Judge: Jon R. Takasugi, Case: 20STCV10093, Date: 2023-05-15 Tentative Ruling

Case Number: 20STCV10093    Hearing Date: May 15, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Plaintiff’s motion for new trial is GRANTED IN PART, DENIED IN PART.

Plaintiff’s motion for new trial is granted as to the disgorgement of profits and as to the scope of the injunction granted. Specifically, the Court finds that the disgorgement-of-profit sum should be limited to the profits actually received from Citibank. The Court also finds that the proper remedy for Plaintiff’s trespass is removal of the sign. Plaintiff’s motion for new trial is denied in all other respects.

On March 12, 2020, Plaintiff M&H Capital, Inc. filed suit against Yi Mei Investment, LLC, Citigroup, Inc., June-Chih Jesse Liu Md, Inc, Green Grace USA, and Time Education Center, Inc. (collectively, Defendants), alleging: (1) trespass; (2) conversion; and (3) declaratory relief.

            On May 29, 2020, Cross-Complainant Yi Mei Investment, LLC (Yi Mei Investment) filed a cross-complaint (XC) against Cross-Defendant M&H Capital, Inc., alleging: (1) adverse possession; and (2) prescriptive easement.

            Now, Defendants move for a new trial.

Discussion

            In their motion, Defendants raise the following eight issues: 1) the Court failed to read a submitted supplemental brief; (2) Plaintiff did not attach a copy of the Arcadia Development Code to the Request for Judicial Notice; (3) There is newly discovered evidence from the assistant city planner at the City of Arcadia; (4) there were excessive damages awarded; (5) the proper relief is to remove the sign and compensate Defendants monetarily; (6) there was insufficient analysis that the intrusion was willful; (7) the Court improperly concluded that the sign was a continuing trespass such that the injunctive relief granted was improper; and (8) prejudgment interest was incorrectly calculated.

            The Court addresses each in turn.

            As to the first contention, Defendants argue, without any evidence that, “[t]here is no evidence that the Court considered Defendants’ Brief” and this constitutes an irregularity warranting a new trial (Motion, 8:18-19.)

Irregularities by a trial court that constitutes grounds for a new trial are limited to “an overt act of the judge which prevents the complaining party from having a fair and impartial trial [...for which] the determination is made with reference to the course of conduct alleged to constitute an irregularity violative of a right to a fair and impartial trial.” (Dev.-Amatic Eng'g v. Republic Mortg. Co. (1970) 12 Cal. App. 3d 143, 151.)

The motion at issue in this motion for new trial is the motion of summary judgment. As such, Defendants must show irregularities or a lack of fairness in the summary judgment hearing. Defendants have not done so.

As to the second contention, Defendants contend that it was improper for the Court to consider the Arcadia Development Code because it was not included in Plaintiff’s request for judicial notice. However, it is beyond dispute that the Court is free to research and read law in deciding dispositive motions, and that includes municipal laws, codes, and ordinances. As such, the Court strongly rejects the suggestion that it can only consider a municipal code if it is submitted in a request of judicial notice.  (See, e.g., City of Corona v. Naulls, (2008) 166 Cal. App. 4th 418, 431 (“the trial court found, based upon its reading of both the City's municipal code...”).

Moreover, the Court is confused by Defendants’ suggestion that the Court merely adopted Plaintiff’s notion, without evidence, that the Arcadia Development Code precluded Plaintiff from constructing a similar sign. The express language of Arcadia Development Code Section 9103.11 et seq. limits properties to one pylon sign per street frontage. As such, the Court did not adopt this conclusion based on Plaintiff’s contention, but based on its review of the relevant code section. To add to the confusion, Defendants’ brief does not advance substantive argument to contend that the Court has misunderstood or misinterpreted the Code language.

As for the third contention, Defendants argue that they are entitled to a new trial based on newly discovered evidence. More specifically, Defendants contend that “Defendants’ property manager presented photographs to, and communicated with, Arcadia’s Assistant City Planner, Alison MacCarley, who stated [the Code did not prevent Plaintiff from obtaining a similar sign]. According to the City Planner, given that there are three big front yards on Plaintiff’s property, the biggest of which is about 15 feet x 30 feet, there was sufficient space to put at least an 8-feet tall monument sign on Plaintiff’s property.” (Motion, 10: 7-9.)  However, again, Defendants’ conduct is confusing here. First, the relevance of the Arcadia Development Code was clear even at the time of the summary judgment motion. As such, Defendants have not offered any reason as to why they would not have sought out this evidence in order to oppose Plaintiff’s motion for summary judgment.

 However, more importantly, Defendants do not submit admissible evidence of Ms. MacCarley’s contentions. Rather than submit a declaration from Ms. MacCarley or even set forth a substantive analysis as to why multiple signs are allowed in spite of Arcadia Development Code Section 9103.11 to support Ms. MacCarley’s alleged contentions, Defendants only submitted a declaration from counsel recalling Ms. MacCarley’s comments second hand. The Court must agree with Plaintiff that this constitutes inadmissible hearsay. As such, the Court has no admissible evidence before it to suggest that Plaintiff could built its own sign on the property.

