Friends of the Raymond Theatre v. City of Pasadena

Filed 10/17/06 Friends of the Raymond Theatre v. City of Pasadena CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

APPEAL from a judgment of the Los Angeles Superior Court. Dzintra Janavs, Judge. Affirmed in part, reversed in part, and remanded with directions.

Law Offices of Craig A. Sherman, Craig A. Sherman for Plaintiffs and Appellants.

Michele Beal Bagneris, City Attorney, and Frank L. Rhemrev, Assistant City Attorney, for Respondent City of Pasadena.

Hahn & Hahn, William K. Henley and Rita M. Diaz for Real Parties in Interest and Respondents Buchanan/Raymond LTD and Buchanan/Symonds Limited Partnership.

O’Melveny & Myers and David P. Enzminger for Real Party in Interest and Respondent Pasadena Heritage.

Michael H. Buhler for Real Party in Interest and Respondent National Trust for Historic Preservation.

INTRODUCTION

This case involves challenges to a city’s decision to grant changes to a conditional use permit issued for a renovation project. In an action governed by the limitations period specified by Government Code section 65009 (section 65009), a real party in interest must be served before the limitations period expires. Additionally, an action arising under Public Resources Code section 21167, subdivision (a) (section 21167) is governed by the limitations period set forth therein, not in section 65009. Finally, in an action arising under section 21167, a real party in interest must be served before the limitations period expires.

BACKGROUND AND PROCEDURAL HISTORY

This appeal arises from the trial court’s decision to sustain demurrers to a petition for writ of mandate challenging the City of Pasadena’s (City) approval of conditional use permit changes sought by Buchanan/Perkins LTD. (Buchanan) on a renovation project.

A 2002 conditional use permit approved variances in a project to renovate Pasadena’s historic Raymond Theatre, owned by Buchanan.[1] On January 5, 2004, Buchanan proposed changes in the project. The changes included reducing the number of living units from 61 apartments to 36 condominiums, live/work spaces, or townhomes; adding a seventh story inside the theatre; expanding the commercial footage from 28,565 to 32,500 square feet; reducing the number of parking spaces from 157 to either 116 or 102; and cutting holes in the theatre’s ceiling to allow light and air into the interior space.

On March 15, 2004, the City’s Design Commission disapproved the proposed changes to the conditional use permit. Before the Commission filed a notice of decision, the City Council initiated a de novo review of the Commission findings. On May 17, the City Council voted to override the Commission’s decision disapproving the changes.

On August 3, 2004, Friends of the Raymond Theatre and Foundation for the Realization of Contemporary Arts, Sciences and Technologies (collectively, Friends) petitioned the trial court for a writ of mandate directing the City to set aside its May 17 decision overriding the Commission’s disapproval of the proposed changes. The petition alleged six causes of action and named Buchanan as a real party in interest in each action:

· Cause of action one alleges the City violated the California Environmental Quality Act (CEQA) by failing to make findings regarding the environmental effect of the proposed changes;

· Cause of action two alleges the City violated state and local statutes in conducting design review proceedings;

· Cause of action three alleges the City violated state and local statutes in conducting proceedings regarding the easement;

· Cause of action four alleges the City violated a state statute by determining without sufficient support that the approved changes are consistent with standards set by the Secretary of the Interior;

· Cause of action five alleges the City violated state and local statutes in approving the changes because the project constitutes a subdivision, and the City failed to comply with the requirements for approving a subdivision;

· Finally, cause of action six alleges the City failed to make required findings regarding the effect of the changes on the conditions specified in the original conditional use permit.

In addition to naming the City and Buchanan in the petition, Friends named Pasadena Heritage and National Trust as real parties in interest. Buchanan had previously granted Pasadena Heritage an easement covering the façade of the Raymond Theatre. National Trust is Pasadena Heritage’s successor in interest with respect to the easement. The easement is the subject of cause of action three against the City.

