Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

This action stems from a dispute over a billboard lease.  Plaintiff/Cross-Defendant Rittersbacher Sunset, LLC was the owner of the property located at 8300 West Sunset Boulevard (the “Property”), the former site of the Hollywood Standard Hotel.  (Fourth Amended Cross Complaint (“4ACC”), ¶ 4.)  Defendant/Cross-Complainant Osik Media, LLC’s predecessor-in-interest acquired ownership of a static billboard structure located on the Property, pursuant to a billboard lease with Golden Crest, Inc. (“GCI”). (Id. ¶ 7.)  

On September 12, 2019, Osik entered into an amendment to the billboard lease (“Amendment”).  The Amendment extended the lease term to December 31, 2027 and provided for its immediate termination if the ground lease from which GCI’s rights in the Property were derived ever terminated:  

Lessee [Osik] acknowledges that Lessor’s [GCI’s] rights in the Property are derived through a ground lease under which Lessor is the ground lessee. Lessee [Osik] acknowledges and agrees that if for any reason the ground lease is terminated…all rights of Lessee [Osik] under the Lease shall automatically terminate and be of no further force or effect contemporaneous with termination of said ground lease.  

 

(Request for Judicial Notice “RJN”), Ex. B [Amendment], ¶ 4). 

In 2019 – at or around the time that Osik executed the Amendment – Rittersbacher was involved in a dispute with GCI regarding the amount of rent due under the ground lease (“Rent Dispute”).   Litigation was commenced, in which Rittersbacher prevailed.  (4ACC, ¶ 15.)  Rittersbacher, GCI, and the hotel operator entered into a contract whereby GCI and the hotel operator agreed to terminate the ground lease and surrender possession of the Property (“Termination Agreement”). (4ACC, ¶ 16.)   

Osik refused to acknowledge the termination of the billboard lease or surrender possession of the Property.  (Id. ¶¶ 22–24.)  Rittersbacher filed an action for unlawful detainer against Osik. (Id. ¶22.)  The court in the unlawful detainer action entered judgment in favor of Rittersbacher, restoring it to immediate possession of the Property. (RJN, Ex. C [UD Judgment], p. 2.)  The judgment was affirmed on appeal.  (4ACC, ¶ 23.)  

In November 2019 (a few months after Osik executed the Amendment acknowledging that GCI was not the owner of the Property), Osik applied to the City for a Concept Award. (4ACC, ¶¶ 13-14.) A Concept Award is a preliminary land use approval that authorizes recipients to submit permit applications to the City to construct digital billboards. (See RJN, Ex. D [Concept Award Ltr.].)  Concept Awards are only available to owners of real property upon which a billboard is proposed to be located.  (RJN, Ex. E [Concept Award Apps].) The City mandates that nobody else is permitted to apply. (Id.)  In its applications to the City, Osik and/or its agent swore under penalty of perjury that GCI owned the Property and that Osik had obtained the Property’s owner’s consent to apply. (4ACC, ¶¶ 13-14; RJN, Ex. E [Concept Award Apps.].)  

On March 26, 2021, the City issued a Concept Award based upon an application submitted by Osik. (See 4ACC, at ¶¶ 10, 13; RJN, Ex. D [Concept Award Ltr.].)  However, because the Concept Award is a land use entitlement akin to a conditional use permit that “runs with the land,” it was issued directly to Rittersbacher. (RJN, Ex. F [Concept Award Ltr.].) This was the very reason why the City mandated that only real property owners (as opposed to billboard operators) could apply.  

In or around October 2021 – approximately one month after Osik’s right to possess the Property and operate the static billboard were terminated – Rittersbacher began to publicly market the Property for sale. (4ACC, ¶ 17.) As part of its marketing, Rittersbacher’s broker published a sales flyer that provided, “Although the site contains an existing income generating static billboard, the City of West Hollywood has awarded [the Property] with the ability to install digital signage.” (4ACC, ¶ 17.)   

On April 1, 2022, Rittersbacher entered into an agreement to sell the Property to 8300 Sunset Owner, LLC (“8300 Sunset”) for $122.5 million. (4ACC, ¶ 20.). As a result of the significant delay in the closing caused by Osik’s unlawful detainer, Rittersbacher was forced to reduce the previously agreed-upon selling price by $10 million in order to close its deal. (Id. ¶ 24.) 

