Laurie A. Michelena for Defendants and Appellants.
Robert J. Legate for Plaintiff and Respondent. [25 Cal. App. 4th 3]
RYLAARSDAM, J. fn. *
In 1974, the developer of the Broadmoor homes recorded a declaration
of covenants, conditions and restrictions (CC&Rs) which provided "no
business or commercial activity shall be maintained or conducted upon
any of the [Broadmoor homes]." In 1990, appellants Robert N. Nelson,
individually and as trustee of the Robert N. Nelson and Elsie M. Nelson
Revocable Living Trust, Alexis Edwards, and Rosehaven, a corporation
(the Nelsons), purchased a home subject to the CC&Rs. Subsequently
the Nelsons remodeled the home to make it suitable for use as a licensed
"residential care facility for six or fewer non-ambulatory elderly
adults which they called 'Rosehaven.' " This type of facility is subject
to the California Residential Care Facilities for the Elderly Act.
(Health & Saf. Code, § 1569 et seq.) The Nelsons commenced marketing
the services of the home under the name "Rosehaven" and contemplated
charging fees for services to be rendered to the residents.
Respondent Broadmoor San Clemente Homeowners Association commenced this
action seeking an injunction contending the operation of such a
residential care facility violated the CC&Rs. After a court trial on
stipulated facts, the trial court found the proposed operation of
"Rosehaven" constituted a business and therefore violated the CC&Rs.
This finding was based on the fact the Nelsons contemplated charging
fees to non-family-member residents. The court thereupon ordered
judgment entered in favor of the association enjoining the Nelsons from
(1) "owning, operating, marketing, managing or controlling a residential
care facility for six or fewer people," (2) "advertising or soliciting
for resident or potential residents for a residential care facility for
six or fewer people," and (3) "contracting with any residents or
potential residents of a residential care facility for six or fewer
people." The appeal is from this judgment.
The appeal raises a
number of issues relating to the reasonableness of the enforcement of
the restriction, the factual basis therefore, and the procedures used in
the enforcement of the restriction. The appeal further contends the
judgment violates the Federal Fair Housing Act (42 U.S.C. § 3601 et
seq.) After the briefs were filed, the Legislature amended Government
Code sections 12955 and 12955.6, effective January 1, 1994, which, as we
will discuss below, rendered the restriction in the CC&Rs, as
applied to the facts of this case, unlawful. We permitted the parties to
file supplemental briefs concerning the effect of these recent
amendments. In view of our holding,
[25 Cal. App. 4th 4] based on these recent amendments, we need not consider the other issues initially raised in the appeal.
I. Applicability of Subsequent Legislation to Relief by Injunction
 As a general rule, an appeal only determines whether the judgment
was correctly rendered based on the facts presented to the trial court
and the law as it existed at that time. (Solomon v. Solomon (1953) 118 Cal. App. 2d 149,
155 [257 P.2d 760]; People's Home Savings Bank v. Sadler (1905) 1 Cal.
App. 189, 193 [81 P. 1029]. See also 9 Witkin, Cal. Procedure (3d ed.
1985) Appeal, § 52, p. 258.) However, the general rule does not apply to
a judgment granting an injunction; "[s]ince relief by injunction
operates in futuro, the right to such relief must be determined under
the law which exists at the time of an appellate court's decision."
(California Satellite Systems, Inc. v. Nichols (1985) 170 Cal. App. 3d 56, 66 [216 Cal. Rptr. 180].)
In the light of the legislative determination characterizing the
restrictive covenant under the facts of this case as an unlawful
discrimination because of disability, it would be inappropriate for us
to review the judgment only on the basis of the law as it existed at the
time of the judgment. Were we to affirm on the basis of the prior law,
we would be performing an idle act since the Nelsons would have the
right to obtain a subsequent modification of the judgment based on the
changes in the law.
II. Law In Effect at Time of Judgment
Health and Safety Code section 1569.87, part of the California
Residential Care Facilities for the Elderly Act (Health & Saf. Code,
§ 1569 et seq.), adopted in 1985, provides: "For the purposes of any
contract, deed, or covenant for the transfer of real property executed
on or after January 1, 1979, a residential facility for the elderly
which serves six or fewer persons shall be considered a residential use
of property and a use of property by a single family, notwithstanding
any disclaimers to the contrary." (Italics added.) The restrictive
covenant at issue herein was created by CC&Rs recorded in 1974.
