Reserve your seat for our annual conference taking place in March of 2024 for our in-person and virtual conferences.

On March 14, 2024, Abbott & Kindermann, Inc. will present its 23rd annual In-Person Conference. March 28-29, 2024 Abbott & Kindermann, Inc. will present its 23rd annual Virtual Conferences. All Conferences are for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry.

A summary of 2023 case law and legislative updates includes the following hot topics:

  • CALIFORNIA WATER RIGHTS AND SUPPLY
  • WATER QUALITY
  • WETLANDS
  • AIR QUALITY
  • CLIMATE CHANGE & RENEWABLE ENERGY
  • ENDANGERED SPECIES
  • HAZARDOUS MATERIALS & REMEDIATION
  • NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)
  • MINING, OIL AND GAS
  • STREAMBED ALTERATION AGREEMENTS
  • FOREST RESOURCES
  • CULTURAL RESOURCES PROTECTION
  • ENVIRONMENTAL ENFORCEMENT
  • GENERAL REAL ESTATE
  • COMMON INTEREST DEVELOPMENTS
  • REAL ESTATE CONTRACTS & TRANSACTIONS
  • EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
  • FEES, TAKINGS, AND EXACTIONS
  • CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”)
  • PLANNING, DEVELOPMENT AND THE SUBDIVISION MAP ACT
  • LOCAL GOVERNMENT AND LOCAL GOVERNMENT ORGANIZATION

Details for the In-Person and Virtual Conferences will come out shortly.  We hope you can join us and we look forward to seeing you there.

Reserve your seat for our annual conference taking place in March of 2024 for our In-Person and Virtual Conferences.

On March 14, 2024, Abbott & Kindermann, Inc. will present its 23rd annual In-Person Conference. March 28th or 29th, 2024 Abbott & Kindermann, Inc. will present its 23rd annual Virtual Conferences. All Conferences are for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry.

A summary of 2023 case law and legislative updates includes the following hot topics:

  • CALIFORNIA WATER RIGHTS AND SUPPLY
  • WATER QUALITY
  • WETLANDS
  • AIR QUALITY & CLIMATE CHANGE
  • RENEWABLE ENERGY
  • ENDANGERED SPECIES
  • HAZARDOUS MATERIALS & REMEDIATION
  • NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)
  • MINING, OIL AND GAS
  • STREAMBED ALTERATION AGREEMENTS
  • FOREST RESOURCES
  • CULTURAL RESOURCES PROTECTION
  • ENVIRONMENTAL ENFORCEMENT
  • GENERAL REAL ESTATE
  • COMMON INTEREST DEVELOPMENTS
  • REAL ESTATE CONTRACTS & TRANSACTIONS
  • EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
  • FEES, TAKINGS, AND EXACTIONS
  • CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”)
  • PLANNING, DEVELOPMENT AND THE SUBDIVISION MAP ACT
  • LOCAL GOVERNMENT AND LOCAL GOVERNMENT ORGANIZATION

Abbott & Kindermann, Inc. will present its annual program virtually and in-person with a mix of conveniently available pre-recorded content and a live session component. 

Registration Information:

  • Registration fee is $110.00 for In-Person Conference
    • Location of In-Person Conference: Hilton Sacramento Arden West
  • Registration fee is $55.00 for Virtual Events
  • Register for the date of the In-Person and Virtual Event you would like to attend by clicking the following links:
    • March 14, 2024 (In-Person):
    • March 28th or 29th, 2024 (Virtual):

Please register early to reserve your spot. MCLE and AICP CM credits are available. We hope you can join us and we look forward to engaging with you soon.

Please call (916) 456-9595 with any questions.

Colyear v. Rolling Hills Community Assn. of Rancho Palos Verdes (2024) 100 Cal.App.5th 110

In Colyear v. Rolling Hills Community Assn. of Rancho Palos Verdes (2024) 100 Cal.App.5th 110, the Court of Appeal for the Second District held that the Rolling Hills Community Association of Rancho Palos Verdes (“Association”) could not enforce a covenant that allowed the Association to trim property owners’ trees against an owner whose deed did not contain the covenant and whose property was not described in any instrument containing the covenant.

In the 1930’s the Palos Verdes Corporation began subdividing the planned community of Rolling Hills. The first phase of the development was initiated with the recordation of Declaration 150, which covered only a certain portion of Rolling Hills and established that additional tracts may be added via subsequent declarations. Declaration 150 contains a tree cutting covenant (“TCC”) that allows the Association to enter properties and trim trees in order to preserve the views of the community. Additional tracts were added to Rolling Hills over the years governed by additional declarations, not all of which included the TCC. In 1967 and 1970 Richard C. Colyear purchased two parcels governed by Declaration 150-M, which does not contain the TCC.

