Opinion
B301912
05-25-2021
JEAN-PIERRE BOUALI, Cross-complainant and Appellant, v. CITY OF LONG BEACH, Cross-defendant and Respondent.
Law Offices of Daniel B. Spitzer and Daniel B. Spitzer for Cross-complainant and Appellant. Charles Parkin, City Attorney, Chelsea N. Trotter, Principal Deputy City Attorney; Alderman & Hilgers and Allison R. Hilgers for Cross-defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. NC061892) APPEAL from a judgment of the Superior Court of Los Angeles County. Michael P. Vicencia, Judge. Affirmed. Law Offices of Daniel B. Spitzer and Daniel B. Spitzer for Cross-complainant and Appellant. Charles Parkin, City Attorney, Chelsea N. Trotter, Principal Deputy City Attorney; Alderman & Hilgers and Allison R. Hilgers for Cross-defendant and Respondent.
____________________
This case arises out of an erroneous zoning confirmation letter from the City of Long Beach (City) that resulted in Jean-Pierre Bouali (Bouali) being sued by a third party in connection with the sale of an apartment building. When Bouali cross-complained for recompense, the trial court granted the City summary judgment based on Government Code section 818.8, the statute that immunizes public entities against claims stemming from their misrepresentations. On appeal, Bouali contends: (1) the trial court erred when it granted summary judgment based on section 818.8 because it is inapplicable; and (2) the trial court abused its discretion when it refused to allow him leave to amend to allege causes of action for breach of contract and implied contractual indemnity. We find no error and affirm the judgment.
All further statutory references are to the Government Code unless otherwise indicated.
The trial court also granted summary judgment based on section 818.6. That statute provides that a "public entity is not liable for injury caused by its failure to make an inspection, or by reason of making an inadequate or negligent inspection, of any property, other than its property . . . , for the purpose of determining whether the property complies with or violates any enactment or contains or constitutes a hazard to health or safety." (§ 818.6.) We need not discuss section 818.6 because we conclude that summary judgment was properly granted based on section 818.8.
FACTS
Background
In 2007, Bouali acquired an apartment building in Long Beach (Property). When he decided to sell the Property in 2015, he had doubts as to whether it was zoned for four dwelling units or six. On August 25, 2015, he paid a $655.80 fee to obtain a letter from the City's planning bureau confirming the zoning and allowable occupancy of the Property. That same day, the City issued its August 25, 2015 Zoning Confirmation Letter stating that the Property was approved for six dwelling units. A few months later, Amit Weinberg (Weinberg) purchased the Property from Bouali. In July 2016, the planning bureau investigated the Property's permit history and issued a letter stating that while the Property had originally been permitted for six dwelling units, a subsequent building permit was issued to reduce the Property's dwelling units from six down to four.
Trial Court Proceedings
Pleadings
Weinberg sued Bouali for damages.
Bouali filed a cross-complaint against the City for equitable indemnity, contribution, apportionment, and negligent misrepresentation based on the misrepresentation in the August 25, 2015 Zoning Confirmation Letter that the Property was zoned for six dwelling units. The cross-complaint alleged that Bouali filed a claim for damages against the City on August 21, 2018, and that the City denied the claim on October 16, 2018. Various documents were attached to the cross-complaint, including the August 25, 2015 Zoning Confirmation Letter and a generic application that had multiple uses. The "Job Description" in the application is typed in as "research letter." At the bottom of the application, it states that Bouali paid $655.80. On a separate page breaking down the components of the fee, it states that Bouali paid $600 for "Zoning Confirmation Letter with Research" and $55.80 for two different surcharges.
The City's Motion for Summary Judgment
The City moved for summary judgment, arguing that the immunity in section 818.8 shielded it against liability for its misrepresentation.
The motion also raised section 818.6 (inspection immunity), section 820.2 (discretionary act immunity for public employees), and section 822.2 (misrepresentation immunity for public employees).
