Pointe SDMU LP v. County of San Diego CA4/1 ( 2016 )

Filed 7/21/16 Pointe SDMU LP v. County of San Diego CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
POINTE SDMU LP et al., D066888
Plaintiffs and Appellants,
v. (Super. Ct. No.
37-2012-00090197-CU-EI-CTL)
COUNTY OF SAN DIEGO,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of San Diego County, Joel M.
Pressman, Judge. Affirmed.
Rockwood & Noziska, C. Brant Noziska; Dentons US and Charles A. Bird for
Plaintiffs and Appellants.
Thomas E. Montgomery, County Counsel, and Thomas Deák, Senior Deputy
County Counsel, for Defendant and Respondent.
Plaintiffs Pointe SDMU LP, Gosnell Builders Corporation of California, Lakeview
Homes at the Pointe, LLC (Lakeview), and The Pointe Mountaintop Homes, LLC
(Mountaintop) (together Plaintiffs) appeal a judgment denying their action against
defendant County of San Diego (County) alleging causes of action for inverse
condemnation.1 On appeal, Lakeview contends the trial court erred by denying its
inverse condemnation cause of action because County unlawfully took $261,888 from it,
without its valid consent, to pay for off-site street improvements not included in County's
original approval of its real property development. Mountaintop contends the court erred
by denying its inverse condemnation cause of action because County unconstitutionally
conditioned, without its valid consent, the issuance of building permits for Mountaintop's
real property development on completion of off-site street improvements by another
party. As we explain below, we conclude the court in a bench trial correctly denied
Lakeview's and Mountaintop's causes of action for inverse condemnation.
FACTUAL AND PROCEDURAL BACKGROUND
This case arises out of the proposed real property development of San Diego
County Tract No. 4828 in Spring Valley (Project), which was to include a resort, golf
course, commercial uses, and about 900 housing units. In 1990, County approved
Tentative Map No. 4828 for the Project, subject to conditions including that the
developers of the Project, Pointe San Diego Residential Community LP (PSDRC) and
Pointe Communities of San Diego, Inc. (PCSD) (separately or together Developer), make
certain improvements to Jamacha Boulevard to accommodate the additional traffic that
1 Pointe SDMU LP and Gosnell Builders Corporation of California have not
asserted on appeal any error by the trial court and therefore have, in effect, abandoned
their appeals of the judgment. Accordingly, our opinion addresses only Lakeview's and
Mountaintop's contentions on appeal.
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would be generated by the Project. That condition was incorporated into a 1992
improvement agreement (1992 Agreement), pursuant to which Developer provided a
performance bond guaranteeing performance of the work. However, because the
improvements were not completed as required by the 1992 Agreement, in 2001 County
made a claim on the performance bond and demanded that the surety complete the
required improvements.
In 2002, County, Developer, and the surety entered into a tri-party agreement
(2002 Agreement), pursuant to which the surety agreed to deposit money with County to
finance improvements per modified plans to be resubmitted by Developer and approved
by County because of changes in circumstances since the 1992 Agreement. The modified
improvements are referred to by the parties as the "CG 4476" improvements. In 2006,
County and Developer entered into a two-party agreement (2006 Agreement), pursuant to
which Developer agreed to cover the subsequent shortfall in funding for the CG 4476
improvements by making payments to County as units of the Lakeview project were sold.
Developer thereafter made payments totaling about $261,888 pursuant to the 2006
Agreement.
In April 2007, Developer's contractor stopped work on the CG 4476
improvements. In May, County notified Developer that because it was not in compliance
with the 2006 Agreement, County would withhold rough grade and subsequent building
permits for future Project home construction until adequate progress was made to
construct the CG 4476 improvements.
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By the end of 2007, Lakeview had completed construction of, and sold, about 44
units and Mountaintop had partially completed construction of 24 units. In 2009,
Mountaintop lost its property in foreclosure at a trustee's sale.
Plaintiffs filed the instant action against County, alleging 20 causes of action.
Lakeview and Mountaintop each alleged a cause of action for inverse condemnation.
They alleged that County imposed unconstitutional conditions on the development of
their properties (e.g., it made the issuance of building permits conditional on Developer's
performance of the 2002 Agreement) that resulted in unconstitutional takings of their
property. They alleged they were entities separate and distinct from Developer.
