The owner of a commercial building and billboard next to a freeway could not avoid state prohibitions against off-site advertising simply by leasing office space to the advertisers, the First District Court of Appeal has ruled. The court held that the Outdoor Advertising Act (Bus. & Prof. Code § 5200 et. seq.) prohibited the billboard's use for promoting commercial enterprises that were clearly undertaken elsewhere. In the early 1990s, Nano Maldonado purchased a commercial building next to the southbound lanes of Highway 101 in Redwood City. On top of the building is a double-sided billboard erected in 1956. In March 1993, Maldonado applied to Caltrans for a permit to use the billboard for off-premise displays. Caltrans denied the permit because Highway 101 was classified a "landscaped freeway" under the Outdoor Advertising Act, which prohibits billboards unless they promote goods or services available at the property on which the sign is located. Later in 1993, Caltrans cited Maldonado for violating the Act because his billboard was advertising off-site goods and services. In October 1996, Caltrans again cited the property owner and ordered him to remove the advertising within five weeks. Maldonado appealed to the California Outdoor Advertising Review Board, which upheld Caltrans' decision. Caltrans then sued to abate a public nuisance. Maldonado argued that he did not violate the Act's ban on off-premise advertising because the businesses that leased the billboard space also leased office space in the building. But San Mateo County Superior Court Judge Barbara Mallach ruled that Caltrans properly denied the permit because none of the lessees actually provided goods or services on the site. Mallach ruled that the advertisements violated the Act, and she enjoined Maldonado from placing further advertising on the billboard without permission from Caltrans. A three-judge panel of the First District, Division Five, unanimously upheld the trial court. According to essentially undisputed facts in the record, only two of the advertisers ever used the office space at all, and those two "did so only briefly and for purposes wholly unrelated to the message of their advertising," Justice Barbara Jones wrote for the appellate court. "At trial, appellant [Maldonado] testified that he did not know the nature of the business conducted in his building by Palo Alto Holiday Inn, Stanford Shopping Center, Skyway Cellular or Golden Time Jewelers. He was unaware of these businesses ever, respectively, offering meals and accommodation, opening a shopping annex, selling cellular telephones or selling watches at his building," Justice Jones wrote. Furthermore, there was no evidence that the businesses that did use the office space constituted the primary activity in the building or Maldonado's principle source of income. The court cited People ex rel. Dept. of Transportation v. Harris, (1982) 128 Cal.App. 3d 264. In that case, the court ruled that a sign on Harris Ranch property along Interstate 5, and saying "Harris Ranch 7 Miles," violated the Outdoor Advertising Act because it directed motorists to a restaurant seven miles away from the sign's location. Maldonado also argued that his billboard for off-premise advertising was lawfully erected before passage of the Act, and pointed to § 5216.1, which states that there is a rebuttable presumption that such a sign is legal if the owner has not been cited during the previous five years. But the appellate court rejected this argument, too. Section 5441 states that prohibited signs along landscaped freeways are subject to removal three years from the date Caltrans designated the freeway as landscaped and the character of the freeway has been changed, the court ruled. "Therefore, the fact the billboard may have been lawfully erected for purposes of § 5216.1 became moot once the portion of Highway 101 alongside appellant's property was designed ‘landscaped' in 1993," Justice Jones wrote. "Any advertising display that violates the Act is a public nuisance and subject to removal." The First District upheld Judge Mallach's injunction except for one portion requiring Maldonado to get a permit. Proper billboards do not require a permit under the Act, the court held. In an unpublished portion of the opinion, the court upheld Mallach's decision not to allow Maldonado to file a cross-complaint and an amended answer alleging inverse condemnation and that the sign was grandfathered. The trial judge gave the property owner 30 days to file an affirmative defense, but Maldonado missed the deadline. The Case: The People ex rel. Department of Transportation v. Nano Maldonado, No. A089538, 2001 Daily Journal, D.A.R. 1463, filed January 10, 2001, certified for partial publication Feb. 7, 2001. The Lawyers: For Caltrans: David Sandler, (415) 982-3130. For Maldonado: Terry Traktman, (707) 769-3090.