Filed 9/19/13 Lawrence v. City of West Hollywood CA2/7 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

TONI LAWRENCE,
Plaintiff and Appellant,

v.
CITY OF WEST HOLLYWOOD,
Defendant and Respondent. B243823
(Los Angeles County Super. Ct. No. SC115655)

APPEAL from a judgment of the Su perior Court of Los Angeles County, Lisa Hart Cole, Judge. Affirmed.

Law Offices of Rosario Perry and Ro sario Perry for Plaintiff and Appellant.

Michael Jenkins, City Attorney; Jenkins & Hogin, Christi Hogin and Gregg
Kovacevich for Defend ant and Respondent.

________________ ________________2 In July 2008, plaintiff and appellant T oni Lawrence (Lawrence) rented a West Hollywood apartment to real pa rties in interest Charles Ga nt and Sonya Burtnett (Gant and Burtnett). In June 2011, Lawrence informed Gant and Burtnett that they owed her $42,194 in back rent, leadi ng Gant and Burtnett to file a Maximum Allowable Rent (MAR) request with defendant and respondent, the City of West Ho llywood (City). After an administrative hearing in August 2011, th e hearing examiner found the MAR to be $724.70, not $1,995 as claimed by Lawren ce. Lawrence appealed to the Rent Stabilization Commission (RSC) which affirm ed the hearing examiner’s decision. Lawrence filed a petition for a writ of mandate in Superior Court to invalidate the RSC’s decision. The petition was deni ed and Lawrence appeals.
We affirm.
FACTUAL & PROCEDURAL BACKGROUND West Hollywood’s Rent Stabilizati on Ordinance The City enacted its Rent Stabilization Ordinance (RSO) with in Title 17 of the West Hollywood Municipal Code (WHMC) in re sponse to a critical shortage of rental housing. The City attempted to maintain a balance in protecting tenants without infringing substantially upon the rights of la ndlords to receive a reasonable return. (WHMC § 17.04.020.) The RSO aims to dire ct the maximum allowable rent a landlord may charge a tenant and the circumstances u nder which that rent may be subsequently
increased. Section 17. 40.020(1) of the WHMC allows a landlord to determine the initial rent a new tenant pays in most circumstances. There are four exceptions to the general rule that a landlord may not charge a new te nant more than the previous one, within WHMC section 17.40.020(2). Section 17. 40.020(2)(c) of the WHMC, at issue here, prevents upward rent adjustments where the previous vacancy was not voluntary, instead caused by the landlord’s harassing conduct, a ttempts at constructive eviction, or because
of a breach of the covenant of quiet enjoyment of the prope rty. The various types of
tenant harassment are laid out within the RSO and include entic ing a tenant to vacate the property through intentional mi srepresentation or the concealment of a material fact.3 (WHMC § 17.52.090.) Under RS O 17.40.020(2)(d), a unit is not eligible for a market rate rental increase if the prior tenant oc cupied the unit for less than six months and principally for the purpose of establishing eligibility for a vacan cy rent increase (a sham tenancy). The RSC is empowered to make an initia l determination as to whether the vacancy was voluntary or encouraged, using informati on received by the Department of
Rent Stabilization and Housin g. The landlord may file an administrative appeal. (WHMC § 17.40 .020(2)(c).)
The Costa-Hawkins Act and the RSO California Constitution, article XI, section 7 states that a county or city may make and enforce within its limits all local, po lice, sanitary, and other ordinances and regulations which do not conflic t with general laws. As such , the City is permitted to
make laws which are not incons istent with or contradict st ate-wide California laws.
Government Code section 50022.2 authorizes any local agency to enact any ordinance which adopts any code by reference.
Civil Code sections 1954.50–1954.535 encompass the Cost a-Hawkins Rental Housing Act (Costa-Hawkins), which serves the same goals as the City’s RSO. However, Costa-Hawkins and the RSO differ sli ghtly. Under Costa-Hawkins, Civil Code section 1954.53, subdivision (a) provides that an owner of residential real property may establish the initial rental rate for a dwelling or unit, except where any of the following applies: (1) the previous tenancy has been terminated by the owner by notice pursuant to Civil Code section 1946.1; (2) the previous te nancy has been terminated upon a change in the terms of the tenancy pursuant to Civil C ode section 827; (3) the owner has terminated or not renewed a contract or recorded ag reement with a governmental agency that provides for a rent limitation to a qualified te nant; or (4) the dwelling or unit has a health, fire, or safety citation from the appropriate governmental agency that went uncorrected for at least 60 days prior to the vacancy. (Civ. Code, § 1954.53, subds. (a)(1) and (f).)4 The RSO contains these four exceptions , as well as two additional exceptions, within RSO section 17.40.020, subdivisions (2)(c) and (2)(d). These state that a landlord
is not entitled to set an initial rental rate on a unit if (1) the vaca ncy on which the rent adjustment is based was not a voluntary vaca ncy, because it resulte d from conduct of the
landlord or the landlord’s agent which constituted hara ssment prohibited by law,
constructive eviction or a breach of the covena nt of quiet enjoyment of the property; and (2) the prior tenant did not have a bona fide landlord-tenant relations hip with the property owner or occupied the property for less than six months and principally for the purpose of vacating the property to estab lish eligibility for a vacancy rent increase under this title. However, Costa-Hawkins includes Civil Co de section 1954.53, subdivision (e) which provides that “Nothing in this section shall be construe d to affect any authority of a public entity that may otherw ise exist to regulate or monito r the grounds for eviction.”
The First Two Tenants Lawrence rented out the apartment at 918 N. San Vicente (the Apartment) at a rate of $715 per month over a pe riod from 2005 until 2008, w ith only one tenant, Cutler, residing there during this time. In June 2008, Lawrence paid Cutler $9,700 to leave the Apartment. She and Cutler executed a Settleme nt Agreement which pr ovided, inter alia,
that “Lawrence desires that Cu tler vacate the premises”; that “Cutler desires to have the time to move and be reimbursed for expenses of the move”; that Lawrence agrees to pay Cutler $9,700 within 15 days after Cutler executes the Settlement Agreement; and that the security deposit will be re turned after an inspection of the Apartment. The Settlement Agreement also provided that should Cutler fail to vacate the Apartment, Lawrence was
entitled to evict him and he would be liable fo r daily rental and attorneys fees and costs
associated with the eviction. Cutler move d out in May 2008 an d Lawrence rented the Apartment to Jeff Hadst, at the same rate. Hadst left shortly thereafter and Lawrence sought out new tenants. On July 14, 2008, Gant and Burt nett signed a lease agreement for the Apartment. The lease period was for one year, from A ugust 1, 2008 until July 31, 2009, and provided for a mont hly rental of $1,995.5 During this period the maximum allowa ble rent for the Ap artment remained registered with the City at $715. Charles Gant and Sony a Burtnett’s Tenancy
Once Gant and Burtnett moved into the Apartment, Lawrence attempted to reregister the rental rate with the City at $1, 995. As required, Lawrence filed a Unit ReRegistration After Vacancy form with the City on Ju ly 16, 2008, notifying it of the higher

