Welcome to Abbott & Kindermann, Inc.’s October Real Estate Law Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.

  1. PREVIOUS MONTH’S UPDATE

To read the September 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/09/uncategorized/september-monthly-real-estate-law-action-news/ .

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are no cases pending at the California Supreme Court at this time.

  1. UPDATE

A. TAKINGS

  1. Tan Phu Cuong Investment, LLC et al. v. King County, 2020 U.S. App. LEXIS 32367 (9th October 9, 2020).

The Ninth Circuit upheld the ruling of the district court when it dismissed property owners’ (Tan Phu Cuong Investments, LLC, referred herein as “Appellants”) claims against King County for an alleged physical taking, regulatory taking, and Clean Water Act violation. The suit between parties arose when Appellants purchased low-lying properties prone to standing water and groundwater percolation issues. Shortly after, Appellants sued King County for a host of environmental and takings claim. The district court granted summary judgment and Appellants appealed. The Ninth Circuit affirmed the district court’s determination finding Appellants did not suffer a physical taking because the pooling predated the Appellants purchase of the property thus barring inverse condemnation claims. The Ninth Circuit further held that Appellant failed to address the Penn Central factors allowing them relief for a regulatory taking and failed to seek available variances making their claims not ripe for review. Lastly, the Court held that Appellants could not bring claims under the citizen suit provisions of the Clean Water Act since Appellants failed to provide proper notice to King County requiring compliance for the groundwater percolation on the property.

  1. Weiss v. People ex rel. Dept. of Transportation (2020) 9 Cal.5th 840.

The California Supreme Court denied defendants’ request to apply the laws and procedures governing Eminent Domain law into inverse condemnation claims. The defendants recognized that their defenses were grounded purely in inapplicable eminent domain laws, but asked that the Court apply eminent domain law and process to inverse condemnation because the Court has discretion to interpret and apply borrowed procedures from other bodies of law in other circumstances. Defendants argued that a similar approach could apply here, because the Legislature allowed the judicial branch to develop the application of inverse condemnation actions to various statutes and rules. The Court was unconvinced and held that the eminent domain statutes do not apply in inverse condemnation cases. It reasoned that the eminent domain statutes were narrowly construed by the Legislature and tailored specially to only eminent domain actions. It further reasoned that eminent domain has a particular set of statutory procedures that are inapplicable in inverse condemnation actions. The Court, thus, concluded that the adoption and amendment of statewide rules governing inverse condemnation statutes should be left to the Legislature or Judicial Council.  As such, it affirmed the judgment of the Court of Appeal and denied defendants’ request to import eminent domain statutory authority into inverse condemnation procedure.

  1. Bridge Aina Le’a, LLC v. State Land Use Comm’n (9th Cir. 2020) 950 F.3d 610.

In 2011, the State of Hawaii’s Land Use Commission reverted 1,060 acres on the Big Island of Hawaii from a conditional urban land use classification to the prior agricultural use classification. Plaintiff Bridge Aina Le’a, LLC, a landowner at the time of reversion, challenged the reversion’s legality and constitutionality in a state agency appeal, later filing suit in federal district court. After the trial, the jury decided that there was an unconstitutional regulatory taking of the plaintiff’s property pursuant to Lucas and Penn Central. The district court entered a judgment for the plaintiff, awarded $1 million in nominal damages, and denied the State’s renewed motion for judgment as a matter of law (“JMOL”). The state appealed the denial of the JMOL.

The Ninth Circuit held that the district court erred in denying the State’s renewed JMOL because plaintiff’s evidence did not establish a taking under Lucas or Penn Central. The conditions for the Lucas test were not met because the land retained substantial residual value in its agricultural use classification which still allowed the plaintiff to use the land in economically beneficial ways. The Court concluded that the State was entitled to judgment as a matter of law under Lucas.

Applying the Penn Central factors, the Court concluded that the jury could not reasonably find for the plaintiff. The Court held that the valuation evidence weighed strongly against a taking pursuant to the first factor which considers the extent of the economic loss suffered by the landowner as a result of the action, usually measured by diminution in market value, and rejected the plaintiff’s assertion that the disruption of a land sales agreement showed economic impact. The Commission’s reversion order did not interfere with the plaintiff’s reasonable investment backed expectations at the time of acquisition because the plaintiff had committed to build 385 housing units and had failed to complete them. Hawaii law expressly authorized the Commission to impose this condition. The Court held that plaintiff’s own evidence established a diminution in value that was too small, and the reversion did not interfere with the plaintiff’s reasonable investment-backed expectations for the land. The Court then reversed the district court’s denial of the State’s renewed JMOL motion on the Penn Central test as well.

  1. Ruiz v. County of San Diego (2020) 47 Cal.App.5th 504.

The Court of Appeal reversed the trial court’s determination that a homeowner could claim redress by inverse condemnation against a county if their private drainage system allowed for flow of public water. The Court of Appeal considered whether privately owned drainage on private property allows for homeowner remedies by inverse condemnation if the water in the private pipeline is for public use. Plaintiff/Appellee Ruiz (“Ruiz”), claimed that because the developer offered the County of San Diego (“County”) a dedicated easement to allow for public drainage in 1959 and the County turned down the easement, Ruiz could recover for water damage as a result in the pipeline leaking on Ruiz’s property. Ruiz claimed that the County’s use of the drainage system as part of the Valley drainage system constituted an acceptance of the drainage easement offered in 1959. The Court of Appeal, citing Locklin v. City of Lafayette, 7Cal.4th 327 (1994),  held that the County’s use of the Ruiz pipe did not meet the requirements for inverse condemnation since the County needed to exert minimal control and maintenance over the watercourse near the Ruiz property since the County would be liable for damage caused by streamflow. The Court of Appeal found Ruiz’s arguments unpersuasive since the County did not control continually nor own any portion of the private pipeline. The Court stated the Ruiz lacked substantial evidence to prove that the County had taken their private property for a public use. The Court reversed the award of attorney’s fees to Ruiz and held that each party should bear their own attorney’s fees on appeal.

B. GENERAL REAL ESTATE

  1. Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22.

A commercial lease set rent to increase 150 percent if the tenant stayed past a certain date. The date passed but the tenant refused to pay the increased rent. Plaintiffs, a commercial landlord (“Constellation”), filed a breach of contract action against defendants  corporations (“World Trading” and “World Tech Toys”) seeking damages for past due rent, late fees, interest, failure to maintain and repair, costs for not being able to use the premises, and holdover rent. Constellation alleged that World Tech Toys was an alter ego of World Trading. The trial court rejected the theory of alter ego liability and held the defendants liable for all damages except the holdover rent, finding it to be an unenforceable penalty. World Trading and World Tech Toys were held liable to Constellation and its successors for $27.196.74. Constellation appealed and defendants cross appealed.

The Court of Appeal reversed the judgement denying Constellation holdover rent.  The court held that the holdover rent was not an unlawful penalty.  The court affirmed the remainder of the judgment, including the trial rejection of alter ego liability. The Court of Appeal explained that holdover rent, or “a graduated rental provision”, in commercial provisions are enforceable even if the increased rent is much greater than the base. To qualify as an unenforceable penalty, defendants must prove that the provision amounted to an illegal liquidation of damages. Here, the defendants failed to show that Constellation had market power to set the rate, and the defendants could have easily avoided higher rent by leaving the premise. Therefore, the trial court should have enforced the holdover agreement.

Further, the defendants argued that the penalty could be avoided under section 1671 of the Civil Code.  However, the Court of Appeal held that section 1671 was inapplicable because the case did not involve a question of penalty or liquidated damages. While the evidence showed unity of interest and ownership, which is required to invoke the alter ego doctrine, there was insufficient evidence to prove that treating defendants as separate entities would promote injustice. The court dismissed the defendant’s cross-appeal and appeal from the order after judgement.

The dissenting Justice argued that the liquidated damages provision, which established the holdover rent at 150 percent of base rent, was an unenforceable penalty. The Dissent argued that the majority’s new test allows contracting parties to bypass tethering a liquidated damages provision to estimated anticipated loss, and instead requires a challenger to analyze each contracting party’s respective market power and persuade a court that there was enough of an imbalance between parties to invalidate the damages provision.

  1. Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33.

Plaintiffs Matthew Matson and Matson SDRE Group, LLC (“Matson”) contested the deed of trust purchased in a foreclosure auction after learning the lien was second in position with a lower fair market value than the auction price. Matson’s complaint alleged that the terms of sale were unconscionable, and they relied on a mistake of fact when purchasing the deed of trust. The trial court granted summary judgment to defendants, S.B.S. Trust Deed Network (“SBS”) stating that there was no irregularity, unfairness, or fraud during the acquisition. The trial court further reasoned that a judicial remedy was not appropriate where plaintiff failed to read through a title report to discover the value and position in the chain of title. Plaintiffs appealed.  The Court of Appeal affirmed.

The court reasoned that plaintiffs were not entitled to relief because there was no unilateral mistake allowing for a remedy since plaintiffs bore the risk of their mistake not to fully read the title report. The transaction was complete when plaintiffs accepted the final bid at auction and there was no legal effect of rejecting the title after plaintiffs learned the deed of trust was second in priority to another deed. For this reason, the court held that plaintiffs failed to produce evidence to warrant judicial remedy by rescission. Also, the court reasoned that because plaintiffs were aware of the risks, they bared through the complete title report, they were not entitled to relief.

  1. Jeppson v. Ley (2020) 44 Cal.App.5th 845.

Among one of the more colorful neighbor disputes in 2020, the Court of Appeal affirmed the trial court’s decision to deny redress to Appellant, Jeppson, since there was no issue of “public interest” involved in a neighborhood feud where appellant’s cat was killed by appellee’s dog. The Court evaluated whether Jeppson’s claims arose from protected activity and then measured the likelihood of success on each claim as part of Jeppson’s summary judgment motion. A protective activity would grant relief to plaintiff in connection with an issue within the public interest. § 425.16, subd. (e)(3). The Court evaluated six criteria outlined in Rand Resources, LLC v. City of Carson (2019) 6.Cal.5th 610; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913; Weinberg v. Feisel (2003) 110 Cal.App.4th 1122; Workman v. Colichman (2019) 33 Cal.App.5th 1039; Abuemeira v. Stephens (2016) 246 Cal.App.4th 1291; FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, to determine if the Jeppson’s claims were in fact within the “public interest.” The criteria were as follows:

  • Statements or conduct concerning a person or entity in the public eye,
  • Conduct that could directly affect a large number of people,
  • A topic of widespread public interest,
  • Whether the issues affect only those directly involved,
  • Gathering ammunition for a private controversy, and
  • Where issues are too remotely connected to the public conversation to assert the issue within the public interest.

The Court reasoned that the claims at issue between Jeppson and Ley did not meet the criteria outlined in any of the above categories, thus the Jeppson claims did not constituted issues of public interest. The Court stated, “Feuds can metastasize into the Hatfields and McCoys or the Montagues and Capulets. This tiff, though bitter, remained strictly local: a private affair and not a matter of “public interest.” The Court affirmed the trial court’s ruling in favor of Lay and awarded costs on appeal to Jeppson.

  1. Kelly v. House (2020) 47 Cal.App.5th 384, certified for partial publication.

The Court of Appeal awarded statutory attorney’s fees to Appellant for the trespass and conversion on to Appellant’s agricultural property because the damaged land resulted in loss of organic certification status and prevention of prospective buyers. Plaintiffs, the Houses, appealed the decision of the trial court on their claims for attorney’s fees against the Fosses for trespass and conversion of their property. The Court of Appeal considered whether the Fosses entering the Houses property and spraying pesticide jeopardized the fragile organic farming certification held by the Houses and whether such claims gave rise to an award of attorney’s fees for both claims. Statute Section 1021.9 provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.” The Court held that the Houses could recover attorney’s fees under the statute because the statute was intended to protect farmers from illegal trespasses to their land. Defendant claimed that the Houses could not recover under Section 1021.9 for attorney’s fees because the majority of their fees related back claims other than the trespass claims. The Court remanded the case to the trial court to determine the amount of reasonableness of the Houses attorney’s fees under Section 1021.9 as it relates to the trespass claim only.

C. COMMON INTEREST DEVELOPMENTS

  1. Coley v. Eskaton (2020) 51 Cal.App.5th 943, certified for partial publication.

The trial court held that (i) directors of a homeowners association breached their fiduciary duties when they apportioned costs while acting under a conflict of interest, precluding the use of the best business judgement rule, and (ii) that the directors were not liable in their personal capacities.  The Court of Appeal affirmed in part, reversed in part, and remanded. Since the directors did not engage in transactions with the association, the common law standard of inherent fairness was more appropriate than the statutory standard of a just and reasonable transaction. However, requiring the directors to show that the transaction was just and reasonable was not an error because this standard closely resembles the common-law standard. It also held that the trial court erred by not finding the directors liable in their personal capacities because they breached their fiduciary duties by apportioning costs and expenses which were inconsistent with their governing duties and resulted in damages.

2.  Aldea Dos Vientos v. CalAtlantic Group, Inc. (2020) 44 Cal.App.5th 1073.

In a construction defect case before the Court of Appeal, the Court reversed the trial court’s confirmation of the arbitrator’s award for a condominium association (‘association”). The Court of Appeal concluded that the association’s governing documents require a majority vote of members to bind arbitration, and that the arbitrator failed to obtain a vote of the association constituting an “unreasonable servitude” under the statute. As the Court reasoned, the arbitrator’s award violated the plain language of the statute. The Court reversed the trial court’s decision and awarded costs to the appellant.

D. REAL ESTATE CONTRACTS & TRANSACTIONS

    1. Texcell Inc. v. STS Hydropower Ltd., 2020 U.S. Dist. LEXIS 158192 (E.D. CA., August 31, 2020).

A federal judge granted summary judgment for defendants, two renewable energy companies, over a contract dispute on long term lease terms. The parties agreed to a long-term lease of thirty years where defendants (STS Hydropower ltd., later acquired by Eagle Creek Renewable Energy), planned to construct a hydroelectric facility. Defendants were unable to pay the costs and expenses related to operation of the facility out of revenue and considered lease termination. In 2017, the Ponderosa Wildlife destroyed the facility leaving the terms of the contract in question. Plaintiff demanded defendants rebuild the facility and continue operation of the lease and in response defendants moved to terminate the lease in writing. Plaintiffs filed suit against defendants alleging: 1) breach of contract, 2) breach of good faith and fair dealing, and 3) declaratory relief. Defendants filed a summary judgment motion on all three claims leaving the court to order the partial summary judgment.

The court granted summary judgment to defendants on the breach of contract claim. Plaintiff argued that Eagle Creek was the alter ego of STS and whatever actions were taken by STS should constitute an action taken by Eagle Creek. Plaintiff further alleged that the terms of the contract obligated STS to rebuild the facility and resume the terms of the lease after the fire. The court was unconvinced. The court held that since plaintiff failed to provide material evidence that STS was obligated to rebuild the facility and that Eagle Creek was its alter ago, summary judgment was granted in defendants favor on the breach of contract claim. On the breach of good faith and fair dealing claim, the court held that even viewing the facts in a way most favorable to the plaintiffs, the court could not find that defendants acted in bad faith by exercising their right to terminate the contract. The court granted defendants summary judgment motion on the good faith and fair dealing claim as well. Since the court could find no grounds for awarding declaratory relief to plaintiffs, the court denied plaintiff’s request for declaratory judgment.

  1. Harris v. University Village Thousand Oaks, CCRC, LLC (2020) 49 Cal.App.5th 847.

The Court of Appeal reversed a trial court decision stating that residents of a continuing care retirement community were protected under the continuing care contracts entered into by the retirement community. Residents of a retirement community appealed an arbitrator’s award denying statutory protections to elders. Defendant argued that the basic protections did not apply to the residents since the award was made in arbitration and not in litigation. The Court of Appeal reversed, holding that the plain language of Civil Code sections 1940 and 1953 applies to all continuing care contracts regardless of the stage in litigation or related court proceedings. As the Court stated, because residents paid fees to be protected by the terms of their living agreement the residents were entitled to receive the benefits of the fully executed residential contract.

The Court acknowledged that although retirement community contracts have fundamental differences from a standard residential unit contract, the protections received under both types of contract are no different. The Court reasoned that when fees are paid to confer benefits to all residents and as long as an exchange of money occurs allowing for benefits to be conferred to tenants, then the facility is obligated to honor those benefits under the landlord’s duty of care. Lastly, the Court held that the “the legislative purposes of both the landlord-tenant laws and the continuing care contract laws are best served by applying the arbitration prohibition to the housing component of continuing care contracts.” The Court remanded the case to the trial court with instructions.

  1. Moore v. Teed (2020) 48 Cal.App.5th 280.

The Court of Appeal affirmed the holding of the trial court for allowing “benefit-of-the-bargain” damages to plaintiff for all detrimental actions taken by defendant resulting from plaintiffs botched remodel. Plaintiff (“Moore”) brought suit against defendant (“Teed”) when Teed advised Moore to purchase a $4.8 million home in San Francisco with significant structural and foundation issues. Teed further agreed to act as the intermediary between the contractors restoring the home and directed Moore to pay him directly rather than the contractors. The home repairs were not made properly, and Moore paid Teed a significant amount of money before ultimately filing a complaint against Teed. At trial, an expert witness testified that the home repairs would have cost $4.477 million with at least $620,000 to be spent, specifically on the foundation. A jury found for Moore stating that Teed had fraudulently induced Moore into purchasing and restoring the home while falsely claiming repairs would only amount to $900,000. The jury granted a damages award of $2,144,434 plus $104,498 in “benefit-of-the-bargain” damages. Teed conceded to the claims against him for fraudulent inducement but appealed on the “benefit-of-the-bargain” damages.

The Court of Appeal held first that the trial court did not err in instructing the jury to award alternative damages to Moore since false misrepresentation allowed for multiple means of recovery. The Court stated, “a ‘broader’ measure of damages may be awarded than simply ‘out-of-pocket’ losses.” Second, the Court held that the “benefit-of-the-bargain” damages could be awarded in real property transactions. As the Court held, a person who was defrauded out of the financial benefit of real property can collect broader damages including “benefit-of-the-bargain” damages. Third, The Court held that the damages award was not speculative because tort damages fully compensate an injured party and the jury would have determined the same jury award regardless of using “benefit-of the-bargain” as a measure for damages. Fourth, the Court pointed out that the award was not duplicative because the jury issued a jury award significantly lower than the $3,842,160 requested by Moore. The Court affirmed the ruling of the trial court and awarded attorney fees on appeal to Moore.

