Plaintiffs are owners of condominium units that are designated "Below Market Rate" (BMR units), and thus subject to restrictions imposed by the Below Market Rate Condominium Conversion Program (BMR Program) created by the City and County of San Francisco (the City), under authority of the state Subdivision Map Act (Gov. Code, § 66410 et seq.) (SMA).
In this interlocutory appeal, the City claims the court erred in issuing a preliminary injunction to maintain the status quo while plaintiffs' claims were being litigated. Among other arguments, the City claims that plaintiffs did not have a reasonable probability of prevailing at the trial—one of the requirements for issuing a preliminary injunction—because all of plaintiffs' causes of action were time-barred. We agree with the City that section 66499.37, the statute of limitations governing any subdivision-related decision under the SMA, required plaintiffs' facial challenge to the Ordinance to be filed within 90 days of the enactment of the Ordinance. Because plaintiffs' claims were not filed within the 90-day timeframe, plaintiffs have not shown a likelihood
The SMA is "the primary regulatory control" governing the subdivision of real property in California. (Hill v. City of Clovis (2000) 80 Cal.App.4th 438, 445 [94 Cal.Rptr.2d 901].) Condominium projects are expressly defined as subdivisions within the meaning of the SMA. (§ 66424.) The SMA vests the "[r]egulation and control of the design and improvement of subdivisions" in the legislative bodies of local governments which must promulgate ordinances on the subject. (§ 66411.) Under the SMA, local governments possess the powers necessary to set condominium conversion restrictions. (See Soderling v. City of Santa Monica (1983) 142 Cal.App.3d 501, 507-508 [191 Cal.Rptr. 140].)
Pursuant to the City's authority under the SMA, the City established its BMR Program in 1979 to expand "opportunities for homeownership while preserving and expanding the supply of low- and moderate-income housing." (S.F. Ord. No. 320-08, adding § 1344 to S.F. Subd. Code.) The City created the BMR Program by adopting sections 1341 and 1385 of the City's Subdivision Code, which, among other things, required property owners seeking to convert their apartments into condominiums to set aside a certain number of their units for the BMR program. The purpose of conditioning approval of subdivision maps in this way was to restrict the sales and rental prices of each affected unit to ensure the affected units would remain available for purchase by low- to moderate-income households. The affordable housing restrictions were then reflected as conditions set forth in the San Francisco Planning Commission's subdivision map approvals. The program restrictions were, in turn, reflected on each property's subdivision map.
In 2008, a dispute arose between the City and several owners of BMR units regarding the terms of the BMR Program, including whether the program's restrictions lasted in perpetuity, or for only 20 years. In response, on December 19, 2008, the City adopted the Ordinance at the center of this controversy, which amended sections 1341 and 1385 and added a new section 1344 to the City's Subdivision Code.
New section 1344 of the City's Subdivision Code states that it applies to "BMR Units purchased or acquired on or after the effective date of this ordinance," and retroactively to "BMR Units purchased or acquired before the effective date of this ordinance." (S.F. Subd. Code, § 1344, subd. (a)(1),
In addition, the Ordinance (1) sets out procedures for calculating the sale price for BMR units and the procedures unit owners must follow to sell their units (S.F. Subd. Code, § 1344, subds. (c), (e)); (2) specifies how the City adds costs for capital improvements to the base resale price of the units (id., subd. (d)); (3) establishes rental restrictions (id., subd. (f)); and (4) allows certain unit owners to pay a fee to have their units released from the BMR Program, so long as they make such election "24 months from the effective date of this legislation" (id., subd. (i)). Section 1344, former subdivision (i)(a) of the City's Subdivision Code also requires that in order to have a unit released from the BMR Program, "the BMR Unit Owner must waive all claims against the City for damages or other alleged injury arising from the Owner's participation in the Program."
Throughout this litigation, the parties have taken vastly different views of the purpose and effect of the Ordinance. The City claims the Ordinance "was enacted to further the planning goals of the SMA by clarifying conditions placed on the subdivision of [plaintiffs'] properties and by creating new options for Program participants who wish to exit the program or sell their units . . . ." In plaintiffs' view, "[i]n 2008, after years of the City's mismanagement and the exit of nearly half of the BMR Units from the Program, the City . . . attempted to unilaterally rewrite the terms of the program and subject Plaintiffs to permanent resale, rental and inheritance restrictions."
On May 13, 2009, five months after the City adopted the Ordinance, plaintiffs filed a complaint in federal district court challenging both the City's adoption of the Ordinance, and the City's alleged mismanagement of the BMR Program. (Aiuto v. San Francisco's Mayor's Office of Housing (N.D.Cal., No. C 09-2093 CW).) In the federal case, plaintiffs asserted claims for the unlawful taking of their property, preemption under state law, declaratory relief, injunctive relief, and violations of their due process, equal protection, and civil rights.
