Court Opinion

ID: 4697647
Source: CourtListenerOpinion
Date Created: 2021-06-22 20:03:13.042475+00
Date Added: 2024-06-11T08:05:47.658073
License: Public Domain

Filed 6/22/21 Rudisill v. California Coastal Commission CA2/7
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

  California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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  has not been certified for publication or ordered published for purposes of rule 8.1115.

  IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                           SECOND APPELLATE DISTRICT

                                        DIVISION SEVEN

ROBIN RUDISILL et al.,                                           B299331

       Plaintiffs, Respondents, and                              (Los Angeles County
       Cross-appellants,                                         Super. Ct. No. BS168074)

       v.

CALIFORNIA COASTAL
COMMISSION,

       Defendant,

LIGHTHOUSE BROOKS, LLC et al.,

       Real Parties in Interest,
       Appellants, and Cross-
       respondents.

CITY OF LOS ANGELES,

      Real Party in Interest and
      Appellant.
      APPEAL from orders of the Superior Court of Los Angeles
County, James C. Chalfant, Judge. Reversed in part, affirmed in
part.
      Gaines & Stacey, Fred Gaines, and Lisa A. Weinberg for
Real Parties in Interest, Appellants, and Cross-respondents
Lighthouse Brooks, LLC and Ramin Kolahi.
      Michael N. Feuer, City Attorney, Terry P. Kaufmann-
Macias, Assistant City Attorney, Amy Brothers and Oscar
Medellin, Deputy City Attorneys, for Real Party in Interest and
Appellant City of Los Angeles.
      Venskus & Associates and Sabrina Venskus for Plaintiffs,
Respondents, and Cross-appellants.
                  _____________________________

                       INTRODUCTION

       This appeal arises out of the construction by Lighthouse
Brooks, LLC and Ramin Kolahi (collectively, Lighthouse) of four
homes in Venice (the Project). Lighthouse obtained a coastal
development permit from the California Coastal Commission
after Lighthouse had substantially completed the Project. Robin
Rudisill and Jenni Hawk, two Venice residents who opposed the
Project, filed a petition for a writ of administrative mandate. The
trial court granted the petition and directed the Commission to
set aside the permit and reconsider whether the Project complied
with the Coastal Act. The court also stayed “the Project.” The
Commission and Lighthouse appealed, and we reversed the
judgment and directed the trial court to deny the petition for writ
of mandate. (See Rudisill v. California Coastal Com. (Dec. 9,
2020, B294460) [nonpub. opn.] (Rudisill I).)

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      While the appeal was pending, Lighthouse took certain
steps to enable residents to occupy the homes, including
requesting and obtaining certificates of occupancy from the City
of Los Angeles. The trial court granted a request by Rudisill and
Hawk to sanction Lighthouse under Code of Civil Procedure
section 177.5 for violating the stay.1 The court also ordered the
City, which at that point was no longer a party to the case, to
revoke the certificates of occupancy. Finally, the court denied a
motion by Rudisill and Hawk for attorneys’ fees.
      All of the parties appealed: Lighthouse Brooks, LLC and
Kolahi from the order sanctioning each of them $1,500; the City
from the order requiring it to revoke the permits; Rudisill and
Hawk from an order denying their motion for attorneys’ fees. We
reverse the first two orders and affirm the third.

      FACTUAL AND PROCEDURAL BACKGROUND

      A.     The Trial Court Grants a Petition by Rudisill and
             Hawk for Writ of Administrative Mandate
      The facts concerning the Project and the petition for writ of
administrative mandate are discussed in more detail in our prior
opinion. (See Rudisill I, supra, B294460.) To summarize, the
Project is in the coastal zone, as defined by the Coastal Act. (See
Pub. Resources Code, § 30103.) In October 2013 the City issued a
coastal development permit for Lighthouse to build the Project,
but failed to send notice of the permit to the Commission, as

1    Undesignated statutory references are to the Code of Civil
Procedure.

                                 3
required by the Coastal Act.2 Lighthouse completed most of the
Project between 2013 and 2016. In August 2016 the Commission
learned about the Project and informed the City it never received
notice the City had issued a permit for the Project, which
prompted the City to belatedly send notice of the permit it had
issued to Lighthouse three years earlier. Rudisill, Hawk, and
several other Venice residents filed an appeal with the
Commission challenging the City’s decision to issue the permit.3
After a public hearing the Commission issued a permit for the
Project with certain modifications. (See Rudisill I, supra,
B294460.)
      Rudisill and Hawk filed a petition for writ of
administrative mandate arguing, among other things, the
Commission improperly issued the permit without determining
whether the Project complied with the Coastal Act. In November
2018 the trial court granted the petition and issued a writ of
mandate directing the Commission to set aside the permit and
reconsider whether the Project complied with the Coastal Act.

