H & M ASSOCIATES v. City of El Centro

Plaintiff H & M Associates appeals the judgment of dismissal entered after defendants', City of El Centro and the members of the El Centro City Council, demurrer to its second amended complaint (complaint) was sustained without leave to amend. As we will explain, plaintiff, a limited partnership, has alleged facts sufficient to state causes of action for intentional interference with contractual relationships, invasion of privacy and conspiracy against the City of El Centro (City). We reverse the judgment.

H & M Associates, a limited partnership, owns and operates H & M Apartments, a 306-unit apartment complex in El Centro, California. The property was encumbered, before September 21, 1975, with deeds of trust securing notes in favor of defendants Coachella Valley Savings and Loan Association, U.S. Life Savings and Loan, and Kaibab Industries, Inc. requiring payments in monthly installments. During that period of time, each defendant knew that plaintiff had made, and there was pending for approval, a written application with the Federal Housing Authority to refinance the mortgages on the property. Defendants also knew that plaintiff had written contractual…

Plaintiff H & M Associates appeals the judgment of dismissal entered after defendants’, City of El Centro and the members of the El Centro City Council, demurrer to its second amended complaint (complaint) was sustained without leave to amend. As we will explain, plaintiff, a limited partnership, has alleged facts sufficient to state causes of action for intentional interference with contractual relationships, invasion of privacy and conspiracy against the City of El Centro (City). We reverse the judgment.

*404 Factual and Procedural Background

H & M Associates, a limited partnership, owns and operates H & M Apartments, a 306-unit apartment complex in El Centro, California. The property was encumbered, before September 21, 1975, with deeds of trust securing notes in favor of defendants Coachella Valley Savings and Loan Association, U.S. Life Savings and Loan, and Kaibab Industries, Inc. requiring payments in monthly installments. During that period of time, each defendant knew that plaintiff had made, and there was pending for approval, a written application with the Federal Housing Authority to refinance the mortgages on the property. Defendants also knew that…

concur in the judgment of reversal.

*414 Plaintiff alleges inter alia:, “(a) Without notifying plaintiff of its intent to terminate water service to the entire apartment complex, without providing plaintiff with a hearing regarding termination of said water service, and without providing plaintiff with an opportunity to pay any amounts due and owing on account of the provision of water service to said apartment complex, and after tender of payment for water service on seven (7) of the accounts hereinabove described, defendant City, by and through its City Manager, on or about September 16, 1975, terminated water service to the entire Three Hundred Six (306) units in the apartment complex hereinabove described;. . . ”

These facts, standing alone, authorized the relief sought. The United States Supreme Court in Memphis Light, Gas & Water Div. v. Craft (1978) 436 U.S. 1 [ 56 L.Ed.2d 30, 40-43 , 98 S.Ct. 1554, 1561-1563 ], held a municipal utility liable in damages for failure to provide adequate notice and opportunity for hearing prior to termination of essential utilities if under state law the customer had a protected interest in continuing service absent cause. (Id.., at pp.…