Citizens for Amending Proposition L v. City of Pomona ( 2018 )

Filed 11/7/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
CITIZENS FOR AMENDING B283740
PROPOSITION L et al.,
(Los Angeles County
Plaintiffs and Respondents, Super. Ct. No. BS150549)
v.
CITY OF POMONA,
Defendant and Appellant.
APPEAL from an order and judgment of the Superior Court
of Los Angeles County, Amy D. Hogue, Judge. Affirmed.
Greenberg Gross, Becky S. James and Jaya C. Gupta for
Defendant and Appellant.
Raymond N. Haynes for Plaintiffs and Respondents.
In June 1993, appellant City of Pomona (Pomona) entered
into an agreement with non-party Regency Outdoor Advertising,
Inc. (Regency). Pursuant to that agreement, Regency erected
advertising billboards alongside several Pomona freeways.
Shortly thereafter, in November 1993, the citizens of Pomona
passed a ballot initiative, Proposition L (Prop. L), which
prohibited the construction of additional billboards within city
limits.
Pomona’s agreement with Regency expired by its terms in
June 2014. In July 2014, the Pomona city council adopted an
ordinance purporting to amend the agreement by extending it for
an additional 12-year term. Plaintiffs/Respondents Citizens for
Amending Proposition L (Citizens), Vernon Price, and J. Keith
Stephens (collectively, respondents) filed a petition for a writ of
mandate and complaint for declaratory relief, alleging that the
July 2014 “amendment” was in fact a new agreement for new
billboards enacted in violation of Prop. L. The trial court agreed
and granted the petition. It also awarded respondents attorney’s
fees pursuant to Code of Civil Procedure section 1021.5.1
In this appeal, Pomona challenges these rulings on a
variety of grounds. Procedurally, it argues that plaintiffs lack
standing and that Regency is an indispensable party to the
litigation. Substantively, it contends that the trial court erred in
concluding that the “amendment” was a new agreement and in
finding that Pomona violated a duty to comply with Prop. L.
Pomona also argues that plaintiffs failed to demonstrate an
entitlement to attorney’s fees. We affirm the trial court’s rulings.
Respondents’ motion for sanctions is denied.
1All
further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
2
FACTUAL BACKGROUND
I. 1993 Agreement
In November 1992, the Pomona city council adopted an
ordinance establishing regulations for “off-site outdoor
advertising structures,” commonly referred to as billboards. That
ordinance created limited “eligible display areas” in which new
billboards could be constructed. Those areas lay alongside three
freeways that passed through the city, state routes 57, 60, and
71. The ordinance also required any advertiser seeking to place
billboards in the eligible display areas to enter into a
development agreement with the city.
Almost immediately, advertising company Regency
negotiated a development agreement with Pomona in accordance
with the ordinance. The city council approved the agreement,
Development Agreement No. 93-001, by ordinance on May 24,
1993; it took effect 30 days later, on June 24, 1993.
Under the agreement, Pomona granted Regency the right
to erect 10 new billboards (“New Structures”) on properties
Regency owned in the eligible display areas. In exchange,
Regency agreed to various conditions, including the removal of 30
existing billboards (“Old Structures”) located elsewhere in the
city. Regency further agreed to pay Pomona various fees,
including one-time development and permitting fees totaling
$62,000, a $500 annual business license fee for each new
billboard face, and a $250 “posting fee every time a sign face is
changed.” Regency agreed to remove all of the New Structures
“on or before the last day” the agreement was in effect. It also
agreed to indemnify Pomona in the event that the validity of the
agreement was challenged, though the agreement gave Regency
the right to select counsel to do so.
3
By its terms, the agreement was slated to expire “ten (10)
years from the earlier to occur of (i) the construction of all of the
New Structures, or (ii) twelve (12) months after the Effective
Date. . . .” The agreement provided, however, that it was to “be
automatically extended for a second ten (10) year term,” subject
to an increase in the fees Regency was obligated to pay, “unless
such term is otherwise terminated, modified or extended by
circumstances set forth in this Agreement or by mutual consent
of the parties.” The parties agree that the first 10-year term
ended on June 24, 2004, and that the agreement automatically
renewed for a second 10-year term scheduled to expire on June
24, 2014.
II. Proposition L
In November 1993, just months after Regency and Pomona
entered into their agreement, citizens of Pomona approved Prop.
L in a special municipal election. Prop. L, now codified at Pomona
Municipal Code section .503-K-K, provides in relevant part: “No
new or structurally altered offsite billboards shall be permitted
within the City of Pomona. In technical words conveying the
same meaning, no ‘offsite advertising signs’ as defined shall be
constructed, relocated, or structurally altered in any zoning
district.” (Pomona Mun. Code, § .503-K-K.) An editor’s note in
the municipal code states that Prop. L “cannot be modified
without a vote of the people.” (Ibid.) Thus, beginning in
November 1993, no additional billboards could be built in
Pomona without voter approval. Under the terms of both Prop. L
and the Regency agreement, however, the new law did not apply
to the New Structures.
III. Efforts to Extend the 1993 Agreement
In 2010, six years into the second 10-year term of the 1993
4
agreement, Regency approached Pomona with a proposal to
extend the agreement for an additional 15 years. City staff
prepared a report on the proposal and concluded that it would be
possible to extend the agreement notwithstanding Prop. L. Staff
reasoned that Prop. L “does not speak to the removal of existing
signs, which can remain in tact [sic] as long as they are in a
‘grandfathered’ status . . . or as long as the [1993 agreement] is in
effect. . . .” The staff report further noted that, absent some
extension of the agreement, “at the end of the effective date, the
ten signs will need to be removed by Regency.” The report
recommended that the city council entertain the proposal.
Pomona followed the recommendation and began
negotiating with Regency. At the October 2010 city council
meeting, “[d]iscussion ensued regarding the locations of
billboards in the City, types of digital signs, light emissions, and
the possibility of negotiating the removal of the three additional
signs.” No resolution was reached, however, and the matter was
continued.
In advance of the city council meeting scheduled for
January 2011, plaintiff Stephens sent a letter opposing the
proposal to Pomona’s mayor and city council. In the letter, which
he signed in his capacity as president of billboard company Valley
Outdoor, Inc., Stephens opined that the proposed agreement
extension, particularly Regency’s request to digitize certain New
Structures, “violates both the intent and the spirit” of Prop. L.
He further asserted that Pomona could receive “significant
revenue beyond the proposed $1,000,000” by negotiating for
different terms or with his company. In a second letter, sent in
February 2011, Stephens reiterated his concerns about
compliance with Prop. L and explicitly invited the city council “to
5
negotiate a revenue sharing development agreement with Valley
Outdoor.”
In March 2011, a representative of Regency sent a letter to
Pomona asking the city council to delay further action “for the
basic reason that Regency . . . and the city have not yet reached a
final consensus on the terms of the agreement.” The city council
appears to have heeded this request; at any rate, the appellate
record does not pick up again until June 2012, when the city
council began the process of issuing public notice for a July 2,
2012 discussion about extending the agreement.
Pomona continued to negotiate extending the 1993
agreement with Regency through early 2014. During the ongoing
negotiations, Regency withdrew its request to digitize some of the
billboards and proposed agreement extensions with varying
durations and revisions. City staff reports prepared during these
negotiations reflect an understanding that the billboards
governed by the 1993 agreement would have to be removed “in
June, 2014 when the term expires” if the agreement was not
extended.
Eventually, in February 2014, Pomona and Regency
tentatively agreed to extend their 1993 agreement for 12 years,
with a one-time payment of $1,000,000 by Regency. A first
reading of an ordinance to approve the agreement extension was
placed on the June 2, 2014 city council agenda. Plaintiff
Stephens appeared at the meeting to oppose the extension. A
representative of the Alameda Corridor-East Construction
Authority also appeared to oppose the extension; some of the
billboards Regency had erected under the agreement were “in
direct conflict” with the agency’s ongoing, $1 billion railroad
expansion project. The city council voted “to open and continue
6
the Public Hearing to the Regular City Council meeting to be
held on June 16, 2014.”
Between June 2 and June 16, 2014, Regency worked to
revise the extension proposal to accommodate the railroad
project. Under the terms of the revised proposal—which
expressly recognized that “the original termination date of the
Development Agreement is June 24, 2014”—Regency agreed to
relocate one interfering billboard and remove another, and the
City agreed to process the permits and approvals for the
relocation expeditiously and in good faith. The revised proposal
also included a revised indemnity provision. Under the revised
provision, Regency still had the obligation to indemnify and
defend Pomona, but Pomona had the right “to approve . . . the
legal counsel providing the City’s defense” and Regency agreed to
“not object to the City Attorney’s Office serving as counsel for the
City.”
At its June 16, 2014 meeting, the city council introduced for
first reading Ordinance No. 4190, “an Ordinance approving
amendment number three to Development Agreement No. 93-001
between the City of Pomona and Regency Outdoor Advertising
Inc., extending the agreement twelve years and paying the City
of Pomona $1,000,000.” The annotated agenda for the meeting
states that the city council “approved” the ordinance.
