Developments of Interest

New Cases of Interest - December 17, 2012

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12/17/2012

West Washington Properties, LLC v. Department of Transportation (2012) 210 Cal.App.4th 1136.  A property owner purchased a building that had an advertising wallscape, but that advertisement lacked a permit and exceeded the permissible size.  The property owner contended that the California Department of Transportation should be estopped from seeking to have the advertising display removed after he acquired the property.  The Department of Transportation made a determination that the advertising had to be removed years after the current owner acquired the property.

Everyone agreed that the advertisement was not in compliance with the Outdoor Advertising Act when the advertisement was first put in place.  While there was a presumption of lawful erection under Business and Professions Code §5216.1, that presumption was one that CalTrans was entitled to rebut under Evidence Code §606, without having to explain any delay in the enforcement of the ordinance.  CalTrans was only required to establish that the display did not comply with the laws in effect when the display was put in place and it provided substantial evidence to support such a finding.  Neither equitable estoppel nor laches was of assistance to the property owner because the property owner's reliance on no activity from California Department of Transportation was itself unreasonable and because applying estoppel and/or laches would also nullify important public policy goals as expressed in Business and Professions Code §5226.  The court also denied the owner's inverse condemnation claim because the enforcement action was the exercise of a police power, not a taking.

Kyablue v. Watkins (2012) 210 Cal.App.4th 1288.  In this case a lender loaned money to a borrower who indicated he intended to use the funds to engage in legal gambling, with the winnings to be divided up between the parties.  When the loan wasn't repaid, and the loan also had not been used for the purpose expressed, the lender terminated the relationship and asked for repayment, which of course the borrower didn't do.  The trial court found that the underlying loan agreement was unenforceable on public policy grounds because it involved gambling.  The court of appeal, however, reversed because the contract's express limitation of the use of funds to legal gambling mitigated the extent to which California's public policy was offended, and the forfeiture that would result from unenforceability would be disproportionately harsh considering the nature of the illegality, the relative fault of the contracting parties and the unjust enrichment of the borrower.  The court also found that the personal loan portion of the contract was severable.
 

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