Civ. 69423.
Court of Appeal, Second District, Division 3, California.
Aug. 1, 1984.
As Modified Aug. 9, 1984.
Certified for Partial Publication. [FN*]
Levy & Norminton and Thomas M. Norminton and Leo D. Plotkin, Los Angeles, for plaintiff and appellant Maple Properties.
Loeb & Loeb and Howard I. Friedman and Robin Meadow, Los Angeles, and Ervin, Cohen & Jessup, Beverly Hills, and Richard Amerian, Los Angeles, for plaintiff and appellant Maple Properties and Levy & Norminton.
Selvin & Weiner and Paul P. Selvin and James S. Tyre and Yusim, Stein & Hanger and Robert T. Hanger, Roger Bentley and Scott C. Haith, Beverly Hills, for defendants and respondents.
LUI, Acting Presiding Justice.
In this appeal, we are asked to analyze the sufficiency of the allegations of a complaint filed by appellant, a real estate developer, against the respondents, private citizens who supported a referendum that repealed a city ordinance which would have allowed appellant to build a condominium project. For the reasons stated below, we conclude that the conduct of the citizens during the course of this political campaign was not actionable.
We also determine that the appeal is partially frivolous as to the libel claims because the invalidity of these claims was conclusively adjudicated by our Supreme Court. Accordingly, we assess sanctions against appellant's counsel Levy & Norminton.
As a portion of the complaint has already been thoroughly reviewed by our Supreme Court in Okun v. Superior Court (1981) 29 Cal.3d 442, 175 Cal.Rptr. 157, 629 P.2d 1369 (cert. den. 454 U.S. 1099, 102 S.Ct. 673, 70 L.Ed.2d 641), we adopt the Supreme Court's recital of the facts of this case as our own.
Appellant, Maple Properties, "is a limited partnership that purchases, manages, develops, and sells real property. In 1977 it bought 10 acres of Beverly Hills property with a view to building condominiums. The property, then under a building moratorium pending determination of zoning, adjoined city-owned parcels. [Appellant] had discussed with city officials the possibility of a land exchange so that [appellant] and the city each would own contiguous land. The discussions concluded successfully on November 28, 1978, when the city council agreed to the land exchange and adopted a zoning ordinance allowing plaintiff to construct condominiums on all its newly acquired property. [P] To prevent construction, [respondents Erwin Okun, Betty H. Harris, Joann Ruden and various Does] circulated and then filed a petition to allow the electorate to reject or accept the ordinance. Consequently, the council placed it on the ballot for an election held March 9, 1979. It was rejected and thus repealed...." (Okun, supra, 29 Cal.3d at pp. 447-448, 175 Cal.Rptr. 157, 629 P.2d 1369.)
Two months after the referendum election, appellant filed its initial complaint against respondents. The subsequently filed first amended complaint alleged ten causes of action, namely for libel (the first, second, third and fifth causes of action), slander (fourth and sixth causes of action), violation of various federal civil rights laws (seventh and eighth causes of action) and interference with prospective economic advantage (ninth and tenth causes of action).
On April 24, 1980, respondents' demurrer to the first and seventh through tenth causes of action was sustained without leave to amend. Respondents' demurrer to the defamation causes of action (second, third, fifth and sixth), however, was overruled. The fourth cause of action was placed off calendar because it alleged only Doe defendants.
The Supreme Court granted a hearing on respondents' petition for writ of mandate on the defamation causes of action and eventually issued a peremptory writ of mandate directing the superior court to sustain the demurrer. (Okun, supra, 29 Cal.3d at p. 460, 175 Cal.Rptr. 157, 629 P.2d 1369.) The peremptory writ issued by the Supreme Court ordered the demurrer to the libel causes of action sustained without leave to amend but permitted amendment of the sixth cause of action for slander. (Id., at p. 460, 175 Cal.Rptr. 157, 629 P.2d 1369.) [FN1]
Appellant filed a second amended complaint, alleging only a fourth cause of action for slander and a sixth cause of action for conspiracy to commit slander. The trial court sustained respondents' demurrer to the second amended complaint and denied further leave to amend. Subsequently, the trial court dismissed the entire action.
Appellant filed a timely notice of appeal which is the subject of this opinion.
On remand, the trial court, pursuant to the order of the Supreme Court, sustained the demurrer to the libel causes of action without leave to amend.
Appellant contends that the complaint states ten viable causes of action and that the trial court erred in sustaining the various demurrers without leave to amend.
