Judge: Jon R. Takasugi, Case: 20STCP04014, Date: 2024-01-05 Tentative Ruling

Case Number: 20STCP04014    Hearing Date: January 5, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s demurrer is SUSTAINED PART, OVERRULED IN PART:

-         Defendant’s demurrer is OVERRULED as to the third and fourth causes of action

-         Defendant’s demurrer is OVERRULED as to the first cause of action against Plaintiff Rabadi Service Station, Inc.

-          Defendant’s demurrer is SUSTAINED, WITH 15 DAYS LEAVE TO AMEND, as the first cause of action against Virtual and Individual Defendants Karraa and Stephens.

Defendant’s motion to strike is DENIED.

            On 12/7/2020, Plaintiffs Anton Karraa, Rabadi Service Station, Inc., J. Keith Stephens, and Virtual Media, In. filed suit against the City of Los Angeles and Outfront Media, LLC alleging: (1) writ of mandate; (2) violation of California Unfair Competition Law; (3) waste; and (4) private nuisance.

            Now, Defendant Outfront Media, LLC demurs to Plaintiffs’ second, third, and fourth causes of action. Outfront also moves to strike portions of Plaintiffs’ Complaint.

Factual Background

            This action is based on a terminated license agreement through which Defendant operated a billboard on Plaintiff’s property. Defendant argues that it was required to remove the billboard upon termination. As a result, Defendant applied and received a permit from the City of Los Angeles’ Department of Building and Safety to remove the billboard, and removed it.

            Plaintiffs allege that Defendant was not required to remove the billboard, that it did not have their consent to do so, and that they illegally obtained the permit issued by the Department of Building and Safety. Plaintiffs allege they have been harmed by this improper removal because when they applied for a permit to reconstruct the billboard (they had since entered into a new license agreement whereby the company Virtual would rent the space), the permit application was denied based on new 2020 Sign Ban.

Discussion

            Defendant argues that Plaintiff cannot state a claim for the second, third, or fourth cause of action. More specifically, Defendant argues that: (1) Plaintiff lacks standing under the UCL and has not alleged a UCL violation; (2) Plaintiff consented to the alleged waste and it was required by contract; and (3) Plaintiff consented to the alleged nuisance, and the City Ordinance expressly authorized the purported nuisance.

            The Court addresses each contention in turn.

            As to the first contention, Defendant argues that Plaintiffs lack standing under the UCL because only Plaintiff Rabadi is the property owner, and the remaining Plaintiffs cannot claim they suffered economy injury based on lost rents under the license agreement because they are not parties to the agreement. The Court agrees that Plaintiffs have not alleged facts which could show Plaintiffs Virtual, Kaara or Stephens have standing, but finds sufficient facts at the pleading stage to show Plaintiffs Outfront has standing.

“[T]o have standing to bring a [UCL] cause of action, a plaintiff must ‘(1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that the economic injury was the result of, i.e., caused by, the unfair business practice … that is the gravamen of the claim.” Bower v. AT&T Mobility, LLC (2011) 196 Cal. App. 4th 1545, 577 (quoting Kwikset Corp. v. Super. Ct. (2011) 51 Cal. 4th 310, 322)

Here, Rabadi Service Station, Inc. owns the property where the billboard was removed, and alleges that this removal was improper and has now deprived it of the ability to rent out billboard advertising on its property. Accepted as true at the pleading stage, these allegations are sufficient to show that it suffered an economic loss as a result of Defendant’s alleged conduct.

While Virtual was a party to the new license agreement with Outfront, it has not alleged facts which could show it lost or was deprived of money as a result of being unable to advertise on the property, nor has it alleged facts which could show harm to its property.  Individual Plaintiffs Kaara and Stephen do not allege any facts which could show monetary or property loss. Plaintiffs’ opposition did not persuasively show otherwise. Rather, Plaintiffs’ arguments concerned a reduction in the value of the underlying real property, which is a harm only incurred by the owner.  