In 2015 Colyear’s neighbor filed an application with the Association requesting the Association trim another neighbor’s trees. The application contained a photograph in which two of Colyear’s trees were visible. Colyear preemptively sued the Association seeking declaratory relief stating the TCC was not enforceable against his property.

The trial court ruled in favor of Colyear, and the Association appealed. On appeal the Association argued that: (1) Declaration 150-M’s references to Declaration 150 incorporate the restrictions of Declaration 150, or, alternatively, put Colyear on notice that the TCC applies to his property; and (2) because Colyear benefits from the use of the Association’s common areas the TCC applies to his property.

Under Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, Declaration 150 Does Not Apply to Colyear’s Property

The Court of Appeal first explained why Declaration 150 does not directly apply to Colyear’s property, independent of the Association’s allegations that it was incorporated by reference into Declaration 150-M. In Citizens,the California Supreme Court established that where a common plan for a subdivision is recorded before the properties are sold, all properties in the subdivision are bound by the restrictions therein, regardless of whether the deed for a given property mentions the restrictions. The Citizens court explained that this rule is “consistent with the rationale that a covenant requires an agreement between buyer and seller.” If a recorded plan establishes that it applies to a given property, the implied intent of the purchaser to be bound by its restrictions may be inferred. However, here Declaration 150 does not describe Colyear’s property and does not indicate that it applies to all properties in Rolling Hills. Rather Declaration 150 covers a narrow strip down the middle of Rolling Hills. The Court of Appeal therefore explained that under Citizens, Declaration 150 does not apply to Colyear’s property.

Declaration 150-M Does Not Incorporate the Restrictions in Declaration 150 by Reference

Though a contract may incorporate the terms of another contract by reference, “the reference…must be clear and unequivocal.” Unlike some declarations governing tracts in Rolling Hills, Declaration 150-M does not expressly incorporate the restrictions in Declaration 150. Rather Declaration 150-M duplicates some of Declaration 150’s restrictions while omitting others. Though Declaration 150-M acknowledges that Declaration 150 exists, it does not state that Declaration 150’s covenants apply to tracts covered by Declaration 150-M. Because the references to Declaration 150 in Declaration 150-M do not sufficiently provide a clear, unequivocal, or certain incorporation of Declaration 150’s terms, the references that do exist in Declaration 150-M do not subject Colyear’s property to Declaration 150’s TCC.

References to Declaration 150 Did Not Put Colyear on Notice

Alternatively, the Association asserted the references to Declaration 150 in Declaration 150-M are sufficient to have put Colyear on notice at the time he purchased his property that the TCC applied to the property. According to the Association, Colyear should have seen the references, analyzed the competing declarations, and concluded the TCC applied to the property, and, under Citizens, this is sufficient to enforce the TCC. The court disagreed, explaining that in reviewing Declaration 150 Colyear could have reasonably concluded it only applied to the section of Rolling Hills described, which does not include his property. Accordingly, the court held the references to Declaration 150 in Declaration 150-M did not put Colyear on notice that the TCC applied to his property.

Colyear’s Use of Common Areas Does Not Subject His Property to the TCC

As a final argument, the Association asserted it would be unfair to allow Colyear to enjoy the benefits of Rolling Hills’ roads, gates, and other common areas without subjecting him to the burden of the TCC. The court disagreed, explaining that the Association’s articles of incorporation “establish that the common areas are governed by the Association ‘for the benefit of residents of any tract’ and as may be set forth in any subsequent declaration for such tract.” This means the use of the common areas is not restricted to properties subject to Declaration 150, and, as no declaration applicable to Colyear’s property includes the TCC, his use of the common areas could not be grounds for enforcing the TCC.

Conclusion

Though Citizens established that under certain circumstances covenants which are not recorded in a property’s deed can still be enforced against a property, it “does not stand for the proposition that a purported covenant outside the chain of title can be enforced whenever there is a development with a common grantor.” Though all the parcels in Rolling Hills share a common grantor, the parcels were conveyed under different declarations. For a covenant to apply to a property when it is not in the deed the restriction must be recorded in such a way that it would indicate to the purchaser at the time of purchase that the property is encumbered. As no recorded instrument indicated Colyear’s property was subject to the TCC, the court upheld the trial court’s determination.

Jack Sandage is a Law Clerk and J. Gage Marchini is a Senior Associate Attorney at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

Sam v. Kwan (2024) 101 Cal. App. 5th 556.

The California Court of Appeal, Second Appellate District reversed a trial court’s decision in a real estate case of breach of fiduciary duty between two partners of an LLC. The case demonstrates that the bona fide purchaser doctrine will not protect a third-party buying the property when the buyer negligently ignored the obvious disputes regarding the seller LLC’s true managing manager. The ruling also underscores the importance of conducting thorough title research in real estate transactions and the potential liability of the escrow agents and title companies involved in these transactions.

