The Folb Partnership v. City of Los Angeles CA2/7 ( 2020 )

Filed 9/10/20 The Folb Partnership v. City of Los Angeles CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
THE FOLB PARTNERSHIP et al., B301786
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC587659)
v.
THE CITY OF LOS ANGELES,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, David Sotelo, Judge. Reversed with
directions.
Loeb & Loeb and William M. Brody; Greenberg Glusker
Fields Claman & Machtinger and Douglas E. Mirell for Plaintiff
and Appellant Paramount Contractors & Developers, Inc.
Michael N. Feuer, Los Angeles City Attorney, Terry
Kaufmann Macias, Assistant City Attorney, and Kenneth T. Fong
and Yongdan Li, Deputy City Attorneys for Defendant and
Respondent.
INTRODUCTION
Paramount Contractors & Developers, Inc. sued the City of
Los Angeles over the City’s denial of Paramount’s application for
permits to display signs on two office buildings in Hollywood.
Paramount appeals from the judgment entered after the trial
court sustained the City’s demurrer without leave to amend.
Paramount contends the court abused its discretion in denying
Paramount leave to amend to allege that the City wrongly denied
Paramount permits for “wall signs” with “on-site” and political
messages and that the City wrongly refused to process any of
Paramount’s sign permit applications. We agree with Paramount
and reverse the trial court’s denial of leave to amend.
FACTUAL AND PROCEDURAL BACKGROUND
A. Paramount and the Folb Partnership Sue the City
The Los Angeles Municipal Code defines several kinds of
signs that are relevant here. A “wall sign” is “[a]ny sign attached
to, painted on or erected against the wall of a building or
structure, with the exposed face of the sign in a plane
approximately parallel to the plane of the wall.” (L.A. Mun.
Code, § 14.4.2.) A “supergraphic sign” is, generally speaking, a
large sign that is projected onto or hung from a building (ibid.;
see World Wide Rush, LLC v. City of Los Angeles (9th Cir. 2010)
606 F.3d 676, 682), “and which does not comply with,” among
other provisions, those governing wall signs (L.A. Mun. Code,
§§ 14.4.2, 14.4.10). An “off-site sign” is one that advertises a
business conducted “elsewhere than on the premises where the
sign is located.” (L.A. Mun. Code, § 14.4.2.) An “on-site sign” is a
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“sign that is other than an off-site sign.” (Ibid.) A “temporary
sign” is “[a]ny sign that is to be maintained for a limited
duration, not to exceed 30 days . . . .” (Ibid.)
In July 2015 Paramount and the Folb Partnership filed a
complaint in Los Angeles Superior Court “seek[ing] redress for
the City’s improper denial of [their] attempts to obtain permits
for various types of signage on their buildings” and “challeng[ing]
aspects of the City’s signage regulations” based on alleged
constitutional violations. Paramount and Folb alleged that in
2015 they “sought new permits to erect various types of signs on”
the two Hollywood buildings operated by Paramount and a third
building owned by Folb. Paramount and Folb alleged they
“sought these permits so that they could display messages for
themselves, for political campaigns, and for third parties.” More
specifically, Paramount alleged it applied for permits to erect
“[t]emporary signs to display ‘off-site’ messages for a 30-day
period,” “supergraphics signs to display ‘off-site’ messages,”
“[s]upergraphics signs to display political messages for up to a
30-day period,” and “[w]all signs to display ‘off-site’ messages.”
Paramount and Folb alleged that, although their applications
“complied with all necessary requirements,” the City “refused to
process or approve any of [their] applications and, in fact, failed
to even fully review the applications.”
Paramount and Folb asserted two causes of action based on
these allegations. In the first, Paramount and Folb alleged the
City’s sign regulations violated their free speech rights under the
United States and California constitutions. In the second,
Paramount alleged the City violated its sign regulations by
denying Paramount’s recent permit applications “[w]ithout
performing a proper review” and by not issuing permits to
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Paramount “for two types of signage” in particular: supergraphic
signs that met the requirements for “an exception to the citywide
partial ‘ban’ on supergraphics” and “temporary signs to display
off-site messages.”
