Brown v. Capital Asset Partners CA2/2 ( 2024 )

Filed 1/17/24 Brown v. Capital Asset Partners CA2/2
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
ROBERT A. BROWN et al., B321763
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. 21STCV14819)
v.
CAPITAL ASSET PARTNERS
et al.,
Defendants and
Respondents.
APPEAL from an order of the Superior Court of Los
Angeles County, Upinder S. Kalra and Yolanda Orozco, Judges.
Affirmed.
Law Offices of Robert A. Brown and Robert A. Brown for
Plaintiffs and Appellants.
Counts Law Firm, Emahn Counts and Dina Adham for
Defendants and Respondents Esfandiary, LLC, and Capital Asset
Partners, LLC.
Hydee Feldstein Soto, City Attorney, Denise C. Mills, Chief
Deputy City Attorney, John Heath, Terry P. Kaufmann-Macias,
Adrienne S. Khorasanee, Assistant City Attorneys, and Oscar
Medellin, Deputy City Attorney, for Defendant and Respondent
City of Los Angeles.
******
Appellants Robert Brown and Susana Brown (the Browns)
challenge the judgment of dismissal entered after the demurrer of
Esfandiary, LLC, and Capital Asset Partners, LLC (collectively
Esfandiary), and the separate demurrer of City of Los Angeles
(the City) were sustained without leave to amend. We find the
Browns’ claims for declaratory relief do not plead the existence of
an actual controversy related to Esfandiary’s 2019 application to
subdivide the property because judicially noticed facts show the
application had already been rejected by the City. Thus, we
affirm.
BACKGROUND
The Browns possess a road easement on Esfandiary’s
property. Esfandiary applied twice to subdivide its property—
first in 2016 and then in 2019. The City initially approved the
2016 application, but later reversed its decision because the
proposed subdivision would infringe on the Browns’ road
easement. Esfandiary submitted a revised plan in its 2019
application. However, before the City could make a decision, the
Browns filed their civil complaint on April 19, 2021. In the
complaint, the Browns sought two declarations: (1) that res
judicata bars Esfandiary from carrying out the construction
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identified in the 2021 proposed parcel map due to the denial of
the 2016 application and (2) the City has no jurisdiction to
approve the 2021 proposed map, which supports the 2019
application.1
While this action was pending on May 3, 2021, the City
rejected Esfandiary’s 2019 application. Subsequently both
Esfandiary and the City filed demurrers challenging the
sufficiency of Browns’ declaratory relief claims. Esfandiary
argued the pleadings did not establish that the City’s denial of
the 2016 application barred the 2019 application. Esfandiary also
presented a declaration from Pascha Esfandiary confirming
Esfandiary has no pending application to subdivide the property,
thus suggesting there was no actual controversy. The City also
argued that the Browns failed to allege they had exhausted their
administrative remedies and that the claims were moot due to
the rejection of the 2019 application.
The trial court sustained the City’s demurrer because the
Browns had not pleaded exhaustion of administrative remedies.
The trial court also sustained Esfandiary’s demurrer, finding no
actual controversy existed. Additionally, the trial court
determined declaratory relief was not necessary or proper under
the circumstances, citing Code of Civil Procedure section 1061.2
1 Since the 2021 proposed parcel map was filed in support of
and part of the 2019 application, our use of “2019 application”
refers to both.
2 Code of Civil Procedure section 1061 states: “The court may
refuse to exercise the power granted by this chapter in any case
where its declaration or determination is not necessary or proper
at the time under all the circumstances.”
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Finally, the Browns’ proposed amendment did not correct
the defects in their complaint. The Browns sought only to add an
exhibit about the denial of the 2016 application and more
allegations that the 2019 application had been denied. The trial
court concluded the proposed amendment occurred subsequent to
the filing of the complaint, specifically the denial by the City of
the second application and the Browns’ implicit
acknowledgement there was no longer a current controversy.
Thus, no leave to amend was granted.
The Browns filed a timely notice of appeal.
DISCUSSION
I. Applicable law and standard of review
A demurrer tests the legal sufficiency of the complaint.
(Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 1497
(Hernandez).) First, we review the complaint de novo to
determine whether it contains sufficient facts to state a cause of
action. (Ibid.) “In doing so, we accept as true the properly pleaded
material factual allegations of the complaint, together with facts
that may be properly judicially noticed.” (Ibid.) Reversal is
warranted if facts were alleged showing that the plaintiff is
entitled to relief under any possible legal theory. (Ibid.)
When a demurrer is sustained without leave to amend, we
must determine whether the trial court abused its discretion in
declining to grant leave to amend. (Hernandez, supra, 49
Cal.App.4th at p. 1497.) “[W]e will only reverse for abuse of
discretion if we determine there is a reasonable possibility the
Unless otherwise indicated, all future statutory references
are to the Code of Civil Procedure.
