Judge Mitchell L. Beckloff, Case 21STCP02000 2022-08-12 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 21STCP02000, Date: 2022-08-12 Tentative Ruling

[Tentative] ORDER SUSTAINING IN PART CITY OF BURBANK’S DEMURRER TO SECOND AMENDED PETITION

[Tenative] ORDER SUSTAINING IN PART REAL PARTY RAISING CANE’S RESTAURANTS, LLC’S DEMURRER TO SECOND AMANEDED PETITION

Petitioner, Save Rancho Providencia Neighborhood, filed its operative Second Amended Petition for Writ of Mandate and Complaint for Fraud (SAP) on May 2, 2022, after the court sustained the demurrer of Real Party in Interest and Defendant, Raising Cane’s Restaurants, LLC (Real Party) to Petitioner’s First Amended Petition. Petitioner brings its SAP pursuant to Code of Civil Procedure section 1085, and challenges Respondent City of Burbank’s issuance of a Certificate of Occupancy (COO) for a fast-food restaurant, called Raising Cane’s, in Burbank, California.

Subsequently, on June 1, 2022, Respondent and Real Party, each demurred to the SAP. Each demurrer challenges both causes of action alleged in the SAP. The demurrers argue the SAP fails to allege sufficient facts to constitute a cause of action. Given their similarity, the court considers the demurrers simultaneously.

Respondent’s demurrer is OVERRULED in part and SUSTAINED in part without leave to amend. Respondent’s demurrer to Petitioner’s first cause of action for a writ of mandate is overruled. Respondent’s demurrer to Petitioner’s second cause of action for fraudulent Inducement is sustained without leave to amend.

Real Party’s demurrer is OVERRULED in part and SUSTAINED in part without leave to amend. Respondent’s demurrer to Petitioner’s first cause of action for a writ of mandate is overruled. Respondent’s demurrer to Petitioner’s second cause of action for fraudulent Inducement is sustained without leave to amend.

Real Party applied to Respondent for required permits to construct a fast-food restaurant (Project) at 1750 W. Olive Avenue in Burbank, California (Project Site). (SAP, ¶ 1.) The Project Site is located next to certain residential uses, and was previously home to several banking establishments, which have operated upon the Project Site from approximately 1974 to 2019. (SAP, ¶¶ 1-2.) The prior banking establishments included a drive-through window, which apparently made use of an external speaker. (See SAP, ¶¶ 7-8.)

The Project proposed reducing the square footage of the existing building upon the Project Site from 5,300 square feet to 2,476 square feet, constructing a new driveway to provide access for drive-through service, extending the onsite queuing for the drive-through service, as well as parking and landscaping improvements. (SAP, ¶ 13.)

Ultimately, Respondent approved the Project. On December 16, 2020, Respondent issued a building permit for the Project. (SAP, ¶ 1.)

Following completion of construction, and following Respondent’s inspection of the Project, on April 14, 2022, Respondent issued a COO for the Project. The COO indicated the newly constructed Project was safe for occupancy. (SAP, ¶ 1.)

Petitioner’s first cause of action for a writ of mandate is predicated upon the following factual allegations contained within the SAP. Petitioner’s first cause of action challenges Respondent’s issuance of the COO for the Project. (SAP, ¶ 24.)

Petitioner alleges California Building Code section 111.2 (incorporated by reference within the Burbank Municipal Code [BMC]) provides that a COO may only be issued “after the building official inspects the building or structure and does not find violations of the provisions of this code or other laws that are enforced by the building official[.]” (SAP, ¶ 15 [emphasis added].) Further, Petitioner alleges, BMC section 10-1-404-B provides, “[a]ll officers and employees vested with authority to issue . . . certificates . . . shall comply with the provisions of the Zoning Ordinance and shall not issue any . . . certificate . . . in conflict with [the Zoning Ordinance]. Any permit, certificate or license so issued shall be void.” (Ibid [emphasis added].)

Petitioner contends Respondent’s issuance of a COO violates California Building Code section 111.2 and BMC section 10-1-404-B. Petitioner alleges Respondent issued a COO for the Project even though the Project was in standing violation of the Zoning Ordinance, specifically BMC section 10-1-1810(3). (SAP, ¶ 24.)

BMC section 10-1-1830(3), which is applicable to projects which contemplate construction upon existing structures, provides any existing structure which is made nonconforming with the Zoning Ordinance pursuant to a new proposed construction may continue to operate so long as the structure is not destroyed equivalent to “more than 50 percent of [the structure’s] replacement cost.” (SAP, ¶ 25.) Where a proposed project does contemplate destroying “more than 50 percent of [the existing structure’s] replacement cost,” the proposed construction may not be permitted unless it is in conformity with the current provisions of the Zoning Ordinance. (SAP, ¶ 25.)

Upon consideration of the Project, Respondent determined “the extent of demolition” of the existing banking establishment was less than 50 percent of the existing structure’s replacement cost and, therefore, Respondent concluded the Project may continue to operate without conformity with current provisions of the Zoning Ordinance. (SAP, ¶ 18.) Based upon its finding, Respondent decided the expanded drive-through use proposed by the Project would not need a Conditional Use Permit (CUP) and Real Party could operate without a CUP. (SAP, ¶¶ 18, 24.) Respondent therefore issued a Building Permit approving the construction.

