Vacation Rental Owners and Neighbors of Rancho Mirage v. City of Rancho Mirage CA4/2 (2023) · DecisionDepot
Vacation Rental Owners and Neighbors of Rancho Mirage v. City of Rancho Mirage CA4/2
California Court of Appeal Jul 11, 2023 No. E077462Unpublished
Filed 7/11/23 Vacation Rental Owners and Neighbors of Rancho Mirage v. City of Rancho Mirage CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
VACATION RENTAL OWNERS AND NEIGHBORS OF RANCHO MIRAGE et al., E077462
Plaintiffs and Respondents, (Super.Ct.No. CVRI2100368)
v. OPINION
CITY OF RANCHO MIRAGE et al.,
Defendants and Appellants.
APPEAL from the Superior Court of Riverside County. Russell L. Moore, Judge.
Affirmed.
Law Offices of Quintanilla & Associates, Michael R. Cobden, Steven B.
Quintanilla, Colin D. Kirkpatrick; Colantuono, Highsmith & Whatley, Holly O. Whatley,
and Alena Shamos, for Defendants and Appellants.
Slovak, Baron, Empey, Murphy & Pinkney, and Shaun M. Murphy for Plaintiffs
and Respondents.
1
In December 2020, Ordinance No. 1174 (Ordinance 1174) became effective in the
City of Rancho Mirage (the City). The ordinance prohibits short-term rentals in most
residential neighborhoods in the City. In July 2021, the trial court modified a preliminary
injunction to require the City to process certain residential property owners’ applications
for short-term rental certificates based on the law as it existed before Ordinance 1174.
The City and its city council (collectively, the municipal defendants) appeal from the
order modifying the preliminary injunction. We affirm the order.
BACKGROUND
A. The City’s Regulation of Short-Term Rentals
In November 2020, the city council approved and adopted Ordinance 1174, which
became effective the following month. Ordinance 1174 was added to Title 3 of the City’s
municipal code.
Ordinance 1174 prohibits short-term rentals in all public neighborhoods and in any
common interest development imposing such a restriction. Public neighborhoods are
defined as nongated neighborhoods not governed by conditions, covenants, and
restrictions (CC&Rs) and in which residential parcels abut public streets. Common
interest developments are defined as any development subject to the provisions of the
Davis–Stirling Common Interest Development Act, Civil Code section 4000 et seq. and
as defined in section 4100 of the Civil Code, “including without limitation homeowners
associations, condominium owner associations and similar associations formed pursuant
to the aforementioned Act.” (Boldface and underlining omitted.) Civil Code section
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4100 provides: “‘Common interest development’ means any of the following: [¶] (a) A
community apartment project. [¶] (b) A condominium project. [¶] (c) A planned
development. [¶] (d) A stock cooperative.”
To rent an eligible property as a short-term rental, an owner must obtain a short-
term rental certificate from the City. The certificate must be renewed annually. Any
property owner who had a valid certificate when Ordinance 1174 became effective for a
property that was made ineligible for short-term rentals by the new law would not be
permitted to renew the certificate or to apply for a new certificate.
According to the recitals in Ordinance 1174, the city council adopted the new law
because the city council found that even though short-term rentals provided the City with
additional tax revenue, “there [were] various secondary negative effects associated with
the use of residential dwellings as short-term rentals in residential neighborhoods.” Staff
members of the City had monitored the impacts that short-term rentals had on
neighborhoods and had received complaints and feedback concerning short-term rentals.
The City’s staff recommended that the city council adopt a ban on short-term rentals as
outlined in Ordinance 1174 “to preserve the public health, safety, welfare and character”
in public neighborhoods and in common interest developments that had “determined that
short-term rentals are not a permitted use of property.”