The Trial Court Erred in Granting Summary Judgment in Favor of the Board

Anthony Sam and Renee Kwan formed a limited liability company (“2013 LLC”) to buy a parking lot, but their business relationship deteriorated. In 2015, Kwan negotiated the sale of the parking lot to the Board of Fire and Police Pension Commissioners for the City of Los Angeles (“Board”) for $3.8 million, which reaped more than $2 million in profit in less than a year and a half. The Board used a law firm as outside counsel and First American Title Company (“First American”) as the title insurer and escrow agent for the real estate transaction. Sam did not share the gains from the sale. He alleged this sale was done without his knowledge, and that Kwan had “fabricated” and “forged” documents to remove him from the 2013 LLC, as well as pocketing the sale proceeds. Sam sued Kwan, her companies, First American, and the Board after discovering the sale of the parking lot. The trial court ruled in favor of the defendants on various pretrial motions, effectively denying Sam a legal remedy.

There were two versions of the operating agreement which revealed contradictory information – one named Kwan as the managing manager and the other named Sam as the manager. The two operating agreements bored the same date “October 13, 2013” and the two partners developed conflicting explanations. Kwan said it was a simple and innocent “mistake” while Sam charged Kwan forged her version by altering the names, and fraudulently created it to make it look like she had authority she did not possess. Because Kwan’s proof of consent document appeared to have several problems, and the Board’s ignorance of such suspect and closing the deal rendered inadequate diligence, the court of appeal ruled that the summary judgment in the Board’s favor was inappropriate, and a fact finder must decide who was telling the truth.

Bona Fide Purchaser Doctrine

The bona fide purchaser (“BFP”) doctrine enables a buyer to keep the purchased property if the property is bought for value and the buyer lacked knowledge or notice of another’s claim. When the buyer has actual, constructive or inquiry notice of a prior interest, however, the buyer takes the property subject to those other interests. For a buyer to claim BFP protection, he must demonstrate that he has conducted research with due diligence to see if the title of the property-to-purchase would be good. California’s quiet title laws put this duty of inquiry on buyers of real estate transactions, and they must inquire into the validity of their prospective ownership claim. Even if the buyer does not have actual notice of the prior interest, if he negligently caused the lack of knowledge, or he would have known the dispute had he done the research, he would not be able to use the BFP doctrine.

More specifically, the buyer cannot claim as a BFP if he failed to do the due diligence. In the present case, there were apparent inconsistencies in the documented deed showing who was the managing manager, however, the Board’s lawyer entirely skipped the portion of the preliminary report that stressed the need, in the case of a limited liability company, to examine the company’s operating agreement and to obtain proof the company was properly operating through its manager. The Board’s attorney also failed to review the deed of trust and the assignment of rents. This suspect claim of authority would have caused a reasonable and prudent buyer to inquire further, and it is a standard practice to review the operating agreement during an LLC involved real estate transactions. But instead of pausing to figure out the details and suspects of the disputes, the Board went ahead and closed the transaction. Therefore, it cannot be qualified as a BFP and avoided possible damage or litigation, when the managing manager got challenged in a later claim.

Fiduciary Duty Between Partners of an LLC

As a joint venturer in an LLC, each partner owes the other one a fiduciary duty, even for a non-managing member, and one of the duties included is the duty to disclose material information. Sam alleged that Kwan, as his fiduciary, was under a duty to disclose material facts that she concealed: namely, her fabrication of a false operating agreement, her sale of the property without proper approval, and her failure properly to account for the funds. Sam also adequately alleged a claim for fraud based on concealment. A claim for fraud based on concealment will lie where the defendant concealed a material fact; the defendant was under a duty to disclose the fact to the plaintiff; the defendant concealed the fact with the intent to defraud the plaintiff; the plaintiff was unaware of the fact and would have acted differently if plaintiff knew; and the concealment harmed the plaintiff. Since Sam adequately alleged harm, the trial court erroneously granted judgment on the pleadings to the LLC’s managing member on Sam’s breach of fiduciary claim and it should be reversed.

Conclusion

A third-party buying property from a manager-managed LLC does not qualify as a BFP on summary judgment if there are factual disputes regarding the identity of the LLC’s manager and the buyer acted negligently in its due diligence to discover the obvious disputes.  It is the buyer’s duty to make a reasonable inquiry regarding the identity of the LLC’s manager. The court’s holding also indicates the potential liability of escrow agents and title companies in real estate deals, although it was not the focus of the ruling of the present case.

William Abbott is of Counsel and Simyllina Chen is a Law Clerk at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

Simple Avo Paradise Ranch, LLC v. Southern Cal. Edison Co. (2024) 102 Cal.App.5th 281.

In Simple Avo Paradise Ranch, LLC v. Southern Cal. Edison Co. (2024) 102 Cal.App.5th 281, the Second District Court of Appeal affirmed the applicability of inverse condemnation claims to privately-owned utility companies.

