Judge Mary H. Strobel, Case 20STCP03774 2022-09-08 Tentative Ruling

Hon. Mary H. Strobel

The clerk for Department 82 may be reached at (213) 893-0530.

Petitioner Hermosa Funding, LLC (“Petitioner”) moves for an award of attorneys’ fees pursuant to CCP section 1021.5 against Respondent City of Los Angeles (“Respondent” or “City”) in the amount of $30,650. Petitioner also requests costs of $744.72.

On November 23, 2020, Petitioner filed its verified petition for writ of mandate and complaint for declaratory relief. Respondent answered.

On February 22, 2022, the court issued its ruling and granted the writ petition in part (hereafter “Ruling”). The court denied the second cause of action for declaratory relief. The Ruling provides a detailed discussion of the court’s legal analysis, which is not repeated here but is incorporated by reference.

On April 6, 2022, the court entered judgment granting the petition in part, denying the petition in part, and denying the second cause of action for declaratory relief. The judgment states: “Upon submission by Petitioner of a complete application for a zone change amendment and payment by Petitioner of all applicable fees, Respondent shall process the application regardless of whether a general plan amendment is required.”

On April 7, 2022, the clerk issued a Writ of Mandate commanding the City to process any application by Petitioner or any other property owner for a zone change. (See Writ, issued Apr. 7, 2022.) The City objected to the extension of relief to third parties, and the court sustained that objection, issuing an Amended Writ which limits relief to Petitioner. (See Amended Writ, issued May 19, 2022.) The Amended Writ directs City, as follows:

YOU ARE HEREBY COMMANDED that upon submission by Petitioner Hermosa Funding, LLC (“Petitioner”) of a complete application or applications for a zone change amendment or amendments relating to the properties at 1915 South Ocean Front Walk and/or 2013-2015 South Ocean Front Walk and payment by Petitioner of all applicable fees associated with such application(s), the Department of City Planning (“Department”) shall process the application in accordance with the Los Angeles Municipal Code regardless of whether the initiation of a general plan amendment is also required in relation to the foregoing properties.

On April 21, 2022, Petitioner filed a memorandum of costs requesting $744.72 in total costs, not including any award of attorneys’ fees.

An award of attorney fees is appropriate “to a successful party … in any action which has resulted in the enforcement of an important right affecting the public interest.” (CCP § 1021.5.) The three factors necessary to support an award of attorney fees to a successful party pursuant to section 1021.5 are: “(1) [the] action has resulted in the enforcement of an important right affecting the public interest,’ (2) a significant benefit, whether pecuniary or nonpecuniary has been conferred on the general public or a large class of persons and (3) the necessity and financial burden of private enforcement are such as to make the award appropriate.” (In re Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1214.)

“When it comes to section 1021.5, the successful party is ‘the party to litigation that achieves its objectives.’” (La Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2018) 22 Cal.App.5th 1149, 1157 [plaintiff was the “successful” party where the Court invalidated some, but not all, of the city’s approvals of a project].)

“[A] plaintiff may be deemed to have been successful under section 1021.5 by succeeding on any significant issue in the litigation which achieves some of the benefit plaintiff sought in bringing suit.” (Hall v. Dept. of Motor Vehicles (2018) 26 Cal.App.5th 182, 190.)

Here, as discussed in the Ruling, there was some “lack of clarity in what Petitioner seeks” in this writ action. (Ruling 6-7.) In the Prayer, “Petitioner appears to be contending that Respondent has a duty to initiate and process the GPA it has requested.” (Ibid.) The court rejected that claim, concluding that “Charter section 555 clearly provides that only the Council, the City Planning Commission, or the Director of Planning may propose amendments to the General Plan.” (Id. at 7.) The court also denied Petitioner’s claims for declaratory relief on similar grounds, including with respect to the legality of Memo, Form 7723.1. (Id. 10-11.) Petitioner did not prevail on those aspects of the petition.

However, the petition sought a writ directing Respondents “to initiate and cause to be filed Petitioner’s GPA Request Form in conjunction with its application for a zone change.” (Prayer ¶ 1 [bold italics added].) As reflected in the parties’ writ briefing and oral argument, this Prayer raised a legal question of “whether Respondents have a ministerial duty to process Petitioner’s zone change application separately from any duty with respect to processing a request for a GPA.” (Ruling at 7.) Petitioner prevailed on that narrow issue when the court granted the writ petition, in part, and issued a writ directing Respondent to process “a complete application or applications for a zone change amendment or amendments relating to the properties at 1915 South Ocean Front Walk and/or 2013-2015 South Ocean Front Walk … in accordance with the Los Angeles Municipal Code … regardless of whether the initiation of a general plan amendment is also required in relation to the foregoing properties.” (Judgment and Amended Writ.)