Respondent, additionally and separately, determined a CUP would not be required for the Project under BMC section 10-1-1609(D), which provides:

“An existing residentially adjacent establishment with a drive-through legally operating without a Conditional Use Permit for the drive-through prior to December 26, 1998, may continue to operate; provided however that the establishment may not be expanded or enlarged or otherwise modified until the proposed work has been evaluated by the Building Official. If the Building Official determines that the desired expansion, enlargement or modification will 1) prolong the useful life of the service windows(s) and/or 2) increase the pre-permit building valuation by ten percent or more, the property owner must obtain a Conditional Use Permit for the drive-through prior to the issuance of any building permits or other development permits and must comply with subsections 10-1-1608(1) and (2) above.” (SAP, ¶ 16.)

Respondent concluded the two circumstances set forth within BMC section 10-1-1609(D) were not present with the Project. Accordingly, Respondent determined Real Party could continue to use the pre-existing drive-through window on the Project Site without a CUP. (Id. ¶ 17.)

Petitioner’s first cause of action alleges Respondent issued the COO for the Project improperly because the Project is in violation of BMC section 10-1-1830(3). Petitioner does not challenge Respondent’s determination under BMC section 10-1-1609(D).

Petitioner alleges, while the building permit for the Project contemplated the existing banking structure would not be destroyed equivalent to “more than 50 percent of [the structure’s] replacement cost,” Real Party’s construction of the Project failed to comply with the building permit and, indeed, resulted in destruction equal to “more than 50 percent of [the structure’s] replacement cost,” thereby requiring the Project to comply with current provisions of the Zoning Code, including the necessity of a CUP for a new drive-through window. (SAP, ¶ 24. [“City’s issuance of a [COO] violated the BMC because Real Party demolished more of the foundation than authorized by the Building Permit thereby requiring a Conditional Use Permit for a new drive-through.”])

Petitioner further alleges, despite Real Party’s unapproved demolition, and the Project’s resulting violation of BMC section 10-1-1830(e), Respondent improperly issued a COO for the Project, in violation of California Building Code section 111.2 and BMC section 10-1-404-B. (SAP, ¶¶ 24-30.)

Petitioner’s first cause of action prays for a peremptory writ of mandate ordering Respondent to rescind the COO until Real Party has obtained a CUP for the drive-through window at the Project Site. (SAP, Prayer ¶ 1.)

Second Cause of Action— Fraudulent Inducement to Issue Permits and Fraudulent Issuance of Permits (against Real Party)

Petitioner’s second cause of action is predicated upon the following facts, as alleged within the SAP. Petitioner alleges Real Party made fraudulent representations to Respondent during the period in which Real Party applied for a building permit for the Project. (SAP, ¶¶ 31-35.)

During consideration of Real Party’s application for a building permit, Respondent repeatedly noted that if Real Party proposed installing an external drive-through speaker at a new location upon the Project Site—as opposed to installing an external speaker upon the same location where the external drive-through speaker was originally located during operation of the baking establishments—a CUP would be required. (SAP, ¶ 10.) In other words, Respondent informed Real Party, if Real Party proposed moving the location of the external drive-through speaker, Real Party would have to obtain a CUP. (SAP, ¶ 10.)

Petitioner alleges Real Party misrepresented to Respondent that the location of the external drive-through speaker would not be moved and would remain in the same location as the pre-existing drive-through speaker. (SAP, ¶ 8.) Specifically, Petitioner alleges Real Party represented to Respondent that the pre-existing drive-through speaker was located near the intersection of Olive Avenue and Orchard Drive, and it is upon this exact location where Real Party intended to place the external drive-through speaker. (SAP, ¶ 8.)

Petitioner alleges Real Party’s representation was false. Petitioner alleges the pre-existing external drive-through speaker was not located near the intersection of Olive Avenue and Orchard Drive but, in fact, was located on the opposite side of the existing structure. (SAP, ¶ 9.)

Petitioner additionally alleges Real Party intentionally made such a representation. Real Party must have recognized the pre-existing external drive-through speaker could not have been located near the intersection of Olive Avenue and Orchard Drive, a location “at least sixty feet from the nearest drive-through aisle for the bank building,” and there “was no drive aisle” near the intersection of Olive Avenue and Orchard Drive prior to the Project. (SAP, ¶ 8.)

Petitioner alleges Respondent relied upon Real Party’s misrepresentations. Respondent concluded Real Party did not need a CUP for the external drive-through speaker as the location of the external drive-through speaker upon the Project Site would remain unchanged. (SAP, ¶¶ 8, 13.)

A demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. (Code Civil Proc. § 430.30, subd. (a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “We assume the truth of the allegations in the complaint, but do not assume the truth of contentions, deductions, or conclusions of law.” (California Logistics, Inc. v. State (2008) 161 Cal.App.4th 242, 247.)

A demurrer may be sustained without leave to amend when there is no reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan, supra, 39 Cal.3d at 318.) Indeed, where the facts are not in dispute and the nature of the plaintiff's claim is clear, but no liability exists under substantive law and no amendment would change the result, the sustaining of a demurrer without leave to amend is proper. (City of Ceres v. City of Modesto (1969) 274 Cal. App. 2d 545, 554.) The burden is on the plaintiff to show how the complaint might be amended so as to cure the defect. (Association of Community Organizations for Reform Now v. Department of Industrial Relations (1995) 41 Cal.App.4th 298, 302.)

