The Daily Journal - August 12, 2003
Landlords Win Right to Use Ellis Act for Some Evictions
The state high court rules 4-3 in favor of a San Francisco landlord whose tenant said he had suffered retaliation.

By Hudson Sangree
Daily Journal Staff Writer

SACRAMENTO - A divided California Supreme Court ruled Monday that landlords who truly intend to remove a property from the rental market can evict even those tenants who claim they are being retaliated against.

The case, Drouet v. Superior Court, 2003 DJDAR 8914, forced the justices to reconcile two competing state statutes, one protecting renters and the other protecting property owners.

The Ellis Act, starting in Government Code Section 7060, provides that no law can compel owners of residential real estate "to offer, or to continue to offer, accommodations in the property for rent or lease." That means a landlord can withdraw property from the rental market and, if necessary, evict the tenants.

On the other hand, Civil Code Section 1942.5 allows tenants faced with an unlawful detainer action to assert a defense of retaliatory eviction, in which they claim the landlord is targeting them because they asserted their rights or complained about the condition of the rental unit.

In Drouet, a 4-3 majority of the court held that the right of property owners to cease renting their property trumps the ability of tenants to avoid eviction in cases where the landlord can show he or she intends to stop renting the property altogether.

"[W]here a landlord has complied with the Ellis Act and has instituted an action for unlawful detainer, and the tenant has asserted the statutory defense of retaliatory eviction, the landlord may overcome the defense by demonstrating a bona fide intent to withdraw the property from the market," the majority held in an opinion written by Justice Marvin R. Baxter.

"If the tenant controverts the landlord's bona fide intent to withdraw the property, the landlord has the burden to establish its truth at the hearing by a preponderance of the evidence," Baxter wrote.

The decision reverses a ruling by the 1st District Court of Appeal and remands the case to San Francisco Superior Court for further proceedings.

Baxter was joined in his opinion by Chief Justice Ronald M. George, Justice Janice Rogers Brown and Justice Ming W. Chin.

Dissenting were Justice Carlos R. Moreno, Joyce L. Kennard and Kathryn Mickle Werdegar.

"I would not hold, as does the majority, 'that a landlord's bona fide intent to withdraw the property from the rental market under the Ellis Act will defeat the statutory defense of retaliatory eviction,'" Moreno wrote. "In my view, the Ellis Act was not intended to permit a landlord to evict a tenant for a retaliatory purpose."

"The majority's holding will permit landlords to threaten tenants ... if they complain about the condition of their residence or exercise their rights under Civil Code Section 1942 ...," he said. "The majority opinion thus violates the public policy of this state by encouraging retaliatory eviction."

In Drouet, landlord Joel Drouet owned a two-unit building on San Carlos Street in San Francisco. Tenant Jim Broustis had lived in one of the units since 1988 and over the years had several run-ins with Drouet.

In 1999, Drouet failed to pay part of the garbage bill, and Broustis told him he would deduct the amount from the rent. At about the same time, Broustis complained about a leaking sewage drain and shower.

Instead of fixing the problems, the landlord began Ellis Act proceedings to withdraw the building from the rental market and evict Broustis and his roommate. The tenants offered a defense of retaliatory eviction.

San Francisco attorney Andrew Zachs, who represented the landlord in the case, called Monday's decision "a major victory for property owners in California."

"The absolute right of property owners to evict tenants has been confirmed after a five-year court battle in this case," he said.

William Simpich, an Oakland lawyer who represented the tenants in the case, was on vacation and could not be reached for comment.

Also on vacation was Brad Seligman, a Berkeley attorney with The Impact Fund, who argued in the Supreme Court for a group of amici curiae for Broustis that included Protection and Advocacy, Inc., the Legal Aid Foundation of Los Angeles and the ACLU of Northern California.