Judge: Virginia Keeny, Case: 21STCV37436, Date: 2025-02-07 Tentative Ruling
Case Number: 21STCV37436 Hearing Date: February 7, 2025 Dept: 45
THE HIGHROAD, LLC V. CITY OF LOS
ANGELES, ET AL.
MOTION TO STRIKE DEFENDANTS’ MOTION FOR JUDGMENT ON
THE PLEADINGS; MOTION FOR SANCTIONS
Date of Hearing: February 7, 2025 Trial Date: August 4,
2025
Department: 45 Case
No.: 21STCV37436
Moving
Party: Plaintiff and
Petitioner Highroad, LLC
Responding
Party: Defendants and Respondents
City of Los Angeles and Los Angeles Department of Building and Safety
BACKGROUND
On October 12, 2021, Plaintiff and Petitioner The Highroad,
LLC aka The High Road, LLC (“Highroad” or “Petitioner”) filed a Complaint and
Petition against Defendants and Respondents City of Los Angeles (“COLA”), City
of Los Angeles Department of Building and Safety (“LADBS”) (collectively, the
“City” or “Respondents”), and Does 1-10, inclusive, in The Highroad, LLC v.
City of Los Angeles, et al., LASC Case No. 21STCV37436 (the “1st
Action”). The Complaint alleges causes of action for: (1) declaratory relief
for violation of the Mitigation Fee Act; (2) restitution of Linkage Fees; (3) money
had and received; and (4) traditional mandamus.
Also, on such date, the 1st Action was assigned to the
Honorable Mel Red Recana sitting in Department 45. (10/12/21 Notice of Case
Assignment.)
On November 2, 2021, the 1st Action was reassigned to Judge
James C. Chalfant in Department 85 at the Stanley Mosk Courthouse for all
purposes. (11/02/21 Minute Order at p. 1.)
On November 15, 2021, the City filed a demurrer to all
causes of action in the Complaint and Petition, to which Highroad opposed and
the City replied.
On February 8, 2022, after hearing oral argument, Judge
Chalfant overruled the demurrer to the Petition. (02/08/22 Minute Order at p.
1.) The Court agreed with the City that “Highroad be ordered to separate its
Mitigation Fee Act, special tax under Prop 218, and takings claims” as “the
court [would] only hear the mandamus claim—including the Mitigation Fee Act and
special tax under Prop 218 claims, but not the takings – and the subsumed
declaratory relief claim on the same subjects.” (02/08/22 Minute Order at p.
1.) Petitioner was ordered “to separate the claims in the first and fourth
causes of action in a First Amended Complaint/Petition (“FAP”) within 20 days.”
(02/08/22 Minute Order at p. 1.) The Court indicated that “Respondents [would]
have 20 days after the FAP is filed and served to answer only.” (02/08/22
Minute Order at p. 1.) The Court indicated that “[t]he restitution, money had
and received, and takings claim are stayed pending the outcome of mandamus and
subsumed claim declaratory relief.” (02/08/22 Minute Order at p. 2.)
On February 28, 2022, in the 1st Action, Highroad filed the
operative First Amended Complaint and Petition (“FAP”), which alleges causes of
action for: (1) declaratory relief protesting the imposition and payment of a
Linkage Fee in violation of the Mitigation Fee Act; (2) declaratory relief
protesting the imposition and payment of a Linkage Fee which violates the U.S.
and California constitutions; (3) declaratory relief protesting the imposition
and payment of a Linkage Fee which violations Proposition 218; (4) restitution
of Linkage Fees; (5) money had and received (common counts); (6) writ of
mandate for violation of the Mitigation Fee Act; (7) writ of mandate for
violation of the U.S. and California constitutions; and (8) writ of mandate for
violation of Proposition 218.
On June 21, 2022, after hearing, the Court granted
Respondents’ motion to limit the issues to be decided at trial under CCP § 598
concerning the Mitigation Fee Act and Special Tax Claims. (06/21/22 Minute
Order at p. 1.) The Court indicated that “[i]f the Mitigation Fee Act and laws
against special tax are applicable to this case, the City is (1) required to
establish a reasonable relationship between the linkage fee’s use and need and
the type of development at issue under Govt. Code section 66001(a), which is
new residential development comprising eight subtypes identified in a fee
schedule adopted by City Council, and (2) not required to establish or
otherwise justify any relationship between the linkage fees and each of the 408
individual properties for which Highland is assignee under govt. code section
66001(b).” (06/21/22 Minute Order at pp. 1-2.)