Real Party has submitted a Request for Judicial Notice and requests judicial notice of the following documents:

(3) Exhibit C, Excerpts of the Deposition Transcript of Mark Sauceda filed by Petitioner, dated January 5, 2022 (Evid. Code, § 452, subd. (d));

(4) Exhibit D, Declaration of Michael Watson in Support of Real Party’s Opposition Brief, dated February 8, 2022 (Evid. Code, § 452, subd. (d));

(5) Exhibit E, Declaration of Ronald Takiguchi in support of the City’s Opposition to Petitioner’s Motion for Preliminary Injunction, dated September 23, 2021 (Evid. Code, § 452, subd. (d));

(6) Exhibit F, Excerpt of approved demolition plans for the Project, dated December 3, 2020 (Evid. Code, § 452, subd. (b)); and

(7) through (12) Exhibits G through L, Excepts from City of Burbank Zoning Code (Evid. Code, § 452, subd. (b)).

The Court takes judicial notice of Exhibits A, B, F, and G through L as such documents constitute “[r]egulations and legislative enactments issued by or under the authority of . . . any public entity in the United States.” (Evid. Code, § 452, subd. (b).) However, the Court takes judicial notice of the existence of such official public documents but is precluded from taking judicial notice of the truth of the matters stated therein. (In re Joseph H. (2015) 237 Cal.App.4th 517, 541-542 [court “can take judicial notice of official acts and public records, but we cannot take judicial notice of the truth of the matters stated therein.”].)

Additionally, the Court takes judicial notice of Exhibits C, D, and E as these documents have been previously filed in the record of this action and constitute “[r]ecords of (1) any court of this state.” (Evid. Code, § 452, subd. (d).) However, the Court merely takes judicial notice of the existence of the deposition transcript and declarations included within Exhibits C, D, and E, and expressly refrains from taking judicial notice of the factual allegations and opinions expressed therein. (Intengen v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1057. [“While judicial notice could be properly taken of the existence of Jones’ declaration, it could not be taken of the facts . . . asserted in the declaration”]; Garcia v. Sterling (1985) 176 Cal.App.3d 17, 22. [“Although the existence of statements contained in a deposition transcript filed as part of the court record can be judicially noticed, their truth is not subject to judicial notice.”])

Respondent has filed a similar Request for Judicial Notice. Respondent’s requests judicial notice of the following documents:

(2) Exhibit B, Excerpts of the Deposition Transcript of Mark Sauceda filed by Petitioner, dated January 5, 2022 (Evid. Code, § 452, subd. (d));

(3) Exhibit C, Declaration of Ronald Takiguchi in support of the City’s Opposition to Petitioner’s Motion for Preliminary Injunction, dated September 23, 2021 (Evid. Code, § 452, subd. (d)); and

(4) through (9) Exhibits D through I, excerpts from City of Burbank Zoning Code (Evid. Code, § 452, subd. (b)).

The Court takes judicial notice of Exhibits A, D through I as such documents constitute “[r]egulations and legislative enactments issued by or under the authority of . . . any public entity in the United States.” (Evid. Code, § 452, subd. (b).) However, the Court takes judicial notice of the existence of such official public documents but is precluded from taking judicial notice of the truth of the matters stated therein. (In re Joseph H., supra, 237 Cal.App.4th at 541-542.) Additionally, the Court takes judicial notice of Exhibits B and C as these documents have been previously filed in the record of this action and constitute “[r]ecords of (1) any court of this state.” (Evid. Code, § 452, subd. (d).) Again, the Court takes judicial notice of the existence of the deposition transcript and declarations included within Exhibits C, D, and E, and expressly refrains from taking judicial notice of the factual allegations and opinions expressed therein. (Intengen v. BAC Home Loans Servicing LP, supra, 214 Cal.App.4th at 1057; Garcia v. Sterling, supra, 176 Cal.App.3d at 22.)

As noted earlier, based on the similarities in the demurrers, the court considers them together.

Respondent and Real Party demur to Petitioner’s first cause of action for a traditional writ of mandate. They argue Petitioner has failed to allege facts sufficient to constitute a cause of action. Respondent and Real Party advance a variety of arguments to support their position on demurrer. The court addresses each in turn.

First, Respondent and Real Party contend Petitioner’s first cause of action is subject to demurrer because Petitioner has failed to allege a “clear, present, and usually ministerial duty” with which Respondent failed to comply. (Resp. Dem. 10:3-12; RPI/Dem. 15:11-21.) Rather, Respondent and Real Party contend Respondent sufficiently fulfilled any applicable ministerial duty, and Petitioner merely disagrees with Respondent’s conclusions and improperly seeks to substitute its own judgment for that of Respondent’s building official. (Resp. Dem. 10:13-11:6; RPI Dem. 13:22-14:9.)

There are two essential requirements to the issuance of an ordinary writ of mandate under Code of Civil Procedure section 1085: (1) a clear, present and ministerial duty on the part of the respondent, and (2) a clear, present and beneficial right on the part of the petitioner to the performance of that duty. (California Assn. for Health Services at Home v. Department of Health Services (2007) 148 Cal.App.4th 696, 704.) “An action in ordinary mandamus is proper where . . . the claim is that an agency has failed to act as required by law.” (Id. at 705.)

“A ministerial act is an act that a public officer is required to perform in a prescribed manner in obedience to the mandate of legal authority and without regard to his own judgment or opinion concerning such act's propriety or impropriety, when a given state of facts exists.” (Kavanaugh v. West Sonoma County Union High School Dist. (2003) 29 Cal.4th 911, 916.)

