LANDGATE, INC., et al., v. CALIFORNIA COASTAL COMMISSION

On May 9, 2013, Kassouni Law overturned Landgate v. California Coastal Commission by asking the Court to decide on Lockaway v. County of Alameda. The Coastal Commission lawyers and land use lawyers at Kassouni Law recognized Landgate gave the California Coastal Commission and all other California government agencies unbounded authority to arbitrarily delay property development in California with no consequence. The Lockaway decision puts Californians’ Constitutional property rights back on better footing by holding the government accountable for damages when development delays are found arbitrary by the Court. The Landgate decision, now overturned, follows below.

Court of Appeal, Second District, Division 1, California.

LANDGATE, INC., et al., Plaintiffs and Appellants, v. CALIFORNIA COASTAL COMMISSION, Defendant and Appellant.

No. B084315.

Decided: February 7, 1997

Daniel E. Lungren, Attorney General, Roderick E. Walston, Chief Assistant Attorney General, Jan S. Stevens, Assistant Attorney General, Peter Kaufman and Joseph Barbieri, Deputy Attorneys General, for Defendant and Appellant.  Reznik & Reznik, Fred N. Gaines and Kevin M. Kemper, Sherman Oaks, for Plaintiffs and Appellants.

In October 1990, Landgate, Inc. applied to the California Coastal Commission for a coastal development permit to build a house and related structures on its lot in the Malibu hills.   The Commission asserted that the lot-approved by the County of Los Angeles when owned by Landgate’s predecessor in interest-was unlawful because it lacked Commission approval.   The Commission denied Landgate’s coastal permit application.   Landgate successfully petitioned the trial court for a writ of mandate challenging the permit denial and successfully defended on appeal the trial court’s grant of the writ.   Landgate then returned to the trial court to resolve the remaining “taking” claims.

The Commission appeals from the judgment awarding compensation for inverse condemnation, prejudgment interest, and attorney fees and costs.   The Commission claims the trial court erred in granting Landgate’s motion for summary adjudication on its third cause of action, which alleged that the Commission had, by its February 1991 permit denial, deprived Landgate of all economically viable use of its land and thus temporarily “taken” that land without paying the constitutionally required “just compensation.”   The Commission also argues the trial court erred in awarding Landgate $155,657 in temporary taking damages following trial on the subject of damages.

Landgate cross-appeals, claiming (1) it was entitled to Code of Civil Procedure section 1036 expenses incurred in the writ of mandate proceeding, (2) the court should have adopted the fair rental value method of assessing damages, and (3) the court erred in dismissing Landgate’s 42 United States Code section 1983 cause of action and refusing to allow Landgate to identify Commission members and Commission staff personnel individually as Doe defendants in that claim.

In the published portion of this opinion, we affirm the trial court’s ruling that the Commission’s denial of the permit temporarily deprived Landgate of all economically viable use of its lot and thus constituted a categorical taking under the Fifth Amendment to the United States Constitution and article I, section 19 of the California Constitution.   We also reverse and remand with respect to the trial court’s denial of Landgate’s request for Code of Civil Procedure section 1036 expenses incurred for the writ of mandate proceeding.

In the unpublished portion of the opinion, we reverse that portion of the damages award attributable to property taxes for the relevant period, affirm the balance of the award, and affirm the dismissal of Landgate’s 42 United States Code section 1983 cause of action and the grant of the Commission’s motion to quash service of summons on individual Commissioners and staff members.

FACTS

Before 1973, a large unimproved tract in the Malibu hills was approved for subdivision into approximately two-acre lots, each zoned for a single-family home.   After the subdivision, Landgate’s predecessor in interest owned two parcels which ran north and south.   The northern portions were sloped, the southern portions were flat.   One of the lots contained a single family home on its flat southern portion.   Both lots lie within the coastal zone in the County of Los Angeles.

