By Cori Badgley and Nathan Jones
Estoppel is a pervasive legal concept dating back to the common law of England. Though it takes many forms, its application revolves around a party’s action or inaction to the prejudice of the other side or to a decision maker. Estoppel is a legal doctrine that may be used in certain situations to prevent a person from relying upon certain rights, or upon a set of facts (e.g. words said or actions performed) which differs from an earlier set of facts. Inquasi-judicial tribunals like the Coastal Commission, the agency may both oppose you and act in a judicial capacity. The case of Mt. Holyoke Homes, LP v. California Coastal Commission (2008) 167 Cal.App.4th illustrates that estoppel applies when a party continues to negotiate with the California Coastal Commission (“Commission”) even though the Coastal Commission has already lost jurisdiction over the disputed matter.
Mt. Holyoke Homes, LLC (“MHH”) owned a parcel of property in Pacific Palisades, California (“City”). Intent on developing the property and after considerable litigation and compromise with the City, MHH obtained approval of a parcel map and a coastal development permit. Schelbert, a neighboring landowner, who had fought the development of the property throughout the City’s approval phase, appealed the approval of the permit to the Coastal Commission. After more than a year of delay, paper chase and negotiation, the Commission notified MHH that a hearing would take place on May 9, 2000. At the hearing, the Commission determined that substantial issues regarding visual impacts, geologic hazards, and potential land form alterations were affected by MHH’s development project. The Commission then set a date for a final hearing.
Two and a half years of follow-up requests for information from the Commission then followed. Finally, on June 11, 2003 the Commission held a hearing on the merits of the coastal development permit. MHH contended that, in addition to factual arguments on the merits of the project, the Coastal Commission had lost jurisdiction over the matter because it had not “set a hearing within 49 days…of receipt of an appeal” in light of a recent court of appeal decision, Encinitas Country Day School, Inc. v. California Coastal Commission (2003) 108 Cal.App.4th 575. The Encinitas case effectively held that the Commission’s regular practice of continuing hearings past the 49 day procedural deadline was outside of its jurisdictional mandate (Pub. Resource Code § 30621(a)), and barred the Commission from hearing the matter. Notwithstanding MHH’s arguments, the Commission denied the permit.
MHH filed a writ of mandate against the Commission on July 31, 2003. Two months later, on September 19, 2003, MHH requested the matter be continued to facilitate discussion and consideration of alternatives. After separate appeals and a failed settlement, the trial court granted the writ of mandate, finding the Commission had lost jurisdiction under Encinatas, and that the City’s original coastal development permit had become final when a hearing was not held within 49 days. Both the Commission and Schelbert appealed. They claimed that MHH had waived its right to challenge the Commission’s jurisdiction, or that it should be estopped from doing so.
The Appellate Court Held that MHH was Estopped from Denying the Commission’s Jurisdiction
While the appellate court recognized that the Commission’s failure to hold a hearing within 49 days would have stripped it of jurisdiction, MHH was precluded from setting aside the Commissions’ decision by principles of estoppel. Treating the Commission’s denial of the permit as quasi-judicial in nature, it held “When…the court has jurisdiction of the subject, a party who seeks or consents to action beyond the court’s power as defined by statute or decisional rule may be estopped to complain of the ensuing action in excess of jurisdiction.” According to the court, MHH failed to aggressively raise the jurisdictional issue for three and a half years. MHH readily provided information and presented itself as prepared to negotiate with the Commission throughout the entire dispute. To hold otherwise, the court reasoned, would be to invite error or “trifling with the court.” Furthermore, estoppel to contest jurisdiction does not require the party to know or understand the legal consequences of its actions. The important issue in this case was MHH’s failure to object or invoke a right in a timely manner, and then its attempt to raise the issue to the prejudice of the efficiency of the system. “[W]hile MHH may have believed it was attempting to amicably resolve the Commission’s concerns over its proposed…subdivision…it had an obligation to contest the Commission’s jurisdiction promptly after the date on which it contends the Commission lost it.”
Most courts are generous to parties who make a continuous and good faith attempt to resolve their disputes notwithstanding the existence of a solid defense. It appears MHH’s mistake was in failing to raise the issues following its initial determination that the Coastal Commission lacked jurisdiction. The court’s analysis suggested that it was perturbed by MHH’s delay in raising the issue to the detriment of the entire legal process. This case illustrates that while continuing to negotiate, the project proponent should still clearly raise any viable legal defenses from the beginning. If they are not promptly voiced, the defense may be lost.
Cori Badgley is an associate with Abbott & Kindermann, LLP, and Nathan Jones is a law clerk with the firm. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.