  1. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337.

On appeal, the Court of Appeal reversed the lower court’s denial of Appellant, Jaman Properties 8 LLC (“Jaman”), moving papers for arbitration under the Federal Arbitration Act (“FAA”). Victrola 89, LLC (“Victrola”) brought suit Jaman in superior court alleging undisclosed and unrepaired defects in a real property transaction. Under the real estate purchase agreement between parties, Jaman moved for arbitration under the Federal Arbitration, which the trial court denied finding that the California Arbitration Act (“CAA”) controls arbitration between the parties. The Court held that the FAA preempts procedural provisions otherwise controlled by the CAA if the purchase agreement between the parties incorporates FAA on its face. The real estate purchase agreement between the parties on its face specified that the FAA would control. The Court held that Victrola’s piecemeal arguments of which sections of the CAA should control and which of the FAA should control in arbitration were unpersuasive. The Court reasoned that the lack of specificity in the contract for which claims should be arbitrated under the CAA and under the FAA is immaterial since the FAA controls over all claims by federal preemption. Lastly, the Court held that Victrola must arbitrate its claims under the FAA unless Jaman is estopped by the trial court from doing so. The Court overturned the trial court’s decision and remanded the case back to the trial court to determine whether Jaman is estopped from arbitration under the FAA.

E. EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES

  1. Riverside County Transportation Commission v. Southern California Gas Company (2020) 53 Cal.App.5th 1003, certified for partial publication.

The 4th District Court of Appeal affirmed PUC’s authority to demand company’s relocate its pipeline operations at the cost of the company. The court further found that after the PUC terminates a company’s licenses for pipeline operation, the company can be held liable for trespass if operations continue. Plaintiff (Riverside County Transportation Commission) pursued plans to extend Metrolink commuter rail in across defendant’s (Southern California Gas Company) pipelines. Plaintiff terminated the licenses held by defendant to operate its pipelines and demanded that defendant move the pipelines at defendant’s own expense. Defendant agreed to move the pipelines, but at the expense of plaintiff. In the trial court, plaintiff won a determination that defendant was obligated to move pipelines at its own expense but failed to win its claim that defendant had been trespassing after plaintiff terminated the pipeline licenses.

On appeal, the Court of Appeal affirmed the trial court’s holding that plaintiff had the authority to require defendants to relocate its pipelines at their expense. The Court reasoned that the licenses contained specifically language granting plaintiff the authority to terminate the lease and that expenses should be left to defendant. The Court concluded that plaintiff was entitled to enforce the contract for the pipelines entered into by both parties. The Court reversed the trespass ruling by the trial court holding that defendant could not apply any alternative easement theories to circumvent its trespass on plaintiff’s property once plaintiff terminated the licenses allowing the pipelines in the public right-of-way. The Court held that defendant needed the permission of the public entity in order to maintain operations and failed to do so. In short, the Court held that defendant trespassed on plaintiff’s property when they failed to abandon operations after plaintiff terminated the operational licenses. The Court reiterated that public easement cases were frequent, and the publication of this case was intended to provide clear instruction on the easement rights of public agencies and private licensures.

  1. Martis Camp Community Association v. County of Placer (2020) 53 Cal.App.5th 569.

The Court of Appeal held that the County’s decision to abandon a road while reserving rights to easements on other sections of that road was reasonable, since the road itself was unnecessary and merely a residential convenience rather than a necessity. Defendant, the County of Placer partially abandoned a public easement right for a road connecting two subdivisions. The road’s intended use was supposed to be as an emergency services road and closed off to private use. However, sometime around 2010, residents in the two subdivisions began privately using the access road leading county officials to request the County Board of Supervisors to abandon the public rights to use and retain rights to use for emergency and transit services. Plaintiffs argued that the trial court erred in denying that the County had a right to abandon a public road. Other causes of action included violations of the Brown Act, violations of CEQA when deciding to abandon the road easement, and the trial court improperly sustaining a demurrer on an inverse condemnation claim.

The Court of Appeal affirmed the trial court’s determination that the County did not violate the statutory requirement for abandoning a public road. The Court agreed with the Board of Supervisor’s determination that the road was never intended to be used as part of the public transportation network. The Court held that the actions of the County were reasonable and supported by substantial evidence because use of the road by the public was convenient but also unauthorized since the road was not planned, designed, or approved to accommodate use in the public road system. Plaintiffs further acknowledged that the County had the right to abandon the road, but that it could only abandon the road in full or approve it for complete use, not reserve some right of access to the road. The Court dismissed this argument, holding that Plaintiffs failed to point to any authority supporting their argument and the Court could not find any case law stating that the County had to abandon the entire road without reserving some easement rights. The Court further held that the County did not violate the Brown Act and dismissed the inverse condemnation claim by plaintiffs. Lastly, the Court held that plaintiffs were entitled to relief on the CEQA claims and remanded the case with instructions to order the issuance of a writ of mandate and require proper compliance with CEQA.

  1. Gamerberg v. 3000 E. 11th St., LLC (2020) 44 Cal.App.5th 424.

The Court of Appeal reversed a trial court ruling holding that irrevocable licenses tied to a 1950 parking affidavit do not survive transfers of the property to different owners without notice. The dispute between parties arose when it became unclear who had a right to eight parking spaces on lot between two commercial business owners. Plaintiff, Gamerberg, filed a complaint in the trial court alleging that he held an irrevocable license over eight spaces in the lot based on a 1950 parking affidavit grandfathering his use of the spaces between owners. The Court examined whether the 1950 affidavit created an irrevocable license binding on subsequent purchasers who had no notice of the affidavit. The Court determined that the lack of recordation of the 1950 affidavit meant that the document did not bind subsequent purchasers who had no actual notice of the provisions in the document. Since the prior owners failed to record the parking affidavit, binding subsequent purchasers to the affidavit was irrelevant. The Court reversed the trial court’s ruling and awarded costs to 3000 E. 11st St., LLC.

  1. Madani v. Rabinowitz (2020) 45 Cal.App.5th 602.

In a suit based on claims of trespass and negligence when defendant, Rabinowitz, erected a fence on plaintiff, Madani’s, property and continually parked inoperable cars in Madani’s property, the Court of Appeal affirmed that the fence and parked cars were continuing encroachments. The Court held that since the fence and parked cars were a continuing encroachment that the statute of limitations did not apply, and the Court could review the case subject to independent review of the facts. The Court agreed with the lower court that costs to move the fence were not sufficient to warrant leaving the fence as a permanent structure. The Court noted that Rabinowitz replaced the fence in 2015 and could move the fence for a modest cost. The Court further held that Madani could not recover costs because they did not present sufficient evidence to justify a damages award. The Court reasoned that the trial court granted injunctive relief, and that was sufficient to deny an award of monetary damages. The Court affirmed the trial court’s ruling and ruled both parties shall split costs.

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.

Welcome to Abbott & Kindermann’s 2020 3rd Quarter cumulative CEQA update. This summary provides links to more in-depth case write-ups on the firm’s blog. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.

1.         2019 CEQA UPDATE

To read the 2019 cumulative CEQA review, click here: https://blog.aklandlaw.com/2020/01/articles/ceqa/2019-ceqa-4th-quarter-review/ .

2.         CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are one CEQA case pending at the California Supreme Court. The case and the Court’s summary is as follows:

County of Butte v. Department of Water Resources, S258574. (C071785; 39 Cal.App.5th 708; Yolo County Superior Court; CVCV091258.) Petition for review after the Court of Appeal dismissed an appeal in an action for writ of administrative mandate. This case presents the following issues: (1) To what extent does the Federal Power Act (16 U.S.C. § 791a et seq.) preempt application of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) when the state is acting on its own behalf and exercising its discretion in deciding to pursue licensing for a hydroelectric dam project? (2) Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act in order to comply with the federal water quality certification under the federal Clean Water Act?

3.         UPDATE

A.    Ministerial v. Discretionary

Protecting Our Water & Environmental Resources v. County of Stanislaus (2020) 10 Cal.5th 479.

The California Supreme Court struck down the County’s practice of categorically determining that the issuance of all well permits that do not require a variance is ministerial. In Protecting Our Water & Environmental Resources v. County of Stanislaus, the County established a well construction permit ordinance that relied on state well development standards promulgated by the Department of Water Resources. DWR’s standards at issue include requirements that all wells: (1) “be located an adequate horizontal distance” from sources of contamination, including suggested distances for certain common types of sources; (2) “where possible…be located up the groundwater gradient from sources of contamination”; (3) “if possible…located outside areas of flooding; and (4) “annular space” is “effectively sealed” and establishes minimum surface seal depths.

Rejecting the appellate court’s holding that all well permits were discretionary based on its reading of the “horizontal distance” requirement, the California Supreme Court took on a more nuanced view which deferred to the agency to make such determinations on a case-by-case basis. Relying on the “functional test” set forth in a line of cases distinguishing discretionary decisions from ministerial ones (e.g. Mountain Lion Foundation v. Fish & Game Commission (1997) 16 Cal.4th 105; Health First v. March Joint Powers Authority (2009) 174 Cal.App.4th 1135; Friends of Juana Briones House v. City of Palo Alto (2010) 190 Cal.App.4th 286), the Court considered whether “the agency is empowered to disapprove or condition approval of a project based on environmental concerns that might be uncovered by CEQA review…,” and found that at least in some circumstances the County has such discretion. For instance, the Court in evaluating the “horizontal distance” requirement noted that while the determination of the proper distance from a source of contamination involved considerable discretion, instances where there are no known sources of contamination involved would properly eliminate that discretion. Thus, it reasoned, establishing a categorical determination that all such well construction permits were ministerial was improper.

B.     Exemptions

Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103.

Petitioners challenged the CEQA exemption determination by Caltrans for an Interstate 5/State Route 56 interchange project in San Diego County as part of its North Coastal Corridor (“NCC”) project to improve vehicle and railroad transportation in the 27-mile La Jolla-Oceanside Corridor. After previously issuing a Draft EIR in 2012, and a Final EIR in 2017 for a 30-day review period which stated “After the [FEIR] is circulated, if Caltrans decides to approve the [p]roject, a [NOD] will be published in compliance with CEQA by Caltrans . . . ,” Caltrans filed a Notice of Exemption (“NOE”) on June 30, 2017, prior to the close of the FEIR review period. In the NOE, Caltrans asserted that the project was statutorily exempt from CEQA pursuant to Streets & Highways Code section 103 and Public Resources Code sections 21080.5(c) and 21080.9. Caltrans further relied on the position that the project’s impacts were analyzed consistent with the California Coastal Commission’s certified regulatory program.

Petitioners first became aware of the NOE on September 28, 2017 and requested Caltrans rescind the NOE or agree to a 180-day statute of limitations for challenging the decision. Caltrans refused and petitioners filed suit on November 1, 2017, alleging (i) that Caltrans improperly relied on section 103, (ii) that the department is estopped from relying on the 35-day statute of limitations period, and (iii) additional claims on the merits of the adequacy of the FEIR for the project. Caltrans demurred and the trial court sustained the demurrer without leave to amend. Petitioners appealed.

The Court of Appeal reversed and remanded the case for further proceedings. It held that Caltrans improperly relied on section 103 as a statutory exemption, because its plain language was limited to the approval of a public works plan (such as the NCC project) by the Coastal Commission, not for the approval of a specific individual project by Caltrans. The Court also held that petitioners had adequately alleged facts sufficient to support the estoppel claim. It reasoned that Caltrans public statements of its intent to issue a NOD for the project after the FEIR review period were enough to establish a disputed question of fact as to whether the elements of estoppel could be met.

C.    Negative Declarations

Save the Agoura Cornell Knoll v. City of Agoura Hills (2020) 46 Cal.App.5th 665.

The familiar story in this blog is that of the fair argument standard, and the difficulty faced by a lead agency when defending a negative declaration or mitigated negative declaration. The facts involve a relatively small project on 8.2 acres, and the developer’s plan was to consolidate 24 parcels into two lots, with a mixed-use project on 6.23 acres and the balance of 1.98 acres as an open space lot. Most of the site was covered by a specific plan adopted in 2008, the balance noted as a Significant Ecological Area. The City Council approved the project based upon a negative declaration following an appeal from the planning commission approval. The trial court ruled against the lead agency and developer (Gelfand) based upon CEQA claims and violation of the City’s oak tree ordinance. The Court of Appeal in a very detailed decision covering several substantive and procedural issues, affirmed the trial court’s judgment.

Tribal Cultural Resources. In prior studies, a portion of the project site had been identified as a significant heritage resource, and prior consultants believed that the site met the requirements for inclusion in the California Register of Historic Resources. The negative declaration included three mitigation measures to reduce impacts to less-than-significant levels: (i) CS-CR-1 (monitoring during construction with an action plan to be developed based upon resources which are discovered), (ii) CS-CR-2 (notification steps if human remains discovered), and (iii) CS-CR-3 (excavation program if the site cannot be avoided). On appeal, the issues were (1) whether the City properly consulted with the Tribe with respect to tribal cultural resources (“TCRs”), and (2) the sufficiency of CS-CR-3. (The appellate decision does not address the consultation issue any further than to note that there had been exhaustion of administrative remedies.)

As to the merits of the mitigation measures, the appellate court faulted the City because (1) the extent of the resource site had never been established, (2) the response plan if resources were discovered was improperly deferred and was not tied to a performance standard, and (3) there was competent evidence of a fair argument by an expert that the project would destroy the cultural resource. In response to the same expert’s conclusion that the data recovery program would be expensive, the Court ventured into unchartered waters concluding that the negative declaration failed to assess the feasibility of the data recovery program required as part of Mitigation Measure CS-CR-3. (In this author’s opinion, this evaluation is not required.) All of these facts undermined the conclusion that impacts would be mitigated to a less than significant level.

Sensitive Plant Species. The negative declaration included mitigation for impacts on sensitive plant species. CS-Bio-1 required surveys for two species in advance of grading and replanting requirements. The appellate court concluded that there was substantial evidence of a fair argument of potential impacts because (1) a letter from California Department of Fish and Wildlife (“CDFW”) indicated that the studies relied upon were “outdated,” and (2) the most recent study was during a drought period, and CDFW recommended additional studies. The appellate court concluded that there was no substantial evidence that the additional studies could not have been performed. Additionally, CDFW also questioned the success of restoration planting for the two species, and a previous study noted that most of the attempts to re-establish the plants had failed. The Court also concluded that there was improper deferral as there was no standard identified to determine if avoidance was infeasible and that there was no detail about what the maintenance plan actions would entail.

As to a third plant, a special status species, the appellate court also found that the administrative record contained sufficient evidence to support a fair argument that mitigation through onsite preservation or offsite restoration may not succeed, and therefore there may be a significant impact.

CS-Bio-2 dealt with the location of the key plants in areas of firebreaks. However, the mitigation strategy was only crafted to address plant protection initially during construction, and not long term. The CDFW letter expressed concern for the disruption of the plant species (although not in very emphatic terms) and this letter was sufficient to provide the required evidence in support of a fair argument.

Oaks. The site included a number of oak trees and scrub oak habitat, and the project would require significant oak and habitat removal. The appellate court concluded that the mitigation measures were insufficient, and that there was substantial evidence of a fair argument as to potential impacts. As to the oaks retained on site, there was testimony that site grading could have an adverse effect on the subsurface water flow to the oaks, jeopardizing the trees according to the appellant’s consultant, a point also confirmed by the City’s own consultant. Additionally, there was substantial evidence of a fair argument that replanting, as one of the mitigation options, had not been demonstrated as successful in recreating oak woodlands. Finally, allowed mitigation included payment into an in-lieu fund. The Court rejected this mitigation option as the negative declaration did not specify the fees to be paid, the number of trees to be planted offsite or any analysis of the feasibility of an offsite mitigation program. (It appears that the City’s fee program had not gone through its own CEQA review.)

Exhaustion of Administrative Remedies. On appeal, the City and developer vigorously argued that the issues raised in court had not been raised during the administrative proceeding, leading to a defense of failure to exhaust administrative remedies. This is a fact intense inquiry, but for each argument, the Court of Appeal found record of sufficient objections during the project review process to satisfy the exhaustion requirement.

Standing. On appeal, the City and developer argued that there was no evidence that the petitioner, or a member of the organization had objected to the project, and that the amended pleading which added California Native Plant Society as a petitioner occurred after the expiration of the statute of limitations. Thus, argued the City/developer, the case should be dismissed. However, this defense was not raised at the trial court, but only included in the developer’s reply brief. In these circumstances, the argument was considered to be waived.

Attorney’s Fees (Code of Civil Procedure §1021.5). The trial court awarded the opponents $142,148 in fees and costs (the opponents sought nearly $340,000) and allocated one half of the liability to the City and the balance to the developer (personally) and the partnership, jointly and severally. On appeal, the appellants argued that the petitioners were not entitled to any award on the basis that a copy of the petition had not been timely served on the California Attorney General. (See Public Resources Code §21167.7.)  A prior decision had reached that conclusion. (Schwartz v. City of Rosemead (1984) 155 Cal.App.3d 547.) However, this court found the facts to be distinguishable (in Schwartz, the service was not accomplished until right before the hearing on the merits. Here, the service was well in advance of the court hearing, leaving the Attorney General ample time to participate in the litigation.)

The Court of Appeal also affirmed the developer’s personal liability. The developer, Gelfand, was an officer of the corporation which served as the general partner in the limited partnership. Gelfand had been listed as the applicant in the notice of determination as did the resolutions of approval. Additionally, there was evidence that Gelfand had more of an interest in the property than just serving as a corporate officer, supporting the conclusion that Gelfand had a personal interest in the project and outcome and that he was holding himself out as “a property owner and/or project applicant.” In these circumstances, the trial court did not err in finding Gelfand and the corporation’s general partner as jointly and severally liable for one half of the award. (Obviously, applicants would do well to follow more disciplined communication practices when communicating with the City or County as part of the application process.)