In the mid 1980’s, the County planned to improve an east-west road through the two lots.   The proposed road would divide the two lots into one northern lot and one southern lot.   The landowner and the County agreed that, in exchange for the owner’s dedicating portions of the parcels for the roadway easement, the County would reconfigure the lots into a single, sloped lot north of the road and a single, flat lot south of the road, each still zoned for a single family home.

The County completed the road improvement and formally approved the lot reconfiguration, which was recorded July 5, 1989.   At that point, the Commission had approved the County’s Malibu land use plan, but at all relevant times had not certified a County Malibu local coastal program.   The lots’ owner did not seek or receive Commission approval of the lot line adjustment.   The Commission did not challenge the County’s approval of the reconfiguration.

In October 1990, Landgate bought the sloped northern 2.45 acre lot and applied for and received County approval in concept of grading and building plans for a single-family home to be built on the property.1  Landgate applied to the Commission for a permit to build the house and related structures and the Commission scheduled the matter for its December meeting in San Diego.

Landgate’s October 12, 1990, permit application sought approval of the house and related structures.   The plans called for a 9,036 square foot home, a guest house and swimming pool and 8,500 cubic yards of grading.   In a November 1 letter, Commission staff requested additional materials in connection with the application.   In late November, Landgate’s representative first learned from staff that the lot line adjustment was going to be an issue in connection with the application.   Before the original staff report was prepared, Landgate modified its proposal by reducing the house to 7,500 square feet, eliminating the guest house and changing other structures, and reducing proposed grading to 4,300 cubic yards.

According to the November 1990 staff report, development along the road or “overview” for which the Landgate house was proposed was “limited to two existing single family residences.”   Although there was “no existing or planned-for development along the inland or northern side of the overview [,] ․ there [was] a three-lot subdivision ․ which was approved with conditions at the December, 1990 ․ Commission hearings.   This subdivision is just north and west of the overview.”

At its December 13 meeting in San Diego, the Commission first considered the now-reduced project, which, according to the staff report, proposed to build on an illegal lot and violated visual resources (views from a trail in a tributary of Escondido Canyon below the south side of the road) and landform alteration (grading) requirements.   The Commission voted to continue the matter due to questions concerning the legality of the lot under the California Coastal Act of 1976 (Pub. Resources Code, § 30000 et seq.) because the Commission had not approved the County’s lot line adjustment.

According to the declaration of its engineer/representative in support of Landgate’s motion (“Petrovsky Declaration”), “once the lot line adjustment issue was raised ․ the [Commission] staff would not negotiate with regard to the issues of the size of home, grading, etc.   Instead, the legality of the lot became the focus of their attention.”   Landgate then reapplied for a coastal development permit, adding a request for Commission approval of the County lot line adjustment.

At its February 7, 1991, meeting, the Commission denied Landgate’s application, finding, among other things and over Landgate’s objection, that the lot itself constituted an impermissible “development” under the Coastal Act because it was created without Commission approval, and that the proposed house and related structures would produce excessive soil, grading, and visual degradation.2

At the hearing, the District Director, who presented staff’s recommendations, told the Commission, “The lot line adjustment changed the configuration of the two lots so that instead of being long, narrow lots, you now have two lots with the lot line being located at the center line of [the road].  [¶] What this does is it results in two lots, one of which is on the down slope side of [the road] and is much steeper than the area located on the up slope side of [the road].  [¶] Staff would suggest that this lot line adjustment not be approved, that it would be preferable to concentrate the development on the two lots on the up slope side of [the road] where the property is more level.”

After Petrovsky, Mr. Bogart, and others spoke, one Commissioner asked the District Director whether he was “right ․ to say that if the lot line adjustment came before us, you would have recommended denial?”   The District Director replied, “That is correct.”   Shortly thereafter, the Commission denied the application.

