SHELTER CREEK DEVELOPMENT CORPORATION et al., Plaintiffs and Appellants, v. CITY OF OXNARD et al., Defendants and Appellants, 34 Cal. 3d 733

Opinion MOSK, J. Plaintiffs, the owners of a 216-unit apartment complex in the City of Oxnard, and a real estate developer who holds an option to purchase the property, seek to convert the structure to a stock cooperative form of ownership. The city has enacted an ordinance that provides a special use permit must be obtained to accomplish the conversion and sets forth certain physical standards to which the structure should conform to qualify for a permit.

Plaintiffs claim that the ordinance is unconstitutional and, moreover, that it does not apply to their project because of a statute containing a grandfather clause excepting certain stock cooperative conversion projects from the requirements of local ordinances. We conclude that their exemption argument is meritorious. Therefore, we do not reach the constitutional issues raised by the parties. A stock cooperative is defined in

section 11003.2 of the Business and Professions Code as a corporation formed for the purpose of holding title to improved real property. The shareholders receive the right of exclusive occupancy of a portion of the property, and that right may only be transferred concurrently with the shares. State law prior to 1979 provided, as it does presently, that shares in a stock cooperative could not be sold until a public report setting forth various matters pertaining to the property was obtained from the Department of Real Estate (Bus. & Prof.

Code, §§ 11004.5; 11010; 11010.2), but stock cooperatives were not required to comply with the provisions of the Subdivision Map Act (Gov. Code, § 66410 et seq., Stats. 1977, ch. 234, § 3, pp. 1033-1034).

The act vests the authority to control the design and improvement of subdivisions of five or more units in the legislative bodies of local agencies. (Id., § 66411.) It requires that the local agency approve a subdivision map for all subdivisions as defined therein (id., §§ 66426; 66458), and approval of the map depends upon a determination by the local body that the map is consistent with the local entity’s plans and ordinances (id., §§ 66473; 66473.5; 66474; 66474.2). In September 1979, the Legislature amended

section 66424 of the Government Code to include stock cooperatives within the definition of a “subdivision” under the Subdivision Map Act, so as to require stock cooperative conversion projects to comply with the provisions of the act. (Stats. 1979, ch. 1192, § 1, pp. 4691-4692.) The amendment became effective on January 1, 1980. The measure which amended

section 66424 contained the grandfather clause relied on by plaintiffs. It provides in subdivision (

b) of

section 8 (hereafter

section 8) that governmental agency regulation of stock cooperative conversions under the provisions of the Subdivision Map Act which was “exercised pursuant to a legislative enactment prior to January 1, 1980, shall not be invalidated by this section; provided that no such regulation enacted after July 1, 1979, shall affect a stock cooperative conversion if the application for that conversion’s public report, including payment of an appropriate fee, was made prior to July 1, 1979.” (Stats. 1979, ch. 1192, § 8, subd. (b), p. 4695.) On April 1, 1980, the city adopted ordinance No. 1805, which requires that a special use permit be obtained for stock cooperative conversions, and sets forth certain conditions for the issuance of a permit.

The measure was to take effect on May 1, 1980, and it provides that any project which had not received a special use permit as of March 6, 1980, must comply with the ordinance. Plaintiffs applied for a public report from the Department of Real Estate on August 18, 1978, i.e., almost a year prior to the July 1, 1979, date referred to in

section 8, and they paid the required fee. However, they made no application to the city for the special use permit required by ordinance No. 1805. In June 1980, they filed a complaint for declaratory relief, seeking a determination that the ordinance is unconstitutional and that it is inapplicable to their project because of the grandfather clause in

section 8. They made a motion for

summary judgment on these grounds, and the parties entered into certain stipulations for the purpose of the motion. The trial court denied the motion deciding, inter alia, that

section 8 does not exempt plaintiffs’ project from local regulation. It declined to rule on the constitutionality of the ordinance because it deemed the issue to be outside the matters stipulated by the parties for the purpose of the motion. Thereafter, plaintiffs filed a second motion for

summary judgment, challenging the constitutionality of the ordinance. This time, the trial court granted the motion, holding that the ordinance was unconstitutional as applied to plaintiffs’ project; it enjoined the city from attempting to enforce the ordinance against plaintiffs. On this appeal from the ensuing judgment, the city challenges the jurisdiction of the trial court to decide the constitutionality of the statute as applied to plaintiffs’ property, and the sufficiency of the evidence to sustain the court’s finding of unconstitutionality of the statute as applied.

Plaintiffs oppose these contentions and urge, in addition, that they were not required to comply with the ordinance because of the grandfather clause in

section 8. As we have seen,

section 8 provides that local regulation of stock cooperative conversions enacted after July 1, 1979, under the Subdivision Map Act would not affect conversions as to which an application for a public report from the Department of Real Estate had been made before July 1, 1979, and the application fee paid. Since plaintiffs had applied for the report and paid the fee in 1978, the exemption would appear applicable to them. However, claims the city, the exemption does not apply because by its terms it relates only to those local regulations passed after July 1, 1979, under the authority of the Subdivision Map Act.

It asserts that ordinance No. 1805 was not enacted pursuant to that act but, rather, under the authority granted to local bodies by other state statutes (e.g., Gov. Code, § 65800 et seq.); ergo, the exemption does not apply to stock cooperative conversions within the scope of ordinance No. 1805. This contention is without merit. The ordinance was enacted after January 1, 1980, which is the effective date of the amendment to

section 66424 of the Government Code making stock cooperative conversions subject to the Subdivision Map Act. After that date, the city was required to apply the provisions of the act to all stock cooperative conversion projects unless the Legislature allowed an exemption. In these circumstances, it cannot be said that the adoption of the ordinance was not accomplished “under the provisions of the Subdivision Map Act.” Assuming that the city had the authority from a source other than the act to regulate stock cooperative conversions (cf. Norsco Enterprises v.

City of Fremont (1976) 54 Cal.App.3d 488, 496-497 [126 Cal.Rptr. 659]), the regulation of such conversions following the effective date of the amendment to

section 66424 of the Government Code must necessarily also have been effected under the provisions of the act. Thus, the exemption set forth in

section 8 applies to plaintiffs’ project. The judgment is affirmed. Richardson, J., Kaus, J., Broussard, J., and Grodin, J., concurred. Plaintiffs were excused from making such an application because, as we shall conclude, they were exempted from the entire ordinance by operation of the grandfather clause of the statute. PIaintiffs filed a “cross appeal” from the trial court’s denial of their first motion for

summary judgment. This order is not appealable (Code Civ. Proc., § 904.1; Shulze v. Schulze (1953) 121 Cal.App.2d 75, 83 [262 P.2d 646]; Nevada Constructors v. Mariposa etc. Dist. (1952) 114 Cal.App.2d 816, 818 [251 P.2d 53]), and the appeal therefrom is dismissed. Before the adoption of ordinance No. 1805 in April 1980, the city had enacted temporary ordinances which expired by their own terms, requiring that a special use permit be obtained as a condition to the conversion of a structure to a .stock cooperative form of ownership. The city does not claim that these expired ordinances are relevant to plaintiffs’ project.