Court Opinion

ID: 2683856
Source: CourtListenerOpinion
Date Created: 2014-07-15 21:01:25.647929+00
Date Added: 2024-06-11T13:13:40.400751
License: Public Domain

Filed 7/15/14 Aiuto v. City and County of San Francisco CA1/4
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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                  IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                         FIRST APPELLATE DISTRICT

                                                  DIVISION FOUR

VICTOR AIUTO et al.,
         Plaintiffs and Appellants,
                                                                    A138367
v.
CITY AND COUNTY OF SAN                                              (San Francisco City & County
FRANCISCO,                                                          Super. Ct. No. CGC-10-502358)

         Defendants and Respondents.

                                                             I.
                                                INTRODUCTION
         Victor Aiuto and other condominium owners (plaintiffs) own units that are 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).1
Plaintiffs’ second amended complaint (SAC) against the City2 alleges the entire BMR
Program is void and unenforceable because the City failed to record adequate documents
reflecting the BMR Program restrictions as required by section 27281.5. Plaintiffs appeal
after the trial court granted the City’s demurrer to the SAC without leave to amend,
concluding plaintiffs’ claims were statutorily barred by section 66499.37––which applies

         1
             All undesignated statutory references are to the Government Code.
         2
         The City is sued along with the Mayor’s Office of Housing, former Mayor
Gavin Newsom, and the San Francisco Board of Supervisors (collectively referred to as
the City).

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a 90-day statute of limitations to actions challenging decisions made by local agencies
“concerning a subdivision.” We affirm.
                                             II.
                        FACTS AND PROCEDURAL HISTORY
       We have fully set out the background of this litigation in our prior opinion in this
case, Aiuto v. City & County of San Francisco (2011) 201 Cal.App.4th 1347, 1351
(review den. Mar. 21, 2012) (Aiuto I). As we explained in Aiuto I, “[t]he SMA is ‘the
primary regulatory control’ governing the subdivision of real property in California.
[Citation.] 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.
[Citation.]” (Aiuto I, at p. 1351.)
       As part of its effort to meet the housing needs of all economic segments of the
community (§§ 65302, subd. (c), 65583, subd. (c)), the City adopted the BMR Program in
1979 pursuant to its authority under the SMA to provide “ ‘opportunities for
homeownership while preserving and expanding the supply of low- and moderate-income
housing.’ (S.F. Subd. Code § 1344(b)(3).)” (Aiuto I, supra, 201 Cal.App.4th at p. 1351.)
The BMR Program, reflected in sections 1341 and 1385 of the City’s Subdivision Code,
required property owners seeking to convert their apartments into condominiums to set
aside a certain number of their units for the BMR program. (Aiuto I, at p. 1351.) The
purpose of conditioning approval of the subdivision 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. (Ibid.)
       In 2008 a dispute arose between the City and several owners of BMR units
regarding whether the BMR program restrictions lasted in perpetuity, or only for 20
years. In response, on December 19, 2008, the City adopted an ordinance which

                                             2
amended sections 1341 and 1385 and added a new section 1344 to the City’s Subdivision
Code (2008 ordinance). (Aiuto I, supra, 201 Cal.App.4th at p. 1351.)
       On May 13, 2009, five months after the City adopted the 2008 ordinance,
plaintiffs filed their complaint challenging the City’s adoption of the 2008 ordinance and
its alleged mismanagement of the BMR program. (Aiuto I, supra, 201 Cal.App.4th at
p. 1352.) The original filing was in federal court and was dismissed pursuant to the
City’s motion after the plaintiffs failed to amend their claim under 42 United States Code
section 1983, having been granted leave to amend as to that cause of action. (Aiuto I, at
p. 1352.) On August 6, 2010, three months after their federal case was dismissed,
plaintiffs filed their complaint in San Francisco Superior Court making a facial challenge
to the 2008 ordinance. Plaintiffs asserted three claims for relief: (1) regulatory taking;
(2) state law preemption; and (3) civil rights violations. (Id. at pp. 1352-1353.)
       On September 10, 2010, plaintiffs filed a motion for preliminary injunction
seeking to toll certain deadlines that were part of the 2008 ordinance. (Aiuto I, supra,
201 Cal.App.4th at p. 1353.) The court heard plaintiffs’ motion for a preliminary
injunction and concluded that plaintiffs had met their burden of establishing a reasonable
probability of success on the merits. (Id. at p. 1354.) In conjunction with that ruling, the
court found that section 66499.37––which would have required plaintiffs’ facial
challenge to the 2008 ordinance to be filed within 90 days of its adoption––did not apply
to plaintiffs’ claims. (Aiuto I, at p. 1354.) Having resolved the statute of limitations
issue, the court then issued its order granting plaintiffs a preliminary injunction. (Ibid.)
The City sought review of the issuance of the preliminary injunction by direct appeal and
writ relief. (Ibid.)
       The City’s appeal and writ were consolidated for decision, and in Aiuto I, supra,
201 Cal.App.4th 1347, this court reversed the trial court’s order granting plaintiffs a
preliminary injunction. In doing so, this court agreed with the City that section 66499.37,
the statute of limitations governing any subdivision-related decision under the SMA,
required plaintiffs to assert their challenge to the 2008 ordinance within 90 days of its
enactment. (Aiuto I, supra, 201 Cal.App.4th at pp. 1350-1351, 1360-1361.) Because