Bouali's Ex Parte Application for Leave to Amend
Bouali filed an ex parte application to amend his pleading to add causes of action for breach of contract and implied contractual indemnity, and he attached a proposed first amended cross-complaint (Proposed Amendment).
"[W]here each of two persons is made responsible by law to an injured party[,] the one to whom the right to indemnity inures is entitled to shift the entire liability for the loss to the other party. Accordingly, a right of implied indemnification may arise as a result of contract or equitable considerations." (Cahill Bros., Inc. v. Clementina Co. (1962) 208 Cal.App.2d 367, 376.) Implied contractual indemnity may be asserted against a public entity. (E.L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 506-507.)
In support of both causes of action, the Proposed Amendment alleged the following facts: Bouali submitted a written application to City's Planning Bureau and paid a fee of $655.80 to obtain the August 25, 2015 Zoning Confirmation Letter confirming the zoning and allowable occupancy of the Property. By accepting the application and Bouali's payment, and by subsequently issuing the August 25, 2015 Zoning Confirmation Letter, the City agreed to confirm the zoning designation of the Property and state the nonconforming rights generally conferred by the City's regulations as well as the restoration rights generally conferred upon a nonconforming structure by City's zoning regulations. The City knew and understood "that it was to answer [Bouali's] specific inquiry concerning the . . . number of dwelling units legally permitted" on the Property. The Proposed Amendment alleged three breaches: the failure to "research the status of the zoning of the Property fully and accurately;" the failure to "consider the license permit history of the Property;" and issuing the August 25, 2015 Zoning Confirmation Letter with the incorrect conclusion that the Property was zoned for six units.
The trial court denied the ex parte application.
Bouali contends that the trial court denied the ex parte application because it would require a continuance of the trial. The parties' settled statement in lieu of the reporter's transcript does not support this contention.
Bouali's Opposition to the Motion for Summary Judgment
In opposition to the City's motion, Bouali argued that section 818.8 did not apply because: (1) once the City agreed to issue a zoning confirmation letter, it had a duty to perform in a nonnegligent manner; and (2) this case involved Bouali's personal interests and section 818.8 only applies to interests of a financial or commercial nature. Bouali once again requested leave to amend.
The Hearing; the Trial Court's Ruling
On July 25, 2019, the parties convened for a hearing. The trial court "considered only . . . section [818.8],[] reasoned that the facts before it were governed by the case of Grenell v. City of Hermosa Beach (1980) 103 Cal.App.3d 864 [(Grenell)], and therefore found that the [City] was immune to prosecution under . . . Bouali's cross-complaint." The trial court denied Bouali's request for leave to amend, noting, "This request is procedurally improper in an opposition to a motion for summary judgment. The [trial] court previously denied this request[] and, from the allegation before the court, no contractual agreement ever existed."
The parties' settled statement indicates that the trial court only considered "[section 818.6]." This appears to be a typographical error because the settled statement then indicates that the trial court reasoned that the case was governed by Grenell. Grenell was decided based on section 818.8, not section 818.6. (Grenell, supra, 103 Cal.App.3d at p. 875.) Moreover, the settled statement and written ruling provide that the trial court ruled that summary judgment was granted based on section 818.8.
The City suggests that the trial court denied leave to amend because it would cause prejudicial delay. The record does not confirm this suggestion.
In the trial court's written ruling, it granted summary judgment based on section 818.8.
The trial court entered judgment.
This appeal followed.
DISCUSSION
I. Standard of Review.
An appellate court independently reviews an order granting summary judgment. (Shamsian v. Atlantic Richfield Co. (2003) 107 Cal.App.4th 967, 975.) When a party opposing a motion for summary judgment submits facts suggesting he can amend his pleading in a manner that is not negated by the motion, we review the denial of leave to amend for an abuse of discretion. (Kirby v. Albert D. Seeno Construction Co. (1992) 11 Cal.App.4th 1059, 1069.)
II. Summary Judgment.
Appellant argues that summary judgment must be reversed because the City is not protected by the immunity set forth in section 818.8.
