Tahoe Regional Planning Agency v. King

• Decision Date: 06 September 1991
• Citation: 233 Cal.App.3d 1365,285 Cal.Rptr. 335
• Parties: TAHOE REGIONAL PLANNING AGENCY, Plaintiff and Appellant, v. Bruce KING, etc., et al., Defendants and Respondents. Civ. C005345.
• Court: California Court of Appeals Court of Appeals

Page 335

285 Cal.Rptr. 335

233 Cal.App.3d 1365

TAHOE REGIONAL PLANNING AGENCY, Plaintiff and Appellant, v. Bruce KING, etc., et al., Defendants and Respondents.

Civ. C005345.

Court of Appeal, Third District, California.

Sept. 6, 1991.

Review Denied Nov. 21, 1991.

[233 Cal.App.3d 1373] Gary A. Owen, Crowell, Susich, Owen & Tackes, Ltd., Carson City, Nev., for plaintiff and appellant.

David K. Hughes, Peter M. Tiersma, Price, Postel & Parma, Santa Barbara, for defendants and respondents.

J. Dennis Crabb, City Atty., City of South Lake Tahoe, for amicus curiae.

DAVIS, Associate Justice.

I INTRODUCTION

The central issues posed by this appeal are whether plaintiff Tahoe Regional Planning Agency (TRPA) may compel the removal of defendants' off-premise billboard signs pursuant to its sign ordinance which allows a five-year pre-removal amortization period to recoup costs or whether it is (1) statutorily compelled to pay compensation for their removal under the federal Highway Beautification Act (HBA) (23 U.S.C., § 131), or (2) constitutionally compelled to pay just compensation for a taking of defendants' property under the just compensation clause of the Fifth Amendment of the United States Constitution.

Defendants are billboard owners and lessees and owners of the real property on which the three billboards which do not comply with TRPA's sign ordinance are located. TRPA filed suit for declaratory and injunctive relief, alleging that the billboards are prohibited off-premise signs which are fully amortized and in violation of its sign ordinance. This case comes to us on TRPA's appeal from a judgment following the granting of defendants' motion for summary judgment, denying TRPA's motion for summary judgment and declaring a portion of its sign ordinance invalid.

TRPA challenges the trial court's determination that the HBA limits its authority to regulate outdoor advertising in the Lake Tahoe Region and that its ordinance effectuates a "taking" without compensation of off-premise outdoor advertising billboards in violation of the Fifth Amendment. Defendants also urge that TRPA's ordinance violates the free speech clause of the First Amendment. We reverse. We hold that the HBA does not limit TRPA's authority to compel the removal of nonconforming signs within the Region pursuant to its ordinance and that the ordinance on its face does not effectuate a "taking." Accordingly, we reverse the judgment for defendants and the declaration that section 5.00 of TRPA's ordinance is invalid and unenforceable as applied to their existing billboards. Because there are triable issues of material fact as to whether the ordinance as applied effectuates a taking of defendants' property, summary judgment is inappropriate and we remand for trial. Finally, we hold that the First Amendment challenge to the ordinance may be averted by limiting its reach to off-premise commercial signs, in accordance with TRPA's original intent and its current practice.

A. Procedural Background

On August 16, 1983, TRPA filed a complaint for declaratory and injunctive relief and for civil penalties against defendants for violation of its Ordinance No. 24, "An Ordinance Prohibiting Off-Premise Signs Within The Tahoe Region." Defendants generally denied the allegations of the complaint and raised affirmative defenses, including challenges to the validity of the ordinance under the federal HBA and the First, Fifth and Fourteenth Amendments to the United States Constitution.

On May 18, 1987, the parties filed a Joint Stipulation of Facts, "for the purposes of disposition of this action pursuant to cross-motions for summary judgment and any appeals therefrom...." On May 29, 1987, both plaintiff and defendants filed their motions for summary judgment. ¹

On August 26, 1987, the parties stipulated that the summary judgment motions be referred to Melvin Beverly as referee for a hearing and to report to the court his findings of fact and recommended order. On September 14, 1987, the referee filed his report on cross-motions for summary judgment recommending that TRPA's motion be denied, that defendants' motion be granted, that judgment be entered in their favor and that a judgment be entered that section 5.00 of TRPA's sign ordinance is invalid and unenforceable as to defendants' existing billboards. ²

On July 28, 1988, the trial court affirmed the report of the referee in its entirety. The court ruled that the provision of Section 5.00 of TRPA's ordinance which requires removal of nonconforming signs is invalid as (1) not conforming to the payment of compensation provision of the Highway Act for billboards removed from sites within 660 feet of a federal highway, and (2) as purporting to authorize the taking of property without payment of just compensation in violation of the Fifth Amendment to the United States Constitution. The court suggested alternatives to TRPA of (1) amending the ordinance to provide for amortization based on the actual value of defendants' signs and their useful life (not the original cost); (2) withdrawing the invalid regulation in its entirety; or (3) seeking for itself the power of eminent domain. The court did not rule on defendants' First Amendment claim of unconstitutionality of the ordinance. Judgment was entered on September 12, 1988, and TRPA timely appealed.