Appellant first contends that the superior court erred in dismissing the libel causes of action. The allegedly libelous documents consisted of a letter to the editor of the Los Angeles Times, [FN2] an open letter to the Mayor published in the Beverly Hills Courier [FN3] and the statement included in the "Sample Ballot and Voter Information Pamphlet." [FN4]
"The article regarding a controversial land swap between the Beverly Hills City Council and a developer of luxury condominiums ('Land Swap Stirs Up Beverly Hills' by Sam Kaplan, Dec. 26) missed the point entirely. "To set the record straight: "While the area in contention adjacent to Beverly Hills' civic center -- is known as the industrial area, it also houses the city's vital municipal services facilities. It is the site of the city's refuse transfer station, vehicle maintenance garages and all the other indispensable operations that make a city function. It is also the site of a water treatment plant that the city council abandoned in 1976. "This action was followed by the council's abandoning the city's own water wells in the midst of the recent drought. It was this incredible move that caused a number of citizens to become suspicious of the council's motives. Beverly Hills residents were thus forced to become completely dependent upon one very expensive source of water, that supplied by the Metropolitan Water District of Southern California. Even the MWD's general manager advised the city against this decision. "Nevertheless, this was done despite the fact that in 1974 the voters of Beverly Hills had passed, by a two-thirds majority, a $3.75 million bond issue to refurbish the city's water wells and
treatment facilities. The only council member opposed to the bond issue and retention of the city's wells was Richard Stone, an attorney. "Mysteriously, one week after the voters approved the refurbishing of their water system, the city announced that its cost projections to revitalize the wells were $5 million short. Amazingly, a year later the claim went to $12 million more
than the voter-approved bonds. But, without asking the voters again, in December, 1976, the council closed down the wells and sold off the land on which they were located. "Not until April 12, 1977, did Richard Stone, at that time the mayor of Beverly Hills, reveal that David Rowen, representing a developer, had become a client of Stone's. The abandoned treatment plant is now earmarked for the developers in a landswap deal."
[FN3] The letter provided in pertinent part as follows: "Are we going to become a contract city, beholden to outside vendors? [P] Where will our water come from when we are totally at the mercy of the MWD and rates treble and we are in a drought worse than the recent one? [P] Why are we trading land which we should be buying -- like other cities that are landbanking for the future? [P] But the even larger question is who will gain from this plan? The majority of residents, or the very few individuals with a vested interest in the condominium project? [P] And what about all the ambiguous promises to the senior citizens? The 100-unit housing promise is a blatant, political carrot in return for their dedicated support. [P] Can you
honestly tell the folks there really will be such a building for them exclusively? What will the costs be? $300 a month? $650? Who will determine those with highest priority? How can you restrict entry to city residents only, if state and federal money is involved? And what about the
hundreds and hundreds of needy, Beverly Hills seniors who will be left out?"
[FN4] The statement provided as follows:
"Beverly Hills has only one Industrial Area to sustain us as an independent city. We must keep it for our community needs and not allow it to be zoned away.
"We need a place for police cars, carpentry and paint shops, city truck maintenance, park equipment, trash disposal, water facilities and other lifeline services essential to our community. "These indispensable city services enable Beverly Hills to operate efficiently and at low cost. They must be contained in the Industrial Area for they are unpleasant neighbors. We cannot afford to allow developers to take over the only suitable location within our city for these vital needs. "Every citizen approved General Plan designated this land to be saved for municipal and service use. The developers hired one of our Councilmen, subsequently the Fair Political
Practices Commission ruled the Councilman had a conflict of interest. The General Plan was changed drastically to accommodate the developer's desires, ignoring residents' needs. "The Council violated the recommendation of their own consultant and the Council-appointed citizens committees when it voted this rezoning. "THIS SCHEME WILL COST THE TAXPAYERS MILLIONS. Rubbish disposal has to be moved, street intersections redesigned, businesses
relocated, city services put underground, all at prohibitive costs to taxpayers. "ONLY THE DEVELOPERS BENEFIT FROM THIS REZONING. They will sell condominiums at up to $1,000,000.00 each, which the taxpayers will subsidize. They will get city maintained landscaping. By the Council's own admission, these luxury condominiums will cost the city more to service than revenues they will produce. "Senior Housing is being used as a deceptive
cover for this "Enrich the Developers" scheme. "Don't jeopardize our city's future! VOTE NO ON PROPOSITION B.
"JOANN RUDEN, President
BETTY H. HARRIS, Chairperson
Incredibly, appellant now asks this court to overturn the superior court order which complies with the clear and unambiguous directive of the Supreme Court to dismiss the libel causes of action.
