Cinema W., LLC v. Baker
220 Cal. Rptr. 3d 415
Cal. Ct. App. 5th2017Background
- City of Hesperia entered a DDA with Cinema West for a 12‑screen movie theater: Cinema West would buy the land at fair market value, build the theater, operate it 10 years; City would build an adjacent on‑grade parking lot, water retention, and off‑site improvements and provide reciprocal access.
- The DDA contemplated a $102,529 one‑time payment and a $1,546,363 "forgivable loan" (plus a later $250,000 forgivable loan) as consideration for an operating covenant; City actually constructed the parking lot and related infrastructure costing about $1.5 million.
- Union requested a prevailing‑wage coverage determination; the Director concluded the theater, parking lot, and related work formed one integrated project and that public funds/subsidies were used, so the PWL applied.
- Cinema West administratively appealed, requested a hearing but submitted little or no evidence; the Director affirmed. Cinema West filed a writ petition in superior court, which upheld the Director and refused to admit extra‑record evidence.
- On appeal to the Court of Appeal, the court reviewed factual findings for substantial evidence and legal interpretation de novo, affirmed denial of extra‑record evidence, and held the development was a public work subject to prevailing wage requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether theater and parking lot are one "construction" (a single "complete integrated object") for §1720 | Cinema West: projects are distinct; mere coordination doesn't make private work public | Director: facts show coordinated design, timing, necessity and mutual agreements making a single integrated project | Court: the totality of facts show a complete integrated object; theater + parking lot are one construction project |
| Whether any public funds/subsidies were used to pay for the project | Cinema West: it received no public funds; forgivable loans/one‑time payment never actually changed hands | Director: DDA, promissory notes, and City construction of parking lot are public subsidies; even if payments not disbursed, City's construction counts | Court: City performance of construction (parking lot, infrastructure) is public funding under §1720(b)(2); PWL applies |
| Whether the superior court erred by excluding extra‑record evidence and denying a hearing (due process) | Cinema West: Director denied meaningful opportunity to present evidence and the court should consider extra‑record declarations | Director: parties had notice and chance to submit documents; extra‑record evidence is generally barred in mandamus review of quasi‑legislative decisions | Court: Director offered opportunities; Cinema West failed to diligently submit evidence; exclusion of extra‑record evidence was proper; no due process violation |
| Whether injunction relief was warranted to halt DLSE enforcement / penalties | Cinema West: DLSE proceedings and penalty assessment were baseless and statutory hearing deadline violated | Director: Cinema West sought stay in superior court; statutory 90‑day rule is directory; Cinema West failed to exhaust remedies | Court: Cinema West forfeited the issue by inadequate briefing; superior court's denial stands |
Key Cases Cited
- Lusardi Constr. Co. v. Aubry, 1 Cal.4th 976 (1992) (states PWL purpose and §1771 prevailing wage requirement)
- Oxbow Carbon & Minerals, LLC v. Dep't of Indus. Relations, 194 Cal.App.4th 538 (2011) (adopts "complete integrated object" and totality‑of‑facts approach to scope of "construction")
- Western States Petroleum Assn. v. Superior Court, 9 Cal.4th 559 (1995) (extra‑record evidence generally barred in mandamus review of quasi‑legislative agency decisions)
- City of Long Beach v. Dep't of Indus. Relations, 34 Cal.4th 942 (2004) (discusses scope of §1720 prior to statutory expansion; relevant to construction/payments analysis)
- Associated Builders & Contractors, Inc. v. San Francisco Airports Comm., 21 Cal.4th 352 (1999) (standard for substantial‑evidence review and deference to agency factfinding)
- Greystone Homes, Inc. v. Cake, 135 Cal.App.4th 1 (2005) (distinguishes payments that are not "payment for actual construction" but noted court relied on earlier statutory formulation)