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pleading can be cured by amendment.” (Id. at p. 1498.) “The
burden of proving such reasonable possibility is squarely on the
plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
II. There is no actual controversy to resolve
In the complaint the Browns sought a judicial adjudication
of the parties’ rights and duties related to Esfandiary’s 2019
application. First, the Browns sought a declaration that, due to
the City’s denial of the 2016 application, res judicata barred
Esfandiary from implementing the plans in the 2019 application.
Second, the Browns sought a declaration that the City’s denial of
the 2016 application deprived it of jurisdiction to approve the
proposed parcel map in the 2019 application.
Declaratory relief is available to a party “who desires a
declaration of his or her rights or duties with respect to another.”
(§ 1060.) A complaint for declaratory relief is legally sufficient if
it sets forth facts showing the existence of an actual controversy
relating to the legal rights and duties of the parties and requests
that the rights and duties of the parties be adjudged by the court.
(Monterey Coastkeeper v. California Regional Water Quality
Control Bd., etc. (2022) 76 Cal.App.5th 1, 13 (Monterey
Coastkeeper).)
“A party seeking declaratory relief must show a very
significant possibility of future harm. [Citation.] In assessing
whether declaratory relief is available, a court determines
whether ‘a probable future dispute over legal rights between
parties is sufficiently ripe to represent an “actual controversy”
within the meaning of the statute authorizing declaratory relief
(Code Civ. Proc., § 1060), as opposed to purely hypothetical
concerns . . . .’” (Monterey Coastkeeper, supra, 76 Cal.App.5th at
p. 13.)
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“‘The ripeness requirement, a branch of the doctrine of
justiciability, prevents courts from issuing purely advisory
opinions.’ [Citation.] Generally speaking, a controversy is ripe
‘“when it has reached, but has not passed, the point that the facts
have sufficiently congealed to permit an intelligent and useful
decision to be made.”’ [Citation.] ‘In contrast, unripe cases are
those “‘in which parties seek a judicial declaration on a question
of law, though no actual dispute or controversy ever existed
between them requiring the declaration for its determination.’”’”
(Redondo Beach Waterfront, LLC v. City of Redondo Beach (2020)
51 Cal.App.5th 982, 1000.)
Here, there is no actual controversy requiring a judicial
declaration on Esfandiary’s 2019 application because judicially
noticed facts show the application was rejected by the City.
During hearings on January 14 and 19, 2022, the Browns
acknowledged the rejection of Esfandiary’s 2019 application.
Thus any court ruling on the rights and duties pertaining to the
2019 application would not resolve a current dispute; instead, the
ruling would be an idle act or purely advisory.
The Browns argued the rejection of the 2019 application
does not make their claims deficient, citing Californians for
Native Salmon etc. Assn. v. Department of Forestry (1990) 221
Cal.App.3d 1419, where an actual controversy was recognized
after an application to a public entity was withdrawn. In that
case, a company obtained approval from the Department of
Forestry for the cutting of 76 acres of fir trees. The plaintiffs sued
the department, seeking a writ of mandate vacating the approval
and declaratory relief concerning the department’s policies for
evaluating similar applications. Subsequently the company
withdrew its application. Based on that withdrawal, the trial
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court found no actual controversy existed and sustained the
department’s demurrer without leave to amend. The plaintiffs,
however, had also sought relief pertaining to the department’s
policies. Thus the Court of Appeal reversed, finding the
withdrawal did not moot the controversy over the department’s
policies.
Here, the Browns’ lawsuit concerned solely Esfandiary’s
2019 application, not the City’s overall policies on subdivision
approvals. With the 2019 application rejected, there is no need
for the court to determine whether res judicata applies or
whether the City has jurisdiction. As a result, the rejection of the
2019 application makes moot the controversy identified in the
pleadings.
The Browns also argue the need for declaratory relief for
any future applications Esfandiary might file. They attempt to
find support in three inapposite cases. First, in Redwood Coast
Watersheds Alliance v. State Bd. of Forestry & Fire Protection
(1999) 70 Cal.App.4th 962, the Court of Appeal affirmed a trial
court’s determination that the State Board of Forestry had a
mandatory duty under the Z’berg-Nejedly Forest Practice Act of
1973 to enact timber regulations. The case concerned the
interpretation of a statute in order to determine whether the
board had a mandatory or discretionary duty to enact the
regulations. Despite the fact the board had promulgated
regulations, the court found a justiciable issue existed because
the board might avoid its duty by continually delaying the
effective date of the regulations.
The Browns’ argument is not supported by this case
because the Browns are not seeking a determination of an
existing dispute, such as whether the City had a mandatory or
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discretionary duty under a statute. No actual dispute exists here
until Esfandiary files an application for the court to review the
proposed plans for the subdivision to determine if they burden
the Browns’ road easement.
In the second case offered by the Browns, Mefford v. City of
Tulare (1951) 102 Cal.App.2d 919, the court addressed a
challenge to the City of Tulare’s ordinance requiring property
owners to file subdivision maps. The plaintiff claimed the
ordinance was invalid even though he had not filed a subdivision
map or sought to comply with the ordinance. The Court of Appeal
found declaratory relief was a proper method for adjudicating the
validity of the ordinance. The case thus concerned an actual
controversy over the validity of an ordinance and not the validity
of any unfiled subdivision map.