                                              3
plaintiffs’ claims were filed after the 90-day window had closed, plaintiffs did not show a
likelihood of success on the merits of their claims, and the trial court should not have
granted injunctive relief. (Ibid.)
       While Aiuto I was pending, plaintiffs amended their complaint to allege numerous
new causes of action. (201 Cal.App.4th at p. 1361, fn. 10.) For purposes of this appeal,
we focus on plaintiffs’ SAC and their sole argument that they alleged sufficient facts to
assert a viable claim for their first cause of action entitled “Inadequate Recording.” This
cause of action alleged that the City “imposed restrictions upon the real property owned
by plaintiffs through its Subdivision Code” restricting, among other things, plaintiffs’
ability “to convey and rent their homes.” Plaintiffs further alleged that in imposing the
BMR Program restrictions on their property, the City violated section 27281.5, which
required the City to record the restrictions, with the restricted property “particularly
described” so as to provide “constructive notice of the restriction.”3 Plaintiffs alleged the
City “failed to set forth these restrictions in a recorded document particularly describing
plaintiffs’ properties,” nor did the City “record a document which describes plaintiffs’
properties and which refers by page and book number to a separately recorded document

       3
          Section 27281.5 reads in full: “(a) Any restriction imposed upon real property
on or after January 1, 1982, which restricts either the ability of the owner of real property
to convey the real property or the owner of a proprietary leasehold interest to convey
such interest and which is imposed by a municipal or governmental entity on real
property or a proprietary leasehold interest which is not owned by the municipal or
governmental entity, shall be specifically set forth in a recorded document which
particularly describes the real property restricted in order to impart constructive notice of
the restriction, or shall be referenced in a recorded document which particularly describes
the real property restricted and which refers by page and book number to a separately
recorded document in which the restriction is set forth in full.
       “(b) Any restriction on the ability of a person to convey real property which is
subject to subdivision (a) shall be valid and enforceable only when the requirements
contained in subdivision (a) have been met.
        “(c) Nothing in this section shall be construed, either directly or by implication, to
enhance, diminish, or authorize any municipal or governmental entity to impose a
restriction on the ability of a person to convey real property or a proprietary leasehold
interest.”

                                              4
in which the restriction is set forth in full.” Consequently, plaintiffs alleged “the rental,
resale and other restrictions placed [by the BMR Program] on plaintiffs’ homes are not
valid or enforceable.”
       The City filed a demurrer, again raising the issue of the 90-day statute of
limitations in section 66499.37. The City invoked the language of Aiuto I that the “90-
day limitations period . . . is expressly made applicable to any action ‘to determine the
reasonableness, legality, or validity’ of any subdivision condition . . . .’ ” (201
Cal.App.4th at p. 1357.) The City argued plaintiffs’ cause of action for “Inadequate
Recording” was time-barred because “[n]one of the Plaintiffs challenged the restrictions
imposed by the BMR Program within 90 days of the imposition of the Program’s
restriction’s on their properties.”
       As an alternative argument, the City claimed that even if plaintiffs’ claim was
timely, it should be rejected as a matter of law. The City requested the trial court take
judicial notice of documentary evidence which purported to show the “the subdivision
maps recorded for Plaintiffs’ properties contain the program restrictions, providing the
constructive notice contemplated under § 27281.5.” The City claimed the statutory
requirements were fulfilled because the “restrictions of the BMR Program are thus ‘set
forth in a recorded document’––the subdivision maps––which ‘particularly describe[] the
real property.’ ”
       Plaintiffs opposed the demurrer, claiming this action was not subject to the 90-day
statute of limitations of section 66499.37 because it was not for the purpose of attacking a
government decision “concerning a subdivision . . . or to determine the reasonableness,
legality, or validity of any condition attached thereto . . . .” Instead, plaintiffs argued it
was merely presents a “claim seeking a declaration that no recorded document restricts a
plaintiff’s right to convey their property.” Plaintiffs also contended there was a factual
dispute whether the “special notes” on the recorded subdivision maps complied with
section 27281.5’s requirements, making it inappropriate for resolution by demurrer.
       Following a hearing, the trial court found the changes plaintiffs made in their SAC
alleging a new cause of action for “Inadequate Recording” amounted to nothing more