On June 24, 2014, the second 10-year term of the
agreement ended. Regency did not remove any of the billboards it
had placed pursuant to the agreement.
Almost two weeks later, on July 7, 2014, the city council
introduced Ordinance No. 4190 for second reading and adoption.
Stephens attended the meeting to oppose the ordinance;
Regency’s counsel attended to support it. After hearing their
7
comments and discussing the matter, the city council
unanimously voted in favor of Ordinance No. 4190. The
annotated agenda for the meeting reflects that the council
“adopted, at second reading, Ordinance 4190 approving the third
amendment to Development Agreement No. 93-001 between the
City of Pomona and Regency Outdoor Advertising, Inc., extending
the term of the agreement by twelve years and paying the City of
Pomona $1,000,000.”
PROCEDURAL HISTORY
I. Petition
Plaintiffs filed a verified petition for writ of mandate and
complaint for declaratory relief against Pomona—but not
Regency—on August 13, 2014. Plaintiffs described themselves as
follows. “Petitioner and Plaintiff Citizens for Amending
Proposition L is an unincorporated association of residents of the
City of Pomona formed for the purpose of protecting the citizen
based initiative enacted in the City of Pomona in November, 1993
known as Proposition L and to amend Proposition L in the only
manner in which it can be amended, that is, through a vote of the
people of Pomona.” “Vernon Price is an individual residing in the
City of Pomona, and the Chairman of the Citizens for Amending
Proposition L.” “J. Keith Stephens is an individual actively
involved in the billboard business in Pomona since 1987, an
opponent of Proposition L in 1992, an advocate for the 1993
Development Agreement as described in this petition and
complaint [the Regency agreement], but a competitor of Regency
Outdoor Advertising today. Stephens would be adversely affected
by the enactment of the development agreement described later
in this petition.”
8
In their first cause of action, for an alternative and
peremptory writ of mandate, plaintiffs alleged that Pomona’s
adoption of Ordinance No. 4190 “exceeded the power of the City
of Pomona, and constituted an abuse of discretion.” They alleged
that the 1993 agreement “expired on June 24, 2014, and required
the removal of the billboards allowed under that agreement on or
before that date. By not requiring the removal of the billboards,
making any signs that remain ‘new’ signs, that is, signs that
would have otherwise not been allowed (sic). The City has
violated the terms of Proposition L by allowing the ‘new signs’ to
be placed.”2 Plaintiffs asserted that Pomona “had the duty to act
in accordance with State and local laws governing the adoption of
Ordinance 4190 and the extension/amendment to Development
Agreement 93-001, including the California Environmental
Quality Act, . . . and Proposition L, and Plaintiffs have a
beneficial interest in the [sic] enforcing these provisions as
concerned citizens of the City of Pomona, and active participants
in the adoption of Proposition L in the City of Pomona.”
In their second cause of action, for declaratory relief,
plaintiffs sought “a judicial declaration of the rights and
obligations of the parties, specifically a declaration that
2 Plaintiffs also alleged that Pomona failed to comply with
the requirements of the California Environmental Quality Act
(CEQA) “in that it failed to study: (1) the environmental impact
of extending/amending a development agreement originally
contemplated by the parties to be in effect for 20 years; and (2)
the environmental impact of the placement of new billboards on
locations not originally studied with the adoption of the original
development agreement in 1993.” The trial court did not address
plaintiffs’ CEQA claim on the merits, and the parties do not
address the CEQA claim in their briefing.
9
Ordinance 4190 and the extension/amendment of Development
Agreement 93-001 is and/or was illegal, and that any action
taken pursuant to that agreement is null and void.” Plaintiffs
requested attorney’s fees “pursuant to the private attorney
general provisions of state law for protecting the public and the
initiative process.”
II. Demurrer and Motion to Strike
Pomona filed a demurrer and a motion to strike. In its
demurrer, Pomona argued that the action should be dismissed
because plaintiffs failed to join Regency, which it asserted was an
indispensable party under section 389, subdivision (b). In its
motion to strike, Pomona sought to strike numerous allegations
of the pleading on the grounds that they were directly
contradicted by attached exhibits, judicially noticeable
documents, and applicable governing law. It specifically argued
that the Prop. L allegations should be stricken because Prop. L
was not applicable to the agreement, which was enacted before
its passage.
The trial court overruled the demurrer, concluding that
Regency was not an indispensable party to the action. The trial
court also largely denied the motion to strike, granting it only as
to two paragraphs relating to an alleged lack of public notice and
exhaustion of administrative remedies. The court granted
plaintiffs leave to amend, but they did not do so. The proceedings
were stayed for the next year and a half by agreement of the
parties.
III. Ruling
When the stay was lifted, the parties filed memoranda of
points and authorities addressing the merits of the petition. In
the caption on the cover of their supporting memorandum,
10
plaintiffs identified themselves as “Pomona Residents to Fix the
Budget Without a Tax Increase” and “J. Keith Stephens”; they
did not mention plaintiffs Price or Citizens. In its opposition,
Pomona argued that the change of parties was improper, negated
the verification of the petition, and demonstrated a lack of
standing. Pomona also argued that the petition must be denied
for failure to name Regency, an indispensable party, and that it
failed on the merits because Pomona had discretion to extend the
1993 agreement. In reply, plaintiffs disputed Pomona’s merits
arguments and asserted that the change in parties listed in the
caption had been a mistake.
The trial court held a hearing on April 7, 2017 and granted
the petition. The trial court accepted plaintiffs’ representation
that the caption change had been in error and concluded that
Citizens and Price had public interest standing as residents of
Pomona.3 The trial court further concluded that Regency, though
a necessary party under section 389, subdivision (a), was not an
indispensable party under subdivision (b) such that the case
could not proceed in its absence. On the merits, the trial court
rejected Pomona’s contention that Prop. L was inapplicable to the
July 7, 2014 agreement extension. It concluded that the 1993
agreement expired on June 24, 2014, such that the putative
“extension” was “in fact a new agreement between the City and
Regency supported by new consideration and containing new
terms.” The court reasoned, “Because the City did not adopt the
Third Amendment until after the Agreement had expired, the
Third Amendment was a new agreement subject to the rules,
regulations, and official policies in force at the time of its
3The court did not address Stephens’s standing or lack
thereof.
11
execution (July 7, 2014), including Proposition L. By adopting the
Third Amendment, the City violated its duty to abide by
Proposition L[,] which prohibits any new or structurally altered
offsite billboards within the City of Pomona.” The court
accordingly granted the petition and directed Pomona to set aside
Ordinance No. 4190. The court entered judgment on May 10,
2017, and notice of entry of judgment was filed on May 11, 2017.
IV. Attorney’s Fees
After the trial court granted the petition, plaintiffs moved
for attorney’s fees under section 1021.5. They asked for a
lodestar of $189,900, representing 379.8 hours of work at a rate
of $500 per hour. They also requested that the lodestar be
multiplied by three, for a total fee award of $569,700, citing the
complexity of the case, their complete victory, and other factors.
Pomona opposed the motion, arguing that plaintiffs did not
satisfy the statutory requirements for fees under section 1021.5,
that the time expenditures and requested fees were excessive,
and that a multiplier was unwarranted.
The trial court found that plaintiffs met the statutory
criteria of section 1021.5 and granted the motion for fees. It
determined that both the billing rate and number of hours billed
were excessive, however, and reduced the hourly fee to $300 and
the total compensable hours to 250.67. The resultant lodestar
was $75,200.40. The court found “no basis for enhancing the fees
with a multiplier” and therefore awarded plaintiffs a total of
$75,200.40 in attorney’s fees. It entered the order on June 16,
2017.
V. Appeal and Motion for Sanctions
Pomona filed a timely notice of appeal on July 7, 2017,
challenging both the judgment and the award of attorney’s fees.
12
After the matter was fully briefed, plaintiffs filed a motion
for sanctions pursuant to section 907 and California Rules of
Court, rule 8.276(a)(1). Plaintiffs alleged that “the only purpose
of this appeal was to delay the effect of the writ of mandate” and
sought sanctions in the “minimum” amount of “$200,000.00 as a
one month estimate of the revenue” Regency earned while
operating its billboards.
DISCUSSION
I. Standing
Pomona contends that none of the three plaintiffs—Price,
Stephens, and Citizens—had standing to bring this mandamus
action. It argues that all three plaintiffs lack the beneficial
interest in the litigation necessary to support a writ of
mandamus. It further argues that none of them qualifies for the
“public interest” exception to the beneficial interest requirement,
because “they seek to further their own competitive interests, not
the public interest.” We disagree. The trial court appropriately
concluded that plaintiffs Price and Citizens had public interest
standing to pursue this action.
