300 DeHaro Street Investors v. Department of Housing & Community Development

Following the trial court’s sustaining of a demurrer without leave to amend, plaintiff 300 DeHaro Street Investors appeals from a dismissal of its third amended complaint alleging that defendant Department of Housing and Community Development (the Department) breached a contract (Regulatory Agreement) by denying plaintiff’s request to increase rents in an apartment building for which plaintiff received a low-interest loan in exchange for renting units to low-income households under a statutory and regulatory scheme (Health & Saf. Code, § 50660 et seq.; Cal. Code Regs., tit. 25, § 7670 et seq.). The Regulatory Agreement, as well as the underlying statutory/regulatory scheme, called for the Department to approve specified rent increases if plaintiff proved specified matters to the Department’s satisfaction. Plaintiff challenges the trial court’s conclusions that dismissal was warranted because (1) plaintiff’s complaint was uncertain as to whether it alleged the rent increase was mandatory or discretionary, and (2) plaintiff’s sole avenue for relief for a discretionary increase was a petition for writ of mandate (Code Civ. Proc., § 1094.5) rather than a breach of contract…