Carnahan v. City of Santa Monica
Filed
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF
SECOND APPELLATE DISTRICT
DIVISION FIVE
SCOTT CARNAHAN, Plaintiff and Appellant, v. CITY OF SANTA MONICA, Defendant and Respondent. | B186948 ( Super. |
APPEAL from a judgment of the Superior Court of Los Angeles County.
Ricahrd L. Fruin, Jr., Judge. Affirmed.
Law Offices of Rosario Perry, Rosario Perry, and Jacqueline M. Fabe for Plaintiff and Appellant.
Marsha Jones Moutrie, City Attorney, and Adam Radinsky, Deputy City Attorney, for Defendant and Respondent.
_______________
Plaintiff and appellant Scott Carnahan appeals from the judgment entered in favor of defendant and respondent City of Santa Monica, after the City's motion for judgment under Code of Civil Procedure section 631.8 was granted. We affirm, as we explain:
In September of 1989, Steven and Christine Engle, the owners of a 22-unit apartment building in Santa Monica, received permission from the City to convert the building to condominiums. (
The agreement, titled Agreement Imposing Restrictions on Real Property provides, inter alia, that Unit 2029-B unit is subject to the City's rent control laws, " including section 1803, subdivision (t)," is not subject to the Ellis Act (Gov. Code, § 7080 et seq), and that " Developer hereby covenants and agrees for itself, its heirs, successors and assigns that said Unit 2029-B shall continue to be made available for use as a rental housing unit at all times."
Carnahan bought the unit in 2000. In August 2004, he sued the City for declaratory relief and to quiet title. He alleged that the City wrongly contended that he could not live in the Unit, and sought a declaration that his occupancy was compatible with the Agreement.
Trial was to the court. Carnahan testified that when he bought the unit, the sellers did not tell him that owner occupancy was prohibited. He never saw the Agreement prior to the lawsuit and knew nothing about the restriction until June of 2002, when Steven Engle told him that there was a restriction on the property so that it could not be owner-occupied. Carnahan entered into evidence the Agreement and various sections of the City's Charter. When he rested, the City moved for judgment. (Code Civ. Proc., § 631.8.) The court granted the motion, finding that " I can't allow Mr. Carnahan, because he did not look at the recorded instrument, to avoid its consequences."
On this appeal, Carnahan contends that the deed restriction does not prevent the owner of Unit 2029-B from living in the unit.[1]
We agree with Carnahan that our review is de novo. (E.M.M.I. Inc. v. Zurich American Ins. Co. (2004) 32 Cal.4th 465, 471 [contract interpretation]; Bohbot v. Santa Monica Rent Control Board (2005) 133 Cal.App.4th 456, 461 [statutory interpretation].)
We do not, however, agree with Carnahan's suggestion that we must apply heightened level of scrutiny. Carnahan relies Cwynar v. City and County of San Francisco (2001) 90 Cal.App.4th 637. In that case, plaintiffs challenged a San Francisco ordinance which restricted a property owner's ability to evict a tenant from a residential unit so that the unit could be used as a residence by the owner or a close family member, contending that the regulation amounted to a taking. After a discussion of takings law, the Court concluded that the San Francisco ordinance should be closely scrutinized, finding that that " It is not a straightforward, evenly applied regulation. It directly affects the possessory property rights of an apparently arbitrary category of property owners." (Id. at p. 661.)
This case, however, does not involve a takings allegation or a regulation or ordinance. Instead, it involves an agreement between the Engels and the City. We see no reason in law to apply a heightened level of scrutiny.
On the merits, Carnahan's arguments are the Agreement is ambiguous and unclear, and that when it is interpreted in its ordinary and popular sense (Butler v. City of Palos Verdes Estates (2005) 135 Cal.App.4th 174, 181) it does not prohibit him from living in his unit. In Carnahan's view, an apartment is " available for rental" even if the owner lives in it, because it could be rented if the owner were to decide to move out and find a tenant. At oral argument, he additionally argued that the unit was " illegal" because it was formed when a larger unit was improperly divided, and that the restriction thus means only that the unit must continue to exist as a separate unit, and cannot be recombined.
Carnahan also cites the rules that " 'Restrictions on the use of land will not be read into a restrictive covenant by implication . . . . (Hannula v. Hacienda Homes, Inc., 34 Cal.2d 442, 444 [211 P.2d 302, 19 A.L.R.2d 1268]; Anderson v. Pacific Ave. Inv. Co., 201 Cal.App.2d 260, 264.)' Restrictive covenants are to be strictly construed against limitations upon the free use of property. (Wing v. Forest Lawn Cemetery Assn. [1940] 15 Cal.2d 472.) [W]here subject to more than one interpretation, that construction consonant with the unencumbered use of the property will be adopted . . . ." (Smith v. North, 244 Cal.App.2d 245, 248.'" (Heinly v. Lolli (1969) 2 Cal.App.3d 904, 909.)
With due deference to the rules of interpretation of restrictive covenants, we draw the opposite conclusion from the one Carnahan urges. When read in the ordinary sense, the Agreement clearly prohibits owner occupancy. It provides that the unit " shall continue to be made available for use as a rental housing unit at all times." The only natural reading of those words is that the unit cannot be taken out of the rental housing market through owner occupation. A unit which is owner-occupied is not available for use as a rental.
This reading is confirmed by the fact that the Agreement provides that the unit is subject to City's rent control law, specifically section 1803, subdivision (t) of that law, and is not subject to the Ellis Act.
The cited provision of the rent control law concerns landlords who wish to remove rent-controlled rental units from the rental housing market. The change requires a permit which can only be granted by the Rent Control Board pursuant to the criteria set out in the law. The Ellis Act sets forth the procedure by which a landlord may go out of business by removing rental units from the market. (Drouet v. Superior Court (2003) 31 Cal.4th 583, 589.)
By providing that the Unit is subject to section 1803, subdivision (t) of the rent control law, and is not subject to the Ellis Act, the Agreement provides that the owner of Unit 2909-B cannot remove the unit from rental housing. Ellis Act procedures are not available, and owner occupancy is not allowed, absent a permit.
Nor can we see anything in the plain language of the words which would allow us to find that it means only that the unit must exist as a separate unit. It surely would have been possible to draft a clause which said that -- but this clause does not so provide.
Finally, Carnahan makes an argument under rent control law's definition of " rental unit" as " Any building, structure, or part thereof, or land appurtenant thereto, or any other rental property rented or offered for rent for living or dwelling house units, . . ." (Santa Monica City Charter § 1801, subd. (h).) Carnahan argues that Unit 2029-B is a rental unit under this definition because it is " any other real propert[y] used for living or dwelling purposes." [2] From this, he concludes that a " rental housing unit," the Agreement's term, may be an owner-occupied unit.
We are unpersuaded. At best, the argument establishes that the City's rent control law extends to owner occupied units, and under certain circumstances allows owner occupation of units subject to rent control. The argument does not change the plain meaning of the Agreement, which prohibits owner occupation of Unit 2029-B.
Disposition
The judgment is affirmed. Respondent to recover costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
ARMSTRONG, J.
We concur:
TURNER, P. J. MOSK, J.
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[1] In his brief, he also contended that the restriction was an unreasonable and unlawful restraint against alienation under Civil Code section 711. He abandoned that claim at oral argument.
[2] He also argues that there are many " rental units" in Santa Monica that are owner-occupied. No such fact is in the record, although section 1803, subdivision (t) tells us that this might be so.