Barrett v. Lipscomb (1987) 194 Cal. App. 3d 1524 [240 Cal. Rptr. 336]
held Health and Safety Code section 1566.5, enacted in 1978, which
imposed a similar condition for the benefit of this type of facility
prior to the enactment of section 1569.87, did not invalidate pre-1979
covenants restricting the operation of residential facilities for the
[25 Cal. App. 4th 5]
Welsch v. Goswick (1982) 130 Cal. App. 3d 398 [181 Cal. Rptr. 703],
contrary to Barrett v. Lipscomb, supra, 194 Cal. App. 3d 1542, held
Health and Safety Code section 1566.5 did "not attempt to reach
covenants entered into before 1979" (130 Cal.App.3d at p. 407) and hence
the validity of such pre-1979 restrictions was left open for the court
to decide. Welsch went on to hold such pre-1979 covenants restricting an
identical use were nevertheless invalid because "recent changes in the
social fabric convince us that operation of a residential care facility
for six or fewer residents is not inconsistent with a single-family
residential purpose restriction." (Id. at p. 408.) In so doing, the
Welsch court stretched the rules of statutory interpretation beyond
 We agree with Barrett v. Lipscomb,
supra, 194 Cal.App.3d 1524: "[t]he language of section 1566.5 [and the
similar language of section 1569.87] is so clear and unambiguous that
there is no room for interpretation." (Id. at p. 1530.) From the very
language of the statute it is clear the Legislature intended to exempt
pre-1979 covenants. "The fundamental tenet of statutory construction is
that a court must ascertain the intent of the Legislature so as to
effectuate the purpose of the law. In determining the intent of the
Legislature, the court must first look to the language of the statute.
If that language is clear and unambiguous and there is no question as to
the Legislature's intent, there is no need for construction and courts
should not indulge in it." (Carlton Browne & Co. v. Superior Court
(1989) 210 Cal. App. 3d 35, 40 [258 Cal. Rptr. 118].)
We therefore agree with the trial court's interpretation of Health and
Safety Code section 1569.87 in accordance with the analysis of Barrett
v. Lipscomb, supra,
194 Cal. App. 3d 1524. Under the then-existing statutory scheme, the 1974 covenant prohibiting the use contemplated by the Nelsons was valid.
III. Effect of 1993 Amendment to Government Code Sections 12955 and 12955.6
 In 1993, the Legislature amended Government Code section 12955,
part of the California Fair Employment and Housing Act, to provide: "It
shall be unlawful ... [¶] (1) To discriminate through public or private
land use practices, decisions, and authorizations because of ...
disability.... Discrimination includes, but is not limited to,
restrictive covenants ...." Government Code section 12955.6, part of the
same act, was amended to provide: "Any state law that purports to
require or permit any action that
[25 Cal. App. 4th 6] would be
an unlawful practice under this part shall to that extent be invalid."
Health and Safety Code section 1569.87 permits restrictive covenants
executed before 1979 to prohibit residential care facilities for the
elderly. It therefore appears from the face of Government Code sections
12955 and 12955.6 that the portion of section 1569.87 containing such
permission has been repealed. The legislative intent expressly stated in
the act amending sections 12955 and 12955.6 confirms this conclusion.
The act amending the Fair Employment and Housing Act, provides, in
describing the legislative intent, "[i]t is the Legislature's intent to
make the following findings and declarations regarding unlawful housing
practices prohibited by this act: [¶] (a) That public and private land
use practices, decisions, and authorizations have restricted, in
residentially zoned areas, the establishment and operation of group
housing.... [¶] (b) That persons with disabilities ... are significantly
more likely than other persons to live with unrelated persons in group
housing. [¶] (c) That this act covers unlawful discriminatory
restrictions against group housing for these persons." (Stats. 1993, ch.
1277, § 18; 12 West Cal. Legis. Services, p. 6038.)
Code section 12955.3 defines "disability" in part as "A physical or
mental impairment that substantially limits one or more of a person's
major life activities." The facility at issue herein, was intended to
house "non-ambulatory elderly adults." A "residential care facility for
the elderly" is defined in Health and Safety Code section 1569.2,
subdivision (k), as a housing arrangement for persons 60 years of age or
over providing "varying levels and intensities of care and supervision,
protective supervision, or personal care." Such group homes are
therefore facilities intended to provide for persons with disabilities.
Health and Safety Code section 1569.87, on its face, and as interpreted by Barrett v. Lipscomb, supra, 194 Cal. App. 3d 1524,
with respect to pre-1979 covenants, purports to permit restrictive
covenants to exclude group homes for elderly persons with disabilities.
The expressed legislative intent indicates this is the type of
discrimination which Government Code section 12955 intended to make
unlawful. Therefore, the exclusion for pre-1979 covenants contained in
section 1569.87 has been invalidated by Government Code section 12955.6.