On October 6, 2023, in The Highroad, LLC v. City of Los
Angeles, et al., LASC Case No. 23STCV24554 (the “2d Action”),
Highroad filed a Complaint against Respondents for: (1) declaratory relief
protesting the imposition and payment of a Linkage Fee in violation of the
Mitigation Fee Act; (2) declaratory relief protesting the imposition and
payment of a Linkage Fee which violates the U.S. and California constitutions;
(3) declaratory relief protesting the imposition and payment of a Linkage Fee
which violations Proposition 218; (4) restitution of Linkage Fees; and (5)
money had and received (common counts). The Complaint in the 2d Action alleges
that it should be consolidated with the 1st Action as it involves the same
parties and the same issues. (2d Action Compl., ¶ 3.)
On
October 10, 2023, in the 1st Action, the Court held a hearing on Highroad’s
Petition for Writ of Mandate to compel the City to set aside linkage fees
imposed on Highroad’s Assignors. (10/10/23 Minute Order at pp. 1-2.) The Court
granted the FAP’s first and sixth causes of action concerning the Mitigation
Fee Act (MFA) and denied the third and eighth causes of action. (10/10/23
Minute Order at p. 2.) The Court stated that “[t]he FAP’s remaining claims for
restitution, money had and received, and takings are ordered transferred to
Department 45 for resolution.” (10/10/23 Minute Order at p. 2.)
On January 3, 2024, in the 2d Action, Highroad filed a First
Amended Complaint (“FAC”), which alleges the same causes of action as the FAP
in in the 1st Action.
On February 2, 2024, the City filed an Answer to the FAC in
the 2d Action.
On February 16, 2024, the 1st Action and the 2d Action were
deemed related and consolidated pursuant to a stipulation between the parties.
(See 02/16/24 Stipulation and Order.) Further, pursuant to such stipulation,
the Court dismissed Highroad’s takings causes of action, which are the second
and seventh causes of action in the 1st Action and the 2d Action. (See 02/16/24
Stipulation and Order at p. 4:9-11.)
On August 5, 2024, the City filed a motion for judgment on
the pleadings (“MJOP”) as to the FAP and the FAC, which were filed in the 1st
Action and 2d Action, respectively. The City moves for “judgment on the
pleadings pursuant to common law authority as well as Code of Civil Procedure
section 438, subdivisions (c)(1)(B)(ii) and (c)(2)(A) as to the Fourth Causes
of Action (for restitution) and Fifth Causes of Action (for money had and
received) alleged by [Highroad] in the 2/28/22 [FAP] and 1/3/24 FAC.” (Not. of
Mot. at p. 2:17-20.) The motion is made on the grounds that neither the fourth
nor fifth causes of action in either of the operative pleadings in either the 1st
Action or 2d Action “alleges facts sufficient to state a cause of action, and
that [Highroad] does not have any basis to claim or pray for refunds. Reasons
includes, inter alia: Government Code sections 66020 and 66021 do not authorize
a plaintiff who did not pay and protest to file suit for refunds, none of the
parties who paid any of the challenged fees filed protests pursuant [to]
Section 66020 and the ordinance at issue in this case (Ordinance No. 185342),
Plaintiff lacks standing, and Plaintiff cannot pursue such claims as an
assignee.” (Not. of Mot. at p. 3:5-12.)
On October 23, 2024, Highroad filed the instant motion to
strike the City’s motion for judgment on the pleadings, which Highroad contends
seeks to have Department 45 reconsider Judge Chalfant’s October 10, 2023 order.
The motion is made on the grounds that the City’s motion for judgment on the
pleadings “is an untimely, improper motion for reconsideration under C.C.P. §
1008 in that it seeks to relitigate issues already ruled upon by Judge James C.
Chalfant in Department 85 at the trial of the Petition for Writ of Mandate on
October 10, 2023.” (Not. of Mot. at p. 1:27-2:2.)
On November 5, 2024, Highroad filed and served a notice of
motion for sanctions under CCP § 128.5 against the City and their attorneys of
record. The notice of motion of sanctions is made on the grounds that the
City’s MJOP is a “thinly disguised, untimely, improper motion for
reconsideration.” (See 11/05/24 Not. of Mot. at p. 2:10-11.)
On December 11, 2024, Highroad filed and served a motion for
sanctions in the amount of $12,060.00 under CCP § 128.5 against the City. Highroad
asserts that the City has “engaged in bad faith actions that are frivolous or
solely intended to cause unnecessary delay by [the City] filing and refusing,
during the safe-harbor period, to withdraw their frivolous MJOP.” (Not. of Mot.
at p. 2:8-10.)
On January 27, 2025, the City filed an opposition to the
motion to strike as well as an opposition to the motion for sanctions.
On January 31, 2025, Highroad filed and served reply briefs
as to the motion to strike and motion for sanctions.
The Court will address the motion to strike and the motion
for sanctions in this one ruling.