2      Generally, any person “wishing to perform or undertake
any development in the coastal zone . . . shall obtain a coastal
development permit.” (Pub. Resources Code, § 30600, subd. (a).)
Where a local government issues a coastal development permit
“prior to certification of its local coastal program” by the
Commission, the local government “shall within five working
days notify the commission . . . .” (Id., § 30620.5, subd. (c).) The
Commission has not certified a complete local coastal program for
the City of Los Angeles.

3     “Prior to certification of its local coastal program, any
action taken by a local government on a coastal development
permit application may be appealed . . . to the commission.”
(Pub. Resources Code, § 30602.)

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The court also ordered that the Project was “stayed pursuant to
Section 30623 of the Coastal Act.” In December 2020 we reversed
the judgment and directed the court to deny the petition. (See
Rudisill I, supra, B294460.)

      B.     Rudisill and Hawk Seek Sanctions Against
             Lighthouse for Violating the Stay
      In February 2019, while the appeal was pending, Rudisill
and Hawk observed some activity at the Project and discovered
that in January 2019 the City had issued certificates of
occupancy for three of the four homes. Rudisill and Hawk filed
an application for an order to show cause why the court should
not sanction Lighthouse under section 177.5 for violating the
stay. The trial court granted the application, set the matter for a
hearing, and ordered the City to appear. After discussing the
scope of the stay with the parties at the hearing, the court
entered an order stating that “the project is enjoined, except for
use of the property,” and that “no further permits for the property
shall be issued.”
      In response to the order to show cause, Lighthouse
contended the only construction at the Project was a series of
“cosmetic changes” to the interior of one of the homes by a tenant,
not by Lighthouse. In their reply, Rudisill and Hawk submitted
additional information they claimed demonstrated Lighthouse
violated the stay, including that Lighthouse submitted a permit
application related to the homes in December 2018 and that
Lighthouse performed corrective work between December 2018
and January 2019 to obtain a certificate of occupancy for one of
the homes. Rudisill and Hawk also contended Lighthouse
violated the trial court’s February 2019 order clarifying the scope

                                5
of the stay because, later on the same day the court entered the
clarification order, the City issued the certificate of occupancy for
that home. In addition to seeking monetary sanctions under
section 177.5, Rudisill and Hawk filed a motion for attorneys’ fees
under section 575.2, the statute governing failure to comply with
local rules, and the private attorney general doctrine articulated
in Serrano v. Priest (1977) 20 Cal.3d 25, seeking over $141,000 in
attorneys’ fees.
       In a surreply Lighthouse explained that the December 2018
permit application was for an awning Lighthouse had installed
on one of the residential units before the trial court issued the
writ of mandate. Lighthouse explained the corrective work
included removing a temporary power pole for the Project that
was no longer needed. With respect to the final certificate of
occupancy the City issued, Lighthouse stated that it applied for
the certificate before the court’s February 2019 order, but that
the City happened to issue the permit the day the court made the
order.

      C.    The Trial Court Sanctions Lighthouse, but Denies the
            Motion by Rudisill and Hawk for Attorneys’ Fees
      The parties appeared at the hearing in July 2019, and the
City made a special appearance. The trial court sanctioned
Lighthouse Brooks, LLC and Kolahi $1,500 each for violating the
stay. The court ruled Lighthouse violated the stay by submitting
a permit application for the previously installed awning, by
removing the temporary power pole and performing corrective
work, and by requesting certificates of occupancy from the City.
The court also ruled, however, Lighthouse was not responsible for
construction performed inside the homes by the tenants. The

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trial court also found the City acted as Lighthouse’s agent when
it issued the certificates of occupancy. The court ordered the City
to “revoke all Certificates of Occupancy issued for the Project . . .
within ten (10) days of the date of entry of this Order.”
       The court denied the motion by Rudisill and Hawk for
attorneys’ fees. The court ruled that they were not entitled to
fees under section 575.2 because Lighthouse had not violated a
local rule and that they were not entitled to fees under the
private attorney general doctrine or its codification in section
1021.5 because Lighthouse’s violations were “minor” and not
“serious in nature” and the request for sanctions did not concern
an important right affecting the public interest or confer a
significant public benefit. Lighthouse timely appealed, and
Rudisill and Hawk cross-appealed.

