Opinion
This case concerns an advertising display California’s Department of Transportation (Caltrans) found was in violation of the Outdoor Advertising Act, Business and Professions Code section 5200 et seq. (the Act).
FACTUAL AND PROCEDURAL BACKGROUND
We adopt some of the background from our previous unpublished opinion.
In 1999, West Washington bought a building at 155 West Washington Boulevard in Los Angeles. On the side of the building was an advertising space, referred to as a “wallscape,” measuring approximately 8,000 square feet. West Washington believed the wallscape had been in place since 1984, and was first installed in connection with the 1984 Olympics. When West Washington purchased the building, it located permits from the City of Los Angeles for the wallscape. West Washington did not contact Caltrans to determine whether there were state-issued permits. The wallscape displayed advertising visible from the I-10 Interstate Highway.
In March 2006, a Caltrans field inspector took note of the wallscape and determined it violated the Act because it did not have a permit (§ 5350), and exceeded 1,200 square feet (§ 5408).
Administrative Proceedings
West Washington contested the notice of violation. In advance of a January 2007 administrative hearing, the parties stipulated to several facts. The parties stipulated that “[t]he wallscape exceeds 1,200 square feet and is located within 660 feet of Interstate 10. The wallscape is approximately 8,000 square
West Washington argued Caltrans should be estopped from enforcing the Act as to the wallscape because so much time had passed without the agency taking any action. West Washington contended that the opportunity to profit from the wallscape was the significant motivation for its purchase of the building. It also represented that it had rejected offers in the millions of dollars for the sale of the display, based on the assumption that it would be able to continue legally operating the wallscape. West Washington asserted its agreement to temporarily reduce the size of the wallscape would cost it $50,000 per month in revenue. It further contended that if forced to permanently reduce the size of the wallscape, it would lose “the entire capitalized future value of the gross revenue (net of agency commissions) generated by the wallscape which calculated at conventional industry cap rates exceeds $12,000,000.”
In support of its equitable arguments, West Washington argued Caltrans knew or should have known of the wallscape years before it issued a citation. West Washington claimed Caltrans investigators must have driven past the extremely conspicuous wallscape and could not have missed it because it was so large. West Washington further pointed to photographs in Caltrans files that reflected both portions of the highway and the wallscape. The earliest photograph to include the wallscape was from 1985. West Washington contended there were no similarly situated sign owners, thus applying estoppel would not create a precedent. Caltrans responded with evidence demonstrating that in 2005 and 2006, it cited the owners of seven unrelated advertising signs for violations of the Act’s size requirements. The Caltrans employees who testified at the hearing could offer only suppositions to explain why Caltrans had not issued a notice of violation or taken other enforcement actions before 2006. However, these witnesses testified about Caltrans’s recordkeeping system for advertising display permits, and indicated there was no record of a permit for the wallscape.
The administrative law judge issued a proposed decision finding the wallscape violated the Act, but equitable estoppel and laches barred Caltrans from enforcing the Act’s provisions. The Caltrans director only partially adopted the administrative law judge’s findings. The director determined that
Superior Court Proceedings
West Washington filed a petition for writ of administrative mandamus and complaint for damages in the superior court. In addition to challenging the administrative decision, the joint petition and complaint asserted a claim under 42 United States Code section 1983 alleging Caltrans violated West Washington’s civil rights. The trial court concluded equitable defenses would not bar Caltrans from enforcing the Act and denied the petition. The court sent the case to a different division for further proceedings on the section 1983 claim. The parties subsequently stipulated to the dismissal of the section 1983 claim without prejudice. West Washington appealed the order denying the petition for writ of administrative mandamus. In an unpublished opinion, we dismissed West Washington’s appeal for lack of jurisdiction. (West Washington Properties, LLC v. California Department of Transportation (Oct. 1, 2009, B209932) (app. dism.) [nonpub. opn.].)
West Washington filed an amended petition for writ of administrative mandamus and complaint for inverse condemnation and damages (petition). The petition’s arguments were again based on estoppel and laches theories. The petition also alleged the wallscape was presumed legal under section 5216.1 and Caltrans was estopped from rebutting the presumption of legality. Caltrans demurred to the amended petition. The trial court sustained the demurrer with leave to amend as to the inverse condemnation claim only. West Washington filed a second amended petition, to which Caltrans also demurred. In the second amended petition, West Washington alleged Caltrans has moved offices several times since 1984 and lost many of its records. West Washington further contended: “Because of that loss of evidence and the passage of time, the basis for the decision [in] 1984 and the continuing failure to enforce for many years thereafter cannot be determined .... Now that the witnesses are dead or long gone, the documents are lost and 22 years have transpired; Caltrans are [ízc] estopped to overcome the presumed legality of this Wallscape without paying compensation.” The trial court concluded equitable principles would not apply and sustained the second demurrer without leave to amend. This appeal followed.
