Landlords Win Symbolic Court Victory

By Teresa Rochester

In a largely symbolic victory for landlords, the Court of Appeal last week held that tenants cannot use a retaliatory defense when evicted under the Ellis Act.

Local attorneys said the ruling in the San Francisco case is significant but will have little impact in Santa Monica, where tenants have rarely, if ever, raised the argument that an Ellis eviction is retaliatory. The 1986 Ellis Act allows landlords to get out of the rental business by emptying their buildings and removing units from the rental market.

"It will allow landlords to proceed with Ellis with much more certainty," said local landlord attorney Rosario Perry. "Does it mean there will be more Ellises? Probably not. Does it mean Ellises will be handled more expeditiously? Yes."

Drouet vs. Superior Court, however, is expected to have a major impact in San Francisco, which has experienced a flurry of Ellis activity in a booming housing market.

Andrew Zacks, the attorney who represented San Francisco landlord Joel Drouet, said the case is important because it reaffirms a landlord's right to go out of business.

"I think it's a pretty significant decision for landlords," said Zacks, who has been the target of picketing tenants. "We have a fair amount of [Ellis] activity [up here]. I think what it means is the right of owners to go out of business is preserved."

The case tested whether a tenant who is facing eviction under the Ellis Act can use the retaliatory eviction defense when the landlord has properly complied with the procedural requirements of the Ellis Act, according to the ruling written by Judge James Marchiano.

According to the court's decision the answer is no. The only defense tenants can make in fighting an Ellis eviction is if the landlord fails to fill out the necessary Ellis paperwork properly.

The ruling also allows tenants to file a separate suit for monetary damages stemming from an alleged retaliatory Ellis eviction once the tenant moves out of the unit. Under state law, the burden of proving that an eviction was retaliatory falls on the tenant.

Tenant rights supporters in Santa Monica said they were not surprised by the court's decision and were heartened that the court still allows tenants to seek damages.

"It comes as no surprise," said Michael Tarbet, a tenant advocate for Santa Monicans for Renters' Rights, the city's powerful tenants group. "What can I say? It's intimated that's what the Ellis Act means. The Ellis Act is the problem."

"I haven't really heard that anyone had used that defense," said Doris Ganga, legal consul for the Rent Control Board. "One good thing is, the court recognized evicting somebody under Ellis in retaliation is a bad thing. Whether it will have a big impact here, probably not."

The decision is based on the case of Joel Drouet, who began Ellis Act proceedings on a two-unit building in August of 1999. Two tenants who shared one of the apartments, and had a contentious relationship with the landlord, refused to move by the Oct. 4 eviction deadline.

Drouet filed suit against the tenants in San Francisco Superior Court. The tenants answered the suit with four defenses, one of which alleged that the eviction was retaliatory. The Superior Court threw out three allegations but said the retaliation charge might be defensible and the case would have to go to trial.

Instead of going to trial Drouet took the case to the Appellate Division. The Appellate Division sent the case back to Superior Court. Before the case began, the Appeals Court stepped in and found the tenants' argument that the eviction was retaliatory was not legally available.