Judge Mitchell L. Beckloff, Case Number: 23STCP01092, Date: 2023-09-13 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 23STCP01092, Date: 2023-09-13 Tentative Ruling

Respondents, City of Glendale and the City Council of Glendale, generally demur to the first amended petition (FAP) of Petitioner, Friends of Rockhaven.

Respondents’ Request for Judicial Notice (RJN), filed June 12, 2023[1], of Exhibits 1 and 2 is granted. The court judicially notices the existence of these official records but not the truth of any factual or hearsay statements made therein or the truth of any asserted interpretation of the records. (See Love v. Wolf (1964) 226 Cal.App.2d 378, 403; Garcia v. Sterling (1985) 176 Cal. App. 3d 17, 22; Fremont Indemnity Co. v. Fremon General Corp. (2007) 20 Cal.4th 449, 457, fn. 9.)

In 2008, the City purchased Rockhaven Sanitarium Historic District (Rockhaven) for $8.25 million. (FAP ¶ 8.) Rockhaven is listed on the State and National Registries of Historic Resources and Places. (FAP ¶ 2.) In August 2022, the City accepted a state grant of $8 million to renovate and preserve Rockhaven. (FAP ¶¶ 7-8.) Since taking ownership of Rockhaven in 2008, the City has ignored and continues to ignore experts who have advised on measures to care for Rockhaven. The City “has allowed Rockhaven to fall into decay.” (FAP ¶ 9.) The City has jeopardized Rockhaven’s “historic preservation” and City’s “persistent failure to care for this important historic property” has damaged “public property in violation of the law.” (FAP ¶¶ 10, 11.) The City’s failure to act constitutes a violation of Glendale Municipal Code (GMC) section 15.20.120 and is also a waste of public funds and property within the meaning of Code of Civil Procedure section 526a. (FAP ¶¶ 61-69, 74-87.) Petitioner prays for a “writ of mandate under Code of Civil Procedure § 1085 ordering Respondents to comply with their mandatory duty under Glendale Municipal Code §15.20.120.” (FAP Prayer ¶ (v).)

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 of California (2008) 161 Cal.App.4th 242, 247.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.” (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The allegations in the petition must be liberally construed in favor of Petitioner on demurrer. (See Mobil Oil Corp. v Exxon Corp. (1986) 177 Cal.App.3d 942, 947.) “A demurrer must dispose of an entire cause of action to be sustained.” (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.)

Respondents contend Petitioner has not stated a cause of action for ordinary mandate because “the duty alleged in the FAP necessarily requires the City’s discretion” and “mandamus will not lie to compel a discretionary act.” (Memo 6:2, 13.)

“Generally, mandamus is available to compel a public agency’s performance or to correct an agency’s abuse of discretion when the action being compelled or corrected is ministerial.” (AIDS Healthcare Foundation v. Los Angeles County Dept. of Public Health (2011) 197 Cal.App.4th 693, 700.) “Mandamus does not lie to compel a public agency to exercise discretionary powers in a particular manner, only to compel it to exercise its discretion in some manner.” (Ibid.)

However, as argued by Petitioner, a writ of ordinary mandate may be appropriate if the agency has abused its discretion and refused to act as required by law. Mandamus “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.) “To compel the [respondent] to take some action the [petitioner] must plead and prove the [respondent] has failed to act, and its failure to act is arbitrary, beyond the bounds of reason, or in derogation of the applicable legal standards.” (AIDS Healthcare Foundation v. Los Angeles County Dept. of Public Health, supra, 197 Cal.App.4th at 704.)

“Where a statute leaves room for discretion, a challenger must show the official acted arbitrarily, beyond the bounds of reason or in derogation of the applicable legal standards. Where only one choice can be a reasonable exercise of discretion, a court may compel an official to make that choice.” (California Correctional Supervisors Organization, Inc. v. Department of Corrections (2002) 96 Cal.App.4th 824, 827; see also County of Los Angeles v. City of Los Angeles, supra, 214 Cal.App.4th at 654; Fair v. Fountain Valley School Dist. (1979) 90 Cal.App.3d 180, 187.)

Respondents acknowledge an ordinary writ of mandate may issue if the agency’s action or failure to act was arbitrary, capricious, or palpably unreasonable. (See Reply 4:1-3.)