I. The Trial Court Properly Denied the Petition for Writ of Administrative Mandamus
A. Standard of Review
“The claim essentially attacks the [agency’s] order as an abuse of discretion. Code of Civil Procedure section 1094.5 permits trial court review of quasi-judicial administrative decisions, that is, decisions that result when the agency has exercised its discretion and applied the governing regulations and law to a particular factual situation. For this purpose, an abuse of discretion is established if the respondent has not proceeded in the manner required by law, the decision is not supported by the findings, or the findings are not supported by the evidence. [Citation.] To the extent the question turns on factual disputes, we review the trial court’s ruling in the light most favorable to the judgment, considering only whether it is supported by substantial evidence. [Citation.] Where ... the facts are undisputed, and there is only one inference to be drawn, whether estoppel applies is a question of law. Finally where ... the issues require a weighing of policy concerns, they present a question of law. [Citations.]” (Golden Gate Water Ski Club v. County of Contra Costa (2008)
B. Section 5216.1
On appeal, West Washington contends the wallscape must be considered lawful under section 5216.1. We disagree.
Section 5216.1 provides: “ ‘Lawfully erected’ means, in reference to advertising displays, advertising displays which were erected in compliance with state laws and local ordinances in effect at the time of their erection or which were subsequently brought into full compliance with state laws and local ordinances, except that the term does not apply to any advertising display whose use is modified after erection in a manner which causes it to become illegal. There shall be a rebuttable presumption pursuant to Section 606 of the Evidence Code that an advertising display is lawfully erected if it has been in existence for a period of five years or longer without the owner having received written notice during that period from a governmental entity stating that the display was not lawfully erected.”
As stated above, section 5216.1 defines “lawfully erected” as an advertising display erected in compliance with state laws and local ordinances at the time of erection, or subsequently brought into compliance with relevant laws. Section 5216.1 only creates a rebuttable presumption. Even if Caltrans—or other government entities—have failed to issue a notice of violation within five years of the erection of an unlawful display, section 5216.1’s only purpose is to shift the burden of proof of unlawful erection to Caltrans. It neither renders a display lawful as a matter of law, nor estops Caltrans from proving the display was not lawfully erected.
In this case, the evidence adduced at the administrative hearing consisted in large part of stipulated facts. The parties stipulated that West Washington believed the wallscape was erected in 1984 and is approximately 8,000 square feet, and is within 660 feet of an interstate highway. In 1984, the Act prohibited advertising displays larger than 1,200 square feet in business areas within 660 feet of an interstate. (§ 5408.) In 1984, the Act also required that displays subject to the Act have a permit before being placed. (§ 5350.)
West Washington argues the lack of a permit does not rebut the presumption. We reject this argument. The lack of a permit may rebut the presumption of lawful erection if Caltrans establishes a permit was required for the display and none was sought or issued. Such was the case here. The parties stipulated to facts indicating the display came within the purview of the Act, and that no one ever sought a permit for the display despite the statutory requirements. In addition, there was evidence at the hearing establishing there was no permit on record for the wallscape. Further, the section 5216.1 presumption was also rebutted by evidence that the wallscape violated the Act by exceeding relevant size requirements.
West Washington also contends Caltrans could only rebut the presumption by providing a reason for its nonenforcement of the Act. This is incorrect. Section 5216.1 does not require that Caltrans explain why it failed to enforce the provisions of the Act. Instead, when the presumption is applicable, Caltrans must establish the display was not erected in compliance with state laws and local ordinances in effect at the time of erection. Here, the parties stipulated to facts making it clear the display was not in compliance with the Act when it was erected, and there was additional evidence admitted at the administrative hearing that served the same purpose. Substantial evidence supported a trial court finding that the section 5216.1 presumption was rebutted.
C. Equitable Estoppel and Laches
West Washington contends the trial court committed prejudicial error in rejecting the equitable estoppel and laches defenses. We disagree.