D.    Environmental Impact Reports

Golden Door Properties v. County of San Diego (2020) 50 Cal.App.5th 467.

In the third round before the Fourth District Court of Appeal, the court again set aside the County of San Diego’s adoption of its Climate Action Plan and the County’s certification of a supplemental environmental impact report (“SEIR”) on both land use and CEQA grounds, largely the result of a flawed mitigation measure designed to allow for the purchase of carbon offset credits for GHG emissions for General Plan Amendment (“GPA”) projects—M-GHG-1. The Court of Appeal addressed several CEQA-related issues and found as follows:

M-GHG-1.  The mitigation measure contained unenforceable performance standards and improperly deferred mitigation to the County Director of Planning & Development Services. The court noted that although the measure required carbon offsets to be purchased from CARB-approved registries, or to otherwise meet the Cap-and-Trade program’s statutory requirements, it failed to require the carbon offsets to be in compliance with CARB’s offset protocols. As a result, the failure to require compliance with the protocols meant the offsets could not be assumed to be in compliance with AB 32 and could allow the purchase of offsets anywhere in the world, including countries that do not have the same monitoring and reporting requirements as CARB requires. Regarding improper deferral to the Director, the court reasoned that the measure failed to provide objective standards upon which the Director could determine whether the proposed offsets were in compliance and, thus, left the determination up to the Director’s subjective discretion.

Cumulative Analysis.  The court held that the County’s SEIR was required to consider the cumulative effects of certain projects that were under consideration by the County at the time the SEIR was being prepared. The County had argued this was not required because (i) the projects would be required to comply with M-GHG-1 which addressed GHG emissions, and (ii) the related impacts, such as air quality and VMT, were speculative because the projects were too early in their respective processing stages and subject to change. The court reasoned that these projects were sufficiently detailed, including their type, general scope, and location to make reasonable assumptions for the purpose of a cumulative analysis. Thus, it held that the County was required to account for other in-county impacts. It further noted that this obligation was only heightened by the fact that M-GHG-1 could authorize offsets to be purchased outside the County meaning some of the related local impacts (i.e. air quality, VMT, etc.) could go unmitigated by a GHG offset program.

Consistency with Regional Transportation Plan.  As a result of the flaws identified in M-GHG-1, the court also held that the SEIR’s finding of consistency with the County’s Regional Transportation Plan (“RTP”) was not supported by substantial evidence because the measure’s failure to ensure the full mitigation of GHG impacts from future GPAs meant that the SEIR’s finding of consistency that relied on the net zero emissions as a result of M-GHG-1 was unsubstantiated.

Range of Alternatives.  The court held that the SEIR failed to analyze a reasonable range of alternatives. It reasoned that the County’s rejection of petitioner’s proposed smart-growth alternative which was focused on reducing VMT was improper, because the SEIR’s range did not include an alternative focused on reducing VMT or transportation-related GHG emissions, which is one of the largest sources of GHG emissions impacts.

Responses to Comments.  The court held that certain responses to comments on the Draft SEIR were adequate. It found that the subject responses directly addressed the question posed in the comments, relied on factual assertions, were not simply conclusory statements, and explained the disagreement when it addressed the objections in the comment. The court also reiterated that no response was necessary when a comment is nothing more than an “exhortation to comply with the law.”

Communities for a Better Environment v. South Coast AQMD (2020) 47 Cal.App.5th 588.

Tesoro, a major operator in the fuel industry now known as Andeavor, sought approval for its Los Angeles Refinery Integration and Compliance Project (the “Project”). The controversy over the Project centered on the means of reducing the pollutant emissions of the heater unit at the Wilmington facility. Tesoro sought to revise the permit to: (1) impose a new air pollution limitation that assumed the heater would never be operated above the 252 heat rate, and (2) raise the thermal operating limit to coincide with the heater’s existing heating capability. This change would allow Tesoro to either process a heavier blend of crude or increase its throughput by 6,000 barrels per day, but not both.

After the South Coast Air Quality Management District (the “District”) certified the EIR and approved the permit, Communities for a Better Environment (“CBE”) filed suit, arguing the EIR was inadequate in four respects: (1) the EIR used the wrong baseline to evaluate the impacts of the Project; (2) the District failed to obtain sufficient information about the pre- and post-project crude oil composition to explain the implications on pollutant emissions; (3) the EIR included no explanation of how the “6,000 barrel” figure was calculated; and (4) the EIR failed to disclose the existing volume of crude oil processed at the facility, nor its unused capacity. The trial court rejected the claims and CBE appealed. The Second District Court of Appeal rejected each of the four claims raised by CBE and affirmed the trial court decision:

  • The court held that the peak baseline selected by the District was proper, rejecting the assertion that the District should have used an “average-value” baseline. It reasoned that the District’s selection, which focused on the impact of peak emissions on the most vulnerable populations, was a rational choice that was supported by substantial evidence. The court pointed to the District’s consistency with the practice of the federal Environmental Protection Agency, and it noted that: (i) the federal and state regulatory purposes were in sync—to protect public health and welfare; (ii) the federal use of the peak baseline was based on data of the existing conditions on the 15 worst days in the 730-day review period; (iii) while not necessarily required, the District always has the option to rely on similar federal efforts that achieve the same goals and purposes; and (iv) CBE’s claim that use of an average is “normal” for baseline ignores the fact that there is no such thing as “normal” when it comes to averages.
  • The court held that there was no need for the District to obtain detailed information on pre-project v. post-project crude oil composition, reasoning that such information was irrelevant due to the District’s reliance on the refinery’s “crude oil operating envelope” (defined as the facility’s range of acceptable blends that are within an identified range of weight and sulfur content). This was because operating with any crude that does not fit within the existing operating envelope would require substantial physical changes to other parts of the refinery equipment which were not proposed for the Project. Thus, any increased air emissions that could result from using heavier crude could only be due to the need to burn more fuel to operate the refinery’s burners, which was precisely what the EIR had analyzed.
  • The court held that CBE had forfeited its claim regarding the “6,000 barrels” calculation. It reasoned that the claim was not raised during the administrative process and, thus, CBE failed to exhaust its administrative remedies. The court noted that throughout the 1,716 pages of comments provided by CBE and another law firm, the only comment identified by CBE in the record that discussed an increase of 6,000 barrels per day did not raise questions about how the 6,000 figure was calculated; rather, it broadly focused on purported inconsistencies between post-Project capacity and information submitted to the Securities and Exchange Commission on the refinery’s capacity. This, the court held, was insufficient to allow CBE to rely on a broadly applicable comment to support a much more specific claim, even though it could arguably be encompassed in that broader comment.
  • Applying the abuse of discretion standard, the court held that the District did not have an obligation to disclose either the existing volume of crude oil processing or the refinery’s unused capacity. CBE had argued that the existing volume information was necessary to verify that the “actual post-project increase in capacity would not exceed the 6,000 barrels per day” assumption. But the court rejected this argument, reasoning that the “6,000 barrels” figure was adequately supported by the EIR’s analysis of the “crude oil operating envelope” which noted that any increase in overall refinery output would require other physical changes to be made to the refinery. As for the unused capacity data, the court rejected the claim as nothing more that “a variant of [CBE’s] preceding [existing volume of crude oil processing] argument.” Furthermore, the court concluded that the data was not needed, because the EIR’s analysis was already otherwise supported by substantial evidence.

Environmental Council of Sacramento v. County of Sacramento (2020) 45 Cal.App.5th 1020.

The County of Sacramento approved a master planned community, a feature of which was a proposed university. Opponents filed a CEQA challenge arguing: (1) the uncertainty over whether the university would be constructed invalidated the project description and impact analyses for traffic, air quality and climate change; (2) the project was inconsistent with the local Sustainable Communities Strategy; and (3) the agency’s failure to adopt feasible mitigation measures. The trial court and Court of Appeal upheld the master plan approval, addressing several issues:

Project Description.  The appellants argued that uncertainty regarding the university resulted in an improper project description. The original development application reflected a California State University as the future education facility, but the Board of Trustees withdrew. The project was approved without an educational commitment. The project was conditioned to freeze the university campus site for 30 years, and the developer was required to fund a university escrow account. The administrative proceedings included communications speaking to the need for additional educational facilities and the desirability of this location for this purpose. Based upon these facts, the Court held that it was not unreasonable for the County to include the university as part of the project description. Stated another way, it was not reasonably foreseeable that a substitute land use would occur in lieu of the university, and an EIR is only required to evaluate reasonably foreseeable activities. Thus, the opponents failed to present “credible and substantial evidence” that the university was an illusory land use.

Air Quality.  The appellants made a related argument that as the university was illusory, certain impact analyses and conclusions were necessarily erroneous. Regarding air quality, the mitigation measures had been revised to achieve the same air quality mitigation levels even in the event of a change in land use for the university, thus there was no substantial increase in impact levels (and no recirculation required).  Moreover, the project impact was already determined to significantly exceed the threshold of significance levels that a reduction in mitigation would not ultimately lead to a substantial increase in severity of the impact. Finally, the Court noted that in any case the resultant reduction in the level of mitigation is not equivalent to an increase in impacts for recirculation purposes.

Climate Change.  As with air quality, the planning documents were amended to carry forward the metric tons per capita limit for GHG emissions, with or without the university.  Thus, the environmental document remained valid even in the absence of the university component.

Traffic.  Appellants also challenged the traffic analysis in the event the university was not developed.  However, the Court held that this was adequately addressed in the FEIR as a response to comment which noted that non-automotive trips associated with the university had only limited effect on overall mode share and that elimination of the university would reduce daily trips by approximately 9,000.

Sustainable Community Strategies.  The appellate court rejected the inconsistency argument on the basis that appellants failed to exhaust administrative remedies and nothing in SB 375 required consistency review as part of the CEQA process.

Feasible Mitigation Measures.  Appellants argued that phasing the project would be a feasible mitigation measure. This was interpreted by the trial court as not building some, or all of the project until a university was built. The Board had adopted findings that suggested mitigation measures not incorporated into the project were rejected in part because the measures would interfere with attaining the economic, social and other benefits of the project which the “Board finds outweighs the unmitigated impacts of the Project.” The appellate court concluded that the appellants had failed to meet their burden of demonstration the feasibility of the phasing mitigation measure.

King & Gardiner Farms, LLC v. County of Kern (2020) 45 Cal.App.5th 814.

In a long and detailed opinion from the Fifth District Court of Appeal, the appellate court considered a multitude of CEQA claims over the County’s environmental impact report adoption in support of an ordinance establishing streamlined processing procedures for eligible oil and gas exploration and production activities in Kern County. The trial court ruled in favor of petitioners, finding deficiencies in the EIR related to agricultural impacts and impacts of road paving as mitigation for dust and air quality. Plaintiffs appealed.

The ordinance had already spawned a separate bifurcated decision on land use claims alleging the ordinance violated the equal protection and due process clauses of the California and U.S. Constitutions. The decision rejecting those challenges was issued in November 2019 in Vaquero Energy, Inc. v. County of Kern (2019) 42 Cal.App.5th 312 (See p. 44 of CEQA/Land Use Update). While only “CERTIFIED FOR PARTIAL PUBLICATION,” the published portion of the King & Gardiner Farms decision still addressed numerous topics that CEQA practitioners should consider when preparing EIRs, many of which could have broad applicability. The most noteworthy holdings addressed (1) conservation easements as agricultural mitigation; and (2) the evidence required to support the use of mitigation that requires an action to be taken “to the extent feasible.” As to the former, the Court concluded that the less than significant impact conclusion for the loss of agricultural land was unsupported, reasoning that conservation easements do not actually reduce the amount of agricultural land lost due to the project. As for the latter, the Court found that “to the extent feasible” was more of a goal statement than a commitment to mitigation and that agencies have a duty to demonstrate the mitigation will have at least some reduction of the impact to be deemed mitigation. The Court explained that the agency’s finding that the mitigation “‘could’ [reduce water supply impacts] suggests the possibility of reductions without eliminating the possibility there might not be any reductions.”

E.     Subsequent Environmental Review

Martis Camp Community Association v. County of Placer (2020) 53 Cal.App.5th 569.

Petitioners challenged the County’s decision to abandon a roadway connecting two residential subdivisions, the Martis Camp project (“Martis Camp”) and the Retreat at NorthStar project (“Retreat”), near Lake Tahoe in eastern Placer County on several claims, including the California Environmental Quality Act (“CEQA”). The road was originally intended to serve as access for emergency vehicles and transit and was described as such in both EIRs for the two projects.  Over time the road was frequently used by Martis Camp residents as a convenient shortcut to the NorthStar Village area through Retreat. To comply with CEQA, the County relied on an addendum to a previously certified environmental impact report for Martis Camp (“Martis Camp EIR”). The petitioners argued that the County: (1) use of an addendum to the Martis Camp EIR was improper; (2) used the wrong baseline to evaluate the impacts of the abandonment; and (3) failed to prepare a subsequent or supplemental EIR. The trial court denied the CEQA petition, and petitioners appealed.

The appellate court reversed. The County argued the Martis Camp EIR was the most appropriate document to rely on because the effects of the abandonment would be focused on changed traffic patterns of residents at Martis Camp and would not impact the Retreat residents. The Court agreed with petitioners that the County’s reliance on the Martis Camp EIR was improper because the abandonment of the roadway was not a modification of the Martis Camp project. It noted that an addendum is only proper to consider proposed changes to a previously approved project and EIR. Applying this standard, the Court reasoned that since there were no subsequent discretionary approvals needed to modify the Martis Camp project, the subsequent review procedures in CEQA Guidelines section 15162 were not applicable to the Martis Camp EIR. The Court further noted that the roadway was actually proposed and analyzed in the Retreat EIR and held that the County failed to evaluate whether the abandonment would require major revisions to the Retreat EIR. As a result, the Court concluded that the County abused its discretion in finding that no subsequent or supplemental EIR is required because the County relied on the wrong EIR to make that finding. As for the improper baseline claim, the Court remanded the issue to allow for the County to make its own determination of whether or not the existing use of the roadway by Martis Camp residents is a “changed circumstance” from the Retreat EIR and determine the proper CEQA review process in light of the decision. For more discussion on the road abandonment claims, see the August Real Estate Action News.

Willow Glen Trestle Conservancy v. City of San Jose (2020) 49 Cal.App.5th 127.

In a follow up case to the Friends of Willow Glen Trestle v. City of San Jose (2016) 2 Cal.App.5th 457 (“Friends”), petitioners challenged the City’s action seeking a new Streambed Alteration Agreement (“SAA”) from the Department of Fish & Wildlife (“DFW”) after the original one had expired. Petitioners challenged the City’s determination that no further CEQA analysis was required arguing that merely seeking and accepting the SAA was itself a discretionary action, because the City always “‘retain[s] discretion to reconsider or alter’ the project.” Thus, under this theory, the decision to seek another SAA was a subsequent discretionary decision to re-approve the project. Relying on the subsequent review principles set forth by the California Supreme Court in Friends of College of San Mateo Gardens v. San Mateo County Community College Dist. (2016) 1 Cal.5th 937, and CEQA Guidelines section 15162, the court held that the City’s action to seek a new SAA did not trigger new subsequent environmental review. It reasoned that petitioners’ argument was counter to the public policy of favoring finality and efficiency that is embodied in the CEQA Guidelines. (Id. §15162(c) [“Information appearing after an approval does not require reopening of that approval.”].) And because the original approval contemplated the need for the City to acquire an SAA in order to complete the project, the court concluded that the City’s action to seek a new SAA was nothing more than “simply implementing the project that it had already approved in 2014.” (emphasis in original.)

Save Berkeley’s Neighborhoods v. Regents of the University of California (2020) 51 Cal.App.5th 226.

In 2005, the University of California Regents (“UC Regents”) adopted a comprehensive, long-range development plan to guide future development and projected enrollment for the UC Berkeley campus and the related program environmental impact report (“2005 EIR”). For over a decade beginning in 2007, the UC Regents continuously approved increasing levels of projected enrollment for the UC Berkeley campus without updating the 2005 EIR, citing Public Resources Code section 21080.09 to conclude that such enrollment increases do not require additional CEQA review, absent an amendment to the long range development plan which involve changes to the physical development and land uses it proposed. The trial court sustained the UC Regent’s demurrer. The appellate court reversed. It held that the trial court misinterpreted section 21080.09 as not triggering CEQA compliance requirements for enrollment increases without concurrent changes to the development plan. It reasoned that the role of enrollment levels is inextricably linked to the physical development of the campus, and thus, enrollment increases alone must still be evaluated under CEQA as an amendment to the log range development plan.

F.     CEQA Litigation

Parkford Owners for a Better Community v. County of Placer, 2020 Cal.App. LEXIS 872.

Petitioners filed suit under CEQA and the Planning and Zoning Law challenging the County’s approval of a building permit for a new 28,240 square-foot building and associated utilities which expanded an existing self-storage facility. The storage facility was originally constructed in 1998 and was expanded two additional times in the years prior to the current dispute. Petitioners, whose suit was filed approximately four months after the permit was issued and construction was underway, sought a temporary restraining order and a preliminary injunction. The trial court denied both interim relief requests holding that because the status of project construction was well underway and substantial progress had already been made, petitioners could not establish the necessary “irreparable harm,” or that the “balance of interim harm” sufficiently favored petitioners, to issue a TRO, or an injunction, respectively. The parties then moved to the trial on the merits where the trial court held that (1) the County did not violate CEQA because the building permit was ministerial; and (2) the Planning and Zoning Law claim was time-barred. Petitioners appealed.

On appeal, the County argued that petitioners’ claims were now moot, given that the expansion project building was now fully constructed. The Third District Court of Appeal agreed, holding that the court could not grant petitioners any effectual relief and dismissed the appeal. It reasoned that completion of a challenged project normally ends any actual controversy over an approving resolution or an EIR, absent indications that the real parties in interest acted “in bad faith or in an attempt to evade the requirements of CEQA or the Planning and Zoning Law.” Here, the Court noted that construction commenced and was substantially underway months before petitioners ever filed the litigation or the requests for preliminary relief, distinguishing the present case from Woodward Park Homeowners Association v. Garreks, Inc. (2000) 77 Cal.App.4th 880, where “the developer ‘proceeded with construction and completion of the project after [the homeowners association] filed its mandamus petition’ and ‘despite the trial court’s order mandating the preparation of an EIR….’”