A. Legal Principles
A writ of mandate under section 1085 is a vehicle to compel
a public entity to perform a legal duty, typically one that is
ministerial. (Weiss v. City of Los Angeles (2016) 2 Cal.App.5th
194, 204.) Under section 1085, the trial court reviews an
administrative action to determine whether an agency’s action
“‘was arbitrary, capricious, or entirely lacking in evidentiary
support, contrary to established public policy, unlawful [or]
procedurally unfair. . . . [Citations.] “Although mandate will not
lie to control a public agency’s discretion, that is to say, force the
exercise of discretion in a particular manner, it will lie to correct
13
abuses of discretion. [Citation.]”’ [Citation.]” (Ibid.)
“As a general rule, a party must be ‘beneficially interested’
to seek a writ of mandate. (Code Civ. Proc., § 1086.) ‘The
requirement that a petitioner be “beneficially interested” has
been generally interpreted to mean that one may obtain the writ
only if the person has some special interest to be served or some
particular right to be preserved or protected over and above the
interest held in common with the public at large. [Citations.] . . .’
The beneficial interest must be direct and substantial.” (Save the
Plastic Bag Coalition v. City of Manhattan Beach (2011) 52
Cal. 4th 155, 165 (Save the Plastic Bag).) This standard “is
equivalent to the federal ‘injury in fact’ test, which requires a
party to prove by a preponderance of the evidence that it has
suffered ‘an invasion of a legally protected interest that is “(a)
concrete and particularized, and (b) actual or imminent, not
conjectural or hypothetical.”’ [Citation.]” (Associated Builders
and Contractors, Inc. v. San Francisco Airports Commission
(1999) 21 Cal. 4th 352, 362.)
“Nevertheless, ‘“where the question is one of public right
and the object of the mandamus is to procure the enforcement of
a public duty, the [petitioner] need not show that he has any legal
or special interest in the result, since it is sufficient that he is
interested as a citizen in having the laws executed and the duty
in question enforced.”’ [Citation.] This ‘“public right/public duty”
exception to the requirement of a beneficial interest for a writ of
mandate’ ‘promotes the policy of guaranteeing citizens the
opportunity to ensure that no governmental body impairs or
defeats the purpose of legislation establishing a public right.’
[Citations.] We refer to this variety of standing as ‘public interest
standing.’ [Citation.]” (Save the Plastic Bag, supra, 52 Cal.4th at
14
p. 166.) It is also known as “‘citizen standing.’” (See, e.g., Rialto
Citizens for Responsible Growth v. City of Rialto (2012) 208
Cal. App. 4th 899, 913.)
“[T]he interest of a citizen may be considered sufficient
when the public duty is sharp and the public need weighty.”
(Waste Management of Alameda County, Inc. v. County of
Alameda (2000) 79 Cal. App. 4th 1223, 1237, disapproved on other
grounds by Save the Plastic Bag, supra, 52 Cal.4th at pp. 169-170
(Waste Management).) “[T]he courts balance the applicant’s need
for relief (i.e., his beneficial interest) against the public need for
enforcement of the official duty. When the duty is sharp and the
public need weighty, the courts will grant a mandamus at the
behest of an applicant who shows no greater personal interest
than that of a citizen who wants the law enforced.” (McDonald v.
Stockton Metropolitan Transit District (1973) 36 Cal. App. 3d 436,
440.) Determining whether the exception is warranted thus
“involves a ‘judicial balancing of interests.’ [Citation.]” (SJJC
Aviation Services, LLC v. City of San Jose (2017) 12 Cal.App.5th
1043, 1058 (SJJC).) The balancing is done on a sliding scale:
“When the public need is less pointed, the courts hold the
petitioner to a sharper showing of personal need.” (McDonald v.
Stockton Metropolitan Transit District, supra, 36 Cal.App.3d at p.
440.) The trial court also may find public interest standing
outweighed by “competing considerations of a more urgent
nature.” (Green v. Obledo (1981) 29 Cal. 3d 126, 145; see also
Reynolds v. City of Calistoga (2014) 223 Cal. App. 4th 865, 874-
875.) A petitioner is not entitled to pursue a mandamus petition
under the public interest exception as a matter of right. (Save
the Plastic Bag, supra, 52 Cal.4th at p. 170 & fn. 5.)
15
Standing is a question of law that we review de novo. (San
Luis Rey Racing, Inc. v. California Horse Racing Board (2017) 15
Cal.App.5th 67, 74.) We review any factual findings underlying a
trial court’s ruling on standing for substantial evidence. (Ibid.)
However, the determination whether to apply the public interest
exception involves a judicial balancing of interests and is
reviewed for abuse of discretion. (Reynolds v. City of Calistoga,
supra, 223 Cal.App.4th at pp. 874-875.)
B. Analysis
The trial court found that plaintiffs Price and Citizens were
residents of Pomona and had public interest standing “to ensure
that the City does not permit the construction of billboards in
violation of Proposition L.” Pomona argues that the trial court’s
application of the public interest standing exception implies that
it found plaintiffs lacked a beneficial interest in a writ of
mandamus. We agree.
There would be no need for the trial court to consider the
public interest exception if plaintiffs demonstrated a beneficial
interest. Nothing in the record suggests they made such a
showing, despite their unsupported assertion that they have a
beneficial interest in “making sure Appellant complies with its
laws.” A beneficial interest is present only when a plaintiff “‘has
some special interest to be served or protected over and above the
interest held in common with the public at large.’” (Save the
Plastic Bag, supra, 52 Cal.4th at p. 165.) There is no evidence
that Citizens, Price, or Stephens experienced any actual,
imminent, or particularized invasion of a legally protected
interest as a result of Pomona’s adoption of Ordinance No. 4190.
A desire to ensure that a city complies with its laws does not
alone give rise to a beneficial interest.
16
Yet it may give rise to public interest standing, as the court
concluded it did here for Price and Citizens. Pomona contends
that conclusion was erroneous for two reasons.
First, Pomona argues that all three plaintiffs lack public
interest standing because they sought mandamus to advance
their own competitive objectives rather than to promote or
safeguard the public welfare. Pomona contends plaintiffs “failed
to demonstrate that the public has any interest in preventing the
City from extending a development agreement that is authorized
by state law and provides significant revenues to the City,” and
that even if they had, their “interest is not in removing
billboards, but in removing Regency’s billboards and promoting
their own.” Pomona relies primarily on Waste Management,
supra, 79 Cal. App. 4th 1223 and SJJC, supra, 12 Cal.App.5th
1043. Neither case demonstrates that the trial court abused its
discretion in concluding public interest standing supported the
action here.
In Waste Management, two competing landfills were located
in the same county but were under the jurisdiction of two
different regional water boards. (Waste Management, supra, 79
Cal.App.4th at p. 1230.) When Waste Management sought to
accept certain designated wastes at its landfill, the water board
overseeing it required Waste Management to undergo a
“classification upgrade,” and the county required Waste
Management to conduct a CEQA review. (Id. at p. 1231.) When
Waste Management’s competitor later sought to accept the same
type of waste, its water board did not require it to reclassify; the
county accordingly did not require the competitor to perform a
CEQA review. (Id. at p. 1231.) Waste Management took issue
with the fact that it had to perform a CEQA review while its
17
competitor did not; it alleged the disparity “would create an
unlevel playing field” and wrote a letter to the county demanding
that the county mandate CEQA review for the competitor. (Ibid.)
The county ultimately filed a notice of CEQA exemption for the
competitor. (Ibid.)
Waste Management sought a writ of mandate. The trial
court issued the writ, but the court of appeal reversed on
standing grounds. (Waste Management, supra, 79 Cal.App.4th at
1241.) As relevant here, the court of appeal held that Waste
Management lacked public interest standing primarily because it
was “pursuing its own economic and competitive interests” rather
than “interest in or commitment to the environmental concerns
which are the essence of CEQA.” (Id. at p. 1238.) The court of
appeal additionally noted that Waste Management had “not
pointed to any beneficially interested persons whom it purports
to represent,” nor had it “demonstrated that persons who may be
beneficially interested in the matter would find it difficult or
impossible to vindicate their own interests.” (Id. at pp. 1238-
1239.)4
In SJJC, an unsuccessful bidder for an airport expansion
project sought a writ of mandate when the city awarded the
project to a competitor. (See SJJC, supra, 12 Cal.App.5th at pp.
1047-1049.) It alleged that the award violated CEQA and that
the proposal assessment process had been unfair. (Id. at p. 1050.)
Like Waste Management, SJJC primarily argued that the city
4Waste Management also held that a “nonhuman entity”
should be held to a higher standard than a natural person when
seeking to assert public interest standing. (Waste Management,
supra, 79 Cal.App.4th at p. 1238.) The Supreme Court
disapproved this holding. (Save the Plastic Bag, supra, 52
Cal.4th at pp. 169-170.)
18
gave its competitor an unfair advantage. (See ibid.) The trial
court sustained the city’s demurrer, and the court of appeal
affirmed on standing grounds. (Id. at p. 1053.) The court of
appeal rejected SJJC’s assertion of public interest standing. It
explained, “where the claim of ‘citizen’ or ‘public interest’
standing is driven by personal objectives rather than ‘broader
public concerns,” a court may find the litigant to lack such
standing.” (Id. at p. 1057, quoting Save the Plastic Bag, supra, 52
Cal.4th at p. 169.) Such a finding was proper in SJJC because
“SJJC contends that as a potential competitor at the airport it
should know what the public should want. It does not
demonstrate how the City Council erred in determining that [its
competitor’s proposal] would be in the public interest.” (Id. at p.