The Court also finds sufficient facts have been alleged to show Plaintiff Outfront’s entitlement to the injunctive relief provided for by the UCL. While Defendant argues that Plaintiffs’ allegations of unfairness are based on “tortured” interpretations of the license agreement, the Court accepts well-pled facts as true at the pleading stage. In determining the intent of the parties the court looks to the written contract as well as extrinsic evidence regarding the parties’ intent at the time the contract was made. The parties’ expectations are assessed by examining the language used in the contract, case law interpreting similar language, and relevant extrinsic evidence, including the subsequent conduct of the parties. (See Hewlett-Packard Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506.)   As a result, a determination as to the true intent and meaning of the license agreement terms is not properly made at the demurrer stage.

As for the second contention, Defendant argues that the license agreement by its express terms required the removal of the sign. In support, Defendant points to provisions such as Paragraph 8 of the License Agreement, which provides that at termination, Outfront Media, “shall remove the Sign … and [] shall restore the Property to its condition prior to the Effective Date in a manner acceptable to Licensor.” (Complaint Ex. A ¶ 8.)

However, in opposition, Plaintiffs note that later in the same paragraph the agreement provides that “Licensor, in its sole discretion, shall have the right, but not the obligation, to move all such signs, structures, and any appurtenances thereto and restore the Property to such satisfactory condition at the sole cost and expense of Licensee. (Complaint Ex. A ¶ 8.)

Thus, while the Court certainly understands Defendant’s interpretation, there do seem to be ambiguities in the contract as to who was able to remove things from the property that should not be properly resolved at the pleading stage.

Moreover, the Court disagrees with Defendant that the alleged injury to Plaintiff is repairable, not permanent. Plaintiffs allege that Outfront is now unable to reconstruct a billboard due to a new Sign Ban. “Waste is defined as an unlawful act … on the part of a tenant, resulting in permanent injury to the property.” (Avalon Pac.-Santa Ana, L.P. v. HD Supply Repair & Remodel, LLC (2011) 192 Cal. App. 4th 1183, 1212.) Here, accepted as true, Plaintiffs have alleged facts which could show that it has been permanently deprived the opportunity to sell billboard advertising space on its property as a result of Defendant’s removal.

As for the third contention, Defendant argues Plaintiffs cannot state a claim for private nuisance because they consented to the removal, and because the nuisance was expressly authorized. As set forth above, the Court finds that there are disputes as to the true meaning of the contract, and whether or not Defendant consented, which are not properly decided at this stage.

Moreover, while it is true that “[n]othing which is done or maintained under the express authority of a statute can be deemed a nuisance,” LAMC section 91.103.2 makes it a misdemeanor to obtain a building permit without “the consent of the owner of record of the property.” (Civ. Code § 3482.) Here, Plaintiffs allege that they did not consent to removal, and that the permit was thus improperly obtained through a false representation to the Department of Building and Safety that there as consent for removal. An authorization of removal obtained through improper means would not be an act done pursuant to express statutory authority. (Farmers Ins. Exchange v. California (1985) 175 Cal.App.3d 494, 503) (“[A]cts done pursuant to express statutory authority are by definition not a nuisance.”). Accepted as true, Plaintiffs have alleged facts which could show that the alleged nuisance was not authorized by statute because the act was performed without the consent to the remove as required by the statute.

Based on the foregoing, Defendant’s demurrer is sustained in part, overruled in part. Defendant’s demurrer is overruled as to the third and fourth causes of action. Defendant’s demurrer is overruled as to the first cause of action against Plaintiff Rabadi Service Station, Inc. Defendant’s demurrer is sustained, with 15 days leave to amend, as the first cause of action against Virtual and Individual defendants Karraa and Stephens.

Motion to Strike

            Defendant argues that Plaintiff cannot support a prayer for punitive damages.

            As set forth above, the Court overruled the demurrer as to the causes of action for waste and private nuisance, and concluded Plaintiff Rabadi had alleged sufficient facts to state a claim for a UCL violation. Accordingly, Plaintiffs have alleged sufficient facts at the pleading stage which could show despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. (Id., subd. (c)(2).)

