GRUZEN v. HENRY

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Docket Number

Docket No. 53533.

Attorney(S)

COUNSEL Kamminga, Gerber, Wong Oehrle, John McDermott, John O. Calmore and Arthur Lang Wong for Defendants and Appellants. Ronald L. Gruzen for Plaintiff and Respondent.

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Smart Summary

Factual and Procedural Background

This appeal arises from a judgment adverse to defendants in an unlawful detainer action initiated by plaintiff landlord Jack Gruzen. The defendants contended that their rental agreement was void because the plaintiff had not secured the certificate of occupancy mandated by the City of Pasadena Ordinance No. 5121 prior to leasing the premises. The trial court rejected this contention, but the defendants appealed. The case was heard by the Court of Appeal of California, Second District, Division Four.

Legal Issues Presented

Whether the rental agreement between plaintiff and defendants is void due to plaintiff's failure to obtain the certificate of occupancy required by City of Pasadena Ordinance No. 5121.
Whether the ordinance, which imposes only criminal sanctions for violations and is silent on lease enforcement consequences, can be enforced as a defense in an unlawful detainer action.
Whether an eviction order can properly be entered when the notice demands rent in an amount slightly exceeding the judgment amount.

Arguments of the Parties

Defendants' Arguments

The rental agreement is void because plaintiff failed to secure the certificate of occupancy required by the City of Pasadena Ordinance No. 5121 before leasing the property.
Under Werner v. Sargeant, no eviction order should be entered since the notice demanded rent in excess of the amount found due by the court.

Plaintiff's Arguments

The trial court rejected the defendants' contention and enforced the rental agreement despite the absence of the certificate of occupancy.
The plaintiff sought an eviction order and a money judgment for unpaid rent.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Currier v. City of Pasadena, 48 Cal.App.3d 810 (1975)	Validity and constitutionality of Pasadena Ordinance No. 5121 regarding certificate of occupancy requirements.	The court upheld the ordinance as constitutional and part of a legitimate health and safety regulatory scheme.
Birkenfeld v. City of Berkeley, 17 Cal.3d 129 (1976)	Invalidity of procedural requirements in rent control ordinances that impose undue burdens inconsistent with state law.	The court distinguished the Pasadena ordinance from the Berkeley ordinance, finding no similar procedural burdens.
Lyke v. Pursley, 171 Cal.App.2d 417 (1959)	Contracts made in violation of public protection statutes are unenforceable even if the statute does not expressly void such contracts.	Applied to hold that leases made without required occupancy permits are void, allowing tenants to rescind and withhold rent.
Loving Evans v. Blick, 33 Cal.2d 603 (1948)	Public policy requires contracts made in violation of licensing statutes designed for public protection to be unenforceable.	Supported the principle that contracts violating public protection statutes are void.
Lewis Queen v. N.M. Ball Sons, 48 Cal.2d 141 (1957)	Contracts entered into in violation of licensing statutes are unenforceable regardless of explicit statutory provisions.	Reinforced the rule that lack of licensing renders contracts void for public protection.
Smith v. Bach, 183 Cal. 259 (1920)	Contracts violating statutes are void whether the violation is malum in se or malum prohibitum.	Confirmed that statutory violations void contracts regardless of the nature of the offense.
Levinson v. Boas, 150 Cal. 185 (1907)	Contracts made in violation of statutes aimed at public protection are unenforceable.	Supported the voiding of contracts violating protective statutes.
Werner v. Sargeant, 121 Cal.App.2d 833 (1953)	An eviction notice demanding rent exceeding the judgment amount invalidates eviction orders.	The court found the excess demand in the present case to be de minimis and did not reverse the judgment on that basis.
Johnson v. Sanches, 56 Cal.App.2d 115 (1942)	Excessive rent demand in eviction notice invalidates eviction orders.	Referenced to contrast with the minor excess in the present case.
Dertiman v. Almey, 92 Cal.App.2d 724 (1949)	Excessive rent demand in eviction notice invalidates eviction orders.	Referenced to show the substantial excess in prior cases compared to the present case.