rent. The City responded on July 24 with a letter to Lawrence, denying the new rental rate. According to the City , the original March 2008 vacancy was induced under RSO section 17.52.090( 5) because Lawrence required the tena nt Cutler to sign an agreement to leave the Apartment. The Ci ty found that the Settlement Agreement induced Cutler to
leave under the circumstances described in s ection 17.52.090 (5) of the RSO, that is “Enticing a tenant to vacate a rental housing unit through an intentional misrepresentation(s) or the concealment of a material fact. The City concluded that
because Cutler had been asked to leave and Hadst lived at the Ap artment for less than two months, it was a sham tenancy and thus th e Apartment was not eligible for a market rate rental increase pursuant to RSO section 17 .40.020(2)(d). Therefor e the City held that
Gant and Burtnett should not pay above $717.75. In a s ubsequent letter, dated August 26, 2008, the City amended the amount to $715.75.
Each letter informed Lawrence of her right to appeal w ithin ten business days, if the decision was based on false or misleading in formation. Lawrence did not appeal. In an August 2008 e-mail to Gant and Burtne tt, Lawrence acknowledged: “I got a letter from rent control which questioned the two month occupancy and si nce the two of you were happy with the apartment, I did not take it any further.” She also acknowledged that on the advice of her attorney she brought in Ha dst, the short-term renter, primarily so he could live there and pay the original, rent-con trolled rate. Lawrence believed that after two months, when Hadst left on his own free will, she could subsequently charge any
new tenants more than the rent-controlled rate , hoping to receive the going market rate6 for the Apartment. On Au gust 17, 2008, Lawrence re-fi led the Unit Re-Registration After Vacancy form setting the rent at the approved rate of $715.75. Demand for Additional Rent
Lawrence renewed the lease with Gant and Burtnett from 2008 until 2011 and they paid the monthly rent of $715.75 with only minor increases every year as allowed by the City. On June 22, 2011, however, Gant an d Burtnett received a letter sent from an attorney on Lawrence’s behalf which orde red them to pay $42,194 in back rent. 1 The letter claimed that the City had invalidly determ ined the rental rate for the Apartment, in
violation of Civil Code s ections 1954.53 et.seq. In response, Gant and Burtnett filed a MAR form with the C ity. The matter was set for a hearing on August 5, 2011. Administrative Hearing At the August 5, 2011 ad ministrative hearing, Bu rnett, Gant and Lawrence
testified. Lawrence testified that she had asked Cutler to leave because he was selling marijuana out of the Apartmen t. She claimed she never forced him out. Hadst moved out so quickly because of th e construction next door.
The examiner concluded that the City made a valid decision in 2008 when it determined the legal rent was $715.75 Sh e found that the first tenant, Cutler, was induced to leave, and the s econd tenant, Hadst, failed to occupy the Apartment long enough to permit an increase of the rental ra te of the unit to the market rate, under RSO sections 17.52.090(5) and 17 .40.020(2)(c). The hearing examiner did not consider evidence offered to prove or disprove the City’s 2008 determination. Finally, the
examiner found that Lawrence had actual notice of her right to appeal and understood this right, as she acknowledged it in the August 2008 e-mail to Burtnett. Since Lawrence