B. The Lawsuit
In January 2021, Vacation Rental Owners and Neighbors of Rancho Mirage
(Vacation Rental), Allicia Louisa Davis, Scott Shanstrom, Mary Pavlica, and RM
3
Vacation Rentals LLC (a vacation rental company in which Shanstrom was the sole
member and manager) (collectively, petitioners) filed a verified petition for writ of
mandate and a complaint for declaratory and injunctive relief (the petition) against the
municipal defendants and the individual city council members. (The councilmembers
have been dismissed from the lawsuit, so we do not discuss them further.) The petition
contained 13 causes of action challenging the constitutionality and validity of Ordinance
1174, including that the municipal defendants violated the California Environmental
Quality Act (CEQA) when enacting the ordinance.
Numerous exhibits were attached to the petition, including October and November
2020 reports from the City’s staff to the city council about short-term rentals. The
October 2020 report recommended prohibiting short-term rentals in “a public district.”
Several maps of various districts within the City were attached to the October 2020
report. The maps were not mentioned in the report, and the report did not describe what
the maps depicted. In the November 2020 report, the City’s staff recommended adopting
Ordinance 1174 specifically. Two maps were attached to the November 2020 report: (1)
a heat map depicting short-term rentals about which the City had received complaints,
and (2) a district map. Those two maps are not included in the record on appeal.
C. The Preliminary Injunction
In February 2021, petitioners moved for a preliminary injunction to enjoin
enforcement of Ordinance 1174 while the litigation was pending. Petitioners argued that
4
they were likely to succeed on the merits of many of their claims, including the CEQA
claim, and would suffer irreparable harm without such an injunction.
Petitioners claimed that in analyzing whether applicants were eligible for short-
term rental certificates under the new law, the City was using a map on their website that
depicted districts in which short-term rentals were purportedly allowed or banned.
Petitioners argued that the online short-term rental map differed from the maps attached
to the October and November 2020 staff reports that purported to depict areas in which
short-term rentals were banned. According to a supporting declaration from petitioners’
attorney, several changes were made to the online map between December 11, 2020, and
January 29, 2021. Areas that were previously designated as being within a common
interest development that permitted short-term rentals were redesignated as areas that
were not in common interest developments and in which short-term rentals were banned.
Copies of the online maps from the different time periods were attached to the
declaration.
Twenty seven individual members of Vacation Rental who owned short-term
rental properties in the City filed declarations in support of the motion. Petitioners’
attorney also filed a declaration in support of the motion. She summarized the data
contained in the individuals’ declarations and described how the new law had impacted
them.
Mary Davis is one of the Vacation Rental members who filed a declaration in
support of the motion. She and her husband were the sole managers and members of two
5
limited liability companies that owned three residential properties in the City that had
been used as short-term rental properties. Mary D. attested that the properties were not
located in gated communities and were not governed by homeowners’ associations or
CC&Rs.1
The municipal defendants opposed the motion, arguing that money damages
provided petitioners adequate relief and that petitioners had failed to demonstrate that
they were irreparably harmed by Ordinance 1174.
The court held three hearings on the motion. At one of the hearings, the municipal
defendants’ attorney conceded that the online short-term rental map was “not part of
[Ordinance] 1174” and “not [the] law” but instead was “a map that [was] created by
planners to assist the public in understanding at a quick glance what the city planners
know already may be allowed or not allowed.”
In April 2021, the court issued a preliminary injunction. It enjoined the City and
any of its employees or agents “from any and all use of [the City’s] so-called ‘district
maps’ . . . in the course of processing, accepting, or denying any and all requests for
short-term rental permits.” The order applied to all short-term rental applications that
were pending and to subsequent applications. The court reasoned that there was not
substantial evidence demonstrating that such maps were approved by the city council or
incorporated into the law, as Ordinance 1174 did not include any reference to a map. The
court found that there was substantial evidence that properties otherwise eligible for
1 We refer to Mary D. by her first name and the first initial of her last name because she has the same last name as petitioner Allicia Davis. No disrespect is intended.
6
short-term rental under the ordinance were located in districts on the maps that were
designated as ineligible for short-term rentals. The court concluded “that without the
intervention of injunctive relief, [short-term rental]-applicants who qualify under the
explicit terms of the ordinance but not the unenacted district maps will continue to be
unlawfully denied” short-term rental certificates “for the foreseeable future.”