Court's Reasoning and Analysis

The court first addressed the constitutionality of Pasadena Ordinance No. 5121, relying on its prior decision in Currier v. City of Pasadena which upheld the ordinance as a valid health and safety regulation. It distinguished this ordinance from the rent control ordinance invalidated in Birkenfeld v. City of Berkeley, noting that the Pasadena ordinance imposes no onerous procedural burdens and is designed to ensure safe housing conditions.

The court then considered whether the ordinance's failure to expressly void leases made in violation of its certificate of occupancy requirement precludes such leases from being unenforceable. Citing Lyke v. Pursley and other precedents, the court adopted the principle that contracts violating statutes enacted for public protection are void and unenforceable, regardless of whether the statute imposes only criminal sanctions or contains explicit provisions voiding such contracts. Consequently, the court held that the rental agreement was void due to the absence of the required certificate of occupancy.

However, the court clarified that this ruling does not permit defendants to occupy the premises without compensation indefinitely. The plaintiff is entitled to an eviction order but not to rent payments for the period during which the certificate of occupancy was lacking, consistent with the tenant's right to rescind as established in Lyke.

Lastly, the court addressed defendants' argument based on Werner v. Sargeant that the eviction notice's rent demand exceeded the judgment amount. The court found the excess amount ($18) to be trivial and applied the legal maxim de minimis non curat lex (the law does not concern itself with trifles), declining to reverse the judgment on this ground.

Accordingly, the court modified the judgment by deleting the money judgment portion against defendants but affirmed the eviction order.

Holding and Implications

The court held that the rental agreement was void due to the plaintiff's failure to obtain the required certificate of occupancy under Pasadena Ordinance No. 5121. The trial court's judgment was modified to delete the money judgment for rent, but the eviction order was affirmed.

The direct effect of this decision is that landlords must secure the necessary certificate of occupancy before leasing property to enforce rent obligations, but tenants cannot remain without paying rent indefinitely. The ruling does not establish new precedent beyond affirming existing principles regarding contracts violating public protection statutes and the limited application of eviction notice technicalities.

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JACK GRUZEN, Plaintiff and Respondent, v. AARON P. HENRY et al., Defendants and Appellants.

OPINION

KINGSLEY, J.

Defendants appeal from a judgment adverse to them in an action for unlawful detainer. We modify the judgment and affirm it as so modified.

The only issue before us on this appeal is defendants' contention that their rental agreement with plaintiff landlord was void because plaintiff had not previously secured the certificate of occupancy required by Ordinance of the City of Pasadena, Number 5121. That contention was rejected by the trial court. We conclude that the contention is correct.

(1) In Currier v. City of Pasadena (1975) 48 Cal.App.3d 810 [ 121 Cal.Rptr. 913], we considered at length the validity of the ordinance herein involved and held that, construed in accordance with that opinion, the ordinance was constitutional. The Supreme Court denied hearing. We see nothing in Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129 [ 130 Cal.Rptr. 465, 550 P.2d 1001], to lead us to take a different view in this case. Ordinance No. 5121 is part of a scheme to insure that property in the City of Pasadena meets the health and safety requirements of that city's code. We sustained the ordinance as a legitimate procedure to carry out that objective. The ordinance before the court in Birkenfeld did not deal with the subject of enforcing health and safety laws, but it was part of a scheme to control rents in the City of Berkeley. As part of that scheme, the ordinance required a landlord to secure a certificate from a city agency before instituting any eviction proceeding. That requirement was held unconstitutional as imposing procedural requirements unduly onerous for the accomplishment of the rent control provisions, and imposing requirements that differed substantially from the state-imposed provisions for eviction proceedings. The ordinance herein involved is not in any way similar to that involved in Birkenfeld. It deals with property that is vacant or about to become vacant; it imposes (as construed) no onerous requirements for securing a certificate of occupancy, and no state legislation is called to our attention that attempts to cover the ground of enforcement of local health and safety laws.