Initially, appellant contended in its opening brief that our further review of the libel causes of action was warranted on grounds that subsequent to the Supreme Court's decision in Okun, "new facts" "which were not part of the record in the first appeal" were discovered. Appellant urged that these "new facts" that respondent and others had agreed to make criminal complaints against Richard Stone and appellant with government agencies at the time the allegedly libelous letters were published, "add[ed] new contextual meaning" to the publications which our Supreme Court had deemed to be nonlibelous.
However, the record reveals that these additional facts were not "new" at all. Appellant now concedes that these facts were part of the record when the Supreme Court considered respondents' petition for writ of mandate and again when it considered appellant's petition for rehearing. [FN5]
In Okun, supra, 29 Cal.3d 442, 175 Cal.Rptr. 157, 629 P.2d 1369, the Supreme Court exhaustively analyzed these documents and concluded that they "could not reasonably have been interpreted by its probable readers as having a libelous meaning." (Id., at p. 457, 175 Cal.Rptr. 157, 629 P.2d 1369.) The court further concluded that leave to amend the complaint should be denied "because 'there are no circumstances under which an amendment would serve any useful purpose' [citation] ...." (Id., at p. 460, 175 Cal.Rptr. 157, 629 P.2d 1369.) (Emphasis added.)
League of Women Voters of Beverly Hills
Committee to Save Beverly Hills"
A. The Procedural History and Our Order To Show Cause
We now address the question as to whether sanctions should be imposed under Code of Civil Procedure section 907 [FN6] and rule 26(a) of the California Rules of Court. [FN7]
[FN7] Rule 26(a) of the California Rules of Court provides in pertinent part that, "[w]here the appeal is frivolous or taken solely for the purpose of delay ... the reviewing court may impose upon offending attorneys or parties such penalties, including the withholding or imposing of costs, as the circumstances of the case and the discouragement of like conduct in the future may require."
Appellant filed a written election to waive oral argument at the hearing on the appeal set for May 16, 1984. Respondents' counsel appeared at the oral argument, argued briefly and responded to our questions; both counsel then requested sanctions against appellant for pursuing a frivolous appeal. We indicated to respondents' counsel that we would consider remanding the
matter for hearing in the superior court on the question of sanctions for an appeal that was frivolous with regard to the libel claims.
Upon reflection, it was our view that the issue of sanctions for an appeal which was partially frivolous was a question of law and therefore an issue we should decide. Because of our desire to follow scrupulously the dictates of our Supreme Court's decision in In re Marriage of Flaherty (1982) 31 Cal.3d 637, 183 Cal.Rptr. 508, 646 P.2d 179 (Flaherty ), and because of appellant's decision not to appear for oral argument, we issued an Order to Show Cause why sanctions should not be assessed against appellant and its counsel. [FN8]
"Good cause appearing therefor, you are hereby ordered to appear before this court in its courtroom at 3580 Wilshire Boulevard, on June 20, 1984, at 9:00 a.m., to show why sanctions should not be assessed against you in the above appeal. (Code Civ.Proc., s 907, Cal.Rules of Court, rules 26, subd. (a), and 135 [sic]; In re Marriage of Flaherty (1971) 31 Cal.3d 637, 649
[183 Cal.Rptr. 508, 646 P.2d 179]; see also People v. Beverly Bail Bonds (1982) 134 Cal.App.3d 906 [185 Cal.Rptr. 36]; Miller v. R.K.A. Management (1979) 99 Cal.App.3d 460, 469-470 [160 Cal.Rptr. 164].) "Appellant may file a brief in opposition to this order to show cause on or before June 4, 1984. On or before June 11, 1984, respondents may file a brief documenting those damages which they incurred on appeal by virtue of appellant's request that this court review the libel causes of action in the complaint below following the Supreme Court's decision in a prior but related appeal. (Okun v. Superior Court (1981) 29 Cal.3d 442 [175 Cal.Rptr. 157, 629 P.2d 1369].)" The citation to rule 135 in the Order to Show Cause which refers to sanctions for frivolous appeals in the superior court, was clearly irrelevant and when read in connection with rule 26(a) which preceded it, is obviously surplusage. Subsequent to the issuance of our Order to Show Cause, we denied appellant's demand for a jury trial on the issue of sanctions and also denied appellant's motion for an extension of time to respond to our Order to Show Cause.
In its brief on appeal, respondent Okun requested that this court award sanctions for attorney's fees and costs on the grounds that the contentions on appeal were frivolous. (Code Civ.Proc., s 907; Cal.Rules of Court, rule 26(a).) Appellant argued against the imposition of sanctions in its reply brief.