There is no dispute that if section 818.8 applies to the negligent misrepresentation cause of action, it also applies to the derivative causes of action for equitable indemnity, contribution and apportionment.
We disagree.
A. Section 818.8; Relevant Case Law.
Section 818.8 provides: "A public entity is not liable for an injury caused by misrepresentation by an employee of the public entity, whether or not such misrepresentation be negligent or intentional."
Johnson v. State of California (1968) 69 Cal.2d 782, 800 (Johnson) explained that "'misrepresentation,' as a tort distinct from the general milieu of negligent and intentional wrongs, applies to interferences with financial or commercial interest. The Legislature designed section 818.8 to exempt the governmental entity from this type of liability." To support its holding, the Johnson court adverted to United States v. Neustadt (1961) 366 U.S. 696 (Neustadt), a case which considered "the analogous section of the Federal Tort Claims Act[.]" (Johnson, supra, 69 Cal.2d at p. 800.) In Neustadt, the issue was whether the federal government could be held liable to the purchaser of residential property who was induced to pay more than market value based on an inaccurate inspection report and appraisal provided by the Federal Housing Administration. (Neustadt, supra, at pp. 697, 698.) Neustadt held that the "Government must be absolved from liability." (Id. at p. 701.)
In Grenell, the prospective sellers of property obtained a "Report of Residential Building Records" from a public entity. The report, which was mandated by local ordinances, misrepresented that the property had no apparent building or zoning code violations. (Grenell, supra, 103 Cal.App.3d at p. 867.) During the subsequent sale, the public entity issued a report to the buyers stating that only one of the two dwelling units had been constructed pursuant to a permit. The buyers sued the sellers, who then sought indemnity from the public entity. (Grenell, supra, at pp. 867-874.) When concluding that the public entity was immune, the Grenell court explained that the "language of section 818.8 is . . . absolute[.]" (Grenell, at p. 873.)
Grenell explained, "The high court held in Neustadt that the federal act, which grants immunity for misrepresentation, was a bar to any recovery by the purchaser. The Johnson court's reference to Neustadt in this context must be taken as indicating that the facts in Neustadt illustrated the type of misrepresentation which is within the ambit of section 818.8. [¶] In the case before us[,] the alleged interference with financial interest is closely analogous to the interference for which the government was immune in Neustadt." (Grenell, supra, 103 Cal.App.3d at p. 874.) Also, Grenell relied on the decision in Hirsch v. Department of Motor Vehicles (1974) 42 Cal.App.3d 252 (Hirsch). (Grenell, supra, at p. 874.) In Hirsch, the plaintiff sued the Department of Motor Vehicles for negligently issuing a certificate of ownership to the seller of a stolen vehicle. (Hirsch, supra, at pp. 254-255.) Hirsch found immunity under various statutes, including section 818.8. (Hirsch, at p. 258.)
Finally, the Grenell court rejected the argument of the sellers that section 818.8 was limited to discretionary acts and did not apply to the issuance of a report mandated by the local ordinances. It explained that nothing in the statutory language justified "limiting the application of [it] . . . to misrepresentations made in the course of a discretionary governmental act." (Grenell, supra, 103 Cal.App.3d at p. 871.)
B. The City is Immune from Tort Liability.
There is no material distinction between this case and Grenell because they both involved a government misrepresentation about the legal status of property that resulted in lawsuits against its sellers and impacted their financial interests. Though Grenell involved a zoning reporting duty mandated by law (Grenell, supra, 103 Cal.App.3d at p. 871) and the City did not have such a duty, the distinction is irrelevant even though Bouali suggests otherwise. The language of section 818.8 has no qualification (Grenell, supra, 103 Cal.App.3d at p. 871), and it does not matter whether, as Bouali suggests, the City acted under a ministerial duty to issue the zoning confirmation letter that was triggered after it accepted Bouali's application and fee. We conclude that the trial court properly granted summary judgment because section 818.8 immunizes the City against the cross-complaint.