[Tentative] Ruling
Plaintiff and Petitioner The Highroad, LLC’s Motion to
Strike Defendants and Respondents City of Los Angeles and City of Los Angeles
Department of Building and Safety’s Motion for Judgment on the Pleadings is GRANTED.
Plaintiff and Petitioner The Highroad, LLC’s Motion for
Sanctions is DENIED.
MOTION
TO STRIKE THE CITY’S MOTION FOR JUDGMENT ON THE PLEADINGS
Legal Standard/Applicable Law
Code
Civ. Proc. § 1008(a) requires that a motion for reconsideration be based on new
or different facts, circumstances, or law. (New York Times Co. v.
Superior Court (2005) 135 Cal.App.4th 206, 212.) A party seeking
reconsideration must also provide a satisfactory explanation for the failure to
produce the evidence at an earlier time. (Ibid.) A trial court’s
ruling on a motion for reconsideration is reviewed under the abuse of
discretion standard. (Ibid.)
California
Code of Civil Procedure, Section 1008(a) provides that “[w]hen an
application for an order has been made to a judge, or to a court, and refused
in whole or in part, or granted, or granted conditionally, or on terms, any
party affected by the order may, within 10 days after service upon the party of
written notice of entry of the order . . . [may] make application to the same
judge or court that made the order, to reconsider the matter and modify, amend,
or revoke the prior order.” “The party making the application shall state
by affidavit what application was made before, when and to what judge, what
order or decisions were made, and what new or different facts, circumstances,
or law are claimed to be shown.” (Code Civ. Proc., § 1008, subd. (a).) A
trial court has discretion with respect to granting a motion for
reconsideration. (New York Times Co. v. Superior Court, supra,
135 Cal.App.4th 206, 212.)
“The
name of a motion is not controlling, and, regardless of the name, a motion
asking the trial court to decide the same matter previously ruled on is a
motion for reconsideration under Code of Civil Procedure section 1008.” (Powell v.
County of Orange (2011) 197 Cal.App.4th 1573, 1577.)
ANALYSIS
AS TO THE MOTION TO STRIKE
Parties’
Positions
In
the moving papers, Highroad argues that the City’s MJOP should be stricken
because: (1) the Court has already adjudicated standing, assignments, and
timeliness of the protest/government claim, which was a trial on the merits;
(2) the writ was a trial on the merits, which also adjudicated the issues of
standing and timeliness of protest; (3) based on the adjudication of the writ
by Department 85, the only issue before Department 45 is the amount of damages;
(4) the MJOP is an improper motion for reconsideration; (5) the MJOP/motion for
reconsideration is untimely and fails to meet statutory requirements; and (6)
in a bifurcated trial, the findings in the liability phase are binding in the
damages phase and cannot be relitigated or subverted.
In
opposition to the motion, the City raises the following arguments: (1) the MJOP
does not seek reconsideration of an order on any cause of action adjudicated by
Judge Chalfant; (2) the Court retains authority to rule on Highroad’s lack of
right to claim refunds; (3) Highroad’s lack of standing is a legal issue and
cannot be waived; and (4) Highroad may oppose, but not strike, the City’s MJOP.
On
reply, Highroad argues that: (1) the opposition attempts to invent a
non-existent rule that use of a motion to strike should be cautious and
sparing; (2) Judge Chalfant’s finding of standing and the refund order applies
to all of Highroad’s causes of action; (3) the MJOP asks Department 45 to
contradict Judge Chalfant’s writ trial order with its finding of standing,
assignment, a timely protest, and the order for Department 45 to calculate the
refund amount; (4) the opposition mischaracterizes the history of the
proceedings and Judge Chalfant’s ruling; (5) the City cites to inapplicable
authorities in support of the arguments raised in the opposition; and (6) this
was a complete CCP § 1048(a) consolidation of both lawsuits and thus the writ
trial ruling applies to both identical cases.
Allegations
of the FAP in the 1st Action
The
Court finds it necessary to set forth the pertinent allegations of the
operative FAP, which was filed on February 28, 2022, in The Highroad, LLC v.
City of Los Angeles, et al., LASC Case No. 21STCV37436 (the “1st
Action”).
The
FAP alleges the following: Highroad is the assignee of numerous Linkage Fee
claimants. (FAP at p. 2:22-23.) Linkage Fee charges in excess of $10,000,000.00
were assessed and paid or will be paid for a residential Linkage Fee to the
City for a residential building permit. (FAP at p. 2:24-27.) Such Linkage Fee
was not given with the required statutory notice under Gov. Code § 66020(d)(1)
and/or City Ordinance #185342(3)(b), and the claimants were adversely impacted
by the Linkage Fee. (FAP at p. 2:27-3:1.) Highroad alleges that the Linkage Fee
violates the Mitigation Fee Act (the “MFA”) under Gov. Code § 66000 et seq.
and the United States Constitution. (FAP at p. 3:1-2.) Highroad is an assignee
and “brings this action as and for a Complaint combined with a Petition for
Writ of Mandate, seeking judicial review of and relief from the imposition and
payment of the ‘Linkage Fee,’ which is a fee, dedication, reservation, or
exaction imposed on development projects by . . . [the City] . . . under
Government Code §§ 66020, 66021, and City of Los Angeles Ordinance #185342,
like [Highroad’s] residential projects . . . .” (FAP at p. 3:3-9.)
