Opinion
F041194.
7-21-2003
AMVETS DEPARTMENT OF CALIFORNIA SERVICE FOUNDATION, Defendant and Appellant, v. PASQUALE DE SANTIS et al., Plaintiffs and Respondents.
Heily & Blase and John R. Johnson for Defendant and Appellant. William H. Leifer for Plaintiffs and Respondents.
This dispute concerns the meaning and enforceability of restrictions on the commercial development of land containing a shopping center. Respondents Pasquale and Carmela DeSantis (DeSantises) own a parcel in the shopping center adjacent to a parcel purchased by appellant AMVETS Department of California Service Foundation (AMVETS). AMVETS began constructing improvements on its parcel. The DeSantises claimed the improvements violated size and location restrictions adopted and recorded in the 1950s by prior owners of the parcels. They sought and obtained a preliminary injunction halting the construction.
AMVETS appeals the grant of the preliminary injunction and argues the superior court misconstrued the instruments addressing the commercial development of its parcel. AMVETS contends the size and location restrictions are subject to an earlier adopted provision allowing the construction of commercial buildings if they were permitted by zoning or variances because those restrictions either were not intended to prohibit its improvements or were not enforceable because they impinged upon the local governments exercise of its police power.
We conclude the superior court did not abuse its discretion in determining, based on the evidence before it, that there was a reasonable probability the DeSantises would prevail at trial and that an injunction halting the construction appropriately balanced the relative harm to the parties of granting or denying interim relief. Thus, the order granting the preliminary injunction will be affirmed.
FACTS AND PROCEEDINGS
The Palm Plaza Shopping Center is located at the northwest corner of Cedar and Shields Avenues in the City of Fresno. The land occupied by the shopping center is described as lot 92 of tract No. 1399, Cedar Knolls No. 2, according to the map recorded in book 17, page 38 of plats, Fresno County Records (Lot 92).
On February 8, 1955, the owners of lots 41 through 92 of tract 1399 recorded a declaration of restrictions (1955 CC&Rs) governing the future development of those lots. Under paragraphs 2 and 3 of the 1955 CC&Rs, the lots shall be used for residential purposes, except Lot 92, "which may be used for commercial purposes as permitted by variance or zoning granted by the proper governing body."
On February 6, 1957, the owner of Lot 92, F. M. Roessler Estate (Roessler), sold the southerly portion of the lot to J. W. Miller Realty Co. (Miller) for construction of a supermarket. Roessler and Miller executed and recorded an instrument entitled "Grants of Easements and Agreement With Respect Thereto" (1957 Agreement) for the purpose of, among other things, creating a single unified parking area.
Paragraphs 1 through 5 of the 1957 Agreement set forth the terms of the easements, each owners obligations to pave and maintain adequate parking and access roads, and the conditions imposed on each owners enjoyment of the easements. Paragraphs 6 and 7 of the 1957 Agreement impose restrictions on the location and size of buildings that Roessler and Miller could place on their respective parcels.
Paragraph 6 states that Miller "shall not erect, cause or permit to be erected, any building on the Miller property which shall (a) exceed in size 15,000 square feet on the first floor level, (b) be constructed closer than 35 feet from the westerly property line of the Miller property." Paragraph 7 states that Roessler "shall not erect, cause or permit to be erected, any building on the Roessler property which (i) shall in the aggregate exceed in size 48,000 square feet on the ground floor or first floor level, (ii) shall be constructed closer than 35 feet from the adjoining property lines or (iii) shall be constructed on a site other than as shown on Exhibit C." Paragraphs 6 and 7 contain "covenants running with the land, and as such, shall be binding upon, and inure to the benefit of, all portions of the Roessler property and Miller property ...."
Paragraph 8 requires Roessler and Miller to "establish, pave and maintain a 35 foot service alley" on that portion of their respective properties subject to the 35-foot building set back required by paragraphs 6 and 7. This alley is located along the western boundary of the Roessler and Miller properties. According to paragraph 11 of the 1957 Agreement, its covenants and restrictions shall expire 50 years after the date of the agreement, except that certain obligations under paragraph 5 shall continue.
