Midas Industries v. City of
Buenaventura
Filed 7/3/12 Midas
Industries v. City of San Buenaventura CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
SIX
MIDAS INDUSTRIES INTERNATIONAL, LLC, et
al.,
Plaintiffs and Appellants,
v.
CITY OF SAN BUENAVENTURA,
Defendant and Respondent.
2d
Civil No. B234194
(Super.
Ct. No. 56-2010-
00382589-CU-CR-VTA)
(Ventura County)
The owners of a liquor store filed a complaint alleging their
they were not allowed to sell alcoholic beverages without a conditional use
permit (CUP). The trial court sustained
the demurrer of the City of San
Buenaventura (City) without
leave to amend on the grounds that appellants initially failed to exhaust
exercised their administrative remedies and obtained the permit they
sought. We affirm.
PROCEDURAL HISTORY
Since 2005, the City's zoning code requires that a conditional use
permit be obtained from City prior to commencing the retail sale of alcoholic
beverages. (San Buenaventura Mun. Code,
§ 24.460.210.) The code sets forth
the procedure for applying for and obtaining a permit, which includes submitting
an application, paying a fee, a planning commission hearing, and the right to
appeal an adverse planning commission decision to the City Council. (
The code provides for an exemption from the CUP requirement if proof of
alcohol sales occurring within the past six months by the previous owner was provided. (
In March 2010, appellants Midas Industries International, LLC, and
its principals, David T. Ungar and Kimberly A. Ungar, both California
attorneys, entered into a lease to rent premises located at 4013 East Main Street, Ventura, for the
purpose of operating a retail store called "Oceanus Market & Select
Spirits." Previously, from
September 2005 through August 2009, Eun Suk Choi had a license to operate a
liquor store on the premises. Choi
cancelled his business license on August 18, 2009,
and ceased doing business at that time.
On June 29, 2010, appellants submitted a new business license application to
respondent City and a license was issued for the period July 1, 2010, to June 30, 2011. Appellants checked a box on the application
which states: "Business sells
alcohol. Use permit required." On August 3, 2010,
appellants obtained a license to sell alcohol from the State of California
Alcoholic Beverage Control Agency (ABC).
Without obtaining a CUP or providing evidence exempting them from the
CUP requirement, Oceanus opened for business on or about August 13, 2010.
On or about August 25, 2010, Derek Donswyk,
the City's alcohol enforcement officer, went to the store and again informed
appellants that they were required to obtain a CUP before operating a liquor
store and could not sell alcohol in the store until a CUP was obtained. Donswyk explained that appellants were not
eligible for an exemption from the CUP requirement because alcohol had not been
sold on the premises during the previous six months.
On September 7, 2010, appellants submitted a CUP application to the City. The CUP was granted a few months later.
On September 30, 2010, appellants filed a complaint for
injunction against the City and its police department alleging violation of
procedural due process rights and challenging the constitutional validity of
the City's alcohol control ordinance and the CUP application fee. On October 5, 2010,
appellants sought and obtained by ex
parte application a temporary restraining order and order to show cause re
preliminary injunction enjoining enforcement of the ordinance.
After a hearing on
October 25, 2010, the trial court denied appellants' request for a preliminary
injunction on the grounds that the City's regulation of alcohol retailers was a
valid exercise of the City's police power, the ordinance did not violate
appellants' right to procedural due process, and appellants failed to exhaust
their administrative remedies.
On November 17, 2010, the court sustained the City's demurrer to the complaint with
leave to amend. Appellants filed a
the same causes of action as the initial complaint and also alleging that they
were not informed of their right to contest the City staff's decision that they
could not sell alcohol until they obtained a CUP and therefore were not
required to exhaust administrative remedies before filing a civil action.
The trial court
sustained the City's demurrer without leave to amend on the grounds that the
challenge to the City's administrative process was moot because appellants had
been issued a CUP, the City's regulations of the sale of alcohol constitute a
valid exercise of the police power, and the FAC alleged no facts giving rise to
application of an equitable estoppel.
On appeal,
appellants assert the issuance of the CUP did not moot their challenge to the
availability or adequacy of administrative remedies, pursuit of administrative
remedies would have been futile, and the City should be estopped from asserting
the defense of exhaustion of administrative remedies because of its negligent
or intentional conduct which caused appellants to fail to exhaust
administrative remedies.