Petitioner alleges the City “has failed to perform its mandatory duty under the Glendale Municipal Code and has wasted and continues to waste taxpayer funds and taxpayer-owned property by failing to maintain and preserve” Rockhaven. (FAP ¶ 12.) Petitioner summarizes its claim:

67. The City is in violation of its clear mandatory duty under GMC §15.20.120. The City has not actively prevented demolition by neglect, deterioration, dilapidation and/or decay of Rockhaven. The City has not ensured the Rockhaven was not subject to deterioration, dilapidation and decay or demolition by neglect, because the City did not “make certain” that decay and deterioration did not happen. As alleged above, since the City acquired ownership of Rockhaven, multiple city-issued reports have identified water damage and mold as well as structural deficits as a result of the water damage and mold, with each new report evidencing additional and more severe water damage and mold contamination than those that have preceeded it. . . .

68. For the same reasons, the City has also failed to comply with its duty to maintain Rockhaven in a manner that ensures its continued eligibility for listing in the Glendale Register of Historic Resources, California Register of Historical Resources, and/or the National Register of Historic Places. . . . The City’s acts and omissions, as documented by its own reporting, show water damage, mold and structural damage that have progressively become worse during the City’s ownership. This threatens Rockhaven’s listing under both the California and National [Registries]. . . . (FAP ¶¶ 67-68.)

“In July 2009, ARG [Architectural Resource Group, a city consultant] issued a Draft Report stating that ‘the Rockhaven property appears eligible for listing on the National and California Registers. . . .’ The July 2009 ARG report noted roof damages and evidence of leaks and/or dry rot in most of the Rockhaven. ARG noted the roofs would require attention and that mold inspections and abatement should be performed. . . . The ARG report also recommended preparation of a maintenance plan that will guide future repair and maintenance with sensitivity to the historic character of the buildings. No maintenance plan was ever adopted. The Final October 2009 ARG Report also identified priority items that were preventative measures to prohibit further deterioration to Rockhaven’s buildings. Those priority items included replacing the roofs of twelve buildings. That report also showed mold in the Dining Hall and water damage in four of the buildings at Rockhaven.” (FAP ¶¶ 27-29 [emphasis added].)

“During a February 11, 2020 City Council Meeting, a Council Member inquired about what precautions were being taken at Rockhaven in light of recent rain events, the City Manager stated that every rainy season the City places tarps over the roofs.” (FAP ¶ 33.)

“A few months later the city reviewed its annual budget. The budget for FY20-21 indicates that Rockhaven had a ‘Life to Date’ rehabilitation budget of just over $1 million. As of March 31, 2020 the City’s rehabilitation budget shows that it had a remaining balance of $44,000.00. The city appears to have expended nearly all of the $1 million budget for Rockhaven rehabilitation apparently without performing any identifiable work on the roofs as recommended by its expert consultants.” (FAP ¶ 34.)

“In July 2021, Historic Buildings Services (‘HBS’) issued an assessment of Rockhaven. The HBS Report evidenced neglect, deterioration, dilapidation and decay at Rockhaven, stating that the property has essentially been in an ad hoc mothball state (i.e. preserving a property/asset for future use) five years past the maximum mothballing period of ten years recommended by National Parks Service in NPS Bulletin 31.” (FAP ¶ 37.) “The HBS 2021 Report observed that, ‘Many important safeguards have not been in place,’ including ‘Water-tight roofs, Working rain gutters and site drainage, Secure windows and doors, Proper ventilation, Ensuring structural integrity, Capping or securing utilities, Monitoring the buildings for fire, water and vandalism.’ ” (FAP ¶ 43.)

“As part of the FY 2021-2022 Budget the City of Glendale appropriated $300k for Rockhaven roof replacement. . . . At a January 11, 2022 meeting, staff revealed that on December 25th and/or December 26th, 2021, city workers put plastic covering over the roofs of the Rockhaven buildings in the middle of a rain storm. . . . At a December 13, 2022 meeting, the City Mayor asked about the status of Rockhaven after recent rain storms. Staff stated that they were still working on advertising bids for replacing roofs, putting down tarps and remediating hazardous material.” (FAP ¶¶ 45-49.)

“On or around January 2023, Industrial Hygiene Management Inc., issued a Report which states that ‘The majority of buildings have widespread water damage with visible water stains and/or active mold growth on the walls and ceilings which are constructed of plaster and underlying button-board with a paper facing. It is highly likely, therefore, that there is additional hidden mold growth inside the wall cavities. The lower walls and carpets are still wet in many areas. Patches of acoustic spray-on (popcorn) ceiling have fallen down in some rooms.’ The Report further depicted via photographs water damage, mold growth and/or structural damage in at least 10 of the buildings.” (FAP ¶ 50 [emphasis added].)

