Posted by: Patricia Salkin | January 1, 2019

CA Appeals Court Holds City’s Approval of Ordinance Purporting to Extend Development Agreement Violated Ordinance Prohibiting Construction of Additional Billboards

This post as authored by Matthew Loeser, Esq.

In 1993, appellant City of Pomona entered into an agreement with non-party Regency Outdoor Advertising, Inc. Pursuant to the agreement, Regency erected advertising billboards alongside several Pomona freeways. In 1993, the citizens of Pomona passed a ballot initiative, Proposition L (“Prop. L”), which prohibited the construction of additional billboards within city limits. Pomona’s agreement with Regency expired by its terms in June 2014. In July 2014, the Pomona city council adopted an ordinance purporting to amend the agreement by extending it for an additional 12-year term. Plaintiffs/Respondents Citizens for Amending Proposition L, Vernon Price, and J. Keith Stephens filed a petition for a writ of mandate and complaint for declaratory relief, alleging that the July 2014 “amendment” was in fact a new agreement for new billboards enacted in violation of Prop. L. The trial court agreed and granted the petition.

On appeal, Pomona argued that none of the three plaintiffs – Price, Stephens, and Citizens – had standing to bring this mandamus action. The coiurt noted that compliance with the law, particularly one enacted by voter initiative in response to the initial formation of the contract allowing billboards into the city, was a “sharp” public duty. Additionally, public need for enforcement of the law also was weighty, as the record indicated that, absent Stephens’s 2011 intervention in the negotiations, digital billboards might have been installed without broad public awareness of any potential issue. The court held that when the duty is sharp and the public need weighty, the courts “will grant a mandamus at the behest of an applicant who shows no greater personal interest than that of a citizen who wants the law enforced.” Accordingly, the trial court’s holding that plaintiffs Price and Citizens had public interest standing to sue was affirmed.

Pomona next argued that the trial court abused its discretion by holding Regency was not an indispensable party to the litigation. Here, the indemnity language from the 1993 agreement set forth, “Developer shall defend City … from any legal actions … challenging the validity of any provision of this Agreement and shall be entitled to select counsel to conduct such defense, who shall be authorized to represent City as well as Developer.” Thus, by requiring Regency to defend the City, the Agreement ensured that Regency’s interests would be protected regardless of whether Regency was made a party to the action. Furthermore, the court found the City’s and Regency’s interests were aligned because the City had an interest in ensuring that its million dollar contract with Regency was not set aside.

Next, the court found the original written agreement between Regency and Pomona demonstrated that the parties intended the agreement to terminate after a period of 20 years. The record reflected that Regency and Pomona recognized throughout their negotiations the need to comply with public notice, publication, and city council procedures. The parties also acknowledged the requirement for an express agreement between the parties. The court held this negated any notion that Pomona and Regency intended to extend the agreement solely by virtue of their conduct. Accordingly, Pomona and Regency did not have an implied-in-fact contract. As the explicit contractual time limits elapsed before the city council adopted Ordinance No. 4190, there was no reasonable way to construe the adopted July 7, 2014 written agreement as an amendment to or extension of the original agreement.

Lastly, the court upheld the award attorneys’ fees as it agreed with Plaintiffs that effectuating the voters’ right to enforce Proposition L conferred a significant benefit on the general public.

Citizens for Amending Proposition L v City of Pomona, 239 Cal. Rptr. 3d 750 (CA App. 11/7/2018)

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