1058.) Moreover, the court of appeal continued, SJJC failed to
identify any statutory violations indicating that the city violated
its duty to conduct a fair procurement process or any violations of
the city’s own municipal laws or charter. (Id. at pp. 1058-1059.)
Here, Pomona speculates that Price and Citizens are
exclusively advancing a commercial interest. Yet Price is
identified in the record as an individual residing in Pomona and
chairperson of Citizens. Citizens is identified as “an
unincorporated association of residents of the City of Pomona
formed for the purpose of protecting” Proposition L. The record
does not reveal that either of them was a competitor of Regency
or was directly affiliated with Stephens, who plainly was acting
to advance the interests of his own billboard company. Even if it
did, neutrality is not “a necessary prerequisite for public interest
standing.” (Save the Plastic Bag, supra, 52 Cal.4th at p. 169.)
“[I]ndeed, truly neutral parties are unlikely to bring citizen
suits.” (Ibid.) Instead, a personal objective is one factor the court
19
may consider when weighing the propriety of public interest
standing. (See SJJC, supra, 12 Cal.App.5th at p. 1057.) Unlike
the plaintiff in SJJC, plaintiffs here alleged that the city violated
its own municipal law. Compliance with the law, particularly one
enacted by voter initiative in response to the initial formation of
the contract allowing billboards into the city, is in our view a
“sharp” public duty. The public need for enforcement of the law
also is weighty; the record suggests that, absent Stephens’s 2011
intervention in the negotiations, digital billboards might have
been installed without broad public awareness of any potential
issue. “When the duty is sharp and the public need weighty, the
courts will grant a mandamus at the behest of an applicant who
shows no greater personal interest than that of a citizen who
wants the law enforced.” (McDonald v. Stockton Metropolitan
Transit District, supra, 36 Cal.App.3d at p. 440.) That is what
happened here.
Pomona also contends that the trial court erred in finding
that Citizens had public interest standing because “there is no
evidence that this association has any members other than Price
and . . . there is no record of its advocacy or even its existence
apart from this lawsuit.” It further asserts that “[i]t is telling”
that Citizens’s name was replaced on a filing by the name of
another organization. Pomona relies solely on San Francisco
Apartment Association v. City and County of San Francisco
(2016) 3 Cal.App.5th 463, 472, for the proposition that an
association’s standing is derivative of its members’ standing and
is subject to the same challenges. That case indeed states that an
association has standing to bring suit on behalf of its members
when (1) its members otherwise would have standing to sue in
their own right; (2) the interests it seeks to protect are pertinent
20
to the association’s purpose; and (3) neither the claim asserted
nor the relief requested requires participation of the association’s
individual members. (Ibid.) Those principles do not help here.
Price, the sole identified member of Citizens, has public interest
standing to sue, as may other Pomona citizens involved in the
organization. One of Citizens’s asserted purposes is to protect
Prop. L, and neither the claim—that Pomona violated Prop. L—
nor the relief requested—that Pomona comply with Prop. L—
requires any members of Citizens to participate in the suit.
The trial court did not err in concluding that plaintiffs
Price and Citizens had public interest standing to sue.
II. Indispensable Party
Pomona next contends that the trial court abused its
discretion by holding that Regency was not an indispensable
party to the litigation. Pomona argues that the trial court abused
its discretion both by failing to consider all of the statutory
factors listed in section 389, subdivision (b) and by finding that
Pomona would adequately represent Regency’s interests. We
disagree.
A. Legal Principles
Section 389 governs the joinder of parties to litigation. It
provides:
“(a) A person who is subject to service of process and whose
joinder will not deprive the court of jurisdiction over the subject
matter of the action shall be joined as a party in the action if (1)
in his absence complete relief cannot be accorded among those
already parties or (2) he claims an interest relating to the subject
of the action and is so situated that the disposition of the action
in his absence may (i) as a practical matter impair or impede his
ability to protect that interest or (ii) leave any of the persons
21
already parties subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations by reason of his
claimed interest. If he has not been so joined, the court shall
order that he be made a party.
“(b) If a person as described in paragraph (1) or (2) of
subdivision (a) cannot be made a party, the court shall determine
whether in equity and good conscience the action should proceed
among the parties before it, or should be dismissed without
prejudice, the absent person being thus regarded as
indispensable. The factors to be considered by the court include:
(1) to what extent a judgment rendered in the person’s absence
might be prejudicial to him or those already parties; (2) the
extent to which, by protective provisions in the judgment, by the
shaping of relief, or by other measures, the prejudice can be
lessened or avoided; (3) whether a judgment rendered in the
person’s absence will be adequate; (4) whether the plaintiff or
cross-complainant will have an adequate remedy if the action is
dismissed for nonjoinder.” (§ 389, subds. (a) & (b).)
Subdivision (a) of section 389 defines “necessary parties” as
those persons who “ought to be joined if possible.” (County of San
Joaquin v. State Water Resources Control Board (1997) 54
Cal. App. 4th 1144, 1149.) The trial court must determine that a
party is necessary under subdivision (a) before assessing whether
the party is indispensable under subdivision (b). (Deltakeeper v.
Oakdale Irrigation District (2001) 94 Cal. App. 4th 1092, 1100
(Deltakeeper).) “Then, subdivision (b) sets forth the factors to
follow if such a person cannot be made a party in order to
determine ‘whether in equity and good conscience the action
should proceed among the parties before it, or should be
dismissed without prejudice, the absent person being thus
22
regarded as indispensable.’ (Italics added.) The subdivision (b)
factors ‘are not arranged in a hierarchical order, and no factor is
determinative or necessarily more important than another.’
[Citation.]” (San Joaquin, supra, 54 Cal.App.4th at p. 1149.)
The trial court’s assessment of indispensability and consideration
of these factors “‘involve the balancing of competing interests and
must be steeped in “pragmatic considerations.”’ [Citation.]” (Id.
at p. 1152.)
We review the trial court’s determination that a party is or
is not indispensable for abuse of discretion. (San Joaquin, supra,
54 Cal.App.4th at pp. 1151-1153; Kaczorowski v. Mendocino
County Board of Supervisors (2001) 88 Cal. App. 4th 564, 568.)
B. Ruling
The trial court initially addressed Regency’s
indispensability at the demurrer stage of the litigation. There, it
concluded that Regency was a necessary party under Public
Resources Code section 21167.6.5, subdivision (a), due to
plaintiffs’ CEQA claim.5 The trial court did not revisit its ruling
that Regency was a necessary party, and the parties do not
dispute the finding.
The trial court also identified each of the four section 389,
subdivision (b) factors and discussed them at length in its
demurrer ruling. As to the first factor, prejudice, the trial court
concluded Regency would not be prejudiced “because its interests
will be adequately protected by the City pursuant to the
5Although neither side substantively addresses the CEQA
claim in this appeal, Pomona advocates in favor of the trial
court’s conclusion that Regency is a necessary party under
CEQA. It does not argue that Regency is necessary on any other
basis.
23
Development Agreement,” which the court noted “requires the
City and Regency to ‘cooperate with each other in the preparation
and defense of any action.’” The trial court found this analogous
to an agreement in Deltakeeper, supra, 94 Cal.App.4th at p. 1103,
which gave nonjoined entities a right to participate in and control
the litigation. The court also reasoned that both Regency and
Pomona had a financial interest in the agreement: “[t]he financial
stake the City has in the Amendment, for which Regency is
obligated to pay $1 million, also places the City in a position to
argue vigorously in favor of its validity. This protects Regency’s
interests in this litigation.”
As to the second factor, “[w]hether there are measures by
which any prejudice to the unjoined party can be lessened or
avoided,” the trial court asked what contribution Regency could
make if joined to the proceedings. It concluded that Regency’s
contribution would be minimal: “[t]he fact that both the City and
Regency are bound by a collective litigation decision-making
process indicates that their defenses to the litigation will be the
same.” The court further found that Regency and Pomona “have
identical interests in enforcing the Amendment, to which they are
both parties,” and share “significant financial interests.” The
court accordingly concluded that the second factor, like the first,
weighed against deeming Regency an indispensable party.
As to the third factor, adequacy of the judgment in the
absence of the nonjoined party, the trial court focused on whether
complete relief could be afforded to the participating parties in
Regency’s absence. As part of that query, the trial court
considered whether any judgment would be subject to collateral
attack by Regency. The trial court found that it would not be,
because a ruling that the amended agreement was unenforceable
24
would render any action to enforce it legally impossible. “If the
Amendment is found to exceed the City’s authority and violate
Proposition L and/or the Planning Law, any attempt by Regency
to force the City to meet its obligations under the Amendment
would be met with the defense of legal impossibility. [Citation.]
Therefore, any judgment rendered in this action would be
adequate as to the parties currently before the Court.”