B. The City Removes the Case to Federal Court, Which
Decides Part of the Case in the City’s Favor and
Remands the Rest
The City removed the case to federal court and moved to
dismiss the complaint under rule 12(b)(6) of the Federal Rules of
Civil Procedure. The district court granted the motion to dismiss
Paramount’s claims without leave to amend on the ground that,
under the doctrine of res judicata, prior litigation by Paramount
against the City over applications for permits to display signs on
the two Hollywood buildings barred Paramount’s claims in this
case. The court also granted the City’s motion to dismiss Folb’s
claim with leave to amend. After Folb filed an amended
complaint, the City moved to dismiss it, and the court granted
the motion, dismissing the amended complaint without leave to
amend. Paramount and Folb appealed, though Folb later
withdrew its appeal.1
In the Ninth Circuit Paramount abandoned its
constitutional challenge to the City’s regulations and focused on
its “claim that the City wrongfully denied its 2015 permit
applications.” The Ninth Circuit affirmed the district court’s
dismissal of “Paramount’s claim concerning supergraphics,” but
held “the district court erred in determining that res judicata
barred Paramount’s claim concerning wall signs” because its
prior litigation with the City “did not involve any dispute over
1 Thus ending Folb’s participation in this case.
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wall signs.” The Ninth Circuit therefore reversed “the district
court’s dismissal of Paramount’s claim concerning wall signs” and
remanded the case to the district court. The district court,
declining to exercise supplemental jurisdiction over a matter no
longer involving federal constitutional claims, remanded the
action to state court.
C. The Superior Court Sustains the City’s Demurrer
Without Leave To Amend
Back in state court, the City filed a demurrer to what
remained of Paramount’s complaint. The City argued “[t]he
Ninth Circuit remanded only one claim” (emphasis omitted)—
namely, that the City “failed to properly apply its local signage
regulations when it denied Paramount’s permit applications for
wall signs displaying off-site messages”—which failed as a matter
of law because the City’s sign regulations for the Hollywood area,
the Amended Hollywood Signage Supplemental Use District (the
Amended Hollywood SUD), prohibited “off-site wall signs.”
In opposing the demurrer Paramount argued, among other
things, that the applicable regulations did not categorically ban
“off-site wall signs” and that, in any event, its “claims [were] not
limited to off-site wall signs,” but included allegations Paramount
was entitled to permits for wall signs to display “on-site” and
“political” messages, which it was unable to obtain because the
City wrongfully refused to review or process any application by
Paramount for permits. Paramount asked for leave to amend, in
the event the court sustained the demurrer, to more clearly allege
that its second cause of action was not limited to asserting the
City wrongfully denied permits for “off-site wall signs” and that
Paramount was also stating a cause of action based on the City’s
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wrongful refusal to review or process any application by
Paramount for sign permits.
The trial court sustained the City’s demurrer without leave
to amend. The court observed that the “[Amended] Hollywood
SUD ordinance specifically prohibits off-site wall signs, including
temporary signs,” and concluded that the exceptions to this
provision cited by Paramount did not apply. The court further
ruled: “Paramount’s Claim is Limited to Temporary Off-Site
Wall Signs: Paramount argues that its claim is not limited to
temporary off-site wall signs, but also includes other types of
signs. The Court disagrees. The Ninth Circuit reversed the
district court’s dismissal only as to off-site message wall signs.
The only wall signs remaining in Paramount’s complaint are
temporary off-site wall signs.” The court entered judgment in
favor of the City, and Paramount timely appealed.