In 1959, Roessler conveyed an additional portion of Lot 92 to Miller. Roessler and Miller entered into an amendment to the 1957 Agreement (1959 Amendment) that adjusted the building size restrictions so that Millers permitted building size was increased by 910 square feet and Roesslers permitted building size was reduced 910 square feet. A new exhibit C, which reconfigured the planned customer parking and permitted building locations, also was included in the 1959 Amendment.
AMVETS contends a number of deviations from the 1957 Agreement, as amended, occurred prior to its purchase of the Miller property. For example, Arthurs Toys, an owner of the Miller property before AMVETS acquired it, fenced off part of the area designated for customer parking to use as a display area for swimming pools. Also, when AMVETS acquired the Miller property, the Roessler property contained four buildings with a total square footage of 49,400. This exceeded the 47,090-square foot restriction placed on the Roessler property and one of the four buildings was built on an area designated for customer parking by exhibit C of the 1959 Amendment.
When AMVETS acquired the Miller property, it was aware of the 1955 CC&Rs, the 1957 Agreement and the 1959 Amendment. AMVETS agreed to purchase the Miller property subject to the approval by the City of Fresno Development Department (Department) of "Conditional Use Permit No. C-01-002" (CUP) and "Variance No. V-01-001" (Variance). The CUP and Variance concerned the construction of a 4,882-square foot addition to the existing 15,080-square foot building on the Miller property. The addition was to be a fully enclosed receiving and processing bay where trucks delivering donated goods could be unloaded. The addition was to be located at the south end of the existing 15,080-square foot building in the area that had been used by Arthurs Toys to display its swimming pools.
The Department approved the CUP and Variance on March 20, 2001, and sent a notice to neighboring property owners, including the DeSantises, of their right to appeal. The notice stated that the CUP and Variance had been granted subject to certain conditions, which included "special permit conditions of approval dated February 21, 2001, on file in the Development Department" and general conditions to project approval on file in the Department. The appellate record does not include a copy of either the special or general conditions imposed by the Department. However, the declaration of AMVETSs facilities manager states the City of Fresno requested the installation of a permanent, fully enclosed, self-contained, tamper-free trash collection facility.
The DeSantises did not appeal the Departments approval of the CUP and Variance. Mr. DeSantis claims he did not receive any notice of AMVETSs intent to build in the easement areas. Mr. DeSantis asserts he first became aware of the construction by AMVETS in March or April 2002 when he saw the actual construction, that he tried to communicate to AMVETS to stop trespassing and interfering with his parcels, and that by letter dated May 7, 2002, he notified AMVETS in Ventura, California, of his complaints regarding the construction. The facilities manager for AMVETS contends he first received a protest from the DeSantises about alleged violations of the 1955 CC&Rs and 1957 Agreement, as amended, on June 4, 2002.
On June 6, 2002, the DeSantises filed a complaint for preliminary injunction, permanent injunction, declaratory relief and damages. The superior court issued an order to show cause for a preliminary injunction and a temporary restraining order. After the hearing on the order to show cause, the superior court granted a preliminary injunction that required AMVETS to "immediately cease all further construction of improvements on [AMVETSs] property (APN # 437-313-09) but [AMVETS was] not required to remove or tear down any existing improvement pending trial." AMVETS also was enjoined from trespassing or encroaching on the land of the DeSantises and from leaving vehicles or trailers along the west side of their properties in any manner that blocks or hinders traffic along the western border of their properties (the alley).
AMVETS appeal.
DISCUSSION
I. Standard of Review
A superior court must evaluate two interrelated factors when ruling on a request for a preliminary injunction-(1) the likelihood that the plaintiff will prevail on the merits at trial and (2) the interim harm that the plaintiff is likely to sustain if the injunction were denied as compared to the harm the defendant is likely to suffer if the preliminary injunction were issued. (Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286, 219 Cal. Rptr. 467, 707 P.2d 840.) Weighing these factors lies within the broad discretion of the superior court. (Ibid.)