This hearing is on Rittersbacher’s demurrer to the 4ACC.  Rittersbacher demurs to the entire cross-complaint on the ground that the cross-complaint is barred by Osik’s unclean hands.  Rittersbacher demurs to the first cause of action for quasi-contract/restitution on the ground that it exceeds the scope of the Court’s leave to amend; Osik has never held any rights in the Concept Award; Osik cannot pursue a benefit for its own selfish motives and then recover because its self-interested pursuit benefited another, and Osik does not hold a better legal or equitable right in the Concept Award than Rittersbacher.  Rittersbacher demurs to the second cause of action for slander/disparagement of title on the ground that Rittersbacher’s alleged statements about Osik are true and privileged, and Osik has not alleged any pecuniary harm.  Rittersbacher demurs to the third cause of action for intentional interference with prospective economic advantage because Osik has failed to allege the existence of any actionable economic relationship with a third party, and Osik has failed to allege independently wrongful conduct on the part of Rittersbacher.   

REQUEST FOR JUDICIAL NOTICE  

Rittersbacher seeks judicial notice of two court records: an opinion of the appellate division of the Superior Court, County of Los Angeles, dated June 13, 2023, in the matter of 8300 Sunset Owner, LLC v. Osik Media, LLC, LASC Case No. 22SMUD00094 and Appellate Division Case No. 22APLC0033, and the judgment in the matter of Rittersbacher Sunset, LLC v. Osik Media, LLC, LASC Case No. 22 SMUD000094.  The court may in its discretion take judicial notice of any court record in the United States.  (Evid. Code §452(d).)  However, “[w]hile we may¿take¿judicial¿notice¿of the existence of judicial¿opinions, court documents, and verdicts reached, we¿cannot¿take¿judicial¿notice¿of the truth of hearsay statements in other decisions or court files [citation] or of the truth of factual¿findings¿made in another action”.  (Johnson & Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 768.)  Accordingly, the Court takes judicial notice of the judgment reached in the court records but not their findings of fact.   

Rittersbacher also seeks judicial notice of the Amendment to the Billboard Lease, dated September 12, 2019.  Judicial notice of the Amendment is proper because it is incorporated by reference in the cross-complaint.  (4ACC ¶ 12.)  A court may “take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff’s pleading.”  (Byrne v. Harvey (1962) 211 Cal.App.2d 92, 106.)   

Additionally, Rittersbacher seeks judicial notice of (1) a March 26, 2021 Sunset Boulevard Off-Site Advertising Signage Program Design Excellence Screening Concept Award; (2) City of West Hollywood Sunset Boulevard Off-Site Advertising Signage Program Design Excellence Screening Applications dated November 4, 2019 and August 25, 2020, and (3) City of West Hollywood Sunset Specific Plan and Amendments, dated January 25, 2019.  The Court may take judicial notice of “regulations and legislative enactments issued by or under the authority of the United States or any public entity in the United States.”  (Evid. Code §452(b).) The Court may also take judicial notice of “official acts of the legislative, executive and judicial departments of the United States and of any state of the United States.”  (Evid. Code §452(c).) The Court also grants the request pursuant to Cal. Evid. Code §452(h), as “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” 

Further, Rittersbacher asks the Court to take judicial notice of the Second Amendment to Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions, effective as of December 23, 2022, including all exhibits attached thereto, between Rittersbacher and 8300 Sunset Owner LLC ("PSA").  Judicial notice of the PSA is proper pursuant to the holdings in Knievel v. ESPN (9th Cir. 2005) 393 F.3d 1068, 1076 and Byrne v. Harvey (1962) 211 Cal.App.2d 92, 106, which provide that under the doctrine of incorporation by reference, a court may “take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached the plaintiffs’ pleading.” Osik has made factual assertions in its 4ACC that refer to the PSA.  

Rittersbacher also seeks judicial notice of the fact that the Concept Award issued by the City of West Hollywood is a land use entitlement that runs with the Property.  Judicial notice of this fact is proper pursuant to Evidence Code section 452(h), which authorizes the Court to take judicial notice of facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.   