“[A] writ of mandate is not available to control the discretion of that public body or official. Although a court may order a public body to exercise its discretion in the first instance when it has refused to act at all, the court will not compel the exercise of that discretion in a particular manner or to reach a particular result . . . . When the duty of a public body is broadly defined, the manner in which it carries out that responsibility ordinarily requires the exercise of discretion; under such circumstances, mandate is not available to order that public body to proceed in a particular manner.” (Building Industry Assn. v. Marin Mun. Water District (1991) 235 Cal.App.3d 1641, 1645-46.)

“Normally, mandate will not lie to control a public agency's discretion, that is to say, force the exercise of discretion in a particular manner. However, it will lie to correct abuses of discretion. In determining whether a public agency has abused its discretion, the court may not substitute its judgment for that of the agency, and if reasonable minds may disagree as to the wisdom of the agency's action, its determination must be upheld. A court must ask whether the public agency's action was arbitrary, capricious, or entirely lacking in evidentiary support, or whether the agency failed to follow the procedure and give the notices the law requires.” (County of Los Angeles v. City of Los Angeles (2013) 214 Cal.App.4th 643, 654.)

The clear, present, ministerial duty contemplated by the SAP is articulated within California Building Code section 111.2 and BMC section 10-1-404-B. (SAP, ¶ 15.) California Building Code section 111.2 provides, a COO “shall” be issued by the Building Official “after the building official inspects the building or structure and finds no violations of the provisions of this code or other laws that are enforced by the building official[.]” (Ibid.) Further, BMC section 10-1-404-B provides, “[a]ll officers and employees vested with authority to issue . . . certificates . . . shall comply with the provisions of the Zoning Ordinance and shall not issue any . . . certificate . . . in conflict with [the Zoning Ordinance]. Any . . . certificate . . . so issued shall be void.” (Ibid.)

The parties do not dispute that, pursuant to California Building Code section 111.2 and BMC section 10-1-404-B, Respondent had a ministerial duty to issue a COO following a determination that the structure inspected is not in violation of the Zoning Ordinance. (Resp. Dem. 10:3-12; SAP ¶ 24.)

Respondent and Real Party argue Petitioner’s first cause of action is subject to demurrer because Petitioner has failed to allege Respondent failed to discharge this duty. Respondent and Real Party argue, Respondent affirmatively inspected the Project, sufficiently found the Project was not in violation of the Zoning Ordinance, and in accordance with California Building Code section 111.2 and BMC section 10-1-404-B, issued a COO as required. (Resp. Dem 10:3-23.)

Respondent and Real Party argue Petitioner has failed to allege any ministerial duty that Respondent has failed to fulfill. Rather, Respondent and Real Party contend Petitioner’s first cause of action merely disagrees with Respondent’s conclusions concerning whether the Project was in violation of the Zoning Ordinance. (Resp. Dem. 10:16-21. [“Petitioner does not allege the City failed to inspect the project or failed to determine that the project complied with the permits and the law. Instead, the Petitioner disagreed with the manner in which the City discharged its duty . . . . Petitioner does not actually plead that the City failed to discharge a ministerial duty.”]) As Petitioner has failed to allege any ministerial duty that Respondent failed to fulfill or discharge, Respondent and Real Party contend their demurrer to Petitioner’s first cause of action must be sustained, without leave to amend.

The court disagrees with Respondent’s and Real Party’s position. The court finds Petitioner’s first cause of action sufficiently alleges a cause of action for a writ of mandate pursuant to Code of Civil Procedure section 1085. Respondent and Real Party too narrowly interpret Petitioner’s allegations. Petitioner sufficiently alleges a ministerial duty with which Respondent has failed to comply—precisely, Respondent’s duty to issue a COO only where the inspected structure is not in standing violation of the Zoning Code. (SAP, ¶ 24. [“City’s issuance of the [COO] required a determination that the Project complied with all application ordinances pursuant to [California Building Code] Section 111.2 and BMC Section 10-1-404-B.”]) Petitioner alleges Respondent failed to discharge this ministerial duty as Respondent issued a COO despite the Project standing violation of the Zoning Ordinance. More specifically, Respondent issued the building permit for less than 50 percent of the structure and did not require a CUP. BMC section 10-1-1810(3), however, limits demolition to an existing structure to 50 percent or less of the structure’s “replacement cost” to avoid a CUP and compliance with the current Zoning Ordinance. (Id. ¶¶ 24-25, 30 [alleging Respondent failed to fulfill its ministerial duty as a COO was issued “despite demolition of more than 50 percent of the structure”].)

While Respondent and Real Party correctly note a writ of “mandate will not lie to control a public agency’s direction,” a writ of mandate will be proper where the court concludes a public agency has abused its discretion by rendering a decision which is entirely lacking in evidentiary support. (County of Los Angeles, supra, 214 Cal.App.4th at 654.) The court finds a writ of mandate may properly issue pursuant to Petitioner’s allegations, which contend Respondent failed to discharge a ministerial duty by affirmatively issuing a COO even though the Project was in standing violation of Burbank Municipal Code section 10-1-1810(3) having demolished more than 50 percent of the existing structure. (SAP, ¶ 24.) While Respondent concluded the Project did not violate the Zoning Code, and issued a COO accordingly, Petitioner’s first cause of action challenges the City’s decision as one entirely lacking in evidentiary support. (Id. ¶¶ 24-30.)

Second, Respondent and Real Party contend Petitioner’s first cause of action is subject to demurrer as Petitioner’s underlying claim “ignores extensive discovery on this issue” and the “well-established discovery record in this case.” (Resp. Dem. 10:13; RPI Dem. 14:10.)