Golden Door Properties, LLC v. Superior Court (2020) 53 Cal.App.5th 733.

In Golden Door Properties, LLC v. Superior Court, the Fourth Appellate District addressed several key issues involving the scope of a CEQA record of proceedings, including the question of what is the obligation of a lead agency to retain emails, and possibly even internal notes and other non-electronic documentation, which are otherwise routinely deleted or discarded pursuant to agency policy or common practice.

The litigation backdrop to this decision is equivalent to the United States involvement in Afghanistan: It is a conflict with no apparent ending in sight. The petitioner (“Golden Door”) is a resort property located in San Diego County that vigorously opposed the potential development of nearby property. This conflict generated Golden Door litigation against the water district, a Public Records Act (“PRA”) lawsuit against the County, and a separate CEQA lawsuit against the County following project approval. The combined litigation involved extensive discovery disputes in the trial court, multiple writs filed with the Court of Appeal and one to the California Supreme Court. The general plan amendment, which was part of the project approval, was the subject of a referendum and was defeated by the voters.

The heart of this most recent decision involved the consequences of the County’s policy of routinely deleting emails after 60 days. This issue presented itself in both the PRA litigation and the CEQA challenge to the project approval. Petitioner elected to prepare the record of proceedings in the CEQA challenge but was provided only a limited number of emails. The County advised the petitioners of its policy providing for automatic deletion of emails after 60 days, a practice then challenged by the petitioners. The appellate decision is lengthy at 50-plus pages and provides an extensive discussion of the various discovery disputes (involving not only the County, but the EIR consultants as well) and the litigation. The key holdings can be distilled down to the following:

1. The County’s policy of routinely deleting emails conflicted with CEQA’s definition of the record of proceedings (Public Resources Code §21167.6). Although CEQA contains no express requirement that emails be retained, the Court relied on Section 21167.6, subdivision (e)(7) (“All written evidence or correspondence submitted to, or transferred from, the respondent public agency with respect to compliance with this division or with respect to the project”), to conclude that the lead agency was obligated to retain emails as official records.

2. The trial court utilized a discovery referee who ultimately sided with the County on many of the discovery disputes. The referee erroneously considered the petitioners’ demands for documents as requests for extra record evidence and this formed a basis for the referee ruling for the County. In fact, the petitioners’ discovery efforts concerning emails and other materials was a dispute over obtaining a complete record of proceedings and should not have been viewed as extra record evidence as was considered in Western States Petroleum Association v. Superior Court (1995) 9 Cal.4th 559.

3. The County violated its own policy on record retention. In interpreting the County code, the appellate court concluded that because CEQA considers emails as documents to be retained, these emails became records required by law to be kept under the County’s own record retention rules.

4. The Civil Discovery Act applies in CEQA cases. [Note: This opens the door for petitioners to subpoena relevant documents from the lead agency, other agencies, and agency consultants. To the extent that the applicant has communicated with agencies, those communications may be relevant to the CEQA litigation and may be subject to subpoena.]

5. The cost of email retention is immaterial. The County argued that it would cost $76,000 per month to store the emails. While the appellate court noted the cost, it did not alter the court’s position as to the obligation of the agency to preserve emails. The court noted that emails not relevant to the project or with the agency’s compliance with CEQA could be deleted. [Note: This puts the lead agency in the unenviable and unworkable position of screening the content of every email before deleting, risking an accidental deletion. In these authors’ assessment, the agency would be better off to save all emails than to spend the time, money, and risk of parsing out some emails.]

6. In its efforts to create the record of proceedings, the petitioners could subpoena the business records of the consultants hired by the County in an effort to recreate the emails and documents deleted by the County.

7. Because of the ongoing multiple cases filed against the project, the developer and County could enter into an agreement permitting confidential document exchange through respective legal counsel. Absent that fact pattern, the appellate court concurred in the decision of Citizens for Ceres v. Superior Court (2013) 217 Cal.App.4th 889, holding that there is no legal basis during application processing for a common interest exemption from disclosure.

8. The referee improperly upheld the non-disclosure of 1,900 documents based upon the preliminary draft exemption and the deliberative process exemption. While that might have been an appropriate basis to not disclose, the record before the referee was insufficient. The privilege log must contain “reasonably specific detail.” The County’s supporting declaration lacked sufficient information and was too broadly framed to support the non-disclosure. [Note: The court did not directly address other non-email documents such as staff notes, sticky notes, or even fax confirmations, some of which may benefit from these exemptions. It did, however, affirm a broad principle that only documents “that do not provide insight into the project or the agency’s CEQA compliance with respect to the project” can be discarded. This raises the prospect that these other types of written documents could also come under the same scrutiny and suggests it could be prudent to hold on to these documents as well, at least until the record has been agreed to by the parties and certified.]

Commentary: The practical effect of this decision is to make CEQA processing and litigation more difficult and expensive for all concerned. For major projects we can look forward to the time and expense of locating, vetting, and indexing even more documents never to be cited in any brief or legal argument, hardly a value-added exercise. Unfortunately, as the court notes in its holding, the consequences for failing to secure these records can be substantial, as the court has the power to rule in favor of petitioners and vacate project approvals for that reason alone. It is worth noting that this is not a problem caused by the courts, but the failure of the Legislature to provide meaningful bookends to CEQA litigation.

Coalition for an Equitable Westlake/MacArthur Park v. City of Los Angeles (2020) 47 Cal.App.5th 368.

On March 3, 2017, the Director of Planning, serving as the “advisory agency” pursuant to the Subdivision Map Act, approved a negative declaration and vesting tentative map for a mixed use project consisting of a 220 room hotel, 41 story residential tower and a 70,000 square foot learning, cultural and performing arts center. The Director’s decision included notice of a 10-day appeal period.  On March 15th, the City filed a Notice of Determination (“NOD”). Seven months later, the Planning Commission approved conditional use permits and other related project approvals, determining that the project had been analyzed in the previously approved negative declaration for the vesting tentative map. Tenants in an existing building on the project site filed appeals. On appeal, the City Council denied the appeals and approved general plan amendments associated with the project. Project opponents then filed a petition for writ of mandate, challenging the City’s approval of the negative declaration. The City and developer filed a demurrer asserting that the statute of limitations had expired following the filing of the Notice of Determination in March. The trial court sustained the demurrer without leave to amend, concluding the litigation. The project opponents appealed.

The Court of Appeal affirmed the dismissal. The appellate court recognized that either of  two procedural errors would preclude the running of the statute of limitations and allow the case to proceed: (1) the filing of an NOD which contains erroneous information (e.g. approval date)(Sierra Club v. City of Orange (2008) 163 Cal.App.4th 523, 532); or (2) an NOD filed before the decisionmaking body approves the project (County of Amador v. El Dorado County Water Agency (1999) 76 Cal.App.4th 931, 963).  In this case, the appellate court determined that the March NOD “included an accurate identification and description of the Project” and detailed findings and information regarding the project.  There was no debate that the NOD was filed after the approval of the tract map.  Although the opponents asserted procedural errors (e.g. was the Director authorized to approve the CEQA document) with the actions of the Director, those claims were part of the CEQA approval covered by the original NOD.

Canyon Crest Conservancy v. County of Los Angeles (2020) 46 Cal.App.5th 398.

A non-profit organization petitioner, established by the immediate neighbors to the project site, filed suit challenging the County’s decision approving a minor conditional use permit and an oak tree permit for development on a steep hillside and the removal of a protected coastal oak tree to allow the development of a 1,436 square foot single family home on an undeveloped 1-acre lot in Los Angeles County. After the trial court granted a stay of the permit approvals, the project proponent requested the County vacate the approvals, stating that he could not afford the litigation. The County complied, the case was dismissed, and the petitioner filed a motion for attorney fees pursuant to Code of Civil Procedure section 1021.5. The trial court denied the motion and petitioner appealed.

The appellate court affirmed. Applying the abuse of discretion standard of review, it held that petitioner failed to establish two of the prongs necessary to support an award of attorney fees, including (1) the enforcement of an important right affecting the public interest; or (2) conferring a significant benefit on the general public or a large class of persons. On the first, the Court reasoned that petitioner had not actually achieved the goal of additional environmental review as the stay was not based upon the merits of the case, and there was no evidence that the County would do anything differently if the applicant or anyone else reapplied. As for the second, it reasoned that although the enforcement of a statutory obligation always confers a benefit on the public, there was no significant benefit to the public because the project only involved a small home, there was no evidence that the county would actually change any of its practices, and there was no evidence that the lawsuit would lead to additional opportunities for public input which were lacking in the disputed approval process.

 

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.

Welcome to Abbott & Kindermann, Inc.’s September Environmental Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020.

PREVIOUS MONTH’S UPDATE

To read the August 2020 Environmental Action News post, click here:

https://blog.aklandlaw.com/2020/08/uncategorized/august-environmental-action-news/ 

SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:

County of Butte v. Department of Water Resources, S258574. (C071785; 39 Cal.App.5th 708; Yolo County Superior Court; CVCV091258.) Petition for review after the Court of Appeal dismissed an appeal in an action for writ of administrative mandate.  This case presents the following issues: (1) To what extent does the Federal Power Act (16 U.S.C. § 791a et seq.) preempt application of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) when the state is acting on its own behalf and exercising its discretion in deciding to pursue licensing for a hydroelectric dam project?  (2) Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act in order to comply with the federal water quality certification under the federal Clean Water Act?

UPDATE

 

 WATER QUALITY

  1. Alpine County v. South Tahoe Public Utility District, 2020 U.S. Dist. LEXIS 176018 (E.D. CA. September 24, 2020).

Plaintiff Alpine County (“County”) sued federal defendants and South Tahoe Public Utility District (“STPUD”) for violations of the Clean Water Act and California common law resulting from a continued transportation of sewage waste into Alpine County without making annual contractual payments to the County. The County claimed that STPUD violated the CWA and that Defendants could not comply with the guidelines of the CWA without a contract between the County and Defendants. The lack of an agreement thus led to violations of the CWA’s discharge requirements. The County’s complaint further alleged that because Lake Tahoe required sewage mitigation to meet statewide water quality standards all Defendants were required to seek various approvals and comply with guidance outlined by the EPA. The court was unconvinced by either allegation. The court granted STPUD’s motion to dismiss the case specifically because the County failed to allege any violation of the CWA. At oral argument on the motion to dismiss, the County’s counsel asked the Court whether they could amend their pleading to allege an entirely different federal law, the Tahoe Regional Planning Compact, but failed to include the Compact in its pleading or reference it prior to oral argument. The court further held that state court is likely a better venue for the contractual issues under California common law. The court concluded by stating that because the court dismissed the County’s only federal law claim, the court lacked jurisdiction for further recourse in federal court. The court dismissed the suit in its entirety.

AIR QUALITY AND CLIMATE CHANGE

  1. United States v. California, 2020 U.S. Dist. LEXIS 126504 (E.D. CA. July 17, 2020).

In October 2019, the United States government sought declaratory and injunctive relief against California, Quebec and WCI, Inc., for violations of the Treaty Clause, Compact Clause, and Foreign Commerce Clause of the U.S. Constitution resulting from the partnership between each entity to trade Cap-and-Trade credits between each entity. Plaintiff and defendants filed cross summary judgment motions for the Treaty and Compact Clause claims. Plaintiffs won summary judgment on those claims and the case proceeded to second cross-motions for summary judgment on the Foreign Commerce Clause claim. The court held that the United States failed to identity a clear and express foreign policy that directly conflicted with California’s Cap-and-Trade program. The court further stated that while the United States government has a unique role in communicating with foreign governments that could be jeopardized if individual states usurp the authority of the federal government, the court failed to see where California’s actions substantially compromised foreign relations or the operation of California’s Cap-and-Trade program. The court granted summary judgment for California and denied summary judgment motions for the United States. On September 16, 2020, the United States appealed this decision to the Ninth Circuit. The AK blog contains a detailed blog about the court’s summary judgment ruling on the Treat and Compact Clause claims.

  1. Riverside County Transportation Comm. v. Southern California Gas Co. (2020) 53 Cal.App.5th 1003, certified for partial publication.

The 4th District Court of Appeal affirmed PUC’s authority to demand a company to relocate its pipeline operations at the cost of the company. The court further found that after the PUC terminates a company’s licenses for pipeline operation, the company can be held liable for trespass if operations continue. Plaintiff (Riverside County Transportation Commission) pursued plans to extend Metrolink commuter rail across defendant’s (Southern California Gas Company) pipelines. Plaintiff terminated the licenses held by defendant to operate its pipelines and demanded that defendant move the pipelines at defendant’s own expense. Defendant agreed to move the pipelines, but at the expense of plaintiff. In the trial court, plaintiff won a determination that defendant was obligated to move pipelines at its own expense, but failed to win its claim that defendant had been trespassing after plaintiff terminated the pipeline licenses.

On appeal, the Court of Appeal affirmed the trial court’s holding that plaintiff had the authority to require defendants to relocate its pipelines at their expense. The Court reasoned that the licenses contained specific language granting plaintiff the authority to terminate the lease and that expenses should be left to defendant. The Court concluded that plaintiff was entitled to enforce the contract for the pipelines entered into by both parties. The Court reversed the trespass ruling by the trial court holding that defendant could not apply any alternative easement theories to circumvent its trespass on plaintiff’s property once plaintiff terminated the licenses allowing the pipelines in the public right-of-way. The Court held that defendant needed the permission of the public entity to maintain operations and failed to do so. In short, the Court held that defendant trespassed on plaintiff’s property when they failed to abandon operations after plaintiff terminated the operational licenses. The Court reiterated that public easement cases were frequent, and the publication of this case was intended to provide clear instruction on the easement rights of public agencies and private licensures.

 RENEWABLE ENERGY

  1. Governor’s Executive Order Phases Out Sale Of Gas Consuming Vehicles By 2035.

Governor Newsom signed an executive order in late September phasing out the sale of all gasoline powered personal vehicles by 2035 in an effort to encourage the purchase of electric cars, or other zero emission vehicle technologies, and reduce greenhouse gases in the state. The order would apply only to new vehicles in-state and would not apply to used-cars or cars sold in out-of-state markets. In a public press conference where the Governor signed the executive order, he expressed public support for implementing a ban on hydraulic fracturing in the state, and further stated that this executive order was a direct result of the state’s increased prevalence of wildfires. California has had increasing record-breaking wildfires for the past three fires seasons. Transportation is the state’s largest source of collective greenhouse gas emissions and several state agencies have recognized that in order to meet the state’s mandatory emissions reduction goals and RPS compliance by 2030, there needs to be statewide transitions in the transportation sector. Earlier in the summer, AK published an exhaustive blog speaking directly to the modifications to the transportation and land use development sectors resulting from the state’s RPS benchmarks. Although California has seen an increase in electric vehicle procurement, the state’s EV purchases account for only 8% of the market. Many opposition groups submitted public comments and expressed their concerns for the Governor’s order. It is expected that litigation challenging the Governor’s executive order will be filed shortly. As part of the order, the California Air Resources Board was directed to develop regulations to mandate that 100 percent of new in-state personal vehicle purchases are zero-emission by 2035. The order further states that the Air Resources Board will develop regulations to mandate that all medium and heavy-duty vehicles need to be 100 percent zero emission vehicles by 2045 where possible. The order states that the State would join 15 other countries committed to phasing out gasoline-powered vehicles in the next 15 to 20 years.

For more information see:

https://www.gov.ca.gov/2020/09/23/governor-newsom-announces-california-will-phase-out-gasoline-powered-cars-drastically-reduce-demand-for-fossil-fuel-in-californias-fight-against-climate-change/

https://www.npr.org/2020/09/23/916209659/california-governor-signs-order-banning-sales-of-new-gasoline-cars-by-2035

https://www.msn.com/en-us/autos/news/california-to-ban-sale-of-new-gas-powered-cars-in-2035-under-newsom-order/ar-BB19m4E0

https://www.forbes.com/sites/danielcassady/2020/09/23/california-to-ban-new-gas-powered-cars-by-2035/#2b1532cf29ac 

ENDANGERED SPECIES ACT

  1. The Trump Administration Finalizes Formal Modifications To The Endangered Species Act.

The Department of the Interior finalized rules significantly weakening enforcement of the ESA in September 2019 but delayed formal implementation of the rules until 2020.  Under the new rule, U.S. Fish and Wildlife Service (“FWS”) and National Marine Fisheries Service (“NMFS”) do not need to take into consideration the effects of climate change when deciding to list a species. Further, the rules allow for an economic assessment to be conducted when determining to list a species. As part of the press release by Interior Secretary David Bernhardt, the new rules are intended to increase transparency in the listing process. The new rules went into effect in July 2020. As part of the litigation pending before the U.S. District Court for the Northern District of California, 17 states argue that the change in the rules contradicts the goals of the act and the rules fail to provide a reasonable basis for the changes made or the environmental impacts as required by federal law. Parties to this suit are currently briefing the issues as the litigation is still ongoing.  In August 2020, FWS and NMFS proposed a new definition of “habitat” for the implementation of the regulations recently finalized. The agencies are currently accepting public comments on the proposed definition. Earlier in September, FWS proposed a further modification to the regulations recently adopted by creating new protocols to designate critical habitat. The new definition excludes critical habitat designation for projects earmarked for schools, hospitals, and federal lands. The agency is accepting public comment until October 8, 2020 on the proposed rule.