Highroad
is the written assignee of all Linkage Fee rights and claims of 433 claimants
and assignors. (FAP, ¶ 2; Exh. A.) Linkage Fee charges in excess of
$10,000,000.00 were assessed and paid, or will be paid, to the City by the
claimants and assignors who did not receive the required statutory 90-day
notice and were adversely impacted by the unlawful Linkage Fee. (FAP, ¶ 2.)
Hundreds of persons and/or entities that paid or will pay the unlawful Linkage
Fee have assigned their respective rights and claims to Highroad. (FAP, ¶ 4.) In
or about June 2018, COLA started charging and imposing the Linkage Fee. (FAP, ¶
11.) The Linkage Fee is the most expensive line item on the building permit.
(FAP, ¶ 11.)
Prior
to adopting the Linkage Fee, COLA commissioned a so-called “Nexus Study” from
BAE Urban Economics (“BAE”) to demonstrate a “nexus” or “linkage” between
market rate development and reduced housing affordability. (FAP, ¶ 12.) BAE’s
2016 study was limited to new housing, which would not generate significant
Linkage Fee revenue. (FAP, ¶ 12.) In 2017, just prior to the vote to adopt the
Linkage Fee, in order to justify the fee on the much more common event of
replacement housing, BAE issued a supplement to the BAE 2016 study. (FAP, ¶
12.) Highroad alleges that BAE’s studies fail the requisite MFA test. (FAP, ¶
14.) Highroad alleges that the City failed to provide the required 90-day
notice required by Gov. Code § 66020(d) and Ordinance #185342(3)(b). (FAP, ¶¶
22-23.) Highroad alleges that the City thwarted a pre-lawsuit protest by
Highroad and/or its Assignors by failing to give proper notice; however,
Highroad and its assignors still timely filed and served a timely protest to
the Linkage Fees. (FAC, ¶¶ 26-27; Exh. B.)
Highroad’s
assignors were forced to pay in excess of $10,000,000.00 of Linkage Fees under
duress because their building permits were held hostage. (FAP, ¶ 28.) Highroad
contends that COLA failed to meet the requirements of the MFA prior to charging
the Linkage Fee. (FAP, ¶¶ 29-36.)
As
relief for the first three causes of action in the FAP—which are for
declaratory relief protesting the imposition and payment of the Linkage fee
under the MFA, the U.S. and California Constitutions, and Proposition 218,
respectively—Highroad requests identical relief: a refund of all the Linkage
Fees paid to the City by Highroad’s assignors, that the Linkage Fees be
declared invalid and void, an award of Gov. Code § 66020 interest of eight
percent, and attorneys’ fees pursuant to CCP § 1021.5 and/or the Common Fund
Doctrine. (FAP, ¶¶ 43, 50, 54.)
Allegations
of the FAC in the 2d Action
The
operative FAC in the 2d Action was filed on January 3, 2024, in The
Highroad, LLC v. City of Los Angeles, et al., LASC Case No. 23STCV37436
(the “2d Action”).
In
the operative FAC in the 2d Action, Highroad alleges that “[t]his lawsuit
requests that the granted writ of mandate on the identical lawsuit, parties,
facts and issues in Case No. 21STCV37436 . . . be applied as res judicata and
collateral estoppel in this lawsuit.” (FAC at p. 3:2-4; Exh. B.)
The
FAC makes the same allegations as the FAP in the 1st Action except that the FAC
applies to a different group of Assignors. (FAC at p. 7:1-10; Exh. A.) The FAC
alleges that Linkage Fees in excess of $15,000,000.00 were improperly imposed
on various assignors, on the same grounds that are alleged in the FAP in the 1st
Action. (FAC, ¶ 1; Exh. A.) In fact, Highroad alleges that the writ of mandate
issued in the 1st Action is concerned with identical facts, parties, and issues
in the 2d Action. (FAC, ¶ 3; Exh. B.) Highroad alleges that the City
acknowledges that the claims asserted in the 2d Action are identical to those
at issue in the 1st Action. (FAC, ¶ 4; Exh. C.)
