Inverse Condemnation: Court Reads Writing on L.A. Sign Ordinance Clearly; Upholds Permit
The Second District Court of Appeal has overturned a City of Los Angeles decision not to permit construction of a billboard, and the court indicated the city could be liable for revenue the would-be sign builder lost.
The opinion by Justice Rueben Ortega strongly suggests that political pressure from the mayor's office influenced the city's Board of Building and Safety Commissioners. The board initially refused to revoke the billboard permit on appeal. After the mayor's office intervened, the board did revoke the permit on grounds the Court of Appeal rejected.
In July 1996, the Los Angeles Department of Building and Safety issued a permit for Van Wagner Communications to erect an off-site sign at the intersection of Bentley Avenue and Little Santa Monica Boulevard. A nearby store, Koo Koo Roo, appealed the awarding of the permit. Department staff members denied the appeal, which then went to the Board of Building and Safety Commissioners. At the end of a long public hearing, the Board determined the sign permit was issued in error because the proposed sign was too close to an existing sign on Sepulveda Boulevard. However, the board stopped short of revoking the permit. Department staff members revoked the permit anyway in October 1996.
Van Wagner then asked the department to reconsider and to find that Van Wagner had acquired a vested right because it had begun constructing the sign. The department ruled in Van Wagner's favor.
Koo Koo Roo then brought a second appeal to the Board, challenging the department's decision and the lack of a public hearing on Van Wagner's claim of vested rights. At the second Board hearing, two department staff members said the proposed sign was acceptable under the city's ordinance, which requires 600 feet between off-site signs on the same side of the street. In this case, the existing sign and proposed sign were within 600 feet but they were not on the same street. Nevertheless, a representative of the mayor's office objected to the proposed sign, as did Koo Koo Roo. The Board then ruled that the permit was invalid, that Van Wagner did not act in good faith reliance on the permit when it began building the sign, and that Van Wagner had no vested right to the permit.
Van Wagner sued the city in May 1997. Los Angeles Superior Court Judge David Yaffe concluded that the Board was authorized to interpret the city's 600-foot spacing ordinance. He noted that the existing sign on Sepulveda Boulevard is angled so that motorists on Little Santa Monica Boulevard can see it; hence, the proposed sign could not be placed within 600 feet. He also suggested Van Wagner rushed to begin construction even though it knew an appeal was possible. Yaffe then transferred the case to Superior Court Judge Edward Ferns, who rejected Van Wagner's inverse condemnation and estoppel claims.
On appeal, the issues were application of the 600-foot spacing restriction, and whether Van Wagner may seek inverse condemnation damages for loss of revenue. The unanimous three-judge panel concluded that the 600-foot requirement did not apply. "The ordinance unambiguously states that it applies to signs that are located on the same side of the same street, which these signs are not. … Had the City wished to regulate the spacing of signs situated on different streets but visible to motorists on an adjacent street, it could have done so," Justice Ortega wrote.
Because it ruled the permit was valid, the court also reversed Judge Ferns's inverse condemnation judgement against Van Wager. The company sought compensation for delays associated with administrative and judicial proceedings and with the city's erroneous revoking of the permit.
"Should the motion be renewed below, the parties and trial court will be bound by our findings that the permit was validly issued and erroneously revoked," Ortega wrote regarding the inverse condemnation claim. He then pointed to two cases: Landgate, Inc., v. California Coastal Com. (1998) 17 Cal4th 1006, in which the court held that failure to approve a development did not constitute a taking (see CP&DR Legal Digest January 1999); and Ali v. City of Los Angeles, (1999) 77 Cal.App.4th 246, in which the city's delay in issuing a demolition permit was ruled a temporary taking and the city was ordered to pay more than $1.2 million for inverse condemnation (see CP&DR Legal Digest, February 2000).
The court held that the estoppel claim was moot because the court reinstated the permit.
Van Wagner Communications, Inc. v. City of Los Angeles, No. B135654, 00 C.D.O.S. 8753, 2000 Daily Journal D.A.R. 11577, filed October 30, 2000.
For Van Wagner: George James Stephan, Stephan, Oringher, Richman & Theodora, 310 557-2009.
For the city: Michael Klekner, deputy city attorney, (213) 485-5420.