Government Liability Update

If Mobile Home Park Is Making Fair Rate of Return, It Has No Constitutional Right to Raise Rents to Market Rates

In Besaro Mobile Home Park v. City of Fremont, published March 14, 2012, the First District Court of Appeal, Division Five, rejected a mobile home park owner's argument that it was constitutionally entitled to raise its rents to market rates.  The owner argued that rent control is constitutionally limited to preventing "excessive" rents; and that, by definition, the market rate rent is not excessive because the market is willing to pay it.  The court opined that mobile home rent control laws are designed to protect unit owners because of their inherent disadvantage in negotiating rates -- i.e., because they cannot easily move their homes, they are subject to whatever rate the owner charges to rent them  the land under their homes.  The owner is constitutionally entitled only to charge enough rent to receive a fair rate of return.  Because there was no dispute that the owner was receiving such a rate, the appellate court upheld the trial court's decision refusing to grant the owner the rent increase he sought.

School Districts May Be Held Vicariously Liable for Administrators' and Supervisors' Negligent Hiring or Retention Recommendations Concerning Employees Who Intentionally Injure Students

In C.A. v. William S.Hart Union High School District, published March 8, 2012, the California Supreme Court ruled that school administrators and supervisors can be held liable for negligent hiring and retention of teachers and other employees who molest students; and that, under Government Code section 815.2(a), the school districts that employ the administrators and supervisors may be held vicariously liable. 

The issue arose because past decisions have established that school districts may not be held vicariously liable for the acts of employees who molest students, because such acts are outside the scope of employment as a matter of law; and may not be held directly liable for negligent hiring or retention, because there is no statutory basis for that cause of action.  Further, administrators and supervisors do not make the ultimate decision whether to hire, retain, or fire employees such as teachers; school boards make that decision.  Nevertheless, the court ruled, administrators and supervisors stand in a special relationship with students that creates a duty of care to prevent injury to them from third persons; and they may have the ability to make recommendations concerning hiring, retention, and firing of employees.

The court stressed that issues of causation and foreseeability limit the administrators and supervisors who can be held negligent, and for whose negligence the districts can be held liable.  Causation requires that the administrators or supervisors' recommendations play a substantial factor in the ultimate decision to hire or retain an employee; and foreseeability requires that the administrator or supervisor know, or reasonably should know, that the employee poses a substantial risk to student safety.

The court further held that the complaint need not name the allegedly negligence administrators or supervisors to survive demurrer -- although they must eventually be identified in the litigation.

Notice of Denial of Leave to Present Late Claim Must Include Date of Board's Action on Application

In D.C. v. Oakdale Joint Unified School District , published March 1, 2012, the Fifth District Court of Appeal interpreted Grovernment Code section 911.8 to require a public entity that grants or denies an application for leave to present late claim to include in the notice the date the entity's board acted on the claim. Although section 911.8 requires the entity to give notice of its action on the application, it does not prescribe the contents of the notice. But since the six months for the claimant to petition the court for relief from the claim statutes runs from the date the application to the entity is denied, rather than the date the notice is sent, the court held that the legislature must have intended that the notice include the date the application was denied. In the D.C. case, the notice was mailed a month after the application was denied, and yet less than 45 days after the application was sent (after which the application would be denied by operation of law). The petition was filed within six months of the notice's mailing. Under those circumstances, the court held, the petitioner should be able to allege and prove in the petition that the entity's failure to give the date of denial in the notice estopped the entity from asserting that the petition was untimely.