The trial court concluded that the fourth factor, whether
plaintiffs would have an adequate remedy if their action were
dismissed for failure to join Regency, also cut in favor of
plaintiffs. The court concluded that plaintiffs, like the plaintiffs
in Deltakeeper, supra, 94 Cal.App.4th at p. 1108, would have no
recourse, because the statute of limitations for adding more
parties had passed. The trial court also noted Pomona’s
acknowledgment “that [Plaintiffs] have no other remedy at law.”
After finding that all four factors pointed to the conclusion
that Regency was not indispensable, the court ruled that Regency
was not an indispensable party and allowed the suit to move
forward. Pomona raised the issue of indispensability a second
time in advance of the merits hearing, reasserting its previous
arguments and adding that a decision published after the ruling
on the demurrer, Simonelli v. City of Carmel-by-the-Sea (2015)
240 Cal. App. 4th 480 (Simonelli), was “directly on point and
establishes that Regency is both a necessary and indispensable
party.”
The trial court indicated that it was not inclined to
reconsider its earlier ruling. It distinguished Simonelli, supra,
on the basis that the agreement between Regency and Pomona
“gives Regency the ability to control defense of any litigation.”
The trial court pointed to the indemnity language from the 1993
25
agreement, not the July 2014 amendment: “‘[i]n the event of any
legal action instituted by a third party . . . challenging the
validity of any provision of this Agreement, Developer [Regency]
and the City shall cooperate in defending any such action.’ . . .
‘Developer shall defend City . . . from any legal actions . . .
challenging the validity of any provision of this Agreement’ and
‘shall be entitled to select counsel to conduct such defense, who
shall be authorized to represent City as well as Developer. . . .’”
The trial court reasoned, “[b]y requiring Regency to defend the
City, the Agreement ensures that Regency’s interests will be
protected regardless of whether Regency is made a party to the
action. Moreover, in this case, the City’s and Regency’s interests
are aligned because the City has an interest in ensuring that its
million dollar contract with Regency is not set aside.”
C. Analysis
Pomona first contends the trial court abused its discretion
by failing to consider all factors supporting a finding of
indispensability. It asserts, “the trial court gave no indication it
considered all the Subsection [sic] (b) Factors and balanced these
factors as required.” Pomona suggests that the trial court
considered only the third factor. These contentions are not
supported by the record.
As outlined above, the trial court identified and discussed
all four factors set forth in section 389, subdivision (b) when it
overruled Pomona’s demurrer. In its subsequent ruling, the trial
restated the section 389, subdivision (b) factors and expressly
referred back to its previous ruling—“The Court previously
overruled Respondent’s demurrer on this ground[,] finding that
Regency is not an indispensable party to this action. (See March
18, 2015 Minute Order.)” The court’s enumeration of the
26
statutory factors and its explicit reference to its earlier analysis
of them is an indication that it was aware of and considered the
appropriate factors. The court was well within its discretion to
reiterate rather than reproduce its prior analysis.
Pomona next contends the trial court abused its discretion
by finding that Regency’s interests would be adequately
protected. Specifically, it argues that the trial court erroneously
relied on the indemnity provision from the original development
agreement rather than the amended one, and that in any event
Simonelli, supra, 240 Cal. App. 4th 480 holds that an indemnity
provision “is not a sufficient basis to conclude that the party
named in the litigation will adequate [sic] represent the interests
of the absent party.”
We agree with Pomona that the applicable indemnity
provision was that contained in the July 7, 2014 version of the
agreement. Whether the agreement was amended (as Pomona
argues) or was a new agreement (as plaintiffs argue and the trial
court ruled), the indemnity provision it contained was the
operative one between Pomona and Regency. Indeed, it expressly
“replaced in its entirety” the indemnity provision from the
original agreement on which the trial court relied, and applies to
attempts, like that of plaintiffs, to “modify, set aside, void, or
annul” the amended agreement. We note, however, that Pomona
did little to alert the court, either in its briefing or in open court,
that the applicable provision was that contained in the July 7,
2014 agreement.
The updated provision, entitled “Cooperation in the Event
of Legal Challenge and Indemnity,” states:
“Developer shall indemnify, protect, defend, and hold
harmless the City . . . from any and all claims, demands, law
27
suits [sic], writs of mandamus, and other actions and proceedings
(whether legal, equitable, declaratory, administrative or
adjudicatory in nature), and alternative dispute resolution
procedures (including, but not limited to, arbitrations,
mediations, and other such procedures), (collectively, ‘Actions’),
brought against the City . . ., that seek to modify, set aside, void,
or annul, the Development Agreement and this Third
Amendment, whether such Actions are brought under the
California Environmental Quality Act, the Planning and Zoning
Law, the Subdivisions Map Act, Code of Civil Procedure Section
1085 or 1094.5, or any other state, federal, or local statute, law,
ordinance, rule, regulation, or any decision of a court of
competent jurisdiction. It is expressly agreed that the City shall
have the right to approve, which approval will not be
unreasonably withheld, the legal counsel providing the City’s
defense, and that Developer shall reimburse City for any
reasonable costs and expenses directly and necessarily incurred
by the City in the course of the defense. Developer will not object
to the City Attorney’s Office serving as counsel for the City.
“City shall notify Developer of any Action within ten (10)
business days of receipt of an Action. Failure of the City to
promptly notify Developer of an Action shall, at the election of
Developer, terminate any obligation for Developer to indemnify
the City.
“City and Developer agree that they, and any legal counsel
hired by them, will cooperate with each other in the preparation
and defense of any Action. This includes, but is not limited to,
cooperation in the preparation of the administrative record and
consultation with one another in good faith in the preparation of
court filings to ensure that unnecessary and duplicative costs are
28
not incurred in the defense of any Action. City shall have the
right to review and approve all court filings filed on its behalf.
City and Developer agree that each will be advised by their
respective counsel independently of the other party.
“City shall not enter into any settlement or resolution of
the Action without first obtaining written approval of such
settlement or resolution by Developer. Developer shall not enter
into any settlement or resolution of any Action without first
consulting with the City. City shall not reject any reasonable
settlement; if City does reject a settlement that is acceptable to
Developer, Developer may settle the action, as it relates to
Developer, and City shall thereafter defend such action
(including appeals) at its own cost.”
Pomona argues that this provision is not sufficient to
support the trial court’s conclusion that its interests were aligned
with Regency’s. It relies on Simonelli, supra, 240 Cal. App. 4th
480, which the trial court distinguished.
In Simonelli, a petitioner proceeding in pro. per. sought a
writ of mandamus against Carmel-by-the-Sea after the city
approved a development application for a vacant lot abutting her
property. She did not name the developer as a party. (Simonelli,
supra, 240 Cal.App.4th at p. 482.) The trial court sustained the
city’s demurrer without leave to amend on the ground that the
developer was an indispensable party that could not be joined
due to the statute of limitations. (Ibid.) The petitioner appealed,
and the appellate court affirmed the trial court’s ruling that the
developer was an indispensable party. (Id. at p. 482.)
As is relevant here, the petitioner argued that the
developer was not a necessary or indispensable party because the
developer was required, “as a condition of approval of its permit[,]
29
to fund the City’s defense against her petition.” (Simonelli,
supra, 240 Cal.App.4th at p. 484.) The indemnity provision at
issue stated: “‘The applicant agrees, at its sole expense, to
defend, indemnify, and hold harmless the City . . . from any
liability; and shall reimburse the City for any expense incurred,
resulting from, or in connection with any project approvals. . . .
The City shall promptly notify the applicant of any legal
proceedings, and shall cooperate fully in the defense.’” (Ibid.)
This provision formed the entire basis of the petitioner’s
argument as to why the developer was not an indispensable
party.
The appellate court rejected her argument. It concluded
that the provision did not ensure that the City would protect the
developer’s interests because it “does not give [the developer] the
power to control the City’s defense of Simonelli’s action.” (Ibid.)
The court further found that the city “has not ceded control of the
litigation” and therefore “could decide not to defend against
Simonelli’s action or to conduct the litigation in such a manner as
to be adverse to [the developer’s] interest.” (Id. at pp. 484-485.)
The appellate court relied on this reasoning to conclude that the
developer was both a necessary and indispensable party to the
litigation, because it otherwise would be unable to protect its
interests.
Pomona asserts the same rationale should apply here. It
argues, “Simonelli establishes that an obligation to defend
another in litigation does not permit a finding that that person
will adequately represent the payor’s interest in [the] litigation.
[Citation.] Just as the Simonelli court recognized that the city
could ‘conduct the litigation in such a manner as to be adverse to
[the developer’s] interest,’ the City’s counsel here could choose to
30
represent its interests to the detriment of Regency’s.” A leading
treatise has interpreted Simonelli the same way, citing the case
for the proposition that “[t]he mere fact that the nonjoined party
is required to defend and indemnify the joined party is not
enough to establish adequacy of representation if the nonjoined
party does not have the power to control the joined party’s
defense.” (Weil & Brown, Cal. Practice Guide: Civil Procedure
Before Trial (The Rutter Group June 2018 Update) ¶ 2:156, p.2-
65.)
