June 2016

People for Proper Planning v. City of Palm Springs (April 22, 2016, E062725) ____ Cal.App.4th ____. 

By William W. Abbott

In 2013, the City of Palm Springs amended its general plan to remove any mention of minimum densities in the residential land districts. The text of the general plan in some residential districts provided for a range of densities, in others an average density or one stated density. The general plan also provided that the stated densities at the upper end were maximums, but the lower end reflected “the minimum amount of development anticipated, provided that all other required conditions can be met.” The City Council’s resolution adopting the amendment provided in part that “the current and past practice of the city… is to consider only the maximum density allowed within each land category and consider and approve lower density projects.” The Council passed the resolution relying upon a categorical exemption (Class 5; “minor alterations in land use limitations in areas of average slope of less than 20%, which do not result in any changes in land use or density….”). A citizens group filed suit, challenging the amendment on CEQA grounds as well as violations of the state planning and zoning law. The trial court ruled in favor of the city and the petitioners appealed. In the published portion of the decision, the appellate court reversed the City’s use of an exemption.

Surprisingly, the appellate court did not cite the Supreme Court’s decision in Berkeley Hillside Preservation v. City of Berkeley (2015) 241 Cal.App.4th 943, on judicial review of CEQA exemptions. The appellate court’s first point was that the amendment facially conflicted with the terms of the exemption in that that it resulted in change in densities. Accepting for the sake of argument the City’s position that the amendment simply reflected actual city practices, the appellate court noted that the petitioner had presented sufficient evidence of a fair argument (without elaborating on that evidence) and that the general plan amendment was capable of significant cumulative effects to the supply of high density, low and moderate income housing. To this latter point, the court noted that the 2007 General Plan EIR discussed the role of high density housing to meet its housing needs and to avoid unnecessary conversion of surrounding desert lands. The Court then questioned the City’s ability to meet its fair share of housing as a basis to overturn the use of the CEQA exemption.

The court went on to address the City’s argument that the baseline had not changed, asserting that as the City had not interpreted its general plan in a manner which dictated minimum densities, there was therefore no change from the baseline as a result of the general plan amendment. The Court concluded that once the general plan was adopted, it became the new baseline. Since the general plan relied upon the anticipated densities to meet housing needs, the question remained as to the City’s ability to meet its fair share housing needs. Although the published decision lacks critical analysis, the inference is that this unanswered question defeated the use of the categorical exemption.

Comment: The court’s characterization of the general plan as the new baseline while in many circumstances this would be an ideal approach in reducing CEQA burdens, this court’s approach is at variance with a number other long standing CEQA decisions, and lead agencies should be cautious about uncritical reliance upon this approach. The decision is best viewed as an unusual analysis of a CEQA exemption and left at that.

William W. Abbott is a partner at Abbott & Kindermann, LLP. 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.

 

By Glen Hansen

Friends Of Martin’s Beach v. Martin’s Beach 1, LLC (2016) 246 Cal.App.4th 1312

In a dispute between a plaintiff unincorporated association asserting public rights and defendant property owners over the use of a road, parking area and the inland dry sand of a popular beach that were owned by defendants, the Court of Appeal for the First Appellate District in Friends Of Martin’s Beach v. Martin’s Beach 1, LLC (2016) 246 Cal.App.4th 1312, 2016 Cal.App.LEXIS 341, held: (1) that the trial court properly granted summary adjudication as to plaintiff’s claim that Article X, section 4, of the California Constitution, confers on the public a right of access over private property to tidelands; and (2) that the trial court erred in granting summary adjudication as to plaintiff’s claim that, under the theory of common law dedication, the owner’s predecessors dedicated such access to the public through their words and acts, and that the public accepted that offer by using those parts of defendants’ property.

The Martin’s Beach case involved two parcels of land bounded on the east by Highway 1 and on the west by the Pacific Ocean (“Property”). At the western edge of the Property is a crescent-shaped strip of land known as “Martin’s Beach.” The only land access to Martin’s Beach is via a road that runs across the Property from Highway 1 to the beach. The Property was once part of a larger tract of land that was provisionally granted by the Mexican Governor of California in 1838 (“Rancho”).  The grant was not finalized by the time war broke out between Mexico and the United States in 1848. The Treaty of Guadalupe Hidalgo ended the war, and in 1851, Congress passed legislation to implement the Treaty. The 1851 Act established the process to address pre-war land claims.  Claims that were confirmed in those proceedings resulted in a federal patent, which is the equivalent of a deed from the federal government conveying fee simple ownership.  A patent claim for the Rancho was eventually confirmed in such patent proceedings, and by the United States Supreme Court on appeal.  Over time, the Rancho was divided into smaller parcels, including the Property, and conveyed to various persons. 

