THUNDERBIRD MOBILE CLUB v. WILSONVILLE

228 P.3d 650

234 Or. App. 457

THUNDERBIRD MOBILE CLUB, LLC, Plaintiff-Respondent Cross-Appellant, v. CITY OF WILSONVILLE, Defendant-Appellant Cross-Respondent.

CV05110027; A134750.

Court of Appeals of Oregon.

Argued and Submitted January 22, 2009.

Decided March 24, 2010.

Paul A. Lee argued the cause for appellant-cross-respondent. With him on the briefs were Michael E. Kohlhoff and City of Wilsonville.

William Dickas, Portland, argued the cause for respondent-cross-appellant. With him on the briefs was Kell, Alterman & Runstein, LLP.

Thomas Sponsler, Gresham, Nancy L. Werner, and Beery, Eisner & Hammond, LLP filed the brief amicus curiae for League of Oregon Cities.

Before WOLLHEIM, Presiding Judge, and BREWER, Chief Judge, and SERCOMBE, Judge.^*

SERCOMBE, J.

Plaintiff, the owner of a mobile home park, filed a declaratory judgment action against the City of Wilsonville (city) to invalidate the city's ordinances that regulate the conversion of mobile home parks to other uses. Following a trial, the trial court entered a judgment declaring that those ordinances are preempted by state law and violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution. The city appeals and contends that the controversy is not justiciable, the ordinances are not preempted, and the ordinances are not invalid as a matter of substantive due process. The city also asserts that the trial court erred in awarding attorney fees under 42 U.S.C. section 1988.

Plaintiff disputes the city's contentions and cross-appeals, assigning as error the trial court's failure to invalidate the ordinances for additional reasons. Plaintiff asserts that the trial court should have found that the operation of the ordinances effects an uncompensated taking of plaintiff's property and money, that the operation of the ordinances unconstitutionally impairs the obligations of lease agreements between defendant and its tenants, and that the operation of the law to affect only mobile home parks within the city boundaries violates uniformity policies in the state and federal constitutions.

We conclude that the issues raised in the city's appeal are justiciable and that the ordinances are not preempted under state law or facially unconstitutional under the Due Process Clause. We also conclude that the trial court erred in failing to determine whether the ordinances are invalid on their face for the alternative reasons plaintiff advances in its cross-appeal, and we remand for a determination on the justiciability and merits of those claims. In light of those conclusions, the trial court erred in awarding attorney fees to plaintiff. Accordingly, we reverse and remand the general judgment under review and vacate and remand the supplemental judgment for costs and attorney fees.

I. PROCEDURAL HISTORY

This case concerns the legality of the city's ordinances that regulate the closure of mobile home parks by requiring the park owner to obtain a closure permit from the city and to compensate displaced tenants. At the time of the adoption of the ordinances,¹ ORS 90.630(5) (2005) directed a mobile home park landlord who wished to convert the park to a different use to provide tenants with a one-year notice of termination, or at least 180-days notice of termination, together with "space acceptable to the tenant to which the tenant can move" and payment of moving expenses, or $3,500, whichever is less.² Then and now, ORS 90.505 to 90.840 regulated a number of aspects of the landlord-tenant relationship for the rental of spaces in mobile home parks, including policies concerning disclosures to tenants, billing methods for utility charges, extensions of the term of a rental agreement, rental increases, termination of tenancies, closure of the facility, ownership changes, and sale of the mobile home. All of those policies were part of the Oregon Residential Landlord and Tenant Act, ORS chapter 90. ORS 90.115 sets out the scope of that act:

"This chapter applies to, regulates and determines rights, obligations and remedies under a rental agreement, wherever made, for a dwelling unit located within this state."