On August 9, 2004, Friends mailed a copy of the petition and two notice and acknowledgment forms to the home address of Gene Buchanan, who was Buchanan’s agent for service. On August 10, Friends mailed copies of the petition and notice and acknowledgment forms to the Pasadena City Clerk’s Office and to an address registered with the Secretary of State as Buchanan’s agent for service.

On August 11, 12 and 13, 2004, Friends unsuccessfully attempted personal service on Gene Buchanan at his home. On August 13, Lilia Novelo, a City Clerk’s Office staff assistant, signed and returned one acknowledgment of receipt form. Novelo forwarded another petition and notice and acknowledgment of receipt to Assistant City Attorney Frank Rhemrev. Buchanan received the mailed documents on August 17, even though the address registered with the Secretary of State was incorrect due to Buchanan’s removal of its offices. Gene Buchanan received the documents mailed to his home on August 23. Rhemrev signed and returned the second acknowledgment of receipt forwarded by Novelo on August 30. On November 17, Buchanan signed and returned an acknowledgment of receipt.

Buchanan demurrered to the petition on January 19, 2005. The City joined in the demurrer January 28, 2005. The demurrer claims:

· Cause of action one is barred by the 180-day statute of limitations specified in section 21167, subdivision (a) as service on Buchanan was required before expiration of the limitations period, and Buchanan was not served before the expiration date;[2]

· Causes of action two, three, four and six are barred by the 90-day statute of limitations specified in section 65009, subdivision (c) because neither the City nor Buchanan was served before the expiration date;

· Cause of action three is barred as Friends lack standing to assert claims based on the easement. Standing was lacking because, in another case involving the conditional use permit, the trial court determined Friends lacked standing to assert an easement claim;

· Cause of action five is barred by the statute of limitations specified in Government Code section 66499.37 (section 66499.37) as Buchanan was not served with a summons; and

· Because section 66499.37 specifies a 90-day limitations period, Buchanan was not served before its expiration.

Pasadena Heritage and National Trust also demurred on February 2, 2005. The demurrer claims that all six causes of action fail to state facts sufficient to constitute a cause of action against them and that neither of them are real parties in interest.

On February 22, Novelo and Rhemrev submitted declarations in support of the City’s demurrer, claiming Novelo lacked authorization to sign the acknowledgment of receipt and signed the acknowledgment by mistake.

The trial court sustained the demurrers of Buchanan, City, Pasadena Heritage and National Trust as to all causes of action. The court reasoned that section 65009’s strict 90-day limitations period established the statute of limitations as to all six causes of action asserted against Buchanan. Under section 65009, the limitations period expired on August 15. The court found the City was not properly served by August 15 as Novelo was not authorized to sign and return the acknowledgment of receipt.

The trial court also determined section 65009 required service on Buchanan as a real party in interest by August 15, even though the requirement is not explicitly stated in the statute. According to the court, the legislative intent underlying section 65009 indicates a need for prompt resolution of challenges to a city’s land use decisions. Real parties therefore must be served before the limitations period expires. The court further sustained the demurrer to the third cause of action on lack of standing grounds.

The trial court also sustained the demurrers of Pasadena Heritage and National Trust as no allegation indicated the easement would be affected, and nothing remained to adjudicate against them.[3]

Friends contend on appeal that, because they complied with service requirements, the City was properly served when Novelo signed the acknowledgment. Friends also contend service on Buchanan was not required by August 15 inasmuch as section 65009 does not require service on real parties in interest. Further, even if service on Buchanan was required by August 15, Friends claim they complied with the service requirements.

Although no party to the appeal contends the trial court erred in holding that section 65009’s statute of limitations governs the first cause of action, we must consider whether Friends can proceed under any legal theory. For organizational purposes, the rulings respecting causes of action two, three, four, five and six are discussed before cause of action one is addressed.