The
Court’s October 10, 2023 Order
In
support of the motion, counsel for Highroad, Steve A. Hoffman (“Hoffman”),
provides the Court with a copy of the Court’s October 10, 2023 order issued by
Judge James C. Chalfant in Department 85 with respect to the trial of the
mandamus cause of action. (Hoffman Decl., ¶ 2; Exh. 1.) The Court finds it
necessary to set forth pertinent information from the Court’s October 10, 2023
order.
The
FAP in the 1st Action alleges the following: Highroad is the assignee of the
rights of claimants identified on a spreadsheet attached to such pleading (the
“Assignors”) who were assessed and paid LADBS a linkage fee for a residential
building permit. (Hoffman Decl., Exh. 1 at p. 1.) The total linkage fees
charged to the Assignors exceed $10 million and Highroad, as assignee, seeks
judicial review of, and relief from, the imposition and payment of the linkage
fees. (Hoffman Decl., Exh. 1. at p. 1.) Highroad sought a writ of traditional
mandate to compel the City to set aside linkage fees imposed on Highroad’s
Assignors. (Hoffman Decl., Exh. 1 at p. 1.)
The
Court’s October 10, 2023 order addressed the standing of Highroad. (Hoffman
Decl., Exh. 1 at pp. 21-22.) Highroad argued that it had standing because it
was beneficially interested in the outcome of the case. (Hoffman Decl., Exh. 1.
at p. 22.) The Court noted that Highroad sought “to set aside more than $10
million in linkage fees imposed on its Assignors’ residential housing
developments.” (Hoffman Decl., Exh. 1 at p. 22.) Critically, the Court stated
that the “City does not dispute Highroad’s standing for the claims at issue
(although it can challenge individual Assignor entitlement to a refund in a
next phase).” (Hoffman Decl., Exh. 1 at p. 22.) The City also did not dispute
the timeliness of Highroad’s lawsuit. (Hoffman Decl., Exh. 1 at p. 23.)
Ultimately,
the Court found that “the linkage fees paid by the Assignors are invalid under
the [Mitigation Fee Act] and must be refunded in an amount to be determined by
Department 45.” (Hoffman Decl., Exh. 1. at p. 35.) The Court granted the first
and sixth causes of action concerning the Mitigation Fee Act and denied the
third and eighth causes of action concerning a special tax. (Hoffman Decl.,
Exh. 1 at p. 35.) The remaining claims in the FAP for restitution, money had
and received, and takings were ordered transferred to Department 45 for
resolution. (Hoffman Decl., Exh. 1 at p. 35.)
The amount of the refund for the invalid linkage fees were ordered to be
refunded in an amount determined by Department 45. (Hoffman Decl., Exh. 1 at p.
35.)
Highroad
is Entitled to Move to Strike the City’s MJOP
Upon
motion of a party or on its own motion, the court may “[s]trike out any
irrelevant, false, or improper matter inserted in any pleading.” (Code Civ.
Proc., § 436, subd. (a).) A court may also “[s]trike out all or any part of any
pleading not drawn or filed in conformity with the laws of this state, a court
rule, or an order of the court.” (Code Civ. Proc., § 436, subd. (b).) A
pleading is defined as “a demurrer, answer, complaint, or cross-complaint.”
(Code Civ. Proc., § 435, subd. (a)(2).) Prior to filing a motion to strike,
“the moving party shall meet and confer in person, by telephone, or by video
conference with the party who filed the pleading that is subject to the motion
to strike for the purpose of determining if an agreement can be reached that
resolves the objections to be raised in the motion to strike.” (Code Civ.
Proc., § 435.5, subd. (a).) “A determination by the court that the meet and
confer process was insufficient shall not be grounds to grant or deny the
motion to strike.” (Code Civ. Proc., § 435.5, subd. (a)(4).)
The
Court finds that Highroad has sufficiently met and conferred prior to filing
the instant motion to strike. (See 12/02/24 Hoffman Decl. re: Meet and Confer,
¶ 4.) However, the Court finds that CCP § 436 does not give Highroad the
authority to move to strike a motion. Under CCP § 435(a)(2), a motion is not a
pleading.
The
Court, however, does have authority to strike an improper motion. (Andersen
v. Superior Court of California in and for Napa County (1921) 187 Cal. 95,
103 (“[T]he proper practice in the case of an unauthorized motion is to strike
it from the files.”).) The Court also has the inherent power to strike a
pleading that is “irrelevant to resolution of the remaining issues.” (Greshko
v. County of Los Angeles (1987) 194 Cal.App.3d 822, 830.)
Thus,
the Court rejects the argument of the City that Highroad cannot move to strike
the City’s MJOP. (Opp’n to Motion to Strike at p. 14:11-15.)
The
Court therefore will assess the motion to strike on the merits.
