DeAnza Santa Cruz Homeowners Association v. DeAnza Santa Cruz Mobile Estates, et al.
Published: Apr. 10, 1999 | Result Date: Jan. 22, 1999 | Filing Date: Jan. 1, 1900 |Case number: 128001 Verdict – $6,000,000
Judge
Court
Santa Cruz Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Charles P. Harper
(technical)
Facts
In 1993, the owners of the DeAnza Santa Cruz Mobile Estates (mobile home park) decided to separately meter each of the 198 tenants relative to water and sewer usage. Most of the tenants were under rent control, although some had long-term leases. The purpose of separately metering the water and sewage utility charges was to allow the landlord to bill the tenants for their actual usage of utilities. In rising utility rate circumstances, as existed in 1993 in Santa Cruz County, this allowed the property owner to pass through rising rates each tenant as they used the utility services. This activity is authorized pursuant to Civil Code º798.41. The tenants did not object to this process. However, the landlords, when they started to separately bill, over-billed each tenant $3 to $5 per month, plus a 7 percent additional amount which was labeled "a City utility tax." The tenants determined that there had been over-billing and approached the park owner.The park owner said that their method of billing was justified, not only under the Civil Code section, but under relevant Public Utilities Code sections. During the pendency of this matter, the property was sold from the DeAnza Santa Cruz Mobile Estates, a California Limited Partnerships, to MHC Corporation. MHC continued the practice of over-billing that was started by DeAnza Santa Cruz Mobile Estates. The tenants complaints resulted in an administrarive hearing that was provided as a remedy for rent control tenants. Although a lawsuit had been filed over the practice, the property owners demanded that these tenants exhaust their administrative remedies. The civil lawsuit was stayed while the administrative activity went foward. The tenants prevailed at the admistrative level. The defendants filed a writ in the Superior Court. The tenants prevailed in the Superior Court action. The defendants appealed to the Court of Appeals. The tenants prevailed at the Court of Appeals. The case was then remanded back and the civil case then proceeded on the question as to whether the approximately $40,000 in over-billing by the landowners, which had gone on for 40 months, was of a character to entitle the plaintiffs to punitive damages. The plaintiff brought this action against the defendants based on a claim that defendants had wilfully and fraudulently violated the Civil Code sections.
Settlement Discussions
The plaintiff made a settlement demand for $500,000 (which included $100,000 in attorney fees that had already been awarded to the plaintiffs as a result of their prevailing in the writ action. The defendant offered $150,000.
Damages
Punitive damages
Other Information
Just under $40,000 in over billings were returned to the tenants in early 1997, when the Court of Appeals refused the landowners' request for a stay of the findings of the Superior Court in the writ proceeding.
Deliberation
5½ hours
Poll
10-2
Length
seven days
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