1 This figure was calculated as the di fference between $1,995 and $754 times 34 months.7 failed to exercised this right, the City’s determination was final and the MAR was $724.70. 2 Lawrence appealed the August 5, 2011 administrative h earing decision to the RSC on September 20, 2011. She ar gued (1) the RSO violated Co sta-Hawkins; (2) the hearing officer relied on documents not part of th e hearing itself, thus depriving Lawrence of procedural and substantive due process; and (3) the hearing officer was not qualified to hear the matter, thus depriving Lawrence of pr ocedural and substantiv e due process. The matter was heard on October 27, 2011, befo re the RSC, which affirmed the hearing
examiner’s decision. It fo und that the 2008 decision of the Department of Rent Stabilization and Housing occurred in the norma l course of business and was final, as it was not appealed. Petition for Writ of Mandate On January 20, 2012, La wrence petitioned the superior court for a writ of administrative mandamus directing the City to reverse the RSC’s decision. The court heard argument on the petiti on on July 27, 2012. During the hearing, Lawrence stressed her belief that the City’s local law was preempted by Costa-Hawkins, and as a result the City’s MAR decision could not stand. Lawrence argued that Costa-Hawkins may give the City the power to monitor tenant evictions, but it stops short of allowing the Ci ty to regulate rents after vacancies. In response, the trial court asked Lawrence how to reconcile Civil Code section 1954.53, subdivision (e) with her argument. Lawrence interpreted Civil Code section 1954.53, subdivision (e) as restrictiv e, finding it did not permit local ordinances to regulate the rents an owner may set after a vacancy. Lawrence argued that Costa-Hawkins permitted four exclusive exceptions, and because the eviction here did not fall within any of these scenarios, the doctrine of preemption prev ented the City from creating any additional

