Judge Holly J. Fujie, Case 19STCP00482 2022-10-31 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Real Party in Interest/Cross-Defendant Regency Outdoor Advertising, Inc. (“Regency”)

RESPONDING PARTIES: (1) Defendant/Cross-Complainant City of Pomona (the “City”); and (2) Plaintiffs

This action concerns billboard structures (the “Billboards”) that are operated by Regency. Plaintiffs initiated this action on February 14, 2019 by filing a complaint and petition for writ of mandate. After several rounds of demurrers, Plaintiffs’ currently operative sixth amended complaint (the “6AC”) alleges: (1) declaratory relief, injunctive relief and damages for deprivation of civil rights (First Amendment). On April 29, 2019, the City filed a cross-complaint (the “XC”) against Regency alleging: (1) implied equitable indemnity; (2) contribution; (3) declaratory relief; (4) express contractual indemnity; and (5) breach of contract.

On September 6, 2022, Regency filed an ex parte application for a temporary restraining order and order to show cause why a preliminary injunction should not issue against Pomona (the “Motion”). Regency seeks to enjoin the city from taking any action to abate, remove, destroy, or physically alter the Billboards. The Court granted a temporary restraining order on September 30, 2022.

Under California Code of Civil Procedure (“CCP”) section 526, subdivision (a)(3), a preliminary injunction may be granted when it appears, during the litigation, that a party to the action is doing, is threatening, or is about to do some act in violation of the rights of another party to the action concerning the subject of the action and tending to render the judgment ineffectual. (CCP § 526, subd. (a)(3).) A preliminary injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefore. (CCP § 527, subd. (a).) No preliminary injunction shall be granted without notice to the opposing party. (Id.)

To obtain a preliminary injunction, a plaintiff ordinarily is required to present evidence of irreparable injury or interim harm that it will suffer if an injunction is not issued pending an adjudication of the merits. (White v. Davis (2003) 30 Cal.4th 528, 554.) A trial court must weigh two interrelated factors when deciding whether to grant a plaintiff’s motion for a preliminary injunction: (1) the likelihood that the plaintiff will prevail on the merits at trial; and (2) the relative interim harm to the parties from the issuance or nonissuance of the injunction, that is, the interim harm the plaintiff is likely to sustain if the injunction is denied as compared to the harm the defendant is likely to suffer if the preliminary injunction is issued. (SB Liberty, LLC v. Isla Verde Assn., Inc. (2013) 217 Cal.App.4th 272, 280.) The burden is on plaintiffs, as the parties seeking injunctive relief, to show all elements necessary to support issuance of a preliminary injunction. (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)

On or about June 24, 1993, the City and Regency entered into an agreement (the “Development Agreement”) authorizing Regency to construct and operate the Billboards along freeways in Pomona. (Declaration of Philip Berardi (“Berardi Decl.”), Exhibit A.) The Development Agreement provided for an initial ten-year term, which automatically extended into a second ten-year term. The Development Agreement was authorized by Ordinance 3692, adopted on May we, a993. The first amendment to the Development Agreement was authorized by Ordinance 3710, adopted on October 11, 1993.

“Effective Date and Term. The Effective Date of this Agreement shall be thirty (30) days after City enacts an ordinance approving this Agreement ("Effective Date"). The first term of this Agreement shall 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 of this Agreement. This Agreement shall be automatically extended for a second ten (10) year term, subject to the increase in fees set forth in Section I.B. above, unless such term is otherwise terminated, modified or extended by circumstances set forth in this Agreement or by mutual consent of the parties.

At least sixty (60) days before the end of the final ten (10) year term, Developer shall apply for a separate demolition permit for each New Structure. Provided that City has timely issued demolition permits, Developer shall remove all of the New Structures on or before the last day of the final ten (10) year term of this Agreement. In the event that Developer fails to remove any of the New Structures by the end of the final ten (10) year term of this Agreement, City shall have the right to remove said remaining New Structures and to charge Developer its actual costs of removal. In addition, in the event that Developer fails to remove any of the New Structures by the end of the final ten (10) year term of this Agreement, Developer shall pay City a fine of either (i) five hundred dollars ($500.00) a day, which shall be adjusted annually in accordance with the CPI Forumula [sic], or (ii) the actual amount of revenues received by Developer for the New Structures for the period following the end of the final ten (10) year term of this Agreement, whichever is greater. Developer hereby waives any causes of action it may have to postpone removal of the New Structures under this paragraph after the final ten (10) year term of this Agreement.”

On November 1, 1993, the City adopted Proposition L, which added Section .503-K-K to the Pomona Zoning Code (the “Zoning Code”) prohibiting new or structurally altered offsite billboards within the City. (See Bolstad Decl., Exhibit 1.) Section .503-K-H of the Zoning Code requires that illegal signs be abated. The Zoning Code does not require abatement of legal nonconforming signs, which are defined as signs which were legally installed under laws or ordinances in effect at the time of their installation but do not comply with subsequently enacted laws or ordinances.

