Opinion
D073032
07-20-2018
THE CITY OF SAN DIEGO, Plaintiff and Respondent, v. 4008 TAYLOR STREET LLC et al., Defendants and Appellants.
Law Offices of Dale Dixon and R. Dale Dixon, Jr., for Defendants and Appellants. Mara W. Elliot, City Attorney, John C. Hemmerling, Assistant City Attorney, and Patricia Miranda, Deputy City Attorney, for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2016-00016601-CU-MC-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Richard E.L. Strauss, Judge. Affirmed. Law Offices of Dale Dixon and R. Dale Dixon, Jr., for Defendants and Appellants. Mara W. Elliot, City Attorney, John C. Hemmerling, Assistant City Attorney, and Patricia Miranda, Deputy City Attorney, for Plaintiff and Respondent.
The City of San Diego (City) filed a civil action against 4008 Taylor Street, LLC and its managing member Todd Lesser (collectively Lesser), and Lesser's tenant, Scott Fronczek, seeking an injunction and civil penalties for Fronczek's operation of a marijuana dispensary business at 4008 Taylor Street in Old Town in violation of the San Diego Municipal Code (SDMC). After months of litigation, the City obtained summary judgment against Lesser and Fronczek and the court issued a permanent injunction prohibiting them from maintaining or operating a marijuana dispensary without obtaining proper permits. The court also assessed $ 12,500 in civil penalties jointly and severally against Lesser and Fronczek. Lesser appeals the court's orders, asserting vaguely that the SDMC "is unconstitutional because it violates decades of California case law, the California Constitution, and due process rights." We reject Lesser's appeal and affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUD
On April 26, 2016, Lesser entered a commercial lease with Fronczek allowing Fronczek to operate any lawful business at 4008 Taylor Street. The prior year, the narcotics unit of the San Diego Police Department had received a complaint that a marijuana dispensary, called 6 Way Greens, was being operated at 4004 Taylor Street. On April 28, 2016, the narcotics unit received a tip that the business had moved from 4004 to 4008 Taylor Street. The following day the code enforcement division of the City's development services department started an investigation into the illegal operation of a dispensary at 4008 Taylor Street.
On April 30, 2016, a City investigator witnessed 15 people enter the parking lot for the property, then witnessed many of them being given small white bags by what appeared to be an employee at the property. Several days later, two other City investigators saw people entering the building, then leave with the same white bags. The investigators also reported they could smell the strong odor of marijuana at the property. Similar activity was observed by San Diego Police Department officers later in May, and again in August.
On August 31, 2016, police executed a search warrant at the property. Once inside, officers observed several display cases filled with marijuana in glass jars, signs identifying different products, a refrigerator containing marijuana products, a freezer with marijuana ice cream, menu boards listing different products with their prices, and an ATM. Over 18 pounds of marijuana and $3,000 was seized from the property.
Prior to the police raid, on May 17, 2016, the City filed its initial complaint against Lesser and Fronczek, alleging Fronczek was maintaining and operating an illegal marijuana dispensary at 4008 Taylor Street in violation of section 121.0302 of the SDMC. In response, Fronczek demurred. The City filed an ex parte application seeking a temporary restraining order (TRO) to cease operation of the dispensary and order to show cause why a preliminary injunction should not be granted. On August 19, 2016, the court denied the application without prejudice, finding the evidence presented by the City did not sufficiently show that the transfer of marijuana was taking place inside the property or that the alleged business operation violated the SDMC. The order denying the TRO set a hearing on the City's motion for a preliminary injunction for October 14, 2016.
On September 20, 2016, Fronczek filed an ex parte application for leave to file a cross-complaint and a TRO preventing the City from taking any code enforcement action with respect to the property and requiring it to issue him a Business Tax Certification for the operation of a marijuana related business. On September 29, 2016, the court granted Fronczek permission to file his cross-complaint, which sought declaratory and injunctive relief requiring the City to issue a Business Tax Certification for his marijuana business and preventing further enforcement action.
On October 14, 2016, the court denied the City's request for a preliminary injunction on the grounds that there was no harm to the City because Fronczek had ceased operations after the police raid on August 31, 2016. The City demurred to Fronczek's cross-complaint on October 21st. On October 28, 2016, the court sustained Fronczek's demurrer and granted the City leave to amend its complaint. The City filed its first amended complaint (FAC) on November 9, 2016. Fronczek again demurred. In January 2017, the trial court sustained the City's demurrer to Fronczek's complaint and overruled Fronczek's demurrer to the City's FAC.
