San Francisco landlord attorneys filed a lawsuit on Thursday against San Francisco and five tenants in an effort to overturn Sup. David Campos' new law requiring higher relocation assistance payments to tenants evicted under the Ellis Act, but the main plaintiff in the case may not be the helpless victim the suit purports him to be.
Under the recently implemented measure, landlords must now pay the difference between their tenants’ current rent and the cost of "comparable" units for two years, as determined by the City Controller's Office. Though many property owners haven't been deterred by the measure, as evidenced by the Ellis Act evictions that continue to sweep the city, a group of landlords and their attorneys filed a lawsuit (Jerrold Jacoby et al. v. City and County of San Francisco, et al.) claiming the new law is unjust.
"The city has tried to change the rules on them," said attorney Andrew Zacks, who represents the plaintiffs. "We don't think that is allowed under the law."
Jacoby, the lawsuit’s main plaintiff, is an 80-year-old property owner who, according to tenant attorney Joseph Tobener, is a "slumlord” who has mistreated his tenants and failed to adequately maintain his valuable rental property.
"He is in the business of landlording. That is all he does," Tobener, who represents three of the five tenants being sued in the lawsuit, told the Guardian. "The lawsuit against the City only used Jacoby as plaintiff because he is a senior...They think this guy Jacoby, a slumlord, is a perfect plaintiff, but they misrepresent this story in their complaint."
One of Tobener's clients, Judith Barrett, is a 62-year-old single mother who teaches English at Galileo High School in San Francisco. She has lived in her current unit for 25 years, and she lives paycheck-to-paycheck.
Barrett, who Jacoby recently evicted using the Ellis Act, has been involved in protracted legal proceedings with her landlord in the past. Tobener said Jacoby and unit co-owner Jeanmarie Hryshko (Jacoby's ex-wife) have collected more than $22,500 in illegal rent since October 2009, according to a ruling by the San Francisco Rent Board. That's just the tip of the iceberg, according to Tobener, who said there was "much more prior" but that it extends beyond the statute of limitations.
Using a clause in the San Francisco Rent Board’s regulations, Jacoby claimed "financial hardship" when sued by Barrett over the illegal rent collection. “He tried to file a hardship exemption for the $22,500 at the Rent Board and he lost,” said Tobener, who also noted that Jacoby and Hryshko still owe Barrett an additional $8,000 because they executed the eviction before the reduced rent could cover the landlord’s debt to his tenants.
Barrett's eviction, according to Tobener, was prompted by a lawsuit filed by tenants that claimed the landlords wouldn't make "even the most basic repairs to the subject unit." The lawsuit, which is still pending, claims that Jacoby and Hryshko have saved hundreds of thousands of dollars over the years, though they have an equity of $1.8 million on the two-unit property.
"That's flat out untrue. There is a chronology that completely undercuts Mr. Tobener's statement," Zacks said, noting that aggressive moves by the tenants—specifically ”legal threats” from Tobener—ultimately resulted in the Ellis evictions. "This is exactly why we have the Ellis Act and why it's an important right for property owners. The notion that [Jacoby] should have to pay $100,000 to stop being a landlord is not only unfair, it's illegal by state law."
The "aggressive moves" in question are chronicled in Tobener's letter to David Wasserman, an attorney involved in the case. Tobener believes Jacoby and Hryshko have no intention of living together, and that they instead hope to rid their debt by evicting their rent-controlled tenants.
"If we are successful in proving that your clients have ulterior motives or are retaliating against the tenants, we will then file a wrongful eviction action against your clients,” Tobener wrote. “By now, I am sure your clients have wrongful eviction insurance. Perhaps they take comfort in the protections this insurance will provide them should they lose their unlawful detainer bid. But, what your clients may not know is that their insurance policy will not cover our largest seam of gold -- the treble-damages penalties under the San Francisco Rent Ordinance for wrongful eviction."
In the event of an unfavorable ruling, Zacks said he and his client don't plan to remain complacent. "If the local judge agrees with the city," he said. "We will appeal."
Indeed, could be just the beginning of epic court battles between landlord and tenants advocates in San Francisco, where the hot housing market has triggered an eviction epidemic. The November ballot includes a tax on real estate speculation, which landlord groups have already threatened a lawsuit to challenge.
“Ellising a two-unit building is a real estate speculation play,” Tobener told the Guardian. “They are going to remodel and sell as TICs [tenants-in-common] to wealthy new owners. They cannot re-let the units, so they have to remodel and sell.”