B. Stipulated Facts

According to the stipulated facts, TRPA is an agency created by the Tahoe Regional Planning Compact (hereafter, the Compact) (Pub.L. 91-148, 83 Stat. 360; Gov.Code, §§ 66800 and 66801; Nev.Rev.Stat. 277.190 and 277.200.), ³ with jurisdiction over the Lake Tahoe Region ("Region"), as defined in the Compact, including that portion of the County of El Dorado, State of California, within the Region. Pursuant to the Compact, TRPA has adopted a regional plan and implementing ordinances for orderly growth and development within the Region. On July 24, 1975, TRPA adopted Ordinance No. 24, "An Ordinance Prohibiting Off-Premise Signs Within the Tahoe Region," effective September 22, 1975.

Defendants' outdoor advertising signs do not advertise goods or services sold or made available on the premises on which the signs are located; do not advertise products or services sold or made available by the owners of the signs. The signs are made available to "all-comers", in a fashion similar to newspaper or broadcasting advertising. The copy of defendants' signs changes periodically. During defendants' use or ownership, the signs have "advertised a business or similar economic means for the production of income," i.e., have been used for commercial rather than noncommercial messages.

Many of the commercial areas of South Lake Tahoe, California and Stateline, Nevada consist of hotels, motels, casinos, restaurants and service-businesses located on the commercial zoning along, or in close proximity to, United States Highway [Federal and Primary] Route 50. All of the businesses along that route have on-premise signs advertising the occupant of, and the nature of each business conducted upon their commercial premises.

Defendants, Bruce King, dba Bruce Outdoor Advertising, and National Advertising Company, Inc. are engaged in the outdoor advertising business in the Region. Bruce King owns or controls no outdoor advertising signs outside the Region, while National Advertising owns or controls 39,000 outdoor advertising signs nationally. The remaining defendants own the real property and are the lessors of the property on which the outdoor advertising signs are located. Edward Stearns owns the sign on his property, and leases both the land and the sign to Bruce King.

The outdoor advertising business consists of placing, maintaining and selling outdoor advertising space to "all-comers" for whatever lawful message they desire to communicate. The three outdoor advertising signs at issue in this lawsuit are located within and visible from 660 feet of a federal interstate highway, U.S. Highway 50.

Sign A was erected in June 1961 and is owned by Bruce King. It is located on land leased from and owned by Mr. and Mrs. Burke in El Dorado County. The lease was renewed in July 1986 for an additional 6.5 years.

Sign B was erected in February 1974 and is owned by Edward Stearns. It is located on his property in El Dorado County. Bruce King leases the sign from him. This lease was renewed in January 1987 for an additional 6.5 years.

Sign C was erected in July 1964 and is owned by National Advertising Company, Inc. It is located in El Dorado County on land leased from David Salzberg. The lease was renewed in April 1983 for an additional 23 years.

Annual income to the sign owner in 1987 was $23,400 for Sign A; $24,840 for Sign B; and $30,000 for Sign C. Annual rent to the land owner in 1987 was $1,148 for Sign A; $3,768 for Sign B and $5,000 for Sign C.

Each of the advertisers on the signs, hotel-casinos located at Stateline, Nevada, has outdoor on-premise advertising signs at its premises advertising its business.

Each of the outdoor advertising signs was legally erected in full compliance with all then-applicable laws and is in full compliance with such laws except for Ordinance No. 24. Each sign, which was constructed of steel or other durable material, has a remaining useful income-producing life in excess of 25 years, if maintained and repaired.

The five-year amortization provision of section 5.10 of TRPA Ordinance No. 24 relates to the original cost of constructing the signs, unless the owner of the sign can produce sufficient evidence to show the valuation is incorrect or is set aside pursuant to the ordinance.

TRPA acknowledges that defendants would produce evidence that the fair market value of Sign A is $78,000; of Sign B is $82,800; and of Sign C is $100,000.

The advertising or lease income to the respective defendants from each sign has exceeded the original cost [labor and materials] of constructing the sign and its supporting members. The amortization...