The
City’s Motion for Judgment on the Pleadings is an Improper Request for
Reconsideration of Issues Previously Decided by Judge Chalfant
Highroad
contends that the City’s motion for judgment on the pleadings is an improper
motion for reconsideration and that the City is seeking a redo and is engaged
in forum shopping. (Memo. of Ps and As at pp. 6-8.) The City opposes the motion
to strike and contends that the motion for judgment on the pleadings does not
seek reconsideration of an order or any cause of action adjudicated by Judge
Chalfant. (Opp’n at pp. 7-10.)
“Issues
adjudicated in earlier phases of a bifurcated trial are binding in later phases
of that trial and need not be relitigated.” (Reliant Life Shares, LLC v.
Cooper (2023) 90 Cal.App.5th 14, 31-32 [citations omitted, internal
quotations omitted].) “[D]uplication of effort is the very opposite of the
purpose of bifurcated trials.” (Ibid. [internal quotations omitted].) A
court may revisit an issue of law raised in a subsequent motion which was
raised in a prior unrelated motion. (Emerald Bay Community Assn v. Golden
Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1087 [explaining that “a
trial court is not prevented in a motion for summary judgment or adjudication
from revisiting issues of law raised on demurrer . . . .”].) “A court may
consider its order granting or denying a motion and may even reconsider or
alter its judgment so long as the judgment has not yet been entered. Once
judgment has been entered, however, the court may not reconsider it and loses
its unrestricted power to change the judgment.” (APRI Ins. Co. v. Superior
Court (1999) 76 Cal.App.4th 176, 181.)
As
to standing, “[a] litigant’s standing to sue is a threshold issue to be
resolved before the matter can be reached on the merits.” (Apartment Assn.
of Los Angeles County, Inc. v. City of Los Angeles (2006) 136 Cal.App.4th
119, 128.) “Standing goes to the existence of a cause of action . . . and the
lack of standing may be raised at any time in the proceedings.” (Ibid.
[emphasis in original].) “[A] plaintiff who lacks standing cannot state a valid
cause of action; therefore, a contention based on a plaintiff’s lack of
standing cannot be waived under Code of Civil Procedure section 430.80 and may
be raised at any time in the proceeding.” (Sherwyn & Handel v.
Department of Social Services (1985) 173 Cal.App.3d 52, 58.)
Initially,
the Court finds that the City’s reliance on Community Hospital v. County of
Ventura (1996) 50 Cal.App.4th 199 (Community Hospital) is inapposite
as such case addressed whether a motion for summary judgment or summary
adjudication was a motion for reconsideration of a motion overruling a
demurrer. (Community Hospital, supra, 50 Cal.App.4th 199, 205.) Community
Hospital was concerned with whether the trial court was prevented from
revisiting issues of law raised on demurrer when assessing a motion for summary
judgment or summary adjudication, which the Community Hospital court
answered in the negative. (Community Hospital, supra, 50
Cal.App.4th 199, 205.) The City’s
reliance on Emerald Bay Community Assn v. Golden Eagle Ins. Corp. (2005)
130 Cal.Ap.4th 1078 (Emerald Bay) is also inapposite. Emerald Bay did
not involve a hearing on a petition for writ of mandate where findings were
made concerning standing. The City’s reliance on Coshow v. City of Escondido
(2005) 132 Cal.App.4th 687 is also inapposite as such case concerned
whether it was proper for the trial court to treat motions in limine as
a motion for judgment on the pleadings. (Coshow v. City of Escondido, supra,
132 Cal.App.4th 687, 701-702.)
On
the other hand, the Court also finds that Highroad’s citation to Reliant
Life Shares, LLC v. Cooper, supra, 90 Cal.App.5th 14 is inapposite
as such case did not involve findings made pursuant to a writ of mandate that
were sought to be applied to stayed claims as is the case here.
Here,
the pending MJOP filed by the City addresses the fourth cause of action for
restitution and the fifth cause of action for money had and received in the
operative pleadings in the 1st Action and the 2d Action.
The
Court’s October 10, 2023 order, issued by Judge Chalfant in Department 85, set
forth that Highroad sought the following relief: (1) declaratory relief that
the City’s imposition of the linkage fees on Highroad and its Assignors is
invalid; (2) a judgment directing the City to reimburse Highroad and its
Assignors with 8% interest and attorney’s fees; (3) injunctive relief
restraining the City from imposing or collecting linkage fees; (4) a writ of
mandate compelling the City to set aside the linkage fees; and (5) attorney’s
fees and costs. (See 10/10/23 Order at p. 1.)
Judge
Chalfant’s order explicitly stated that “the linkage fees paid by the Assignors
are invalid under the [Mitigation Fee Act] and must be refunded in an amount to
be determined by Department 45." (10/11/23 Order at p. 35.) The fourth and
fifth causes of action in the FAP were transferred to Department 45 for
resolution. (10/11/23 Order at p. 35.) The fourth and fifth causes of action in
the FAP are based upon the now-deemed invalid linkage fees. (FAP, ¶¶ 55-64.)