Osik seeks judicial notice of a July 9, 1959 Ground Lease, a May 18, 2010 Estoppel Certificate, and an August 25, 2020 Design Excellence Screening Application.  The Court grants the request pursuant to Cal. Evid. Code §452(h), as “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.”  The Court also grants the request pursuant to Cal. Evid. Code § 453 as the Court must grant judicial notice of any matter specified in¿Section 452¿where a party requests it and “(a)¿Gives each adverse party sufficient notice of the request, through the pleadings or otherwise, to enable such adverse party to prepare to meet the request; and (b)¿Furnishes the court with sufficient information to enable it to take judicial notice of the matter.” 

LEGAL STANDARD¿ 

A demurrer to a complaint may be general or special.¿ A general demurrer challenges the legal sufficiency of the complaint on the ground it fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc. § 430.10, subd. (e).)¿ A special demurrer challenges other defects in the complaint, including whether a pleading is uncertain. (Code Civ. Proc. § 430.10, subd. (f).)¿ The term uncertain means “ambiguous and unintelligible.”¿ (Id.)¿ A demurrer for uncertainty should be sustained if the complaint is drafted in such a manner that the defendant cannot reasonably respond, i.e., the defendant cannot determine what issues must be admitted or denied, or what counts are directed against the defendant. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)¿ 

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable.  (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents).)  For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)  

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”).)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)  

ANALYSIS 

Rittersbacher demurs to the entire complaint on the ground it is barred by Osik’s unclean hands.  The Court agrees.   

A court can sustain a demurrer based on the doctrine of unclean hands. (See Blain v. Doctor’s Co. (1990) 222 Cal.App.3d 1048, 1055–1056, 1060–1065.) In Blain, a doctor sued his lawyer for legal malpractice alleging he had been damaged after lying at a deposition based on his attorney’s advice. (Id. at 1057–1058.)  Applying the doctrine of unclean hands, the court found that plaintiff was unable to state a cause of action for injuries necessarily caused by his own misconduct. (Id. at 1063.)  

Like the doctor in Blain, Osik’s own misconduct – unlawfully detaining the Property and lying to the City of West Hollywood – is the premise upon which all of its claims are based.  Had Osik not unlawfully detained the Property, there would have been no static billboard belonging to Osik at the Property at the time Rittersbacher marketed and sold it.  Likewise, Osik’s Concept Award applications were premised on false statements and should have never been submitted without Rittersbacher’s express consent, as required by the City.  Because Osik’s “standing” is necessarily derived from its unlawful conduct, all of its claims fail.  (Blain, 222 Cal.App.3d at 1063.)  

Osik argues that its unlawful detainer and misstatements to the City are irrelevant because Rittersbacher ratified Osik's unlawful conduct by selling the Concept Award and leveraging the unlawful presence of Osik’s sign structure to obtain a higher sales price for the property.  But Rittersbacher never sold the Concept Award to the purchaser or anyone else. (Supp. RJN, Ex. A [PSA], at Bates Nos. 15054-15055.)  The Concept Award was a land use entitlement that runs with the land and was necessarily transferred to the purchaser upon the close of Rittersbacher’s sale, along with all of the other rights attendant to property ownership.  To ensure that all parties were clear about the fact that Rittersbacher was not selling the Concept Award, Rittersbacher and the purchaser executed a Billboard Concept Award Assignment, attached as Exhibit D to the purchase agreement, wherein Rittersbacher expressly disclaimed any " ... rights to use, pursue, enforce or control that may emanate from the Concept Award. No representation or warranty is made by Owner as to Transferee’s ability to use or derive any economic or other benefit from the Concept Award." (Supp. RJN, Ex. A [2nd Am. PSA], at Bates No. 15054.).  Accordingly, no portion of the sales proceeds realized by Rittersbacher can be attributed to the Concept Award.  

Osik’s claim that Rittersbacher ratified Osik’s unlawful detainer through inclusion of a condition precedent in the purchase agreement regarding Osik’s static billboard is also incorrect.  In a first amendment to the purchase agreement, the condition precedent was deleted and replaced with a provision whereby the purchaser expressly agreed to “acquir[ e] the property subject to all claims of Osik and its affiliates with respect to the Billboard and assume[d] all risks associated with those claims and any custody, possession or control of any portion of the Billboard ....” (Id., at Bates No. 15088-15093.) Accordingly, the purchase agreement pursuant to which the Property was actually sold contained no condition whatsoever with respect to Osik’s static billboard structure or the need for an abandonment thereof. The factual predicate of Osik’s ratification argument is therefore incorrect and the doctrine is not applicable here.   