The association's supplemental brief questions such a reading of the
statute. Accordingly, we reviewed the legislative history and find it
confirms our reading of the statute. As discussed below, it clearly was
the intent of the Legislature, in adopting the 1993 amendments, to
conform California law on
[25 Cal. App. 4th 7] the subject of
fair housing to the Federal Fair Housing Act. Reviewing cases under that
act, we find enforcement of the restrictive covenant, under the facts
presented here, violative of the statute. Legislative History of 1993
Amendments to Government Code Sections 12955 and 12955.6:
amendments to Government Code sections 12955 and 12955.6 originated as
Assembly Bill No. 2244 (1993-1994 Reg. Sess.). An analysis of the bill
prepared for the Assembly Committee on Judiciary defines the subject of
the bill as "This bill conforms state housing discrimination law with
federal law." (Assem. Com. on Judiciary, Rep. on Assem. Bill No. 2244
(1993-1994 Reg. Sess.) (Apr. 21, 1993) p. 1.) In this connection, the
analysis notes the proposed legislation "[p]rovides that discriminatory
land use regulations, zoning laws and restrictive covenants are unlawful
acts," (id. at p. 2) and that the proposed legislation "[p]rovides that
violation of the FEHA (Fair Employment and Housing Act) may be proved
by establishing ... [that] an act or failure to act has the effect,
regardless of intent, of unlawful discrimination (discriminatory
effect)." (Id. at p. 3.) A subsequent analysis prepared for the same
committee contains identical language. (Assem. Com. on Judiciary, Rep.
on Assem. Bill No. 2244 (1993-1994 Reg. Sess.) (Apr. 28, 1993) pp. 1-3.)
The committee analyses contain the following statement attributed to
the author of the bill: "this bill is necessary to 'clean-up substantive
and technical problems' with the Fair Employment and Housing Act, as
amended by SB 1234 of 1992. The author points out that HUD has
identified a number of 'significant differences' between the FEHA and
federal law and, therefore, has not certified California law as
'substantially equivalent' to federal fair housing law and procedure.
The lack of certification has resulted in loss of substantial federal
funds to enforce fair housing laws. [¶] The author contends that this
bill responds to various modifications to the FEHA suggested in
correspondence with HUD regarding the deficiencies in California's FEHA.
The author argues that, if adopted, this bill will result in California
law being 'substantially equivalent' to federal fair housing laws and,
thereby, eligible to certification to receive federal funding." (Assem.
Com. on Judiciary, Rep. on Assem. Bill No. 2244 (1993-1994 Reg. Sess.)
(Apr. 21, 1993) pp. 4-5; Assem. Com. on Judiciary, Rep. on Assem. Bill
No. 2244 (1993-1994 Reg. Sess.) (Apr. 28, 1993) pp. 4-5.) In providing
an example of discrepancies between federal and California law, the
committee analyses reference Casa Marie, Inc. v. Superior Court of
Puerto Rico (D.P.R. 1990) 752 F. Supp. 1152,
which enjoined enforcement of a restrictive covenant to prevent
operation of a group home for the disabled elderly. (Assem. Com. on
Judiciary, Rep. on Assem. Bill No. 2244 (1993-1994 Reg. Sess.) (Apr. 21,
1993) p. 6; Assem. Com. on Judiciary, Rep. on Assem. Bill No. 2244
(1993-1994 Reg. Sess.) (Apr. 28, 1993) p. 6.)
[25 Cal. App. 4th 8]
An analysis of Assembly Bill No. 2244 prepared for the Assembly Ways
and Means Committee likewise indicates the bill is intended to bring
state law "into conformance with provisions of federal law, known as the
Fair Housing Amendment Act (FHAA) of 1988." (Assem. Ways & Means
Com., Analysis on Assem. Bill No. 2244 (1993-1994 Reg. Sess.), June 2,
1993.) Similar language is also contained in the analysis prepared for
the Senate Committee on Judiciary (Sen. Com. on Judiciary, Rep. on
Assem. Bill No. 2244 (1993-1994 Reg. Sess.) (Aug. 17, 1993, & Aug.
24, 1993)) and the Senate Rules Committee (Sen. Rules Com., Rep. on
Assem. Bill No. 2244 (1993-1994 Reg. Sess.) (Aug. 24, 1993)). It is
therefore clear it was the intent of the Legislature, in amending
Government Code sections 12955 and 12955.6 to conform California's
housing statutes to federal law.
Validity of Restrictive Covenants to Prohibit Group Housing for the Handicapped Under Federal Law:
The Federal Fair Housing Act of 1968, was amended in 1988, to make it
unlawful "[t]o discriminate in the sale or rental, or to otherwise make
unavailable or deny, a dwelling to any buyer or renter because of a
handicap of ... [¶] a person, residing in or intending to reside in that
dwelling after it is so sold, rented, or made available...." (42 U.S.C.