Simple Avo Paradise Ranch, LLC (“Simple Avo”), a private-owned avocado farm, and other plaintiff filed an action against Southern California Edison Company (“SCE”), a private utility company, alleging SCE was responsible for damages caused by the 2017 Thomas Fire in Southern California. A master complaint in a coordinated proceeding involving hundreds of similar lawsuits alleged an inverse condemnation cause of action, claiming that the fire was caused by downed power lines owned and operated by SCE, which allegedly failed to mitigate the risks associated with its problematic electrical distribution system.

SCE demurred to the master complaint on the ground that inverse condemnation should only apply to public entities and not to investor-owned utility companies, like SCE. But in light of established precedent in Barham v. Southern Cal. Edison Co. (1999) 74 Cal.App.4th 744 (“Barham”)and Pacific Bell Telephone Co. v. Southern California Edison Co. (2012) 208 Cal.App.4th 1400 (“Pacific Bell”), the trial court overruled the demurrer. Simple Avo joined the lawsuit five months after the trial court overruled SCE’s demurrer, submitting a form complaint adopting and incorporating the master complaint.

In January 2022, Simple Avo settled with SCE and Edison International in the amount of $1.75 million, subject to SEC’s appeal of the demurrer ruling. The trial court entered the stipulated judgment and SCE appealed.

On appeal, SCE continued to question the viability of Barham and Pacific Bell, and also contended that Simple Avo has not alleged other elements of the inverse condemnation cause of action. The Court of Appeal affirmed the trial court’s decision overruling the demurrer. The court addressed the issue of whether a privately-owned utility can be liable in an inverse condemnation action. As in Barham, SCE argued it was a privately-owned utility company, not a public entity subject to inverse condemnation claims because it could not spread its losses from the cost of wildfires as a matter of right by raising its rates, like a public entity can do. As a privately-owned utility, SCE needed approval from the Public Utilities Commission (“CPUC”) to raise its rates. Barham rejected that argument because there was no rational basis for distinguishing publicly owned utilities from privately owned utilities. Thus, Barham expressly held that “SCE may be liable in inverse condemnation as a public entity.” Pacific Bell reviewed the California Supreme Court decision in Pettis v. General Tel. Co. (1967) 66 Cal.2d 503, that held that a privately owned utility could be liable for inverse condemnation.

Here, the Court of Appeal recognized that SCE lacked the authority to raise rates without the CPUC’s approval. But that did not preclude liability for inverse condemnation because there was no evidence the CPUC would not allow SCE to raise its rates to pass on damages. Also, the court reasoned that “although the Legislature has chosen not to do so, nothing in the Constitution prevents the Legislature from placing municipally owned utilities under the regulations of the Public Utilities Commission, including regulation of rates… We do not believe such regulation would immunize municipal utilities from inverse condemnation liability under the theory that they were no longer able to spread the cost of public improvements.” Therefore, the court concluded that SCE did not provide any persuasive reason to depart from Barham and Pacific Bell.

SCE also argued that the master complaint failed to allege the necessary elements for an inverse condemnation claim under City of Oroville v. Superior Court (2019) 7 Cal.5th 1091, which requires a plaintiff to show that the property damage was “substantially caused by an inherent risk in the deliberate design, construction, or maintenance of the public improvement.” But the court found the master complaint sufficiently alleged these facts because SCE knew its infrastructure was outdated but took no action to prevent potential disasters caused by the aging equipment, thus SCE deliberately ignored necessary inspections and maintenance finally leading to the Thomas Fire.

Glen Hansen is Senior Counsel and Simyllina Chen is a Law Clerk at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

Temple of 1001 Buddhas v. City of Fremont (2024) 100 Cal.App.5th 456

In Temple of 1001 Buddhas v. City of Fremont (2024) 100 Cal.App.5th 456, the Court of Appeal for the First District held that the City of Fremont holding hearings for appeals of determinations related to building code violations in front of a single administrative hearing officer conflicts with the mandatory duty established by California Building Code, section 1.8.8 (“section 1.8.8”) requiring local governments to hold such hearings before a board.

Between 2013 and 2021 Miaolan Lee and her successor in interest, Temple of 1001 Buddhas, (“Plaintiffs”) received multiple notices and orders for public nuisances premised on violations of municipal building and zoning codes. Plaintiffs appealed, and Fremont appointed Ann Danforth as the hearing officer for the appeal in accordance with the provisions of Fremont’s municipal code governing appeals. Danforth issued a decision in favor of Fremont. Plaintiffs appealed, and the trial court upheld Danforth’s determination. Plaintiffs appealed again, this time to the Court of Appeal.

Plaintiffs argued that Fremont’s appeal process is preempted by section 1.8.8, and that they received an unfair hearing due to (1) evidentiary rulings Danforth made; (2) financial bias related to Danforth’s hiring; and (3) violations of due process caused by Deputy City Attorney Bronwen Lacey acting as both an advocate for Fremont and an advisor to Danforth. The court first addressed preemption before turning to the unfair hearing arguments.