As for the fourth contention, Plaintiff argues that the award of profit disgorgement is too high because “the only evidence is that Citibank paid $281 per month for the sign and none of the three other Defendant tenants ever paid for use of the sign.” (Motion, 11:5-7.) In support, Plaintiff cites Kevin Hsieh’s declaration at paragraphs 25-26 and Exhibit M. Initially, the Court granted $42,194.88 in disgorged profits under the theory that Plaintiff was disgorging from Defendants what reasonably could have been realized for renting out all four signs. However, upon further consideration, the Court finds these damages to be excessive. Upon proving trespass, “[t]here is no fixed, inflexible rule for determining the measure of damages for injury to, or destruction of, property; whatever formula is most appropriate to compensate the injured party for the loss sustained in the particular case will be adopted.” (Armitage v. Decker (1990) 218 Cal. App. 3d 887, 904 (quotations omitted). Here, Plaintiff’s contention that it would have been reaping profits from all four signs is speculative, and Defendants should only be forced disgorge those profits they actually obtained from their trespass (i.e., the profits paid by Citibank)

As for the fifth contention, Defendants argue that they submitted evidence that the sign belongs to them, and that the Court’s ruling attempts to grant ownership of the sign to Plaintiff. However, the ruling does no such thing. The ruling orders Defendants to refrain from trespassing onto the property, and contains no grant or transfer of ownership.

As for the sixth contention, Defendants argue that the proper remedy for trespass is abatement and/or damages, not to grant Plaintiff ownership of the sign. The Court agrees. As noted above, the Court’s judgment did not purport to grant or transfer ownership of the sign. Moreover, Defendants’ caselaw firmly establishes that the proper remedy of a continuing trespass is removal of the trespass. (See e.g. Brown Derby Hollywood Corp. v. Haatton (1964) 61 Cal.2d 855, 857-859; Hirshfield v. Schwartz (2001) 91 Cal.App.4^th 749, 758.) 

Notably, in opposition, Plaintiff does not identify any reported caselaw wherein a Court allowed a continuing trespass to remain on the property as a remedy for the trespass. While Plaintiff cites Hirschfield, supra, to argue that the Court has the power to fashion an injunction “so broad as to be capable of dealing with novel conditions,” it is worth noting that there is nothing to indicate that novel conditions exist here (nor does Plaintiff advance an argument to show that there is). Moreover, Plaintiff’s own opposition concedes that nothing was transferred by the ruling: “All the Court did is recognize the undisputed fact that the sign is on Plaintiff’s property and prevents Defendant from trespassing onto that property. There is no grant or transfer of ownership of anything.” (Opp., 12: 7-9.) To allow the sign to remain on Plaintiff’s property, would amount to a de facto transfer of ownership to Plaintiff given that it would now be able to avail itself of the sign. It would also amount to a determination that the trespass was a permanent trespass, rather than a continuing one, and this would have clear implications for the statute of limitations.

As such, the court finds that it was an error in law to order Plaintiff not to remove or alter any monuments or structures. The Court finds that the judgment should be altered to instruct Plaintiff to remove the signage.

As for the seventh contention, Defendants contend that Plaintiff did not engage in sufficient analysis to determine that the entry of the signage was willful and not innocent.  However, the Court did not determine that the initial encroachment was willful. Rather, the Court concluded that the encroachment became willful once Defendants were notified by Plaintiff that it considered the Sign to be an encroachment and should be removed.

However, even setting this aside, to establish an equitable encroachment, a party must show: (1) the trespass was “innocent rather than willful or negligent,” (2) the public or the property owner will not be “irreparably injured by the easement,” and (3) the “hardship to the trespasser from having to cease the trespass is greatly disproportionate to the hardship caused the owner by the continuance of the encroachment.” (Shoen v. Zacarias (2015) 237 Cal. App. 4th 16, 19 (2015) (citing Tashakori v. Lakis (2011)196 Cal. App. 4th 1003, 1009.) Here, even assuming the innocence element was met, Defendants did not submit evidence which could support a reasonable inference that either the second or third elements were met. As such, Defendants still would not have met their burden on summary judgment, and thus there is no indication that but for this determination, the result would have been different.    

Finally, as to the eighth contention, Defendants argue that the Court did not engage in sufficient analysis to conclude that the sign was a continuing trespass, contending that the Court did not appreciate the difficulty of removing the four board signs from the 30+ foot Sign, especially in light of declarations that there were electrical wiring connecting both properties. In support, Defendants cite a declaration from Citibank (Exhibit Q) and Mr. Hsieh’s declaration. However, the declaration from Alexander Mao on behalf of Citibank contains a single assertion, “Because there were electrical wirings associated to this signage, additional work was required in the construction and permitting process. The electrical wirings connected to the Citibank sign emanate from the electrical panels located within Citibank’s branch location.” (Mao Decl., ¶¶ 8-9.) This falls far short of evidence which could show that the electrical wiring is so extensive between the properties that the trespass should constitute a permanent trespass. Similarly, the Court could not locate any such evidence in Mr. Hsieh’s declaration.

Plaintiff’s motion for new trial is granted in part, denied in part. Plaintiff’s motion for new trial is granted as to the overall disgorgement-of-profits sum and as to the scope of the injunction granted. Specifically, the Court finds that the disgorgement of profit sum should be limited to the profits actually received from Citibank. The Court also finds that the proper remedy for Plaintiff’s trespass is removal of the sign. Plaintiff’s motion for new trial is denied in all other respects.

It is so ordered.

Dated:  May    , 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. 

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