In the third case, City of Tiburon v. Northwestern Pac. R.R.
Co. (1970) 4 Cal.App.3d 160, the city claimed the defendants had
violated ordinances regulating subdivisions. The claim arose from
a lease agreement that included the option to purchase the
property through five deeds that separated the property into five
parcels. The city sought remedies to bar the defendants from
selling or leasing the property until they complied with the
statutes and ordinances governing property subdivisions. The
Court of Appeal found an actual controversy existed regarding
whether the defendants had violated the statutes and ordinances
through the lease agreement. This case does not assist the
Browns as they did not seek a declaration that Esfandiary is
currently violating an ordinance or statute.
In each of the above cited cases, the Court of Appeal found
an actual controversy existed without an application to the public
entity because the disputes concerned policies, statutes, and
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ordinances. Since the Browns’ claims do not concern a dispute
over a policy, statute, or ordinance, they have failed to show their
pleadings meet the necessary standard. Instead their dispute
concerns Esfandiary’s efforts to subdivide its property at all.
Until Esfandiary files another subdivision application, there is no
actual controversy that would support a claim for declaratory
relief.
Therefore, we find the demurrers by Esfandiary and the
City were properly sustained.
III. The Browns’ claim against the City is barred by the
exhaustion of remedies doctrine
Though the absence of an actual controversy alone
invalidates the Browns’ claims against Esfandiary and the City,
their claims against the City are also barred because they sought
a declaration that interfered with ongoing administrative
processes. “Administrative proceedings should be completed
before the issuance of a judicial writ. The rule is not a matter of
discretion; compliance is a jurisdictional prerequisite to judicial
review. [Citation.] ‘“Exhaustion” applies where a claim is
cognizable in the first instance by an administrative agency
alone; judicial interference is withheld until the administrative
process has run its course.’” (California Water Impact Network v.
Newhall County Water Dist. (2008) 161 Cal.App.4th 1464, 1489.)
Administrative procedures in Los Angeles Municipal Code
sections 17.51 to 17.53 identify how property owners can obtain
approval for proposed parcel maps. Section 17.54 describes the
appeal process.
The Browns do not allege the administrative proceedings
involving Esfandiary’s 2019 application have been completed nor
do they seek relief concerning the final determination on a
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proposed parcel map. Instead, the Browns seek a court ruling
that would interfere with an ongoing agency proceedings. This
judicial interference is barred by the doctrine of exhaustion of
remedies.
The Browns cite Knickerbocker v. City of Stockton (1988)
199 Cal.App.3d 235 (Knickerbocker), arguing they need not
exhaust administrative remedies because they seek to enforce the
outcome on the 2016 application, not challenge any decision by
the City. In Knickerbocker, the plaintiff was fired from his
position with the defendant as a police officer with the rank of
lieutenant. He challenged his firing at a Civil Service
Commission hearing and was reinstated at a lower rank. He did
not challenge the commission’s ruling by a writ; rather, he filed a
lawsuit seeking damages for the firing. The plaintiff’s acceptance
of the reinstatement, without a reversal of the justification for his
demotion, resulted in the dismissal of his lawsuit due to
collateral estoppel.
The Browns rely on language that a plaintiff is not required
to attack an administrative determination in which the plaintiff
agrees. (Knickerbocker, supra, 199 Cal.App.3d at p. 244.) They
argue there is no need to exhaust administrative remedies
because they acquiesced in the outcome of the 2016 decision. Yet
they seek declaratory relief for the 2019 application. The Browns’
acceptance of the outcome of the 2016 application does not relieve
them of the need to follow the City’s procedures in contesting the
2019 application. The Browns’ failure to plead exhaustion of
remedies in the proceedings on the 2019 application
demonstrates the trial court lacked jurisdiction to grant relief.
The trial court properly sustained the City’s demurrer
under this additional ground.
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IV. No abuse of discretion in the denial of leave to
amend
The trial court sustained Esfandiary’s and the City’s
demurrers to the Browns’ claims without leave to amend.
The Browns offer no amendment addressing the
fundamental issue: the lack of an actual controversy. Rather they
seek declaratory relief related to the already rejected 2019
application or a hypothetical future application. Any such
declaration would be moot or purely advisory.
Under section 1061, courts may refuse to grant declaratory
relief when such relief “is not necessary or proper at the time
under all the circumstances.” Here, the City has already rejected
Esfandiary’s 2019 application. While Esfandiary might file a
future application, it is not possible to make a useful decision on
whether a hypothetical subdivision plan will burden the Browns’
road easement. Thus, the trial court properly exercised its
discretion by refusing to adjudicate the parties’ rights and duties
when it would be an idle act or purely advisory.
Therefore it was not an abuse of discretion to deny leave to
amend.
DISPOSITION
The order is affirmed. Respondents are awarded their costs
of appeal.
CHAVEZ, J.
We concur:
LUI, P. J. ASHMANN-GERST, J.
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