© Provided by Monterey Herald Susan Hobbs, left, and William Hobbs, rear, walk out of Monterey County Superior Court in 2019 with their attorney Christina Sandefur. (Dennis L. Taylor/Monterey Herald) Susan Hobbs, left, and William Hobbs, rear, walk out of Superior Court Tuesday with their attorney Christina Sandefur, after a partial win on their lawsuit against the city of Pacific Grove over short-term rentals. (Dennis L. Taylor - Monterey Herald)
PACIFIC GROVE — The legal case of a Pacific Grove husband and wife against the city alleging their due-process rights were violated when the city declined to renew a short-term rental license for their property has taken an unforeseen turn, but whether it’s just a wrinkle in their allegations or a crevasse is open to interpretation.
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William and Susan Hobbs are selling the house that lies at the base of their legal argument. The ocean-front house at 1135 Ocean View Blvd. is being listed through Tim Allen Properties for $2.5 million.
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The couple, through their attorneys Timothy and Christina Sandefur and the conservative Phoenix-based Goldwater Institute, sued the city in 2018 alleging that the city’s decision not to renew a license to operate a short-term rental violated their due process rights.
Earlier that year the city developed a lottery system and the numbers that were drawn determined which licenses would not be renewed. The Hobbs were among those residents, so they sued. But a lower court ruled their rights were not violated since the licenses needed to be renewed annually and there was never a guarantee of renewal.
In early 2020, having lost their case in a lower court, the couple appealed to the California Court of Appeal, 6th District, in San Jose. The case, now moving into its third year, is being watched closely by attorneys across the state as more cities make short-term rentals illegal because of their effect of reducing the stock of badly needed long-term rentals. Short-term rentals are considered anything rented for less than 30 days.
Short-term rentals are illegal in both Monterey and Carmel.
Pacific Grove City Attorney David Laredo said he believes the sale of the house would have a significant effect on the case, noting “the provisions of all short-term rental licenses in Pacific Grove specifically provide they are not transferable to any other person.”
“This means a sale or transfer of a short-term rental property cannot be lawfully operated under a prior license, even if the court deems the former license to be usable. A sale of the property would make the Hobbs’ claims moot.”
An email request for comment sent to Christina Sandefur was not returned Thursday.
The sale of the property comes just before Sandefur or other Goldwater attorneys are due to file their opening brief with the California Court of Appeal no later than March 15. The brief filing by the city of Pacific Grove will follow.
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Attorneys contacted for this article raised questions about how the appellate court might view the sale of the house. One former law professor who asked his name not be used because the case is still in litigation raised the question of “standing.”
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“Standing” is a legal term used in connection with lawsuits that in simple terms means the courts ask whether or not the party bringing the suit has a dog in the fight. Standing limits participation in lawsuits and asks whether the person bringing a lawsuit, or defending one, has enough cause to “stand” before the court and advocate.
In this case, the appeals court might consider whether or not the Hobbs have standing since they no longer own the property they wanted to rent out.
With their attorney not responding to requests for comments and the Hobbs themselves remaining quiet about the court proceedings, it’s difficult to understand how they are feeling about the status of the appeal. Whether or not the Goldwater Institute is providing its services to the Hobbs pro bono is not known.
But in July 2018 Sue Hobbs spelled out her grievances against the city in an op-ed in the San Francisco Chronicle where she talks about the property that she and William Hobbs named “Seadance.”
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“We didn’t just lose our permit: We may lose our livelihood as well. Without the income we get from short-term rentals, we may not be able to afford to keep the home that’s been in my family for decades, the one we carefully restored,” Sue Hobbs wrote. “A lawsuit filed against the city of Pacific Grove may restore our right to rent out our home, but we still worry about what the future holds for Seadance.”
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That worry may soon be relieved once a buyer is found for the house and escrow is signed.