Fremont’s Appeal Process is Preempted by California Building Code Section 1.8.8

Section 1.8.8 states that “[e]very city, county, or city and county shall establish a process to hear and decide appeals of orders, decisions and determinations…relative to the application and interpretation of this code and other regulations governing construction, use, maintenance and change of occupancy. The governing body…may establish a[n]…appeals board to serve this purpose…Where no such appeals boards or agencies have been established, the governing body…shall serve as the…appeals board.” The court in Lippman v. City of Oakland (2017) 19 Cal.App.5th 750, considered a challenge to the City of Oakland’s administrative citations appeal process which allowed for the appointment of a hearing officer, as Fremont’s does here. The Lippman court held that section 1.8.8 creates a mandatory duty for local governments to either (1) establish an appeals board or agency to hear appeals relating to building codes, or (2) hold such hearings before the governing body and found that Oakland’s municipal code violated this mandatory duty by allowing for appeals to be held before a single hearing officer.

Fremont argued that Lippman is distinguishable because this case involved public nuisance determinations rather than administrative citations for building code violations. The court reasoned that nuisance determinations premised on building code violations are necessarily determinations that the building codes were violated, so the nuisance determinations “fall[] squarely within the scope of Building Code section 1.8.8.” Accordingly, the court decided to follow the Lippman case in finding that Fremont’s process of settling appeals before a single hearing officer violated their mandatory duty under Section 1.8.8.

Fremont further urged the court to adopt the trial court’s “gravamen” rule to find that, where zoning code violations are at issue in addition to building code violations, the addition of the zoning code violations renders section 1.8.8 inapplicable. However, while the court agreed that section 1.8.8 is inapplicable to appeals relating to the application of zoning codes, it did not accept that this invalidates section 1.8.8’s mandatory duty with regards to building code violations and maintained that Fremont violated this duty..

Apart From Section 1.8.8 Preempting Fremont’s Appeal Process for Building Code Violations, Plaintiffs Did Not Receive an Unfair Hearing

a. Plaintiffs Failed to Establish Violations of Their Due Process Based on Evidentiary Rulings

Plaintiffs argued that evidentiary rulings Danforth made during the hearing excluding evidence violated their due process rights. The court determined that Plaintiffs’ claims were factually inaccurate or not supported by the record. Further, Plaintiffs failed to provide any reasoned argument as to how the rulings resulted in prejudice. The court explained that evidence exclusion at administrative hearings does not provide grounds for reversal absent a showing that the error resulted in a miscarriage of justice. Absent such a showing, even presuming the factual validity of Plaintiffs’ allegations, the claims could not provide grounds for reversal.

b. There was no Financial Bias in Danforth’s Hiring

Plaintiffs argued that Fremont’s process for hiring a hearing officer violates due process. In Haas v. County of San Bernardino (2002) 27 Cal.4th 1017, the California Supreme Court held that hiring temporary administrative hearing officers on an ad hoc basis and paying them according to the amount of work performed could give the hearing officers an impermissible financial interest in the outcome of cases they decide. However, if local governments appoint the officers in a way that does not create the risk that favorable decisions will be rewarded with future work, it is not a due process violation. Though the Haas court did not lay out specific rules, it suggested that a local government could appoint a panel of attorneys to hear cases under a pre-established system of rotation. Finding that Fremont followed a rotation procedure like that described in Haas, the court held Danforth’s hiring did not create financial bias by incentivizing her to issue a decision favorable to Fremont.

c. Plaintiffs Forfeited Their Dual Role Claim by Not Raising it At the Hearing

Plaintiffs asserted that Deputy City Attorney Bronwen Lacey acted as both an advocate for Fremont and an advisor to Danforth at the hearing, violating their due process. The court agreed that an attorney cannot act as an advocate for an agency and as an adviser to the decision maker reviewing the decision for which the lawyer advocated. Despite this rule, the court found no error with respect to Lacey for two reasons. First, Plaintiffs failed to show that they objected to Lacey’s alleged dual rule at the hearing. The court explained that when a litigant suspects bias on the part of a member of an administrative hearing body, the issue must be raised in the first instance at the hearing. Second, while Lacey undisputedly served as Fremont’s counsel, Plaintiffs failed to establish that Lacey advised Danforth at the hearing.

Conclusion

Because Fremont’s process for appeals premised on building code violations conflicted with the mandatory duty established by section 1.8.8, the court remanded the case to the trial court with orders to compel Fremont to set aside the hearing determinations premised on the building codes, and to provide an appeal in accordance with section 1.8.8. However, because section 1.8.8 is inapplicable to appeals for determinations related to zoning codes, and because the court found that Plaintiffs did not receive an unfair hearing with regards to those determinations, the aspects of the hearing with respect to zoning code violations were left undisturbed.