Petitioner’s allegations concerning the extent of demolition are supported by certain conclusions reached by “a licensed architect, Frances Offenhauser.” (Id. ¶¶ 28-29.) Specifically, the SAP expresses Ms. Offenhauser’s conclusion the Project resulted in demolition of the existing structure equal to “more than 50 percent of [the structure’s] replacement cost immediately prior to destruction.” (Ibid.)

Respondent and Real Party argue Ms. Offenhauser’s conclusions are incorrect and are contrary to facts produced during discovery in this action. Respondent and Real Party prompt the court to reference declarations and deposition transcripts of different experts, and effectively weigh evidence for the purposes of concluding that Ms. Offenhauser’s conclusions are incorrect. (RPI Dem. 13:22-14:9, 14:10-28; Resp. Dem. 8:10-19, 10:13-15.)

This, of course, the court cannot do. As counsel knows, Petitioner’s factual allegations included within the operative SAP are to be taken as true. (Code Civ. Proc., § 430.30, subd.(a); Blank v. Kirwin, supra, 39 Cal.3d at 318 [upon demurrer, the court treats the pleading as “admitting all material facts properly pleaded”].) Further, the court is expressly precluded from considering extrinsic evidence for the purpose of evaluating whether Petitioner has sufficiently stated a cause of action. (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.)

In light of the foregoing, Respondent’s and Real Party’s demurrers, on this ground, are OVERRULED.

Lastly, Respondent and Real Party contend Petitioner’s first cause of action for a writ of mandate is subject to Demurrer as the operative SAP fails to effectively “plead around” or address BMC section 10-1-1810.

Respondent and Real Party argue BMC section 10-1-1810 operates as an affirmative defense to Petitioner’s first cause of action. As noted above, Petitioner alleges the Project was in violation of Burbank Municipal Code section 10-1-1810(3) as the Project did result in the demolition equal to “more than 50 percent of [the structure’s] replacement cost”, and the Project subsequently failed to comply with current provisions of the Zoning Ordinance, specifically obtaining a Conditional Use Permit for the Project’s drive-through service. (SAP, ¶¶ 25-30.)

Respondent and Real Party argue, although BMC section 10-1-1810(3) limits demolition to less than 50 percent of the building’s replacement cost, BMC section 10-1-1810 provides an exception to this limitation, and permits demolition above and beyond this limitation where such an act is taken to strengthen or restore to a safe condition any building or part thereof “declared to be unsafe by any City or State official charged with protecting the public health or safety, upon order of such official.” (Resp. RJN, Ex. D, p. 2; RPI RJN, Ex. G, p. 2.) The exception relied upon by Respondent and Real Party provides:

“Nothing in this section shall be deemed to prevent the strengthening or restoring to a safe condition of any building or part thereof declared to be unsafe by any City or State official charged with protecting the public health or safety, upon order of such official.”

Respondent and Real Party contend, even if Petitioner’s allegations are true concerning the Project, demolition of “more than 50 percent of [the existing structure’s] replacement cost” would not be considered a violation of the Zoning Ordinance because such demolition was performed following a declaration of the Building Official that the existing structure on the Project Site was unsafe, and for the purposes of “strengthening or restoring” the existing structure to a safe condition. (RPI Dem. 10:5-11, 11:23-13:9; Resp. Dem. 11:7-12:6.)

The court finds the argument insufficient to prevail on demurrer. A pleading will only be susceptible to demurrer where the defect contended appears upon the face of the pleading. (Donabedian v. Mercury Ins. Co. (2004 116 Cal.App.4th 968, 994.) By way of example, a statute of limitations defense will only be sufficient to defeat a pleading upon demurrer where “ ‘ “the complaint shows on its face that the statute [of limitations] bars the action.” ’ [Citation.]” (Czajkowski v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 174.) The defect “ ‘ “must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows merely that the action may be barred.” ’ [Citation.]” (Ibid.) Presently, the allegations upon Petitioner’s SAP do not demonstrate that the defense asserted by Respondent and Real Party clearly and affirmatively defeats Petitioner’s first cause of action. In other words, Petitioner’s first cause of action does not plead any facts concerning the reasons why “more than 50 percent” of the subject demolition occurred and, therefore, upon the face of Petitioner’s SAP, the Court is unable to conclude the demolition was permissible under BMC section 10-1-1810 (i.e., the demolition was conducted following a finding that the existing structure was unsafe and for the purposes of strengthening or restoring the existing structure). Respondent’s and Real Party’s argument requires this Court to entertain facts which are not found upon the face of the pleading, which is an improper practice for the purposes of demurrer.

In light of the above, Respondent’s and Real Party’s demurrers, upon this ground, are OVERRULED.

Second Cause of Action—Fraudulent Inducement to Issue Permits and Fraudulent Issuance of Permits

Respondent and Real Party demur to Petitioner’s second cause of action for fraudulent inducement to issue permits and fraudulent issuance of permits on various grounds. The court addresses each in turn.

First, Respondent and Real Party contend Petitioner’s second cause of action is time-barred pursuant to Government Code section 65009, subdivision (c)(1)(E). Petitioner contends the applicable statute of limitations is three years as specified in Code of Civil Procedure section 338, subdivision (d).