DISCUSSION

1. Standard of review.

The trial court’s decision to sustain the demurrers of Buchanan, City, Pasadena Heritage and National Trust without leave to amend is reviewed de novo. In conducting the review, this court exercises its independent own judgment to determine whether the action can proceed under any legal theory. (Honig v. San Francisco Planning Dept. (2005) 127 Cal.App.4th 520, 524 (Honig).) Leave to amend is not granted where the pleadings disclose the action is barred by statutes of limitation. (Ibid.)

2. The demurrers to causes of action two, three, four, five and six were properly sustained as Buchanan was not served before the limitations period expired.[4]

a. Service was required by August 15.

Friends contend section 65009 does not explicitly require service on real parties in interest at the same time as service on a city whose land use decision is challenged. As a result, service on Buchanan within the 90-day limitations period was not required. This contention is contrary to the legislative intent underlying section 65009.

Section 65009 requires strict compliance with the 90-day period in order to “provide certainty for property owners and local governments regarding decisions made pursuant to this division.” (§ 65009, subd. (a)(3).) The Legislature found that “a legal action or proceeding challenging a decision of a city . . . has a chilling effect on the confidence with which property owners . . . can proceed with projects” and governmental entities listed in Government Code section 65903. Section 65903 lists zoning boards and zoning administrators among the entities. Section 65009 applies to a challenge when a variance is approved by a zoning administrator. However, a building permit is not granted by an entity listed in section 65903, and thus is not governed by section 65009 but by a longer period specified by a different statute.

In Honig, the court held that section 65009 applied for two reasons. First, the plaintiffs were attacking the variance, despite the claim they were challenging the building permit. Second, and more significantly, the court found it unfair to apply the longer limitations period that governed a challenge to the building permit. The application of the longer period would enable an opponent of the variance to delay a review of the variance decision by failing to promptly serve the challenge to the building permit as opposed to the variance. A non-literal statutory interpretation therefore was required in order to effectuate the legislative intent of promptly resolving challenges to a city’s land use decision. (Honig, supra, 127 Cal.App.4th at pp. 525-529.)

Friends’ contention that service on Buchanan by August 15 was not required is unavailing for the same reason as in Honig. Interpreting section 65009 to permit service on Buchanan after August 15 would enable Friends to delay any review of the City’s decision. Review would be delayed because Buchanan is an indispensable party, and a land use challenge cannot be resolved in the absence of an indispensable party. (Sierra Club, Inc., v. California Coastal Com. (1979) 95 Cal.App.3d 495 (Sierra Club).)

In Sierra Club, the plaintiffs challenged a permit for a development project. (Sierra Club, supra, 95 Cal.App.3d at p. 498.) The permit holder was an indispensable party because the relief sought would impair his ability to protect his interest in the project. (Id. at pp. 501-502, citing Bank of California v. Superior Court (1940) 16 Cal.2d 516, 522; Code Civ. Proc., § 389.) Because the statute had run, the permit holder could not be joined. Moreover, because the permit holder would be able to collaterally attack any judgment against him, granting relief would risk exposure to inconsistent obligations -- one from the underlying case and another from a collateral attack. (Sierra Club, supra, 95 Cal.App.3d at p. 501.) Failure to join an indispensable party is not tantamount to a jurisdictional defect requiring mandatory dismissal. However, to avoid prejudicing an indispensable party by impairing its ability to protect its interest and to prevent future collateral attacks leading to inconsistent judgments, a court should not proceed with an action if an indispensable party is not joined. Consequently, dismissal for failure to join an indispensable party was proper. (Id. at pp. 500-502.)

Like the developer in Sierra Club, Buchanan holds a permit for an authorized development, and the permit is the subject of an action seeking relief that would injure or affect Buchanan’s interest. Additionally, if Buchanan was not joined in the action, it could collaterally attack any unfavorable judgment against it, and the City would be exposed to the risk of inconsistent judgments. If Buchanan was not joined in the action before August 15, dismissal is appropriate for failure to join Buchanan as an indispensable party before the limitations period expired.