The court denied petitioners’ request for a preliminary injunction insofar as it
relied on facial challenges to Ordinance 1174. In that regard, the court found that CEQA
did not provide any basis for the court to issue a preliminary injunction.
D. The Anti-SLAPP Proceedings
The day after the court issued the preliminary injunction, the municipal defendants
moved to strike the entirety of petitioners’ claims under Code of Civil Procedure section
425.16, the anti-SLAPP statute.2 (Unlabeled statutory references are to the Code of Civil
Procedure.) In May 2021, the trial court denied the motion. The municipal defendants
immediately appealed from that order. We address the anti-SLAPP appeal in a separate
unpublished opinion. (See Vacation Rental Owners and Neighbors of Rancho Mirage v.
City of Rancho Mirage (July 11, 2023, E077118) [nonpub. opn.].)
E. The Modified Preliminary Injunction
In June 2021, petitioners moved to modify the preliminary injunction to allow all
2020 short-term rental “permittees to lawfully rent their properties on a short-term basis
for their properties that had valid [short-term rental] permits as of December 31, 2020,”
2 “SLAPP is an acronym for ‘strategic lawsuit against public participation.’” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.)
7
and to “honor all 2020 [short-term rental] permits as if still valid until adjudication of this
case.” Petitioners argued that the modification was necessary to maintain the status quo
for them while litigation was pending because the City had continued denying individual
petitioners’ short-term rental certificate applications after the preliminary injunction
issued. In addition, several petitioners had already sold or were selling their short-term
rental properties. Several days before the motion was filed, the court dismissed
petitioners Shanstrom, Pavlica, and RM Vacation Rentals LLC at their request.
In support of the motion to modify, petitioners submitted declarations from
Shanstrom, Mary D., and three other individual members of Vacation Rental The motion
was also supported by a declaration from petitioners’ attorney that had 23 exhibits
attached.
Mary D. filed two declarations in support of the motion. She stated that after
reading the preliminary injunction she investigated whether two of the properties she
owned through limited liability companies qualified for short-term rental certificates.
She reviewed the preliminary title report for one property and the deed for the other. She
discovered that the properties were subject to CC&Rs and that the governing CC&Rs do
not prohibit short-term rentals. Mary D. stated when she had previously attested that her
properties were not governed by CC&Rs she believed that information to be true. Her
belief was based in part on the City’s online permit process that had informed her that the
properties were not eligible under Ordinance 1174 for short-term rental certificates.
8
In light of the newly discovered information and the preliminary injunction,
Mary D. applied for short-term rental certificates for the two properties. When she filed
her declarations, one of the applications remained pending. The other was denied. Mary
D. appealed that denial according to the instructions given to her in the email from the
City informing her of the denial. The appeal was then denied because Mary D. had
previously declared that the property was not governed by CC&Rs. According to the
email informing Mary D. of the denial of her appeal, that denial could be appealed to the
City’s Planning Commission. Mary D. submitted an appeal to the Planning Commission.
When Mary D. filed her declaration in support of the motion, she was unsure whether the
appeal was still pending or whether the City rejected it for being incomplete.
The municipal defendants opposed modifying the preliminary injunction and filed
objections to petitioners’ evidence supporting the motion. The municipal defendants
supported their opposition with a declaration from the City official who was primarily
responsible for processing short-term rental certificate applications.
The trial court held several hearings on the motion to modify and issued two
tentative rulings, which the court incorporated in its final ruling. The court did not
expressly rule on the municipal defendants’ evidentiary objections in any of the written
rulings.
