Judge Mitchell L. Beckloff, Case Number: 23STCP01011, Date: 2023-09-01 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 23STCP01011, Date: 2023-09-01 Tentative Ruling

Proposed Intervenor, CANGRESS dba Los Angeles Community Action Network (LA CAN), moves to intervene in this action. Petitioner, the City of Los Angeles, opposes the motion.

LA CAN’s request for judicial notice (RJN) of Exhibits 1 through 4 is granted.

The Skid Row Housing Trust was created to manage 29 properties in the Los Angeles area that house 1,500 vulnerable tenants whose rents are subsidized. (Pet., ¶ 13.) Due to a series of financial missteps, however, the Skid Row Housing Trust lost the financial ability to maintain the properties. (Pet., ¶ 14.) As a result, the properties fell into unhealthy and dangerous condition posing various risks to tenants. (Pet., ¶¶ 16, 18, 21, 26-28.)

On March 30, 2023, the City filed its petition to establish a receivership over the properties pursuant to Health and Safety Code section 17980.7, subdivision (c).

On April 7, 2023, the court granted the City’s petition and appointed a receiver to correct building and safety violations at the properties and immediately abate all threats to life, health and safety. The court ordered the receiver to create a remediation plan to rehabilitate the properties.

The Receiver’s efforts at rehabilitating the properties is ongoing. Given the scope of the receivership estate and the extent of rehabilitation necessary, the court has conducted frequent status hearings in the matter with input from interested parties.

“An intervention takes place when a non-party, deemed an intervenor, becomes a party to an action or proceeding between other persons by doing any of the following: (1) Joining a plaintiff in claiming what is sought by the complaint. (2) Uniting with a defendant in resisting the claims of a plaintiff. (3) Demanding anything adverse to both a plaintiff and a defendant.” (Code Civ. Proc., § 387, subd. (b).)

“Mandatory intervention is governed by . . . section 387 subdivision (d)(1)—which ‘should be liberally construed in favor of intervention.’ [Citation.]” (Crestwood Behavioral Health, Inc. v. Lacy (2021) 70 Cal.App.5th 560, 572.) “[T]o establish mandatory intervention under subdivision (d)(1)(B), [the proposed intervenor] must show (1) “ ‘an interest relating to the property [or] transaction which is the subject of the action’ ” [citation]; (2) ‘he or she “is so situated that the disposition of the action may as a practical matter impair or impede’ ” his or her “ ‘ability to protect that interest’ ” [citation]; and (3) he or she is not “ ‘adequately represented by the existing parties’ ” [citation].” (Id. at 572-573 [fn. omitted].)

For permissive intervention, the nonparty must satisfy the following factors: “(1) the proper procedures have been followed; (2) the nonparty has a direct and immediate interest in the action; (3) the intervention will not enlarge the issues in the litigation; and (4) the reasons for the intervention outweigh any opposition by the parties presently in the action.” (Reliance Ins. Co. v. Superior Court (2000) 84 Cal.App.4th 383, 386; Code of Civ. Proc., § 387, subd. (d)(2).)

LA CAN moves to intervene in this action for the purpose of defending its rights as successor-in-interest to a settlement agreement and judgment in Wiggins, et al. v. Community Redevelopment Agency of Los Angeles, Los Angeles Superior Court case number

BC 276472 (Wiggins Settlement). LA CAN argues the Wiggins Settlement “governs the use, condition and occupancy of the majority of Residential Hotels subject to the Receivership in this action.” (Memo 5:9-10.) LA CAN asserts it “has a protected interest in preserving the affordability of many of the Respondent Hotels in this action . . . .” (Memo 5:10-12.)

LA CAN presents evidence 19 of the properties in the receivership estate are subject to the Wiggins Settlement. (Schultz Decl., ¶ 13.)