2 She came to this number via the 200 8 MAR, amended to include appropriate annual general adjustment s allowed by the City.8 exceptions to regulate the rate set by Lawrence or any other after-vacancy rental rates. Furthermore, Lawrence ch allenged the 2011 MAR. The City presented a different interpre tation of Civil Code section 1954.53, subdivision (e), analyzing it from a policy persp ective. It argued if Costa-Hawkins does not permit the regulation of af ter vacancy rent control, there can be no remedy for pretextual or bad faith evictions. After hearing each side, the court stated its decision rested upon Civil Code section 1954.53, subdivision (e).
The trial court addressed the 2011 MAR fi rst, concluding that Lawrence did not rest her objection upon the belief that the findings were flawed or that the record failed to support the final decision. In stead, Lawrence disputed the au thority of the RSO, and the City acknowledged the RSO served as the basi s for its decision in 2008. As such, the court concluded that the validity of the 2011 MAR could not be addressed until the legality of the RSO was determined. In analyzing the conflicting RSO sections , the trial court looked at the four exceptions laid out in Costa- Hawkins with those found w ithin the RSO. The court reviewed the doctrine of preemption, fi nding that Lawrence bore the burden of establishing Costa-Hawkins did preempt the RSO. The City could regulate this area if it did not overstep or encroach upon the boundaries and purpose set out within CostaHawkins. The court found th e City received its authority within Costa-Hawkins (Civ. Code § 1954.53, subd. (e)), as the legislature’s inclusion of this section makes a strong statement that local governments are permitted to maintain their right to regulate and monitor the grounds for evicti on, in order to prevent pret extual evictions. A local government may regulate an after vacancy rental rate when its ordinance is directly tied to the regulation of pretextual eviction and th e focus is to prevent bad faith evictions. Because the disputed RSO sections here regu late and monitor bad faith evictions, it found a reasonable relationship between maintain ing post-vacancy rent control and the prohibited grounds for eviction. It found th e RSO is not preempte d by Costa-Hawkins.9 The court found that the legislature would not have included this section if it did not wish to permit local governments to regulate the area of pretextual evictions, in some way. It found the City’s additional exceptions confor m to Costa-Hawkins, pa rticularly in their focus upon bad faith evictions. It distinguis hed the court decisions cited by Lawrence, as
the ordinances struck down in those decisi ons did not aim to regulate good faith and bad faith evictions differently. The trial court found the City’s RSO qu alified as a proper means of eviction
control under Costa-Hawkins. (Civ. Code, § 1954.53, subd. (e ).) It found the RSO is not void or preempted by Costa-Hawk ins and the City did not abus e its discretion in applying
it. After the hearing, the trial court denied the petition for writ of mandate, entering judgment in favor of the City, Gant, and Burtnett. Lawrence appealed on September 5, 2012.
CONTENTIONS ON APPEAL
Lawrence contends on appeal the trial court erred in denying the petition because (1) her right to appeal is not waived by the doctrine of collateral estoppel when she failed to respond within the 10-day period allocated by the RSC in 2008; (2) the City does not have permissible authority to create any a dditional exceptions to Costa-Hawkins and as such RSO section 17.40.020 is void; and (3) assuming the City has authority to create additional exceptions to Cost a-Hawkins, the RSC’s admi nistrative procedures and resulting decision constituted an unlawful exertion of judicial powers.
DISCUSSION The City contends that the doctrine of collateral estoppel bars Lawrence’s appeal. While Lawrence challenged the 2011 MAR decision, that decision was based upon the initial determination by the City in 2008. However, Lawrence expressly waived her right to appeal that MAR determination in 2008, as evidenced by her Au gust 2008 e-mail to
Gant and Burtnett.10 This administrative proceeding was quasi-judi cial in nature, and therefore subject to the doctrine of collateral estoppel. ( Pacific Lumber Co. v. State Water Resources (1982) 37 Cal.4th 921, 944.) Collateral estoppel requires an issue be necessarily decided at the previous proceeding, that the decision itself be final, and that party against whom estoppel is sought was also a party. ( Id . at p. 943.) Here, Lawrence contests the MAR, a matter which the City settled conclusively in 2008. While this is a direct appeal of th e 2011 decision, the hearing examiner stated on September 6, 2011, that the Ju ly 24 and August 26, 2008 dete rminations by the City were final and binding on Lawrence. Therefore, appealing the 2011 MAR is effectively appealing the 2008 MAR.
Lawrence received two notifications of the final decision in July and August 2008 and willingly let each stand. The City advised her in each letter that she could appeal if
the determination was based on false or misl eading information. She failed to appeal
after the RSC mailed either notice. Furthe rmore, Lawrence and the City were both
involved in the 2 008 MAR decision. In her reply brief, Lawrence argues that collateral estoppel of an administrative ruling does not apply when the agency has no authority to issue th e ruling in the first
instance. She cites Woods v. Superior Court (1981) 28 Cal.3d 668, City of Lodi v.
Randtron (2004) 118 Cal.App.4th 337 and City of Fillmore v. Board of Equalization (2011) 194 Cal.App.4th 716.