In a bifurcated bench trial, the trial court first found in favor of County on its
statute of limitations defenses as to all causes of action, except for the inverse
condemnation and promissory estoppel causes of action. The court then received
evidence on County's alleged liability on the remaining causes of action and ultimately
found in favor of County on those causes of action. The court issued a final statement of
decision setting forth its findings of fact and conclusions of law on all of the causes of
action. Thereafter, it entered judgment in favor of County. It denied Plaintiffs' motions
to set aside and vacate the judgment. Plaintiffs timely filed a notice of appeal.
DISCUSSION
I
Inverse Condemnation Generally
Takings clauses. The United States and California Constitutions guarantee real
property owners just compensation when their land is "taken" for a public use. (U.S.
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Const., 5th Amend.; Cal. Const., art. I, § 19; Lingle v. Chevron U.S.A. Inc. (2005) 544
U.S. 528, 537; Kavanau v. Santa Monica Rent Control Bd. (1997) 16 Cal.4th 761, 773.)
"The Fifth Amendment's takings clause, made applicable to the states through the
Fourteenth Amendment, does not prohibit the taking of private property. Rather, it places
a condition—payment of just compensation—on the exercise of that power." (Shaw v.
County of Santa Cruz (2008) 170 Cal.App.4th 229, 259.) California's takings clause is
construed congruently with the Fifth Amendment's takings clause. (Shaw, at p. 260;
California Building Industry Assn. v. City of San Jose (2015) 61 Cal.4th 435, 456-457, fn.
10 (California Building).)
The constitutional "taking" clause authorizes both eminent domain proceedings
instituted by public entities to directly acquire private property and inverse condemnation
actions instituted by real property owners to obtain compensation for alleged takings of
their private property for public use. (D & M Financial Corp. v. City of Long Beach
(2006) 136 Cal.App.4th 165, 175-176; Barthelemy v. Orange County Flood Control Dist.
(1998) 65 Cal.App.4th 558, 563-564.) "An inverse condemnation action is the equivalent
of an eminent domain proceeding, except that the plaintiff is the property owner, not the
condemnor." (D & M Financial Corp., at p. 176.)
"Inverse condemnation actions provide a vehicle for property owners to obtain
'just compensation.' " (Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006)
39 Cal.4th 507, 516.) "[I]n an inverse condemnation action, the property owner must
first clear the hurdle of establishing that the public entity has, in fact, taken [or damaged]
his or her property before he or she can reach the issue of 'just compensation.' " (Beaty v.
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Imperial Irrigation Dist. (1986) 186 Cal.App.3d 897, 903, cited with approval in San
Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 940.)
"The paradigmatic taking requiring just compensation is a direct government
appropriation or physical invasion of private property." (Lingle v. Chevron U.S.A., Inc.,
supra, 544 U.S. at p. 537.) In addition, a government regulation of private property may
be so onerous that its effect is tantamount to a direct appropriation of property and
constitutes a "regulatory taking" compensable under the Fifth Amendment. (Lingle, at
p. 537.) Importantly, as alleged in this case, another type of inverse condemnation cause
of action is the taking of private property under the "unconstitutional conditions doctrine"
as set forth in Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan
v. City of Tigard (1994) 512 U.S. 374.
"As a general matter, the unconstitutional conditions doctrine imposes special
restrictions upon the government's otherwise broad authority to condition the grant of a
privilege or benefit when a proposed condition requires the individual to give up or
refrain from exercising a constitutional right. [Citations.] In the takings context, the
special limitations imposed by the unconstitutional conditions doctrine . . . derive from
[Nollan] and [Dolan]." (California Building, supra, 61 Cal.4th at p. 457.) Nollan and
Dolan "explain[ed] and describe[d] the nature and extent of the special scrutiny that is
called for under the takings clause when the government conditions the grant of a land
use permit on the property owner's agreement to dedicate a portion of its property for
public use without the payment of just compensation. Under Nollan and Dolan, the
government may impose such a condition only when the government demonstrates that
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there is an 'essential nexus' and 'rough proportionality' between the required dedication
and the projected impact of the proposed land use." (California Building, at p. 458.)
In Koontz v. St. Johns River Water Mgmt. Dist. (2013) 570 U.S. ___ [186 L.Ed.2d
697, 133 S.Ct. 2586] (Koontz), the United States Supreme Court held that "the
Nollan/Dolan test applies not only when the government conditions approval of a land
use permit on the property owner's dedication of a portion of the property for public use
but also when it conditions approval of such a permit upon the owner's payment of
money [i.e., a monetary exaction]." (California Building, supra, 61 Cal.4th at p. 458.)