The trial court found that the following changed circumstances provided good
cause to justify modifying the preliminary injunction: (1) Three petitioners had requested
dismissal because they could no longer afford to maintain their residential properties
9
without being allowed to rent them on a short-term basis; (2) the municipal defendants’
appeal from the denial of the anti-SLAPP motion would result in increased financial
losses to petitioners because of the resulting litigation stay; (3) the City had imposed
requirements on short-term rental certificate applicants that were not included in and
were contrary to Ordinance 1174, causing applications to be wrongly denied; and (4) the
administrative appellate process encountered by applicants also was not included in
Ordinance 1174 or Title 3 of the City’s municipal code. In addition, the court had
reconsidered its position on the CEQA claim and believed that petitioners would likely
succeed on the merits of that claim. In light of the changed circumstances demonstrating
the financial hardship that petitioners were experiencing, the court concluded that “the
balance of hardships favor[ed] the remaining petitioners” and thus warranted modifying
the preliminary injunction to restore them “to the status quo as it existed prior to
ordinance 1174’s enactment.”
The court ordered the City to process the short-term rental certificate applications
of the remaining petitioners “with all deliberate speed” and no longer than 28 days from
the issuance of the order. The court explained: Under the modified injunction, the
petitioners would be allowed “to submit applications to the city for [short-term rental]-
permits under the requirements in existence immediately before ordinance 1174’s
enactment. The city in turn must process the applications in compliance with its [short-
term rental] ordinance as it existed prior to ordinance 1174. The same goes for the
appellate process that was in existence prior to ordinance 1174.” (Fn. omitted.) The
10
court clarified that petitioners could seek pre-Ordinance 1174 short-term rental permits
only “for the specific residences for which they possessed permits prior to ordinance
1174.” (Italics omitted.)
DISCUSSION
The municipal defendants argue that the trial court erred by modifying the
injunction. They claim that the trial court lacked jurisdiction to modify the injunction,
and they also challenge the sufficiency of the evidence supporting the modification. We
reject both arguments.
A. Governing Law
Courts retain the power to modify an injunction “at any point.” (In re Butler
(2018) 4 Cal.5th 728, 738 (Butler).) Under section 533, a court may modify an
injunction upon a showing that (1) “there has been a material change in the facts upon
which the injunction . . . was granted,” (2) “the law upon which the injunction . . . was
granted has changed,” or (3) “the ends of justice would be served by the
modification . . . .” The party seeking the modification bears the burden of demonstrating
by a preponderance of the evidence that modification is warranted. (Loeffler v. Medina
(2009) 174 Cal.App.4th 1495, 1504.)
We reject the municipal defendants’ argument that we independently review the
trial court’s decision to modify the preliminary injunction.3 Our Supreme Court has held
3 The municipal defendants contend that a less deferential standard of review is particularly appropriate because of contempt proceedings that occurred after the court modified the injunction. We address all of the municipal defendants’ arguments concerning the subsequent proceedings in Discussion, part D, post.
11
to the contrary. (Butler, supra, 4 Cal.5th at p. 738.) We are bound by that precedent.
(Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455 (Auto Equity).) We
review for abuse of discretion the trial court’s ruling on a motion to modify an injunctive
order. (Butler, at p. 738.) “Under this standard, we consider the court’s legal conclusions
de novo, and assess its factual findings for substantial evidence.” (Id. at pp. 738-739.)
“We will not reverse the court’s application of the law to the facts unless it is ‘arbitrary
and capricious.’” (Id. at p. 739.)
When reviewing an order granting a preliminary injunction, we do “not resolve
conflicts in the evidence, reweigh the evidence, or assess the credibility of witnesses.”
(Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1450 (Whyte).) The trial court
judges “‘“the credibility of the affidavits filed in support of the application for
preliminary injunction and it is that court’s province to resolve conflicts.”’” (Ibid.)
“Thus, even when presented by declaration, ‘if the evidence on the application is in
conflict, we must interpret the facts in the light most favorable to the prevailing party and
indulge in all reasonable inferences in support of the trial court’s order.’” (Ibid.)
B. The Trial Court Did Not Exceed Its Jurisdiction
The municipal defendants contend that by modifying the preliminary injunction
the trial court exceeded its jurisdiction in several ways. We disagree.
