It is very rare for the California Supreme Court to review a decision of the Court of Appeal. In this landmark case, the court held that the Ellis Act allows landlords to evict tenants and go out of business for any reason, and the tenant’s allegation that the eviction is retaliatory cannot be a defense to an unlawful detainer claim nor can the withdrawal be the basis of a claim for money damages after leaving. Landlords cannot be compelled to stay in business or pay tenants to vacate unless specifically allowed by the Ellis Act.
In Drouet v. Superior Court, the Court of Appeal held that tenants may not defend against an Ellis Act unlawful detainer action by claiming it is retaliatory. The Court of Appeal did allow tenants some ability to sue for money damages after moving out. This will protect the right of property owners to go out of business and screen out phony retaliation claims which tenants may use to force owners to give them large settlements.
In the published opinion of the Appellate Division of the San Francisco Superior Court, the Court ruled that a landowner’s right to go out of the residential rental business under the Ellis Act trumps a tenant’s right to assert a defense of retaliation. The case was certified for transfer by the Court of Appeal.
