Evelyn Smith owns and leases four rental units located in two duplexes in Chico, California. They are operated exclusively for business and commercial purposes, with income generated from the rentals reported as business income. Smith is a Christian. She is a member of Bidwell Presbyterian Church in Chico and has attended there for approximately 25 years. She believes that sex outside of marriage is sinful. She believes that it is a sin for her to rent her units to people who will engage in nonmarital sex on her property. She believes that God will judge her if she permits people to engage in sex outside of marriage in her rental units. If she does so, she will be prevented from meeting her deceased husband in the hereafter.
From on or about March 29, 1987, to April 13, 1987, Smith advertised the availability of one of her units in the Chico Enterprise-Record. On April 1, 1987, Kenneth Phillips and Gail Randall saw the advertisement, viewed the unit that night, and called Smith the next morning. During that call Smith stated that she preferred to rent to married couples. On or about April 2, 1987, the complainants met with Smith and were shown the premises.
On April 7, 1987, a lease agreement was executed between the parties for the unit located at 677 Eastwood Avenue. It was for a month-to-month tenancy commencing May 1, 1987 at a rent of $325 per month. Complainants also paid respondent a security deposit of $150 for which a receipt was given. Complainant Randall signed the lease agreement "Gail Phillips." Later on the same day, complainant Phillips called respondent and told her that he and Randall were not married. Respondent told him that she could not rent to an unmarried cohabiting couple because that would violate her religious beliefs. Respondent said that she would return their deposit. She sent them a check for $150.
Randall and Phillips filed separate complaints against Smith with the commission. Based on the complaints, the commission issued two accusations. As subsequently amended, the accusations alleged Smith had violated Government Code section 12955, subdivisions (a), (b), (c) and (d), Civil Code section 51 (the Unruh Civil Rights Act), and Government Code section 12948. The commission exercised its power not to adopt the proposed decision and to hear the case itself on the existing record. After additional briefing, the commission issued its decision in favor of Randall and Phillips. The commission found Smith had violated Government Code sections 12955, subdivisions (a) and (d), Civil Code section 51, and Government Code section 12948. As relief, the commission ordered Smith to cease and desist from discriminating on the basis of marital status; to post and give to prospective tenants various notices setting out the provisions of FEHA, the outcome of this case, and the statement that Smith practices equal housing opportunity; and to pay Randall and Phillips a total of $454 in compensatory damages and $500 in damages for emotional distress. Smith sought review of the commission's decision by petition for writ of mandate. The Court of Appeal reversed. We granted review.
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