Ursino v. Superior Court

• Decision Date: 30 May 1974
• Citation: 39 Cal.App.3d 611,114 Cal.Rptr. 404
• Court: California Court of Appeals Court of Appeals
• Parties: James URSINO and Joseph Bonilla, Petitioners, v. SUPERIOR COURT of the State of California, IN AND FOR the CITY AND COUNTY OF SAN FRANCISCO, Respondent; McDONALD'S SYSTEMS OF CALIFORNIA, INC., et al., Real Parties in Interest. Civ. 34409.

Page 404

114 Cal.Rptr. 404

39 Cal.App.3d 611

James URSINO and Joseph Bonilla, Petitioners, v. SUPERIOR COURT of the State of California, IN AND FOR the CITY AND COUNTY OF SAN FRANCISCO, Respondent McDONALD'S SYSTEMS OF CALIFORNIA, INC., et al., Real Parties in Interest.

Civ. 34409.

Court of Appeal, First District, Division 1, California.

May 30, 1974.

Davis, Cowell & Bowe by Alan C. Davis, Patricia A. Carson, San Francisco, for petitioner James Ursino.

Davis, Cowell & Bowe by Alan C. Davis, Patricia A. Carson, Wayne S. Canterbury, San Francisco, for petitioner Joseph Bonilla.

Haskell Titchell, Michael L. Ohleyer, Titchell, Maltzman, Mark, Bass & Ohleyer, San Francisco, for real party in interest McDonald's Systems of California, Inc.

Yale H. Smulyan, San Francisco, for real parties in interest Frank Hunt and Carol Hunt.

MOLINARI, Presiding Justice.

In this case we issued an alternative writ of mandate to inquire whether the Board of Permit Appeals of the City and County of San Francisco (hereinafter 'the Board') lost jurisdiction to act upon petitioners' appeal from the issuance of a building permit by the Department of Public Works of said city and county (hereinafter 'the Department') to Frank Hunt and Carol Hunt (hereinafter 'the Hunts') for the construction of a building.

Sction 3.651 of the Charter of the City and County of San Francisco (hereinafter 'the Charter') provides, in pertinent part, that '. . . any person who deems that his interests or property or that the general public interest will be adversely affected as the result of operations authorized by or under any permit . . . granted or issued by any department, may appeal to the board of permit appeals. Such board shall hear the applicant, the permit-holder, or other interested parties, as well as the head or representative of the department issuing . . . such . . . permit, . . . After such hearing and such further investigation as the board may deem necessary, it may concur in the action of the department authorized to issue such . . . permit, or, by the vote of four members, may overrule the action of such department and order that the permit . . . be . . . refused. . . .'

Section 3.651 of the Charter is implemented by sections 8 and 14 of San Francisco Municipal Code (pt. III, art. 1) which provide for the method of appeal, the time and place of hearing, and the conduct of such hearing. It is specifically provided that the Board shall act on the appeal not later than forty (40) days after the filing of the notice of appeal. Section 14 of the Municipal Code provides, in relevant part, that 'the Board may concur in the action of the department authorized to issue . . . the permit, or may overrule the action of said department and order that the permit be . . . denied, . . .'

With respect to the composition of the Board it is provided in section 3.650 of the Charter that it shall consist of five members whose terms shall be for four years. ¹

In the instant case the Department issued a building permit to the Hunts on July 16, 1973. ² The permit called for the construction of a building for restaurant purposes. This building was to be leased to McDonald's Systems of California, Inc. (hereinafter 'McDonald's') and was to be constructed by Arne Falk Construction Company (hereinafter 'Falk').

Petitioners, who operate restaurant establishments in the vicinity of the proposed construction and who oppose its construction, filed a timely notice of appeal from the Department's issuance of the permit. This notice of appeal was filed on July 16. Under the time limitation set out in the Municipal Code the Board was required to hear said appeal and to act thereon not later than 40 days after July 16, i.e., no later than August 27. ³

The Board scheduled a hearing on July 30 ⁴ but the hearing was postponed for one week because only three commissioners were present. At that time the Board was composed of only four members. One member was on vacation and the other had previously resigned and his successor had not been appointed by the mayor who was the appointing power. At the next meeting on August 6 there were four commissioners present at the meeting to conduct business. The fifth member had not been appointed. Petitioner Ursino requested that the matter be continued until a fifth member could be present to participate in the hearing of the matter. ⁵ This request was granted and the matter was continued until such time as the fifth commissioner could be present.