As discussed below, the relief obtained by Petitioner was narrow and strictly limited to Petitioner. Pragmatically, the relief obtained cannot be viewed as conferring a substantial benefit on anyone other than Petitioner.

Nonetheless, Petitioner is a successful party within the meaning of section 1021.5 because it obtained one of its litigation objectives and a favorable ruling on a significant issue in the case. Before the action was filed, Respondent refused to initiate Petitioner’s zone change application. Respondent believed processing such application would be futile “in the absence of a GPA.” (Ruling 7.) However, while the Planning Commission would have no obligation to initiate the GPA, “it is also possible that upon receiving an application, the City Planning Commission would use its authority under Charter section 555 and LAMC section 11.56B to initiate the GPA.” (Ruling 9.) Thus, the court concluded that Respondent had a ministerial duty to process a zone change application submitted by Petitioner and issued the writ requested by Petitioner with respect to the zone change application.

Contrary to Respondent’s assertion, the writ changed the status quo. (Oppo. 9.) Petitioner obtained a writ directing Respondent to take action it had previously refused to take. Whether or not Petitioner has since submitted a zone change application, the writ granted Petitioner the opportunity to take such action.

Hall v. Dept. of Motor Vehicles (2018) 26 Cal.App.5th 182, 190 and Center for Biological Diversity v. California Fish & Game Com. (2011) 195 Cal.App.4th 128, 138-42 are distinguishable. (Oppo. 8-9.) As discussed in reply, the petitioners in those cases only achieved remands for new hearings, which was not the relief they sought. (Reply 2-3.) Thus, as stated in Hall: “The only relief, achievement, or success for Hall from this litigation was a remand to the DMV to conduct another hearing. This was not a significant issue; indeed, it was no issue at all because Hall's strategic objective was to obtain a court order that he prevail as a matter of law by overturning the DMV's decision to revoke his license. He did not achieve his only litigation objective. All Hall achieved was a do-over, something he did not seek, does not want, and in fact, when offered by both the trial court and later the DMV, a remedy he rejected.” (Hall, supra at 190.) Similarly, in Center for Biological Diversity, all the petitioner obtained was a “limited ‘do-over’”: “The trial court did not decide that the Commission had actually used the wrong standard, only that there was an appreciable risk that it may have erroneously evaluated the petition…. When the Commission reviewed the petition for the second time, it reached the same conclusion as it had before.” (Center for Biological Diversity, supra, at 140-141.)

The circumstances here are different than Hall and Center for Biological Diversity. Petitioner obtained a legal determination that Respondent was required by law to process its zone change application and a writ commanding Respondent to take that action. To be sure, Petitioner obtained narrow and limited relief. However, that relief was a significant part of Petitioner’s litigation objectives in this action. Petitioner is not required to prevail on all issues to be determined the successful party.

“The first prong of the section 1021.5 test … requires a determination of ‘the ‘strength’ or ‘societal importance’ of the right involved. That right may be constitutional or statutory, but it must be ‘an important right affecting the public interest’—it ‘cannot involve trivial or peripheral public policies.’ Where, as here, the right vindicated is conferred by statute, ‘courts should generally realistically assess the significance of that right in terms of its relationship to the achievement of fundamental legislative goals.’” (Roybal v. Governing Bd. of Salinas City Elementary School Dist. (2008) 159 Cal.App.4th 1143, 1148.)

Petitioner contends that the writ petition enforced Respondent’s “mandatory duty to accept for filing all complete zone change applications, including Petitioner’s, under LAMC section 12.32C and Charter section 558.” (Mot. 4.) Although not so stated, Petitioner implies that LAMC section 12.32C and Charter section 558 create an important statutory right for property owners to have their zone change applications processed by Respondent, regardless of whether initiation of a GPA is also required. In reply, Petitioner argues, more broadly, that “the important right affecting public interest that was enforced was the fundamental right to have the government follow the law.” (Reply 3.)

Petitioner incorrectly states that the writ directed Respondent to process “all complete zone change applications.” The court expressly limited its relief in the amended writ to Petitioner alone, not to all potential applicants in the City. (See Amended Writ issued May 19, 2022.) Petitioner also fails to submit any evidence that it actually submitted the zone change application permitted by the writ. In reply, Petitioner seems to concede that it has not submitted the zone change application. (Reply 2.) These practical circumstances suggest that the action did not enforce an important right affecting the public interest.

