THE NEVER ENDING PASSY CASE

One of Yogi Berra’s famous sayings is, “It ain’t over till it’s over.” Apparently, Yogi never had to deal with the Santa Monica Rent Control Board. As far as the Board is concerned, “It ain’t over even when the Court says it’s over. One of the cases in my office fits into this category. I am speaking of the Esther Passy case, which should have been over before it began nearly four and one half years ago.

The Esther Passy case started on or about October 26, 1996 when a former tenant voluntarily vacated a controlled rental after giving Ms. Passy a 30 day written notice. Although that former tenant had repeatedly violated her written rental agreement during her tenancy, she was not subject to any eviction notice or legal action at or near the time she vacated the unit. She had complained to the City Attorney’s Office that she had been “harassed” as a result of receiving notices to perform or quit, but the City Attorney’s Office took no action except to dismiss the former tenant’s complaints. Therefore, when the tenant departed, the issue should have been over. But it was only the beginning.

Ms. Passy properly filed a Registration Form with the Board on November 16, 1996, which was well within the time required by the Regulations. Unfortunately, the Rent Board’s Administrator believed the vacancy was “involuntary” because the tenant was “upset and distressed” at the time she vacated the rental unit. Therefore, the Administrator refused to grant the 15 percent vacancy rent increase required by the Costa-Hawkins Act unless Ms. Passy convinced one of the Rent Board’s most unreasonable hearing examiners that the Administrator was wrong and that the vacancy increase should have been granted.

Ms. Passy followed the Administrator’s instructions and filed a petition on April 22, 1997. Although every type of administrative decision must be completed within 120 days or less under the Rent Control Law, the Board pays little or no attention to any time limitations. Therefore ,it did not render a final decision until September 3, 1998, approximately a year and four months after the petition was filed. Of course, Ms. Passy failed to convince the Board that its Administrator was wrong, so an unfavorable decision was issued. This Office appealed the decision less than a month after it was rendered and received a Stay Order which required that the tenant keep paying the rent until the case was reviewed by the Superior Court.

While the Passy case was before the Court, we were also litigating the Cabinda case. Both the Superior Court and the Court of Appeal invalidated the Board’s Regulations which had been applied to Esther Passy in Cabinda LLC v. Santa Monica Rent Control Board. The same Regulations which had been applied to Esther Passy were found to be unconstitutional and facially invalid, which means that the Board had no authority or jurisdiction to apply them to anyone. That should have convinced the Board that the case was definitely over. Unfortunately, the Board refused to accept that obvious conclusion. It filed one Motion requesting leave to file a cross-complaint in the Passy case which was denied. It then filed another Motion arguing that the issue was “moot” because the Board changed its records as a result of the Cabinda decision. It lost that motion and the Superior Court issued a writ on September 7, 2000 ordering the Board to reverse its decision. That should have been the end. But of course, it wasn’t.

On October 30, 2000 the Board decided to begin the dispute over again by filing a Complaint for Declaratory and Injunctive Relief which raised the very same issues the Board had lost in the case described above. This Office responded by filing a Demurrer which argued that the case should be dismissed as a matter of law because the former tenant who was purportedly “harassed” had vacated the premises more than 4 years before the Board filed its Complaint and that the applicable statute of limitations requires that Complaints concerning obligations created by statue must be filed within three years of the date an unlawful act purportedly takes place.

After receiving the Demurrer filed by this Office, the Board decided to amend Its Complaint, and on January 5, 2001 it filed a First Amended Complaint. which demanded $8,568 for “restitutionary damages” plus $25,584 of “penalties” for a total of $34,152. The Board came to this absurd conclusion by refusing to apply the three-year statute of limitations applicable to the recovery of damages or the one-year statute of limitations that is applicable to the imposition of penalties. To add further insult to injury, it also inflated the damages by disallowing all general rent adjustments between 1996 and 2000.

This Office filed a second Demurrer, which is scheduled to be heard on March 26, 2001, at 8:30 a.m. Although the Board’s Complaint will probably be dismissed and this case should be “over” forever more, this case demonstrates that the Board has not changed in 23 years, it is still unreasonable and refuses to recognize property owners’ right . Those of you who attend the next ACTION meeting of March 5, 2001 will receive an update concerning this outrageous case.

Hope to see you then.