Buchanan argues that joinder requires service on a party. Citing Ruttenberg v. Ruttenberg (1997) 53 Cal.App.4th 801 (Ruttenberg), Buchanan asserts that simply naming a party is insufficient for joinder purposes; service of process on the party also is required. In Ruttenberg, the plaintiffs in a wrongful death action failed to serve named party defendants. The failure of service was held to preclude joinder despite the named defendants’ actual notice of the lawsuit. (Id. at p. 808.)

Friends contend Ruttenberg is inapplicable because it pertains only to wrongful death actions. However, Friends cites no authority suggesting that service is not necessary to join a party. Moreover, under Code of Civil Procedure section 410.50, jurisdiction is not obtained until a party is served with a summons (in this case a petition). Accordingly, if Buchanan was not properly served by the August 15 expiration of the limitations period, it was not joined, and the trial court properly sustained the demurrer to causes of action two, three, four, five and six.

b. Buchanan was not served by August 15.

Friends attempted to personally serve Gene Buchanan, as agent of service for Buchanan, at his residence on August 11, 12 and 13. Because he was not home at the time, personal service was not accomplished. Friends mailed the petition and notices of acknowledgment to the address for Buchanan listed with the Secretary of State as Buchanan’s agent for service. Because Buchanan had moved, the address was no longer correct. Friends also mailed the service materials to Gene Buchanan’s home. Buchanan and Gene Buchanan received the mailings on August 17 and August 23, respectively. Buchanan did not return an acknowledgment of service until mid-November. Buchanan’s alleged delay tactics, including instructing Friends how to serve Buchanan, occurred on or after August 17, two days after the statute of limitations for service had run. Since the alleged delay tactics occurred after the statute of limitations expired, they are irrelevant.

The 90-day statute of limitations period specified by section 65009 is strict. An action is barred if not properly served before the period’s expiration. (§ 65009, subd. (c)(1).) The failure to effectuate personal service by August 11, 12 or 13 does not justify extending the limitations period. According to the Friends’ process server, Gene Buchanan was on vacation during this time. Because the record does not suggest Gene Buchanan sought to avoid service by leaving for vacation, nothing occurred before August 15 to justify extending the limitations period for personal service.

Even if Buchanan received the mailing before August 15, a response is not required under the method of service Friends selected. Failure to respond to service under Code of Civil Procedure section 415.30 does not constitute effective service; it only subjects the recipient to liability for expenses incurred in future attempts to serve. (Code Civ. Proc., § 415.30, subd. (d).)

Any suggestion that mailing a petition and acknowledgment forms satisfies service requirements misconstrues the nature of section 415.30. Service under the section is complete only when an acknowledgment of receipt is executed. (Code Civ. Proc., § 415.30, subd. (b).) By electing this method of service, Friends risked a failure of service before August 15. In fact, neither Buchanan nor Gene Buchanan received the mailings before August 15. Because Buchanan was not served by August 15, it was not joined in the action. Because dismissal is warranted when an indispensable party is not joined before the limitations period expires, and because Buchanan was not joined before expiration, the demurrers to causes of action two, three, four, five and six were properly sustained. Leave to amend also was properly denied because the actions are barred by the statute of limitations.

3. Section 21167, subdivision (a), not section 65009, governs the limitations period and service requirements for the first cause of action.

Issues for consideration are whether the trial court correctly concluded that section 65009, rather than section 21167, subdivision (a), controls the first cause of action, and whether the petitions were served on the City and Buchanan before the limitations period for the first cause of action expired. Section 65009 governs actions challenging a city’s decision to grant a conditional use permit. Section 21167, subdivision (a) governs actions challenging a city’s decision to grant a conditional use permit in violation of CEQA on the grounds the city failed to determine if a permitted renovation project would significantly impact the environment. Depending on whether section 65009 or section 21167, subdivision (a) controls the first cause of action, the limitations period and service requirements differ. For this reason, we must determine which statute controls with respect to the cause of action. As discussed below, the court erred in determining that section 65009 controls.

a. Section 21167, subdivision (a) controls the first cause of action.