The indemnity provision here gives the nonjoined party,
Regency, more control over the litigation than the provision in
Simonelli; unlike the developer there, Regency is entitled to play
a role in selecting counsel. Pomona argues this is not enough to
support a finding that Pomona will protect Regency’s interests,
especially in light of the clause providing that Pomona and
Regency “agree that each will be advised by their respective
counsel independently of the other party.” We need not decide
whether this level of control afforded Regency over the litigation
is sufficient to distinguish it from Simonelli, because the case is
distinguishable on its facts.
In Simonelli, the developer sought and received a permit
from the city to develop land next to the petitioner’s; there is no
indication that the city had an independent interest in the
project. Courts have recognized that a city can “not be expected to
adequately represent the developer’s interest in litigation where
the city had no special interest in the project.” (Deltakeeper,
supra, 94 Cal.App.4th at p. 1104; cf. Sierra Club, Inc. v.
California Coastal Commission (1979) 95 Cal. App. 3d 495, 501 [“if
the plaintiff or petitioner prays for the cancellation of a legal
right in a certificate, permit or license issued in the name of and
31
being the property of a third person, such party is an
indispensable party to the action”].) Here, however, Pomona has
an interest in the validity of an agreement to which it is a party.
If the agreement is upheld, it will receive a payment of $1
million. It was not an abuse of discretion for the trial court to
conclude from this interest that Pomona could “be expected
vigorously to argue in favor of” upholding the contract.
(Deltakeeper, supra, at p. 1096.) Indeed, Pomona has done just
that, regardless of the level of control Regency may have exerted
or is exerting over the litigation.
Pomona points to authority stating that “a common
litigation objective is not enough to establish adequacy of
representation by the named parties.” (County of Imperial v.
Superior Court (2007) 152 Cal. App. 4th 13, 38.) Here, however,
the interests of Regency and Pomona are aligned not only legally
but also financially. Moreover, the nonjoined parties in County of
Imperial “vociferously argue[d] that the disparate interests of
[the named parties] prevent the named parties from representing
their interests.” (Ibid.) Neither Pomona nor Regency suggests
their interests do not align.
Pomona does suggest, however, that the other factors listed
in section 389, subdivision (b)—which it maintains the trial court
did not address—“support a finding of indispensability.” Pomona
“analyzes each factor to present a scenario in which the
discretionary factors could be balanced [in its favor], but . . . has
failed to demonstrate why these factors must be balanced in this
manner.” (County of Imperial v. Superior Court, supra, 152
Cal.App.4th at p. 35.) We accordingly are not persuaded.
Although Regency’s interests undoubtedly will be affected by the
outcome of this suit, the trial court did not abuse its discretion by
32
finding that Regency was not indispensable to the litigation. As
in Deltakeeper, “the rights asserted in this litigation”—
compliance with city ordinances when entering contracts—“are
independent of the contractual rights . . . established in the
Agreement.” (Deltakeeper, supra, 94 Cal.App.4th at p. 1106.)
Had Regency been joined, it “would have been limited at trial to
the same legal arguments” about whether and to what extent
Pomona complied with Prop. L. (Id. at p. 1108.)
III. Merits
Pomona argues the trial court erred in granting a writ of
mandamus for several reasons. First, it contends that
“[a]mending a development agreement is a legislative act
committed to the City of Pomona’s discretion by Government
Code §§ 65868 and 65867.5.” Therefore, the trial court should
“have reviewed the Third Amendment under a highly-deferential,
‘arbitrary, capricious, or entirely lacking in evidence’ standard
afforded to legislative acts and upheld it.” Second, it argues that
even if Prop. L could impose a mandatory duty on the city, such
duty “could only be triggered by the discretionary finding that the
billboards at issue are ‘new or altered,’ a finding the City did not
make.” Finally, Pomona argues that the trial court “erred based
on contract law by disregarding the parties’ intent and by
interpreting the contract in a way that rendered it unlawful
rather than in a way that gave it effect.” None of these
contentions is persuasive.
A. Duty
1. Legal Principles
“A writ of mandate will lie to ‘compel the performance of an
act which the law specially enjoins, as a duty resulting from an
office, trust or station,’ (Code Civ. Proc., § 1085) ‘where there is
33
not a plain, speedy, and adequate remedy, in the ordinary course
of law.’ (Code Civ. Proc., § 1086.)” (County of Los Angeles v. City
of Los Angeles (2013) 214 Cal. App. 4th 643, 653 (Los Angeles).) “A
trial court must determine whether the agency had a ministerial
duty capable of direct enforcement or a quasi-legislative duty
entitled to a considerable degree of deference.” (Ibid.) “A
ministerial duty is one which is required by statute. ‘A
ministerial act is an act that a public officer is required to
perform in a prescribed manner in obedience to the mandate of
legal authority and without regard to his own judgment or
opinion concerning such act’s propriety or impropriety, when a
given state of facts exists. Discretion, on the other hand, is the
power conferred on public functionaries to act officially according
to the dictates of their own judgment.’ [ Citations.]” (Id. at pp.
653-654.)
While mandate lies to compel a public agency to comply
with a ministerial duty, it usually does not lie to compel a public
agency to exercise its discretion in a particular manner. (Los
Angeles, supra, 214 Cal.App.4th at p. 654.) An action’s
classification as ministerial or discretionary thus is crucial to the
ultimate question whether mandate lies. “‘A duty is ministerial
when it is the doing of a thing unqualifiedly required. [Citation.]’
[Citation.] A public entity has a ministerial duty to comply with
its own rules and regulations where they are valid and
unambiguous.” (Gregory v. State Board of Control (1999) 73
Cal. App. 4th 584, 595.) In the context of discretionary acts,
mandate lies only to correct abuses of discretion. (Los Angeles,
supra, 214 Cal.App.4th at p. 654) “In determining whether a
public agency has abused its discretion, the court may not
substitute its judgment for that of the agency, and if reasonable
34
minds may disagree as to the wisdom of the agency's action, its
determination must be upheld. [Citation.] A court must ask
whether the public agency’s action was arbitrary, capricious, or
entirely lacking in evidentiary support, or whether the agency
failed to follow the procedure and give the notices the law
requires.” (Ibid.)
“In reviewing a judgment granting a writ of mandate, we
apply the substantial evidence standard of review to the court’s
factual findings, but independently review its findings on legal
issues. [Citation.] Interpretation of statutes, including local
ordinances and municipal codes, is subject to de novo review.”
(City of San Diego v. San Diego Employees’ Retirement System
(2010) 186 Cal. App. 4th 69, 78.)
2. Analysis
Pomona argues that whether to amend a development
agreement is a discretionary decision, and that the trial court
therefore erred in finding it abdicated a duty. Pomona contends
the court should have found that it did not act in an arbitrary or
capricious fashion, or without evidentiary support, in voting to
amend the 1993 agreement. We disagree.
Pomona is correct that the “letting of contract by a
governmental entity necessarily requires an exercise of discretion
guided by considerations of the public welfare.” (Joint Council of
Interns & Residents v. Board of Supervisors (1989) 210
Cal. App. 3d 1202, 1211.) Indeed, Government Code section
65867.5, subdivision (a) provides, “A development agreement is a
legislative act that shall be approved by ordinance and is subject
to referendum.”6 Amendments to development agreements are
The trial court questioned whether the agreement
6
between Pomona and Regency was a “development agreement[]
35
subject to the provisions of Government Code section 65867.5.
(Gov. Code, § 65868.) Legislative enactments such as these “are
presumed to be valid; to overcome this presumption the
petitioner must bring forth evidence compelling the conclusion
that the ordinance is unreasonable and invalid.” (County of Del
Norte v. City of Crescent City (1999) 71 Cal. App. 4th 965, 973.)
The problem for Pomona is that plaintiffs carried that
burden here. They pointed to Prop. L, which unequivocally states
that “No new or structurally altered billboards shall be permitted
within the City of Pomona.” Plaintiffs also pointed to the original
development agreement and its termination date of June 24,
2014. The agreement provided and Pomona acknowledged on
numerous occasions that Regency was supposed to “remove all of
the New Structures” on or before that date; the authorized
number of billboards that could be placed in the eligible display
areas after the agreement expired on June 24, 2014 was zero. Yet
the billboards remained, and Pomona adopted Ordinance No.
4190 on July 7, 2014, purporting to authorize their presence. The
Ordinance (and the contract it authorized) thus violated Prop. L,
which cannot be modified except by vote of the citizens of
Pomona.
The trial court correctly concluded that Pomona violated its
duty to comply with Prop. L by entering into a contract that
directly violated its terms. Public agencies have a duty to comply
with applicable state statutes and local ordinances. (See Rancho
Murieta Airport, Inc. v. County of Sacramento (2006) 142
Cal. App. 4th 323, 325-327.) Pomona abdicated that duty here.
embraced by Government Code sections 65864 et seq.,” but did
not rule on the question. We likewise express no opinion on this
issue.
