Is Your Business a “Nuisance”? If so, It Could Cost You Dearly

Many landlords and businesses are already aware that they may be sued in a civil court for criminal acts committed by others on their property. While this is a reactive process that occurs in response to a specific incident, landowners might not know that many cities have proactive processes by which properties can be declared a nuisance – forcing owners to enact expensive remedies – in order to prevent crimes before they occur. As evidenced by the recent case Benetatos v. City of Los Angeles, the administrative process can be long and expensive; landowners should try to maintain their properties to avoid crimes and the scrutiny that follows.

In 2012, Los Angeles brought its administrative nuisance process against Jack and Nick Benetatos, the owners of Tam’s Burger No. 6, a 24 hour fast-food restaurant. Tam’s is located at Figueroa and 101st in a high crime area. According to the LAPD it was a hotbed for pimping, prostitution, narcotics use and sale, loitering, public intoxication, trash, graffiti, and occasionally, homicide. These crimes generated 58 service calls from LAPD between May 2009 to February 2012. In some instances, Tam’s management and ownership was less than cooperative with the police, reportedly saying it was responsible for only the inside of the building and drug dealers in the parking lot were the polices’ problem.

Through an administrative process, Los Angeles determined that although Tam’s was not at fault for the incidents, it was a nuisance and its dilapidated condition and long hours attracted and encouraged criminal activity. Tam’s was ordered to keep its property free from trash, paint over graffiti, hire a security guard, install security cameras, put up a new fence, establish a complaint hotline for neighbors, and close at 11 p.m. on weekends (earlier on weeknights).

Tam’s then filed a Petition for a Writ of Mandate in the Superior Court, which refused to set aside the nuisance finding, and Tam’s appealed that determination to the Court of Appeal. Tam’s argued that the Superior Court had not properly reviewed the administrative findings and that the required remedies were so expensive that it would be forced to close. The Court of Appeal stated that when reviewing administrative decisions it gave much deference to the municipality, including resolving all conflicts of evidence and drawing all inferences in support of the city’s decision. After reviewing the evidence presented at the administrative hearings, the Court concluded that there was enough evidence to declare Tam’s a nuisance, but not enough evidence to support the claim that Tam’s would be shuttered by the ordered remedies. Adding what could be considered insult to injury, the appellate court ordered Tam’s to pay the City of Los Angeles’ costs in defending the appeal.

The lesson to businesses is that an ounce of prevention is worth a pound of cure. Taking inexpensive action such as keeping the property well-lit and clean can prevent crime from taking root, and if criminal activity starts to occur, regularly working with the police and the community can remedy the situation. Given the substantial advantage the courts give to the administrative findings of municipalities, a landowner who buries his head in the sand can find that once the administrative machinery begins to work there is little his attorneys can do to prevent expensive remedies.

This document is intended to provide you with information about general liability law related developments. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.

April 16, 2015