            Based on the foregoing, Defendant’s motion to strike is denied.

It is so ordered.

Dated:  January    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.  

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

            Defendant’s special motion to strike (anti-SLAPP) is DENIED.

            On 12/7/2020, Plaintiffs Anton Karraa, Rabadi Service Station, Inc., J. Keith Stephens, and Virtual Media, In. filed suit against the City of Los Angeles and Outfront Media, alleging: (1) writ of mandate; (2) violation of California unfair competition law; (3) waste; and (4) private nuisance.

            Now, Defendant Outfront Media, LLC (Defendant) specially moves to strike Plaintiffs’ second and third causes of action.   

Legal Standard

On a special motion to strike pursuant to Code of Civil Procedure (CCP) section 425.16, also known as an anti-SLAPP motion, moving parties have the initial burden to demonstrate that a cause of action is subject to a special motion to strike. (Martinez v. Metabolife Inter. Ins. (2003) 113 Cal.App.4th 181, 186; Fox Searchlight Pictures Inc. v. Paladino (2001) 89 Cal.App.4th 294, 304.) First, the court must determine whether moving parties have made a prima facie showing that the attacked claims arise from a protected activity, including defendants’ right of petition, or free speech, under a constitution, in connection with issues of public interest. (Healy v. Tuscany Hills Landscape & Recreation Corp., (2006) 137 Cal.App.4th 1, 5; Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 278; Code Civ. Proc., § 425.16, subd. (e).) Moving parties can satisfy this burden by showing (1) statements made before legislative, executive or judicial proceedings, or made in connection with matters being considered in such proceedings, or (2) statements made in a public forum, or other conduct in furtherance of the exercise of the constitutional rights of petition or free speech, in connection with issues of public interest. (Code Civ. Proc., § 425.16, subd. (e); Equilon Ent., LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 66.) 

If the court finds this showing has been made, it must dismiss the cause of action unless the plaintiff meets its burden to demonstrate a probability of prevailing on the claim. (Code Civ. Proc., § 425.16, subd. (b)(1); Balzaga v. Fox News Network, LLC (2009) 173 Cal.App.4th 1325, 1336.) This means that the plaintiff must state a legally sufficient claim and must then present evidence that substantiates or sustains the claim. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 61; see also Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821 [plaintiff “must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited”].) 

Factual Background

            This action is based on a terminated license agreement through which Defendant operated a billboard on Plaintiff’s property. Defendant argues that it was required to remove the billboard upon termination. As a result, Defendant applied and received a permit from the City of Los Angeles’ Department of Building and Safety to remove the billboard, and removed it.

            Plaintiffs allege that Defendant was not required to remove the billboard, that it did not have their consent to do so, and that they illegally obtained the permit issued by the Department of Building and Safety. Plaintiffs allege they have been harmed by this improper removal because when they applied for a permit to reconstruct the billboard (they had since entered into a new license agreement whereby the company Virtual would rent the space), the permit application was denied based on new 2020 Sign Ban.

Discussion

            Defendant argues that Plaintiffs claim arises out of their application for a permit and thus arises out of protected activity, and Plaintiffs cannot establish a probability of prevailing on the merits because they were expressly required to apply for the permit and Plaintiffs consented.   

            As to the first prong of the anti-SLAPP analysis, the Court disagree Plaintiffs’ claims arise out of protected activity.

            Here, Defendant categorizes Plaintiffs’ waste claim as targeting Defendant’s procurement of a permit to remove the billboard, which it claims it was legally required to do. However, this construes Defendant’s waste claim far too narrowly.

            Per the Complaint, the waste cause of action is based on an allegation that “[a]s a result of the harm intentionally done by Defendants to the first billboard, they have committed waste and damaged the service station property unreasonably and in an amount accord to proof as trial.” (Complaint ¶ 70.) Plaintiff further alleges that “[i]n the event, such harm can be repaired, Plaintiffs damages will include loss of revenue to Virtual and of rent to Rabadi during the time of such repairs. In the event, the harm done by Defendants cannot be repaired, then their damages will include the diminished value of the service station property in the minimum amount of one million dollars to Rabadi and loss of revenue to Virtual in an amount according to proof at trial.” (Complaint ¶¶ 71-72.)

