Opinion
B226216
08-31-2011
EL SEGUNDO PLAZA ASSOCIATES, L.P., Plaintiff and Appellant, v. CITY OF HAWTHORNE et al., Defendants and Respondents.
Caswell & Cannon and Ronald S. Caswell for Plaintiff and Appellant. Richard I. Miyahira, City Attorney of the City of Hawthorne; Richards, Watson & Gershon, Mitchell E. Abbott, Rochelle Browne and Jennifer L. Petrusis, for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC404244
APPEAL from a judgment of the Superior Court of Los Angeles County. Daniel J. Buckley, Judge. Affirmed.
Caswell & Cannon and Ronald S. Caswell for Plaintiff and Appellant.
Richard I. Miyahira, City Attorney of the City of Hawthorne; Richards, Watson & Gershon, Mitchell E. Abbott, Rochelle Browne and Jennifer L. Petrusis, for Defendants and Respondents.
The owner of a shopping mall in the City of Hawthorne (City) brought this action for damages after the City allegedly breached a contract signed by its planning director to allow the shopping mall owner to demolish and replace a billboard in the mall. The owner appeals from the judgment entered after the trial court granted summary judgment to the City and its employee defendants. We affirm the judgment because the undisputed evidence shows that the City's planning director did not have the authority to sign contracts on the City's behalf.
FACTS AND PROCEEDINGS BELOW
Plaintiff El Segundo Plaza Associates (Plaza) owns a shopping mall in a C-3 zone in the City of Hawthorne. In 1966, an outdoor advertising company leased a small parcel of land in the mall and erected a billboard with the City's permission. In 2002, the City amended its zoning ordinance to prohibit billboards in C-3 zones. This amendment did not automatically require demolition of the Plaza billboard but, as a "legal nonconforming use," if the billboard was voluntarily demolished it could not be replaced except under certain conditions discussed below.
A "nonconforming use" is a use that was lawfully established and maintained but, because of changes in the zoning laws, no longer conforms to the use regulations in the zone where it is located. (Hawthorne Muni. Code § 17.04.455.)
In February 2008, several tenants approached Plaza and asked that the billboard be removed. The tenants stated that the 43-year-old sign cantilevered precariously over their buildings and swayed dangerously in earthquakes. Later that month Plaza's managing partner met with the City's planning director, Harold Roth, to discuss demolition and replacement of the billboard.
Following that meeting, Plaza sent Roth a letter setting out the proposed terms under which Plaza would be allowed to demolish and replace the billboard at the same location. The parties refer to this letter as a "rebuild letter." The letter stated in relevant part: "This letter is intended to confirm our agreement regarding replacement of the existing billboard sign currently located on our property . . . . [¶] Briefly, the City has agreed that the existing double-sided fully illuminated 14' x 48' billboard sign may be replaced with a new double-sided illuminated billboard sign of the same size and height and at the same location as the existing billboard sign. . . . [¶] In consideration of the City's agreement as set forth herein, and in reliance thereupon, we will seek permits for, and remove and replace at our sole cost and expense, the existing billboard sign. . . . [¶] If acceptable, please countersign the enclosed copy of this letter agreement . . . ." Roth signed the letter under the words "agreed and accepted" and added in his handwriting: "Subject to condition that billboard remains a legal non-conforming use."
A few weeks after countersigning Plaza's February 2008 letter, Roth wrote to Plaza stating, "it appears that you either withheld or misrepresented certain key facts in our meeting last month." According to Roth, after he signed the letter he learned that Plaza did not own the billboard and the company that owned it, Clear Channel Outdoor, Inc., intended to demolish it the following month as the company was obligated to do under its lease with Plaza. Roth advised Plaza that pursuant to the applicable city ordinance and the lease agreement, "the billboard, once dismantled at your property, may not be rebuilt. . . ." In conclusion, Roth stated: "We are notifying you now so that you will not incur any expenses in the future for the reconstruction of the billboard." Several months later the City issued a demolition permit and the billboard was removed by a company hired by Clear Channel.
Following the billboard's demolition, Plaza applied for a permit to build a replacement billboard at the same location. The planning department denied the application and its denial was upheld on appeals to the Planning Commission and the City Council. While these appeals were in progress Plaza filed a claim for damages with the City. When the City denied the claim, Plaza brought this action alleging breach of contract, promissory estoppel, violation of the federal Civil Rights Act (42 U.S.C. § 1983) and entitlement to declaratory relief. The complaint named as defendants the City, Roth, and Jag Pathirana, the city manager. Plaza did not file an action for administrative mandamus challenging the denial of a permit to replace the billboard.