The Property was eventually acquired by the Deeney family.  The Complaint in this case alleged that, from the 1930s or earlier, the Deeney family invited the public to use the beach and the road to the beach both by words and conduct, specifically by posting a large billboard on the highway inviting the public to come to the beach by way of the road, by “welcom[ing] all ‘with open arms,’” and by constructing public toilets, a parking area and a convenience store catering to those who visited the beach.  For some of that time they charged a 25ȼ parking fee.  The Complaint also alleged: “Postcards from the ‘50s show hundreds of people enjoying idyllic days at a beach that at times had the feel of a Mediterranean escape.” “In more recent years, surfers, in particular, enjoyed what the website Surfpulse refers to as a ‘mystical and multi-faceted playground’ and what Save the Waves’ program director called ‘a natural theme park with sand.’”  The Deeney family sold the Property to defendants Martin’s Beach 1, LLC and Martin’s Beach 2, LLC (“Owners”) in 2008.  In 2009, the Owners locked a gate barring the entrance to the road, placed “No Trespassing” signs there and otherwise prevented the public from using the road or the beach.

Plaintiff Friends of Martin’s Beach, an unincorporated association (“Plaintiff”), filed a complaint against the Owners “on behalf of the general public,” citing numerous legal theories and causes of action in order to assert “nonexclusive rights and interests acquired by the general public in the beach to high tide at Martin’s Beach, the dry sand inland, an inland area historically used for parking and access along Martin’s Beach Road.”  In response to the parties’ cross-motions for summary adjudication, the trial court ruled in favor of Owners on all of the public access issues.  Plaintiff appealed.  The Court of Appeal affirmed in part, reversed in part, and remanded the case to the trial court on the public dedication claim. 

Plaintiff’s Constitutional Claims For Public Access

Plaintiff argued that Article X, section 4, which was adopted by the People as part of the Constitution of 1879, entitled the public to an easement to use the road across the Property for the purpose of gaining access to the tidelands.  That section 4 provides:

 

No individual, partnership, or corporation, claiming or possessing the frontage or tidal lands of a harbor, bay, inlet, estuary, or other navigable water in this State shall be permitted to exclude the right of way to such water whenever it is required for any public purpose, nor to destroy or obstruct the free navigation of such water; and the Legislature shall enact such laws as will give the most liberal construction to this provision, so that access to the navigable waters of this State shall be always attainable for the people thereof. 

However, the Court of Appeal affirmed the trial court’s conclusion that, whatever public rights exist under section 4 (that issue was not decided), do not override the federal land patent title in the Owner in light of Summa Corp. ex rel. Lands Commission v. California (1984) 466 U.S. 198.   In Summa, the U.S. Supreme Court held that the State of California acquired no public trust interest in lands to which title was confirmed under the federal Act of 1851 patent process based on a Mexican land grant, unless such interest was asserted by the State in the patent proceedings.  Here, Plaintiff’s cause of action based on section 4 was barred under Summa because California did not acquire a public interest in the Property.  That was so because the State did not assert any such interest during the patent proceedings for the Rancho in the 1850s.  In response to Plaintiff’s attempts to distinguish Summa, the Court further held (1) that the provisional nature of the Mexican land grant for the Rancho did not alter the conclusive application of Summa; (2) that section 4 is, at least in part, a codification of the public trust doctrine; and (3) that section 4 is not a mere regulation of an “incident of ownership.”  Thus, Plaintiff’s constitutional claim based on section 4 was barred under Summa.  The Court also explicitly rejected Plaintiff’s alternative argument that section 4 is retroactive and burdens lands held in private ownership before its enactment. Not surprisingly, counsel for the owner called the Court of Appeal’s ruling on the section 4 claim, which ruling rejected the idea of a guaranteed right of beach access under the California Constitution, “a win for our client and for all coastal property owners.”

Plaintiff’s Common Law Dedication Claim For Public Access

The Court of Appeal held that the trial court erred in granting summary adjudication as to Plaintiff’s common law dedication claim.  A common law dedication is a “grant and a gift” of land or an interest in land to the public for a public use.  A claim for dedication has two elements: “intention to dedicate by the owner, and acceptance by the public.” To constitute a dedication at common law no particular formality of either word or act is required. All that is necessary is sufficient evidence that the property owner either expressly or impliedly manifested an unequivocal intention to offer the property for a public purpose and that there was an acceptance of the offer by the public. Such intent may be demonstrated in any conceivable way that a person’s intention can be shown.  Similarly, the acceptance element may be formal, as by resolution or ordinance, or by use.  Here, the Court rejected the Owner’s singular focus on the “express” dedication label that was used in Plaintiff’s Complaint. The elements are the same for either an implied or an express dedication; the only difference is in the mode of proof of the intent element. Contrary to the Owners’ argument, the “intent to dedicate” element in an express dedication may be established by words or overt conduct of an owner other than a grant deed to a public agency or similar formal writing.  Also contrary to the Owners’ argument, an express dedication does not need to be accepted in a formal way or by a public entity. Here, the Court of Appeal held that “there can be little doubt that the facts [Plaintiff] alleged are sufficient to establish the elements of common law dedication, if they can be proven at trial. The complaint alleged a number of acts on the part of the owners that could manifest an intent to dedicate to the public, coupled with public use over many decades that could establish acceptance.” 