Though it arose from a different factual context, Harshbarger v. City of Colton (1988) 197 Cal.App.3d 1335 (Harshbarger) lends support to our conclusion. In that case, building inspectors improperly represented that the construction of a residence complied with the applicable codes. Later, the owners were told the opposite. Due to defects in construction, the owners paid approximately $295,000 for reconstruction of their residence. After the action was dismissed, the owners appealed and argued that section 818.8 was not a bar to suit because there was neither a commercial relationship nor a commercial transaction between them and Colton. The court disagreed, stating, "This alleged interference with the Harshbarger's financial interest is analogous to the situations in which the government was held to be immune from liability in both Neustadt and Grenell. Therefore, we conclude that the facts of this case fall within the immunity provisions of section 818.8 and the Harshbargers cannot maintain a cause of action against [Colton] for intentional misrepresentation." (Harshbarger, supra, 197 Cal.App.3d at p. 1342.) Harshbarger establishes that financial injury related to governmental misrepresentations about the legal status of property fall within the protective shield provided by section 818.8.
Bouali contends that Sava v. Fuller (1967) 249 Cal.App.2d 281, 284 (Sava) and Johnson establish that section 818.8 does not apply to the exercise of ministerial duties that follow a public entity's initial exercise of discretion. He misinterprets the holdings of these two cases.
The issue at play in Sava was whether a state-employed botanist caused the death of a child by negligently analyzing a plant substance the child ingested. (Sava, supra, 249 Cal.App.2d at pp. 283, 290.) For the Johnson court, the question presented was whether a parole officer working for the Youth Authority negligently placed a 16-year-old boy with homicidal tendencies and a history of violence and cruelty in a foster home. (Johnson, supra, 69 Cal.2d at pp. 784-785.) Sava and Johnson discussed the immunity in section 820.2 for the discretionary acts of public employees and explained the rule that once a state actor has exercised its discretion and decided "that a service will be furnished and the service is undertaken, then public policy demands (except when the Legislature specifically decrees otherwise) that government be held to the same standard of care the law requires of its private citizens in the performance of duties imposed by law or assumed." (Johnson, supra, at p. 796, citing Sava, supra, at p. 290.)
Section 820.2 provides, "Except as otherwise provided by statute, a public employee is not liable for an injury resulting from his act or omission where the act or omission was the result of the exercise of the discretion vested in him, whether or not such discretion be abused."
Neither Sava nor Johnson broached whether section 818.8 is limited to discretionary governmental acts, and cases are not authority for propositions they did not consider. (City of Bellflower v. Cohen (2016) 245 Cal.App.4th 438, 452.) Sava specifically pronounced that its "holding is limited . . . to the interpretation of section 820.2," and it made no reference to section 818.8. (Sava, supra, 249 Cal.App.2d at p. 292.) Johnson discussed section 818.8 because that statute led the trial court to sustain a demurrer. It reversed, but only because the case did not involve a misrepresentation that interfered with financial or commercial interests. (Johnson, supra, 69 Cal.2d at pp. 799-800.)
Relying on Connelly v. State of California (1970) 3 Cal.App.3d 744, 752 (Connelly), Bouali argues that section 818.8 is inapplicable because his damages flow from an invasion of a personal right rather than from a commercial transaction between him and the City, or from the City's interference with a commercial transaction between him and a third party. This argument holds no sway.
The appellant in Connelly owned and operated three marinas on a river. For several days in late 1964, appellant called the State Department of Water Resources to inquire about any anticipated change in the level of the river. During the last call, appellant was told that the river was expected to rise to a maximum of 24 feet and appellant adjusted his docks to float at a maximum height of 26 feet. But within four hours, the level rose to 29 feet and appellant's docks were damaged. He sued the state and alleged several claims based on negligence in the issuance of inaccurate river height forecasts. The trial court sustained a demurrer without leave to amend. Connelly reversed, concluding the appellant should have leave to amend. (Connelly, supra, 3 Cal.App.3d at pp. 746-747, 753.)