                          DISCUSSION

      A.     The Trial Court Erred in Ordering the City To Revoke
             the Certificates of Occupancy
       The City argues the trial court lacked jurisdiction to order
it to revoke the certificates of occupancy because the City was not
a party to the action at the time the court made the order. As
Rudisill and Hawk appear to concede by not opposing the City’s
appeal, the court erred in issuing the order against the City.
       Generally, “[a] court’s power is limited to adjudicating
disputes between persons who have been designated as parties or
made parties by service of process; it has ‘no power to adjudicate
a personal claim or obligation unless it has jurisdiction over the
person of the defendant.’ . . . [¶] Consistent with this principle,
courts have long observed a general rule against entering

                                  7
injunctions against nonparties.” (Hassel v. Bird (2018) 5 Cal.5th
522, 549 (conc. opn. of Kruger, J.); see People ex rel. Gwinn v.
Kothari (2000) 83 Cal.App.4th 759, 769 [“an injunction is binding
only on the parties to an action or those acting in concert with
them”]; see also Zenith Radio Corp. v. Hazeltine Research, Inc.
(1969) 395 U.S. 100, 110-112 [89 S.Ct. 1562, 23 L.Ed.2d 129]
[injunction against a nonparty was improper because “it is
elementary that one is not bound by a judgment in personam
resulting from litigation in which he is not designated as a party
or to which he has not been made a party by service of process”].)
“On the other hand, the law recognizes that enjoined parties ‘may
not nullify an injunctive decree by carrying out prohibited acts
with or through nonparties to the original proceeding.’” (Planned
Parenthood Golden Gate v. Garibaldi (2003) 107 Cal.App.4th 345,
353; see People v. Conrad (1997) 55 Cal.App.4th 896, 902.) Thus,
“‘it has been a common practice to make the injunction run also
to classes of persons through whom the enjoined person may act,
such as agents, servants, employees, aiders, abettors, etc., though
not parties to the action, and this practice has always been
upheld by the courts . . . .’” (Ross v. Superior Court (1977)
19 Cal.3d 899, 906; see Berger v. Superior Court (1917) 175 Cal.
719, 721.)
       Rudisill and Hawk originally named the City as a
respondent in their writ petition, but voluntarily dismissed the
City before the trial court ruled on the petition. This left the City
as “‘a stranger to the action,’” as though the City “‘had never been
a party.’” (Deutsche Bank National Trust Co. v. McGurk (2012)
206 Cal.App.4th 201, 212; accord, Paniagua v. Orange County
Fire Authority (2007) 149 Cal.App.4th 83, 89.) Therefore, the
trial court did not have jurisdiction to enjoin the City, unless the

                                 8
City was an entity through which Lighthouse, as subject to the
injunction, could act.
       The trial court seemed to recognize this, finding the City
was an agent of Lighthouse. Substantial evidence, however, did
not support that finding. (See van’t Rood v. County of Santa
Clara (2003) 113 Cal.App.4th 549, 562 [“[a]gency is generally a
question of fact” we review “for substantial evidence”].) “‘“Agency
is the relationship which results from the manifestation of
consent by one person to another that the other shall act on his
behalf and subject to his control, and consent by the other so to
act.”’” (Gordon v. ARC Manufacturing, Inc. (2019)
43 Cal.App.5th 705, 718; see van’t Rood, at p. 571.) “‘The chief
characteristic of the agency is that of representation, the
authority to act for and in the place of the principal for the
purpose of bringing him or her into legal relations with third
parties.’” (Gordon, at p. 718; see Daniels v. Select Portfolio
Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1171.)
       There was no evidence the City acted as an agent of
Lighthouse. There was no evidence the City, in issuing the
certificates of occupancy, agreed to act on behalf of and subject to
the control of Lighthouse or that the City otherwise had
authority to act on behalf of Lighthouse. As the trial court stated
at the hearing on the order to show cause, the City “has no dog in
this hunt in terms of the certificates of occupancy.” The court
found “no fault” on the part of the City, and even recognized the
City “is not normally an agent of the real party,” but nevertheless
concluded the City was an agent of Lighthouse. That was error.
       Moreover, the court issued the injunction against the City
to aid the court’s order granting the petition by Rudisill and