Immediately after the vote, another Commissioner said that the issue of “the County’s refusal to recognize our right to review lot line adjustments” was “an issue that ha[d] come before [the Commission] many, many times in the Malibu area.”   She added it was “really time to become extremely serious about this” and asked that staff counsel be directed to communicate with the County on the topic.   The Commission’s Chief Counsel said he would draft the letter for the Chairman’s signature.

On April 11, 1991, the Commission denied Landgate’s reconsideration request, which included a newly modified proposal reducing the height to 32 feet above natural grade and reducing grading to approximately 500 cubic yards.   After Landgate’s representative described the revised project, staff advised the Commission that Landgate was not requesting reconsideration in terms required by statute, but was describing a new project, for which it was free to apply.3

The District Director told the Commission, “One of the problems I think is that staff has indicated that in your denial of this project part of the basis for your denial was the lot line adjustment and that we told them even if they make these modifications we’ll still recommend denial.”   Chief Counsel told the members, “[W]ithout the lot line adjustment some of these revisions are I think irrelevant.”   Counsel also told the Commission, “This project does not work, if you please, without that lot line adjustment.”

The Commission’s Executive Director advised the members that “even with this new information [that Landgate was proposing], had it been presented at [or before the February 1991 meeting], ․, without your willingness to change the lot line, [the] information wouldn’t have led to a different result.”   The Commission followed staff’s recommendation to deny the reconsideration.

Landgate sued and, among other relief, petitioned for issuance of a writ of mandate directed to the Commission.   On October 24, 1991, the trial court issued the writ, vacating the Commission’s denial of the project and ordering it to reconsider the application assuming the lot reconfiguration valid.   The Commission scheduled the matter for its November 14, 1991, San Diego meeting.   Landgate prepared for and traveled to the meeting, but the Commission continued the matter until its December meeting without conducting a hearing.

On November 21, 1991, the Commission filed a return stating the parties were exploring settlement involving approval of a smaller project on Landgate’s lot.   According to the return, the parties were exploring a resolution of the litigation, including Landgate’s presentation of a downsized project in exchange for Landgate’s agreement to drop its remaining causes of action and withdraw certain portions of its claim for costs and attorney fees.   Instead, the Commission appealed the grant of the writ.   We affirmed the order issuing the writ of mandate, holding that under the facts of this case, the lot line adjustment was not a new “development” within the meaning of the Coastal Act. We held that the Commission had no jurisdiction to deny the permit on that ground.

On February 16, 1993, the Commission approved Landgate’s application for a 7,500 square foot, 35 foot high, single-family residence, with a swimming pool, garage, and septic system.   Grading involved 2,983 cubic yards.   The approval was subject to special conditions which included submission of revised plans for the Executive Director’s approval.   The plans were to show that the height of the house did “not exceed ․ 28[ ] feet above existing grade or finished grade, whichever is more restrictive.”

According to the relevant staff report, the proposed residence was 30 feet in height when nearest the road, 35 feet in height from existing grade in the section extending down the hillside, and would be 15 feet above existing grade for part of where it paralleled the road.   In addition, according to staff, “the only development visible from the [Escondido Canyon Trail] ․ is the roofline of the tower of an existing residence and a home under construction, both on the Overview ridgeline.   However, at least one single-family residence has been approved on the Overview, as well as the Shriner three-lot subdivision to the west on [the same road as the Landgate property].   The Shriner subdivision includes lots above and below the road.”   Other statements in the report reflect other project approvals in the area overlooking the trail.

After issuance of our remittitur, Landgate sought summary adjudication on its third cause of action (“Taking of Property Without Just Compensation”).   Landgate argued its claim was meritorious and without defense because (1) Landgate had been “deprived, at least temporarily, of all economically viable or productive use of its property” because, “at least temporarily, [it] could not legally obtain any valid permits or approvals to construct any project on its property as a result of the Commission’s actions.”   Landgate also argued (2) the Commission’s actions did not “substantially advance any legitimate State interest,” and (3) it had been “deprived, at least temporarily, of all reasonable investment-backed expectations with regard to its property” because it “at least temporarily, could not legally obtain any valid permits or approvals to construct any project on its property as a result of the Commission’s actions.”   The trial court granted Landgate’s motion, ruling that the Commission’s actions had at least temporarily deprived Landgate of all economically viable use of its property.   The court awarded Landgate $155,657 in damages.   The Commission appeals.

