Santa Monica Rent Control Board v. Pearl Street, LLC

In this appeal, plaintiff, the Santa Monica Rent Control Board (the Board), challenges orders that (1) granted defendants’ special motion to strike the Board’s complaint, and (2) awarded defendants attorney’s fees and costs. Defendants are Pearl Street, LLC, a limited liability company, Rosario Perry, sued as manager of Pearl Street, LLC, and Robert Hackamack (Pearl Street, Perry, and Hackamack, collectively defendants).

The Board filed this suit for declaratory and injunctive relief because it contends that portions of state and local rent control law have been violated by defendants in their ownership or management of a four-unit residential rental property at 1028 Pearl Street in the City. Rental of such property is subject to article XVIII and to relevant provisions of state law.

This case concerns the Board’s skepticism about the nature of defendants’ rental of two of the four rental units. Specifically, the Board asserts defendants created sham tenancies to enable themselves to fulfill the letter of state rent control law while avoiding the economic constraints of the spirit of such law. That law provided that when a landlord withdrew a residential unit from the…