Furthermore, it was error for the trial court to conclude, as a matter of law, that the fact that the Deeneys “at some point charged a fee” to the public negated any intent to dedicate.  Evidence of such permissive use may tend to show the owner intended to control or qualify other parties’ access to the property and thereby rebut a finding of dedicative intent.  But that was a triable issue of fact.  Also, the Court held that the trial court erred when it inferred that the Deeneys’ commercial purpose for inviting the public to use the road and beach negated the intent to dedicate the road or beach, as a matter of law.  In fact, such commercial purpose may support a finding of intent to dedicate.

Accordingly, the Court held that Plaintiff alleged facts sufficient to state a common law dedication claim, and the Owners failed to show, as a matter of law, that they are entitled to judgment on this cause of action. The Court remanded the case to the trial court to adjudicate Plaintiff’s common law public dedication claim.  After the Court of Appeal opinion was issued, counsel for Plaintiff stated the ruling “gave us a road map to how to win at trial.”  However, that remains to be seen in this very public lawsuit.

Glen Hansen is a Senior Counsel at Abbott & Kindermann, LLP.  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, or 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.

 

By Glen C. Hansen

Almanor Lakeside Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761

In an action by a homeowners’ association to enforce $54,000 in dues, fees, fines and interest imposed on property owners under the applicable CC&Rs, the Court of Appeal for the Sixth Appellate District held in Almanor Lakeside Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761, 2016 Cal.App LEXIS 301 that (1) the trial court properly issued a judgment that concluded that only $6,620 of the fines were valid against the owners; (2) the trial court did not abuse its discretion in determining that the association achieved its main enforcement objectives and was therefore the prevailing party under the Davis-Stirling Common Interest Development Act (“ Act,” Civ. Code §§4000 et. seq.); and (3) the trial court’s award in favor of the association of its full attorneys’ fees and costs in the amount of $101,803.15 was not unreasonable.

In Almanor, the plaintiff was a homeowners association (“Association”) under the Act for the Almanor Lakeside Villa development (“Development”) on Lake Almanor in Plumas County.  Defendants and cross-complainants James and Kimberly Carson owned a lodge and two chalets (the “Properties”) within the Development.  The Properties are among only a few lots in Development that accommodate commercial use, partially due to the preexisting use of the lodge. The Properties were subject to the CC&Rs of the Development.  Among other things, section 4.09 of the CC&Rs prohibited owners from using their lots “for transient or hotel purposes” or renting for “any period less than 30 days.” From 2010 through 2012 the Association’s Board developed rules to enforce the CC&Rs, including enforcement of the section 4.09 restriction on short-term rentals if a copy of any rental agreement is provided to the Association seven days before the rental period.  Other rules were adopted that affected the Properties, such as parking, trash storage, use of common areas, and issuing decals for any boats using the Association’s boat slips. The Carsons did not believe that such rules applied to their Properties because of section 4.01 of the CC&Rs and the long-established commercial status of the Properties.  The Association sought to impose fines and related fees of $19,979.97 on the Carsons for alleged rule violations related to the Carsons’ leasing of their properties in the development as short-term vacation rentals. The Carsons viewed the rules as unlawful and unfair use restrictions on their commercially zoned properties. Also, the Carsons argued that the Association improperly applied $1,160 of the Carson’s payment for dues toward the fines imposed by the Association.

The Association sued to enforce its rules and recover the fines it imposed, estimating that the total owed by the Carsons was $54,000.  The Carsons cross-complained for breach of contract, private nuisance, and intentional interference with prospective economic advantage. The trial court found that the 30-day minimum rental restriction imposed by section 4.09 of the CC&Rs presented an “obvious conflict” with section 4.01, which “expressly allow[ed] the Carsons to use their lots for commercial purposes (presumably including lodging, since the properties are, in fact, lodges).” The trial court concluded only $6,620 in fines pertaining to the nonuse of the Association’s boat decals were reasonable.  The trial court also concluded that, even assuming the Association had breached the CC&Rs, the Carsons had not proven any damages and so they received nothing on their cross-complaint.  On the parties’ competing motions for attorneys’ fees, the trial court determined the Association to be the prevailing party and awarded the Association its full $101,803.15 in attorneys’ fees and costs.  The Carsons appealed. The Court of Appeal affirmed the judgment.