Plaza's complaint for damages rested on two theories. First, Plaza contended that the February 2008 letter countersigned by Roth constituted a contract between Plaza and the City in which the City agreed to allow Plaza to demolish the existing billboard and replace it with a new one at the same location so long as the new billboard remained a legal nonconforming use. Second, Plaza contended that the City was estopped from refusing to allow Plaza to erect a new billboard because Plaza had justifiably relied on Roth's promise that it could do so and "had incurred substantial fees and expenses preparing and revising the plans and structural calculations for the replacement billboard . . . ." Combining these two theories, Plaza alleged that the City had violated its civil rights and that it was entitled to a declaration of its rights and duties under the February 2008 letter.
Defendants answered the complaint and moved for summary judgment. They argued that Plaza's causes of action for breach of contract and promissory estoppel failed because Roth had no authority to bind the City to a contract and even if he did, he could not bind it to a contract that violated the City's zoning laws or that was not adopted in the manner required by law. Moreover, defendants argued, those causes of action were barred by Plaza's failure to exhaust its administrative remedy by seeking judicial review of the City's refusal to grant a permit to build a new sign. Because those causes of action failed, the defendants contended, the cause of action for declaratory relief necessarily failed. Finally, the defendants maintained that Plaza could not sue for a taking of its property under the federal Civil Rights Act until it exhausted its state remedy of seeking a writ of administrative mandate to overturn the City's denial of its permit to erect a new billboard.
The trial court granted the motion for summary judgment and entered judgment for the defendants. Plaza filed a timely appeal.
DISCUSSION
I. APPELLATE REVIEW OF SUMMARY JUDGMENTS
To prevail on summary judgment a defendant must show that the plaintiff cannot establish one or more elements of the plaintiff's causes of action or that the defendant has a complete defense to the claims. (Code Civ. Proc., § 437c, subd. (p)(2).) A defendant may do this either by presenting evidence which conclusively negates an element of each of plaintiff's causes of action or conclusively establishes a defense to each cause of action, or by presenting evidence that the plaintiff does not possess and cannot reasonably obtain evidence to support her claims. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 855.) Only if the defendant meets this burden does the burden shift to the plaintiff to show the existence of a triable issue of fact with respect to the cause of action or defense. (Id. at p. 850.)
We review the trial court's summary judgment ruling de novo to determine whether the moving party met its burden of showing that there is no triable issue of any material fact and that it is entitled to judgment as a matter of law. (Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 274.)
II. THE PURPORTED CONTRACT BETWEEN THE CITY AND PLAZA IS VOID AND UNENFORCEABLE BECAUSE THE UNDISPUTED EVIDENCE SHOWS THAT ROTH HAD NO AUTHORITY TO CONTRACT ON BEHALF OF THE CITY
Government Code section 40602 states that the mayor shall sign "[a]ll written contracts and conveyances made or entered into by the city" unless the city council provides "by ordinance that the instruments [may] be signed by an officer other than the mayor." Thus, if Roth was not authorized to sign the purported contract permitting Plaza to rebuild its billboard then the contract is void. (South Bay Senior Housing Corp. v. City of Hawthorne (1997) 56 Cal.App.4th 1231, 1236.) Because no evidence on the question of Roth's authority to sign contracts on behalf of the City was admitted at the hearing on the motion, we asked the parties to advise us by letter briefs whether "there is a Hawthorne ordinance providing that contracts may be signed by the Director of the Department of Planning." Based on the parties' responses we take judicial notice that there is no such ordinance.
Future statutory references are to the Government Code unless otherwise specified.
Plaza argues, however, that section 40602 does not require every contract of a municipality be signed by the mayor or a person designated by the city council. Plaza relies on City of Orange v. San Diego County Employees Retirement Assn. (2002) 103 Cal.App.4th 45, 54 (City of Orange)in which the court concluded that section 40602 "do[es] not unambiguously require that every contract, without exception, be in writing and signed by the mayor." For reasons we discuss below, even assuming that the document Roth signed is a contract, City of Orange does not change the result.
Neither at the trial court nor on appeal has the City raised an issue of whether the document signed by Roth is in fact a contract. We therefore do not discuss it.