DISCUSSION
A. Standard of Review
“When a demurrer is sustained without leave to amend, we
decide whether there is a reasonable possibility that the defect
can be cured by amendment. [Citation.] ‘“[I]f it can be, the trial
court has abused its discretion and we reverse; if not, there has
been no abuse of discretion and we affirm.”’ . . . Plaintiff has the
burden to show there is a reasonable possibility the complaint’s
defects can be cured by amendment.” (Adams v. Bank of
America, N.A. (2020) 51 Cal.App.5th 666, 670; see Arista v.
County of Riverside (2018) 29 Cal.App.5th 1051, 1066 [“‘“Where
the complaint is defective, ‘[i]n the furtherance of justice great
liberality should be exercised in permitting a plaintiff to amend
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his complaint, and it ordinarily constitutes an abuse of discretion
to sustain a demurrer without leave to amend if there is a
reasonable possibility that the defect can be cured by
amendment.’”’”].)
B. The Trial Court Abused Its Discretion in Denying
Paramount Leave To Amend
Paramount contends the trial court abused its discretion in
denying leave to amend to allege that the City wrongfully denied
applications by Paramount for permits to display wall signs with
“on-site” and political messages, which Paramount contends the
City’s regulations allow,2 and that the City wrongfully refused to
process or review applications by Paramount for any type of sign.
We agree the trial court should have granted Paramount leave to
amend its complaint.
It appears the trial court denied Paramount leave to amend
because it believed the Ninth Circuit reversed “the district court’s
dismissal only as to off-site message wall signs.” But that is not
what the Ninth Circuit held.3 The Ninth Circuit held that
2 The City does not dispute that otherwise compliant wall
signs with on-site or political messages are permissible under its
regulations.
3 “The meaning of a court order or judgment is a question of
law within the ambit of the appellate court. [Citation.] ‘The true
measure of an order . . . is not an isolated phrase appearing
therein, but its effect when considered as a whole. [Citations.] In
construing orders they must always be considered in their
entirety, and the same rules of interpretation will apply in
ascertaining the meaning of a court’s order as in ascertaining the
meaning of any other writing. If the language of the order be in
any degree uncertain, then reference may be had to the
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Paramount’s previous litigation with the City had not involved
“any dispute over wall signs” and that therefore res judicata did
not bar Paramount’s current claim “concerning wall signs.” If the
Ninth Circuit’s ruling reversed the district court’s dismissal “only
as to off-site message wall signs,” that’s because a claim involving
“off-site message wall signs” was the only wall-sign claim the
district court had dismissed. The Ninth Circuit’s decision does
not preclude Paramount from adding allegations concerning
other kinds of wall signs.
The City argues the sham pleading doctrine precludes
Paramount from amending its allegations as it proposed to do.
Under that doctrine, “a plaintiff cannot avoid allegations that are
determinative to a cause of action simply by filing an amended
complaint which omits the problematic facts or pleads facts
inconsistent with those alleged in the original complaint. The
doctrine precludes a plaintiff from amending a complaint to omit
harmful allegations, without explanation, from previous
complaints to avoid attacks raised in demurrers.” (Tindell v.
Murphy (2018) 22 Cal.App.5th 1239, 1248.)
The doctrine does not apply. Paramount is not attempting
to overcome a successful attack in the City’s demurrer by
omitting problematic facts or by pleading facts inconsistent with
those previously alleged. Paramount proposes to allege
additional facts to clarify that, in addition to applying for permits
for wall signs with off-site messages, it applied for permits for
walls signs with on-site and political messages and that the City
refused to review its applications for permits for any kind of
circumstances surrounding, and the court’s intention in the
making of the same.’” (In re Ins. Installment Fee Cases (2012)
211 Cal.App.4th 1395, 1429-1430.)
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sign—facts that do not contradict any allegations in the original
complaint. (See JPMorgan Chase Bank, N.A. v. Ward (2019)
33 Cal.App.5th 678, 690-691 [the sham pleading doctrine “‘is not
intended to prevent . . . the correction of ambiguous facts’”];
Leasequip, Inc. v. Dapeer (2002) 103 Cal.App.4th 394, 404, fn. 6
[“the rule was not intended to preclude plaintiffs from providing
additional and non-contradictory allegations”].)