To reiterate, Petitioner’s second cause of action alleges, “[i]n May of 2020”, Real Party “applied [to Respondent] for [a] . . . Building Permit” for the purposes of constructing a drive-through, fast-food restaurant known as “Raising Cane’s” in Burbank. (SAP, ¶¶ 1, 8.) Real Party proposed constructing the drive-through, fast-food restaurant on a lot which was previously home to a drive-through banking establishment. (Id. ¶¶ 6-7.) The banking establishment previously had installed a permitted external drive-through speaker for the purposes of conducting drive-through banking services. (Ibid.) Petitioner alleges that, during the Building Permit application process, Respondent informed Real Party that, if Real Party intended to place the fast-food restaurant’s external drive-through speaker at the same location as the banking establishment’s external drive-through speaker, a CUP would not be required. (Id. ¶¶ 8-11.) Relatedly, Respondent informed Real Party that, if Real Party intended to relocate the external drive-through speaker to a new location (i.e., to a location different than where the banking establishment’s external drive-through speaker was previously located), a CUP would be required for the speaker. (Id. ¶¶ 10. [“On August 20, 2020, Assistant Planner Lucia Hwang emailed corrections to Real Party stating that ‘if the existing speaker is moved, then a new CUP’ would be required.”], 11 [“City’s corrections stated: . . . relocating the speaker requires a

Petitioner alleges, during the Building Permit application process, Real Party made certain intentional misrepresentations for the purpose of evading the requirement to obtain a CUP for the Project’s external drive-through speaker. Specifically, Petitioner alleges Real Party misrepresented to Respondent that the banking establishment’s external drive-through speaker was previously located “near the intersection of Olive Avenue and Orchard Drive”, and this is the exact location where Real Party intended to place the fast-food restaurant’s external drive-through speaker. (SAP, ¶¶ 8, 12.) Accordingly, as the location of the external drive-through speaker would allegedly remain unchanged, Real Party informed Respondent that a CUP for the external drive-through speaker would not be needed. (Ibid.) Respondent allegedly relied upon Real Party’s representations and affirmatively issued a building permit. (Id. ¶ 13.) “In issuing the Building Permit . . . , the Building Department took the position that the Raising Cane’s Restaurant . . . did not require any discretionary planning entitlements (such as a conditional use permit) to operate.” (Id. ¶ 16 [emphasis added].)

Petitioner alleges the representations made by Real Party to Respondent were false. (SAP, ¶ 8.) Petitioner alleges such misrepresentations were made for the sole purpose of evading the need to obtain a Conditional Use Permit for the Project’s external drive-through speaker. (Ibid.)

Petitioner’s second cause of action prays for “a peremptory writ of mandate ordering Respondent to rescind the [COO] until Real Party has obtained a CUP pursuant to BMC Sections 10-1-1609(D) and 10-1-1151(F).” (SAP, Prayer ¶ 1.)

Respondent and Real Party contend Petitioner’s second cause of action, while based in fraud, is actually an action challenging Respondent’s issuance of a building permit for the Project and Respondent’s determination the Project’s external drive-through speaker did not require a CUP. Respondent and Real Party contend, such challenges to land-use decisions are clearly governed by Government Code section 65009, subdivision (c)(1)(E), which provides:

(c)(1) Except as provided in subdivision (d), no action or proceeding shall be maintained in any of the following cases by any person unless the action or proceeding is commenced and service is made on the legislative body within 90 days after the legislative body's decision:

(E) To attack, review, set aside, void, or annul any decision on the matters listed in Sections 65901 and 65903, or to determine the reasonableness, legality, or validity of any condition attached to a variance, conditional use permit, or any other permit.

The court previously determined on demurrer the 90-day statute of limitations period set forth in Government Code section 65009, subdivision (c)(1)(E) applied to Petitioner’s action requesting the court set aside the building permit issued by Respondent with respect to the Project as well as Respondent’s determinations which were required to be made in connection with the building permit, such as that the Project complied with the Zoning Ordinance and did not require a COP. (Order Sustaining in Part Real Party’s Demurrer to the First Amended Petition and Order Granting in Part Respondent’s Motion to Strike Portions of the First Amended Petition, at 4 [“Like Citizens, subsumed within the City’s issuance of the building permits is the City’s decision Real Party’s project complied with the City’s zoning ordinance and did not require a conditional use permit.”], 5 [“The City could not have lawfully approved a building permit for Real Party without a decision by the Director—in the role of zoning administrator—that Real Party did not require any discretionary entitlements such as a conditional use permit (CUP).”])

Respondent and Real Party contend Petitioner’s second cause of action clearly challenges a zoning determination made by Respondent in connection with the issuance of the building permit, that is, the determination that “Raising Cane’s restaurant . . . did not require any discretionary planning entitlements (such as a [CUP]) to operate.” (SAP, ¶ 6.) Accordingly, Respondent and Real Party contend Petitioner’s second cause of action, while based in fraud, is governed by Government Code section 65009, subdivision (c)(1)(E), and was required to be commenced 90 days following Respondent’s issuance of a building permit no later than March 16, 2021. (SAP, ¶ 13.) As Petitioner did not commence this action until June 23, 2021, Respondent and Real Party contend Petitioner’s second cause of action is time-barred.

Petitioner argues Respondent and Real Party are incorrect. Petitioner argues the second cause of action does not seek to “attack, review, set aside, void, or annul any decision” made by Respondent because Respondent is not named as an adverse party in the second cause of action. (Opposition 14:16-19.) Rather, the second cause of action is asserted solely against Real Party and seeks to challenge Defendant’s right to benefit from its committed fraud. (Id. at p. 20-25.) Petitioner contends its second cause of action is an “action for relief on the ground of fraud” and, therefore, is governed by the three-year statute of limitations period articulated within Code of Civil Procedure section 338, subdivision (d). Further, as Petitioner did not learn of Real Party’s fraudulent conduct until it received Respondent’s responses during discovery (i.e., after the original Petition was filed), the three-year limitations period does not bar Petitioner’s second cause of action. (Opp., at p. 14:9-12.)