§ 3604(f)(1).) Restrictions on housing accommodations for the disabled
violate the Federal Fair Housing Act as amended in 1988. (Marbrunak,
Inc. v. City of Stow, Ohio (6th Cir. 1992) 974 F.2d 43.) U.S. v. Scott
(D.Kan. 1992) 788 F. Supp. 1555
asked the question: "Specifically, does the enforcement of restrictive
covenants for the purpose of discriminating against handicapped
individuals constitute a violation of the Act?" (Id. at p. 1561.) In
answering this question in the affirmative, the court reviewed the
legislative history of the Federal Fair Housing Act, and noted "[i]n
discussing the scope of the amended Act, the House Committee on the
Judiciary stated that the Act 'is intended to prohibit special
restrictive covenants or other terms or conditions, or denials of
service because of an individual's handicap and which ... exclud[e], for
example, congregate living arrangements for persons with handicaps."
(Ibid.) The court also relied on Casa Marie, Inc. v. Superior Court of
Puerto Rico, supra, 752 F. Supp. 1152
where "the court held that the Fair Housing Act was violated by the
defendants' enforcement of a neutral restrictive covenant in state court
to terminate the operation of a home for the handicapped." (U.S. v.
Scott, supra, at p. 1561.)
In Rhodes v. Palmetto Pathway Homes, Inc. (1991) 303 S.C. 308 [400 S.E.2d 484],
a subdivision was subject to a restrictive covenant which limited the
use of the property to "private residential purposes." Rhodes, an owner
of real property in the subdivision, obtained an injunction in the trial
court restraining Palmetto from establishing a group residence for
[25 Cal. App. 4th 9] impaired adults. The decision, as
in the case now before us, was based upon a finding by the trial court
that Palmetto's operation was contemplated to be of a commercial nature.
The Supreme Court of South Carolina concluded, "interpretation of the
restrictive covenants in such a way as to prohibit location of a group
residence for mentally impaired adults in a community is contrary to
public policy as enunciated by both state and federal legislation." (Id.
at p. 486.) The court went on to note: "The Fair Housing Amendments Act
of 1988 articulates the public policy of the United States as being to
encourage and support handicapped persons' right to live in a group home
in the community of their choice. [Citation.] 'This provision is
intended to prohibit special restrictive covenants ... which have the
effect of excluding ... congregate living arrangements for persons with
handicaps.' " (Ibid.) Effect of Amendments Conforming California Housing
Law to Federal Standards:
It was the clear intent of the
Legislature in enacting the 1993 amendments to Government Code sections
12955 and 12955.6 to bring California housing legislation in full
compliance with federal law. Federal law prohibits enforcement of a
restrictive covenant which has the effect of excluding group homes for
the handicapped. The legislative intent expressed as part of the
amendments, specifically refers to the desirability of making group
housing for the disabled available in residential areas. (Stats. 1993,
ch. 1277, § 18.) Accordingly, the portion of Government Code section
12955.6 invalidating "[a]ny state law that purports to ... permit any
action that would be an unlawful practice under this part," (italics
omitted) was intended to and did invalidate the portion of Health and
Safety Code section 1569.87 which permitted the use of pre-1979
restrictive covenants to be employed to exclude group homes for the
IV. Constitutional Issues Not Considered
Seaton v. Clifford (1972) 24 Cal. App. 3d 46,
52 [100 Cal. Rptr. 779] suggests an attempt by the state to delete
protections afforded by restrictive covenants may be an impairment of
private contractual and property rights under United States
Constitution, article I, section 10 and California Constitution, article
I, section 16. Therefore, arguably the action by the Legislature to
invalidate the restrictive covenant at issue herein may raise
We invited the parties to submit
additional briefs on the issue of whether, if the Legislature intended
by the enactment of Government Code section
[25 Cal. App. 4th 10] 12955.6 to invalidate the pre-1979 exemption as interpreted in Barrett v. Lipscomb, supra, 194 Cal. App. 3d 1524,
there are any constitutional limitations on the power of the
Legislature to accomplish this effect. Counsel for the association
declined our invitation to brief this issue. They responded that, in
view of their position the Legislature did not intend to invalidate the
exemption, "it does not appear necessary to address this issue."
In the light of counsel's failure to address the issue, although we
requested they do so, we consider any constitutional issues the
association might raise as having been waived.
The judgment is reversed; the court shall enter judgment for
defendant. Each party to bear its own costs and attorney fees on appeal.
Sills, P. J., and Crosby, J., concurred.
FN *. Judge of the Orange Superior Court sitting under assignment by the Chairperson of the Judicial Council.
FN *. Judge of the Orange Superior Court sitting under assignment by the Chairperson of the Judicial Council.