                                               5
than a rearticulation of the identical issues resolved by this court in Aiuto I. The court
observed the changes did not alter the substantive purpose of plaintiffs’ pleadings,
which amounted to a legal challenge seeking to invalidate acts or decisions taken
pursuant to ordinances enacted under the SMA. When this matter was argued, the
court observed, “[w]ell, it seems to me that anything you wish to add . . . however it’s
styled that these restrictions are no good, be it invalid or illegal, is barred by the [90-
day] statute of limitations.” The court also found, in the alternative, that even if this
case was not time-barred, “as recorded, the documents comply with Government Code
Section 27281.5 . . . .”4 Accordingly, the trial court granted the City’s demurrer without
leave to amend and dismissed plaintiffs’ action against the City. This appeal followed.
                                             III.
                                       DISCUSSION
A.     Standard of Review
       On appeal from an order dismissing a complaint after the sustaining of a demurrer,
we independently review the pleading to determine whether the facts alleged state a cause
of action under any possible legal theory. (Aubry v. Tri-City Hospital Dist. (1992) 2
Cal.4th 962, 967; Berger v. California Ins. Guarantee Assn. (2005) 128 Cal.App.4th 989,
998.) After reviewing the allegations of the complaint and the matters properly subject to
judicial notice,5 we exercise our independent judgment as to whether the complaint states
a cause of action as a matter of law. (Tucker v. Pacific Bell Mobile Services (2012) 208
Cal.App.4th 201, 210.) We give the complaint a reasonable interpretation, treating the

       4
          Because we affirm the trial court’s ruling that this action was untimely based on
the applicable statute of limitations, we find it unnecessary to address the court's
alternative holding that, as a matter of law, the City complied with section 27281.5’s
requirements.
       5
         While this case was being briefed, the City filed a motion asking this court to
take judicial notice of certain documents. We deferred ruling on the motion until a
decision on the merits of the case. The documents in question are not relevant to our
analysis. Judicial notice is therefore denied. (Mangini v. R. J. Reynolds Tobacco Co.
(1994) 7 Cal.4th 1057, 1063, overruled on another point in In re Tobacco Cases II (2007)
41 Cal.4th 1257, 1276.)

                                              6
demurrer as admitting all material facts properly pleaded, but do not assume the truth of
contentions, deductions or conclusions of law. (Moore v. Regents of University of
California (1990) 51 Cal.3d 120, 125.)
       When, as here, the facts are not in dispute, application of the statute of limitations
is a question of law subject to de novo review. (International Engine Parts, Inc. v.
Feddersen & Co. (1995) 9 Cal.4th 606, 611-612; Aiuto I, supra, 201 Cal.App.4th at
p. 1355.)
B.     Applicability of Section 66499.37
       The City asserts, and the court found, that section 66499.37 of the SMA
determines the limitations period which governs plaintiffs’ claim that the City failed “to
comply with California law and record the specific restrictions applicable to BMR units,”
as required by section 27281.5. Plaintiffs insist the court “mistakenly” applied section
66499.37, because this is a “valid claim[] for quiet title based on Section 27281.5 and the
case law is clear that no statue of limitations bars such claims.”
       Section 66499.37 provides, “Any action or proceeding to attack, review, set aside,
void, or annul the decision of [a] . . . legislative body concerning a subdivision, or of any
of the proceedings, acts, or determinations taken, done, or made prior to the decision, or
to determine the reasonableness, legality, or validity of any condition attached thereto,
including, but not limited to, the approval of a tentative map or final map, shall not be
maintained by any person unless the action or proceeding is commenced and service of
summons effected within 90 days after the date of the decision . . . .”
       The Legislature intended the 90-day service of summons requirement in section
66499.37 to operate as a statute of limitations. (Sprague v. City of San Diego (2003) 106
Cal.App.4th 119, 128.) This requirement is mandatory. (Maginn v. City of Glendale
(1999) 72 Cal.App.4th 1102, 1108.) Where an action is not filed or served within the
time required by section 66499.37, it must be dismissed. (Ibid.)
       The Legislature also intended section 66499.37 to be applied broadly. We stressed
this point in Aiuto I, supra, 201 Cal.App.4th 1347, relying heavily on the California
Supreme Court’s seminal decision in Hensler v. City of Glendale (1994) 8 Cal.4th 1, 23

