Judge: Michael Shultz, Case: 22STCP03975, Date: 2025-01-09 Tentative Ruling
DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. 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) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) 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 email is necessary and all parties should appear at the hearing in person or by Court Call.
Case Number: 22STCP03975 Hearing Date: January 9, 2025 Dept: 40
22STCP03975
H&H Retail Owner, LLC v. City of Los Angeles
[TENTATIVE]
ORDER DENYING DEFENDANT’S MOTION FOR ATTORNEY’S FEES
I.
BACKGROUND
The
first amended complaint (“FAC”) alleges that Plaintiff is the owner of the
retail portion of “Hollywood & Highland,” a multi-use complex now rebranded
as “Ovation Hollywood.” Plaintiff alleges that pursuant to its vested signage
rights, Plaintiff sought to replace outdated signs with digital signs. Defendant, City of Los Angeles, (“City” or
“Defendant”), denied Plaintiff’s digital sign applications and refused to
recognize Plaintiff’s vested signage rights under a 2002 Development Agreement (“DA”).
Plaintiff alleged seven causes of action for contract-related claims and
violations of 42 USC § 1983 (“section 1983”) (fourth and fifth causes of
action) for depriving Plaintiff of its substantive and procedural due process
rights.
On
May 28, 2024, the Hon. Anne Richardson sustained demurrer to the FAC. After a
later hearing held July 3, 2024, Judge Richardson denied Plaintiff’s request
for leave to amend and dismissed the action with prejudice.
II. ARGUMENTS
Defendant
requests attorney’s fees totaling $671,418.30 incurred to defend against
the Section 1983 claims, which were
frivolous, unreasonable, and groundless because Plaintiff could not point to
anything in the DA allowing digital signs. Under section 42 USC 1988(b) a
prevailing defendant can recover attorney’s fees if it can show that a section
1983 civil rights claim is frivolous, unreasonable, or groundless, or if a
plaintiff continues to litigate after it clearly becomes so.
In
opposition, Plaintiff argues that the court recognized that this case presents
complex issues of law which must ultimately be decided by the Court of Appeal. The
City previously issued permits for digital signs based on a City Ordinance.
Plaintiff’s prior reliance on the 1999 Disposition and Development Agreement
(“DDA”) was not improper because the City repeatedly relied on the DDA in assessing
Plaintiff’s claims. The amount of fees that
City seeks to recover is vastly excessive and fails to distinguish between fees
incurred solely on the section 1983 claims as opposed to the contract-based
claims.
In
reply, the City argues that Plaintiff has made many misrepresentations to the
City and the Court which demonstrates that the Plaintiff’s Section 1983 claims
were frivolous, unreasonable, or groundless.
III. LEGAL
STANDARDS
The
court has discretion to award reasonable attorney’s fees as part of costs
incurred to enforce a provision of Section 1983 (among other sections). (42
U.S.C.A. § 1988 subd. (b).) Cases interpreting the statute have “limited
such awards to a prevailing defendant to situations in which the plaintiff's
civil rights claim is ‘frivolous, unreasonable, or groundless, or [if] the
plaintiff continued to litigate after it clearly became so.’" (Jones
& Matson v. Hall (2007) 155 Cal.App.4th 1596, 1610.)
This
is a stringent standard: “the plaintiff's action must be meritless in the sense
that it is groundless or without foundation. The fact that a plaintiff may
ultimately lose his case is not in itself a sufficient justification for the assessment
of fees.” (Hughes
v. Rowe (1980) 449 U.S. 5, 14; Cummings
v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1387 [“such
awards should be permitted 'not routinely, not simply because he succeeds, but
only where the action brought is found to be unreasonable, frivolous, meritless
or vexatious.'”].)
“Meritless”
means groundless or without foundation; “vexatious” does not imply that the
plaintiff possessed subjective bad faith in pursuing the action. (Id.) Cummings observed in its review of
other case authority considering an award to a prevailing defendant, that “patterns
developed” indicating that "either the plaintiff's conduct was egregious
or that his or her case was patently baseless for objective reasons.” (Cummings at 1389.)
IV. DISCUSSION
The
court takes judicial notice of Judge Richardson’s ruling sustaining demurrer to
the FAC which states that all of Plaintiff’s claims were premised on the
Plaintiff’s contention that it had a vested right in installing digital signs
based on the 2002 DA and regulations and rules in effect at the time. (Plt’s RJN
, Ex P, 4.) The vested signage rights under the DA included the right to
remodel, renovate, rehabilitate, rebuild or replace any signs “that are
consistent with the Signage Ordinance throughout the applicable Term.” (Id.) The court acknowledged Plaintiff’s argument
that there were no laws in effect as of the date of the DA that prohibited the
replacement of static signs with digital signs. Judge Richardson, however, determined that
established law provided that if a land use or zoning law in effect at the time
did not expressly permit the use at issue (digital signs), then such use is deemed
prohibited as a matter of law. (Id.)