(2) It follows that the question before us is whether Ordinance No. 5121, which is silent as to the effect on leases of a violation of its requirements, but expressly imposes only a criminal sanction on violation, can be construed as permitting enforcement by way of a defense to an action in unlawful detainer. We conclude that it can. In so holding we adopt the language of the Appellate Department of the Los Angeles Superior Court when this case was before it. That court said:

"In Lyke v. Pursley 171 Cal.App.2d 417 [ 340 P.2d 709] a landowner leased a newly built motel to appellants who thereafter proceeded to rent rooms in it although no permit to occupy the premises, required under state law, has been issued and an inspector found deficiencies in the structure. The tenant sought to rescind the lease agreement and withheld paying his rent. The trial court denied rescission and awarded the unpaid rent to the landowner. The Court of Appeal reversed. In so doing, it said:

"`[3] The court must consider the nature of the undertaking in the light of the licensing statute. If the purpose of the regulation is primarily for public protection, public policy requires that contracts within the purview of the statute between unlicensed persons must be held to be unenforceable. ( Loving Evans v. Blick, 33 Cal.2d 603, 607 [ 204 P.2d 23]; Lewis Queen v. N.M. Ball Sons, 48 Cal.2d 141, 150 [ 308 P.2d 713].) It is not necessary that the licensing statute contain a provision that contracts between unlicensed persons are unenforceable.' (Emphasis added.) The appellate court concluded `The court's finding that appellants were indebted to respondents for rent during the period that the premises were operated without a license is contrary to law and will not support the judgment.' ( Id., at 421.)

"The fact that the statute or ordinance prescribes a penalty for doing the prohibited act but does not expressly state that contracts entered into in violation of the statute or ordinance are void is immaterial. The agreement is void whether the act is malum in se or merely malum prohibitum. Smith v. Bach 183 Cal. 259, 262 [ 191 P. 14]; Levinson v. Boas 150 Cal. 185, 193 [ 88 P. 825].

"The cases return, again and again to the proposition that where the statute in question is designed for the protection of the public, a contract in violation of it is void. E.g. Loving Evans v. Blick 33 Cal.2d 603, 607 [ 204 P.2d 23] and cases therein cited; Levinson v. Boas, supra; Industrial Indemnity Co. v. Golden State Co. 117 Cal.App.2d 519, 527 [ 256 P.2d 677]. The instant ordinance, as its opening provisions show, has a manifest purpose to protect the public from substandard housing. (See Currier v. City of Pasadena 48 Cal.App.3d 810, 817 [ 121 Cal.Rptr. 913], cert. denied, 423 U.S. 1000 [46 L.Ed.2d 375, 96 S.Ct. 432].)"

We do not imply by this opinion that persons in the situation of these defendants may, without compensation, continue to occupy premises because the landlord has not procured a certificate of occupancy. In Lyke, the tenant not only denied an obligation to pay rent but had also elected to rescind the alleged lease. That result is applicable here. Plaintiff is entitled to an order of eviction, but not to an award of rent.

(3) Defendants argue that, under Werner v. Sargeant (1953) 121 Cal.App.2d 833 [ 264 P.2d 217], no order of eviction could properly be entered against them because the notice from the plaintiff demanded accrued rent in the amount of $600 whereas the judgment was for only $582. In Werner the demand was for $400 more than the court found due; in Johnson v. Sanches (1942) 56 Cal.App.2d 115 [ 132 P.2d 853], on which Werner relied, the demand exceeded the amount found due by $750; in Dertiman v. Almey (1949) 92 Cal.App.2d 724 [ 207 P.2d 615], the demand exceeded the judgment by $105, almost a 100 percent excess. In the case at bench the excess of the demand over the judgment was only $18. The three cases cited are the only cases we have found to apply the rule on which defendants here rely. The maxim de minimis non curat lex is well established. We do not reverse a judgment, correct in its result, for such a trifling error.

The petition for rehearing inaccurately states that the judgment was for only $382.

Absent a reporter's transcript of findings of fact we do not know why the trial court made that reduction.

The judgment is modified by deleting the provision for a money judgment against defendants; otherwise it is affirmed. Neither party shall recover costs in this court.

Files, P.J., and Jefferson (Bernard), J., concurred.

A petition for a rehearing was denied September 20, 1978, and the opinion was modified to read as printed above. Appellants' petition for a hearing by the Supreme Court was denied October 25, 1978.