Opinion
A114683
4-19-2007
RAYMOND REUDY et al., Plaintiffs and Respondents, v. O.K. INVESTMENTS, INC. et al., Defendants and Appellants.
NOT TO BE PUBLISHED
Plaintiffs Raymond Reudy and Kevin Hicks sued defendants O.K. Investments, Inc. (OKI) and Homayoun Naimi in connection with two wall signs for outdoor advertising. Among other claims, plaintiffs alleged that the signs did not comply with San Francisco ordinances and sought an injunction against their illegal use. OKI cross-complained. The trial court agreed that the signs were illegal and granted an injunction and attorney fees to plaintiffs, but the court also found for OKI on its cross-complaint. Plaintiffs appealed, but defendants did not. In an earlier decision, this court reversed the trial courts award on the cross-complaint but otherwise left its judgment intact.
While the matter was pending on appeal, Business and Professions Code section 5466, subdivision (a) was enacted. Although defendants now contend that section 5466 defeats plaintiffs claim for injunctive relief, the statute was not raised on the earlier appeal. After remittitur, plaintiffs submitted a proposed amended judgment to conform to our ruling. Only after the amended judgment was entered did defendants, for the first time, seek relief under section 5466, filing a motion to vacate the amended judgment under Code of Civil Procedure section 663. The trial court denied that aspect of the motion to vacate. We affirm.
I. BACKGROUND
The factual background for this action is set out in a prior decision of this court, Reudy v. O.K. Investments, Inc. (Sept. 29, 2005, No. A108198) [nonpub. opn.] (Reudy I). The following summary is taken from Reudy I:
Naimi, the president of OKI, and/or OKI is the owner of two buildings on Lombard Street in San Francisco. In September 1998, Naimi applied to the City of San Francisco (City) for a permit to put a wall sign on 2157 Lombard Street (hereafter 2157). On the permit, he indicated that the size of the sign would be 300 square feet. The application was approved. The following year, Naimi applied for a similar wall sign for 2151 Lombard (hereafter 2151), the other building he owned, with a similar result.
Sometime in the year 2000, Naimi contacted plaintiffs, who were brokers for advertising space. Naimi offered to lease plaintiffs a considerably larger wall sign, over 700 square feet, on 2157, as well as a sign on 2151. Although Naimi told plaintiffs that both wall signs were legal, in fact neither was. The sign at 2151 violated the local zoning ordinances because its top edge was over 24 feet above the street, and the sign at 2157 was both too high and too big. Naimi had never obtained, or even attempted to obtain, a variance permitting the erection of signs violating the zoning ordinances. Nonetheless, plaintiffs and OKI executed leases for the 2151 and 2157 wall signs.
Plaintiffs eventually learned that the signs were not properly permitted and ceased using them. In November 2002, plaintiffs amended their complaint in a preexisting action to allege that defendants had not obtained a proper City permit for the 2157 sign and assert, among others, causes of action for breach of contract, fraud, negligent misrepresentation, rescission of both leases, and a violation of Business and Professions Code section 17200. OKI responded with a cross-complaint for unpaid rent and specific performance of the leases.
The matter was tried to the court in February and March 2004. On March 12, 2004, the trial court rendered a written statement of decision in which it found (1) Naimi did not breach the contract or commit fraud; (2) the wall signs at both 2151 and 2157 were illegal, making the signs a public nuisance as a matter of law; and (3) Naimis maintenance of the illegal signs was an unlawful business practice under Business and Professions Code section 17200. In a judgment entered in July 2004, the trial court denied damages to plaintiffs, granted injunctive relief regarding improper use of the signs, granted OKI damages on its cross-complaint for rent due under the leases, and awarded OKI contractual attorney fees. The trial court subsequently denied plaintiffs motion for a new trial but granted attorney fees to plaintiffs pursuant to Code of Civil Procedure section 1021.5. Plaintiffs appealed both the denial of their claims for damages and the monetary award to OKI. Defendants did not appeal.
In Reudy I, supra, A108198, filed on September 29, 2005, we concluded that the leases for the wall signs were void because they illegally provided for the use of two signs that did not conform to local zoning requirements and were not otherwise properly permitted. We reversed the grant of damages and attorney fees to OKI, but we found no error in the trial courts rejection of plaintiffs claims for damages. We denied defendants subsequent petition for rehearing.