In
determining whether Plaintiff’s claims meet the stringent standard of being “unreasonable,
frivolous, meritless or vexatious,” the court considers Judge Richardson’s
ruling when she determined whether Plaintiff should be granted leave to amend
the original pleading. The court grants Plaintiff’s request for judicial notice
of that ruling issued on January 26, 2024. (PRJN, Ex. J.”) At the outset, Judge
Richardson noted that the proposed FAC was not a sham pleading. (Id. page 8). The City’s motion makes much of
Plaintiff’s changing allegations relating to whether the DDA applied although
it had terminated by its own terms. The City contended that Plaintiff knew but
misled the City into believing the DDA applied. (Mot. 8:21.) Judge Richardson observed that “both
parties have at various times argued that the DDA applied” and that the
different allegations in the proposed pleading were permissible since Plaintiff
can plead inconsistent, alternative facts and theories. (Id.) Moreover, the City cited language in the DDA as an affirmative
defense. (Plaintiff’s RJN, Ex. B.) The City’s claim that Plaintiff knew that
the DDA was terminated is evidence that Plaintiff knew its claims based on the
DDA were baseless is undermined by City’s reliance on the language of the same DDA
as a defense.
Judge
Richardson permitted amendment because the facts and law were “sufficiently
complex” that amendment should be permitted to test the legal theories. (Id.)
It cannot be said that Plaintiff’s contention that it had vested sign rights was
baseless or without foundation since Judge Richardson recognized that vested
signage rights run with the land. (Id. page 8.) Moreover, Plaintiff argued,
and the court accepted Plaintiff’s contention that the facts necessary to
support the amended pleading were revealed in discovery. (Id. [“discovery
in this case played a key role in their determination as to the proper claims
to assert.”].)
The
complex nature of the issues raised by Plaintiff is reflected in the fact
Plaintiff engaged the City and land use counsel for two years in pre-litigation
discussions. (Opp. 9:2-6.) Plaintiff commenced the action on November 13, 2022,
it was not until May 10, 2024, that the City raised for the first time in its
reply to Plaintiff’s motion for leave to file a second amended complaint that
if a use is not expressly permitted, it is presumed prohibited. (PRJN, Ex. N,
3:11-25.) The City’s contention that Plaintiff’s claims were baseless at the
outset is without merit if the City itself did not discover the case authority
on which the court relied to deny leave to amend four years after
Plaintiff commenced negotiations with the City.
This
court’s objective review of the procedural background of this dispute, the contested
litigation of the numerous and complex legal and factual issues required to be
determined by the court, and the fierce advocacy of each party’s counsel in
pursuit of their client’s interests until the point at which Judge Richardson
dismissed the case demonstrates that this is not the type of case that would
warrant an award of fees to the City. These
facts do not support a finding that Plaintiff’s claims were frivolous, unreasonable,
meritless, or vexatious even if the trial court was ultimately persuaded that
the claims could not be supported. (Crane-McNab v. County of Merced
(E.D. Cal. 2011) 773 F.Supp.2d 861, 880 [“… the Ninth Circuit repeatedly has recognized
that attorney's fees in civil rights cases ‘should only be awarded to a
defendant in exceptional circumstances.’”].)
V.
CONCLUSION
The
court must assess the Plaintiff’s claims at the time the complaint was filed and
“must avoid post hoc reasoning by concluding that, because a plaintiff
did not ultimately prevail, his action must have been unreasonable or without
foundation.” (Harris v. Maricopa County Superior Court (9th Cir. 2011) 631 F.3d 963, 976.) For this reason, the court declines to rule on the City’s
evidentiary objections to particular evidence filed by Plaintiff, since in
assessing the propriety of a fee award, the court does not relitigate the issue
of whether Plaintiff’s claims were well founded; Judge Richardson determined
they were not. Whether that was the correct ruling is now before the Court of
Appeal. Rather, the court must objectively consider whether the Plaintiff’s
conduct meets the stringent standard of being “egregious” or “patently
baseless.” (Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1389.)
Based
on the foregoing, the court concludes that this standard is not met.
Accordingly, Defendant’s motion for attorney’s fees is DENIED.