For more information see:

https://eelp.law.harvard.edu/2018/07/endangered-species-act-regulations/

  1. The Joshua Tree Receives Endangered Species Protection As A Formal Vote Approves The Species For The Candidate List.

California Department of Fish and Wildlife formally places the Joshua Tree on the candidates list under the California Endangered Species Act. The Department recommended a listing in April 2020 triggering preliminary protections and a species evaluation. There are two species of Joshua Tree and the species proposed for listing are the western Joshua Tree. U.S. Fish and Wildlife denied a petition to list the Joshua Tree under the U.S. Endangered Species Act. The state listing recommendation collected public comments from April to early June. The Fish and Game Commission provided its recommendation to the Department of Fish and Wildlife and a vote occurred in July 2020. Once the recommendation was accepted, the Joshua Tree was placed on the candidate list for a year to determine the species status and decide whether listing is appropriate. After the one-year period, a second recommendation is made, and a vote occurs to determine whether final protection is necessary. The Joshua Tree and Joshua Tree National Park generate roughly $150 million in revenue for communities living around or indirectly supported by the health of the Joshua Tree species. Public comments on the listing recommendation largely addressed concerns from the surrounding community about how listing the species would affect development in the surrounding areas when the species recovery plan and sensitive habitat zones are established. The concern over survival of the western Joshua Tree is particularly tenuous because much of the range habitat in California is on private and state land. This creates development problems for private landowners but would go a long way to support species survival and the longevity of the economy dependent upon the Joshua Tree.

For more information see:

https://www.desertsun.com/story/news/environment/2020/04/13/joshua-trees-endangered-species-listing-california/2983642001/

https://www.taftmidwaydriller.com/opinion/20200416/commentary-californias-plan-to-save-joshua-trees-is-good-for-more-than-just-u2-fans

https://syvnews.com/news/local/state-and-regional/scientists-say-joshua-trees-may-warrant-listing-as-a-threatened-species/article_edd0f043-1d25-5142-8050-bdecd6ed50ed.html

HAZARDOUS MATERIALS AND REMEDIATION

  1. City of Lincoln v. United States, 2020 U.S. Dist. LEXIS 158386 (E.D. CA. August 31, 2020).

The City of Lincoln (“City”) sued the United States Air Force (“Air Force”) for ongoing contamination of underground water resulting from the Government’s alleged continual offloading of hazardous materials and pollutants from ballistic missile testing at a landfill in the City. The action commenced when The California Regional Water Quality Control Board (“Board”) tested groundwater near the Lincoln landfill’s southern boundary and determined that the groundwater exceeded California Secondary Drinking Water Standards. The City entered into a water recovery plan with the Board to clean up the water quality in the neighboring groundwater. After hiring independent environmental consultants, the City determined that the elevated levels of contaminants were the result of the Air Force dumping untreated missile waste on the property. The City filed suit alleging six causes of action including recovery and contribution under CERCLA. The Air Force moved for summary judgment on the CERCLA claims. The court held that although the City’s evidence proving liability for contribution to the Air Force was circumstantial, there was a genuine issue of material fact that the Air Force could be liable. As such, the court denied the Air Force’s motion for summary judgment. The court further concluded that the City’s costs were recoverable under CERCLA because cleanup was necessary. The court further concluded that although the Air Force was liable for costs under CERCLA, the City also was liable for contributory costs under CERCLA.

 MINING, OIL, AND GAS

  1. Chilkat Indian Klukwan v. Bureau of Land Management, 2020 U.S.App. LEXIS 27493 (9th August 28, 2020).

The Ninth Circuit upheld the district court’s summary judgment ruling in favor of the Bureau of Land Management when the agency concluded that the development of a future mine was not connected to the current mining operations requiring further limitations under the Federal Land Policy and Management Act of 1976 (FLPMA). Appellant-Plaintiffs requested that the Ninth Circuit reverse the approval of BLM’s plans for hard rock mineral exploration on public land in southeastern Alaska. Appellants alleged that the project violated NEPA. After careful review, the Ninth Circuit upheld the determination of the circuit court holding that Appellants failed to demonstrate where BLM was required to consider environmental impacts from future development of a mine rather than linking exploration of public lands to a future mine project. The Ninth Circuit acknowledged that agencies must consider a project’s future impacts where there is a clear point of commitment between the project at issue and future impacts. However, the Court determined that BLM properly found that there was no known point of commitment to this project and the actions of the BLM were not arbitrary and capricious. As such, the Court affirmed the lower court’s holding in favor of BLM.

FOREST RESOURCES

  1. Los Padres Forestwatch v. United States Forest Services, 2020 U.S. Dist. LEXIS 151234 (E.D. CA., August 20, 2020).

In granting the U.S. Forest Service’s motion for summary judgment, the District Court for Central California held that Forest Service’s decision to approve a project for forest thinning was not arbitrary and capricious. Plaintiff, Los Padres Forestwatch contested the Forest Service’s approval of a project to thin 1,626 acres of trees in the Los Padres National Forest because plaintiff believed the project would harm California condors. Plaintiffs alleged that the project was approved without a full environmental assessment and environmental impact statement thus violating NEPA, the ESA, and National Forest Management Act. On cross motions for summary judgment the court granted summary judgment for the Forest Service. The court held that the Forest Service properly utilized a categorical exemption to an environmental assessment or environmental impact statement. The categorical exemption applies to “thinning or brush control to improve growth or to reduce fire hazard.” As such, the court found that the actions of the Forest Service were not arbitrary and capricious and granted summary judgment for the Forest Service.

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.

Welcome to Abbott & Kindermann, Inc.’s September Real Estate Law Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.

  1. PREVIOUS MONTH’S UPDATE

To read the August 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/08/articles/ak-news/august-monthly-real-estate-law-action-news/. 

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are no cases pending at the California Supreme Court at this time.

  1. UPDATE

A. TAKINGS

  1. Weiss v. People ex rel. Dept. of Transportation (2020) 9 Cal.5th 840.

The California Supreme Court denied defendants’ request to apply the laws and procedures governing Eminent Domain law into inverse condemnation claims. The defendants recognized that their defenses were grounded purely in inapplicable eminent domain laws, but asked that the Court apply eminent domain law and process to inverse condemnation because the Court has discretion to interpret and apply borrowed procedures from other bodies of law in other circumstances. Defendants argued that a similar approach could apply here, because the Legislature allowed the judicial branch to develop the application of inverse condemnation actions to various statutes and rules. The Court was unconvinced and held that the eminent domain statutes do not apply in inverse condemnation cases. It reasoned that the eminent domain statutes were narrowly construed by the Legislature and tailored specially to only eminent domain actions. It further reasoned that eminent domain has a particular set of statutory procedures that are inapplicable in inverse condemnation actions. The Court, thus, concluded that the adoption and amendment of statewide rules governing inverse condemnation statutes should be left to the Legislature or Judicial Council.  As such, it affirmed the judgment of the Court of Appeal and denied defendants’ request to import eminent domain statutory authority into inverse condemnation procedure.

  1. Bridge Aina Le’a, LLC v. State Land Use Comm’n (9th Cir. 2020) 950 F.3d 610.

In 2011, the State of Hawaii’s Land Use Commission reverted 1,060 acres on the Big Island of Hawaii from a conditional urban land use classification to the prior agricultural use classification. Plaintiff Bridge Aina Le’a, LLC, a landowner at the time of reversion, challenged the reversion’s legality and constitutionality in a state agency appeal, later filing suit in federal district court. After the trial, the jury decided that there was an unconstitutional regulatory taking of the plaintiff’s property pursuant to Lucas and Penn Central. The district court entered a judgment for the plaintiff, awarded $1 million in nominal damages, and denied the State’s renewed motion for judgment as a matter of law (“JMOL”). The state appealed the denial of the JMOL.

The Ninth Circuit held that the district court erred in denying the State’s renewed JMOL because plaintiff’s evidence did not establish a taking under Lucas or Penn Central. The conditions for the Lucas test were not met because the land retained substantial residual value in its agricultural use classification which still allowed the plaintiff to use the land in economically beneficial ways. The Court concluded that the State was entitled to judgment as a matter of law under Lucas.

Applying the Penn Central factors, the Court concluded that the jury could not reasonably find for the plaintiff. The Court held that the valuation evidence weighed strongly against a taking pursuant to the first factor which considers the extent of the economic loss suffered by the landowner as a result of the action, usually measured by diminution in market value, and rejected the plaintiff’s assertion that the disruption of a land sales agreement showed economic impact. The Commission’s reversion order did not interfere with the plaintiff’s reasonable investment backed expectations at the time of acquisition because the plaintiff had committed to build 385 housing units and had failed to complete them. Hawaii law expressly authorized the Commission to impose this condition. The Court held that plaintiff’s own evidence established a diminution in value that was too small, and the reversion did not interfere with the plaintiff’s reasonable investment-backed expectations for the land. The Court then reversed the district court’s denial of the State’s renewed JMOL motion on the Penn Central test as well.

  1. Ruiz v. County of San Diego (2020) 47 Cal.App.5th 504.

The Court of Appeal reversed the trial court’s determination that a homeowner could claim redress by inverse condemnation against a county if their private drainage system allowed for flow of public water. The Court of Appeal considered whether privately owned drainage on private property allows for homeowner remedies by inverse condemnation if the water in the private pipeline is for public use. Plaintiff/Appellee Ruiz (“Ruiz”), claimed that because the developer offered the County of San Diego (“County”) a dedicated easement to allow for public drainage in 1959 and the County turned down the easement, Ruiz could recover for water damage as a result in the pipeline leaking on Ruiz’s property. Ruiz claimed that the County’s use of the drainage system as part of the Valley drainage system constituted an acceptance of the drainage easement offered in 1959. The Court of Appeal, citing Locklin v. City of Lafayette, 7Cal.4th 327 (1994),  held that the County’s use of the Ruiz pipe did not meet the requirements for inverse condemnation since the County needed to exert minimal control and maintenance over the watercourse near the Ruiz property since the County would be liable for damage caused by streamflow. The Court of Appeal found Ruiz’s arguments unpersuasive since the County did not control continually nor own any portion of the private pipeline. The Court stated the Ruiz lacked substantial evidence to prove that the County had taken their private property for a public use. The Court reversed the award of attorney’s fees to Ruiz and held that each party should bear their own attorney’s fees on appeal.

B. GENERAL REAL ESTATE

  1. Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22.

A commercial lease set rent to increase 150 percent if the tenant stayed past a certain date. The date passed but the tenant refused to pay the increased rent. Plaintiffs, a commercial landlord (“Constellation”), filed a breach of contract action against defendants  corporations (“World Trading” and “World Tech Toys”) seeking damages for past due rent, late fees, interest, failure to maintain and repair, costs for not being able to use the premises, and holdover rent. Constellation alleged that World Tech Toys was an alter ego of World Trading. The trial court rejected the theory of alter ego liability and held the defendants liable for all damages except the holdover rent, finding it to be an unenforceable penalty. World Trading and World Tech Toys were held liable to Constellation and its successors for $27.196.74. Constellation appealed and defendants cross appealed.

The Court of Appeal reversed the judgement denying Constellation holdover rent.  The court held that the holdover rent was not an unlawful penalty.  The court affirmed the remainder of the judgment, including the trial rejection of alter ego liability. The Court of Appeal explained that holdover rent, or “a graduated rental provision”, in commercial provisions are enforceable even if the increased rent is much greater than the base. To qualify as an unenforceable penalty, defendants must prove that the provision amounted to an illegal liquidation of damages. Here, the defendants failed to show that Constellation had market power to set the rate, and the defendants could have easily avoided higher rent by leaving the premise. Therefore, the trial court should have enforced the holdover agreement.

Further, the defendants argued that the penalty could be avoided under section 1671 of the Civil Code.  However, the Court of Appeal held that section 1671 was inapplicable because the case did not involve a question of penalty or liquidated damages. While the evidence showed unity of interest and ownership, which is required to invoke the alter ego doctrine, there was insufficient evidence to prove that treating defendants as separate entities would promote injustice. The court dismissed the defendant’s cross-appeal and appeal from the order after judgement.

The dissenting Justice argued that the liquidated damages provision, which established the holdover rent at 150 percent of base rent, was an unenforceable penalty. The Dissent argued that the majority’s new test allows contracting parties to bypass tethering a liquidated damages provision to estimated anticipated loss, and instead requires a challenger to analyze each contracting party’s respective market power and persuade a court that there was enough of an imbalance between parties to invalidate the damages provision.

  1. Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33.

Plaintiffs Matthew Matson and Matson SDRE Group, LLC (“Matson”) contested the deed of trust purchased in a foreclosure auction after learning the lien was second in position with a lower fair market value than the auction price. Matson’s complaint alleged that the terms of sale were unconscionable, and they relied on a mistake of fact when purchasing the deed of trust. The trial court granted summary judgment to defendants, S.B.S. Trust Deed Network (“SBS”) stating that there was no irregularity, unfairness, or fraud during the acquisition. The trial court further reasoned that a judicial remedy was not appropriate where plaintiff failed to read through a title report to discover the value and position in the chain of title. Plaintiffs appealed.  The Court of Appeal affirmed.

The court reasoned that plaintiffs were not entitled to relief because there was no unilateral mistake allowing for a remedy since plaintiffs bore the risk of their mistake not to fully read the title report. The transaction was complete when plaintiffs accepted the final bid at auction and there was no legal effect of rejecting the title after plaintiffs learned the deed of trust was second in priority to another deed. For this reason, the court held that plaintiffs failed to produce evidence to warrant judicial remedy by rescission. Also, the court reasoned that because plaintiffs were aware of the risks, they bared through the complete title report, they were not entitled to relief.

  1. Jeppson v. Ley (2020) 44 Cal.App.5th 845.

Among one of the more colorful neighbor disputes in 2020, the Court of Appeal affirmed the trial court’s decision to deny redress to Appellant, Jeppson, since there was no issue of “public interest” involved in a neighborhood feud where appellant’s cat was killed by appellee’s dog. The Court evaluated whether Jeppson’s claims arose from protected activity and then measured the likelihood of success on each claim as part of Jeppson’s summary judgment motion. A protective activity would grant relief to plaintiff in connection with an issue within the public interest. § 425.16, subd. (e)(3). The Court evaluated six criteria outlined in Rand Resources, LLC v. City of Carson (2019) 6.Cal.5th 610; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913; Weinberg v. Feisel (2003) 110 Cal.App.4th 1122; Workman v. Colichman (2019) 33 Cal.App.5th 1039; Abuemeira v. Stephens (2016) 246 Cal.App.4th 1291; FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, to determine if the Jeppson’s claims were in fact within the “public interest.” The criteria were as follows:

  • Statements or conduct concerning a person or entity in the public eye,
  • Conduct that could directly affect a large number of people,
  • A topic of widespread public interest,
  • Whether the issues affect only those directly involved,
  • Gathering ammunition for a private controversy, and
  • Where issues are too remotely connected to the public conversation to assert the issue within the public interest.

The Court reasoned that the claims at issue between Jeppson and Ley did not meet the criteria outlined in any of the above categories, thus the Jeppson claims did not constituted issues of public interest. The Court stated, “Feuds can metastasize into the Hatfields and McCoys or the Montagues and Capulets. This tiff, though bitter, remained strictly local: a private affair and not a matter of “public interest.” The Court affirmed the trial court’s ruling in favor of Lay and awarded costs on appeal to Jeppson.

  1. Kelly v. House (2020) 47 Cal.App.5th 384, certified for partial publication.

The Court of Appeal awarded statutory attorney’s fees to Appellant for the trespass and conversion on to Appellant’s agricultural property because the damaged land resulted in loss of organic certification status and prevention of prospective buyers. Plaintiffs, the Houses, appealed the decision of the trial court on their claims for attorney’s fees against the Fosses for trespass and conversion of their property. The Court of Appeal considered whether the Fosses entering the Houses property and spraying pesticide jeopardized the fragile organic farming certification held by the Houses and whether such claims gave rise to an award of attorney’s fees for both claims. Statute Section 1021.9 provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.” The Court held that the Houses could recover attorney’s fees under the statute because the statute was intended to protect farmers from illegal trespasses to their land. Defendant claimed that the Houses could not recover under Section 1021.9 for attorney’s fees because the majority of their fees related back claims other than the trespass claims. The Court remanded the case to the trial court to determine the amount of reasonableness of the Houses attorney’s fees under Section 1021.9 as it relates to the trespass claim only.

C. COMMON INTEREST DEVELOPMENTS

1.                  Coley v. Eskaton (2020) 51 Cal.App.5th 943, certified for partial publication.

The trial court held that (i) directors of a homeowners association breached their fiduciary duties when they apportioned costs while acting under a conflict of interest, precluding the use of the best business judgement rule, and (ii) that the directors were not liable in their personal capacities.  The Court of Appeal affirmed in part, reversed in part, and remanded. Since the directors did not engage in transactions with the association, the common law standard of inherent fairness was more appropriate than the statutory standard of a just and reasonable transaction. However, requiring the directors to show that the transaction was just and reasonable was not an error because this standard closely resembles the common-law standard. It also held that the trial court erred by not finding the directors liable in their personal capacities because they breached their fiduciary duties by apportioning costs and expenses which were inconsistent with their governing duties and resulted in damages.

2.                  Aldea Dos Vientos v. CalAtlantic Group, Inc. (2020) 44 Cal.App.5th 1073.

In a construction defect case before the Court of Appeal, the Court reversed the trial court’s confirmation of the arbitrator’s award for a condominium association (‘association”). The Court of Appeal concluded that the association’s governing documents require a majority vote of members to bind arbitration, and that the arbitrator failed to obtain a vote of the association constituting an “unreasonable servitude” under the statute. As the Court reasoned, the arbitrator’s award violated the plain language of the statute. The Court reversed the trial court’s decision and awarded costs to the appellant.

D. REAL ESTATE CONTRACTS & TRANSACTIONS

  1. Texcell Inc. v. STS Hydropower Ltd., 2020 U.S. Dist. LEXIS 158192 (E.D. CA., August 31, 2020).

A federal judge granted summary judgment for defendants, two renewable energy companies, over a contract dispute on long term lease terms. The parties agreed to a long-term lease of thirty years where defendants (STS Hydropower ltd., later acquired by Eagle Creek Renewable Energy), planned to construct a hydroelectric facility. Defendants were unable to pay the costs and expenses related to operation of the facility out of revenue and considered lease termination. In 2017, the Ponderosa Wildlife destroyed the facility leaving the terms of the contract in question. Plaintiff demanded defendants rebuild the facility and continue operation of the lease and in response defendants moved to terminate the lease in writing. Plaintiffs filed suit against defendants alleging: 1) breach of contract, 2) breach of good faith and fair dealing, and 3) declaratory relief. Defendants filed a summary judgment motion on all three claims leaving the court to order the partial summary judgment.