When two statutes pertain to the same subject, an effort is made to harmonize them. If the statutes cannot be harmonized, the more specific statute controls. (Royalty Carpet Mills, Inc. v. City of Irvine (2005) 125 Cal.App.4th 1110, 1118 (Royalty Carpet).) Section 65009 applies generally to a city’s decision to grant a conditional use permit, while section 21167 applies to challenges to a city’s decision to grant a permit in violation of CEQA. Both sections therefore apply to a city’s decision to grant a conditional use permit.

In Royalty Carpet, the court held that section 65009 could be harmonized with section 21167, subdivision (b)’s shorter, flexible limitations period, and the 90-day limitations period specified by section 65009 therefore controlled. (Royalty Carpet, supra, 125 Cal.App.4th at p. 1123.) In this case, the trial court also concluded Royalty Carpet‘s reasoning applies when violations of section 21167, subdivision (a) are at issue. As a result, it held the 90-day limitations period specified by section 65009 applies to the first cause of action, rather than the 180-day limitations period specified by section 21167, subdivision (a).

In this case, section 21167, subdivision (a) cannot be harmonized with section 65009, and as a result does not control the first cause of action. Unlike Royalty Carpet, where the shorter limitations period could be extended for good cause up to the strict 90-day period specified by section 65009, the shorter limitations period in this case is the strict 90-day period specified by section 65009. Because the shorter period is strictly construed, it cannot be harmonized with the longer period specified by section 21167, subdivision (a). In Royalty Carpet, the shorter period was effective absent a showing of good cause for an extension, and the longer period established an absolute bar to an action. The language of both statutes was thus given effect. In this case, however, the longer period specified by section 21167, subdivision (a) cannot be given effect due to the strict nature of section 65009. Since section 21167, subdivision (a) and section 65009 cannot be harmonized, section 21167, subdivision (a) controls because it is the more specific of the two statutes.

b. Friends complied with service requirements with respect to the City.

Section 21167, subdivision (a) establishes a 180-day limitations period for commencement of an action, and requires personal service within 10 days of the commencement. (§ 21167, subd. (a).) Because Friends commenced the action on August 3, personal or substituted service on the City was required no later than August 13.

Even though Friends did not attempt personal service on the City Clerk’s Office, Code of Civil Procedure section 415.20 permits substituted service when a public entity is involved. The substituted method requires leaving one copy of the served materials at the office with someone apparently in charge, and mailing another copy to the same location. Service is effective 10 days after the mailing. (Code Civ. Proc., § 415.20, subd. (a).)

Friends, however, elected to serve the City by mail under Code of Civil Procedure section 415.30. Section 415.30, subdivision (a) requires mailing a copy of the summons (in this case a petition) along with two copies of a notice and acknowledgment form. Service is effective when an acknowledgment is signed by a person authorized to receive service on behalf of the entity served, as long as the acknowledgment is returned. (Code Civ. Proc., § 415.30, subd. (c).) Friends mailed a copy of the petition and the acknowledgments to the City on August 10.

Although Friends only mailed a copy to the City, service requirements must be construed liberally if the served party receives notice of the action before the limitations period expires. (Bein v. Brechtel-Jochim Group, Inc. (1992) 6 Cal.App.4th 1387, 1392, citing Pasadena Medi-Center Associates v. Superior (1973) 9 Cal.3d 773, 778.) Liberal construction also extends to substituted service (Bein v. Brechtel-Jochim, supra, 6 Cal.App.4th at p. 1392), and may permit service by mail under section 415.30.

City Clerk’s Office Staff Assistant Lilia Novelo signed and returned an acknowledgment on August 13. Novelo’s declaration states she was not authorized to sign an acknowledgment, and did so by mistake. Had Novelo not signed and returned the acknowledgment, service would have been accomplished on August 30, when Assistant City Attorney Rhemrev signed the acknowledgment.