DISCUSSION

Standard of Review

As relevant, Code of Civil Procedure section 437c provides that a party may move for summary adjudication as to a cause of action if that party contends there is no merit to an affirmative defense to that cause of action.   The motion is to be granted only if it completely disposes of that affirmative defense.  (Code Civ. Proc., § 437c, subd. (f)(1).)   A plaintiff meets his burden of showing there is no defense to a cause of action if he has proved each element of his cause of action.   If the plaintiff meets that burden, the burden shifts to the defendant to show that one or more triable issues of material facts exist as to the cause of action or the defense thereto.  (Code Civ. Proc., § 437c, subd. (o)(1).)

“ ‘In reviewing an order granting, or denying, a motion seeking a summary adjudication of particular issues, we are governed by the rules applicable generally to a review of summary judgments.’  [Citation.]  ‘An appellate court determines de novo whether there is a genuine issue of material fact and the moving party was entitled to ․ summary adjudication as a matter of law.’  [Citation.]”  (Hansen Mechanical, Inc. v. Superior Court (1995) 40 Cal.App.4th 722, 726-727, 47 Cal.Rptr.2d 47.)

I

Temporary Taking

In its third cause of action, Landgate alleged that the Commission’s permit denial constituted a taking of property under both the federal and state constitutions.   The Fifth Amendment of the United States Constitution provides that private property shall not “be taken for public use, without just compensation.”   This prohibition was made applicable to the States by the Fourteenth Amendment.  (See Chicago, Burlington & Q.R. Co. v. Chicago (1897) 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979.)  Article I, section 19 of the California Constitution provides that “[p]rivate property may be taken or damaged for public use only when just compensation ․ has first been paid to, or into court for, the owner․”

Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798, offers the best guidance for resolution of this temporary taking claim.   In Lucas, the high court confronted South Carolina’s 1988 Beachfront Management Act, “which had the direct effect of barring [Lucas] from erecting any permanent habitable structures on his two [beachfront] parcels.”  (Id. at p. 1007, 112 S.Ct. at p. 2889.)   The issue was “whether the Act’s dramatic effect on the economic value of Lucas’s lots accomplished a taking of private property under the Fifth and Fourteenth Amendments requiring the payment of ‘just compensation.’  [Citation.]”   (Ibid.)

Lucas had bought his two lots after the state enacted its original coastal zone management act in 1977, under which he was not required to obtain a permit in advance of any development.   He intended to build two single-family homes, as owners of adjacent parcels had already done.   Lucas commissioned architectural drawings.   The 1988 Act ended his plans by prohibiting development of lands located, like his, within an area seaward of a coastal erosion baseline established pursuant to the statute.

Lucas filed suit.   He did not challenge the state’s authority under the police power to enact the ban.   Instead, he claimed the Act’s complete extinguishment of his property’s value entitled him to compensation.   The trial court agreed, finding, among other things, that when Lucas bought the lots both were zoned for his intended use and no restrictions were placed thereon by state or local law.   The trial court also found that the Act decreed a permanent ban on construction on Lucas’s lots, eliminated the unrestricted use, and rendered them valueless, thus concluding that the properties had been “taken” by operation of the Act. The court ordered the state to pay just compensation of $1,232,387.50.

The South Carolina Supreme Court reversed, troubled by Lucas’s failure to challenge the validity of the Act itself.   In the absence of such an attack, “the court believed itself bound to accept the ‘uncontested ․ findings’ of the [state] legislature that new construction in the coastal zone-such as [Lucas] intended-threatened this public resource.  [Citation.]”  (Lucas v. South Carolina Coastal Council, supra, 505 U.S. at p. 1010, 112 S.Ct. at p. 2890.)   The South Carolina court ruled that when a land use regulation is “designed ‘to prevent serious public harm,’ [citations], no compensation is owing under the Takings Clause regardless of the regulation’s effect on the property’s value.”  (Ibid.)