The court granted summary judgment to defendants on the breach of contract claim. Plaintiff argued that Eagle Creek was the alter ego of STS and whatever actions were taken by STS should constitute an action taken by Eagle Creek. Plaintiff further alleged that the terms of the contract obligated STS to rebuild the facility and resume the terms of the lease after the fire. The court was unconvinced. The court held that since plaintiff failed to provide material evidence that STS was obligated to rebuild the facility and that Eagle Creek was its alter ago, summary judgment was granted in defendants favor on the breach of contract claim. On the breach of good faith and fair dealing claim, the court held that even viewing the facts in a way most favorable to the plaintiffs, the court could not find that defendants acted in bad faith by exercising their right to terminate the contract. The court granted defendants summary judgment motion on the good faith and fair dealing claim as well. Since the court could find no grounds for awarding declaratory relief to plaintiffs, the court denied plaintiff’s request for declaratory judgment.

  1. Harris v. University Village Thousand Oaks, CCRC, LLC (2020) 49 Cal.App.5th 847.

The Court of Appeal reversed a trial court decision stating that residents of a continuing care retirement community were protected under the continuing care contracts entered into by the retirement community. Residents of a retirement community appealed an arbitrator’s award denying statutory protections to elders. Defendant argued that the basic protections did not apply to the residents since the award was made in arbitration and not in litigation. The Court of Appeal reversed, holding that the plain language of Civil Code sections 1940 and 1953 applies to all continuing care contracts regardless of the stage in litigation or related court proceedings. As the Court stated, because residents paid fees to be protected by the terms of their living agreement the residents were entitled to receive the benefits of the fully executed residential contract.

The Court acknowledged that although retirement community contracts have fundamental differences from a standard residential unit contract, the protections received under both types of contract are no different. The Court reasoned that when fees are paid to confer benefits to all residents and as long as an exchange of money occurs allowing for benefits to be conferred to tenants, then the facility is obligated to honor those benefits under the landlord’s duty of care. Lastly, the Court held that the “the legislative purposes of both the landlord-tenant laws and the continuing care contract laws are best served by applying the arbitration prohibition to the housing component of continuing care contracts.” The Court remanded the case to the trial court with instructions.

  1. Moore v. Teed (2020) 48 Cal.App.5th 280.

The Court of Appeal affirmed the holding of the trial court for allowing “benefit-of-the-bargain” damages to plaintiff for all detrimental actions taken by defendant resulting from plaintiffs botched remodel. Plaintiff (“Moore”) brought suit against defendant (“Teed”) when Teed advised Moore to purchase a $4.8 million home in San Francisco with significant structural and foundation issues. Teed further agreed to act as the intermediary between the contractors restoring the home and directed Moore to pay him directly rather than the contractors. The home repairs were not made properly, and Moore paid Teed a significant amount of money before ultimately filing a complaint against Teed. At trial, an expert witness testified that the home repairs would have cost $4.477 million with at least $620,000 to be spent, specifically on the foundation. A jury found for Moore stating that Teed had fraudulently induced Moore into purchasing and restoring the home while falsely claiming repairs would only amount to $900,000. The jury granted a damages award of $2,144,434 plus $104,498 in “benefit-of-the-bargain” damages. Teed conceded to the claims against him for fraudulent inducement but appealed on the “benefit-of-the-bargain” damages.

The Court of Appeal held first that the trial court did not err in instructing the jury to award alternative damages to Moore since false misrepresentation allowed for multiple means of recovery. The Court stated, “a ‘broader’ measure of damages may be awarded than simply ‘out-of-pocket’ losses.” Second, the Court held that the “benefit-of-the-bargain” damages could be awarded in real property transactions. As the Court held, a person who was defrauded out of the financial benefit of real property can collect broader damages including “benefit-of-the-bargain” damages. Third, The Court held that the damages award was not speculative because tort damages fully compensate an injured party and the jury would have determined the same jury award regardless of using “benefit-of the-bargain” as a measure for damages. Fourth, the Court pointed out that the award was not duplicative because the jury issued a jury award significantly lower than the $3,842,160 requested by Moore. The Court affirmed the ruling of the trial court and awarded attorney fees on appeal to Moore.

  1. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337.

On appeal, the Court of Appeal reversed the lower court’s denial of Appellant, Jaman Properties 8 LLC (“Jaman”), moving papers for arbitration under the Federal Arbitration Act (“FAA”). Victrola 89, LLC (“Victrola”) brought suit Jaman in superior court alleging undisclosed and unrepaired defects in a real property transaction. Under the real estate purchase agreement between parties, Jaman moved for arbitration under the Federal Arbitration, which the trial court denied finding that the California Arbitration Act (“CAA”) controls arbitration between the parties. The Court held that the FAA preempts procedural provisions otherwise controlled by the CAA if the purchase agreement between the parties incorporates FAA on its face. The real estate purchase agreement between the parties on its face specified that the FAA would control. The Court held that Victrola’s piecemeal arguments of which sections of the CAA should control and which of the FAA should control in arbitration were unpersuasive. The Court reasoned that the lack of specificity in the contract for which claims should be arbitrated under the CAA and under the FAA is immaterial since the FAA controls over all claims by federal preemption. Lastly, the Court held that Victrola must arbitrate its claims under the FAA unless Jaman is estopped by the trial court from doing so. The Court overturned the trial court’s decision and remanded the case back to the trial court to determine whether Jaman is estopped from arbitration under the FAA.

E. EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES

  1. Riverside County Transportation Commission v. Southern California Gas Company (2020) 53 Cal.App.5th 1003, certified for partial publication.

The 4th District Court of Appeal affirmed PUC’s authority to demand company’s relocate its pipeline operations at the cost of the company. The court further found that after the PUC terminates a company’s licenses for pipeline operation, the company can be held liable for trespass if operations continue. Plaintiff (Riverside County Transportation Commission) pursued plans to extend Metrolink commuter rail in across defendant’s (Southern California Gas Company) pipelines. Plaintiff terminated the licenses held by defendant to operate its pipelines and demanded that defendant move the pipelines at defendant’s own expense. Defendant agreed to move the pipelines, but at the expense of plaintiff. In the trial court, plaintiff won a determination that defendant was obligated to move pipelines at its own expense, but failed to win its claim that defendant had been trespassing after plaintiff terminated the pipeline licenses.

On appeal, the Court of Appeal affirmed the trial court’s holding that plaintiff had the authority to require defendants to relocate its pipelines at their expense. The Court reasoned that the licenses contained specifically language granting plaintiff the authority to terminate the lease and that expenses should be left to defendant. The Court concluded that plaintiff was entitled to enforce the contract for the pipelines entered into by both parties. The Court reversed the trespass ruling by the trial court holding that defendant could not apply any alternative easement theories to circumvent its trespass on plaintiff’s property once plaintiff terminated the licenses allowing the pipelines in the public right-of-way. The Court held that defendant needed the permission of the public entity in order to maintain operations and failed to do so. In short, the Court held that defendant trespassed on plaintiff’s property when they failed to abandon operations after plaintiff terminated the operational licenses. The Court reiterated that public easement cases were frequent and the publication of this case was intended to provide clear instruction on the easement rights of public agencies and private licensures.

  1. Martis Camp Community Association v. County of Placer (2020) 53 Cal.App.5th 569.

The Court of Appeal held that the County’s decision to abandon a road while reserving rights to easements on other sections of that road was reasonable, since the road itself was unnecessary and merely a residential convenience rather than a necessity. Defendant, the County of Placer partially abandoned a public easement right for a road connecting two subdivisions. The road’s intended use was supposed to be as an emergency services road and closed off to private use. However, sometime around 2010, residents in the two subdivisions began privately using the access road leading county officials to request the County Board of Supervisors to abandon the public rights to use and retain rights to use for emergency and transit services. Plaintiffs argued that the trial court erred in denying that the County had a right to abandon a public road. Other causes of action included violations of the Brown Act, violations of CEQA when deciding to abandon the road easement, and the trial court improperly sustaining a demurrer on an inverse condemnation claim.

The Court of Appeal affirmed the trial court’s determination that the County did not violate the statutory requirement for abandoning a public road. The Court agreed with the Board of Supervisor’s determination that the road was never intended to be used as part of the public transportation network. The Court held that the actions of the County were reasonable and supported by substantial evidence because use of the road by the public was convenient but also unauthorized since the road was not planned, designed, or approved to accommodate use in the public road system. Plaintiffs further acknowledged that the County had the right to abandon the road, but that it could only abandon the road in full or approve it for complete use, not reserve some right of access to the road. The Court dismissed this argument, holding that Plaintiffs failed to point to any authority supporting their argument and the Court could not find any case law stating that the County had to abandon the entire road without reserving some easement rights. The Court further held that the County did not violate the Brown Act and dismissed the inverse condemnation claim by plaintiffs. Lastly, the Court held that plaintiffs were entitled to relief on the CEQA claims and remanded the case with instructions to order the issuance of a writ of mandate and require proper compliance with CEQA.

  1. Gamerberg v. 3000 E. 11th St., LLC (2020) 44 Cal.App.5th 424.

 The Court of Appeal reversed a trial court ruling holding that irrevocable licenses tied to a 1950 parking affidavit do not survive transfers of the property to different owners without notice. The dispute between parties arose when it became unclear who had a right to eight parking spaces on lot between two commercial business owners. Plaintiff, Gamerberg, filed a complaint in the trial court alleging that he held an irrevocable license over eight spaces in the lot based on a 1950 parking affidavit grandfathering his use of the spaces between owners. The Court examined whether the 1950 affidavit created an irrevocable license binding on subsequent purchasers who had no notice of the affidavit. The Court determined that the lack of recordation of the 1950 affidavit meant that the document did not bind subsequent purchasers who had no actual notice of the provisions in the document. Since the prior owners failed to record the parking affidavit, binding subsequent purchasers to the affidavit was irrelevant. The Court reversed the trial court’s ruling and awarded costs to 3000 E. 11st St., LLC.

  1. Madani v. Rabinowitz (2020) 45 Cal.App.5th 602.

In a suit based on claims of trespass and negligence when defendant, Rabinowitz, erected a fence on plaintiff, Madani’s, property and continually parked inoperable cars in Madani’s property, the Court of Appeal affirmed that the fence and parked cars were continuing encroachments. The Court held that since the fence and parked cars were a continuing encroachment that the statute of limitations did not apply, and the Court could review the case subject to independent review of the facts. The Court agreed with the lower court that costs to move the fence were not sufficient to warrant leaving the fence as a permanent structure. The Court noted that Rabinowitz replaced the fence in 2015 and could move the fence for a modest cost. The Court further held that Madani could not recover costs because they did not present sufficient evidence to justify a damages award. The Court reasoned that the trial court granted injunctive relief, and that was sufficient to deny an award of monetary damages. The Court affirmed the trial court’s ruling and ruled both parties shall split costs.

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.

 

U.S. News & World Report – Best Law Firm:

Abbott & Kindermann is pleased to announce that for 2020, U.S. News and World Report has again identified Abbott & Kindermann, Inc. as a nationally and regionally recognized Best Law Firm; a ranking that the firm has held since 2013.

Abbott & Kindermann, Inc. actively represents private and public clients throughout California, with a particular emphasis over the last 12 months in Alameda, Butte, Calaveras, Colusa, El Dorado, Lake, Napa, Nevada, Placer, Sacramento, Santa Clara, Siskiyou, Sutter, Mariposa, and Yolo counties and cities. Representative matters include:

Advisory Services:

  • Due diligence, entitlements, and real estate services for commercial, industrial, orchard, vineyard, renewable energy, and mining properties;
  • Advise, defend, and settle regulatory compliance matters including the Clean Water Act, Porter-Cologne, air quality, and local zoning;
  • Create and update land use entitlement strategies by evaluating permissible uses on properties throughout the state;
  • Master lease agreement drafting and negotiations for 5G internet implementation;
  • CEQA compliance for new construction and redevelopment projects;
  • Advise and defend AB 1600 Mitigation Fee Act compliance for public agencies and private clients;
  • Expert witness work in land use disputes;
  • Submit client-tailored public comments to statewide programs nearing implementation; and
  • Advise, review, and defend environmental documents and land use entitlements for renewable energy development.

Litigation:

  • CEQA;
  • General Plans and Zoning;
  • Clean Water Act;
  • Easements, implied and express dedications;
  • Covenants, conditions, and restrictions;
  • Failure to disclose in real estate transactions;
  • Land use entitlements;
  • Eminent domain and inverse condemnation;
  • Board of Supervisors or City Council land use approvals;
  • AB 1600 Mitigation Fee Act;
  • Land use construction defect; and
  • California tribal consultation.

Courses Taught:

  • Abbott and Kindermann, Inc. – Annual Conference Series;
  • UC Davis – Annual Land Use Law Update;
  • County Counsel Association – Land Use Law Update;
  • California County Planning Directors Association – CEQA/Land Use Update;
  • League of California Cities – Supreme Court Takings Case and Takings Law Update;
  • National Business Institute – Water Rights and Handling Seminar;
  • UC Davis Extension – Subdivision Map Act class;
  • Abbott and Kindermann, Inc. – Takings & Real Estate Update;
  • UC Davis Extension – Vested Rights, Vesting Maps, and Development Agreements class;
  • American Planning Association, California – Panel on public agency responses to COVID-19;
  • National Business Institute – Best Practices for Handling Winery and Vineyard Land Use Issues;
  • Sacramento County Bar Association – Top 10 Takeaways for Winery and Vineyard Land Use Issues;
  • Sacramento County Bar Association – Supreme Court Takings Case and Takings Litigation Update;
  • Precast Concrete Association – Spring and Fall Annual Conference panels;
  • CalCIMA – Spring and Fall Environmental conference panels;
  • Sacramento County Bar Association – Real Property Section Legal Update; and
  • Halfmoon Bay Education, Inc. – Real Estate, Easements, and Takings Update.

During 2020, state residents and businesses have been navigating through unprecedented fires, landslides, economic downturns, and a once-in-a-century pandemic. Through all of these trials and tribulations, Abbott & Kindermann remains committed to putting our clients first and achieving client desired outcomes as our number one priority. We thank U.S. News and World Report for recognizing our firm during the 2020 ebbs and flows. Most importantly, we thank our clients for continuing to place their trust in us as advocates for their land use problems and creators of their land use solutions.

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.

 

Abbott & Kindermann, Inc. is pleased to announce  that  Sacramento Magazine in its August publication has recognized Bill Abbott again as a top attorney in land use for 2020.   Additionally, Bill is recognized as a 2020 Northern California Superlawyer in the field of land use/zoning and land use litigation  (2004-2020), and by Best Lawyers-Northern California (2009-2020) again in the field of land use.

William Abbott is Of Counsel 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.

Welcome to Abbott & Kindermann, Inc.’s August Environmental Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020.

1. PREVIOUS MONTH’S UPDATE

To read the July 2020 Environmental Action News- Part 2 post, click here:
https://blog.aklandlaw.com/2020/07/articles/july-environmental-action-news-part-2/

2. SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:

County of Butte v. Department of Water Resources, S258574. (C071785; 39 Cal.App.5th 708; Yolo County Superior Court; CVCV091258.) Petition for review after the Court of Appeal dismissed an appeal in an action for writ of administrative mandate. This case presents the following issues: (1) To what extent does the Federal Power Act (16 U.S.C. § 791a et seq.) preempt application of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) when the state is acting on its own behalf and exercising its discretion in deciding to pursue licensing for a hydroelectric dam project? (2) Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act in order to comply with the federal water quality certification under the federal Clean Water Act?

3. UPDATE

A. CALIFORNIA WATER RIGHTS AND SUPPLY

1. As The COVID-19 Pandemic Continues, Many Wineries Fear Compliance With New SWRCB Order For Permitting.

In mid-August, the State Water Resources Control Board released an order proposing to modify the statewide winery permitting process for water discharge. The order classified different wineries into regulatory categories holding the wineries to different tiers of compliance based on the reporting requirement in other codified water laws. In response to the order, many wineries submitted public comments reflecting the fear of many wineries and stating that amid pandemic shutdowns of tasting rooms and burgeoning fires throughout the state, wineries will be unlikely to comply with the order. The Board will address public comments submitted and begin the process of finalizing the permitting process over the coming months.

For more information see:
https://www.agalert.com/story/?id=14202

2. Bureau Of Reclamation Opens Public Comment Period For Expansion Of Shasta Dam.

The U.S. Bureau of Reclamation (“Reclamation”) published its Draft Supplemental Environmental Impact Statement in early August, including in its modified proposal, raising the height of Shasta Dam by 3% or 18.5 feet. The proposal looks to raise storage capacity in the critical water basin by 200 billion gallons equating to support for two million people throughout the state each year. The DEIR states that the increased dam height will improve water quality in the Sacramento River and allow for increased breeding grounds for anadromous fish species. Members of the public will have until September 21st to provide comments on the Supplemental DEIR before Reclamation finalizes the environmental

For more information see:
https://mavensnotebook.com/2020/08/06/this-just-in-public-comment-period-open-for-critical-shasta-dam-proposal-to-increase-water-storage-for-californians-and-fish/

3. Stanford Vina Ranch Irrigation Co. v. State of California (2020) 50 Cal.App.5th 976.

An elongated analysis of this critical appellate court decision was published to the Abbott and Kindermann blog earlier this month. Please see attached link to this longer blog article: https://blog.aklandlaw.com/2020/08/articles/ak-news/water-for-the-fishes-the-third-appellate-district-takes-measured-actions-to-protect-threatened-fish-populations/ .

B. WATER QUALITY

1. A Late July Memo From The Department Of Justice Grants States The Power To Enforce Civil Matters Under The Clean Water Act.

The DOJ issued a memo to the chiefs of the Justice Department setting guidance for DOJ divisions to pull back from prosecuting enforcement actions under the Clean Water Act where states are already pursuing CWA enforcement. The guidance attempts to prevent “piling on” enforcement actions since it is a belief of the DOJ that Congress did not craft the CWA with double recovery in mind for claims arising from the same operative facts. DOJ further laid out a set of criteria for enforcement divisions to utilize when determining whether to pursue enforcement actions or not. DOJ will pursue enforcement action if states are not diligently prosecuting civil enforcement actions or the civil assessment of penalties do not comport with the federal statute. The federal government will continue to prosecute all criminal matters under the statute.