The Wiggins Settlement is enforceable against the City—the successor to a former redevelopment agency—until 2033. Generally, the Wiggins Settlement resulted in “restrict[ions on] the use and development of Residential Hotels in the City Center and Central Industrial Redevelopment Project Areas in order to preserve existing Affordable Housing, guarantee one-for-one replacement of affordable Residential Hotels when a Residential Hotel is proposed for Conversion or Demolition, and prevent or mitigate the hardship that results to Lower Income Households when residential displacement occurs.” (Schultz Decl. ¶ 6.) The Wiggins Settlement requires that a Replacement Housing Plan be implemented when subject-units are removed and a Relocation Assistance Plan when any tenants of the subject properties are displaced. (Schultz Decl. ¶¶ 7-8.) Where the settlement agreement is breached, the breaching party shall have 45 days after written notification to cure. (Schultz Decl. ¶ 9.)

LA CAN contends the City has failed to comply with various aspects of the Wiggins Settlement. (Memo 9:10-10:9.)

Most recently, in June 2023, LA CAN learned tenants of the Dewey Hotel, a receivership property, were relocated (after the building was “red-tagged”) and placed in transitional housing at a motel, instead of being provided with relocation assistance, as required under the Wiggins Settlement. (Memo 10:6-9; White Decl. ¶ 7.)

LA CAN contends it is entitled to intervene in this action as a matter of right. (Code Civ. Proc.,

As noted earlier, “to establish a right to mandatory intervention, the nonparty must: (1) show a protectable interest in the subject of the action, (2) demonstrate that the disposition of the action may impair or impede its ability to protect that interest; and (3) demonstrate that its interests are not adequately represented by the existing parties.” (Carlsbad Police Officers Association v. City of Carlsbad (2020) 49 Cal.App.5th 135, 148.)

LA CAN argues it has a legally protectable interest and a beneficial interest in this litigation stemming from its standing as successor-in-interest to the Wiggins Settlement (and judgment). The Wiggins Settlement “directly address the actions to rehabilitate and preserve many of the same hotels that are also now in the Receiver’s control.” (Reply 7:3-5.) LA CAN believes its ability to enforce the Wiggins Settlement will be impaired if it is not permitted to intervene. LA CAN also asserts its interests are not adequately represented by the parties because those parties’ financial interests might cloud the obligation to abide by the Wiggins Settlement, and the City has neglected to protect LA CAN’s interest in the past. Accordingly, only LA CAN can ensure the Wiggins Settlement is enforced during this receivership.

The City contends LA CAN has failed to show it is entitled to intervene as a matter of right. The City argues LA CAN does not have a significant protectable interest relating to the receivership properties. The City notes LA CAN’s interest are derivative of the Wiggins Settlement and none of LA CAN’s rights have been triggered because the Receiver has not submitted any rehabilitation plans. Finally, the City reports even if LA CAN has some protectable interest here, the receivership does not impair or impeded LA CAN’s ability to protect that interest. LA CAN is free to pursue its judicial enforcement remedies under the Wiggins Settlement.

While LA CAN essentially concedes it may file an enforcement action, LA CAN argues intervention is appropriate here because interventions would prevent multiple legal actions involving the same parties and facts. (Reply 7:26-8:3 [citing People ex rel. Rominger v. County of Trinity (1983) 147 Cal.App.3d 655, 660].) LA CAN also asserts a separate enforcement proceeding would cause delay for LA CAN in protecting its interests. (Reply 8:3-6)

The court finds LA CAN is not entitled to intervene as a matter of right. Even assuming LA CAN has a protectable interest in the receivership estate and its interests are not otherwise adequately represented by the parties, the court finds LA CAN is not “so situated that the disposition of the action may impair or impede [LA CAN’s] ability to protect that interest . . . .” (Code Civ. Proc., § 387, subd. (d)(1)(B).) As essentially conceded by LA CAN, nothing prevents it from bringing a separate action to enforce its rights under the contract or judgment. The Wiggins Settlement provides a clear enforcement mechanism. While LA CAN suggests a separate enforcement action might result in prejudicial delay—an assumption the court does not accept given LA CAN’s ability to seek a temporary restraining order on an ex parte basis—LA CAN has a means of protecting its interests outside of this litigation. (See Siena Court Homeowners Ass’n v. Green Valley Corp. (2008) 164 Cal.App.4th 1416, 1426.) Further, LA CAN’s reliance on People ex rel. Rominger v. County of Trinity, supra, 147 Cal.App.3d at 660 and its discussion of avoidance of delays and multiplicity of actions is in the context of permissive intervention. (People ex rel. Rominger v. County of Trinity, supra, 147 Cal.App.3d at 660. [“Granting or denying leave to intervene is in the discretion of the trial court.”])