In City of Orange, the City sued the defendant for breach of an oral settlement agreement in the underlying lawsuit. The defendant argued that under section 40602 and the Orange Municipal Code all contracts entered into by the City had to be in writing and signed by the mayor. It was undisputed that the alleged settlement agreement was not in writing and did not bear the signature of the mayor. Therefore, the defendant argued, the purported settlement agreement was void and unenforceable by the City. The trial court rejected that argument and awarded the City $950,000 in damages.
The Court of Appeal affirmed the judgment for two reasons. It concluded that the general purpose of section 40602 was to "'"'ensure that expensive decisions are not hastily made'"'" by requiring the approval "by a number of different individuals." (City of Orange, supra, 103 Cal.App.4th at p. 53.) The settlement agreement furthered this statutory purpose because it involved no expenditure of City funds and gave the City adequate time to review the settlement offer. (Id. at p. 55.) Furthermore, the defendant, a private party, was seeking to protect itself against the enforcement of a contract it entered into with a city that was beneficial to the public. Section 40602's restrictions on a city's power to contract, the court held, are designed to protect the public, not to protect a private party that contracts with the city. (103 Cal.App.4th at p. 54.) Thus, enforcing section 40602 against the city "would benefit only the party contracting with the municipality at the public's expense." (Id. at p. 55.)
The City of Orange is thus readily distinguishable on its facts. In that case, a city sought to enforce a contract against a private party that would benefit the public. Here a private party seeks to enforce a contract that would benefit only the private party. The city gains no benefit by a private party installing a billboard and particularly not a billboard in an area where billboards are no longer permitted. In addition, it is not just "expensive decisions" that require approval by more than a single individual. In Hawthorne, not only the director of planning but also the director of building and safety must each approve the issuance of a permit to erect, alter or add to any sign or billboard. (Hawthorne Mun. Ord., §§ 17.35.020, 17.35.040, 17.35.080, 17.35.090.) Allowing the planning director to bind the City to a land use agreement without either the authority of the City Council or the input from the director of building and safety would violate one of the primary purposes of section 40602 identified in City of Orange, supra, 103 Cal.App.4th at p. 53.
Nor can the agreement between Roth and Plaza be enforced under the doctrine of promissory estoppel. Numerous cases have held that promissory estoppel may not be raised against a public entity when it would defeat the public policy of requiring adherence to statutory procedures for entering into contracts. (E.g., Poway Royal Mobilehome Owners Assn. v. City of Poway (2007) 149 Cal.App.4th 1460, 1476.)
Contrary to Plaza's argument, City of Orange did not hold that a city could be estopped from denying the validity of a contract signed by an unauthorized city official. The issue in City of Orange was whether a private party who had accepted the benefit of a contract with the city could avoid performing its part of the contract on the ground that the agreement was not in writing and signed by the mayor under section 40602. The court held that the private party was estopped from denying the validity of the oral contract; "[h]aving received the benefits of the [contract], appellant is estopped from asserting its invalidity." (City of Orange, supra, 103 Cal.App.4th at p. 57.)
Because Plaza's causes of action for breach of contract and promissory estoppel fail, its cause of action for declaratory relief also fails.
III. PLAZA'S SECTION 1983 CAUSE OF ACTION FAILS AS A MATTER OF LAW
Plaza's cause of action for violation of its constitutional rights under 42 U.S.C. section 1983 alleges in relevant part: "Defendants' breach of the Rebuild Letter Agreement with Plaintiff and subsequent denial of Planning's approval acted as a taking of Plaintiff's property without due process . . . ." This cause of action fails as a matter of law for two alternative reasons. If the cause of action is based on the City's breach of contract ("breach of the Rebuild Letter Agreement") it fails because a simple breach of contract does not give rise to a due process claim. (Shawnee Sewerage & Dr. Co. v. Stearns (1911) 220 U.S. 462, 471; and see more recently Lujan v. G & G Fire Sprinklers, Inc. (2001) 532 U.S. 189, 193, 195-196.) If the cause of action is based on the denial of a building permit ("subsequent denial of Planning's approval") it fails because Plaza did not exhaust its judicial remedy of a petition for administrative mandate before bringing suit. (Williamson Planning Comm'n v. Hamilton Bank (1985) 473 U.S. 172, 186-191.)
DISPOSITION
The judgment is affirmed. Respondent is awarded its costs on appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, J. We concur:
MALLANO, P. J.
JOHNSON, J.