36
Alternatively, Pomona’s exercise of its discretion in such a way as
to ignore Prop. L constituted an abuse of that discretion that the
court properly could have found “arbitrary, capricious, or lacking
in evidentiary support.”
B. New Contract
Pomona argues that the trial court’s conclusion that the
July 7, 2014 agreement was a new contract rather than an
extension or amendment of the 1993 agreement was “incorrect as
a matter of contract law.” We reject this argument.
1. Legal Principles
“It is a judicial function to interpret a contract or written
document unless the interpretation turns upon the credibility of
extrinsic evidence.” (City of El Cajon v. El Cajon Police Officers’
Association (1996) 49 Cal. App. 4th 64, 71.) We therefore review
the trial court’s interpretation of the agreement de novo,
“exercising our independent judgment as to the meaning of the
duration clauses” and other provisions of the agreement. (Id. at
p. 70.) We are guided by well-settled rules of contractual
interpretation.
“All contracts, whether public or private, are to be
interpreted by the same rules.” (Civ. Code, § 1635.) One such
rule provides that “[a] contract must be so interpreted as to give
effect to the mutual intention of the parties as it existed at the
time of contracting, so far as the same is ascertainable and
lawful.” (Id. § 1636.) When a contract is written, “the intention
of the parties is to be ascertained from the writing alone, if
possible.” ( Id. § 1639.) “‘It is the outward expression of the
agreement, rather than a party’s unexpressed intention, which
the court will enforce.’ [Citation.] Thus, in interpreting the
[agreement], we are not concerned as much with what the parties
37
might tell us they meant by the words they used as with how a
reasonable person would interpret those words.” (Quantification
Settlement Agreement Cases (2011) 201 Cal. App. 4th 758, 798.)
“The words of a contract are to be understood in their ordinary
and popular sense, rather than according to their strict legal
meaning; unless used by the parties in a technical sense, or
unless a special meaning is given to them by usage, in which case
the latter must be followed.” (Civ. Code, § 1644.)
“Of equal importance is the rule that ‘“[a] contract must
receive such an interpretation as will make it lawful, operative,
definite, reasonable, and capable of being carried into effect, if it
can be done without violating the intention of the parties.” (Civ.
Code, § 1643; see also id., § 3541.) Pursuant to this rule, we will
not construe a contract in a manner that will render it unlawful if
it reasonably can be construed in a manner which will uphold its
validity.’ [Citation.]” (Quantification Settlement Agreement
Cases, supra, 201 Cal.App.4th at p. 798.) A contract is unlawful
if it is “[c]ontrary to an express provision of law.” (Civ. Code,
§ 1667.) Unlawful contracts are considered void. (Civ. Code,
§§ 1598, 1599.)
2. Analysis
The original written agreement between Regency and
Pomona demonstrates that the parties intended the agreement to
terminate after a period of 20 years, “unless such term is
otherwise terminated, modified or extended by circumstances set
forth in this Agreement or by mutual consent of the parties.” “It
is the general rule that when a contract specifies its duration, it
terminates on the expiration of such period.” (Beatty Safway
Scaffold, Inc. v. Skrable (1960) 180 Cal. App. 2d 650, 654; see also
1 Witkin, Summary of Cal. Law (11th ed. 2018 update) Contracts,
38
§ 954.) A contract that is terminated ceases to bind the parties.
A terminated contract cannot be extended or modified; both
extension and modification as those terms are commonly
understood presuppose the existence of a valid contract to extend
or modify. An “extension” is “[t]he continuation of the same
contract for a specified period.” (Black’s Law Dict. (10th ed. 2014)
p. 703, col. 1.) A “modification” is “[a] change to something; an
alteration or amendment.” (Id. at p. 1156, col. 2.)
Here, the 1993 agreement terminated by its terms on June
24, 2014. After that point, there was no valid contract to amend,
modify, or extend. Pomona contends this conclusion cannot stand
because it was contrary to its and Regency’s intent. Pomona thus
appears to suggest that their intent and conduct stemming
therefrom created an implied-in-fact contract. (See Civ. Code,
§ 1621; Retired Employees Assn. of Orange County, Inc. v. County
of Orange (2011) 52 Cal. 4th 1171, 1178 [“a contract implied in
fact ‘consists of obligations arising from a mutual agreement and
intent to promise where the agreement and promise have not
been expressed in words’”].) It is possible for a public contract to
be implied in fact; “[a]ll contracts, whether public or private, are
to be interpreted by the same rules.” (Civ. Code, § 1635; see also
M.F. Kemper Construction Co. v. City of Los Angeles (1951) 37
Cal. 2d 696, 704 [“The California cases uniformly refuse to apply
special rules of law simply because a governmental body is party
to a contract.”].) The existence and scope of implied-in-fact
contracts are determined by the totality of the circumstances.
(Faigin v. Signature Group Holdings, Inc. (2012) 211 Cal. App. 4th
726, 739.) “The question whether such an implied-in-fact
agreement exists is a factual question for the trier of fact unless
the undisputed facts can support only one reasonable conclusion.
39
(Ibid.) ”
The undisputed facts here can support only one reasonable
conclusion: that Pomona and Regency did not have an implied-
in-fact contract. Regency recognized, as early as 2010, that any
amendment or extension of the 1993 agreement would need to be
processed through public channels and reduced to writing. The
record demonstrates that Regency and Pomona recognized
throughout their negotiations the need to comply with public
notice, publication, and city council procedures. As the trial court
recognized, those procedures include a requirement that
ordinances adopting contracts be introduced on a first read and
then “not be passed within five days of their introduction, nor at
other than a regular meeting or at an adjourned regular
meeting.” (Gov. Code, § 36934.) They also require an express
agreement between the parties, negating any notion that Pomona
and Regency intended to extend the agreement solely by virtue of
their conduct.
Pomona also contends the court erred by interpreting the
agreement in such a way as to render it unlawful. The general
rule indeed is that a contract should not be construed in a
manner that will render it unlawful, “if it reasonably can be
construed in a manner which will uphold its validity.”
(Quantification Settlement Agreement Cases, supra, 201
Cal.App.4th at p. 798, emphasis added.) Here, there is no
reasonable way to construe the belatedly adopted July 7, 2014
written agreement as an amendment to or extension of the
original agreement, which by its terms had terminated. Pomona
did not, as it argues, have “discretion to enter into an extension of
the development agreement, regardless of when the second read
was completed.” It faced explicit contractual time limits, which
40
elapsed before the city council adopted Ordinance No. 4190. We
find it telling that Pomona does not dispute that a new
agreement would violate the provisions of Prop. L; instead, it
argues only that the court should have interpreted the agreement
as an extension or amendment. Such an interpretation is not
supported by the facts of this case.
IV. Attorney’s Fees
The trial court awarded plaintiffs $75,200.40 in attorney’s
fees under section 1021.5. Pomona contends the award was
improper because the trial court did not consider whether
plaintiffs vindicated an important public interest, erred in
finding that the litigation conferred a significant benefit on the
public, and erred in finding that plaintiffs demonstrated the
requisite necessity and financial burden of public enforcement.
We affirm.
A. Legal Principles
Section 1021.5 provides, in relevant part, “Upon motion, a
court may award attorneys’ fees to a successful party against one
or more opposing parties in any action which has resulted in the
enforcement of an important right affecting the public interest if:
(a) a significant benefit, whether pecuniary or nonpecuniary, has
been conferred on the general public or a large class of persons,
(b) the necessity and financial burden of private enforcement . . .
are such as to make the award appropriate, and (c) such fees
should not in the interest of justice be paid out of the recovery, if
any.” (§ 1021.5.) The statute “codifies the private attorney
general doctrine and acts as an incentive to pursue ‘“‘public-
interest litigation that might otherwise have been too costly to
bring.’”’ [Citation.]” (Hall v. Department of Motor Vehicles (2018)
26 Cal.App.5th 182, 188.) To obtain fees thereunder, the moving
41
party must establish “(1) he or she is a ‘successful party,’ (2) the
action has resulted in the enforcement of an important right
affecting the public interest, (3) the action has conferred a
significant benefit on the public or a large class of persons, and
(4) an attorney fees award is appropriate in light of the necessity
and financial burden of private enforcement.” (Ibid.)
“We review an attorney fee award under section 1021.5
generally for abuse of discretion. Whether the statutory
requirements have been satisfied so as to justify a fee award is a
question committed to the sound discretion of the trial court,
unless the question turns on statutory construction, which we
review de novo.” (Collins v. City of Los Angeles (2012) 205
Cal. App. 4th 140, 152 (Collins).) Under the abuse of discretion
standard, we presume the trial court properly applied the law
and acted within its discretion unless the appellant affirmatively
shows otherwise. (Ibid.)