Prior to the appeal, the Legislature enacted Business and Professions Code section 5466. On September 15, 2004, the Governor signed Assembly Bill No. 1711 (2003-2004 Reg. Sess.), which became effective on January 1, 2005. (Stats. 2004, ch. 529, p. 3251; Gov. Code, § 9600, subd. (a).) Section 1 of the bill added Business and Professions Code section 5466. Subdivision (a) of section 5466 states: "Notwithstanding any other provision of law, as to an advertising display in place as of August 12, 2004, a cause of action for the erection or maintenance of an advertising display that violates this chapter or the laws of a local governmental entity shall not be brought by a private party against an advertising display that has been in continuous existence in its current location for a period of five years. However, if the advertising display has been illegally modified, the cause of action for the illegal modification may be brought by a private party if it is filed within five years of the date the modification was made." Plaintiffs filed their notice of appeal in Reudy I, supra, A108198, on October 5, 2004, after the Governors action but before the January 1 effective date of the statute. As noted, our decision was filed on September 29, 2005. It is undisputed that defendants did not mention section 5466 in either their respondents brief or their petition for rehearing filed with this court in connection with Reudy I.
Because defendants unsuccessfully sought review of our decision by the Supreme Court, remittitur did not issue until January 3, 2006. At a hearing on March 22, 2006, the trial judge directed the parties to meet and confer on a form of amended judgment to conform the judgment in the trial court to the decision of this court. On April 24, the trial judge entered an amended judgment in the form submitted by plaintiffs counsel. The amended judgment altered the original judgment by adding a finding that the parties contracts were void and that defendants were not entitled to damages or attorney fees, consistent with Reudy I, supra, A108198. The amended judgment also expanded the description of the injunctive relief awarded to plaintiffs and specified the amount of attorney fees and costs awarded to plaintiffs, with the base amount of the attorney fees award increased by interest from the date of the trial courts original order granting attorney fees.
Two weeks later, on May 9, 2006, defendants filed a motion to vacate and amend the amended judgment, contending that the expansion of the injunctive relief and the award of interest on attorney fees was improper and, alternatively, that Business and Professions Code section 5466, subdivision (a) provided a complete defense to plaintiffs claims. In a decision dated June 27, 2006, the trial court agreed with defendants that plaintiffs were not entitled to interest on the award of attorney fees and that the scope of injunctive relief should not have been expanded. However, the court rejected defendants request to vacate the judgment on the basis of section 5466. A second amended judgment was entered consistent with the courts decision.
II. DISCUSSION
The parties raise a number of arguments regarding both the applicability of Business and Professions Code section 5466, subdivision (a) to defendants signs and the procedural propriety of defendants asserting the statute at this time, long after the original judgment was entered. We do not address many of the parties arguments because we conclude that defendants are barred from raising the statute by their failure to appeal the original judgment.
When only a portion of an entered judgment is challenged on appeal, the portion that is not challenged becomes final upon the expiration of the time for filing an appeal. " `Ordinarily [an appeal from a specific portion of a judgment] would leave the parts not appealed from unaffected, and it would logically follow that such unaffected parts must be deemed final . . . . " (Gonzales v. R.J. Novick Constr. Co. (1978) 20 Cal.3d 798, 804-805, quoting Whalen v. Smith (1912) 163 Cal. 360, 362-363; see also ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1014-1015.)
Once a judgment becomes final, it is presumed correct and is immune from later challenge. The Supreme Court described the consequences of the failure to appeal a final judgment in Crew v. Pratt (1897) 119 Cal. 131, 151-152: "[W]e are of opinion it was, under the law, the duty of the [trial] court to adjudicate the question . . . , and that having done so . . . , while its conclusion was erroneous and the judgment open to reversal on appeal, yet as no appeal was taken therefrom and as the time therefor has long since expired, it is not now open to collateral attack." (See similarly In re Crow (1971) 4 Cal.3d 613, 622; People v. Pinedo (2005) 128 Cal.App.4th 968, 972; Alioto Fish Co. v. Alioto (1994) 27 Cal.App.4th 1669, 1685 [refusing to address the merits of a challenge to an award of attorney fees when no timely appeal was taken].) In this case, when defendants failed to appeal the award of injunctive relief and attorney fees against them, those aspects of the judgment became final and binding.