                                 9
Hawk for writ of mandate. We reversed that order in Rudisill I;
there is nothing left for the injunction to aid.

      B.    The Trial Court Erred in Awarding Sanctions
            Against Lighthouse

               1.   Applicable Law and Standard of Review
       Section 177.5 authorizes a court to “impose reasonable
money sanctions, not to exceed fifteen hundred dollars
($1,500), . . . payable to the court, for any violation of a lawful
court order by a person, done without good cause or substantial
justification.” We review a trial court’s award of sanctions under
section 177.5 for an abuse of discretion. (See People v. Kareem A.
(2020) 46 Cal.App.5th 58, 70; County of Riverside v. Public
Employment Relations Bd. (2016) 246 Cal.App.4th 20, 33.)
“While this standard of review is highly deferential to the trial
court’s wide discretion in determining the facts, choosing from
the array of available sanctions, and deciding the severity of any
sanction chosen . . . an abuse of discretion will be found if the
findings underlying the order under review are factually
unsupported [citation], which requires us to ‘assess[ ] the record
for substantial evidence to support the court’s express or implied
findings.’” (People v. Landers (2019) 31 Cal.App.5th 288, 304; see
Menezes v. McDaniel (2019) 44 Cal.App.5th 340, 347 [“We review
findings of fact forming the basis of a sanctions award for
substantial evidence.”].)

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            2.      Lighthouse Acted with Good Cause or
                    Substantial Justification
       Lighthouse argues it acted with substantial justification
when it applied for permits and certificates of occupancy for the
homes and performed some minor work such as removing a
temporary power pole. Lighthouse is correct.
       Although the parties do not identify any authority defining
“substantial justification” for purposes of section 177.5, courts
have generally equated substantial justification with “‘a valid
excuse.’” (People v. Kareem A., supra, 46 Cal.App.5th at p. 78; see
Seykora v. Superior Court (1991) 232 Cal.App.3d 1075, 1081.)
The statutes governing a court’s authority to award sanctions for
misuse of the discovery process also use the term “substantial
justification” (see, e.g., §§ 2023.010, subds. (a), (e) & (h),
2023.030, subd. (a)), and those statutes provide that a position is
substantially justified if “‘well grounded in both law and fact.’”
(City of Los Angeles v. Superior Court (2017) 9 Cal.App.5th 272,
291; accord, Padron v. Watchtower Bible & Tract Society of New
York, Inc. (2017) 16 Cal.App.5th 1246, 1269.)
       Lighthouse’s position—that it did not violate the stay by
applying for permits or performing other minor work at the
Project—was well-grounded in law and fact, and its conduct was
excusable, because the scope of the stay in the court’s original
judgment was vague. In its November 2018 order the trial court
stated the Project was “stayed pursuant to [s]ection 30623 of the
Coastal Act,” which stays “the operation and effect” of a coastal
development permit during the pendency of an appeal from a
local government to the Coastal Commission. But because the
Project was already built, it was not clear how Lighthouse was
supposed to act or what conduct would violate the stay. On the

                                11
one hand, the court may have intended to prohibit Lighthouse
from conducting any activity or using any of the existing
structures on the Project. On the other hand, the November 2018
order only directed the Commission to set aside the coastal
development permit so that the Commission could reconsider
whether the Project complied with the Coastal Act; the order did
not direct the Commission to revoke the permit for the Project.
Thus, the court may have intended only to prohibit Lighthouse
from further developing the Project and to maintain the status
quo, not to prohibit Lighthouse and others from using the homes
Lighthouse had already built.
       The vagueness of the November 2018 stay is confirmed by
the trial court’s statements at the February 2019 hearing and its
ruling on the ex parte application for an order to show cause. At
the hearing the court told counsel for Lighthouse the stay
“doesn’t mean . . . that if you had everything in place you couldn’t
rent it to a tenant. You could. That’s not ‘the Project.’” After
directing counsel for Rudisill and Hawk and Lighthouse to meet
and confer over the language of a revised stay, the court clarified
in its February 2019 order that the stay precluded the City from
issuing any further permits, but that the stay did not apply to the
use of the property.
       Because the trial court’s November 2018 order was vague,
and until the court issued a new order in February 2019
clarifying that the City could not issue any permits while the stay
was in effect, Lighthouse was substantially justified in, and had a
valid excuse for, applying for the certificates of occupancy and a
permit for a previously built awning. Even if the court had
intended to restrict this type of activity in November 2018 when
it issued the original stay, it was unclear the stay covered this