“The demolition by neglect, deterioration, dilapidation and decay continue at Rockhaven, as more extensive water damage, mold and structural components in need of replacement have been identified as recently as June 2023. In fact during, a site inspection, Petitioner took photographs that showed apparent pieces of the ceiling that had collapsed onto the floor and broken windows in one building.” (FAP ¶ 51 [emphasis added].)

Significantly, Petitioner alleges the City’s expenditures and actions have not prevented demolition by neglect, deterioration, dilapidation, and decay of Rockhaven “as reporting shows that extensive water damage, mold and structural damage occurred and has progressively become worse over the last decade.” (FAP ¶ 54 [emphasis added].)

“Glendale Municipal Code (‘GMC’) § 15.20.120 is entitled ‘Duty to maintain historic resources’ and provides: ‘Every owner of a designated historic resource, a resource pending designation as a historic resource, a potential historic resource, or a protected interior shall maintain and keep such resource in a manner that ensures its continued lawful and reasonable use, that ensures its continued eligibility for listing in the Glendale Register of Historic Resources, California Register of Historical Resources, and/or the National Register of Historic Places, and ensures that it is not subject to (and actively prevents) ‘demolition by neglect,’ as well as deterioration, dilapidation and decay of any portion of such resource.” (FAP ¶ 61.)

“‘Demolition by neglect’ means the process by which the owner of a designated historic resource allows its ongoing deterioration over a period of time as a result of lack of maintenance, failure to protect it from pests or vandals, and/or failure to take reasonable measures to prevent ingress of water or wind through the roof, walls, or apertures, leading to deterioration and/or structural failure that results in complete or partial demolition, the loss of character-defining features, and/or that constitutes a threat to public health and safety.” (FAP ¶ 62.)

Petitioner added the emphasized allegations to the FAP after the court sustained the prior demurrer. The emphasized definition of “demolition by neglect” in paragraph 62, while included in the original petition, has greater significance in light of the new allegations.

Notably, Respondents do not address these new allegations in the demurrer or explain why they are insufficient to plead a claim for mandate based upon an abuse of discretion. The new allegations support Petitioner’s claim the City has abused its discretion by failing to take action to preserve Rockhaven over a lengthy period of time and has engaged in “demolition by neglect” in violation of GMC section 15.20.120.

Significantly, the FAP now alleges the following timeline: The 2009 ARG Report “showed mold in the Dining Hall and water damage in four of the buildings at Rockhaven.” (FAP ¶¶ 27-29.) While the City appropriated $300,000 for roof replacement in FY 2021-2022, the “City has not performed any roof replacement or temporary roof installation, save for the roof of one structure, which is ‘in progress’.” (FAP ¶¶ 45-48.) A 2023 expert report “depicted via photographs water damage, mold growth and/or structural damage in at least 10 of the buildings.” (FAP ¶ 50.) Finally, at an inspection in June 2023, Petitioner identified “extensive water damage, mold and structural components in need of replacement.” (FAP ¶ 51.) Thus, the FAP alleges the City has failed to take action and the water damage and mold have “progressively become worse over the last decade.” (FAP ¶ 54.) Liberally construing the pleading as the court must, Petitioner has now alleged sufficient facts to support a claim the City has abused its discretion—it has acted arbitrarily, capriciously, and unreasonably—by failing to take action to preserve Rockhaven and comply with its legal duties under GMC section 15.20.120.

Respondents argue for the first time in reply that Petitioner “fails to allege credible facts that the City’s actions were ‘arbitrary, capricious, or outside the bounds of reason’.” (Reply 2:10-12; see also Reply 5:2-5 [discussing the credibility of Petitioner’s allegations].) Respondents did not make such an argument in their demurrer to attack Petitioner’s claim, “[t]he actions that City has taken with respect to Rockhaven, as well as the actions the City failed to take, constitute an abuse of discretion because they were arbitrary and capricious in that the City’s actions did not actively prevent Rockhaven from sustaining demolition by neglect, deterioration, dilapidation and/or decay under a proper interpretation of the Glendale Municipal Code.” (FAP ¶ 69.)

“The salutary rule is that points raised in a reply brief for the first time will not be considered unless good cause is shown for the failure to present them before.” (Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010.) Respondents do not show good cause to raise these new arguments in reply. The court therefore rejects the new arguments on that procedural basis.

