Judge James C. Chalfant, Case 22STCP00008 2022-10-20 Tentative Ruling

Hangar Holdco, LP v. City of Los Angeles, et al., 22STCP00008

Tentative decision on motion to augment record: denied

Petitioner Hangar Holdco, LP (“Hangar”) moves to augment the record with: (1) emails and the accompanying exhibits (Exs. 17-22); and (2) eight Requests for Admissions (“RFAs”) and the responses (Ex. 23).

The court has read and considered the moving papers, opposition, and reply,[1] and renders the following tentative decision.

Petitioner Hangar commenced this proceeding on January 3, 2022 against Respondents City of Los Angeles (“City”), Los Angeles Housing Department (“LAHD”), Ann Sewill, Marcella DeShurley, Robert Klepa, Edward Jacobs, Rent Adjustment Commission of the City of Los Angeles (“RAC”), Wilshire Escrow Company (“Wilshire Escrow”), Leslie Lim, Does 1 to 10, and Real Party in Interest Carl Downing. The Petition alleges in pertinent part as follows.

Petitioner Hangar is the owner and lessor of property located at 4206 and 4208 Franklin Avenue, Los Angeles, California (the “Property”). Petition, ¶15. Downing is a former tenant of the Property, specifically at 4206 Franklin. Petition, ¶16.

On November 13, 2018, Petitioner filed an Ellis Act package with the City to permanently remove the two rental units from the rental market. Petition, ¶15. Petitioner escrowed $10,750 for Downing’s Ellis Act relocation benefit with Wilshire Escrow. Petition, ¶18.

On November 13, 2018, Petitioner served Downing with an Ellis Act 120-day Notice to Quit. Petition, ¶18. Downing submitted a request for an extension because he was disabled. Petition, ¶19. Petitioner granted the request, and the new date to vacate was November 13, 2019. Ibid.

On December 13, 2018, the City, through its relocation vendor, determined that Downing was an Eligible Tenant and entitled to $10,750 in relocation benefits. Petition, ¶20. Downing appealed that determination, arguing he was entitled to a higher $20,450 relocation benefit amount because he is a Qualified Tenant. Petition, ¶21.

LAHD held a hearing on Downing’s appeal. Petition, ¶22. On January 30, 2019, LAHD issued a written decision in Downing’s favor, agreeing that he was entitled to a higher Qualified Tenant relocation benefit amount of $20,450. Ibid.

In early February 2019, Petitioner increased the escrowed amount with Wilshire Escrow to $20,450. Petition, ¶23. Downing drew down $1,620 on December 14, 2018, and $2,368 on June 7, 2019, from his relocation funds escrowed with Wilshire Escrow, leaving $16,462. Petition, ¶24.

Hangar filed an unlawful detainer action against Downing premised on the Ellis Act notice. Petition, ¶26. On April 1, 2020, Hangar voluntarily dismissed that action without prejudice because of the judicial Covid-19 complete shut-down. Ibid.

On April 29, 2020, Hangar served Downing with a three-day notice to pay rent or quit for the months of October 2019 through February 2020 – i.e., pre-COVID-19 rent, totaling $12,000. Petition, ¶27.

On May 17, 2020, Petitioner commenced an unlawful detainer action based on rent owed. Petition, ¶29. Downing was evicted from his unit on August 3, 2021. Petition, ¶32. On August 21, 2021, Downing requested the remaining $16,462 left in escrow. Petition, ¶33.

Without copying Hangar, Lim and Wilshire Escrow sent a September 3, 2021 letter to the City and LAHD pursuant to the dispute resolution provisions of the RAC Regulations. Petition, ¶36. The City responded in a September 16, 2021 letter without copying Hangar on the letter in violation of RAC regulations. Petition, ¶¶ 38-39. Hangar received a copy of this letter on October 8, 2021. Petition, ¶¶ 39-42.

On October 8, 2021, Hangar filed an appeal of City’s September 16, 2021 decision. Petition, ¶43. The hearing officer conducted the hearing on November 18, 2021. Petition, ¶46. At the hearing, Hangar argued that Downing was not entitled to the $16,462 funds remaining in escrow because he was not evicted due to the Ellis Act in November 2019 but instead for failure to pay rent in August 2021, almost two years after he should have vacated pursuant to the Ellis Act notice. Petition, ¶ 47. On December 3, 2021, Klepa issued a decision denying Hangar’s appeal. Petition, ¶49, Ex. A.

Hangar argues that the decision is an abuse of discretion, contains legal errors, denied it a fair trial, and is not supported by the findings or evidence. Ibid. Hangar now seeks a writ of administrative mandamus to set aside the decision denying its appeal. Petition, Prayer ¶1. Hangar also seeks a traditional writ compelling the amendment of RAC regulations relating to the release of escrowed relocation funds. Petition, Prayer ¶2.