“ ‘Generally speaking, four elements must be present in order to apply the doctrine of equitable estoppel: (1) the party to be estopped must be
not in violation of any other provision of this chapter, may be placed in those locations if placed in business areas: Q] (a) Advertising displays shall not be placed which exceed 1,200 square feet in area with a maximum height of 25 feet and a maximum length of 60 feet, including border and trim, and excluding base or apron supports and other structural members.” (Stats. 1983, ch. 653, § 14, p. 2582.) In 1984, section 5350 contained the same language as the current version: “No person shall place any advertising display within the areas affected by the provisions of this chapter in this state without first having secured a written permit from the director or from his authorized agent.” (Stats. 1970, ch. 991, §2, pp. 1764, 1771.) This language has been in place since 1939. (Stats. 1939, ch. 32, § 1, pp. 333, 335; People ex rel. Dept. Pub. Wks. v. Golden Rule Church Assn. (1975)
When equitable estoppel is asserted against a governmental agency, there are additional considerations. As explained in the seminal case City of Long Beach v. Mansell (1970)
In accordance with the principles explained in Mansell, the weight of the authority indicates government inaction rarely forms a proper basis to estop the government from enforcing a law intended to benefit the public. Cases reaching this result are numerous, and they include cases involving the Act. For example, in Ryan, supra,
The Ryan court also determined “that to apply estoppel would effectively nullify a strong public policy adopted for the benefit of the public and we
Similarly, in People ex rel. Dept. of Transportation v. Outdoor Media Group, supra,
More recently, courts have refused to apply estoppel to prevent government enforcement actions in other land use contexts, despite lengthy delays in enforcement. In Feduniak, the California Coastal Commission ordered coastal homeowners to remove a golf course from their property in accordance with government restrictions on permissible landscaping. The golf course was installed in 1985. The commission did not inspect the site for compliance until 2002, at which time it notified the property owners of the violation. (Feduniak, supra, 148 Cal.App.4th at pp. 1355, 1358.) The golf course was plainly visible from areas commissioners had visited during the 18-year period. (Id. at p. 1356.) The property owners asserted the commission should be estopped from enforcing orders requiring removal of the golf course and restoration of native landscaping. (Id. at pp. 1355-1356.)
The Court of Appeal concluded the property owners’ reliance on the commission’s long period of inaction to believe that it would never enforce the relevant restrictions was not reasonable. The court noted that if such reliance were reasonable, “then more generally, one could argue against the enforcement of a law that had not been enforced for many years and seek estoppel on that ground. However, courts have never accepted such reasoning. On the contrary, the mere failure to enforce the law, without more, will
Likewise, in Golden Gate, supra, 165 Cal.App,4th 249, the court refused to apply estoppel to prevent the county from enforcing an order requiring demolition and removal of structures from an island the club owned. The club purchased the island in 1966 and developed it without obtaining required permits. In 1970, the county issued a notice of violation. The club did not remove any of the offending development, and instead added to the development without obtaining permits. (Id. at p. 254.) In 2003, the county issued another notice of violation. In 2005, the county ordered the club to remove all structures from the island. (Ibid.) The club argued the county should be estopped from enforcing the order based on the county’s inaction, county suggestions—later rescinded—that the club apply to have the island rezoned, and a county employee’s statement that the county would not “ ‘hassle’ ” the club about its violations. (Id. at pp. 257-258.)
The Court of Appeal found the club did not show it was ignorant of true facts, in that it was aware its development violated land use and zoning laws, and that it did not show it suffered actual injury in reliance on the county’s actions or inactions. The court also concluded there were no exceptional circumstances that would allow estoppel to be applied against the county, a governmental entity. The court reviewed the substantial authority adopting this approach, noting the cases “establish that in the absence of exceptional circumstances, the doctrine of equitable estoppel will not be applied to allow a landowner to circumvent land use restrictions even when the landowner relies on the public entity’s express representation that the landowner’s plans comply with the entity’s land use requirements, and certainly not when the public entity simply fails to take early action to warn the landowner the plans violate the land use requirements.” (Golden Gate, supra,
The case at bar is no different. As in Feduniak, West Washington failed to show its reliance on Caltrans’s inaction was reasonable. West Washington did not claim to rely on any affirmative statements or actions from Caltrans when it purchased the building and wallscape. Indeed, West Washington’s principal testified it did not attempt to determine whether the wallscape had a valid Caltrans permit. Instead, West Washington relied purely
But even if West Washington had established all of the requisite elements of estoppel, there are no grounds to override the public interest protected by the Act. The provisions of the Act are intended to benefit the public and represent a strong public policy. (Ryan, supra,
Moreover, there are no exceptional circumstances warranting application of equitable principles. Mansell provides a helpful illustration of “exceptional circumstances.” In Mansell, the California Supreme Court considered whether the City of Long Beach could be estopped from asserting paramount title over certain tidelands. Private owners had acquired and developed some of the lands for nearly 50 years. Development was encouraged by the city. The city granted building permits, approved subdivision maps, constructed and maintained streets and city services, and collected taxes from private owners of the land. (Mansell, supra,
Thus, our high court concluded: “[T]he rare combination of government conduct and extensive reliance here involved will create an extremely narrow precedent for application in future cases. . . . We are here concerned with thousands of homeowners who, through the long continuing conduct of the government entities involved, have been led to believe and have acted upon the belief that the lands upon which they reside are their own private properties. Because similarly compelling circumstances will not often recur, the public policy [at issue] will not suffer substantial erosion as a result of the decision we reach today.” (Mansell, supra,
In contrast, this case involves only government inaction as the basis for the estoppel, an injustice that is purely economic in the form of lost potential or anticipated profits, and one that affects only a single property owner. (Feduniak, supra,
For the same reasons, the trial court properly refused to apply laches as a defense in this case. The defense of laches is not available when its application would nullify an important policy adopted for the public benefit. (Golden Gate, supra,
II. The Trial Court Properly Sustained the Demurrer to the Inverse Condemnation Claim Without Leave to Amend
West Washington argues that even if equitable estoppel and laches are not available to prevent removal of the full-size wallscape, estoppel may be the “basis” of an inverse condemnation claim. We again disagree.