In discussing whether the appellant could amend, Connelly determined that section 818.8 was inapplicable. It noted the rule from Johnson that the tort of misrepresentation applies to interference with financial or commercial interests, then stated: "[W]e find that although appellant suffered a commercial loss in the sense that his business installations were damaged, the loss did not result from a commercial transaction between him and the state, nor from the state's interference with his commercial transactions. The complaint alleges a service gratuitously performed by the state in a negligent manner, resulting in physical damage to property. As there is no allegation of a tortious interference by the state with appellant's commercial activities within the rationale of Johnson, we conclude that section 818.8 does not apply to this case." (Connelly, supra, 3 Cal.App.3d at p. 752.)
As the dissenting and concurring opinion in Connelly pointed out, for a representation to be actionable, it "must be of a past or present fact. [Citations.] The future is always opinion; it must happen before it is a fact." (Connelly, supra, 3 Cal.App.3d at p. 759, (conc. & dis. opn. of David, J.) "'[P]redictions as to future events . . . are not actionable fraud . . . .'" absent certain facts establishing an exception to the general rule. (Cohen v. S&S Constr. Co. (1983) 151 Cal.App.3d 941, 946.) It is unclear whether Connelly involved an actionable misrepresentation.
Connelly is inapposite because it did not involve a government misrepresentation regarding the legal status of property that impacted the sale of that property, as in Grenell and Hirsch, or that caused a property owner to expend money, as in Harshbarger.
III. Denial of Leave to Amend.
Bouali contends the trial court erred when it denied his request for leave to file the Proposed Amendment based on its finding that a contract never existed. He avers that the evidence proves a written contract and that the Proposed Amendment sufficiently alleges a written contract. The City, in response, argues that its acceptance of an application and fee did not evince contractual intent, and that Bouali failed to allege a written contract containing definite terms.
Case law establishes that public entities can be sued for breaching contracts and the doctrine of governmental immunity does not apply. (San Mateo Union High School Dist. v. County of San Mateo (2013) 213 Cal.App.4th 418, 439, fn. 11.) There is no dispute on this point. There is also no dispute that in the absence of a contract, Bouali cannot state a cause of action for implied contractual indemnity.
The parties debate whether the request for leave to amend could have been denied based on prejudicial delay. That was not the basis of the trial court's ruling.
They discuss whether the contract based causes of action are barred by section 945.4, the statute requiring that a person file a claim with a public entity before filing a lawsuit. Bouali contends that his contract based causes of action are fairly reflected in the claim he filed with the City. The City argues otherwise. We conclude that the issue is moot because the trial court did not rule based on section 945.4, and because we affirm on other grounds.
The City is correct.
A. Relevant Law.
Contract formation requires the mutual assent of the parties to the terms. (Civ. Code, §§ 1550, 1580.) "'Mutual assent usually is manifested by an offer communicated to the offeree and an acceptance communicated to the offeror.' [Citation.] 'If there is no evidence establishing a manifestation of assent to the "same thing" by both parties, then there is no mutual consent to contract and no contract formation.' [Citation.]" (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 243.) For the acceptance of an offer to result in the formation of a contract, the offer must contain terms that are sufficiently definite that the performance promised is reasonably certain. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811.) "Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable. [Citations.]" (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 770.)
A public entity is not liable on a contract unless the entity is authorized by statute to incur the obligation. (Lundeeen Coatings Corp. v. Dep't of Water & Power (1991) 232 Cal.App.3d 816, 831.)
"'A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect. [Citation.] In order to plead a contract by its legal effect, plaintiff must "allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions." [Citation.]'" (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 993.)
B. Analysis.
We first examine the evidence.
Bouali contends that the application and the August 25, 2015 Zoning Confirmation Letter attached to the original cross-complaint are part of the purported contract. Neither document contains written promises by the City.