On February 14, 2022, City filed its Answer to the Petition. It filed an Amended Answer on April 18, 2022.

The administrative record includes the transcript of the proceedings, all pleadings, all notices and orders, any proposed decision by a hearing officer, the final decision, all admitted exhibits, all rejected exhibits in the possession of the local agency or its commission, board, officer, or agent, all written evidence and any other papers in the case. CCP §1094.6(c); Govt. Code §11523.

“The general rule is that a hearing on a writ of administrative mandamus is conducted solely on the record of the proceeding before the administrative agency.” Toyota of Visalia v. New Motor Vehicle Bd. (1987) 188 Cal.App.3d 872, 881. The court can only admit additional evidence where the party seeking its inclusion shows (1) the evidence could not have been presented to the agency in the first instance in the exercise of reasonable diligence or (2) was improperly excluded. CCP §1094.5(e); Western States Petroleum Assn. v. Superior Court, (1995) 9 Cal.4th 559, 578 (“Western States”); Eureka Citizens for Responsible Govt. v. City of Eureka, (2007) 147 Cal.App.4th 357, 366.

The Code of Civil Procedure does not expressly provide for a motion to augment or correct the administrative record, but such motions are routinely made. See e.g., Pomona Valley Hospital Medical Center v. Superior Court, (1997) 55 Cal.App.4th 93, 101.

The proposed records “are relevant and could not be obtained at the Administrative Hearing because the Administrative Hearing Officer did not permit Counsel to examine witnesses, or ask any questions for that matter, of any of the attendees.” Cordero-Sacks Decl., ¶18. Hangar’s counsel was not permitted to ask when Wilshire Escrow received the City's letter. Cordero-Sacks Decl., ¶18a. Exhibit 17 is a series of emails ending on October 8, 2021 letter between Hangar’s counsel and Wilshire Escrow in 12-point font. Cordero-Sacks Decl., ¶18b. Exhibit 18 is an October 4, 2021 email from Wilshire Escrow in 12-point font. Cordero-Sacks Decl., ¶18c. Exhibit 19 is a one-page letter from the City to Wilshire Escrow dated September 16, 2021. Cordero-Sacks Decl., ¶18d. Exhibit 20 is an October 8, 2021 email from Wilshire Escrow to Hangar’s attorney attaching the City’s entire two-page letter. Cordero-Sacks Decl., ¶18e. Exhibit 21 is the City’s September 16, 2021 letter to Wilshire Escrow. Cordero-Sacks Decl., ¶18f. Exhibit 22 is an October 8, 2021 email from Hangar’s counsel to the City reflecting an appeal of the City’s determination. Cordero-Sacks Decl., ¶18g. Hangar's requests for admission to Wilshire Escrow served on August 28, 2022 also are attached. See Cordero-Sacks Decl., ¶15.

Hangar attempted to stipulate to the inclusion of the proposed records without success. Cordero-Sacks Decl., ¶¶ 3-15.

On September 19, 2022, Hangar filed a Notice of Errata for the instant motion attaching (a) Wilshire Escrow's responses to the request for admission served on September 13, 2022 and (b) AR 673.

On or about September 15, 2021, LAHD received a letter from Wilshire Escrow asking it to determine whether Hangar or Downing was entitled to the escrowed funds. Zhong Decl., ¶7, Ex. 2, AR 363-64.

On or about September 16, 2021, LAHD determined that funds remaining in the escrow account must be released to Downing. Zhong Decl., ¶8, Ex. 3, AR 376-77. On September 23, 2021, LAHD mailed its determination to Wilshire Escrow. Zhong Decl., ¶9, Ex. 4, AR 343.

Pursuant to RAC Regulations, Hangar had ten days to appeal that determination. RJN Ex. 1 at RAC Reg. § 968.01. Therefore, the appeal was due on October 4, 2022.

On October 8, 2021, LAHD received Hangar's appeal. Zhong Decl., ¶10, Ex. 5, AR 344. The appeal included a claim that Hangar did not receive the City's September 16, 2021 letter until October 4, 2021, and that tolling should apply due to COVID-19 stay-at-home orders if LAHD claims the appeal is untimely. AR 346.

On or about October 29, 2021, Hangar’s counsel forwarded to LAHD a series of email exchanges between Wilshire Escrow and Hangar dated October 4 and October 8, 2021, regarding City’s escrow account determination. Zhong Decl., ¶11, Ex. 6, AR 598, 603-05.