B. Analysis
1. “Important public interest” and
“significant benefit”
Pomona contends that the trial court failed to consider the
importance of the public interest plaintiffs “claim to have
vindicated by invalidating the Third Amendment.” Quoting
Woodland Hills Residents Assn., Inc. v. City Council (1979) 23
Cal. 3d 917, 938 (Woodland Hills), Pomona argues that the trial
court was obliged to “realistically assess the litigation and
determine, from a practical perspective, whether or not the action
served to vindicate an important right so as to justify an attorney
fee award under a private attorney general theory.” Pomona
similarly argues that the trial court failed to properly evaluate
the significance of the benefit to the public of the litigation. It
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contends the court relied on “mere enforcement of a statutory
enactment,” which Woodland Hills “expressly disavowed” as a
sufficient basis for awarding fees.
In Woodland Hills, the plaintiffs prevailed on a procedural
rather than substantive basis and sought attorney’s fees under
section 1021.5. (See Woodland Hills, supra, 23 Cal.3d at p. 937.)
The defendant argued that fees were unwarranted because
ensuring a defendant complies with procedural requirements
“does not rise to the level of an ‘important right’ for purposes of
section 1021.5.” (Ibid.) The Supreme Court rejected that
contention, holding that “the fact that a plaintiff is able to win his
case on a ‘preliminary’ issue, thereby obviating the adjudication
of a theoretically more ‘important’ right, should not necessarily
foreclose the plaintiff from obtaining attorney fees under a
statutory provision.” (Id. at p. 938.) When a plaintiff prevails on
a preliminary issue, the Court instructed, “the trial court,
utilizing its traditional equitable discretion (now codified in
§ 1021.5), must realistically assess the litigation and determine,
from a practical perspective, whether or not the action served to
vindicate an important right so as to justify an attorney fee
award. . . .” (Ibid.) The Court further held that, because the
public always benefits when statutes are enforced, the trial court
should “determine the significance of the benefit, as well as the
size of the class receiving benefit, from a realistic assessment, in
light of all the pertinent circumstances, of the gains which have
resulted in a particular case.” (Id. at pp. 939-940.)
Here, the first quotation from Woodland Hills is inapposite.
Plaintiffs prevailed on the merits of their petition; the trial court
did not resolve the matter on a technicality or at a preliminary
stage. Moreover, the trial court’s order indicates it did consider
43
the importance of the public interest at stake. The trial court
cited plaintiffs’ papers and noted their argument that “they
vindicated the right to have Proposition L enforced. They point
out that the citizens of Pomona were seriously concerned about
the proliferation of billboards in Pomona and wanted to make
sure they had a voice in the approval of any future billboards and
that the City Council completely ignored Proposition L.” The
trial court subsequently stated its conclusion that it “agrees with
Plaintiffs that effectuating the voters’ right to enforce Proposition
L conferred a significant benefit on the general public.” This
discussion shows that the trial court identified the public interest
and evaluated its importance.
It also demonstrates that the trial court appropriately
assessed the significance of the benefit. The entire citizenry of
Pomona, which passed Prop. L in the wake of the 1993
agreement, benefited from the enforcement of Prop. L. The trial
court found persuasive plaintiffs’ argument that “‘the citizens of
Pomona were seriously concerned about the proliferation of
billboards in Pomona’” and concluded that ensuring that no
additional billboards were erected in the city was a significant
benefit to this sizeable class of persons. Pomona has not
persuaded us that the trial court erred in finding the benefit
gained was significant and widespread.
2. “Necessity and financial burden”
“The necessity and financial burden requirement
encompasses two issues: ‘“‘whether private enforcement was
necessary and whether the financial burden of private
enforcement warrants subsidizing the successful party’s
attorneys.’” [Citation.]’ [Citation.]” (Collins, supra, 205
Cal.App.4th at p. 154.) “Private enforcement is necessary only if
44
public enforcement of the ‘important right affecting the public
interest’ (§ 1021.5) at issue is inadequate.” (Ibid.) The financial
burden of private enforcement includes both the costs of litigation
and any financial benefits reasonably expected by the successful
party. (Ibid.) “The appropriate inquiry is whether the financial
burden of the plaintiff’s legal victor outweighs the plaintiff’s
personal financial interest. [Citations.] An attorney fee award
under section 1021.5 is proper unless the plaintiff’s reasonably
expected financial benefits exceed by a substantial margin the
plaintiff’s actual litigation costs.” (Ibid.)
Pomona contends the trial court “erred in failing to hold
[Plaintiffs] to their burden to establish that there was a necessity
of private enforcement.” It argues that plaintiffs merely
“proffered . . . a self-serving statement . . . unsupported by any
facts,” that the city council ignored Prop. L, which was too
“nonspecific and conclusory” to support the award. We disagree.
The trial court had not only the assertion of plaintiffs’ attorney
that Pomona failed to comply with Prop. L, but also an entire
administrative record demonstrating the city’s awareness that
the 1993 agreement was expiring, that the billboards had to be
removed by its expiration date, and that Prop. L could bar the
alteration or relocation of the billboards covered under the
agreement. Indeed, the court stated it was “persuaded that, in
this case, there was a necessity of private enforcement because
but for this litigation, the City would have renewed the
development agreement.” The record amply supported this
finding.
Pomona also argues that the trial court’s finding that
plaintiff s incurred a financial burden sufficient to warrant fees
“was erroneously predicated on a finding that they did not have a
45
pecuniary interest in the outcome of the litigation.” The trial
court indeed found that “there is no evidence that [Plaintiffs’]
success in this action will cause them to attain any pecuniary
benefit or advantage. The evidence presented by Respondents
demonstrates, at most, that [Plaintiffs] have a history of
litigating similar issues for purposes of harassing competitors.”
The trial court reasoned that section 1021.5 “focuses, however, on
the question whether [Plaintiffs] will achieve a pecuniary
advantage from the litigation, not on whether the litigation will
impose a burden on the Respondent.” Pomona contends this “too
narrowly defined what constitutes a financial benefit,” and that
plaintiffs “created a new bidding opportunity for themselves as
they have created pressure on the City to replace the revenue and
other benefits that it would have otherwise received through the
Third Amendment.” In support of this contention, it relies on
Arnold v. California Exposition and State Fair (2004) 125
Cal. App. 4th 498 (Arnold). We are not persuaded.
Pomona has not pointed to any evidence in the record
showing that Price or Citizens is a competitor of Regency, is in
the billboard business, or stands to gain from the cancellation of
Regency’s contract. Even if Price or Citizens did compete with
Regency, they too would be subject to the strictures of Prop. L
and thus unable to financially benefit from the enforcement of
the provision. 7 This is in contrast to Arnold, in which the
plaintiff, who previously operated a harness racing operation at
the California Exposition, successfully sued to vacate agreements
7Pomona asserts, accurately, that plaintiffs were working
to pass a ballot initiative amending Prop. L to expand the eligible
display zones and allow the construction of new billboards. This
is of no moment, as their efforts were unsuccessful.
46
California Exposition had entered with one of his competitors.
(See Arnold, supra, 125 Cal.App.4th at p. 511.) The court found
that it was “no stretch to say the record shows Arnold was
chomping at the bit to again run the Cal Expo harness racing
operation. On several occasions over a significant period of time,
he informed Cal Expo that he would provide it with hundreds of
thousands of additional revenue dollars if he were awarded the
harness racing contract. Arnold was quite specific about these
amounts and intent.” (Ibid.) Therefore, the court concluded, it
was not an abuse of discretion for the trial court to find that “his
financial interest in the harness racing contract was specific,
concrete and significant, and based on objective evidence.” (Ibid.)
There is no such objective evidence of Price’s or Citizens’s intent
to benefit from the lawsuit here. The trial court did not err in
finding that neither stood to gain from the suit.
V. Sanctions
Respondents filed a motion for sanctions on appeal,
alleging that Pomona brought this appeal solely for purposes of
delay. Respondents sought sanctions in the “minimum” amount
of “$200,000.00 as a one month estimate of the revenue” Regency
earned while operating its billboards.
Whether to impose appellate sanctions is a matter within
our discretion. (Winick Corp. v. County Sanitation Dist. No. 2
(1986) 185 Cal. App. 3d 1170, 1181-1182.) Under section 907 and
California Rules of Court, rule 8.276(a)(1), we may award
sanctions when an appeal is frivolous and taken solely to cause
delay. “[A]n appeal should be held to be frivolous only when it is
prosecuted for an improper motive—to harass the respondent or
delay the effect of an adverse judgment—or when it indisputably
has no merit—when any reasonable attorney would agree that
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the appeal is totally and completely without merit. [Citation.]”
(In re Marriage of Flaherty (1982) 31 Cal. 3d 637, 650.) “The two
standards are often used together, with one providing evidence of
the other. Thus, the total lack of merit of an appeal is viewed as
evidence that appellant must have intended it only for delay.”
(Id. at p. 649.)
Sanctions are not warranted in this case. The issues
Pomona identified and pursued in this appeal were arguable and
not frivolous. Moreover, plaintiffs’ request for $200,000 has no
basis in the record. The motion accordingly is denied.
DISPOSITION
The judgment and order of the trial court are affirmed.
Respondents’ motion for sanctions is denied. Respondents are
awarded their costs on appeal.
CERTIFIED FOR PUBLICATION
COLLINS, J.
We concur:
MANELLA, P. J.
WILLHITE, J.
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