Contrary to AMVETSs contention, the superior court was not required to find the DeSantises would have suffered irreparable harm before granting the preliminary injunction. Such a requirement would unduly restrict the superior courts consideration of the second factor, i.e., the relative harm to each party from granting or denying the injunction. (See Butt v. State of California (1992) 4 Cal.4th 668, 693, 842 P.2d 1240 [a finding of irreparable harm not necessary to granting a preliminary injunction].)
An appellate court must reverse an order granting a preliminary injunction if it determines the superior court abused its discretion as to either factor. (Teachers Ins. & Annuity Assn. v. Furlotti (1999) 70 Cal.App.4th 1487, 1493 (Teachers Ins. ).) An abuse of discretion occurs when the superior court exceeds the bounds of reason or contravenes the uncontradicted evidence. (Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 527, 67 Cal. Rptr. 761, 439 P.2d 889.)
II. Plaintiff Has a Reasonable Probability of Success
Whether or not the DeSantises will succeed in this litigation is dependent upon the meaning and the enforceability of restrictive covenants. Specifically, do the 1957 Agreement, as amended, and the 1955 CC&Rs prohibit the building of the 4,882-square foot addition and the pad in the service alley and, if so, are those prohibitions enforceable by the DeSantises against AMVETS?
A. Interpretation of Paragraph 2
AMVETS concedes that the 4,882-square foot addition, if considered as an expansion of the existing 15,080-square foot building, would cause the building to exceed the 15,910-square foot limitation established by the 1959 Amendment of the 1957 Agreement. AMVETS argues the expansion is allowed under paragraph 2 of the 1955 CC&Rs. Paragraph 2 provides that lots 41 to 92 of tract 1399 shall be used for residential purposes, except Lot 92, "which may be used for commercial purposes as permitted by variance or zoning granted by the proper governing body."
If the expansion is considered a separate building, then the restriction against "any building on the Miller property which shall (a) exceed in size 15,910 square feet" would not literally apply. In contrast, the restriction on improvements on the Roessler property was drafted to restrict aggregate building size. That restriction bars the erection of "any building or buildings on the Roessler property which (i) shall in the aggregate exceed in size 47,090 square feet."
Each party has a different interpretation of the exception contained in paragraph 2. The DeSantises argue the exception means that Lot 92 may be used for commercial purposes permitted by variance and zoning subject to the restrictions later agreed upon by Roessler and Miller. Under this interpretation, a commercial structure may be built on the Miller property only if it satisfies both conditions, i.e., is permitted by variance or zoning and complies with the contractual restrictions on size and location.
In contrast, AMVETS argues the exception means that Lot 92 may be used for commercial purposes permitted by variance or zoning notwithstanding any restrictions agreed to by Roessler and Miller in 1957 and 1959. AMVETS further asserts that the only reasonable and sustainable construction of the 1957 Agreement and the 1959 Amendment is that the restrictions agreed to therein would control future development on Lot 92 unless the proper governing body said otherwise.
The first step in construing a contract is to determine whether or not it is reasonably susceptible to two or more meanings, i.e., is ambiguous. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.) If the written instrument is ambiguous, the second step requires the court or jury to interpret the instrument. (Ibid .)
In this case, the 1957 Agreement and the 1959 Amendment did not explicitly address whether or not the parties intended paragraph 2 of the 1955 CC&Rs to override the building size and location restrictions set forth in those instruments. Thus, the superior court had to infer which provision the parties intended to control the other.
The superior courts written order did not expressly state whether it determined the instruments were ambiguous or unambiguous, i.e., susceptible to only one reasonable interpretation. However, during the June 25, 2002, hearing the court stated, "I dont think the language is clear in this paragraph 2 one way or the other. I mean, I think you are both taking obviously the extreme position." This statement implies that the court determined the instruments were ambiguous and, therefore, determined what the instruments meant based on their written terms and extrinsic evidence.