“It is widely understood that a plaintiff is not permitted to evade a statute of limitations by artful pleading that labels a cause of action one thing while actually stating another. California courts therefore look to the gravamen of the cause of action.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 606.) “To determine the statute of limitations which applies to a cause of action it is necessary to identify the nature of the cause of action, i.e., the ‘gravamen’ of the cause of action. [Citations.]” (Hensler v. City of Glendale (1994 8 Cal.4th 1, 22-23.)

Based on the express allegations within Petitioner’s SAP, the court concludes the “gravamen” of Petitioner’s second cause of action is a challenge to Respondent’s land-use determination—specifically, a challenge to Respondent’s determination that a CUP was not required for the Project’s external drive-through speaker. The court finds the label attached to the second cause of action as well as the party against whom the claim is asserted is not controlling. The relief sought requires Respondent to take action.

Real Party’s alleged fraud resulted in Respondent issuing a building permit “without any discretionary planning entitlements (such as a [CUP]) to operate.” (SAP, ¶¶ 8-13, 16.) Based upon such fraudulent misrepresentations, Petitioner’s second cause of action seeks to override Respondent’s CUP determination and “order Respondent to rescind the Certificate of Occupancy until Real Party has obtained a conditional use permit pursuant to [Burbank Municipal Code] Sections 10-1-1609(D) and 10-1-1151(F).” (SAP, Prayer ¶ 1.) The litigation goal of Petitioner’s second cause of action is unquestionably to “attack, review, set aside, void, or annul” Respondent’s decision to issue a building permit for the Project, without requiring a CUP for the external drive-through speaker. (Gov. Code, § 65009, subd. (c)(1)(E).)

Further, the court is guided by the purpose of the 90-day statute of limitations period articulated within Government Code section 65009, subdivision (c)(1)(E). “The statute was enacted ‘to alleviate the “chilling effect on the confidence with which property owners and local governments can proceed with projects” [citation] created by potential legal challenges to local planning and zoning decisions.’ ” (General Develop. Co., L.P. v. City of Santa Maria (2012) 202 Cal.App.4th 1391, 1394.) “The purposes of this section is to provide certainty for property owners and local governments regarding decisions made pursuant to this division.” (Gov. Code, § 65009, subd. (a)(3).) Presently, in the event Petitioner were to prevail on the second cause of action, such would result in the reconsideration of a decision made by Respondent’s building official nearly two years ago (December 16, 2020) concerning the need of a CUP for the Project’s external drive-through speaker. (SAP, ¶¶ 13, 16.) Such an action would defeat the purpose of Government Code section 65009, subdivision (c)(1)(E), which seeks to provide property owners with certainty as to the decisions of the Building Official. (Gov. Code, § 65009, subd. (a)(3).)

Moreover, under the delayed discovery rule, a claim building permits were issued based on a developer’s misrepresentation would completely undermine the certainty of land use decisions. A local government decision would be subject to claims made well after the 90-day period if they could be couched in terms of a developer misrepresenting material facts related to a project.

The court finds Government Code section 65009, subdivision (c)(1)(E). As Petitioner’s SAP alleges Respondent issued the Project’s building permit without “any discretionary entitlements (such as a [CUP])” on December 16, 2020, Petitioner was required to file this action no later than March 16, 2021. (SAP, ¶¶ 13, 16.) As Petitioner did not commence this action until June 23, 2021, Petitioner’s second cause of action is time-barred and there is no possibility of amendment to state a cause of action.

Therefore, Respondent’s and Real Party demurrers to Petitioner’s second cause of action for fraudulent inducement to issue permits and fraudulent issuance of permits is SUSTAINED, without leave to amend.

Second, even if Petitioner’s second cause of action was not time-barred, Respondent and Real Party contend Petitioner’s second cause of action remains susceptible to demurrer as the cause of action fails to state facts sufficient to constitute a cause of action. Respondent and Real Party advance two distinct arguments concerning insufficient facts alleged.

Initially, Respondent and Real Party argue Petitioner lacks standing to advance a cause of action in fraud as the alleged misrepresentations were made and allegedly relied upon by Respondent as opposed to Petitioner. That is, the City suffered the damage flowing from the alleged fraud.

To state a fraud cause of action, Petitioner must allege: (1) a misrepresentation (a false representation, concealment or nondisclosure) as to a material fact; (2) knowledge of its falsity or scienter; (3) intent to defraud; (4) justifiable reliance; and (5) resulting damage. (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 990.)

While Respondent and Real Party contend there is no authority which would permit a party to advance a cause of action for fraud based upon a misrepresentation made to a thirty-party (here, Respondent), such an assertion is incorrect in a tort context. Our Supreme Court considered such an issue in Randi W. v. Muroc Joint Unified School Dist. (1997) 14 Cal.4th 1066 (Randi W.).