When reviewing a
dismissal of a complaint after a demurrer has been sustained without leave to
amend, we accept the factual allegations of the complaint as true and review
the pleading de novo to determine whether the facts as pleaded state a cause of
action. (Medina v. Hillshore Partners (1995) 40 Cal.App.4th 477, 481;
Cal.4th 962, 966-967.) If we determine
that an amendment would cure the defect, we conclude the trial court abused its
discretion and reverse. (
31 Cal.4th 1074, 1081.) The plaintiff
bears the burden of establishing that the complaint could have been
amended. (Ibid.; Campbell v. Regents of
University of California (2005) 35 Cal.4th 311, 320.)
The FAC requests declaratory relief alleging the City's alcohol
control ordinance is unconstitutional and the inadequacy of procedures for
obtaining a CUP. At the hearing on the
demurrer, appellants admitted that it had applied for and obtained a CUP and
had been operating its business for "several months." Where, as here, events occur subsequent to
the filing of a lawsuit which prevent the court from ordering effective relief,
the action may be dismissed as moot. (
Dogs for the Blind (1967) 67 Cal.2d 536, 541; Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60,
77-78.) Here, appellants sought and
received a CUP. They have alleged no
facts or legal authority supporting their contention that they had a vested
right to operate a liquor store before obtaining a CUP. (See, e.g., Korean American Legal Advocacy Foundation v. City of Los Angeles
(1994) 23 Cal.App.4th 376, 388 [city may validly require permit to sell
alcoholic beverages under its zoning power].)
As they have not established a legally vested right, they cannot state a
claim or obtain damages for an alleged due process violation. (See, e.g., Metropolitan Outdoor Advertising Corp. v. City of Santa Ana (1994)
23 Cal.App.4th 1401, 1403-1404 [where grant or denial of permit is
discretionary, no vested right is involved sufficient to invoke due process
protection].)
Inform Appellants
Zoning Code
Appellants assert they
lost money because the City staff did not inform them they were required to
obtain a CUP before selling alcohol. The
argument is without merit. At the time
appellants began operating their liquor store, the City's municipal code
contained a clearly-defined procedure for operating liquor stores in the
City. A party who does business with a
city is deemed to have knowledge of the city's ordinances. (Amelco
Electric v. City of Thousand Oaks (2002) 27 Cal.4th 228, 234; see also
33 Cal.App.4th 1472, 1479 ["'One who deals with the public officer stands
presumptively charged with the full knowledge of that officer's powers, and is
bound at his . . . peril to ascertain the extent of his . . . powers to bind
the government for which he . . . is an officer, and any act of an
officer to be valid must find express authority in the law or be necessarily
incidental to a power expressly granted'"].)
Based on this
established precedent, appellants' allegations that they were ignorant of the
law, or were misled by city officials as to the requirements of the law, do not
state a cause of action. (See, e.g.,
Cal.App.3d 658, 669 ["It is established that the unauthorized promise of
an employee does not constitute grounds for an estoppel as to the governmental
body by which he or she is employed where the means and limitations on its
power to act are prescribed by
statute"].) Moreover, they filled
out and signed a business license application which informed them that a
business selling alcohol was required to obtain a conditional use permit. Thus, appellants' assertions that they were
ignorant of the law or misinformed by City staff is contradicted by the
evidence. (See Hill v. Roll International Corp. (2011) 195 Cal.App.4th 1295, 1300
[facts subject to judicial notice take precedence over inconsistent facts
alleged in complaint].)
The judgment is
affirmed. Respondent shall recover costs
on appeal.
NOT TO BE PUBLISHED.
PERREN,
J.
We concur:
GILBERT,
P.J.
YEGAN,
J.
>
Henry Walsh,
Judge
Superior
Court County of Ventura
______________________________
Kimberly
A. Ungar, in pro. per., and for Plaintiffs and Appellants Midas Industries
International, LLC, and David T. Ungar.
Ariel
Pierre Calonne, City of San Buenaventura City Attorney, Andy H. Viets, Senior
Assistant City Attorney, and Jennifer Lee, Assistant City Attorney, for
Defendant and Respondent.