Regardless of how the superior court analyzed the issue of ambiguity, its determinations underlying the grant of the preliminary injunction are not final adjudication of the issues (see Hunt v. Superior Court (1999) 21 Cal.4th 984, 999, 987 P.2d 705) and, at trial, the issue of ambiguity must be considered anew. Thus, at trial the superior court may provisionally receive additional extrinsic evidence concerning the parties intentions. (Winet v. Price, supra, 4 Cal.App.4th at p. 1165.)
Regardless of the superior courts determination about ambiguity, we need only address whether the 1957 Agreement and the 1959 Amendment are reasonably susceptible to the interpretation urged by the DeSantises and adopted by the superior court and whether there is a "reasonable probability" that the interpretation urged by the DeSantises will be successful at trial. (Continental Baking Co. v. Katz, supra, 68 Cal.2d at p. 528.)
The superior court ruled that the exception allowing commercial construction contained in paragraph 2 was not intended to eliminate subsequent restrictions such as set forth in the 1957 Agreement and the 1959 Amendment. In effect, the superior court ruled that the agreements between Roessler and Miller were intended to impose more demanding restrictions on the commercial development of Lot 92 than those contained in the 1955 CC&Rs. This interpretation has a reasonable probability of success at trial because it is likely that Roessler and Miller intended their later adopted, more specific restrictions concerning building size and location on Lot 92 to remain operative even when the general restriction contained in paragraph 2 had been met. (See Code Civ. Proc., § 1859 [a particular provision is paramount to a general provision].)
The reasonableness of this interpretation is illustrated by an examination of the implications that flow from AMVETSs interpretation. Under AMVETSs interpretation, Roessler and Miller intended to allow commercial construction on Lot 92 if that construction was permitted by zoning or variance. As a result, the restrictions on size and location of construction set forth in the 1957 Agreement and the 1959 Amendment would only be operative in those situations where the construction was not permitted by zoning or variance. Such an interpretation would mean that Roessler and Miller adopted the restrictions solely to regulate commercial buildings erected in violation of zoning ordinances and not permitted by variance. This interpretation, without the support of extrinsic evidence that Roessler and Miller sought to address such a narrow set of circumstances, is less likely than the interpretation that Roessler and Miller intended to restrict, with more specificity than the restrictions imposed by zoning ordinances, how the other developed its parcel.
Accordingly, we hold that (1) the 1957 Agreement and the 1959 Amendment are reasonably susceptible to the interpretation that the size and location restrictions contained in the 1957 Agreement and the 1959 Amendment were in addition to, rather than subject to, the condition imposed on commercial development by paragraph 2 of the 1955 CC&Rs and (2) there is a "reasonable probability" that this interpretation will be successful at trial.
B. AMVETS Has Not Established the Restrictions Are Unenforceable
1. Police Power Argument
AMVETS contends the building size and location restrictions, as interpreted by the DeSantises and the superior court, are unenforceable because they limit the exercise of police power by private contract. AMVETS appears to argue that the special permit conditions and the general conditions imposed by the Department as a condition to its approval of the CUP and Variance were an exercise of the police power.
An analysis of the specific nature of the conditions is hindered because they are not part of the record on appeal.
AMVETS relies upon Teachers Ins., supra, 70 Cal.App.4th 1487 for the proposition that a recorded easement or restrictive covenants may not limit the exercise of police power. However, Teachers Ins. is distinguishable from the facts of this case. In that case, the appellate court held (1) the restriction, which allowed commercial use of land zoned for only residential use, violated a local zoning ordinance and (2) parties to a private agreement could not grant that which is prohibited by zoning. (Teachers Ins., supra, 70 Cal.App.4th at p. 1496.) In this case, the restrictions applicable to Lot 92 do not attempt to authorize construction that has been prohibited by a local exercise of police power. Instead, the restrictions purport to prohibit something otherwise allowed under applicable zoning and variances.