On October 22, 2009, the City filed a motion to dismiss the federal action. Ultimately, the federal court dismissed all of plaintiffs' claims, but granted leave to amend their claim under 42 United States Code section 1983. Plaintiffs did not attempt to amend their federal pleadings. Instead, on August 6, 2010, three months after their federal case was dismissed, plaintiffs filed the underlying complaint in the San Francisco Superior Court alleging three causes of action for (1) regulatory taking, (2) state law preemption by the Costa-Hawkins Rental Housing Act legislation (Civ. Code, § 1954.50 et seq.)
On September 10, 2010, plaintiffs filed a motion for preliminary injunction. In their motion, plaintiffs sought an injunction in case their challenge to the Ordinance failed, and in order to preserve their option of having their units released from the BMR Program in exchange for a fee and a waiver of rights. Specifically, plaintiffs requested the court "to extend the deadline referenced in the San Francisco Subdivision Code, Section 1344(i), as added by Ordinance No. 320-08, from `24 months from the effective date of [Ordinance No. 320-08]' to ninety (90) days after final judgment in this case."
Ordinarily, trial courts "evaluate two interrelated factors when deciding whether or not to issue a preliminary injunction. The first is the likelihood that the plaintiff will prevail on the merits at trial. The second is the interim harm that the plaintiff is likely to sustain if the injunction were denied as compared to the harm that the defendant is likely to suffer if the preliminary injunction were issued. [Citations.]" (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69-70 [196 Cal.Rptr. 715, 672 P.2d 121].)
In claiming there was no likelihood plaintiffs could prevail at trial, the City contended that plaintiffs' claims were all barred by the 90-day statute of limitations period provided by section 66499.37 (actions challenging the decision of a legislative body "concerning a subdivision") and section 65009, subdivision (c)(1) (actions challenging either the adoption or amendment of a zoning ordinance or the validity of conditions attached to variances, conditional use permits, or other permits). The City argued that plaintiffs' claims were governed by both sections 66499.37 and 65009: "[W]hen the City adopts an ordinance under its authority pursuant to the [SMA], or when there is a challenge to conditions imposed by the City on subdivisions, or when the
In opposition, plaintiffs argued that sections 65009 and 66499.37 were wholly inapplicable because plaintiffs' claims could not be fit "into the statutory rules set up for development decisions." Instead, their challenge was to the City's adoption "of an ordinance which unilaterally changes the terms of a low income housing program." Consequently, plaintiffs insisted their claims were governed by the five-year statute of limitations for inverse condemnation claims, including regulatory takings (Code Civ. Proc., §§ 318, 319); the three-year statute of limitations for preemption claims (Code Civ. Proc., § 338, subd. (a)); and the two-year personal injury statute of limitations for 42 United States Code section 1983 claims (Code Civ. Proc., § 335.1; see Jackson v. Cedars-Sinai Medical Center (1990) 220 Cal.App.3d 1315, 1323-1324 [269 Cal.Rptr. 877] [state and federal courts alike have consistently held that the personal injury statute of limitations applies to civil rights causes of action]).
In ruling on plaintiffs' motion for preliminary injunction, the trial court concluded that plaintiffs had met their burden of showing a reasonable probability of success on the merits. The trial court also found that the balance of harm weighed in plaintiffs' favor. On January 7, 2011, after considering further briefing and hearing oral argument from each side, the court determined that neither the statute of limitations found in section 66499.37 nor section 65009 applied to the claims set forth in plaintiffs' complaint. Therefore, the court concluded "this action is not subject to a 90-day statute of limitations." On January 18, 2011, the court entered its order granting plaintiffs' motion for preliminary injunction.
Thereafter, the City sought review of the court's statute of limitations ruling by a direct appeal from the order granting plaintiffs' motion for preliminary injunction (No. A131279) and by filing a petition for writ of mandate, prohibition, certiorari, or other appropriate relief (No. A132908). "Where, however, as here, there is a right to an immediate review by appeal, that remedy is almost as speedy as a writ proceeding, under present practice, and should be considered adequate unless petitioner can show some special reason why it is rendered inadequate by the particular circumstances of his case. [Citation.]" (Phelan v. Superior Court (1950) 35 Cal.2d 363, 370 [217 P.2d 951], fn. omitted.) In this case, the City has an adequate remedy at law in its appeal. (Powers v. City of Richmond (1995) 10 Cal.4th 85, 113 [40 Cal.Rptr.2d 839,
In seeking reversal of the trial court's order granting the preliminary injunction, the City relies on the well-established principle that a preliminary injunction granted without a showing of a likelihood of success on the merits is an abuse of discretion and will be reversed. (See Perez v. Hastings College (1996) 45 Cal.App.4th 453, 457 [53 Cal.Rptr.2d 1] [reversing preliminary injunction because respondent could not show a likelihood of success on the merits].) Among other arguments, the City insists that plaintiffs could not possibly prevail at trial because all of their causes of action are time-barred under the 90-day statute of limitations found in sections 66499.37 and 65009.