On August 8 another commissioner resigned leaving three members as the composition of the Board. Two new commissioners were appointed by the mayor on or about September 4 and they took office on September 13. In the meantime, on September 12, the Hunts and McDonald's filed separate actions in the superior court wherein they sought and obtained alternative writs of prohibition restraining the Board from taking any action on petitioners' appeal other than to uphold the validity of the previously-issued permit. On September 17 the Board convened with five commissioners present. Petitioner Ursino stated he was ready to proceed but due to the issuance of the alternative writ the Board did not proceed to hear petitioners' appeal.

On October 5 respondent superior court ordered its peremptory writ of prohibition to issue in both actions. However, on October 15 the Hunts voluntarily dismissed their actions without prejudice. It should be here noted that petitioners were named as parties in the Hunt action but they were not named or served in McDonald's action. The Board next convened on October 15 and at this meeting voted not to appeal the ruling of respondent court.

Petitioners thereafter moved, pursuant to Code of Civil Procedure section 663, to set aside and vacate the judgment in the McDonald's action. These motions were denied. Petitioners then filed an action against the Hunts, McDonald's and Falk seeking a temporary restraining order and a preliminary injunction. A temporary restraining order and order to show cause why a preliminary injunction should not be granted were issued. The defendants to this action demurred and the demurrer was sustained, with leave to amend, on the ground that the complaint failed to state a cause of action. On the basis of this ruling the respondent court denied petitioners' request for a preliminary injunction pendente lite. The petitioners then filed the instant writ application with this court and we issued the alternative writ of mandate.

Petitioners complain that respondent superior court acted in excess of its jurisdiction by entering its judgment in the action brought by McDonald's without naming petitioners as real parties in interest. As already noted, McDonald's brought the action to prevent the Board from hearing petitioners' appeal.

Section 3.651 of the Charter permits 'any person who deems that his interests or property or that the general public interest will be adversely affected' to pursue such an appeal to the Board. Petitioners operate restaurants in the immidate vicinity of the proposed McDonald's restaurant. They have personal and property interests which they apparently feel will be adversely affected by the proposed construction. They also apparently feel that the general public interest will not be served by permitting the McDonald's restaurant to be built. It was petitioners who set in motion the administrative processes of the Board. They had something to gain from a favorable vote of the Board, and something to lose by the granting of the building permit. It is absurd to avoid the obvious conclusion that petitioners are interested and indispensable parties. ⁶

Code of Civil Procedure section 389, subdivision (a) defines an indispensable party, inter alia, as one who '. . . claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest . . ..' (Emphasis added.) There can be little doubt that McDonald's lawsuit, if successful (as it was) would as a practical matter frustrate petitioners' appeal before the Board and thus impair their ability to protect their interests. Petitioners were indispensable parties because the relief sought by McDonald's would injure or effect their interests. (Bank of California v. Superior Court, 16 Cal.2d 516, 522, 106 P.2d 879; Thomson v. Talbert Drainage Dist., 168 Cal.App.2d 687, 689, 336 P.2d 174.) An attempt to adjudicate their rights without joinder was futile. (Bank of California v. Superior Court, supra; see Code Civ.Proc., § 1107.)

McDonald's argument that it was not necessary to name petitioners as real parties because they were named in a similar lawsuit brought by the Hunts is tenuous. It is elementary that the constitutional guarantee of due process requires that proper notice be given to a party. (See Code Civ.Proc., § 1107.) This requirement is not satisfied by actual knowledge without notification conforming to the statutory requirements. (See Waller v. Weston,125 Cal. 201, 203, 57 P. 892; Chaplin v. Superior Court, 81 Cal.App. 367, 377, 253 P. 954.) As pointed out in Bank of California the failure to obtain personal jurisdiction over an indispensable party deprives the court of subject matter jurisdiction. (16 Cal.2d at p. 522, 106 P.2d 879; see Covarrubias v. James, 21 Cal.App.3d 129, 134, 98 Cal.Rptr. 257; Southern Cal. Title Clearing Co. v. Laws, 2 Cal.App.3d 586, 589, 83 Cal.Rptr. 8; Thomson v. Talbert Drainage Dist., supra, 168 Cal.App.2d 687, 689--690, 336 P.2d 174; 1 Witkin, Cal.Procedure (2d ed.) § 66, pp. 588--589.) ⁷

Since respondent court was powerless to proceed until petitioners were brought in it erred in denying petitioners' motion to vacate the judgment. Under the circumstances respondent court was required to set aside its judgment. (Thomson v. Talbert Drainage Dist., supra, 168 Cal.App.2d 687, 690, 336 P.2d...