Before the expiration of the second term of the Development Agreement, the City and Regency negotiated a proposed third extension, which the City approved on July 7, 2014 when it adopted Ordinance No. 4190. (Berardi Decl. ¶ 6.)[2] On August 23, 2014, Plaintiffs filed a petition for writ of mandate to set aside Ordinance No. 4190 on the grounds that it violated Proposition L (the “First Writ”). The First Writ was granted in April 2017 and was affirmed by the court of appeal on November 7, 2018 in Citizens for Amending Proposition L v. City of Pomona (2018) 28 Cal.App.5^th 1159. (Berardi Decl. ¶¶ 7-8.)[3]

On July 28, 2022, Regency made an offer to the City to resolve issues in the XC and learned that the City is in the process of identifying an abatement process to remove the Billboards. (Berardi Decl. ¶ 10, Exhibit D.) The City did not agree to postpone the abatement process until the conclusion of this litigation. (Bolstad Decl. ¶ 7; Berardi Decl. ¶ 10, Exhibit D.)

Although seeking an injunction against the City, Regency has not filed a cross-complaint as of the time of the hearing. The moving papers show that on September 6, 2022 Regency notified the City of the TRO hearing and asked if it would stipulate to allow Regency to file a cross-complaint. (See Declaration of David C. Bolstad (“Bolstad Decl.”) ¶ 3, Exhibit 1.) The September 6, 2022 email contains an attachment of Regency’s proposed cross-complaint (the “Regency XC”), which alleges: (1) declaratory relief against Pomona; and (2) declaratory relief against non-party Union Pacific Railroad Company. As of the time of this hearing, neither a stipulation nor motion for leave to file a cross-complaint has been filed with the Court. The 6AC and the City’s XC are the only two operative pleadings in this litigation. As a result, it is unclear upon which claims Regency contends it is likely to prevail.

Both the City’s XC and the proposed Regency XC concern the Development Agreement, but they do not seek a determination of the same issues. The City is suing for indemnity for costs incurred in this litigation against Plaintiffs and alleges that Regency is in breach of the Development Agreement because it failed to remove the Billboards after the expiration of the second ten-year term. The cause of action alleged against the City in the proposed Regency XC, however, only seeks a judicial declaration that the Billboards are not subject to the mandatory abatement provision in the City’s Zoning Code because they are legal nonconforming signs. Regency’s presentation of facts and evidence in the Motion focuses on the issue of whether the City is required to abate the Billboards as opposed to whether the City is authorized to abate them. This framing of the issue appears to conflate the causes of action initially alleged by Plaintiffs seeking to mandate the City to remove the Billboards with the City’s cross-claims about Regency’s alleged breach of the Development Agreement. In its moving papers, Regency does not address whether it is in breach of the Development Agreement or the merits of any of the City’s allegations. In addition, Regency neither disputes that the Development Agreement is expired and cannot be extended with Proposition L in effect (as was held by the appellate court in the First Writ proceeding) nor offers an alternate source of authority for their continued operation. In fact, Regency’s argument that it will suffer irreparable harm if the Billboards are abated is largely based on the concession that once they are removed, Regency would not be able to reconstruct them as a result of Proposition L’s restrictions on signage.

By focusing solely on whether the Billboards constitute legal nonconforming signs, Regency does not address its contractual relationship to the City or offer any facts or arguments to rebut or reinterpret the provision in the Development Agreement which states: “In the event that Developer [Regency] fails to remove any of the New Structures [the Billboards] by the end of the final ten (10) year term of this Agreement, City shall have the right to remove said remaining New Structures and to charge Developer its actual costs of removal.” (See Berardi Decl., Exhibit A at § IV.J.) Notably, Regency does not appear to offer any arguments that a determination that the Billboards are legal nonconforming signs would override the City’s authority to remove them pursuant to the Development Agreement.

Regency has not made any showing of its likelihood to prevail on the claims the City has alleged against it. To the extent that Regency is arguing that it is reasonably likely to prevail on its contention that the Billboards are legal nonconforming signs that do not require abatement, such argument is premature since there is no operative pleading seeking a determination of the issue. Moreover, Regency has not made a showing that a determination of the issue in its proposed XC would impact the City’s authority to remove the Billboards.

Because Regency has not demonstrated a possibility that it will prevail, the Court need not balance the potential harms. (See Jamison v. Department of Transportation (2016) 4 Cal.App.5th 356, 362.)[4] The Court therefore DENIES the Motion.

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court

[1] Pomona and Plaintiffs filed separate oppositions. Plaintiffs are not parties to the cross-claims between Pomona and Regency.

[2] Ordinance 4190 was passed after the June 24, 2014 expiration of the Development Agreement’s second ten-year term.

[3] Plaintiffs initiated this litigation after the conclusion of the First Writ proceedings when the Billboards remained operational. Earlier iterations of their pleadings sought to require the City to remove the Billboards, that were all successfully challenged by demurrers.

[4] The Court notes, however, that based on the evidence and the protracted length of the litigation concerning the subject, both in this action and in the First Writ proceeding, Regency has been on notice of the precariousness of the Billboards’ ongoing operations long before seeking injunctive relief. Regency has been aware of the City’s XC, which includes the provision citing the City’s authority to remove the Billboards in the event of a breach in the body of the pleading, since 2019. Further, the City provides evidence of its communications with Regency during the pendency of this litigation discussing its intent to have the Billboards removed, including its intention to remove the Billboards pursuant to the Development Agreement in the event that Regency did not take action, which Regency does not address in its reply papers. (See Declaration of Scott W. Ditfurth (“Ditfurth Decl.”) ¶¶ 8-13.)