Restrictions on land use, whether they are characterized as covenants running with the land or as equitable servitudes, are not unlawful because they prohibit uses of the land permitted by applicable zoning. Moreover, a change in zoning or the issuance of a variance does not confer authority to violate an existing restriction as to use. (See Wilkman v. Banks (1954) 124 Cal. App. 2d 451, 455, 269 P.2d 33.)
Accordingly, we hold the building size and location restrictions contained in the 1957 Agreement and the 1959 Amendment are not an unenforceable impingement of the police power.
2. Enforcement Not Oppressive and Inequitable
AMVETS contends the enjoined construction does not adversely affect the use or value of the property owned by the DeSantises and would actually improve the appearance and sanitary conditions in the service alley. Thus, AMVETS contends the following legal principle applies to this case:
"equity courts will not enforce restrictive covenants by injunction in a case where, by reason of a change in the character of the surrounding neighborhood, not resulting from a breach of the covenants, it would be oppressive and inequitable to give the restriction effect, as where the enforcement of the covenant would have no other result than to harass or injure the defendant, without benefiting the plaintiff. (Hurd v. Albert (1931), 214 Cal. 15, 23, 3 P.2d 545 ...." (Fairchild v. Raines (1944) 24 Cal.2d 818, 822, 151 P.2d 260 [injunction upholding non-Caucasian occupancy restriction on use of lot reversed].)
Although the superior court did not explicitly address this argument, it appears the court rejected it on the basis that the DeSantises would derive a benefit from the preliminary injunction. We infer that the superior court found the DeSantises would receive a benefit from an injunction because it specifically stated that damages would not provide an adequate remedy to the DeSantises. This statement necessarily implies the existence of an injury to be remedied. Sufficient evidence supports the implied finding of injury to the DeSantises because, in part, of the statement in Mr. DeSantiss declaration about complaints from tenants about the construction.
3. Prior Deviations From Restrictions
The statement of facts in AMVETSs opening brief contains a section describing prior deviations from the 1957 Agreement and 1959 Amendment. For instance, the four buildings located on the Roessler property collectively total 49,400 square feet, which exceeds the 47,090-square foot limitation contained in the 1959 Amendment. However, AMVETS does not set forth the legal principles that govern when prior deviations render restrictive covenants or equitable servitudes unenforceable.
We need not address this issue because AMVETS has not provided any legal analysis of the prior deviations and their impact on enforceability. (See Akins v. State of California (1998) 61 Cal.App.4th 1, 50 [contention waived by failure to cite legal authority]; Atchley v. City of Fresno (1984) 151 Cal. App. 3d 635, 647, 199 Cal. Rptr. 72 [a point asserted by appellant without argument or authority need not be discussed by reviewing court]; see also Cal. Rules of Court, rule 14.)
III. Superior Court Appropriately Balanced the Relative Interim Harms
In balancing the relative harms of granting the preliminary injunction, the superior court decided to enjoin further construction by AMVETS but did not require AMVETS "to remove or tear down any existing improvements pending trial." The trial court did not require the construction to be torn down because of the waste that would result if AMVETS prevailed at trial. By balancing the relative harms of interim relief to minimize the harm suffered by each of the parties, the superior courts ruling was consistent with one of the purposes of granting of a preliminary injunction—preserving the status quo until a final determination following a trial. (Scaringe v. J. C. C. Enterprises, Inc. (1988) 205 Cal. App. 3d 1536, 1542, 253 Cal. Rptr. 344, disapproved on another ground in Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 359, 367, 906 P.2d 1314.) Accordingly, the superior court did not abuse its discretion in granting the preliminary injunction.
DISPOSITION
The judgment is affirmed. Costs are awarded to respondents.
WE CONCUR: Dibiaso, Acting P.J., Wiseman, J.