Jack Sandage is a Law Clerk at Abbott & Kindermann, Inc. and J. Gage Marchini is a Senior Associate Attorney at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

City of Norwalk v. City of Cerritos (2024) 99 Cal.App.5th 977

In City of Norwalk v. City of Cerritos (2024) 99 Cal.App.5th 977, the Court of Appeal for the Second District addressed the appeal of a public nuisance action brought by the City of Norwalk (“Norwalk”) against the City of Cerritos (“Cerritos”) for increased traffic in Norwalk resulting from amendments to a Cerritos city ordinance limiting commercial and heavy truck traffic through Cerritos. The Court of Appeal held that Cerritos is shielded from public nuisance liability under Civil Code section 3482 because the increased traffic was an inexorable and inescapable consequence flowing from a statutorily authorized act.

In 1974 Cerritos enacted an ordinance limiting commercial and heavy truck traffic through the city to certain major arteries. In 2019 and 2020 Cerritos issued amendments removing one of those arteries. Following these amendments Norwalk sued Cerritos, asserting the ordinance’s restrictions constitute a public nuisance by diverting extra truck traffic through Norwalk, causing the “adverse effects” that accompany heavier traffic flow. In response, Cerritos filed a demurrer arguing that because it adopted the ordinance “under the express authority of a statute,” in this case Vehicle Code sections 35701 and 21101, it is statutorily immune pursuant to Civil Code section 3482. The trial court sustained the demurrer without leave to amend. Norwalk appealed, arguing the trial court erred in (1) sustaining Cerritos’ demurrer, and (2) in sustaining without leave to amend. The Court of Appeal for the Second district addressed each of these arguments in turn.

Norwalk’s Public Nuisance Claim Was Properly Dismissed

Section 3482 provides that “[n]othing which is done or maintained under the express authority of a statute can be deemed a nuisance.” Though courts construe the immunity granted narrowly so as to ensure it goes no further than the legislature intended, it is accepted that the immunity can extend to certain consequences resulting from statutorily authorized acts. In the court’s view, the appropriate question for a court to ask in determining if an alleged nuisance is immune is whether “the alleged nuisance [is] an inexorable and inescapable consequence that necessarily flows from the statutorily authorized act, such that the statutorily authorized act and the alleged nuisance are flip sides of the same coin[.]” Where an alleged nuisance does not inexorably and inescapably flow, section 3482’s immunity does not apply. This frequently occurs when an alleged tortfeasor has some leeway in how to undertake the authorized act.

Vehicle Code sections 35701 and 21101 expressly authorized Cerritos to enact its ordinance closing an artery to through traffic, therefore the ordinance itself was a statutorily authorized act warranting immunity. The question then became whether the resulting consequences likewise warranted immunity. The court explained that closure of one artery to through traffic necessarily diverts that traffic to a different artery. The adverse effects Norwalk alleged were the “unavoidable byproducts” of that diverted traffic. Because the adverse effects inexorably and inescapably flowed from the ordinance the resulting public nuisance warranted immunity.

Norwalk argued that section 3482’s immunity only applied if Cerritos’ ordinance was “reasonable,” but the court rejected this assertion. The court explained that so long as the local government’s conduct is not so unreasonable as to “invalidate the state’s delegation of regulatory authority, further inquiry into the reasonableness of that local government conduct is off limits to judicial review.” Because the court found that the ordinance was not “so unreasonable” further inquiry into its reasonableness was precluded.

Norwalk’s subsequent petition for review was denied by the California Supreme Court.

Diane Kindermann is the Principal Shareholder, Gage Marchini is a Senior Associate Attorney, and Jack Sandage is a Law Clerk at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

Make UC A Good Neighbor v. Regents of the University of California (2024) 16 Cal.5th 43

In response to a proposed development that would increase student housing, Make UC a Good Neighbor and People’s Park Historic District Advocacy Group (“Good Neighbor”) brought a lawsuit against the Regents, the President, and the Chancellor of the University of California, Berkeley (“UC Berkeley”) alleging UC Berkeley’s certification of an EIR for the development violated CEQA. Following an appellate court decision in favor of Good Neighbor, the California Supreme Court agreed to hear the case. While the case was pending, the Legislature passed Assembly Bill No. 1307 adding two sections to CEQA directly relevant to the case. In Make UC A Good Neighbor v. Regents of the University of California (2024) 16 Cal.5th 43, the California Supreme Court held that the amendments to CEQA invalidated Good Neighbor’s claims.