Next, Bouali directs our attention to a zoning confirmation application form identified in the deposition of the former head of the City's Department of Developmental Services, a woman named Carrie Tai (Tai). Tai testified that she was unable to locate such an application connected to the August 25, 2015 Zoning Confirmation Letter. Presumably, Bouali wants us to infer he filled out this application form and it is part of his purported contract.
This evidence was submitted with Bouali's opposition to the motion for summary judgment.
The zoning confirmation letter application form identified by Tai permitted a requester to ask for a basic zoning letter or a zoning letter with additional research. As to the latter, the form stated: "Zoning Letter with Additional Research. This letter includes all of the information contained in the Basic Zoning Letter, and additionally answers any specific inquiries on the subject property (to the extent feasible, based on available resources), such as number of dwelling units legally permitted, permit history on the site, status of entitlements (e.g., Conditional Use Permits or Standards Variances), and other zoning-related matters specific to the property. If you are requesting additional research, please specify what additional information you wish the letter to provide, either below or by attaching additional sheets to this form." (Bolding omitted.)
There is no evidence that Bouali filled out one of these zoning confirmation letter applications and submitted it to the City. Even if he did, the application does not contain any written promises by the City. Rather, it simply describes the nature of the letter to be issued.
Now, we turn to the Proposed Amendment.
In the breach of written contract causes of action, the Proposed Amendment alleges that by accepting Bouali's application and fee, and by issuing the August 25, 2015 Zoning Confirmation Letter, the City agreed to confirm the Property's zoning designation. But the Proposed Amendment does not state that the City expressly made this promise, or that the City was authorized to enter a contract to provide a truthful zoning confirmation letter.
Bouali does not explain how documents containing no written promises created a written contract. His argument is embodied in the declarative assertion that his "contract with the City is very straightforward: he paid $655.80 in return for issuance of a Zoning Confirmation Letter containing 'additional research.'" His other arguments are similar in character and suggest that the facts are self-explanatory. That is not enough. An appellant must provide concrete analysis of the issues. "It is not our responsibility to develop an appellant's argument." (Alvarez v. Jacmar Pacific Pizza Corp. (2002) 100 Cal.App.4th 1190, 1206, fn. 11.)
Bouali does not argue that the applications and August 15, 2015 Zoning Confirmation Letter created an implied in fact contract for the City to issue a truthful zoning confirmation letter. (Civ. Code, § 1621 ["An implied contract is one, the existence and terms of which are manifested by conduct"].) In fact, he specifically states: "This is not a claim based on an implied-in fact agreement."
Our analysis could end here. To be thorough, we make an additional observation.
Tacitly, Bouali suggests that some sort of unspecified contract was formed because he submitted the application and the City took his money. The suggestion is foreclosed by the reasoning of Engel v. McCloskey (1979) 92 Cal.App.3d 870 (Engel). The appellant there alleged that when the State Bar accepted his application for admission and the related fee that it entered a contract to process the application with reasonable diligence and competence. (Id. at p. 877.) The court stated: "There is no merit to this cause of action. If an application for a license or permit and payment of the required fee created a contract that the application be handled in a certain manner, the immunity provided by . . . sections 818.4 and 821.2 [pertaining to the issuance or denial of licenses] would be nullified. In receiving such an application, the public entity obviously lacks contractual intent." (Engel, supra, at p. 883.) Here, if the form requesting a zoning confirmation letter contractually obligated the City to issue an accurate letter, the immunity provided by section 818.8 would be nullified. It defies logic to suggest the City would forego this immunity. In the words of Engel, the City obviously lacked contractual intent.
We conclude (1) the evidence does not prove formation of a written contract because it fails to show mutual assent on any express promises, (2) Bouali did not sufficiently plead a written contract containing express promises by the City to confirm the Property's zoning designation, and (3) the City's acceptance of an application and fee for a service does not, without more, create a written contract.
DISPOSITION
The judgment is affirmed. The City is entitled to its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
/s/_________, J.
ASHMANN-GERST We concur: /s/_________, P. J.
LUI /s/_________, J.
CHAVEZ