Even if considered, however, Respondents’ new reply arguments are not persuasive at the pleading stage. As noted earlier, on demurrer, the court “assume[s] the truth of the allegations in the complaint. . . .” (California Logistics, Inc. v. State of California, supra, 161 Cal.App.4th at 247.) The court cannot determine the “credibility” of Petitioner’s allegations when considering a demurrer. Further, as summarized earlier, Petitioner has alleged facts and a timeline that, if proven at trial and not rebutted, could plausibly support a finding the City failed to take reasonable action to preserve Rockhaven over a lengthy period of time and has caused a “demolition by neglect” within the meaning of GMC section 15.20.120. Whether the City has engaged in arbitrary, capricious, or unreasonable conduct, in light of those allegations, presents an inherently factual question that cannot be adjudicated on demurrer.

Petitioner prays for a “writ of mandate under Code of Civil Procedure § 1085 ordering Respondents to comply with their mandatory duty under Glendale Municipal Code §15.20.120.” (FAP Prayer ¶ (v).) Thus, contrary to Respondents’ argument, the petition does not necessarily seek a writ directing Respondents to exercise their discretion in a specific way. Rather, the petition seeks a writ directing Respondents “to take some action.” (AIDS Healthcare Foundation v. Los Angeles County Dept. of Public Health, supra, 197 Cal.App.4th at 704.)

Petitioner alleges the “City has and continues to waste public funds and damage public property by failing to comply with its duty to actively prevent the demolition by neglect, deterioration, dilapidation and decay and damage to Rockhaven as required by GMC 15.20.120.” (FAP ¶ 77.) “The City’s actions also involve both an actual and threatened expenditure of public funds. Not only did the City squander its own funds, but is threatening to squander state funds allocated for rehabilitating Rockhaven under the State Grant and recently appropriated city funds.” (FAP ¶ 78.)

Respondents contend that Petitioner has not alleged a cause of action for waste because “Petitioner has not and cannot point to any specific mandatory duty that the City has violated.” (Memo 9:12-13.)

“Section 526a gives citizens standing to challenge governmental action and is liberally construed to achieve that purpose. Taxpayer suits are authorized only if the government body has a duty to act and has refused to do so. If it has discretion and chooses not to act, the courts may not interfere with that decision. [Citation.] The term ‘waste’ under section 526a ‘means something more than an alleged mistake of public officials in matters involving the exercise of judgment or wide discretion. . . . On the other hand, a court must not close its eyes to wasteful, improvident and completely unnecessary public spending, merely because it is done in the exercise of a lawful power.’ [Citation.]” (Daily Journal Corp. v. County of Los Angeles (2009) 172 Cal.App.4th 1550, 1557-58.)[3]

Here, as discussed earlier, Petitioner has now sufficiently alleged the City has engaged in arbitrary, capricious, and unreasonable conduct in failing to take action to preserve Rockhaven over a lengthy period of time and has caused a “demolition by neglect” within the meaning of GMC section 15.20.120. Petitioner alleges, in failing to take such action, the City has wasted public funds. (FAP ¶¶ 77-85.) At the pleading stage, Petitioner’s allegations are sufficient to support a claim the City has engaged in “wasteful, improvident and completely unnecessary public spending” that may be enjoined pursuant to Code of Civil Procedure section 526a. Liberally construing the pleading, Petitioner does not challenge simply an “alleged mistake of public officials,” but rather illegal and wasteful use of public funds and property.

While Code of Civil Procedure section 526a does not authorize the courts to interfere with the agency’s exercise of discretion, taxpayer suites are authorized “if the government body has a duty to act and has refused to do so.” (Daily Journal Corp., supra, 172 Cal.App.4th at 1557-1558.) Because Petitioner alleges the City failed to perform a mandatory duty enjoined by law (GMC section 15.20.120), it has alleged a cause of action for waste pursuant to Code of Civil Procedure section 526a.

In their demurrer, Respondents have not developed an argument the analysis under Code of Civil Procedure section 526a is materially different for a common law taxpayer action. Accordingly, for the same reasons set forth above, Petitioner has also sufficiently alleged a common law taxpayer action. (See Los Altos Property Owners Assn. v. Hutcheon (1977) 69 Cal.App.3d 22, 26 [common law waste includes “fraud, collusion, ultra vires, or a failure to perform a duty specifically enjoined”].)

[1] Respondents did not file a request for judicial notice with their demurrer to the FAP, but they indicated in the notice that the demurrer was based on a request for judicial notice. (Dem. 2.) The court infers that Respondents intended to rely on the June 12, 2023, request for judicial notice, which the court granted in its ruling on the prior demurrer. The court reaches the same result on the instant demurrer even if judicial notice is not granted.

[2] The second cause of action is a statutory claim for waste pursuant to Code of Civil Procedure section 526a and the third cause of action is a common law taxpayer action.

[3] “[T]he limitations inherent in section 526a actions are founded in the separation of powers principle of our tripartite system of government.” (Ibid.)