In Woods v. Superior Court (1981) 28 Cal.3d 668, re sidents of an apartment building which was deemed unfit for habitation sought relocation funds from the county department of social services. The departme nt rejected their claim and their subsequent request for an administrative h earing. The residents then petitioned for a writ of mandate in the superior court. The department filed a demurrer to the petition, whic h the superior court overruled. The California Supreme Cour t ultimately determined that the superior court properly overruled the demurrer and that the residents were entitled to contest the validity of the regulation upon which the deni al of their claims was based. Lawrence11 cites the portion of the opinion which stat es that courts ma y strike down void administrative regulations. ( Id . at p. 679.) However, the Woods court also held that the validity of an administrative regulation can a nd should be raised at the administrative level. “[P]ermitting administrators an opport unity to construe challenged regulations in a manner to avoid their invalidation is preferab le to requiring a court challenge. Moreover,
in those cases in which the va lidity of such a regulation must be judicially resolved, the task of a reviewing court is simplified by a narro wing and clarification of the issues in an administrative hearing.” ( Id . at pp. 680-681.) Here Lawrence did not raise the validity of
the RSO at the administrative level.
In City of Lodi, supra , 117 Cal.App.4th 337, an administrative abatement order was issued by the city of Lodi pursuant to a municipal environmental ordinance. Lodi had enacted the ordinance authorizing it to i nvestigate and regulate the contamination of its soil and groundwater. The defendant did not comply with the ordinance procedures for contesting the order. ( Id. at p. 348.) Lodi brought an action in the name of the “People of the State of California” and the trial court granted summary judgment and a mandatory injunction against the defendant. The defendant appealed, contending the
abatement order was void and unenforceable and the municipal ordinance was preempted by state law. In reversing the trial court, th e court of appeal found state court legislation specifically occupied the field of hazardous waste contamination a nd did not authorize a city to issue administrative orders for remedial action. The court found that because Lodi was preempted from enacting its own ordinance, the enforcing officer had no jurisdiction
to issue the order and the defendant was not collaterally estopped from challenging Lodi’s authority. ( Id . at p. 361.) Although Lawrence is contesting the validity of the rent ordinances and the ability of the City to enact such municipal regulations, we do not agree with Lawrence’s position
that City of Lodi compels a conclusion that collateral estoppel principles are inapplicable
to this case. In City of Lodi , the administrative order wa s issued in 1998, and when Randtron failed to appeal, Lodi took a proa ctive position, filing suit soon after the12 administrative order was issued. The matte r was on appeal within three years from the issuance of the order. ( City of Lodi v. Randtron, supra, 118 Cal.App.4th at p. 348.) Here, Lawrence not only failed to take advantage of the administrative appeal procedure set forth by the City, she explicitly told Gant and Burtne tt that she acquiesced in their determination and re-filed a City rent form setting the rent at $715.15, and renewed the lease for three years. She did not raise the lack of the City’s power to raise the rent until August 2011, when she appealed the administrative hearing decision. Here, no attack on the validity of the City’s power to limit the rent was ra ised when the City issued an MAR ruling in 2008. In fact no challenge was made at all to the ruling made by the City in 2008; La wrence simply accepted the ruling and accepted the lowered rent for three years. City of Fillmore, supra, 194 Cal.App.4th 716 is distin guishable as well. There, two cities sought the reallocation of local sale s tax revenues from another city, the city of Fillmore. They petitioned th e State Board of Equalizati on. The State Board of Equalization issued a decision in favor of th e petitioning cities, and then later issued a supplemental decision. The i ssue in the case was whether the two cities had to exhaust
their administrative remedies wi th respect to one decision befo re seeking judicial review of the other. ( Id . at p. 729.)
The fact that Lawrence claims the RSO is preempted by state law does not excuse her from belatedly seeking a retroactive rent in crease of more than twice the rate she had initially agreed upon. ( Oquendo v. California Institution for Women (1989) 212 Cal.App.3d 520, 523 [unchallenged determina tion of the administrative board collaterally estopped the plaintiff from relitigating]; see San Diego Municipal Employees Assoc. v. Superior Court (2012) 206 Cal.App.4th 1447, 1462 [exhaustion of administrative remedies required even though jurisdictional authority of agen cy contested].) As tenants, Gant and Burtnett were entitled to certainty without fear that their rent could be retroactively raised any time th eir landlord decides to attack the validity of a municipal
rent ordinance.13 Lawrence also argues that collatera l estoppel does not apply because the determination by the city was not made by “a tribunal having the requisite authority, the
issue was not identical to the one which is sought to be re litigated, the proc eeding did not result in a final judgment on the merits, and the party against whom the collateral estoppels is asserted was not a party in priv ity with a party at the prior proceeding. Murray v. Alaska Airlines (2010) 50 Cal.4th 860 answ ers those arguments. In Murray , an administrative complaint was dismissed by the Secretary of Labor, and the complainant did not take advantage of th e administrative review process. The complainant then filed a la wsuit in state court. ( Id . at p. 866.) Because the complainant had an opportunity to litigate issues in the proper admi nistrative proceedings and refused to participate, the Supreme Court found that the Secretary’s factual findings should be afforded preclusive effect in th e subsequent court action. ( Id. at p. 879.)

DISPOSITION

The judgment is affirmed. Res pondent is awarded costs on appeal.

WOODS, J.

We concur:

PERLUSS, P. J. ZELON, J.