Owens v. City of Oakland Housing, Residential Rent etc. Board ( 2020 )

Filed 5/29/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
JONATHAN OWENS,
Plaintiff and Appellant,
A157663
v.
CITY OF OAKLAND (Alameda County
HOUSING, RESIDENTIAL Super. Ct. No.
RENT and RELOCATION RG18914638)
BOARD,
Defendant and
Respondent.
LAUREN BARGHOUT et al.,
Real Parties in Interest
When the owner of a single-family home rents bedrooms in the home to
separate tenants, does the Costa-Hawkins Rental Housing Act (Costa-
Hawkins, or the Act, Civil Code §1954.50 et seq.)1 exempt each of the tenants’
rooms from local rent control because the home is considered an exempt
dwelling under the Act? Jonathan Owens rented out bedrooms in his home to
three unrelated individuals. He contends the City of Oakland’s Housing,
Residential Rent and Relocation Board (the Rent Board) and the trial court
erred when they determined the rented rooms are subject to Oakland’s rent
1 Further statutory citations are to the Civil Code.
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control ordinance. We agree with the Rent Board and the court and affirm
the trial court order denying Owens’s petition for writ of mandamus.
BACKGROUND
Owens owns and resides in a single-family home in Oakland. He
rented individual rooms in the home to three unrelated tenants.
In May 2016, tenant Lauren Barghout filed a petition pursuant to
Oakland’s Rent Adjustment Program alleging her housing became unsuitable
due to disruptive construction work and hazardous conditions on the
premises. Barghout further alleged Owens failed to provide required notice
of the Rent Adjustment Program and retaliated against her by terminating
her lease when she complained about the construction work and sought a
reduction in rent. Owens responded that Barghout’s rental was exempt from
Oakland’s Rent Adjustment Ordinance (the Ordinance) as a single-family
home, and he denied her factual allegations.
The Rent Board set an administrative hearing for August 25, 2016. On
August 3, Owens filed an unlawful detainer complaint against Barghout, to
terminate her tenancy of “the premises located at 3420 Rubin Drive, Room A:
NW Master Bedroom, including bathroom & fenced patio & 3420 Rubin
Drive, Room B: Downstairs Home Office, Oakland, California.” Barghout’s
lease, which Owens attached to the complaint, described the rented premises
similarly and identified Barghout as a housemate with “sole use of one or
more rooms and shared use of common areas (such as kitchen) in the
residence.” The tenancy was month to month subject to 60 days’ notice to
quit after one year.
At the hearing, Owens argued that Barghout’s rental was not subject to
the Ordinance because the rooms she rented were in a single-family home
that was “ ‘alienable, separate from the title of any other dwelling unit’ ” and,
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therefore, exempt under the Costa-Hawkins Act from local rent control
provisions. “ [T]herefore, the Rent Board does not have jurisdiction over any
disputes related to . . . the rent.”
The hearing officer disagreed. “Civil Code Section 1954.52 (Costa-
Hawkins) provides that, under certain circumstances, a single-family home is
exempt from local rent regulations. However, in this case, the owner has
chosen to rent rooms out separately to a number of people, thereby
transforming a single-unit dwelling into a multi-unit dwelling. That portion
of the house rented to the tenant is therefore not exempt from the Rent
Adjustment Ordinance.” But the hearing officer also found Barghout was in
arrears in rent without any justification and dismissed her petition on those
grounds.
Owens appealed to the Rent Board, arguing the hearing officer
erroneously determined the property was not exempt from local rent control
under the Costa-Hawkins exemption for single-family homes.2 The Rent
Adjustment Program unanimously affirmed the hearing officer’s decision.
Owens filed a petition for writ of administrative mandamus in the
superior court to challenge the Rent Board’s determination. The petition
asserted he was “deprived of his rights to an exemption from rent control
under the Costa-Hawkins Rental Housing Act when the RAP [Rent
Adjustment Program] decided his renting rooms in a single-family home
transformed his home into a multi-unit dwelling.”
The trial court disagreed. “At issue is the question of law whether
[Owens’] four-bedroom single-family detached home is exempt from the rent
control ordinance under the Costa-Hawkins Act because it is ‘alienable []
2 Barghout also appealed to the Rent Board, but dropped her appeal as
part of a settlement with Owens and has not participated in the subsequent
proceedings in the trial court and this court.