Here, the remaining fourth and fifth causes of action in the FAP concern
restitution of the linkage fees and the City’s indebtedness to Highroad for the
linkage fees. (FAP, ¶¶ 55-64.) Judge Chalfant has already deemed the paid
linkage fees as invalid. (See 10/10/23 Order at p. 35.) As to standing, Judge
Chalfant’s order discussed the required standing of a party seeking a writ of
mandate and indicated that such party must have a beneficial interest in the
outcome of a case. (See 10/10/23 Order at p. 22.) Highroad was found to have
standing for the claims at issue. (See 10/10/23 Order at pp. 21-22.)
Highroad
argues on reply that there was a complete consolidation of the 1st Action and
the 2d Action, and thus the writ trial ruling applies to both actions. (Reply
at p. 9:9-21.) “There are two types of consolidation: a complete consolidation
resulting in a single action, and a consolidation of separate actions for
trial. Under the former procedure, which may be utilized where the parties are
identical and the causes could have been joined, the pleadings are regarded as
merged, one set of findings is made, and one judgment is rendered. In a
consolidation for trial, the pleadings, verdicts, findings, and judgments are
kept separate; the actions are simply tried together for the sake of
convenience and judicial economy.” (Sanchez v. Superior Court (1988) 203
Cal.App.3d 1391, 1396.)
The
Court agrees with Highroad as to its position on consolidation. As to the FAC
in the 2d Action, which the City concedes in its MJOP is duplicative of the FAP
but-for the alleged Linkage Fees being paid by different assignors (See 08/05/24
MJOP at p. 2:10-13), the Court finds that such action has been completely
consolidated with the 1st Action. Although the 1st Action and 2d Action were
not related and consolidated until after Judge Chalfant made his findings as to
the writ and declaratory relief claims in the 1st Action, there is no dispute
between the parties that the claims are duplicative. The Court fails to see why
Judge Chalfant’s findings as to standing and the invalidity of the Linkage Fees
would not apply to: (1) the entirety of the FAP in the 1st Action; and (2) the
entirety of the FAC in the 2d Action. Both actions concern the same primary
right. A “primary right is simply the plaintiff’s right to be free from the
particular injury suffered.” (Crowley v. Katleman (1994) 8 Cal.4th 666,
681.) Here, both actions concern the right to be free from improperly imposed Linkage
Fees. The MJOP essentially challenges Highroad’s right to be refunded the Linkage
Fees, which Judge Chalfant has already determined that Highroad must be refunded.
(10/10/23 Order at p. 35.)
The
Court finds that the City’s argument that the Court retains authority to rule
on the lack of Highroad’s right to claim refunds is not persuasive. (Opp’n at
pp. 10-12.) This department “may not reconsider the previous ruling of another
superior court judge.” (People v. Goodwillie (2007) 147 Cal.App.4th 695,
713.)
Here,
the Court finds that if it were to allow the MJOP to proceed—which is based on
Highroad’s apparent lack of standing—there is a clear risk that such findings
may conflict with the order issued by Judge Chalfant. Judge Chalfant explicitly
stated that standing was present and that “[t]he City [did] not dispute
Highroad’s standing for the claims at issue (although it can challenge the
individual Assignor entitlement to a refund in a next phase).” (10/10/23 Order
at p. 22.) In the MJOP, the City contends that Highroad does not have any basis
to claim or pray for refunds. (See MJOP at p. 3:8.) The Court finds that such
position conflicts with Judge Chalfant’s order which deemed the Linkage Fees
invalid and ordered that such fees be refunded in an amount to be determined by
this department. (10/10/23 Order at p. 35.)
The
Court will briefly address the City’s argument that Highroad’s lack of standing
is a legal issue and cannot be waived. (Opp’n at pp. 12-14.) The City’s
citation to Apartment Assn. of Los Angeles County, Inc. v. City of Los
Angeles, supra, 136 Cal.App.4th 119 is inapposite as such case
addressed a challenge to standing raised for the first time on appeal and not
where, as here, standing was found to exist during writ proceedings. The City’s
citation to Sherwyn & Handel v. Department of Social Services, supra,
173 Cal.App.3d 52 is also inapposite as such case did not involve a subsequent
motion for judgment on the pleadings that sought to determine the issue of
standing after another judicial officer, during a writ proceeding, found the
existence of standing. Further, the City’s citations to: (1) River’s Side at
Washington Square Homeowners Association v. Superior Court of Yolo County (2023)
88 Cal.App.5th 1209; (2) Steadman v. Osborne (2009) 178 Cal.App.4th 950;
and (3) Payne v. Anaheim Memorial Medical Center, Inc. (2005) 130
Cal.App.4th 729 are all inapposite as such cases did not address instances
where, as here, a finding was made that standing existed and a party thereafter
moved to dispute such finding pursuant to a motion for judgment on the
pleadings.