There is one well-recognized exception to the finality rule. When the appealed portion of a judgment is "so interwoven with its other provisions as to preclude an independent examination of the part challenged by the appellant," the unchallenged portion can be considered or modified on appeal. (American Enterprise, Inc. v. Van Winkle (1952) 39 Cal.2d 210, 217 (American Enterprise).) The test is whether "the matters or issues embraced [in the challenged portion] are the same as, or interdependent upon, the matters or issues which have not been attacked. [Citations.] `[In] order to be severable, and therefore appealable, any determination of the issues so settled by the judgment . . . must not affect the determination of the remaining issues whether such judgment on appeal is reversed or affirmed. . . . Perhaps another way of saying it would be that the judgment is severable when the original determination of those issues by the trial court and reflected in the judgment or any determination which could be made as the result of an appeal cannot affect the determination of the remaining issues of the suit. . . . [Citation.]" (Ibid.)
There are two reasons for rejecting defendants argument that the nonseverability exception is applicable here. First, the doctrine is not applicable in these circumstances. The purpose of the nonseverability doctrine is to allow an appellate court to consider the unappealed, nonseverable portions of a judgment, overcoming the finality that ordinarily results from a failure to appeal. As the Supreme Court noted in American Enterprise, supra, 39 Cal.2d at page 217, "In some states, when an appeal is taken from a portion of a judgment which cannot be separated from the remainder of it, the court will decline to hear the appeal and will dismiss it. [Citations.] However, in California, such an appeal brings before the reviewing court all of the nonseverable portions." If appropriate, the ruling on the appealed portion can be applied to the nonappealed portion of the judgment, as illustrated in In re Marriage of Garrity and Bishton (1986) 181 Cal.App.3d 675 (superseded by statute on another ground as set out in In re Marriage of Weaver (1990) 224 Cal.App.3d 478, 484-485), in which two lawyers divorced. The trial court had applied the same valuation method to both of their legal practices in dividing the couples property. While the husband appealed the use of this method, the wife did not. After the Court of Appeal held that the method was erroneous, it directed the trial court to apply the correct method to the valuation of both parties practices on remand, despite the wifes failure to appeal. (Id. at p. 690.)
That is not defendants purpose in invoking the doctrine. The appeal in Reudy I, supra, A108198, is long since decided, and there is no contention that the decision on that appeal had any bearing on the portion defendants elected not to appeal. Rather, defendants are attempting to use the doctrine to permit the reopening of a judgment long since final, on grounds having nothing to do with the substance of the prior appeal—a very different matter. Because the purposes of the nonseverability doctrine would not be served by invoking it in these circumstances, we decline to do so.
Second, we do not find the two portions of the judgment to have been "so interwoven . . . as to preclude an independent examination of the part challenged by the appellant." (American Enterprise, supra, 39 Cal.2d at p. 217.) Defendants base their argument on the observation that plaintiffs argument under the doctrine of illegality, raised on appeal, and the unappealed claim against defendants under Business and Professions Code section 17200 both depended upon the validity of the trial courts conclusion that defendants signs were illegal. They argue that this shared issue caused the two portions to be nonseverable.
Had the ruling that defendants signs were illegal been challenged on appeal, we might be inclined to agree with this argument. In fact, neither party disputed this ruling. As we noted in Reudy I, supra, A108198, "Defendants sole argument against a finding of illegality is that plaintiffs, by citing only to trial exhibits and the clerks transcript in their appellate brief, rather than to the transcript of the trial, have not complied with the rule of court requiring parties to support their factual assertions through citation to the record." In other words, rather than contending that their signs were legal, defendants merely argued that plaintiffs did not properly brief the issue of illegality. Even if we had accepted this technical argument of appellate procedure, it would not have led to a conclusion that defendants signs were legal; it would merely have required rejection of plaintiffs appellate argument on procedural grounds. Because neither party challenged the finding of illegality, there was never any chance that the results of the appeal would affect the nonappealed portion of the judgment. Accordingly, the portion of the judgment appealed by plaintiffs was severable from the remainder. That nonappealed portion of the judgment became final when the time for appeal expired.
If this court had rejected plaintiffs contract argument under the doctrine of illegality on the ground that defendants signs were, in fact, legal, there is little doubt that we would have been required to overturn the injunctive relief against defendants, notwithstanding their failure to appeal. (See In re Marriage of Garrity and Bishton, supra, 181 Cal.App.3d at p. 690.)