In Randi W., the Supreme Court considered the circumstances under which an employer could be liable in tort for failing to use reasonable care in recommending a former employee for employment without disclosing derogatory material information about the employee. (Randi W., supra, 14 Cal.4th at 1070.) Specifically, a student claimed her school’s vice principal sexually assaulted her and sued other school districts where the vice principal formerly worked, asserting claims for fraud and negligent misrepresentation because the vice principal’s former employers wrote letters of recommendation that failed to disclose earlier sexual misconduct allegations. (Id. at 1072-1073.) As to the fraud claim in particular, the student alleged “defendants intentionally made those knowingly false representations about [the vice principal] with knowledge that they were ‘likely to injure plaintiff,’ and with the intent that they would be relied upon ‘by all other defendants and others, and in fact were relied upon by each other defendant and plaintiff.’ ” (Id. at 1073.)

The Supreme Court held the recommendation letters that contained “unreserved and unconditional praise for [the vice principal] despite defendants’ alleged knowledge of complaints or charged of his sexual misconduct with students” could form the basis of tort liability for fraud. (Randi W., supra, 14 Cal.4th at 1070.) The Supreme Court recognized that “no California case has yet held that one who intentionally or negligently provides false information to another owed a duty of care to a third person who did not receive the information and who has no special relationship with the provider.” (Id. at 1077.) But, the Court held those who wrote the recommendation letters owed third persons a duty not to misrepresent the facts in describing the qualifications of a former employee, “if making these misrepresentations would present a substantial, foreseeable risk of physical injury to . . . third persons.” (Id. at 1081.) The court explained the plaintiff did not need to show she actually relied on the letters so long as she alleged “her injury resulted from action that the recipient of defendants' misrepresentations took in reliance on them.” (Id. at 1085.)

Based on Randi W., this court finds Petitioner could maintain a cause of action for fraud based upon misrepresentations made to a third-party (here, the alleged misrepresentations made by Real Party to Respondent) where Petitioner sufficiently alleges the “misrepresentations would present a substantial, foreseeable risk of physical injury to . . . third persons.” (Randi W., supra, 14 Cal.4th at 1081.)

Here, the court finds Petitioner has not sufficiently allege that the purported misrepresentations made by Real Party to Respondent “would present a substantial, foreseeable risk of physical injury to . . . third persons.” (Randi W., supra, 14 Cal.4th at 1081.) Petitioner has not alleged facts demonstrating that Respondent’s misrepresentations as to the actual location of the external drive-through speaker “would present a substantial, foreseeable risk of physical injury to . . . third persons.”[1] (Randi W., supra, 14 Cal.4th at 1081 [emphasis added].)

Based upon the foregoing, Respondent’s and Real Party’s demurrers to Petitioner’s second cause of action, on this ground, are SUSTAINED. Given the statute of limitations issue, the court finds leave to amend is inappropriate.

Further, Respondent and Real Party contend Petitioner’s second cause of action is subject to demurrer as Petitioner has failed to plead its fraud cause of action with the requisite specificity. Particularly, Respondent and Real Party contend Petitioner has failed to allege the names of the persons who made the allegedly fraudulent misrepresentations, their authority to speak, to whom they spoke, what they said or wrote, or when it was said or written.

“In California, fraud must be pled specificity; general and conclusory allegations do not suffice

. . . . This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Id., at 645.) Further, “in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)

Although the general rule states that a fraud claim must be specifically pleaded, “ ‘courts should not . . . seek to absolve the defendant from liability on highly technical requirements of form in pleading. Pleading facts in ordinary and concise language is as permissible in fraud cases as in any others, and liberal construction of the pleading is as much a duty of the court in these as in other cases.’ ” (Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 242.)

Petitioner’s SAP alleges Real Party made statements to a named employee of Respondent. Petitioner has also alleged the nature of the statements. With regard to who made the statements and his or her authority to speak on behalf of Real Party, the court finds the facts sufficiently within the knowledge of Real Party. At the pleading stage, Petitioner has alleged its second cause of action with sufficient specificity.

The demurrers to Petitioner’s second cause of action are OVERRULED on grounds of insufficient specificity.

Lastly, Respondent and Real Party contend Petitioner’s second cause of action does not support the relief requested. Respondent and Real Party assert, even if Petitioner is correct in alleging certain misrepresentations were made by Real Party for the purposes of evading the requirement of a CUP, the appropriate relief following such a finding would be a writ of mandate requiring Real Party to obtain a CUP for the external drive-through speaker. Respondent and Real Party argue Petitioner prays only for writ of mandate requiring Real Party to obtain a CUP for the entire Project. Respondent and Real Party contend such a prayer is insufficient, and fails to support Petitioner’s second cause of action.

The court disagrees. Petitioner’s second cause of action specifically prays for “a peremptory writ of mandate ordering Respondent to rescind the [COO] until Real Party has obtained a [CUP] pursuant to BMC Section . . . 10-1-1151(F)[,]” which specifically requires a CUP for exterior speakers used “for taking orders, making announcements, playing music, or other purposes.” (SAP, ¶ 8, Prayer ¶ 1.) While Petitioner also prays for relief under BMC section 10-1-1609(D), Petitioner’s fraud claim, if successful, could result in enforcement of BMC section 10-1-1151(F).

For the foregoing reasons, the demurrers to Petitioner’s SAP are OVERRULED, in part, and SUSTAINED, in part, without leave to amend. The demurrers to Petitioner’s first cause of action for a writ of mandate are overruled. The demurrer to Petitioner’s second cause of action for fraudulent inducement to issue permits and fraudulent issuance of permits are sustained, without leave to amend.

[1] The notion physical injury is required in the context of a fraud claim based on misrepresentation to a third party raises damages issues, and whether Petitioner would be entitled to the relief sought in its petition.