For more information see:
https://www.eenews.net/assets/2020/07/27/document_gw_03.pdf

2. San Diego Regional Water Quality Control Board Issues An NPDES Permit To Add Purified Water To The Miramar Reservoir.

The City of San Diego (“City”) was issued an NPDES permit by the San Diego Regional Water Quality Control Board (“Board”) as part of Phase 1 of the City’s Pure Water San Diego Program. The permit would allow the City to add purified water to the Miramar Reservoir and allow the existing Miramar Reservoir to become a complete water system allowing for reuse of the water supply and reduce ocean discharge. As part of Phase 1 of the project, the City must construct a series of facilities and pipelines to clean recycled water and produce 30 million gallons of purified water per day. The project is the first of its kind in the state and was recognized by the Governor as a high-profile program with potential long term solutions to California’s water shortage problem.

For more information see:
https://www.wwdmag.com/pure-water-san-diego-program-achieves-milestone

3. Santa Ana Regional Water Quality Control Board Supports Permitting The Huntington Beach Desalinization Project As Private Organizations Threaten Lawsuits.

In late July, Santa Ana Regional Water Quality Control Board (“Board”) recommended approval for the proposed Huntington Beach Desalinization Project and directed staff to issue the permit for the project on July 30, 2020. The project known as Poseidon, proposed to preserve, enhance, and restore 1,500-acres of Bolsa Chica Wetlands. The project was further approved conditionally based on Poseidon’s commitment to offset 100% of the direct and indirect GHG emissions resulting from operations. Critics of the project expressed concern over the effects large volumes of processed salt will have on the surrounding ecosystem. Further, many pointed out that the Poseidon project has yet to secure a single contract from purchasers for the treated water. Critics pointed out that the Board was required to consider whether a need existed for the plant as one of the factors for approval and failed to do so.

For more information see:
https://voiceofoc.kindful.com/?campaign=288930
https://www.latimes.com/environment/story/2020-08-06/poseidons-huntington-beach-desalination-plant-still-in-choppy-waters

C. RENEWABLE ENERGY

1. Two Bay Area CCAs Issue A Joint Request To Procure Roughly 1 Million MWh Of Renewable Power Annually For Operations.

San Jose Clean Energy and Peninsula Clean Energy issued a request for proposals to electrical energy providers throughout the state with an aim to sign power purchase agreements (“PPAs”) for at least 10 years. The CCAs plan to procure enough renewable energy from PPAs to power 200,000 homes per year from new renewable energy or renewable energy-plus battery storage. The entities jointly provide energy to 1.7 million people in San Jose and San Mateo County and currently procured 45% of all energy supply from renewable energy sources. Although both entities have plans to procure 100% renewable energy supply within the next 10 years, each entity has a different approach to reaching these target goals. The joint PPAs entered by both entities will bring the CCAs that much closer to their 100% supply goal. Renewable energy generators have until September 4, 2020 to submit proposed PPAs.

For more information see:
https://renewablesnow.com/news/california-ccas-eye-ppas-for-1-twh-of-renewable-power-708734/?utm_campaign=REU&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-_RAF4Ywafa6MwsRtVMcahC71PreuQa1SxBUNx1bdXJsAtACQtcEEp5VIBGRCCTvNKN92Ua

2. Breaking Ground: Why Municipalities And Landowners Should Pay Attention To California’s Renewable Portfolio Standard And The 2030 Benchmark.

An elongated analysis of this critical renewable energy subject was published to the Abbott and Kindermann blog earlier this month. Please see attached link to this longer blog article: https://blog.aklandlaw.com/2020/08/articles/ak-news/breaking-ground-why-municipalities-and-landowners-should-pay-attention-to-californias-renewable-portfolio-standard-and-the-2030-benchmark/

D. HAZARDOUS MATERIALS AND REMEDIATION

1. California et al. v. Bernhardt, 2020 U.S. District LEXIS 128961 (N.D. Cal. July 15, 2020).

The U.S. District Court granted summary judgment to citizen suit plaintiffs over the federal government’s failure to comply with the Mineral Leasing Act, the Administrative Procedures Act (“APA”), and the National Environmental Policy Act (“NEPA”) when redefining “waste.” California and numerous other citizen suit plaintiffs contested the Bureau of Land Management’s (“BLM”) modifications to the Mineral Leasing Act alleging that the agency failed to consider scientific findings when modifying the definition of “waste.” In its opinion, the Court describes BLM’s history of modifying the waste definition over a span of three years without providing proper scientific evidence to support modifying the rules implementing the Mineral Leasing Act. The Court stated that core to the litigation is BLM’s arbitrary and capricious modifications of the rule without following proper protocols through the APA. The Court further stated that the decision of the BLM failed to take a “hard look” at the science to support modifying the rule under NEPA. The Court stated that the “BLM could not act in a vacuum. It was required to provide a reasoned explanation for its abrupt reversal as to the findings in the Waste Prevention Rule and to comply with its obligations under NEPA.” The Court granted summary judgment for Plaintiffs and instructed BLM to provide the Court with a detailed report outlining how it will bring the rule into compliance with updates every thirty and sixty days thereafter.

2. California River Water v. City of Vacaville, 2020 U.S. Dist. LEXIS 127562 (E.D. Cal. July 20, 2020).

On cross motions for summary judgment for the presence of hexavalent chromium in the public water supply, the Court granted relief to the City of Vacaville. Under the Court’s reasoning, while it cannot deny that hexavalent chromium exists and presents a risk to human health, plaintiffs overstretched the Resource Recovery and Conservation Act (“RCRA”) statute in order to attach liability to the City. The Court agreed with the City and held that hexavalent chromium is not a “solid waste” under RCRA. The Court further stated that attempting to determine whether the waste was hazardous to human health regardless of whether it is a solid waste under RCRA would be unnecessary, confusing, and advisory since Plaintiffs cause of action was limited to RCRA claims. The Court reiterates that it is not stating that hexavalent chromium does not pose a threat to Vacaville residents; rather, that plaintiffs brought their claims against the City under the wrong statute to attribute liability. The Court further ordered the case closed without further proceeding.

E. NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)

1. CEQ Finalizes Rule Codifying Modifications To NEPA.

In January 2020, The Council on Environmental Quality (“CEQ”) issued a notice of proposed rulemaking with extensive changes to the National Environmental Policy Act (“NEPA”). The changes include a new timeline for NEPA review, increased coordination between stakeholders and relevant agencies, and redefining the scope of NEPA. Comments on the proposed rulemaking were accepted until March 10, 2020. Significant changes to the act include: 1) redefining what constitutes a “major federal action” initiating NEPA review; 2) minimizing the range of alternatives a project needs to consider before deciding on the most technically and economically feasible option; 3) limiting identification of effects of a project to only direct effects on the environment from a project (Note: This has the potential to exclude all climate change analysis); 4) provides vague guidance in defining mitigation as part of a complete mitigation plan; 5) adds page limits to environmental assessments and environmental impact statements; 6) shortens the timeframe for NEPA review from project implementation to approval; and 7) provides a series of exemptions for projects non-federal in nature or covered by other statutes, among other things. The finalized rule also codified a series of documents including judicial interpretations, presidential directives, guidance documents, and non-active legislation. On July 16, 2020, CEQ codified the finalized rule and the new rule will apply to all projects commencing after September 14, 2020.

For more information see:
https://www.environmentallawandpolicy.com/2020/07/ceq-final-rule-overhauls-nepa-regulations/#:~:text=On%20July%2016%2C%202020%2C%20the%20Council%20on%20Environmental,introducing%20important%20changes%20to%20the%2040-year-old%20review%20process
https://www.whitehouse.gov/ceq/nepa-modernization/
https://www.lexology.com/library/detail.aspx?g=31c9dab3-87fb-4a83-8abd-4bdd7bcd7468
https://www.natlawreview.com/article/trump-administration-proposes-sweeping-reforms-to-national-environmental-policy-act
https://www.natlawreview.com/article/trump-administration-proposes-unprecedented-and-comprehensive-revisions-to-nepa
https://www.natlawreview.com/article/revisions-to-nepa-proposed-to-unlock-american-investment

F. FOREST RESOURCES

1. Mt. Cmtys. for Fire Safety v. Elliott, 2020 U.S. Dist. LEXIS 91593 (C.D. Cal. May 26, 2020).

Plaintiffs filed suit against the U.S. Forest Service (“USFS”) for violations of NEPA and the National Forest Management Act (“NFMA”) resulting from USFS approving the Cuddy Forest Health and Fuels Reduction Project which removes trees from Mt. Pinos Place in the Los Padres National Forest. The parties filed cross motions for summary judgment. The Court held that USFS’s use of categorical exemptions under NEPA were appropriate and were not arbitrary or capricious. The Court granted summary judgment on the NEPA claim in favor of USFS, holding that Plaintiffs failed to prove that the NEPA determination by USFS was arbitrary and capricious. Plaintiffs further alleged that USFS failed to consider the aesthetic management and desired conditions for the Los Padres Forest Plan. The Court held that since the actions of the USFS was not arbitrary or capricious as to the NEPA claims, the actions of the USFS were not arbitrary or capricious as to the NFMA claims. As such, the Court dismissed the NFMA claims as moot. The Court granted USFS’s motion for summary judgment in full and denied plaintiffs’ motion for summary judgment in full.

G. STREAMBED ALTERATION AGREEMENTS

1. California Department Of Fish And Wildlife Inform Public Of Need To Notify Agency If Cannabis Cultivation Affects Lakes And Streambeds.

In late July, California Department of Fish and Wildlife (“CDFW”) held a webinar informing members of the public how they intended to implement the State’s cannabis cultivation permitting requirements. As part of the permitting process, CDFW introduced the tools the department uses to ensure that cannabis permitting comports with the Lake and Streambed Alteration (“LSA”) Program. Under the Program, all entities must notify CDFW before conducting activity which would materially alter the natural flow of a river, stream, lake, or body of water (perennial, ephemeral, or intermittent) within the state. CDFW noted that an LSA Agreement may not be required to obtain a cannabis cultivation permit, but the notice to CDFW will drive whether the agency believes entities need to obtain an LSA Agreement prior to project commencement. Applicants for LSA Agreements can utilize CDFW’s new permitting tool online and receive approval in as little as 72 hours or work with CDFW staff directly for more complex permitting applications.

For more information see:
https://www.thedesertreview.com/news/cannabis-cultivation-and-land-protection-requirements/article_2dd3bfaa-d52d-11ea-bef5-fb6f682bc9bc.html

H. ENVIRONMENTAL ENFORCEMENT

1. Crystal Geyser Pays $5 Million In Criminal Penalties For Illegal Storage Of Arsenic Waste.

A U.S. District Court Judge ordered Crystal Geyser to implement a compliance plan within 90 days, pay criminal fines totaling $5 million, and remain on probation for three years because of the corporations illegal storage and transportation of hazardous waste generated from filtering arsenic out of spring water. The DOJ brought two counts of criminal liability against Crystal Geyser and the district court imposed $2.5 million in criminal fines for each count. Crystal Geyser discharged contaminated wastewater into a manmade arsenic pond in Inyo County for a period of 15 years without following any environmental health and safety laws. California’s Department of Toxic Substances Control tested the pond in 2015 and determined that it contained nearly five time the federal limit for arsenic leading to the federal criminal charges brought against Crystal Geyser. The company has 90 days from July 29, 2020, to set forth a plan to bring the pond into compliance and 120 days to implement said plan.

For more information see:
https://www.justice.gov/usao-cdca/pr/crystal-geyser-water-bottler-ordered-pay-5-million-criminal-fine-illegal-storage

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.

Martis Camp Community Association v. County of Placer, 2020 Cal.App. LEXIS 773 (August 17, 2020).

Petitioners challenged the County’s decision to abandon a roadway connecting two residential subdivisions, the Martis Camp project (“Martis Camp”) and the Retreat at NorthStar project (“Retreat”), near Lake Tahoe in eastern Placer County on several claims, including the California Environmental Quality Act (“CEQA”). The road was originally intended to serve as access for emergency vehicles and transit and was described as such in both EIRs for the two projects.  Over time the road was frequently used by Martis Camp residents as a convenient shortcut to the NorthStar Village area through Retreat. To comply with CEQA, the County relied on an addendum to a previously certified environmental impact report for Martis Camp (“Martis Camp EIR”). The petitioners argued that the County: (1) use of an addendum to the Martis Camp EIR was improper; (2) used the wrong baseline to evaluate the impacts of the abandonment; and (3) failed to prepare a subsequent or supplemental EIR. The trial court denied the CEQA petition, and petitioners appealed.

The appellate court reversed. The County argued the Martis Camp EIR was the most appropriate document to rely on because the effects of the abandonment would be focused on changed traffic patterns of residents at Martis Camp and would not impact the Retreat residents. The Court agreed with petitioners that the County’s reliance on the Martis Camp EIR was improper because the abandonment of the roadway was not a modification of the Martis Camp project. It noted that an addendum is only proper to consider proposed changes to a previously approved project and EIR. Applying this standard, the Court reasoned that since there were no subsequent discretionary approvals needed to modify the Martis Camp project, the subsequent review procedures in CEQA Guidelines section 15162 were not applicable to the Martis Camp EIR. The Court further noted that the roadway was actually proposed and analyzed in the Retreat EIR and held that the County failed to evaluate whether the abandonment would require major revisions to the Retreat EIR. As a result, the Court concluded that the County abused its discretion in finding that no subsequent or supplemental EIR is required because the County relied on the wrong EIR to make that finding. As for the improper baseline claim, the Court remanded the issue to allow for the County to make its own determination of whether or not the existing use of the roadway by Martis Camp residents is a “changed circumstance” from the Retreat EIR and determine the proper CEQA review process in light of the decision. For more discussion on the road abandonment claims, see the August Real Estate Action News.

Daniel Cucchi is Senior Associate 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.

Space is still available for Glen Hansen’s virtual brownbag webinar on Thursday, August 27, 2020, titled, “Knick v. Scott: Substantial Changes Coming In Municipal Takings Litigation.” The seminar is hosted by the League of California Cities and will take place from 2:00-3:30pm. Registration closes on Wednesday, August 26. Do not miss out on this informative and impactful webinar!

Webinar Description:

In June 2019, the U.S. Supreme Court in Knick v. Township of Scott, Pennsylvania, overruled the 34-year-old precedent in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985). Under Williamson County, an owner whose property had been taken by a local government had not suffered a violation of his Fifth Amendment rights—and thus could not bring a takings claim in federal court—until a state court had denied his or her claim for just compensation under state law. Knick changed all of that. Claimants may now go to federal court without first pursuing a state court takings action.

This webinar will explore the procedural changes brought about by the Knick decision and discuss the potential ramifications of the decision for California cities, which may be substantial.

League Members have priority registration, and the cost is $50.

Non-League Members may register, and the cost is $150.

REGISTER: www.cacities.org/events by August 26

For questions, please contact Megan Dunn at mdunn@cacities.org

For further information or questions please contact, Alison Leary at aleary@cacities.org. Do not hesitate to reach out to Glen Hansen with any questions as well.

Glen’s blog article on the Knick case is located here: https://blog.aklandlaw.com/2019/10/articles/local-government/whistling-past-ms-knicks-graveyard-the-unstated-but-possible-consequences-of-the-u-s-supreme-courts-takings-decision-in-knick-v-township-of-scott-pennsylvania/

We look forward to this virtual meet and greet!

Glen Hansen is senior counsel 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.

Welcome to Abbott & Kindermann, Inc.’s August Real Estate Law Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.

  1. PREVIOUS MONTH’S UPDATE

To read the July 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/07/articles/ak-news/july-monthly-real-estate-law-action-news/ .

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are no cases pending at the California Supreme Court at this time.

  1. UPDATE

A. TAKINGS

  1. Weiss v. People ex rel. Dept. of Transportation (2020) 9 Cal.5th 840.

The California Supreme Court denied defendants’ request to apply the laws and procedures governing Eminent Domain law into inverse condemnation claims. The defendants recognized that their defenses were grounded purely in inapplicable eminent domain laws, but asked that the Court apply eminent domain law and process to inverse condemnation because the Court has discretion to interpret and apply borrowed procedures from other bodies of law in other circumstances. Defendants argued that a similar approach could apply here, because the Legislature allowed the judicial branch to develop the application of inverse condemnation actions to various statutes and rules. The Court was unconvinced and held that the eminent domain statutes do not apply in inverse condemnation cases. It reasoned that the eminent domain statutes were narrowly construed by the Legislature and tailored specially to only eminent domain actions. It further reasoned that eminent domain has a particular set of statutory procedures that are inapplicable in inverse condemnation actions. The Court, thus, concluded that the adoption and amendment of statewide rules governing inverse condemnation statutes should be left to the Legislature or Judicial Council.  As such, it affirmed the judgment of the Court of Appeal and denied defendants’ request to import eminent domain statutory authority into inverse condemnation procedure.

  1. Bridge Aina Le’a, LLC v. State Land Use Comm’n (9th Cir. 2020) 950 F.3d 610.

In 2011, the State of Hawaii’s Land Use Commission reverted 1,060 acres on the Big Island of Hawaii from a conditional urban land use classification to the prior agricultural use classification. Plaintiff Bridge Aina Le’a, LLC, a landowner at the time of reversion, challenged the reversion’s legality and constitutionality in a state agency appeal, later filing suit in federal district court. After the trial, the jury decided that there was an unconstitutional regulatory taking of the plaintiff’s property pursuant to Lucas and Penn Central. The district court entered a judgment for the plaintiff, awarded $1 million in nominal damages, and denied the State’s renewed motion for judgment as a matter of law (“JMOL”). The state appealed the denial of the JMOL.

The Ninth Circuit held that the district court erred in denying the State’s renewed JMOL because plaintiff’s evidence did not establish a taking under Lucas or Penn Central. The conditions for the Lucas test were not met because the land retained substantial residual value in its agricultural use classification which still allowed the plaintiff to use the land in economically beneficial ways. The Court concluded that the State was entitled to judgment as a matter of law under Lucas.