While Friends may not have selected the optimal service procedure given the operative time constraints, the procedure utilized nonetheless constitutes an authorized method of service. Moreover, when the authorized procedure is utilized, the City is required to act promptly. Friends should not be required to assume the risk that the City would fail to promptly process the materials served, thereby precluding a decision on the merits. Fairness dictates that the City bears responsibility for any shortcomings in its procedures, namely, the lack of an efficient process for handling service materials which provides that an authorized City Clerk’s Office staff member sign and return an acknowledgment form. For these reasons, the trial court erred in determining Friends failed to serve the City before the limitations period expired.

c. Buchanan was not properly served.

Service on Buchanan was required before the limitations period expired on August 13 because challenges to a city’s land use decisions under section 21167 should be dismissed when a real party in interest is not joined before the limitations period expires. (Save Our Bay, Inc. v. San Diego Unified Port Dist. (1996) 42 Cal.App.4th 686, 699.) In Save Our Bay, under section 21167 the plaintiffs challenged a city’s development plan which called for purchase of several acres of land. (Id. at pp. 689-692.) The case was dismissed because the seller was not joined in the action before the limitations period expired.[5] (Id. at p. 699.) Dismissal was held proper because the seller was an indispensable party to the action. The court also held the seller’s rights would necessarily be affected by any judgment, and no other party to the action could adequately represent the seller’s interest. Additionally, failure to join the seller would permit the seller to later collaterally attack the judgment, creating the risk of inconsistent judgments since the seller might secure a judgment in its favor through the collateral attack. (Id. at pp. 694-696.)

Save Our Bay’s reasoning is substantially the same as that articulated in Sierra Club, discussed in regard to causes of action two, three, four, five and six. The same considerations of fairness and efficiency justify a dismissal under section 21167, as under section 65009, if a real party in interest is not joined before the limitations period expires. The limitations period under section 21167, subdivision (a) expired two days before the limitations period under section 65009. As previously discussed, Buchanan was not served by August 15, and thus was not personally served by August 13, as required by section 21167, subdivision (a). Because Buchanan was not served within the limitations period, he was not joined in the action. The demurrer to the first cause of action was thus properly sustained, although for different reasons than given by the trial court.

DISPOSITION

As to causes of action two, three, four, five and six, the order sustaining the demurrers is affirmed. As to cause of action one, the order sustaining Buchanan’s demurrer is affirmed, although on different grounds. As to that cause of action, the order sustaining the City’s demurrer is reversed, and the trial court is directed to enter an order vacating its previous order and enter an order overruling the demurrer. Buchanan, Pasadena Heritage and National Trust are awarded costs on appeal as to the causes of action two, three, four, five and six. Buchanan and City are to bear their own costs on appeal as to cause of action one.

NOT TO BE PUBLSIHED IN THE OFFICIAL REPORTS

BOLAND, J.

We concur:

COOPER, P. J.

FLIER, J.

Publication courtesy of San Diego pro bono legal advice.

Analysis and review provided by Poway Property line attorney.

[1] Appellants are currently appealing another case in Division Four of this court. That case involves the original conditional use permit the City granted to Buchanan in 2002.

[2] Buchanan later argued, and the trial court agreed, that section 65009 controlled the first cause of action based on a Court of Appeal case decided after the demurrer was filed, but before the hearing on demurrer.

[3] With regard to Pasadena Heritage and National Trust, because this case will be decided on other grounds, this demurrer on appeal need not be considered.

[4] Neither party contends--nor is their reason to think--that causes of action two, three, four, five and six are not governed by 90-day limitations periods. Causes of action two, three, four and six are governed by section 65009, and cause of action five is governed by section 66499.37 (also 90 days).

[5] Friends’ contention that Save Our Bay merely involved a failure to name an indispensable party ignores the court’s explicit holding that the case was dismissed for failure to join an indispensable party.