Fronczek and Lesser answered the FAC in early February. The City then filed a motion for summary judgment on March 30, 2017, asserting Fronczek had operated the marijuana business in violation of the SDMC and that the City was entitled as a matter of law to a permanent injunction prohibiting Lesser and Fronczek from operating a marijuana dispensary in the future without proper permits and civil penalties of $317,500 ($2,500 for each day the business was operating). Lesser opposed the motion, arguing the City had not shown any violation of the SDMC at the property, which had remained vacant since August 31, 2016, and that even if there were violations, Lesser could not be held liable for Fronczek's actions. At the conclusion of the June 16, 2017 hearing on the motion, the court confirmed its tentative ruling granting summary judgment and imposing a civil penalty of $12,500 based on the City's undisputed evidence that violations of the SDMC occurred on five days, April 30, 2016, May 2, 2016, May 11, 2016, August 11, 2016, and August 31, 2016.
On July 5, 2017, the court entered final judgment imposing liability for the $12,500 penalty jointly and severally, and a permanent injunction. Lesser timely appealed.
DISCUSSION
Lesser argues that this court should reverse the trial court's order because "the SDMC violates decades of California case law regarding landlord liability, the California Constitution, and due process rights." Specifically, Lesser argues he cannot be held liable for violations of the SDMC that arose solely from Fronczek's conduct. Lesser also argues that he had no ability to avoid liability because the trial court repeatedly found no violations of the law when it denied the City's request for a TRO and preliminary injunction.
I
"Summary judgment is appropriate 'if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' (Code Civ. Proc., § 437c, subd. (c).)" (San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1534.) On review of a trial court's order granting summary judgment, " 'we take the facts from the record that was before the trial court when it ruled on that motion. [Citation.] " 'We review the trial court's decision de novo, considering all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained.' " [Citation.] We liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.' " (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 716-717.) "We need not defer to the trial court and are not bound by the reasons for the summary judgment ruling; we review the ruling of the trial court, not its rationale." (Knapp v. Doherty (2004) 123 Cal.App.4th 76, 85.)
II
As an initial matter, we reject Lesser's repeated assertion that the trial court had affirmatively found that no violation of the SDMC occurred by its denial of the City's request for a TRO and preliminary injunction. Rather, on August 19, 2016, the court found the City had not carried its burden to show the business was a marijuana dispensary that was operating in violation of the municipal code. The basis for the ruling was that the evidence submitted in support of the City's request for a TRO did not establish that marijuana was transferred inside the property, as opposed to the parking lot. Further, the court found it was not clear whether the operation of a medical marijuana dispensary was a violation of the relevant zoning ordinance for the Old Town San Diego Planned District (OTSDPD), where the property is located. The court stated that the OTSDPD "zoning ordinance identifies permitted and non-permitted uses" and the case law relied on by the City to support its assertion that the operation of the dispensary was a nonpermitted use, and therefore in violation of the ordinance, applies only to ordinances that identify permitted uses only. The order, therefore, did not affirmatively establish that no violation of the municipal code had occurred, only that the City had not met the burden required to obtain a TRO.
Lesser states on "June 23, 2016, the trial court refused to grant the City's request for a [TRO] against Fronczek, Taylor, and Lesser." The court, however, did not deny the request. Rather, it merely continued the hearing on the TRO and allowed supplemental briefing.
Likewise, the court's denial of the City's motion for a preliminary injunction did not adjudicate the issue of whether the operation of a dispensary at the property was a violation of the SDMC. The trial court's order found that the City had not met its burden to show harm that necessitated a preliminary injunction because by that point Fronczek was no longer operating the business. The trial court's decisions on the City's request for a TRO and motion for preliminary injunction were not, contrary to Lesser's assertion, findings that there had been no violation of law.
III
Critically, Lesser does not dispute the court's factual findings at summary judgment that Fronczek was operating a medical marijuana dispensary at 4008 Taylor Street prior to August 31, 2016, in violation of the SDMC. His argument is solely that the municipal code provision, which he contends imposes strict liability on landlords for violations by a tenant, conflicts with California case law foreclosing tort liability on a landlord for a nuisance created by a tenant, and therefore the provision is preempted under the California Constitution. This strict liability argument, however, is based on the faulty premise that Lesser could not be found culpable because he had no basis to evict Fronczek after the trial court denied the City's request for a TRO and preliminary injunction.