The United States Supreme Court rejected the state court’s approach.   The high court referred to its history in the area of uncompensated taking by overregulation and concluded, “In 70-odd years of ․ ‘regulatory takings’ jurisprudence [after the decision in Pennsylvania Coal Co. v. Mahon (1922) 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322], we have generally eschewed any ‘ “set formula” ’ for determining how far is too far, preferring to ‘engag[e] in ․ essentially ad hoc, factual inquiries.’  [Citations.]   We have, however, described at least two discrete categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint.   The first encompasses regulations that compel the property owner to suffer a physical ‘invasion’ of his property․  [¶] The second situation in which we have found categorical treatment appropriate is where regulation denies all economically beneficial or productive use of land.  [Citations.]   As we have said on numerous occasions, the Fifth Amendment is violated when land[ ]use regulation ‘does not substantially advance legitimate state interests or denies an owner economically viable use of his land.’  [Citation.]”  (Lucas v. South Carolina Coastal Council, supra, 505 U.S. at pp. 1015-1016, 112 S.Ct. at pp. 2893-2894;  fns. omitted.)

After this court affirmed that the Commission had no jurisdiction to deny the permit on the basis of the lot line adjustment, the Commission granted the conditioned permit described above.   In ruling on Landgate’s later motion for summary adjudication on the taking issue, the trial court found that the Commission’s February 1991 denial of the permit application “deprived [Landgate], at least temporarily, of all economically viable or productive use of its property insofar as Landgate ․ could not legally obtain any valid permits or approvals to construct any project on its property as a result of the Commission’s actions.”

Petrovsky stated in his declaration that he had handled at least 15 Commission matters before Landgate’s and was “very familiar with the procedures and requirements for construction in the Coastal Zone.” He explained that normally the application for a project marked the beginning of negotiations concerning the size of a home, grading, and other construction-related factors.  “Through a negotiated process, a resolution is typically reached with regard to the size of the home, amount of grading and other issues.”

We agree that the Commission’s permit denial caused a taking of Landgate’s property.   The Commission argues that its 1991 permit denial was not, in the language of Lucas, one of those “extraordinary circumstance[s]” in which government actions are found to deprive landowners of all economically viable use.  (Lucas v. South Carolina Coastal Council, supra, 505 U.S. at p. 1017, 112 S.Ct. at p. 2894.)   The Commission does not argue that a viable use of the land remained after the permit denial.   Instead, the Commission contends the two-year hiatus was the result of its “mistake” concerning the lot line adjustment, which resulted in the kind of typical temporary delay which is noncompensable under the takings clause.4  The Commission points out that the regulatory process is complex (including disputes over sufficiency of the applicant’s submitted information, geographical boundaries of an agency’s jurisdiction and of a landowner’s property, and, as in this case, an agency’s authority to require a permit) and that “regulatory agencies ․ sometimes make mistakes in resolving these issues.”

We recognize, as Petrovsky suggested, that the regulatory process necessarily involves reasonable delay to the landowner.   We realize, as well, that mistakes sometimes, but certainly not inevitably, occur as part of the review process.   What we cannot accept is the Commission’s characterization of the treatment of Landgate here as the reasonable result of a “mistake.”   Nothing in the record suggests that the lot line adjustment issue arose out of anything other than the Commission’s ongoing jurisdictional spat with the County of Los Angeles combined with a desire to prevent Landgate from building on its parcel.   Instead, the overwhelming sense of the record is that by its insistence that the lot itself was illegal, the Commission put Landgate in a situation which was not of Landgate’s own making and which Landgate could do nothing to cure.   In short, this was not a case of bureaucratic bungling, but a declaration of war between governmental behemoths in which the inevitable casualty was to be a noncombatant, Landgate.   The Commission, with apparent indifference to the consequences on its applicant, denied the permit without the jurisdiction to do so.   The direct effect was to prevent Landgate from, as the trial court put it, “construct[ing] any project on its property.” 5

