifth Amendment to the United States Constitution. Specifically, appellants alleged: â€