Ratification also does not apply pursuant to the equal dignities rule.  The equal dignities rule provides that “a ratification can only be made in the manner that would have been necessary to confer original authority for the act ratified ... “. (Civ. Code§ 2310.)  For example, where an agent lacking authority enters into a contract within the statute of frauds, ratification may only be made by an instrument in writing because that would have been required for the original authorization.  (Moore v. Hoar (1938) 27 Cal.App.2d 269, 280.) The only manner in which Rittersbacher could have applied for a Concept Award (or authorized Osik to do so on its behalf) was by way of executed writing submitted to the City under penalty of perjury. (See RJN ISO Dem., Ex. E [Concept Award Apps].) Insofar as Osik’s ratification claim is based entirely on Rittersbacher's alleged voluntary acceptance of alleged benefits, the absence of any allegation that Rittersbacher ratified Osik’s conduct by way of a writing executed under penalty of perjury is fatal to Osik’s claim.  

Ratification is also inapplicable because Rittersbacher rejected the benefit and could not restore it to Osik.  Where ratification is claimed based upon alleged acceptance of benefits, the principal must have been in a position to reject the unauthorized act and restore the benefit it received. “If at the time the principal is unable, through no fault of his or her own, to make that restoration, the involuntary retention of benefits will not constitute a ratification.” (1 Witkin, Summary of California Law (11th Ed. 2024 ), § 151 Voluntary Acceptance of Benefits, citing Laack v. Dimmick (1928) 95 Cal.App. 456, 467.)   

Prior iterations of Osik’s 4ACC admit that Rittersbacher rejected Osik’s Concept Award application immediately upon acquiring knowledge that one had been submitted. (2ACC, 1 35 [" ... in March 2021 ... Rittersbacher' s lawyer wrote to Osik saying that Rittersbacher did not authorize any permitting activity by Osik ... "]; see Delfino v. Agilent Technologies (2006) 145 Cal.App.4th 790 (employer did not ratify employee’s conduct because employer was unaware of it when it occurred and when employer discovered it, employer suspended employee immediately].)  These prior allegations constitute judicial admissions binding on Osik.   

The Concept Award was issued to the Property only a few days after Rittersbacher notified Osik of its rejection. Upon issuance, the Concept Award - a land use entitlement - become forever attached to the Property just as any other land use entitlement, e.g., a conditional use permit or even a zoning designation.  Rittersbacher could not simply “give it back.”   

Further, even if Rittersbacher did have the authority to alter land use entitlements issued by a governmental entity, Rittersbacher still could not restore the Concept Award to Osik because the plain language of the City’s application process made clear that Osik was never authorized to apply for it in the first place and would never be able to use it absent its acquisition of the Property.  (RJN ISO Dem. Ex. E ("The Applicant Must Be the Site Owner”).) 

Pacific Bone, Coal & Fertilizer Co. v. Bleakmore (1927) 81 Cal.App. 659, 664 is illustrative.  There, a defendant property owner’s agent purchased fertilizer and spread it on the defendant's land, who was unaware of the transaction until the fertilizer was in the ground, and therefore impossible to return.  In that case, the court found no ratification.  The court held: “There is no ratification if, at the time it becomes known that the agent exceeded his authority, the principal has put it beyond his power to return or restore the benefits received, or if without his fault conditions are such that he cannot be placed¿in statu quo¿or repudiate the entire transaction without loss, or if the continued enjoyment¿of the benefits by the principal is unavoidable.”  (Id.) 

In sum, Osik’s complaint is barred by unclean hands, and Rittersbacher did not ratify Osik’s wrongful conduct so as to avoid applicability of the defense.   

Conclusion 

For the foregoing reasons, the Court SUSTAINS the demurrer to the Fourth Amended Cross-Complaint without leave to amend. 

 

IT IS SO ORDERED. 

 

DATED: November 20, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court