Koontz concluded those "so-called 'monetary exactions' must satisfy the nexus and rough
proportionality requirements of Nollan and Dolan." (Koontz, at p. ___ [133 S.Ct. at
p. 2599].) Koontz explained: "A predicate for any unconstitutional conditions claim is
that the government could not have constitutionally ordered the person asserting the
claim to do what it attempted to pressure that person into doing." (Id. at p. ___ [133 S.Ct.
at p. 2598].) Alternatively stated, "the condition is one that would have constituted a
taking of property without just compensation if it were imposed by the government on a
property owner outside of the permit process." (California Building, at p. 460.) "It is the
governmental requirement that the property owner convey some identifiable property
interest that constitutes a so-called 'exaction' under the takings clause and that brings the
unconstitutional conditions doctrine into play." (Id. at p. 460.)
Standard of review. It is a mixed question of law and fact whether a government
entity's action constitutes a "taking" of private property for public use. (Shaw v. County
of Santa Cruz, supra, 170 Cal.App.4th at p. 269.) "Mixed questions of law and fact
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involve three steps: (1) the determination of the historical facts—what happened; (2)
selection of the applicable legal principles; and (3) application of those legal principles to
the facts. The first step involves factual questions exclusively for the trial court to
determine; these are subject to substantial evidence review; the appellate court must view
the evidence in the light most favorable to the judgment and the findings, express or
implied, of the trial court." (Ali v. City of Los Angeles (1999) 77 Cal.App.4th 246, 250.)
On appeal, we apply the substantial evidence standard of review to the first step and the
de novo standard of review to the questions of law involved in the second and third steps.
(Shaw, at p. 270.)
II
Lakeview's Takings Claim
Lakeview contends the trial court erred by denying its inverse condemnation cause
of action because County unlawfully took $261,888 from it, without its valid consent, to
pay for off-site street improvements not included in County's original approval of its real
property development. However, Lakeview does not challenge any of the factual
findings made by the trial court, stating its "appeal does not tread on any factual issues."
Lakeview also argues the trial court's statement of decision "simply does not speak to the
issues of this appeal, except in general legal analysis."
A plaintiff in an inverse condemnation action must first show that his or her
private property has, in fact, been taken for public use. (Beaty v. Imperial Irrigation
Dist., supra, 186 Cal.App.3d at p. 903; San Diego Gas & Electric Co. v. Superior Court,
supra, 13 Cal.4th at p. 940.) Absent that showing, there can be no inverse condemnation
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finding. In this case, after considering the evidence admitted at trial, the trial court
expressly found that County did not take any money or other property from Lakeview.
Although payments were made pursuant to the 2006 Agreement, the court found "[t]hese
payments were the obligation of [Developer], defined in the [2006 Agreement] as the
'Owner.' " The court further found the 2006 Agreement "did not require that the
payments from [Developer] be made from Lakeview's escrow accounts and there was no
evidence that the County directed [Developer] to make payments in this manner." It
implicitly found the payments ultimately were paid from those escrow accounts because
Developer and Lakeview had common management that had the power to direct payment
of the 2006 Agreement amounts from the escrow account(s) for sales of Lakeview units.
Although Lakeview does not challenge that factual finding by the trial court, we
nevertheless conclude there is substantial evidence to support its finding that County did
not take any money from Lakeview. John Williams, a member of the executive
committee that managed Developer and the other Pointe entities, testified at trial that the
2006 Agreement required the "Owner" to make the payments. Developer, not Lakeview,
is defined as the "Owner" in the 2006 Agreement. Developer made payments totaling
about $261,888 pursuant to the 2006 Agreement. To the extent County "took" money
pursuant to the 2006 Agreement, it did so from Developer and not Lakeview. Anheuser-
Busch, Inc. v. Starley (1946) 28 Cal.2d 347 and Smith v. County of Los Angeles (1989)
214 Cal.App.3d 266, cited by Lakeview, are factually and legally inapposite to this case
and do not persuade us to reach a contrary conclusion. Because Lakeview did not show
County took money (or other property) from it for public uses, the trial court correctly
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concluded Lakeview could not establish a cause of action for inverse condemnation
against County.
Although Lakeview argues it could not have validly consented to County's taking
of $261,888 from it because the 2002 Agreement and 2006 Agreement were illegal and
unlawful and therefore void or otherwise unenforceable as to Lakeview, the issue of
Lakeview's consent to a taking is irrelevant because we concluded above the trial court
correctly found no such taking occurred. Accordingly, we need not, and do not, address
that argument. We likewise need not, and do not, address the question of whether, as
Lakeview argues, our decision in County of San Diego v. Pointe Communities of San
Diego, Inc. (Jan. 28, 2014, D063074) [nonpub. opn.] has a collateral estoppel effect on
the issue of the validity of Lakeview's consent or otherwise.2 Finally, Lakeview suggests
in its reply brief that if it was not the proper party to allege an inverse condemnation
cause of action against County, we should direct the trial court to consider the
substitution of parties as it deems just. We are not persuaded by Lakeview's argument
and decline to do so, especially at this late stage of the case.