In
sum, the Court finds that the MJOP is a veiled attempt to challenge the
standing of Highroad to claim Linkage Fees and is, in essence, a motion for
reconsideration on the issue of standing. While it is true that the MJOP does
not explicitly seek to modify, amend, or revoke Judge Chalfant’s October 10,
2023 order, the MJOP does impliedly seek to amend, modify, or revoke Judge
Chalfant’s findings as to standing. The issue of standing has already been
determined by Judge Chalfant. The City seeks a different conclusion as to
standing via the MJOP. Given that 1st and 2d actions concern the same primary
right—to be free from improperly imposed Linkage Fees—the Court finds that it
would be inappropriate for this department to deem that Highroad lacks standing
for some causes of action when Judge Chalfant has clearly determined that
standing is present and that the Linkage Fees are invalid. If the City believed
that Judge Chalfant’s October 10, 2023 order was improper, the City should have
followed the procedure set forth in CCP § 1008 to seek reconsideration of such
order. Any attempt to dispute Judge Chalfant’s findings as to standing and the
right of Highroad to claim refunds for the Linkage Fees via the MJOP is
untimely under CCP § 1008.
The
Court recognizes that the City has a right to file a motion for judgment on the
pleadings pursuant to CCP § 438 and Martinez v. San Diego County Credit
Union (2020) 50 Cal.App.5th 1048, 1058. However, the City cannot attempt to
subvert a finding of another judge of this Court as to an issue of law. Judge
Chalfant has found that standing is present, and that Highroad is entitled to a
refund for the invalid Linkage Fees. (10/10/23 Order at p. 35.)
The
Court finds it appropriate to grant Highroad’s request that the MJOP be
stricken on the grounds that “it seeks to relitigate issues already ruled upon
by Judge James C. Chalfant in Department 85 at the trial on the Petition for
Writ of Mandate on October 10, 2023.” (Not. of Mot. at p. 1:28-2:2.)
Based
on the foregoing, the Court GRANTS Highroad’s Motion to Strike the City’s
Motion for Judgment on the Pleadings.
MOTION
FOR SANCTIONS
Highroad moves for sanctions
against the City and their attorneys of record in the sum of $12,060.00 under
CCP § 128.5 on the grounds that the MJOP is a frivolous pleading.
Applicable Law
“Section 128.5 authorizes
sanctions for certain bad faith actions or tactics.” (Zarate v. McDaniel (2023)
97 Cal.App.5th 484, 488.) “[U]nder section 128.5, a trial court may award
reasonable expenses, including attorney’s fees, incurred by another party as a
result of actions or tactics, made in bad faith, that are frivolous or solely
intended to cause unnecessary delay.” (Ibid.) “Whether an action is
frivolous is governed by an objective standard. But the statute also requires a
finding of subjective bad faith, i.e., a showing of an improper purpose . . .
to support a sanctions award.” (Orange County Dept. of Child Support
Services v. Superior Court (2005) 129 Cal.App.4th 798, 804, citation
omitted.) Actions or tactics “include but are not limited to, the making or
opposing of motions or the filing and service of a complaint, cross-complaint,
answer, or other responsive pleading.” (Code Civ. Proc., § 128.5, subd.
(b)(1).) Frivolous means totally and completely without merit or for the sole
purpose of harassing an opposing party. (Code Civ. Proc., § 128.5, subd.
(b)(2).)
Highroad Has Not Shown That the
City Engaged in Sanctionable Conduct
Initially, the Court notes that
Highroad’s motion for sanctions raises the same arguments advanced in its
motion to strike the City’s MJOP. As stated above, the Court finds that the
City’s MJOP is an improper motion for reconsideration. Highroad, however, has
not made a showing of subjective bad faith as there is no declaration offered
in support of either the moving or reply papers that the MJOP was brought in
bad faith. (See Calcor Space Facility, Inc. v. Superior Court (1997) 53
Cal.App.4th 216, 224 [“In law and motion practice, factual evidence is supplied
to the court by way of declarations.”].) Highroad has not shown by admissible
evidence that the MJOP was brought for an improper purpose.
Thus, the Court DENIES Highroad’s
motion for sanctions.
CONCLUSION
Based on the foregoing, Plaintiff and Petitioner The
Highroad, LLC’s Motion to Strike Defendants and Respondents City of Los Angeles
and City of Los Angeles Department of Building and Safety’s Motion for Judgment
on the Pleadings is GRANTED.
Plaintiff and Petitioner The Highroad, LLC’s Motion for
Sanctions is DENIED.