The City argues that any cause of action against it for
wrongfully refusing permits to Paramount for wall signs with on-
site or political messages is “not ripe” because Paramount did not
actually submit applications for those types of wall signs, but
only supposedly (quoting from Paramount’s opening brief)
“desired” to do so. The City argues Paramount therefore has not
received a final denial of the applications it proposes to allege the
City denied, and for that reason cannot state a cause of action
based on such applications. Paramount has made clear, however,
that it “can and will allege” that “in 2015, at the same time it
sought permits to display ‘off-site’ messages on wall signs, [it]
also attempted to obtain permits for wall signs to display political
and on-site messages” and that “[t]he City summarily refused to
accept or process these permit applications.” (See Goonewardene
v. ADP, LLC (2019) 6 Cal.5th 817, 832-833 [reviewing court must
assume the properly pleaded facts in a proposed amended
complaint are true]; Anderson v. City of San Jose (2019)
42 Cal.App.5th 683, 698, fn. 5 [“our review on appeal from the
judgment of dismissal after the sustaining of a demurrer
necessarily encompasses consideration of any possible
amendment that could cure the purported pleading defect”];
Bettencourt v. Hennessy Industries, Inc. (2012) 205 Cal.App.4th
1103, 1118 [reviewing court must accept “the truth of the
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allegations in plaintiffs’ proposed amended complaints”].) The
City’s (un)ripeness argument fails.
The City also argues Paramount cannot assert a cause of
action challenging the additional application denials because the
statute of limitations has run and the proposed new allegations
do not relate back to the filing of the original complaint.4 But the
proposed new allegations do relate back. An amended complaint
relates back to the original complaint, and thus avoids the bar of
a statute of limitations, “if both complaints rest on the same
general set of facts, involve the same injury, and refer to the
same instrumentality.” (Esparza v. Safeway, Inc. (2019)
36 Cal.App.5th 42, 60.) “In determining whether the amended
complaint alleges facts that are sufficiently similar to those
alleged in the original complaint, the critical inquiry is whether
the defendant had adequate notice of the claim based on the
original pleading.” (Pointe San Diego Residential Community,
L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195
Cal.App.4th 265, 277.) Paramount’s proposed amendments
concern the same kinds of signs (wall signs) for the same two
buildings applied for and rejected at the same time by the same
entity in the same manner with the same resulting injury as
previously alleged. And the City does not suggest amendment
would deprive it of adequate notice to prepare a defense on the
merits. (See ibid. [“‘The policy behind statutes of limitations is to
4 The City argues that under Government Code section
65009, subdivision (c)(1), “[t]here is a 90-day statute of
limitations to challenge the denial of a permit application” and
that, “[e]ven if the 3-year statute of limitations in [Civil Code
section] 338 applied, it too has long expired.”
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put defendants on notice of the need to defend against a claim in
time to prepare a fair defense on the merits.’”].)
Finally, in a single sentence, the City argues that allowing
Paramount to amend would be “highly prejudicial” to the City
because it “has litigated this case for years based on the current
complaint.” This statement is too vague to establish prejudice.
(See Board of Trustees v. Superior Court (2007) 149 Cal.App.4th
1154, 1163 [“absent a showing of prejudice to the adverse party,
the rule of great liberality in allowing amendment of pleadings
will prevail”].)
DISPOSITION
The judgment is reversed. The trial court is directed to
vacate its order sustaining the City’s demurrer without leave to
amend and to enter a new order sustaining the demurrer with
leave to amend. Paramount is to recover its costs on appeal.
SEGAL, J.
We concur:
PERLUSS, P. J. DILLON, J.*
* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
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