On appeal, the Court addressed three issues.  First, the Carsons challenged the trial court’s determination that they failed to prove damages for their breach of contract cause of action in their cross-complaint. The Court held that, while the trial court’s statement of decision did not specifically reference the Carson’s $1,160 damages claim asserted on appeal, the trial court’s finding that the Carsons failed to establish damages by competent evidence was sound.

Second, the Court addressed the Carsons’ argument that the trial court abused its discretion when it found that the Association was the prevailing party despite having disallowed a majority of the fines the Association sought to have imposed.  The Court explained that Civil Code section 5975 of the Act provides that, in an action to enforce CC&Rs “the prevailing party shall be awarded reasonable attorney’s fees and costs.” Thus, “‘“the trial court is therefore obligated to award attorney fees whenever the statutory conditions have been satisfied.”’” The test for prevailing party “is a pragmatic one, namely whether a party prevailed on a practical level by achieving its main litigation objectives.” That test involves a comparison of “the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources.” Thus, the court must compare “‘the extent to which each party ha[s] succeeded and failed to succeed in its contentions’” and “the practical effect of the relief attained by each.”

Here, the trial court did not abuse its discretion in determining that the Association was the prevailing party.  Of the 88 fines that the Association sought to enforce at trial, the trial court upheld only eight. The Carsons’ success at trial substantially lowered their liability for damages and supported their position that the CC&Rs and associated rules could not impose an unreasonable burden on the properties.  However, by upholding a subset of the fines, the trial court “ruled more broadly” that the Association could impose reasonable use restrictions on the Carsons’ properties. That ruling “echoed [the Association’s] stated objective at trial that the Association sought to counter the Carsons’ position that ‘because their lot is zoned “Commercial,” they are not bound by the rules.  “The fractional damages award does not negate the broader, practical effect of the court’s ruling, which on the one hand narrowed the universe of restrictions that [the Association] could impose on the properties, but on the other hand cemented [the Association’s] authority to promulgate and enforce rules pursuant to the CC&Rs so long as they are not unreasonable.” The court also ruled entirely in favor of the Association on the Carsons’ cross-complaint by finding that the Carsons’ alleged damages were unsupported by competent evidence and too speculative. Thus, the trial court did not abuse its discretion in determining the Association to be the prevailing party.

The Carsons made the public policy argument that, by granting attorneys’ fees to the Association, “the Court is stating that the Carsons should have paid the $54,000.00 that Respondent claimed was owed … , even though only $6,620.00 was actually owed, because they would be penalized for defending themselves and, in the end, owe an additional $101,803.15 in attorney’s fees for defending themselves.” The Court rejected that argument because the Act mandates the award of attorneys’ fees to the prevailing party, and so the trial court had no discretion to deny attorney’s fees once it determined who was the prevailing party.

Third, the Court addressed the Carsons’ argument that the amount of the attorneys’ fees that the trial court awarded was unreasonable (“grossly disproportionate”) in light of the Association’s limited success at trial.   That is an issue committed to the discretion of the trial court. The Carsons argued that Code of Civil Procedure section 1033, subdivision (a), provides that the court has the discretion to disallow attorney’s fees if a party obtains less than the statutory minimum to be classified as an unlimited civil matter.  But the Court rejected that argument because the discretionary provisions of section 1033, subdivision (a), are irreconcilable with the mandatory fees award under section 5975 of the Act.  The Court recognized that “degree of success” may be considered in determining reasonable attorney’s fees under Civil Code section 5975 of the Act, and to the extent a trial court is concerned that a particular award is excessive, “‘it has broad discretion to adjust the fee downward.’” In this case, however, the record did not show that trial court committed a manifest abuse of discretion by awarding the full attorney’s fees sought.  Also, the Carsons did not request a statement of decision with regard to the fee award, and so all intendments and presumptions are indulged to support the judgment. Furthermore, the trial court’s decision is supported by the fact that the minor subset of the fines that formed the basis for the Association’s monetary award requested was sufficient to satisfy the statutory criteria of an action to enforce the governing documents. “In practical effect, [the Association’s] limited success established a baseline from which it can continue to adopt and enforce reasonable use restrictions under the CC&Rs.” Thus, the Court did not find that the award of attorney’s fees, compared to the overall relief obtained by the Association was so disproportionate as to constitute an abuse of discretion.

Glen Hansen is a Senior Counsel at Abbott & Kindermann, LLP.  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, or 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.