1. Anti-SLAPP Stay of Litigation
The municipal defendants argue that the trial court exceeded its jurisdiction by
modifying the preliminary injunction in July 2021 because the litigation had been stayed
12
in May 2021 as a result of the municipal defendants’ appeal from the denial of the anti-
SLAPP motion. We disagree.
Section 916 stays “all further proceedings on the merits during the pendency of an
appeal from the denial of an anti-SLAPP motion.” (Varian Medical Systems, Inc. v.
The municipal defendants do not explain how the exhaustion doctrine applies
under the circumstances of this case. The municipal defendants do not claim that
petitioners failed to exhaust administrative remedies before filing the lawsuit. Nor do
they contend that the trial court lacked jurisdiction to issue the preliminary injunction in
the first instance based on petitioners’ purported failure to exhaust administrative
remedies. The municipal defendants do not provide any legal analysis explaining how
the exhaustion doctrine applies to prevent a court from modifying an injunction that they
do not dispute the court had jurisdiction to issue in the first instance. Nor do we see how
the exhaustion doctrine could apply here given that “[c]ourts retain power to vacate or
modify [injunctive] orders at any point.”4 (Butler, supra, 4 Cal.5th at p. 738.)
We conclude that the trial court did not exceed its jurisdiction by modifying the
preliminary injunction because petitioners failed to exhaust administrative remedies.
C. The Trial Court Did Not Abuse Its Discretion
The municipal defendants argue in the alternative that if the trial court had
jurisdiction to modify the preliminary injunction, then it abused its discretion by doing
so. We disagree.
4 The only authority the municipal defendants cite in support of the argument about administrative exhaustion is Board of Police Commissioners v. Superior Court (1985) 168 Cal.App.3d 420, which they cite for the proposition that an injunction will be set aside if it was issued before a petitioner exhausts administrative remedies. That case is inapposite because it did not involve the modification of an injunction that the court had jurisdiction to issue in the first instance. (Id. at pp. 425-426.)
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The municipal defendants argue that the trial court abused its discretion under
section 533 because petitioners failed to carry their burden of demonstrating that there
had been any change in the law and “could” not “present evidence demonstrating” that
there had been a material change in facts or that the ends of justice would be served by
modification. (§ 533.) We reject the argument for two reasons. First, it is irrelevant
whether petitioners carried their burden of demonstrating that there had been a change in
the law, because the trial court did not base its ruling on any change in the law.
Second, contrary to the municipal defendants’ argument, petitioners did in fact
submit ample evidence in support of their motion. The municipal defendants do not
provide any legal analysis showing that the evidence submitted by petitioners was
insufficient to carry petitioners’ burden in the trial court of demonstrating that there had
been a material change in facts or that the ends of justice would be served by
modification. In the absence of such analysis, we will not review the trial court’s “factual
findings for substantial evidence.” (Butler, supra, 4 Cal.5th at p. 739.) “We are not
required to develop a party’s argument for it nor to search the record on our own seeking
deficiencies.” (LAOSD Asbestos Cases (2023) 87 Cal.App.5th 939, 955.) Because the
municipal defendants do not provide any legal analysis on how petitioners’ evidence is
not sufficient, the municipal defendants’ argument is forfeited. (Ibid.)
The municipal defendants also argue that the evidence supporting the motion was
inadequate and inadmissible. In support of that argument, they point out that the trial
court did not expressly rule on their evidentiary objections. But the municipal defendants
19
do not support the point with any legal analysis or citation of legal authority concerning
(1) whether the trial court had an obligation to expressly rule on the objections, (2) how
under the applicable standard of review on appeal the trial court erred by not doing so,
and (3) whether any such error was prejudicial. We will not develop an appellant’s
argument for them (Los Angeles Unified School District v. Torres Construction Corp.
(2020) 57 Cal.App.5th 480, 498), and we consider forfeited arguments not supported by
any legal analysis or authority (United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36
Cal.App.5th 142, 160-161). Because the municipal defendants do not adequately develop
this argument with any legal analysis or authority, we consider it forfeited. (Ibid.)