In the summer of 2005, plaintiff notified affected tenants that it intended to sell the Thunderbird Mobile Club, a 270-space mobile home park. The park had been in operation for 40 years and was inhabited mostly by persons on fixed incomes. A hue and cry ensued that led to hearings before the city council on the potential expulsion of tenants and conversion of the park to other uses. The council determined that mobile home parks provided affordable housing for low and moderate income persons and that closure of a park typically forces the park residents to abandon their dwellings without recovery of the dwelling's value. After public hearings, the council adopted Ordinance Nos. 600 and 603. The ordinances required:

• A mobile home closure permit prior to closing a mobile home park. "Closure of a mobile home park" was defined to include the termination of "mobile home space rental agreements for all or a portion of the park spaces or the engagement in activity to effect termination of rental agreements or leases or to evict tenants." The ordinances provided that the requirement for a permit was not intended to affect any right to obtain a land use decision for the park use, to "sell, convey or transfer a mobile home park" or to "provide notification under ORS 90.630(5)."

• The filing of a closure impact report as part of an application for a closure permit. That report was required to detail the particulars of the current rental of spaces in the park, provide a list of comparable rentals within 100 miles of the city, set out an analysis of the economic effects of tenant relocation, and offer relocation specialist services to tenants.

• A relocation plan as part of the closure permit application. Under a plan, the owner was required to provide for payment of all reasonable relocation costs for tenants to locate to a comparable space within 100 miles of the city, and, if the dwelling could not be relocated, to purchase the dwelling at its assessed value.

• That the ordinances "be construed as not to conflict with state law, and shall be applied in a manner such that the provisions and state law operate concurrently."

• An "owner relief" process, allowing the park owner to apply for relief from the requirements of the ordinances if the "application of the ordinances are unduly oppressive under the circumstances then and there existing." In allowing or denying an application for relief, the council was required to consider "the amount and percentage of value loss, the extent of remaining uses, past, present and future, the seriousness of the public problem caused by the owner's acts of closure, the degree to which these provisions mitigate the problem, * * * the feasibility of less oppressive solutions, * * * and other factors as may be relevant or necessary to achieve a lawful application of these provisions." The ordinances mandated the adoption of findings on the relief application after a public hearing and provided for judicial review of the decision.

After adoption of the ordinances, but before it applied for any permit or owner's relief under the ordinances, plaintiff filed its first amended complaint, seeking declaratory and injunctive relief. It sought declarations that the ordinances were preempted by the Oregon Residential Landlord and Tenant Act and otherwise effected uncompensated takings of real property and money under the state and federal constitutions; uncompensated taking of services under Article I, section 18, of the Oregon Constitution; deprivation of property without due process of law in violation of the Fourteenth Amendment to the United States Constitution; deprivation of property without remedy in violation of Article I, section 10, of the Oregon Constitution; impairment of tenant contracts inconsistent with Article I, section 10, of the United States Constitution and Article I, section 21, of the Oregon Constitution; denial of equal protection under the Fourteenth Amendment to the United States Constitution; denial of equal privileges in violation of Article I, section 20, of the Oregon Constitution; and improper exercise of judicial functions by a governmental body that was not a court. Plaintiff also alleged:

"The adoption and threatened enforcement of the Ordinances by the City of Wilsonville acting under color of law and ordinance, deprives the Plaintiff of its rights, privileges and immunities secured by the Constitution of the United States in violation of Section 1983, Title 42, United States Code. Plaintiff is entitled to its costs and reasonable attorney fees incurred herein by reason of Section 1988 of Title 42, United States Code, and by reason of ORS 20.085."

The prayer sought a "declaration that the Ordinances are unlawful," an injunction against their enforcement, and reasonable costs and attorney fees.

Following a trial, the trial court entered the judgment under review. The judgment contained specific findings that plaintiff's costs to comply with the ordinances, if a conversion permit were sought, would be substantial. The court found that there were 765 mobile home parks within 100 miles of Wilsonville, with over 38,000 mobile home spaces, so that the costs of preparation of an impact report assessing those spaces would be "substantial." The court further determined that the costs of relocating a mobile home ranges from $3,000 to $27,000, depending on whether the home is a "single wide" or "double wide" mobile home and that approximately two-thirds of the 184 tenant-owned mobile homes in plaintiff's park were larger, double-wide homes. According to the trial court's findings, if the mobile homes could not be relocated, the costs to purchase the homes under the ordinance would be $2,485,570, and the costs of dismantling and disposing of the purchased mobile homes would exceed...