Plaintiffs contend the court's ruling on the applicability of the statute of limitations to plaintiffs' claims is not at issue in this appeal. They assert that we should only reach the question "whether the Trial Court abused its discretion in issuing the injunction" because plaintiffs "can challenge the statute of limitations decision on appeal from a final ruling." We disagree. When the likelihood of prevailing on the merits depends on a question of law, such as construing the applicable statute of limitations, an appellate court can independently determine whether the trial court's interpretation was correct as a matter of law and, therefore, whether there was a possibility of success on the merits. (See Bullock v. City and County of San Francisco (1990) 221 Cal.App.3d 1072, 1094-1095 [271 Cal.Rptr. 44]; Legacy Group v. City of Wasco (2003) 106 Cal.App.4th 1305, 1311 [131 Cal.Rptr.2d 460] (Legacy Group) [applicability of statute of limitations presents question of statutory interpretation subject to de novo review].) Moreover, even where the question of law is not entirely determinative of the likelihood of plaintiffs' success on the merits, "`it may be appropriate for the appellate court to express its opinion in order to clarify or narrow the issues for trial. [Citation.]' [Citations.]" (Carsten v. City of Del Mar (1992) 8 Cal.App.4th 1642, 1650 [11 Cal.Rptr.2d 252].)
In the trial court's written order finding plaintiffs' claims were not subject to the 90-day limitations period of section 66499.37,
Many courts have applied these principles to a wide variety of controversies. (See, e.g., Trinity Park, L.P. v. City of Sunnyvale (2011) 193 Cal.App.4th 1014, 1044-1045 [124 Cal.Rptr.3d 26] [§ 66499.37 applied to a subdivision developer's challenge to city's requirement that the subdivision developer would have to sell a percentage of houses at below market prices as a condition of development approval]; Sprague v. County of San Diego (2003) 106 Cal.App.4th 119, 124, fn. 4 [130 Cal.Rptr.2d 517] (Sprague) [§ 66499.37 barred causes of action asserting "violation of federal civil rights"];
In the face of this overwhelming authority, plaintiffs claim there is no case applying section 66499.37 in a situation such as this one, that "has nothing to do with those original land use control[s]," and instead involves "changing the terms of the operation of a housing program long after the relevant land use approvals were given." We direct plaintiffs' attention to the case of Arcadia Development Co. v. City of Morgan Hill (2008) 169 Cal.App.4th 253 [86 Cal.Rptr.3d 598] (Arcadia). In Arcadia, the owner of an undeveloped 69-acre parcel filed a complaint and petition for writ of mandate against the City of Morgan Hill, challenging a 10-year extension of a growth control ordinance that drastically restricted development, including restrictions on the property owner's ability to subdivide the property. The trial court concluded the action was untimely, even though the property owner filed it within the 90-day timeframe, ruling that the property owner should have challenged the initial growth control ordinance passed by the voters in 1990. The Court of Appeal reversed, agreeing with the property owner that the extension of the density restriction for an additional 10 years imposed a new burden on the property owner, triggering a new 90-day period under section 66499.37 for bringing an action. (169 Cal.App.4th at p. 268.)
Additionally, we believe the adoption of a requirement that subdivision-related decisions must "have a temporal aspect to them" in order to trigger the 90-day time limitation period of section 66499.37 would destabilize what is currently a very predictable and consistent area of the law. Future claimants and local land use authorities would be left to guess what time periods courts would apply to hundreds of subdivision-related decisions arguably subject to section 66499.37. As was explained in Hensler, supra, 8 Cal.4th at page 27, "[t]he purpose of statutes and rules which . . . create relatively short limitation periods for" actions which attack land use decisions "is to permit and promote sound fiscal planning by state and local governmental entities." This purpose would be subverted if we created different rules for different "types" of subdivision-related decisions and allowed facial challenges to some ordinances to be brought years after the challenged actions were taken. Consistent with the need for expeditious resolution of subdivision-related challenges, we conclude the 90-day litigation limitation period prescribed by section 66499.37 applies to plaintiffs' facial claims that the Ordinance
The order granting the preliminary injunction is reversed. The City's petition for writ of mandate, prohibition, certiorari or other appropriate relief is denied. The matter is remanded for further proceedings in the trial court consistent with this opinion. Costs on appeal are awarded to the City.
Reardon, J., and Rivera, J., concurred.