Moreover, Respondent argues that the important right requirement is not met because “[n]o evidence of widespread violations was adduced, nor should it exist, as most property owners likely refrain from applying for land use entitlements which must be denied as a matter of law.” (Oppo. 11.) Respondent refers to the practical reality that a zone change application requiring a GPA would have no effect unless the applicant also obtained a GPA. The court largely agrees with this argument.

Petitioner did not enforce an important right affecting the public interest. As discussed in the Ruling, Charter section 556 requires consistency with the general plan. There is no evidence that Respondent has refused to process zone applications when a GPA is not required or when there is reason to believe a GPA will be obtained. Realistically, when a GPA is required, it seems unlikely that other property owners will seek to pursue zone change applications under LAMC section 12.32C and Charter section 558 unless there is some reasonable prospect of also obtaining a GPA. Given these practical considerations, the statutory right at issue in section 12.32C and Charter section 558 appears to be of limited importance in the absence of a GPA or reasonable prospect that a GPA would be initiated by the Council, the City Planning Commission, or the Director of Planning.

The court does not agree with Petitioner that enforcement of any statutory right satisfies section 1021.5. “[T]he Legislature obviously intended that there be some selectivity, on a qualitative basis, in the award of attorney fees under the statute, for section 1021.5 specifically alludes to litigation which vindicates ‘important’ rights and does not encompass the enforcement of ‘any’ or ‘all’ statutory rights. Thus, again like the federal cases, the statute directs the judiciary to exercise judgment in attempting to ascertain the ‘strength’ or ‘societal importance’ of the right involved.” (Woodland Hills Residents Assn., Inc. and City Council (1979) 23 Cal.3d 917, 935.)[1] Here, the strength and societal importance of the statutory right enforced by Petitioner are both low.

Petitioner fails to show that this action enforced an important right affecting the public interest.

Significant Public Benefit Conferred on General Public or a Large Class of Persons

To obtain an award under Code of Civil Procedure section 1021.5, a party must also show that its action conferred a significant public benefit on the general public or on a large class of persons. A significant benefit may be pecuniary or non-pecuniary and need not be concrete to support a fee award. (Braude v. Automobile Club of Southern California (1986) 178 Cal.App.3d 994, 1013.)

“The trial court determines the significance of the benefit, and the group receiving it, ‘from a realistic assessment, in light of all the pertinent circumstances, of the gains which have resulted in a particular case. The courts are not required to narrowly construe the significant benefit factor. ‘The ‘extent of the public benefit need not be great to justify an attorney fee[s] award.’ And fees may not be denied merely because the primary effect of the litigation was to benefit the individual rather than the public.” (Indio Police Command Unit Association v. City of Indio (2014) 230 Cal.App.4th 521, 543; see also Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 939-940.)

“[M]ere vindication of a statutory violation is not sufficient to be considered a substantial benefit by itself.” (Concerned Citizens of La Habra v. City of La Habra (2005) 131 Cal.App.4th 329, 335.) However, “[t]he ‘extent of the public benefit’ from the lawsuit must be ‘substantial,’ but ‘need not be great.’” (La Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2018) 22 Cal.App.5th 1149, 1158.)

For similar reasons as discussed above, Petitioner fails to show that this action conferred a significant public benefit on the general public or a large class of persons. The court expressly limited its relief in the amended writ to Petitioner alone, not to all potential applicants in the City. (See Amended Writ issued May 19, 2022.) Even construing the writ as clarifying Respondent’s legal duties to process zone change applications even without a GPA, there is no reason to believe that such ruling will have any practical benefit on anyone other than Petitioner. Furthermore, Petitioner also fails to submit any evidence that it actually submitted the zone change application permitted by the writ. Thus, even as to Petitioner, the practical benefit of the petition seems limited.

Petitioner does not show that the action conferred a significant public benefit on the general public or a large class of persons.

The necessity and financial burden requirement “‘examines two issues: whether private enforcement was necessary and whether the financial burden of private enforcement warrants subsidizing the successful party's attorneys.’” (Lyons v. Chinese Hosp. Ass'n (2006) 136 Cal.App.4th 1331, 1348.) Here, private enforcement was necessary as there is no reason to believe a government agency would sue to enforce the claims Petitioner made in the writ petition.