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separate from the title to any other dwelling unit’ . . . and that he may rent
those bedrooms to individual tenants without complying with the RAP.
“The meaning of a ‘dwelling unit’ under building and planning codes is
not in pari materia with the meaning under rent control ordinances. For
purposes of landlord-tenant law, ‘a dwelling or a unit’ or a ‘dwelling unit’ is
not the entire property to which an owner holds title; rather, it is any area
understood to be committed [] to the habitation of a given tenant or tenants
to the exclusion of others. (See, e.g., Civ. Code § 1940(a) [defining ‘dwelling
unit’ as ‘a structure or part of a structure that is used as a home, residence,
or sleeping place by one person who maintains [] a household or by two or
more persons who maintain a common household’ for purposes of a landlord-
tenant statute]; see also, e.g., Oakland Mun. Code § 8.22.020 [defining
‘Covered Unit’ as including ‘all [non-exempt] housing services located in
Oakland and used or occupied in consideration of payment of rent’].)
“The relevant dwelling unit in question is not Owens’s home but rather
each of the rooms he rented to tenants. Those units are not exempt from rent
control as a condominium or single [] family home. (Civ. Code
§1954.52(a)(3)(A).)”
Owens filed this timely appeal from the judgment denying his petition
for administrative writ of mandate.
DISCUSSION
Owens contends the plain language of the Act unconditionally exempts
all single-family homes from local rent control “including individual bedrooms
rented to separate tenants.” The City argues the exemption does not apply to
the rooms Barghout rented in Owens’ home because the Act exempts only
dwellings or units that are alienable separate from the title to any other
dwelling or unit. We review this question of statutory construction
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independently. (T&A Drolapas & Sons, LP v. San Francisco Residential Rent
Stabilization & Arbitration Bd. (2015) 238 Cal.App.4th 646, 651 (T&A
Drolapas).)
“In interpreting the statutory language at issue, ‘[w]e begin with the
fundamental rule that our primary task is to determine the lawmakers’
intent.” (MacIsaac v. Waste Management Collection & Recycling, Inc. (2005)
134 Cal.App.4th 1076, 1082 (MacIsaac).) “In the first step of the interpretive
process we look to the words of the statute themselves. [Citations.] The
Legislature’s chosen language is the most reliable indicator of its intent
because ‘ “it is the language of the statute itself that has successfully braved
the legislative gauntlet.” ’ [Citation.] We give the words of the statute ‘a
plain and commonsense meaning’ unless the statute specifically defines the
words to give them a special meaning. [Citations.] If the statutory language
is clear and unambiguous, our task is at an end, for there is no need for
judicial construction. [Citations.] In such a case, there is nothing for the
court to interpret or construe. [Citation.]
“Nevertheless, the ‘plain meaning’ rule does not prevent a court from
determining whether the literal meaning of the statute comports with its
purpose. [Citations.] Thus, although the words used by the Legislature are
the most useful guide to its intent, we do not view the language of
the statute in isolation. [Citation.] Rather, we construe the words of
the statute in context, keeping in mind the statutory purpose. [Citation.] We
will not follow the plain meaning of the statute ‘when to do so would
‘frustrate[ ] the manifest purposes of the legislation as a whole or [lead] to
absurd results.” ’ [Citation.] Instead, we will ‘ “interpret legislation
reasonably and . . . attempt to give effect to the apparent purpose of
the statute.’ ” (MacIsaac, supra, 134 Cal.App.4th at pp. 1082-1083.) It is
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only when the statutory language does not resolve the question that we look
to our rules of construction and legislative history for clarification. (Id. at pp.
1083-1084.)
Applying these principles here, we conclude the statutory language
answers the question and was correctly interpreted by the trial court.
Section 1954.52 states: “Notwithstanding any other provision of law,
an owner of residential real property may establish the initial and all
subsequent rental rates for a dwelling or a unit about which any of the
following is true: . . . It is alienable separate from the title to any other
dwelling unit. . . .” (§ 1954.52, subdivision (a)(3)(A).)