Each University of California periodically creates a Long Range Development Plan (“LRDP”) that guides “physical development, including land use designations, the location of buildings, and infrastructure systems, for an established time horizon.” In 2021 the Regents of UC Berkeley approved a new LRDP. One of the LRDP’s stated goals is to “[i]mprove the existing housing stock and construct new student beds and faculty housing units.” In furtherance of this goal, the Regents approved a plan to redevelop a site near the campus known as People’s Park, which would create an estimated 1,113 new student beds. The Regents certified an EIR addressing both the LRDP generally, as well as the People’s Park project specifically.

Good Neighbor filed a petition for writ of mandate against UC Berkeley alleging the EIR violated CEQA by: (1) not analyzing social noise attributable to student parties and late-night pedestrians; and (2) failing to consider alternative locations for the People’s Park project. Following the trial court’s denial of the petition, the First District Court of Appeal found in favor of Good Neighbor.


The California Supreme Court granted UC Berkeley’s petition for review. While the appeal was pending, the Legislature passed Assembly Bill No. 1307, which added two new sections to CEQA, both of which were directly relevant to the case at hand. Section 21085 provides that “for residential projects, the effects of noise generated by project occupants and their guests on human beings is not a significant effect on the environment.” Section 21085.2, subdivision (b) provides that “institutions of public higher education shall not be required, in an [EIR], to consider alternatives to the location of [a] residential or mixed-use housing project” so long as certain requirements are met. The resolution of the case required the court to determine the applicability of these new sections to UC Berkeley’s EIR.

Good Neighbor Conceded the Amendments Resolved Some of Their Claims While Maintaining There Was More for the Court to Decide

Good Neighbor conceded that section 21085 exempts the EIR from needing to analyze social noise with respect to the People’s Park project, and that section 21085.2 exempts the EIR from needing to consider alternative locations for the People’s Park project. However, Good Neighbor contended that: (1) the portion of its claim relating to the LRDP was still viable, as the LRDP does not qualify as a “residential project” for the purposes of section 21085; and (2) though section 21085.2 invalidated the claim that the EIR needed to consider alternative locations for the People’s Park project, the court should still decide the claim because it “raises issues of broad public interest that are likely to recur.” The court found each of these arguments unpersuasive.

Section 21085 Applies to the Residential Aspects of the LRDP At Issue

The court determined that the term “residential projects” in section 21085 is ambiguous, and so turned to legislative history to decide if the LRDP was within the scope of the term. The court explained that it was unnecessary to conclusively define the scope of the term “residential projects,” as the legislative history made it clear the purpose of the amendments was to abrogate the lower court’s decision. The legislative history indicated the Legislature was “focused on rejecting the [Court of Appeal’s] central underlying conclusion that social noise from residential users may constitute a significant effect on the environment,” and that social noise issues should be addressed through “local nuisance ordinances and not via CEQA.” As the Legislature was aware that the EIR evaluated both the LRDP and the People’s Park project, and did not account for each individually, the court concluded that the Legislature intended section 21085 to apply to both. The court acknowledged that an LRDP could contain nonresidential aspect, such as a stadium or entertainment venue, which may not be exempt from having to consider the impacts of social noise on the environment, but as the residential aspects of UC Berkeley’s LRDP were at issue in this case, the court held the EIR was not inadequate for failing to address social noise.

The Impact of Section 21085.2 on Future Housing Projects Was Not Before the Court

The court then turned to Good Neighbor’s contention that, though section 21085.2 invalidated its claim that the EIR was inadequate for failing to consider alternative sites for the People’s Park project, the court should still consider the potential application of the section to future projects. The court explained that it does “not render advisory opinions” on issues not before it. As Good Neighbor conceded its claim was no longer viable, the court would not consider the application of section 21085.2 to future projects.

The Court Left Open Issues Not Relevant to its Determination

Choosing to deal solely with the issues before it, the court left open questions regarding the impact of the CEQA amendments on future projects. The court did not conclusively establish the scope of section 21085, nor the potential impact of section 21085.2 on future projects, choosing to let courts address these issues if and when they arise. The legislative history made it clear the Legislature sought to abrogate the Court of Appeals decision, so the Supreme Court effectuated that intent and reversed the Court of Appeals judgment in favor of Good Neighbor.

Jack Sandage is a Law Clerk at Abbott & Kindermann, Inc and J. Gage Marchini is a Senior Associate Attorney.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

Diane G. Kindermann (2015-2024) and William W. Abbott (2004-2024) were again selected for the Northern California Super Lawyers List in the practice areas of Land Use and Zoning law. More information is available here.

Abbott & Kindermann, Inc. has been serving private and public clients in California on land use, environmental, and real estate matters for more than 25 years.

For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Diane Kindermann, Bill Abbott, Glen Hansen or Gage Marchini at Abbott & Kindermann, Inc. at (916) 456–9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.