LA CAN contends it should be permitted to intervene in this action. (Code Civ. Proc., § 387, subd. (d)(2).)

For purposes of this motion, the court finds LA CAN has followed the proper procedures to obtain an order to intervene. (See Reliance Ins. Co. v. Superior Court, supra, 84 Cal.App.4th at 386.)

LACAN asserts it has a direct and immediate interest in this litigation because of its standing to enforce the Wiggins Settlement and goal of preserving affordable housing for a vulnerable population of this city. (Memo 16:8-13.)

To establish a direct and immediate interest in the litigation for purposes of permissive intervention, LA CAN must demonstrate it stands to gain or lose by direct operation of any judgment, even if LA CAN has no specific interest in the properties at issue.¿(Simpson Redwood Co. v. State of California¿(1987) 196 Cal.App.3d 1192, 1201.)¿ “Whether the intervener’s interest is sufficiently direct must be decided on the facts of each case. . . .¿ And section 387 should be liberally construed in favor of intervention.”¿(Id.¿at 1200.)¿“In order that a party may be permitted to intervene it is not necessary that his interest in the action be such that he will inevitably be affected by the judgment.¿It is enough that there be a substantial probability that his interests will also be so affected.¿ ‘The purposes of intervention are to protect the interests of those who may be affected by the judgment¿. . . .’ ”¿(Timberidge¿Enterprises, Inc. v. City of Santa Rosa¿(1978) 86 Cal.App.3d 873, 881-882 [cleaned up].)¿

The court assumes for purposes of this motion that LA CAN has a direct and immediate interest in the litigation. (It does not appear, however, LA CAN stands to gain or lose any of its interest in the properties through this litigation.)

Importantly, however, the court finds intervention would enlarge the issues in this receivership. The Receiver is charged with rehabilitating the (now 22) properties within the receivership estate. The Receiver must resolve code violations and immediately abate all threats to life, health and safety. That most of the properties are subject to the Wiggins Settlement should not result in litigation in this forum with the court’s Health and Safety Code receiver about whether his efforts are consistent with the Wiggins Settlement. To the extent the Receiver’s efforts are informed by the Wiggins Settlement, LA CAN may advise the Receiver of any perceived breach of the settlement agreement’s terms to obtain cure as envisioned by the parties to the Wiggins litigation.

To refocus the receivership proceedings from clearing code violations and abating threats to life, health and safety to include arguments from parties concerning the provisions of the Wiggins Settlement—assuming the Receiver does not comply with any applicable terms of the Wiggins Settlement—expands the scope of issues before the court greatly. As the court views it, LA CAN’s request for permissive joinder would add an entire issue before the court (as opposed to the Receiver) about Wiggins Settlement compliance. The proceedings would become further complicated with a Wiggins Settlement overlay to the rehabilitation issues. Thus, the issues before the court at each hearing would expand to clearing code violations, abating life, health and safety issues, any other issues arising in the receivership and Wiggins Settlement compliance in the context of rehabilitation work. Permitting LA CAN to intervene in this matter would substantially enlarge the issues before the court.[1]

Further, from the inception of this proceeding, the court has consistently heard from any interested party at each and every hearing in an effort to avoid conflict and resolve problems early and quickly. In fact, the court has specially set regular status hearings in this matter to ensure sufficient time for interested parties to be heard on various issues. The court is not inclined to discontinue that practice in the future. To the extent LA CAN believes its interests may be adversely impacted, LA CAN may attend a status hearing and request to be heard.

Based on the foregoing, the court exercises its discretion and denies LA CAN’s request for permissive intervention.

[1] LA CAN argues: “intervention does not necessarily enlarge the issues unless the current parties do not adhere to the terms of Wiggins.” (Memo 17:2-3.) That, of course, is the court’s point about expanding the issues. Whether and to what extent, if at all, the Receiver’s course of conduct complies with the Wiggins Settlement will be raised and then litigated in this Health and Safety Code receivership.