Owens argues section 1954.52, subdivision (a)(3)(A) exempts the rooms
he rents within his home from Oakland’s rent ordinance because the home, in
its entirety, is a “dwelling or a unit” that is “alienable separate from the title
to any other dwelling unit.” In other words, as long as the structure is a
single family residence, and it is alienable apart from any other structure
because it has its own title and can be sold separately, no areas that are
within that structure, even if they are separately rented to third parties, are
subject to local rent control.
The problem with Owens’ position is that the plain language of the
statute focuses on the rent set for the “dwelling” or “unit”. The relevant
question is instead whether the “dwelling” or “unit” separately rented by
Barghout and for which Owens claims the right to establish the amount of
rent, was itself separately alienable from the title to any other dwelling or
unit. (§1954.52(a)(3)(A); see also §1940, subd.(c) [defining “dwelling unit” for
purposes of landlord-tenant law as “a structure or the part of a structure that
is used as a home, residence, or sleeping place. . . .”].) Owens makes no claim
that Barghout’s unit was separately titled or could be separately alienated
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from the rest of his house. Nor does he argue that a plain reading of the
statute would lead to an absurd result. (See MacIsaac, supra, 134
Cal.App.4th at p. 1083.)
Accordingly, the trial court correctly determined the dwelling units
Owens rented to individual tenants “are not exempt from rent control as a
condominium [] or single family home. (§1954.52(a)(3)(A).)”
Because the statutory language compels this result, we will not
consider legislative history or provisions of the Building Code and Oakland
Planning Code that Owens asserts support his contrary view.3 Owens’
reliance on a general statement in a real estate treatise is also uninformative.
The passage he relies on merely recognizes that “[t]he definition of
‘separately alienable’ is somewhat technical . . . , but most single family
detached dwellings on separate lots not containing a second dwelling unit,
single-family condominium units and other single-family attached dwellings
that may be legally conveyed as separately subdivided interest in a common
interest development will qualify for the exemption, once they have actually
been sold into separate ownership.” (10 Miller and Starr, California Real
Estate, 4th ed. 2019 update, §34:246, italics added.) This passage says
nothing about whether the Act applies to dwellings or units rented by an
owner to third parties that are not separately alienable. We have no
authority to extend the Costa-Hawkins exemption for dwellings or units that
3 We therefore deny Owens’ October 1, 2019 request for judicial notice.
“Although a court may judicially notice a variety of matters . . . ,
only relevant material may be noticed. ‘But judicial notice, since it is a
substitute for proof [citation], is always confined to those matters which are
relevant to the issue at hand.’ ” (Mangini v. R. J. Reynolds Tobacco
Co. (1994) 7 Cal.4th 1057, 1063, italics omitted.) The City’s December 20,
2019 request for judicial notice of the entirety of the unlawful detainer
complaint and exhibits incorporated therein is granted.
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are separately alienable to those that are not. “ ‘ “ ‘Appellate courts may not
rewrite unambiguous statutes’ ” or ‘rewrite the clear language of [a] statute
to broaden the statute’s application.’ ” (In re I.A. (2019) 40 Cal.App.5th 19,
23.)
Owens argues for the first time in his reply brief that, while he
concededly “had separate agreements with [his tenants] that each had their
own rooms within the single-family house,” Barghout in fact “was renting and
sharing” the entire home. Other than to observe that the trial court’s
contrary factual findings are supported by the record, we will not address this
contention. “A party may not raise an issue for the first time on appeal
[citation], and points raised for the first time in a reply brief on appeal will
not be considered, absent good cause for failure to present them earlier.”
(Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 583.)
DISPOSITION
The judgment is affirmed.
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_________________________
Siggins, P.J.
WE CONCUR:
_________________________
Fujisaki, J.
_________________________
Petrou, J.
Owens v. City of Oakland, A157663
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Trial Court: Alameda County Superior
Court
Trial Judge: Hon. Frank Roesch
Counsel:
Clifford E. Fried, Jonathan Madison, Fried & Williams, LLP for Appellant.
June Babiracki Barlow, Jenny Yichieh Li, Neil D. Kalin, California Association of Realtors as
Amicus Curiae for Appellant.
Barbara J. Parker, City Attorney, Maria Bee, Chief Assistant City Attorney, Jamilah A.
Jefferson, Special Counsel, Ubaldo Fernandez, Deputy City Attorney for Respondent.
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