Planning & Conservation League v. Department of Water Resources (2024) 98 Cal.App.5th 726

In Planning & Conservation League v. Department of Water Resources (2024) 98 Cal.App.5th 726, the Third District Court of Appeal upheld the Department of Water Resources’ (“Department”) approval of amendments to existing water supply contracts under the State Water Project (“SWP”), finding (1) the amendments complied with the California Environmental Quality Act (“CEQA”); (2) the amendments were not a covered action under the Sacramento-San Joaquin Delta Reform Act (“Delta Reform Act”); and (3) the Department had no duty to weigh the public trust interests.

In the 1960’s the Department entered into long-term contracts with government contractors for the sale, delivery or use of water made available by the SWP (“Contracts”). The Contracts contained initial terms of seventy-five years, but included a provision known as “the evergreen clause” which allows contractors to elect to continue to receive service following the expiration of the contracts. Years before expiration, contractors began to preemptively exercise the evergreen clause.

Prompted by the notices given under the evergreen clause, the Department drafted amendments which proposed extending the Contracts to 2085 and changing certain financial provisions. After determining the amendments would have no environmental impact, the Department certified a final environmental impact report, approved the amendments under CEQA, and filed a validation action to ratify the amendments.

Following the validation action multiple lawsuits were filed against the Department alleging violation of, and failure to comply with, state law. Following a merits hearing, the trial court entered judgment for the Department in all cases. Appellants timely appealed. On appeal appellants contended the amendments violated three laws: (1) CEQA; (2) the Delta Reform Act; and (3) the California public trust doctrine. The Court of Appeals addressed each of these alleged violations in turn.

The Amendments Did Not Violate CEQA

Before dealing with the appellants’ specific arguments as to how the amendments violated CEQA, the court explained that under CEQA an appellate court’s inquiry extends only to whether there was an abuse of discretion on the part of the agency. So long as an agency did not fail to proceed in a manner required by law, and its decision is supported by substantial evidence, the court will defer to the agency’s decision. This largely puts the burden on the challenger to show the court why the agency’s decision does not warrant deference.

The appellants’ contentions fall into two broad categories: (1) the Department must analyze the impact of the amendments relative to a no project alternative where the contracts were allowed to expire and utilize a baseline for environmental review where the Contracts never existed; and (2) the Department should have considered the impact of additional projects that may be funded by revenue generated through the amendments. However, each of the appellants’ CEQA claims were rejected by the court for lacking specificity or analysis as to what the appellants’ contended the department should have done, and why failure to do so was an abuse of discretion, or because there was sufficient evidence to support the department’s determinations.

The court held that CEQA did not require the Department to consider a no project alternative in which the existing contracts were allowed to expire, because it was reasonably foreseeable that the contractors would extend the terms of their contracts through the evergreen clause, and an agency is not required to examine “every conceivable variation” of the no project alternative. Likewise, the court held the Department appropriately utilized the environmental setting under the Contracts as the baseline, because under CEQA a baseline must reflect the “physical conditions existing at the time [the] environmental analysis” begins. Further, the court determined the additional projects which may be funded by revenue from the amendments were all too tenuous, uncertain, or distantly related to require analysis as part of the amendments’ environmental analysis under CEQA. To require otherwise would stretch the definition of “project” under CEQA too far. Accordingly, the court held the Department’s certification of the amendments did not violate CEQA.

The Amendments Were Not a Covered Action Under the Delta Reform Act

A state agency that proposes to undertake a “covered action” under the Delta Reform Act must prepare a written certification of consistency with the Delta Plan. The Department determined that the amendments were not a covered action, and so did not prepare a certificate of consistency. The appellants challenged this determination, but the court disagreed, explaining the Legislature’s clear intent in defining a covered action was to exempt the existing SWP. The amendments merely continued the existing state of affairs of the SWP, so the Department properly concluded the amendments were not a covered action.

The Department Had No Duty Under the Public Trust Doctrine

The appellants contended the Department violated its duty to consider the impacts on public trust interests in approving the amendments. This duty requires that before agencies approve diversions of waters held in the public trust, they consider the impact on public trust interests, including navigable waters, wildlife and recreation. The court reasoned that the Department’s water rights, or diversions, subject to the Contracts were granted by the State Water Resources Control Board in 1967 and because the amendments  did not include new diversions of water, the record supported the Department’s conclusion that the amendments do not impact a public trust resource and, therefore, no duty arose to weigh the public trust interests or consider additional protections for those interests.

Conclusion

Throughout the court’s analysis, it reasoned that the deference owed to the Department regarding its actions created a hefty burden requiring the appellants to explain with specificity why the Department violated the law. Despite the numerous theories upon which the appellants challenged the Department’s approval of the amendments, the court found that appellants failed to carry their burden and rejected many of their arguments for lack of specificity or analysis supporting their claims. Finding that appellants failed to carry their burden, the court refused to second guess the Department’s decisions, upholding validation of the amendments. 

Diane Kindermann is Owner of, Gage Marchini is an Associate Attorney, and Jack Sandage is a Law Clerk at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., 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.