As discussed, the court's earlier orders did not address the ultimate question of whether the operation of a marijuana dispensary at the property constituted a violation of the SDMC. Further, undisputed evidence at summary judgment showed Lesser was aware of the illegal activity within days of entering a lease agreement with Fronczek. Specifically, on April 28, 2016, Lesser's attorney sent a letter to Fronczek stating that Lesser suspected Fronczek's business was engaging in unlawful activity at the property, and demanding Fronczek cease and desist from engaging in that activity and vacate the premises by the next day. The letter indicated that if Fronczek did not respond, 4008 Taylor Street LLC would begin eviction proceedings. Thereafter, Lesser took no further action against Fronczek and Fronczek continued to operate the unlawful dispensary at the property. Accordingly, the evidence before the court was that Lesser was aware of the marijuana dispensary business at the property and took no additional action after the April 28th letter to evict Fronczek. Lesser had the opportunity to avoid the penalty by pursuing eviction, but chose not to.
Lesser next asserts, for the first time on appeal, that he cannot be held liable for Fronczek's violation of the SDMC because the provision is unconstitutional. Because Lesser did not raise it in the trial court, the issue is forfeited. (See Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982, 997 [" 'As a general rule, theories not raised in the trial court cannot be asserted for the first time on appeal; appealing parties must adhere to the theory (or theories) on which their cases were tried. This rule is based on fairness—it would be unfair, both to the trial court and the opposing litigants, to permit a change of theory on appeal.' "].) Even if we were to find the argument was properly preserved, however, we agree with the City that it has no merit.
Section 121.0302, subdivision (a) of the SDMC provides that, "It is unlawful for any person to maintain or use any premises in violation of any of the provisions of the Land Development Code, without a required permit, contrary to permit conditions, or without a required variance." Section 12.0202, subdivision (b) contained in the chapter of the SDMC which governs civil enforcement proceedings, provides that "as a part of civil action filed to enforce provisions of this Code, a court may assess a maximum civil penalty of two thousand five hundred dollars ($2,500) per violation of the Municipal Code for each day during which any person commits, continues, or allows or maintains a violation of any provision of this Code."
Lesser does not contest the court's finding that the City had the ability to prohibit the operation of a medical marijuana dispensary at the property through its zoning ordinances at the time the City brought this civil action. He argues only that the imposition of liability on him under SDMC sections 121.0302 and 12.0202 is preempted by case law concerning premises liability. This argument is not well-taken.
" '[W]hen local government regulates in an area over which it traditionally has exercised control, such as the location of particular land uses, California courts will presume, absent a clear indication of preemptive intent from the Legislature, that such regulation is not preempted by state statute.' " (City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th 729, 743 (City of Riverside).) "However, local legislation that conflicts with state law is void. [Citation.] ' "A conflict exists if the local legislation ' " duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication." ' " ' " (Ibid.) No "conflict will be found where it is reasonably possible to comply with both the state and local laws." (Ibid.)
Here, there is no conflict between the case law Lesser relies on and the City's municipal code provisions regulating land use and imposing liability on landlords for illegal activity that occurs on their property. Lesser's case citations concern whether a landlord can be held liable for tort damages caused by a dangerous condition on the property after a tenant has taken occupancy. (See Resolution Trust Corp. v. Rossmoor Corp. (1995) 34 Cal.App.4th 93, 101 [setting forth duty of care owed by property owner to third party after tenant takes possession of property]; Chee v. Amanda Goldt Property Management (2006) 143 Cal.App.4th 1360, 1369 [addressing duty of care owed by landlord to third party bitten by tenant's dog]; Alcaraz v. Vece (1997) 14 Cal.4th 1149, 1157-1158 [addressing whether property owner owed a duty of care for hazardous condition on property adjacent to his which he did not own, but may have exercised control over]; Uccello v. Laudenslayer (1975) 44 Cal.App.3d 504, 510-511[considering landlord's duty of care with respect to vicious animal kept on property without landlord's consent]; Lucid v. Citizens' Inv. Co. (1920) 49 Cal.App. 257, 260 [Owner liable only if nuisance causing injury existed at the time tenant took occupancy, or reasonably foreseeable that nuisance would arise.].) These cases are not relevant to whether a city may obtain civil penalties against a property owner based on a tenant's known illegal activity.
Simply put, the state's laws concerning the duty of care a property owner owes those injured on his or her property does not preempt the City's ability to regulate land use through its zoning ordinances and municipal code. (See City of Riverside, supra, 56 Cal.4th at pp. 737-738 ["The California Constitution recognizes the authority of cities and counties to make and enforce, within their borders, 'all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.' (Cal. Const., art. XI, § 7.) This inherent local police power includes broad authority to determine, for purposes of the public health, safety, and welfare, the appropriate uses of land within a local jurisdiction's borders, and preemption by state law is not lightly presumed."].)
DISPOSITION
The judgment is affirmed.
HUFFMAN, J. WE CONCUR: BENKE, Acting P. J. AARON, J.