2 Even were we to consider whether that decision has any collateral estoppel effect,
we would likely conclude Lakeview has not carried its burden to show the requirements
for the application of the doctrine of collateral estoppel have been satisfied. (See, e.g.,
Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 [requirements for application of
doctrine of collateral estoppel].)
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III
Mountaintop's Takings Claim
Mountaintop contends the trial court erred by denying its inverse condemnation
cause of action because County unconstitutionally conditioned, without its valid consent,
the issuance of building permits for Mountaintop's real property development on
completion (or adequate progress toward completion) of off-site street improvements by
Developer.
However, we conclude Mountaintop has not shown County took any property
from it under the unconstitutional conditions doctrine. The record does not support a
conclusion that County conditioned the grant of building permits for Mountaintop's real
property development on its dedication of a portion of its property for public use or
payment of money. (California Building, supra, 61 Cal.4th at p. 457; Koontz, supra, 570
U.S. at pp. ___ -___, ___ [133 S.Ct. at pp. 2595-2599, 2603].) "It is the governmental
requirement that the property owner convey some identifiable property interest that
constitutes a so-called 'exaction' under the takings clause and that brings the
unconstitutional conditions doctrine into play." (California Building, at p. 460.)
Although Mountaintop argues County wrongfully conditioned issuance of building
permits for its real property development on Developer's completion of certain off-site
street improvements, any threatened withholding of building permits by County was not
conditioned on Mountaintop's dedication of its real property or payment of money.
Rather, it was conditioned on Developer's completion (or adequate progress toward
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completion) of off-site street improvements. On that ground alone, Mountaintop cannot
establish a cause of action against County for inverse condemnation.
In any event, as the trial court found, Mountaintop did not, in fact, convey to
County any property interest, either monetary or in real property. The court found:
"There was no evidence presented that any property was taken from Mountaintop, either
in the form of an easement or other interest in real property owned by Mountaintop, or in
the form of a 'monetary' payment made by Mountaintop. . . . There is no compensable
taking." Because Mountaintop, like Lakeview, does not dispute the trial court's factual
findings, the court's finding there was no taking of Mountaintop's property also disposes
of its contention on appeal. Koontz stated: "Where the permit is denied and the condition
is never imposed, nothing has been taken. . . . [T]he Fifth Amendment mandates a
particular remedy—just compensation—only for takings." (Koontz, supra, 570 U.S. at
p. ___ [133 S.Ct. at p. 2597].) Therefore, assuming arguendo County conditioned its
issuance of building permits on a demand of property from Mountaintop, there could not
be a taking under the Fifth Amendment unless Mountaintop actually conveyed an interest
in its property or paid money to County. (Ibid.) Because there is no evidence in the
record showing Mountaintop conveyed an interest in its property or paid money to
County because of that purported condition, it has no takings claim under the
unconstitutional conditions doctrine. Rather, to the extent Mountaintop believed County
wrongfully denied, or threatened to deny, issuance of building permits for Mountaintop's
real property development, it could have sought other relief to remedy that alleged wrong
(e.g., petition for writ of mandamus), as the trial court noted. (See, e.g., Selby Realty Co.
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v. City of San Buenaventura (1973) 10 Cal.3d 110, 128.) Because Mountaintop did not
show County took any property from it for public use, the trial court correctly concluded
Mountaintop could not establish a cause of action for inverse condemnation against
County.
Although Mountaintop argues it could not have validly consented to County's
taking of property from it because the 2002 Agreement and 2006 Agreement were illegal
and unlawful and therefore void or otherwise unenforceable as to Mountaintop, the issue
of Mountaintop's consent to a taking is irrelevant because we concluded above the trial
court correctly found no such taking occurred. Accordingly, we need not, and do not,
address that argument. We likewise need not, and do not, address the question of
whether, as Mountaintop argues, our decision in County of San Diego v. Pointe
Communities of San Diego, Inc., supra, D063074 has a collateral estoppel effect on the
issue of the validity of its consent or otherwise.
DISPOSITION
The judgment is affirmed. County shall recover its costs on appeal from Lakeview
and Mountaintop.
McDONALD, J.
WE CONCUR:
BENKE, Acting P. J.
NARES, J.
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