The court in Golden Gate considered and rejected this argument. The property owner club contended “that even if the abatement order is affirmed, it may still be entitled to compensation on its claim for inverse condemnation on the theory the order 15 has resulted in a taking. The flaw in this argument is that the complaint did not allege facts sufficient to support the conclusion abatement would result in a taking. ‘ “Regulations regarding and restrictions upon the use of property in an exercise of the police power for an authorized purpose, do not constitute the taking of property without compensation or give rise to constitutional cause for complaint.” ’ (People ex rel. Dept. Pub. Wks. v. Adco Advertisers (1973)
Here, West Washington purchased the wallscape subject to a restriction. The Act’s provisions rendering the wallscape unlawful were already in effect when West Washington purchased the building and display. And, as explained above, Caltrans rebutted the section 5216.1 presumption that the display was “lawfully erected.” Caltrans’s enforcement of the Act was an exercise of police power for an authorized purpose and did not constitute a taking.
(ID Neither of the two cases West Washington relies on to support its argument compel a contrary result. In Traverso v. People ex rel. Dept. of Transportation (1993)
Ryan also fails to provide persuasive legal authority for West Washington’s inverse condemnation claim. As explained above, in Ryan, the court declined to apply equitable estoppel to prevent removal of unlawful billboards because it would nullify an important public policy. However, the court added a “caveat” that it would not violate a strong public policy to require the department to pay just compensation upon removal of the billboards. (Ryan,
As an initial matter, we note that the court’s statements regarding estoppel and inverse condemnation are dicta. There was no issue of inverse condemnation before the court. Even assuming the analysis has precedential or persuasive value, Ryan must be distinguished from this case based on its facts. In Ryan, the department made affirmative requests and statements that caused the sign owner to relocate the sign, thereby rendering it impossible for the owner to receive compensation that would otherwise have been necessary. The signs in Ryan were at one time in compliance with state laws. They only became unlawful following amendments to the Act, and the relocation which took place at the department’s request.
The facts here are markedly different. The evidence was that the wallscape was not lawfully erected. No one ever attempted to seek a permit for the display, despite statutory requirements. Further, West Washington cannot claim it relied on any affirmative actions on the part of Caltrans that negated its right to receive compensation it would otherwise be owed. The only Caltrans conduct complained of in this case is government inaction, and West Washington’s unreasonable reliance on that inaction. There is no strong public policy to provide compensation to a property owner upon removal of a display that has been unlawful since its erection. (See, e.g., People ex rel. Dept. Pub. Wks. v. Golden Rule Church Assn., supra,
The judgment is affirmed.
Flier, J., and Grimes, J., concurred.
Notes
All further statutory references are to the Business and Professions Code unless otherwise noted.
Section 5350 provides: “No person shall place any advertising display within the areas affected by the provisions of this chapter in this state without first having secured a written permit from the director or from his authorized agent.” Section 5405 limits permissible advertising displays within 660 feet from an interstate or primary highway. Section 5408 provides, in relevant part: “In addition to the advertising displays permitted by Section 5405 to be placed within 660 feet of the edge of the right-of-way of interstate or primary highways, advertising displays conforming to the following standards, and not in violation of any other provision of this chapter, may be placed in those locations if placed in business areas: [][] (a) Advertising displays may not be placed that exceed 1,200 square feet in area with a maximum height of 25 feet and a maximum length of 60 feet, including border and trim, and excluding base or apron supports and other structural members.”
Clear Channel Outdoor, Inc., was also originally cited with violating the Act. Pursuant to a settlement agreement between the parties, Caltrans dismissed the accusation against Clear Channel. The amended notice of violation was issued to West Washington alone. West Washington agreed to reduce the advertising area of the wallscape to 1,200 square feet while the litigation was pending.
Evidence Code section 606 states: “The effect of a presumption affecting the burden of proof is to impose upon the party against whom it operates the burden of proof as to the nonexistence of the presumed fact.”
We also note that even a lawfully erected sign may be subject to removal if it violates current law. (See, e.g., § 5461; People ex rel. Dept. of Transportation v. Maldonado (2001)
In 1984, section 5408 stated, in relevant part: “In addition to the advertising displays permitted by Section 5405 to be placed within 660 feet of the edge of the right-of-way of interstate or primary highways, advertising displays conforming to the following standards, and