The municipal defendants next make several arguments about the trial court’s
reliance on petitioners’ declarations filed in support of the motion to modify. The
arguments have no merit. The municipal defendants first contend that the declarants’
new assertions that their properties are in fact governed by CC&Rs are not reliable or
credible because the declarants had previously declared otherwise. In modifying the
preliminary injunction, the trial court acknowledged the conflict in the evidence but, by
way of example, found Mary D.’s “statements of confusion credible.” The trial court
acted well within its authority to resolve the conflict in evidence and to assess the
declarants’ credibility. (Whyte, supra, 101 Cal.App.4th at p. 1450.) The municipal
defendants’ argument amounts to nothing more than an attack on how the trial court
resolved the conflicting evidence and assessed witness credibility. We do not reweigh
the evidence (ibid.), so the argument fails.
20
With respect to the declarants’ newly discovered evidence about their properties,
the municipal defendants also contend that the trial court should have applied the
equitable doctrine of judicial estoppel. “‘Judicial estoppel prevents a party from asserting
a position in a legal proceeding that is contrary to a position previously taken in the same
or some earlier proceeding. The doctrine serves a clear purpose: to protect the integrity
of the judicial process.’” (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171,
181.) The doctrine applies “when: (1) the same party has taken two positions; (2) the
positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party
was successful in asserting the first position (i.e., the tribunal adopted the position or
accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position
was not taken as a result of ignorance, fraud, or mistake.” (Id. at p. 183; Eng v. Brown
(2018) 21 Cal.App.5th 675, 701.) The municipal defendants’ only argument on this issue
is the singular, conclusory statement that judicial estoppel should apply here “because
Petitioners played ‘fast and loose’ with the court.” The municipal defendants do not
provide any legal analysis explaining how the doctrine applies under the circumstances of
this case or how the trial court erred by not applying it. We “disregard conclusory
arguments that are not supported by pertinent legal authority or fail to disclose the
reasoning by which the appellant reached the conclusions he wants us to adopt.” (City of
Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 287.) Because the municipal
defendants fail to develop the argument with cogent legal analysis, we consider the
argument forfeited.
21
Moreover, the argument appears meritless on its face. For example, Mary D.
explained that her prior statements that the properties were not subject to CC&Rs were
the product of ignorance and mistake.
D. Postinjunction Contempt Proceedings
The municipal defendants appealed only from the trial court’s July 23, 2021, order
modifying the preliminary injunction. The municipal defendants do not contend
otherwise. They nevertheless make numerous arguments about contempt proceedings
that occurred in October 2021 and February 2022, after the order from which they
appealed.
“Our jurisdiction extends to ‘judgment[s] or order[s] appealed from’ and not to
any ‘decision or order from which an appeal might have been taken.’ (§ 906, italics
added.)” (Van v. LanguageLine Solutions (2017) 8 Cal.App.5th 73, 80.) Because the
municipal defendants appeal only from the trial court order modifying the preliminary
injunction, we do not have jurisdiction to consider the arguments about the contempt
proceedings that occurred after the court issued that order.
To the extent that the municipal defendants argue that the contempt proceedings
are nevertheless relevant on appeal from the order under review because they
demonstrate the effect that the modified preliminary injunction has had, they are
mistaken. “It is an elementary rule of appellate procedure that, when reviewing the
correctness of a trial court’s judgment [or order], an appellate court will consider only
matters which were part of the record at the time the judgment [or order] was entered.”
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(Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 813.) Nothing that has
happened in the trial court since the court modified the preliminary injunction is relevant
to our analysis of the appeal from that order because it was not before the court when it
modified the injunction. We accordingly do not consider any argument or evidence
concerning proceedings that occurred after the order under review. We also deny the
municipal defendants’ request for judicial notice of the hearing transcripts from
proceedings that occurred after the order modifying the injunction, because the
documents are not relevant to any material issue on appeal. (People ex rel. Lockyer v.