For this reason, defendants argument that "lack of standing may be raised at any time during the proceeding" is unavailing. While it may be true that lack of standing can be raised at any time during a proceeding, the proceedings over the claims against defendants had ended by the time the issue was raised. Even if the judgment against defendants had been erroneous, it became final and binding when the time for filing an appeal expired in 2004. (Crew v. Pratt, supra, 119 Cal. at pp. 151-152.) Defendants cite no authority suggesting that lack of standing can be raised in a collateral attack after judgment has become final. In the absence of such authority, it is simply too late to raise the issue of the impact of Business and Professions Code section 5466, subdivision (a).
In fact, there is no reason to believe that the judgment was erroneous. There is no dispute that at the time the judgment was entered in June 2004, before the effective date of Business and Professions Code section 5466, plaintiffs had standing to sue defendants under Business and Professions Code section 17200.
For the same reason, it is also too late to raise the impact of Proposition 64. Californians for Disability Rights v. Mervyns, LLC (2006) 39 Cal.4th 223, 232-233, relied on by defendants, holds only that Proposition 64 applies to cases pending at the time it became effective, not that it applies retroactively to cases already final at that time. Even if Proposition 64 became effective prior to the date defendants judgment became final, however, they forfeited the opportunity to take advantage of the proposition when they allowed the judgment to become final without raising the issue.
Defendants contend that, even if the judgment against them became final when they failed to appeal it, they were nonetheless permitted to open up the judgment through a motion to vacate under Code of Civil Procedure section 663 when the trial court entered the amended judgment conforming its judgment to our decision in Reudy I, supra, A108198. They cite no legal authority for this contention, and we find no basis for it. If an appellate courts remand for the purpose of conforming the trial courts judgment to the decision on appeal automatically reopened otherwise final portions of the judgment, the rule of severability discussed above would be rendered pointless. If a partial appeal were found severable, precluding consideration of a challenge by the nonappealing party, that party would simply be required to bide its time, hope for a disposition other than an affirmance, and then raise its challenge in a motion under section 663 once an amended judgment had been entered. This would render the doctrine of finality largely a nullity. As discussed above, the unappealed and severable portions of a judgment become final and cannot be challenged once the time for appeal has expired. The ministerial entry of a new, conforming judgment following remand of the appealed portions does not lift this curtain of finality.
We recognize that plaintiffs, in the initial amended judgment entered by the court, attempted to modify the terms of the injunction against defendants. As the trial court recognized by reinstating the original terms at defendants request, this attempt was improper. Defendants cite no authority for their assertion that plaintiffs "invited the Motion to Vacate" by improperly seeking to expand the scope of the injunction once it had become final. To the extent such a motion was "invited," however, the invitation was merely to return the judgment to its original, proper form, not to reopen previously final portions of the judgment.
Defendants also argue that the trial court had continuing jurisdiction under Code of Civil Procedure section 533, to modify the terms of the injunction, citing such cases as Professional Engineers v. Department of Transportation (1997) 15 Cal.4th 543, 562, and Union Interchange, Inc. v. Savage (1959) 52 Cal.2d 601, 603-604. While this is true, modification under section 533 is permitted only to take account of changed factual or legal circumstances that make maintenance of the original terms of the injunction inequitable. Section 533 is not, as defendants suggest, a general purpose grant of continuing jurisdiction over injunctive relief.
A trial courts decision to modify, or not to modify, an existing injunction under Code of Civil Procedure section 533 is reviewed for abuse of discretion. (Professional Engineers v. Department of Transportation, supra, 15 Cal.4th at p. 562; Welsch v. Goswick (1982) 130 Cal.App.3d 398, 405.) We find no abuse of discretion here. Use of defendants signs was enjoined because they were not properly permitted and failed to conform to San Franciscos ordinances. The passage of Business and Professions Code section 5466, subdivision (a) did not change that situation; the signs remained illegal unless conformed as required by the injunction. The passage of section 5466 merely immunized qualifying illegal signs from suit after its effective date. In the absence of a showing that the immunity bestowed by section 5466 was intended to be retroactive—and defendants make no argument of retroactivity—there was no reason for the trial court to modify the existing injunction to allow defendants illegal signs to be used.
III. DISPOSITION
The trial courts judgment is affirmed.
We concur:
Marchiano, P.J.
Swager, J.