Tenants Are Neccessary Parties in Landlords’ Rent Control Lawsuit

Pinto Lake MHP LLC v. Cnty of Santa Cruz, No. H045747 (D6 Oct. 30, 2020)

The Owner of a mobile home park sought administrative permission to raise rents under Santa Cruz County’s mobile home rent control ordinance. As contemplated by the ordinance, the Tenants participated in that proceeding as an adverse party. When that was denied, the Owner sought review by administrative mandamus against the County. But it didn’t join the Tenants in the Superior Court proceedings. The County demurred for failure to join the tenants under Code of Civil Procedure § 389, and the trial court sustained the demurrer.

The Court of Appeal affirms. Tenants’ rights under the Ordinance were to be adjudicated in the mandamus proceeding. The Ordinance made them parties to the administrative case, and they elected to participate in that capacity. Under the circumstances, Tenants had claimed an interest relating to the subject of the administrative mandamus proceeding and failure to join them would impair their ability to protect their rights under the Ordinance. That made them “necessary” parties whose joinder was required if feasible under § 389(a)(2)(i). In particular, the Court notes that the County’s participation in was an inadequate proxy for the Tenants. 

The superior court, however, never conducted the second part of the test under § 389 because it ordered Owner to join Tenants, and when Owner refused, the superior court granted the demurrer. But a dismissal is proper only after an analysis under § 389(b)—a determination that “equity and good conscience” do not permit the case to go forward even in the absence of the necessary parties. So the Court of Appeal remands for that purpose.

Affirmed in part and remanded.