                                              7
(Hensler). Aiuto I explains, “ ‘Section 66499.37 was enacted to ensure that any challenge
to local legislative or administrative acts or decisions taken pursuant to ordinances
enacted under the authority of the Subdivision Map Act will be brought promptly.’ ”
[Citation.] The [Hensler] court pointed out that every appellate decision which had
considered the issue in a case involving a controversy related to a subdivision had held
that section 66499.37 was applicable no matter what the form of the action. [Citation.]
The key factor was that in each of these cases, whatever wrong was claimed in the
complaint or whatever relief was sought, the gravamen of the complaint was an attack on
a subdivision-related decision under the SMA. [Citations.]” (201 Cal.App.4th at
p. 1358, original italics.)
       In Aiuto I, supra, 201 Cal.App.4th 1347, this court determined that the 90-day
statute of limitations of section 66499.37 applied to an earlier complaint filed in this
action raising claims whereby “plaintiffs seek to set aside an ordinance enacted by the
City under its authority to regulate condominium conversions pursuant to the SMA.
(§ 66411.) As our Supreme Court has directed, ‘if this is a claim arising out of
application of a land-use regulation authorized by [the SMA], section 66499.37 applies.’
[Citation.]” (Id. at p. 1359, fn. omitted.) “Consequently, regardless of the nature of or
label attached to the action challenging the legislative body’s subdivision-related
decision, the action is governed by section 66499.37.” (Presenting Jamul v. Board of
Supervisors (1991) 231 Cal.App.3d 665, 671.)
       Ignoring the significance of this language, plaintiffs insist “[w]here the right being
pursued lies in a statute or law outside of the SMA and its statutory scheme, however, the
courts . . . have declined to apply Section 66499.37.” However, the authority relied on by
plaintiffs does not support such a broad proposition. For instance, in Legacy Group v.
City of Wasco (2003) 106 Cal.App.4th 1305, the developers’ claim that the City of
Wasco had breached development contracts by refusing to approve final subdivision tract
maps was subject to the 90-day limitations period set forth in section 66499.37, not the
longer limitations period normally applicable to contract claims. (Id. at pp. 1313-1314.)
In the course of that analysis, the Court of Appeal also addressed whether a claim for

                                              8
breach of a development agreement is subject to section 66499.37. (Id. at pp. 1311-
1312.) The court found that claim did not arise under or relate to action taken pursuant to
the SMA, and thus was not governed by the 90-day limitation period. (Ibid.)
       The other cases cited by plaintiffs are also distinguishable, because none involved
a decision arising under the SMA. (See Uniwill v. City of Los Angeles (2004) 124
Cal.App.4th 537, 543-544 [easement requirement after city had approved a tentative tract
map did not arise under SMA]; Donohue v. Santa Paula West Mobile Home Park (1996)
47 Cal.App.4th 1168, 1173-1174 [claim that local rent control ordinance could be applied
to property not subject to section 66499.37]; Alfaro v. Community Housing Improvement
System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356 [§ 66499.37 never
mentioned in decision].)
       In the end, while plaintiffs seek to characterize this as a simple action “seek[ing]
to quiet the [plaintiffs’] title of adverse claims made by the City,” we believe the claims
made in this case are, in essence, similar to the claims asserted in Aiuto I, Hensler, and
other cases applying section 66499.37. That is to say, plaintiffs’ claims arise out of land
use restrictions authorized by the SMA and challenge the validity and enforceability of
conditions imposed on a subdivision, which required approval of a subdivision map.
Thus, section 66499.37 applies. As our Supreme Court has stated, “[T]he ‘clear
language’ of section 66499.37 ‘manifests a legislative purpose that a decision such as that
of the City, approving a subdivision map and attaching a condition thereto, shall be
judicially attacked within [the limitation period of section 66499.37], or not at all.’
(Original italics.)” (Hensler, supra, 8 Cal.4th at p. 27.) Accordingly, we agree with the
trial court that plaintiffs’ cause of action for “Inadequate Recording” was subject to the
90-day limitations period set forth in section 66499.37, not the longer limitations period

                                              9
normally applicable to quiet title claims. (See Ankoanda v. Walker-Smith (1996) 44
Cal.App.4th 610, 615.)6
                                            IV.
                                     DISPOSITION
       The judgment is affirmed. Costs on appeal to the City.

                                                  _________________________
                                                  RUVOLO, P. J.

We concur:

_________________________
REARDON, J.

_________________________
RIVERA, J.

       6
          While we conclude the trial court correctly deemed the relevant cause of action
for inadequate recording time-barred by section 66499.37, we express no opinion with
respect to the outcome of litigation involving different parties, such as future purchasers
of the restricted properties, who assert causes of action under section 27281.5.

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