                                12
activity under the circumstances. (Cf. City of Los Angeles v.
Superior Court, supra, 9 Cal.App.5th at p. 292 [no basis for
finding a party acted without substantial justification given “the
unsettled nature of the issues presented” and conflicting legal
authority]; Diepenbrock v. Brown (2012) 208 Cal.App.4th 743,
749 [same].) Lighthouse was also substantially justified in, and
had a valid excuse for, removing a temporary power pole used for
construction that was no longer needed—an action that, if
anything, complemented a stay on further construction.
       Substantial evidence also did not support a finding
Lighthouse violated the stay by performing corrective work on
the Project. In response to Lighthouse’s request for a final
inspection of one of the homes, the City on January 28, 2019
issued corrections to Lighthouse. A few days later, on
February 4, 2019, the City updated the status of the permit for
the home to “OK to issue [Certificate of Occupancy].” The trial
court inferred from this that Lighthouse must have performed
some corrective work on the home between January 28, 2019 and
February 4, 2019. But even if it were reasonable for the court to
infer Lighthouse took some action to cause the City to update the
status of the permit (other than removing the power pole),4 there
was no evidence of what other corrective actions Lighthouse
took—a fact the court acknowledged at the hearing. Given the
vagueness of the stay, it was speculative for the court to conclude
any actions Lighthouse may have taken violated the stay. (See

4     Kolahi stated in a declaration the City unilaterally changed
the status of the permit, without any request for an inspection by
Lighthouse. The court, however, was not required to find this
explanation credible.

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Wise v. DLA Piper LLP (US) (2013) 220 Cal.App.4th 1180, 1188
[“‘speculation is not evidence, less still substantial evidence’”].)
       Finally, the court found Lighthouse violated the February
2019 order clarifying the scope of the stay by obtaining the final
certificate of occupancy shortly after the court issued that order.
Whether Lighthouse violated the February 2019 revised stay, as
opposed to the November 2018 original stay, is a closer question.
The February 2019 order stated that “no further permits . . . shall
be issued.” Although there was no evidence Lighthouse did
anything after the trial court issued the February 2019 stay to
cause the City to issue the certificate later in the day of the
hearing, Lighthouse did not deny it used the certificate after
obtaining it. But this was still not enough to show Lighthouse
violated the February 2019 order without substantial
justification or a valid excuse. While the February 2019 order
stated the City shall not issue any permits, it did not direct
Lighthouse to withdraw any pending permit applications or to
return any permits it might receive in the interim. And, as
discussed, the court stated at the hearing in February 2019 that,
if Lighthouse had everything in place, it could rent the units, and
the February 2019 order stated Lighthouse could continue to use
the property. Although the court may have intended its February
2019 order to prohibit Lighthouse from using permits that it had
previously applied for and that the City finally got around to
issuing, Lighthouse was substantially justified in receiving the
permit based on a pre-stay application and in using the property
consistent with the permit.5

5    Because we conclude Rudisill and Hawk failed to prove
Lighthouse violated the stay and reverse the trial court’s order

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                        DISPOSITION

      The order imposing sanctions under section 177.5 is
reversed. The order directing the City to revoke certificates of
occupancy for the Project is also reversed. The order denying the
request by Rudisill and Hawk for attorneys’ fees is affirmed.
Lighthouse is to recover its costs on appeal.

                  SEGAL, J.

     We concur:

                  PERLUSS, P. J.

                  McCORMICK, J.*

awarding sanctions, we affirm the order denying the motion by
Rudisill and Hawk for attorneys’ fees.

*     Judge of the Orange County Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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