With respect to financial burden, a litigant’s nonpecuniary interests do not affect its eligibility for section 1021.5 fees. (In re Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1217.) “An award on the ‘private attorney general’ theory is appropriate when the cost of the claimant’s legal victory transcends his personal interest, that is, when the necessity for pursuing the lawsuit placed a burden on the plaintiff ‘out of proportion to his individual stake in the matter.’” (Woodland Hills Residents’ Ass’n, Inc. (1979) 23 Cal.3d 917, 941.) “An attorney fee award under section 1021.5 is proper unless the [successful litigant’s] reasonably expected financial benefits exceed by a substantial margin the [litigant’s] actual litigation costs.” (Collins v. City of Los Angeles (2012) 205 Cal.App.4th 140, 154.) “The successful litigant's reasonably expected financial benefits are determined by discounting the monetary value of the benefits that the successful litigant reasonably expected at the time the vital litigation decisions were made by the probability of success at that time.” (Id. at 155.)

“‘[T]he absence of a monetary award, or of precise amounts attached to financial incentives, does not prevent a court from determining whether the plaintiff's financial burden in pursuing the lawsuit is out of proportion to his individual stake in the matter.’ [Citation.] No abuse in awarding fees can be found where the facts show ‘that the plaintiff's ‘future money advantage ... is speculative’ [citation], or that the plaintiff's' ‘pecuniary benefit will be indirect and uncertain.’” (Sweetwater Union High School Dist. v. Julian Union Elementary School Dist. (2019) 36 Cal.App.5th 970, 992; see also Galante Vineyards v. Monterey Peninsula Water Management Dist. (1997) 60 Cal.App.4th 1109, 1128.)

“[I]t is the party seeking private attorney general fees who ‘bears the burden of establishing that its litigation costs transcend its personal interest.’” (Norberg v. California Coastal Commission (2013) 221 Cal.App.4th 535, 545-56.)

In Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106, cited by Respondent, a real estate development partnership, which planned to construct ten condominium units in a coastal area, sought to void a permit condition that would have increased its costs by $300,000. (Id. at 109, 114.) The partnership ultimately prevailed and was awarded attorneys’ fees. (Id. at 109, 111–112.) The Court of Appeal reversed the award, however, because the partnership made “no attempt to compare its litigation costs to the immediate economic benefit it personally received from judicially establishing its right to restore its property, or to the commercial economic gain it anticipates from the renewed ability to build its housing development.” (Id. at 113 & fn. 5.)

Here, Petitioner sought to have the zoning designation for the Properties, located in the highly sought-after area of Venice Beach, CA, to be changed from Medium Residential to Community Commercial. (Ruling 1.) It is reasonable to infer that the purpose of the zone change would be to develop the property commercially and to make profit. (See Pet. ¶ 28.) Petitioner has not submitted evidence of its financial stake in the litigation, i.e., how much it stood to profit by upzoning its property. Petitioner claims legal fees of $30,650. Petitioner fails to submit sufficient evidence from which the court could conclude that Petitioner’s litigation expenses placed a burden on Petitioner “out of proportion” with its financial stake in developing the property commercially.

Petitioner argues that it “derives no financial interest from having the right to apply” for a zone change. (Reply 8.) Yet, Petitioner also argues that the writ requiring Respondent to process the application was significant such that Petitioner should be considered the successful party. (Reply 1-3.) While the zone change application may not have resulted in Petitioner commercializing the properties, it is clear that Petitioner brought the writ petition as part of an effort to rezone the Properties to commercial. The zone change application was part of that objective and was necessary to develop the Properties commercially, as discussed above.

Petitioner has not shown that the financial necessity prong of section 1021.5 is satisfied. Because Petitioner has not proven all elements of section 1021.5, the motion for fees is DENIED.

On April 21, 2022, Petitioner filed a memorandum of costs requesting $744.72 in total costs, not including any award of attorneys’ fees. Respondent has not filed a motion to tax costs. It appears that the time to file a motion to tax costs has expired. (See Cal. Rules of Court, Rule 3.1700(b)(1).) In its discretion, the court finds Petitioner is the successful party and entitled to costs in this writ action. (See CCP § 1095 [court may award costs in writ action].)

[1] Contrary to Petitioner’s suggestion in reply, the California Supreme Court in Woodland Hills did not decide whether the action enforced an important right affecting the public interest. Rather, it remanded to the trial court to make such determination. (Reply 3-4; Woodland Hills, supra at 938.)