As such, by its express terms, the waste claim is based on, and arises out of, the removal of the billboard of itself. While the procurement of a permit was part of the removal, the act of filing for the permit is only incidental to the harm alleged.

“If the allegations of protected activity are only incidental to a cause of action based essentially on nonprotected activity, the mere mention of the protected activity does not subject the cause of action to an anti-SLAPP motion.”  (Scott v. Metabolife Internat., Inc. (2004) 115 Cal.App.4th 404, 414)

Courts have held that a “mixed cause of action”—that is, one based on both protected and unprotected activity—“is subject to section 425.16 if at least one of the underlying acts is protected conduct, unless the allegations of protected conduct are merely incidental to the unprotected activity.”  (Salma v. Capon (2008)161 Cal.App.4th 1275, 1287).  However, in making this inquiry, courts have generally gone beyond determining the mere existence of one claim of protected activity; instead, they look to see whether the essence or “bulk” of the cause of action is based on protected activity.  (Id. at 1288.) 

For example, in Wang v. Wal–Mart Real Estate Business Trust (2007) 153 Cal.App.4th 790, 809, the Court of Appeal overturned the trial court’s ruling that the complaint arose from protected activity, holding that the anti-SLAPP protections did not apply because the “overall thrust” of the complaint was based on unprotected activity and the protected activity—pursuit of government permits—was collateral to the parties’ dispute.

Similarly, in Baharian-Mehr v. Smith (2010) 189 Cal.App.4th 265, 273, the Court of Appeal affirmed the denial of defendant’s anti-SLAPP motion because the “gravamen” of the plaintiff’s complaint was not defendant’s protected conduct; the defendant’s petitioning activity was “ ‘only incidental’ to a business dispute based on nonprotected activity.”

Here, the pursuit of a Building and Safety permit is collateral to the parties’ dispute. The gravamen of Plaintiffs’ Complaint is that the license agreement did not require removal and that Defendant needed to obtain Plaintiffs’ consent before it removed the billboard. The thrust of Defendant’s defense is that the license agreement required removal, and that the license agreement itself expressly provided Defendant’s consent for removal.

 Plaintiffs do not allege any harm caused by the act of seeking the permit: rather, the permit is only relevant to the extent that city regulations required a permit to be obtained to remove the billboard, and thus was part of the process of removal. Moreover, while Plaintiffs allege that Defendant committed a misdemeanor by falsely representing that it had Defendant’s consent to remove the billboard, Plaintiff is not actually claiming harm based on the filing of the permit itself, but on the removal of which the permit was only a necessary procedural step. While the removal could not have been lawfully conducted without the permit this does not mean that the overall thrust of Plaintiffs’ Complaint is the permit process.

As such, like in Wang and Baharian-Mehr, this action concerns a business dispute. The petitioning activity here, i.e., the pursuit of a permit, is merely incidental to the non-protected contractual dispute. This conclusion is reinforced by the fact that Plaintiffs could assert identical claims even if Defendant had not pursued a permit. The only difference would be that instead of alleging that Defendant was improperly awarded a permit, they would allege that Defendant did not seek a permit as required, and thus the removal was improper. In light of this, the conclusion that this petitioning activity is only incidental to the claims here is reinforced.

Moreover, even assuming the permit was not incidental, Plaintiffs allege that the permit application here was entirely based on a false statement made under penalty of perjury.  “Perjured statements lack First Amendment protection not simply because they are false, but because perjury undermines the function and province of the law and threatens the integrity of judgments.” (United States v. Alvarez (2012) 567 U.S. 709, 132 S. Ct. 2537, 2539–40, 183 L. Ed. 2d 574.)

Based on the foregoing, Defendant’s special motion to strike is denied.

It is so ordered.

Dated:  January    , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.