Applying the Penn Central factors, the Court concluded that the jury could not reasonably find for the plaintiff. The Court held that the valuation evidence weighed strongly against a taking pursuant to the first factor which considers the extent of the economic loss suffered by the landowner as a result of the action, usually measured by diminution in market value, and rejected the plaintiff’s assertion that the disruption of a land sales agreement showed economic impact. The Commission’s reversion order did not interfere with the plaintiff’s reasonable investment backed expectations at the time of acquisition because the plaintiff had committed to build 385 housing units and had failed to complete them. Hawaii law expressly authorized the Commission to impose this condition. The Court held that plaintiff’s own evidence established a diminution in value that was too small, and the reversion did not interfere with the plaintiff’s reasonable investment-backed expectations for the land. The Court then reversed the district court’s denial of the State’s renewed JMOL motion on the Penn Central test as well.

  1. Ruiz v. County of San Diego (2020) 47 Cal.App.5th 504.

The Court of Appeal reversed the trial court’s determination that a homeowner could claim redress by inverse condemnation against a county if their private drainage system allowed for flow of public water. The Court of Appeal considered whether privately owned drainage on private property allows for homeowner remedies by inverse condemnation if the water in the private pipeline is for public use. Plaintiff/Appellee Ruiz (“Ruiz”), claimed that because the developer offered the County of San Diego (“County”) a dedicated easement to allow for public drainage in 1959 and the County turned down the easement, Ruiz could recover for water damage as a result in the pipeline leaking on Ruiz’s property. Ruiz claimed that the County’s use of the drainage system as part of the Valley drainage system constituted an acceptance of the drainage easement offered in 1959. The Court of Appeal, citing Locklin v. City of Lafayette, 7Cal.4th 327 (1994),  held that the County’s use of the Ruiz pipe did not meet the requirements for inverse condemnation since the County needed to exert minimal control and maintenance over the watercourse near the Ruiz property since the County would be liable for damage caused by streamflow. The Court of Appeal found Ruiz’s arguments unpersuasive since the County did not control continually nor own any portion of the private pipeline. The Court stated the Ruiz lacked substantial evidence to prove that the County had taken their private property for a public use. The Court reversed the award of attorney’s fees to Ruiz and held that each party should bear their own attorney’s fees on appeal.

B. GENERAL REAL ESTATE

  1. Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22.

A commercial lease set rent to increase 150 percent if the tenant stayed past a certain date. The date passed but the tenant refused to pay the increased rent. Plaintiffs, a commercial landlord (“Constellation”), filed a breach of contract action against defendants  corporations (“World Trading” and “World Tech Toys”) seeking damages for past due rent, late fees, interest, failure to maintain and repair, costs for not being able to use the premises, and holdover rent. Constellation alleged that World Tech Toys was an alter ego of World Trading. The trial court rejected the theory of alter ego liability and held the defendants liable for all damages except the holdover rent, finding it to be an unenforceable penalty. World Trading and World Tech Toys were held liable to Constellation and its successors for $27.196.74. Constellation appealed and defendants cross appealed.

The Court of Appeal reversed the judgement denying Constellation holdover rent.  The court held that the holdover rent was not an unlawful penalty.  The court affirmed the remainder of the judgment, including the trial rejection of alter ego liability. The Court of Appeal explained that holdover rent, or “a graduated rental provision”, in commercial provisions are enforceable even if the increased rent is much greater than the base. To qualify as an unenforceable penalty, defendants must prove that the provision amounted to an illegal liquidation of damages. Here, the defendants failed to show that Constellation had market power to set the rate, and the defendants could have easily avoided higher rent by leaving the premise. Therefore, the trial court should have enforced the holdover agreement.

Further, the defendants argued that the penalty could be avoided under section 1671 of the Civil Code.  However, the Court of Appeal held that section 1671 was inapplicable because the case did not involve a question of penalty or liquidated damages. While the evidence showed unity of interest and ownership, which is required to invoke the alter ego doctrine, there was insufficient evidence to prove that treating defendants as separate entities would promote injustice. The court dismissed the defendant’s cross-appeal and appeal from the order after judgement.

The dissenting Justice argued that the liquidated damages provision, which established the holdover rent at 150 percent of base rent, was an unenforceable penalty. The Dissent argued that the majority’s new test allows contracting parties to bypass tethering a liquidated damages provision to estimated anticipated loss, and instead requires a challenger to analyze each contracting party’s respective market power and persuade a court that there was enough of an imbalance between parties to invalidate the damages provision.

  1. Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33.

Plaintiffs Matthew Matson and Matson SDRE Group, LLC (“Matson”) contested the deed of trust purchased in a foreclosure auction after learning the lien was second in position with a lower fair market value than the auction price. Matson’s complaint alleged that the terms of sale were unconscionable, and they relied on a mistake of fact when purchasing the deed of trust. The trial court granted summary judgment to defendants, S.B.S. Trust Deed Network (“SBS”) stating that there was no irregularity, unfairness, or fraud during the acquisition. The trial court further reasoned that a judicial remedy was not appropriate where plaintiff failed to read through a title report to discover the value and position in the chain of title. Plaintiffs appealed.  The Court of Appeal affirmed.

The court reasoned that plaintiffs were not entitled to relief because there was no unilateral mistake allowing for a remedy since plaintiffs bore the risk of their mistake not to fully read the title report. The transaction was complete when plaintiffs accepted the final bid at auction and there was no legal effect of rejecting the title after plaintiffs learned the deed of trust was second in priority to another deed. For this reason, the court held that plaintiffs failed to produce evidence to warrant judicial remedy by rescission. Also, the court reasoned that because plaintiffs were aware of the risks, they bared through the complete title report, they were not entitled to relief.

  1. Jeppson v. Ley (2020) 44 Cal.App.5th 845.

Among one of the more colorful neighbor disputes in 2020, the Court of Appeal affirmed the trial court’s decision to deny redress to Appellant, Jeppson, since there was no issue of “public interest” involved in a neighborhood feud where appellant’s cat was killed by appellee’s dog. The Court evaluated whether Jeppson’s claims arose from protected activity and then measured the likelihood of success on each claim as part of Jeppson’s summary judgment motion. A protective activity would grant relief to plaintiff in connection with an issue within the public interest. § 425.16, subd. (e)(3). The Court evaluated six criteria outlined in Rand Resources, LLC v. City of Carson (2019) 6.Cal.5th 610; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913; Weinberg v. Feisel (2003) 110 Cal.App.4th 1122; Workman v. Colichman (2019) 33 Cal.App.5th 1039; Abuemeira v. Stephens (2016) 246 Cal.App.4th 1291; FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, to determine if the Jeppson’s claims were in fact within the “public interest.” The criteria were as follows:

  • Statements or conduct concerning a person or entity in the public eye,
  • Conduct that could directly affect a large number of people,
  • A topic of widespread public interest,
  • Whether the issues affect only those directly involved,
  • Gathering ammunition for a private controversy, and
  • Where issues are too remotely connected to the public conversation to assert the issue within the public interest.

The Court reasoned that the claims at issue between Jeppson and Ley did not meet the criteria outlined in any of the above categories, thus the Jeppson claims did not constituted issues of public interest. The Court stated, “Feuds can metastasize into the Hatfields and McCoys or the Montagues and Capulets. This tiff, though bitter, remained strictly local: a private affair and not a matter of “public interest.” The Court affirmed the trial court’s ruling in favor of Lay and awarded costs on appeal to Jeppson.

  1. Kelly v. House (2020) 2020 Cal.App. LEXIS 277 (April 1, 2020), certified for partial publication.

The Court of Appeal awarded statutory attorney’s fees to Appellant for the trespass and conversion on to Appellant’s agricultural property because the damaged land resulted in loss of organic certification status and prevention of prospective buyers. Plaintiffs, the Houses, appealed the decision of the trial court on their claims for attorney’s fees against the Fosses for trespass and conversion of their property. The Court of Appeal considered whether the Fosses entering the Houses property and spraying pesticide jeopardized the fragile organic farming certification held by the Houses and whether such claims gave rise to an award of attorney’s fees for both claims. Statute Section 1021.9 provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.” The Court held that the Houses could recover attorney’s fees under the statute because the statute was intended to protect farmers from illegal trespasses to their land. Defendant claimed that the Houses could not recover under Section 1021.9 for attorney’s fees because the majority of their fees related back claims other than the trespass claims. The Court remanded the case to the trial court to determine the amount of reasonableness of the Houses attorney’s fees under Section 1021.9 as it relates to the trespass claim only.

C. COMMON INTEREST DEVELOPMENTS

  1. Coley v. Eskaton, 2020 Cal.App. LEXIS 629 (June 11, 2020), certified for partial publication.

The trial court held that (i) directors of a homeowners association breached their fiduciary duties when they apportioned costs while acting under a conflict of interest, precluding the use of the best business judgement rule, and (ii) that the directors were not liable in their personal capacities.  The Court of Appeal affirmed in part, reversed in part, and remanded. Since the directors did not engage in transactions with the association, the common law standard of inherent fairness was more appropriate than the statutory standard of a just and reasonable transaction. However, requiring the directors to show that the transaction was just and reasonable was not an error because this standard closely resembles the common-law standard. It also held that the trial court erred by not finding the directors liable in their personal capacities because they breached their fiduciary duties by apportioning costs and expenses which were inconsistent with their governing duties and resulted in damages.

2. Aldea Dos Vientos v. CalAtlantic Group, Inc. (2020) 44 Cal.App.5th 1073.

In a construction defect case before the Court of Appeal, the Court reversed the trial court’s confirmation of the arbitrator’s award for a condominium association (‘association”). The Court of Appeal concluded that the association’s governing documents require a majority vote of members to bind arbitration, and that the arbitrator failed to obtain a vote of the association constituting an “unreasonable servitude” under the statute. As the Court reasoned, the arbitrator’s award violated the plain language of the statute. The Court reversed the trial court’s decision and awarded costs to the appellant.

D. REAL ESTATE CONTRACTS & TRANSACTIONS

  1. Harris v. University Village Thousand Oaks, CCRC, LLC (2020) 49 Cal.App.5th 847.

The Court of Appeal reversed a trial court decision stating that residents of a continuing care retirement community were protected under the continuing care contracts entered into by the retirement community. Residents of a retirement community appealed an arbitrator’s award denying statutory protections to elders. Defendant argued that the basic protections did not apply to the residents since the award was made in arbitration and not in litigation. The Court of Appeal reversed, holding that the plain language of Civil Code sections 1940 and 1953 applies to all continuing care contracts regardless of the stage in litigation or related court proceedings. As the Court stated, because residents paid fees to be protected by the terms of their living agreement the residents were entitled to receive the benefits of the fully executed residential contract.

The Court acknowledged that although retirement community contracts have fundamental differences from a standard residential unit contract, the protections received under both types of contract are no different. The Court reasoned that when fees are paid to confer benefits to all residents and as long as an exchange of money occurs allowing for benefits to be conferred to tenants, then the facility is obligated to honor those benefits under the landlord’s duty of care. Lastly, the Court held that the “the legislative purposes of both the landlord-tenant laws and the continuing care contract laws are best served by applying the arbitration prohibition to the housing component of continuing care contracts.” The Court remanded the case to the trial court with instructions.

  1. Moore v. Teed (2020) 48 Cal.App.5th 280.

The Court of Appeal affirmed the holding of the trial court for allowing “benefit-of-the-bargain” damages to plaintiff for all detrimental actions taken by defendant resulting from plaintiffs botched remodel. Plaintiff (“Moore”) brought suit against defendant (“Teed”) when Teed advised Moore to purchase a $4.8 million home in San Francisco with significant structural and foundation issues. Teed further agreed to act as the intermediary between the contractors restoring the home and directed Moore to pay him directly rather than the contractors. The home repairs were not made properly, and Moore paid Teed a significant amount of money before ultimately filing a complaint against Teed. At trial, an expert witness testified that the home repairs would have cost $4.477 million with at least $620,000 to be spent, specifically on the foundation. A jury found for Moore stating that Teed had fraudulently induced Moore into purchasing and restoring the home while falsely claiming repairs would only amount to $900,000. The jury granted a damages award of $2,144,434 plus $104,498 in “benefit-of-the-bargain” damages. Teed conceded to the claims against him for fraudulent inducement but appealed on the “benefit-of-the-bargain” damages.

The Court of Appeal held first that the trial court did not err in instructing the jury to award alternative damages to Moore since false misrepresentation allowed for multiple means of recovery. The Court stated, “a ‘broader’ measure of damages may be awarded than simply ‘out-of-pocket’ losses.” Second, the Court held that the “benefit-of-the-bargain” damages could be awarded in real property transactions. As the Court held, a person who was defrauded out of the financial benefit of real property can collect broader damages including “benefit-of-the-bargain” damages. Third, The Court held that the damages award was not speculative because tort damages fully compensate an injured party and the jury would have determined the same jury award regardless of using “benefit-of the-bargain” as a measure for damages. Fourth, the Court pointed out that the award was not duplicative because the jury issued a jury award significantly lower than the $3,842,160 requested by Moore. The Court affirmed the ruling of the trial court and awarded attorney fees on appeal to Moore.

  1. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337.

On appeal, the Court of Appeal reversed the lower court’s denial of Appellant, Jaman Properties 8 LLC (“Jaman”), moving papers for arbitration under the Federal Arbitration Act (“FAA”). Victrola 89, LLC (“Victrola”) brought suit Jaman in superior court alleging undisclosed and unrepaired defects in a real property transaction. Under the real estate purchase agreement between parties, Jaman moved for arbitration under the Federal Arbitration, which the trial court denied finding that the California Arbitration Act (“CAA”) controls arbitration between the parties. The Court held that the FAA preempts procedural provisions otherwise controlled by the CAA if the purchase agreement between the parties incorporates FAA on its face. The real estate purchase agreement between the parties on its face specified that the FAA would control. The Court held that Victrola’s piecemeal arguments of which sections of the CAA should control and which of the FAA should control in arbitration were unpersuasive. The Court reasoned that the lack of specificity in the contract for which claims should be arbitrated under the CAA and under the FAA is immaterial since the FAA controls over all claims by federal preemption. Lastly, the Court held that Victrola must arbitrate its claims under the FAA unless Jaman is estopped by the trial court from doing so. The Court overturned the trial court’s decision and remanded the case back to the trial court to determine whether Jaman is estopped from arbitration under the FAA.

E. EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES

  1. Martis Camp Community Association v. County of Placer, 2020 Cal.App.LEXIS 773 (August 17, 2020).

The Court of Appeal held that the County’s decision to abandon a road while reserving rights to easements on other sections of that road was reasonable, since the road itself was unnecessary and merely a residential convenience rather than a necessity. Defendant, the County of Placer partially abandoned a public easement right for a road connecting two subdivisions. The road’s intended use was supposed to be as an emergency services road and closed off to private use. However, sometime around 2010, residents in the two subdivisions began privately using the access road leading county officials to request the County Board of Supervisors to abandon the public rights to use and retain rights to use for emergency and transit services. Plaintiffs argued that the trial court erred in denying that the County had a right to abandon a public road. Other causes of action included violations of the Brown Act, violations of CEQA when deciding to abandon the road easement, and the trial court improperly sustaining a demurrer on an inverse condemnation claim.

The Court of Appeal affirmed the trial court’s determination that the County did not violate the statutory requirement for abandoning a public road. The Court agreed with the Board of Supervisor’s determination that the road was never intended to be used as part of the public transportation network. The Court held that the actions of the County were reasonable and supported by substantial evidence because use of the road by the public was convenient but also unauthorized since the road was not planned, designed, or approved to accommodate use in the public road system. Plaintiffs further acknowledged that the County had the right to abandon the road, but that it could only abandon the road in full or approve it for complete use, not reserve some right of access to the road. The Court dismissed this argument, holding that Plaintiffs failed to point to any authority supporting their argument and the Court could not find any case law stating that the County had to abandon the entire road without reserving some easement rights. The Court further held that the County did not violate the Brown Act and dismissed the inverse condemnation claim by plaintiffs. Lastly, the Court held that plaintiffs were entitled to relief on the CEQA claims and remanded the case with instructions to order the issuance of a writ of mandate and require proper compliance with CEQA.

  1. Gamerberg v. 3000 E. 11th St., LLC (2020) 44 Cal.App.5th 424.

The Court of Appeal reversed a trial court ruling holding that irrevocable licenses tied to a 1950 parking affidavit do not survive transfers of the property to different owners without notice. The dispute between parties arose when it became unclear who had a right to eight parking spaces on lot between two commercial business owners. Plaintiff, Gamerberg, filed a complaint in the trial court alleging that he held an irrevocable license over eight spaces in the lot based on a 1950 parking affidavit grandfathering his use of the spaces between owners. The Court examined whether the 1950 affidavit created an irrevocable license binding on subsequent purchasers who had no notice of the affidavit. The Court determined that the lack of recordation of the 1950 affidavit meant that the document did not bind subsequent purchasers who had no actual notice of the provisions in the document. Since the prior owners failed to record the parking affidavit, binding subsequent purchasers to the affidavit was irrelevant. The Court reversed the trial court’s ruling and awarded costs to 3000 E. 11st St., LLC.

  1. Madani v. Rabinowitz (2020) 45 Cal.App.5th 602.

In a suit based on claims of trespass and negligence when defendant, Rabinowitz, erected a fence on plaintiff, Madani’s, property and continually parked inoperable cars in Madani’s property, the Court of Appeal affirmed that the fence and parked cars were continuing encroachments. The Court held that since the fence and parked cars were a continuing encroachment that the statute of limitations did not apply, and the Court could review the case subject to independent review of the facts. The Court agreed with the lower court that costs to move the fence were not sufficient to warrant leaving the fence as a permanent structure. The Court noted that Rabinowitz replaced the fence in 2015 and could move the fence for a modest cost. The Court further held that Madani could not recover costs because they did not present sufficient evidence to justify a damages award. The Court reasoned that the trial court granted injunctive relief, and that was sufficient to deny an award of monetary damages. The Court affirmed the trial court’s ruling and ruled both parties shall split costs.

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.