Hangar’s administrative appeal was heard on November 18, 2021, where Hangar argued that it did not receive City’s determination letter until October 8, 2021. Zhong Decl., ¶15, Ex. 10, AR 536. Hangar’s counsel did not mention or submit the October 2021 emails.

On December 3, 2021, the hearing officer issued a decision denying Hangar’s appeal, ruling in part that the appeal was barred because it was untimely. Zhong Decl., ¶16, Ex. 11, AR 579.

RAC Regulation section 967.05 requires that the City contact all relevant parties within five business days of notification by escrow holder of the dispute, in order to conduct an investigation. Cordero-Sacks Reply Decl., ¶3c (AR 593). Per RAC Regulation section 968.01, any party may appeal the City’s determination within ten days of the City mailing it. Cordero-Sacks Reply Decl., ¶3c (AR 593).

Wilshire Escrow mailed the dispute information to the City on September 3, 2021, but the City only received it on September 15, 2021. Cordero-Sacks Reply Decl., ¶3a (AR 341). Although the City wrote its determination letter on September 16, 2021, it did not mail the letter out until September 23, 2021. Cordero-Sacks Reply Decl., ¶3a (AR 341). The City mailed the letter only to Wilshire Escrow, which received it on October 4, 2021. Cordero-Sacks Reply Decl., ¶¶ 3a (AR 343), 3b (AR 182).

Petitioner Hangar seeks to augment the record with Exhibits 17-22 (various emails and letters) as well as requests for admission (“RFAs”) to Wilshire Escrow and its responses. Hangar contends that these exhibits are relevant to show that its appeal was timely because the City sent its September 16, 2021 determination letter only to Wilshire Escrow. Wilshire Escrow then sent only the first page of the City's letter to Hangar, sending the entire letter a few days later. Hangar then timely appealed on October 8, 2021. Mot. at 3.

In administrative mandamus, extra-record evidence may be considered only if the party seeking inclusion of such evidence shows (1) the evidence could not have been presented to the agency in the first instance in the exercise of reasonable diligence or (2) was improperly excluded. CCP §1094.5(e); Fairfield v. Superior Court of Solano County, (1975) 14 Cal. 3d 768, 771-772; Western States, 9 Cal.4th at 578-579. In addition, extra-record evidence is admissible only if it is

As a preliminary matter, Exhibit 22 is already part of the administrative record as AR 344. Compare Cordero-Sacks Decl., Ex 11 with Zhong Decl., Ex. 5, AR 344.

Hangar has not shown that the remaining exhibits were improperly excluded or could not have been presented to the agency in the first instance in the exercise of reasonable diligence. CCP §1094.5(e). All of the emails are dated between September 16 and October 8, 2021 and all were in Hangar’s possession at the November 18, 2021 appeal hearing. There is no evidence that Hangar was precluded from presenting this evidence before the hearing officer.

As the City notes, Hangar submitted 117 pages of argument and exhibits in support of its appeal. To the extent that Hangar should have received separate written notice of the City’s determination (Reply at 1; Cordero-Sacks Reply Decl., ¶3 (AR 182, 341, 593)), it was not prejudiced by the City’s failure to provide it. Hangar still could have submitted these additional exhibits and failed to do so. The fact that Hangar’s counsel was not permitted to ask questions at the hearing does not impact this failure.

Hangar also has not shown that the RFAs meet the requirement of extra-record evidence. The City also points out that Wilshire Escrow’s responses did not even exist when the motion was filed, and that Hangar improperly relies on a Notice of Errata to include them. Opp. at 5. Finally, the response to Request No. 8 is not even relevant. That request seeks an admission from Wilshire Escrow that a release of liability provision in which Hangar agreed to hold the City harmless from liability for its administrative decision was not negotiated but rather was part of the RAC regulations. This hold harmless provision is irrelevant to the instant mandamus action in which no liability can be imposed.

As a matter of housekeeping, it is unclear whether the City’s September 16, 2021 letter to Wilshire Escrow (Ex. 21) is in the record. It should be, albeit without the “Received October 4, 2021” stamp of Wilshire Escrow. Additionally, the court does not have any problem with substituting identical emails in 12-point font for emails already in the record that are much smaller in type. With these caveats, the motion to augment the record is denied.

[1] Petitioner Hangar’s reply was untimely filed a day late on October 14, 2022. See CCP §1005. The court has elected to consider it anyway. Hangar also failed to lodge a courtesy copy of its reply brief in violation of the Presiding Judge’s First Amended General Order Re: Mandatory Electronic Filing. Counsel is admonished to provide courtesy copies in all future filings.

[2] City requests the court to take judicial notice of portions of the Los Angeles Municipal Code (RJN Ex. A) and Los Angeles Administrative Code (RJN Ex. B). The requests are granted. Evid. Code §452(b).