The facts of this case speak for themselves.   When it denied the coastal permit, the Commission went too far and denied Landgate all economically viable use of its property, preserving it as open space.   As Lucas states, “[T]he fact that regulations that leave the owner of land without economically beneficial or productive options for its use-typically, as here, by requiring land to be left substantially in its natural state-carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm.  [Citations.]”  (Lucas v. South Carolina Coastal Council, supra, 505 U.S. at p. 1018, 112 S.Ct. at pp. 2894-2895.)

As in Lucas, the trial court here found that the permit denial deprived Landgate of all economically viable use of its land.   Our review of the record leads us to the same conclusion.   Faced with the lot line adjustment issue to which it had not contributed and which had the effect of prematurely ending the normal negotiating process, Landgate was put in an unworkable position.   When its permit to build a single family residence was denied because of that same issue, Landgate was left with no economically viable use of its land.

The Commission contends, in the alternative, that its assertion of permit jurisdiction did not constitute a taking because Landgate did not establish its right to a permit before the alleged taking.   The Commission posits that its denial was based independently on the project’s conflict with Coastal Act policies regarding grading and visual intrusion and, therefore, even had it not reached the lot line adjustment issue, the Commission’s permit denial would have been proper.   Thus, the Commission argues, Landgate did not establish its entitlement to a permit until after additional changes were made and Landgate accepted permit conditions imposed at the February 1993 meeting.   As a result, the argument continues, the February 1991 denial did not constitute a taking.

As we already have noted, in his declaration in support of the summary adjudication motion, Petrovsky, experienced in matters involving the Commission’s process, explained that typically the application for a project marked the beginning of ultimately successful negotiations concerning the size of a home, grading, and other construction-related factors.   However, Commission staff ceased normal negotiations with the applicant after staff raised the lot line adjustment issue, an issue over which Landgate claimed the Commission lacked jurisdiction.   Staff’s position remained unchanged and was conveyed to the Commission, which denied the permit pursuant to staff’s recommendation.

The Petrovsky Declaration and statements of Commission staff, chief counsel, and Commissioners quoted in our factual summary above support our conclusion that the lot line adjustment was pivotal in the permit denial and in the denial’s complete prohibition of any development on Landgate’s lot.   So long as the Commission held to its finding that the reconfiguration remained a subject for its review, Landgate could not negotiate to obtain the permit necessary to build a house on its County-approved lot.   Not until two years after its original denial did the Commission approve a project for the Landgate property.

The Commission’s ultimate approval of the house for the Landgate property, after the reconfiguration issue had been laid to rest, validates our conclusion that the lot line adjustment issue was the determinative basis for the denial.   Despite the Commission’s current protestations to the contrary, hindsight shows clearly that visual impact and grading issues were not pivotal in the 1991 permit denial if only because in 1993, shortly after the remittitur was final in the preceding appeal, the Commission approved a single family residence for the property.   At that point, the project was described as a 7,500 square foot, 35-foot high, single family residence, with swimming pool, garage, and septic system and grading of 2,983 cubic yards.   The only difference between these facts and the rejected 1991 project was a grading reduction of approximately 1,300 cubic yards, apparently proposed by Landgate.6

It is true, as the Commission points out, that its ultimate approval of the project was conditioned and that the conditions included a height limitation, which appears to have resulted in some reduction in height.   However, as Landgate points out, the Commission could have imposed special conditions on matters such as height in February 1991, had it not been so intent on reviewing the County’s lot line adjustment.

Additional substantiation that the lot line adjustment was the basis for the permit denial comes from the fact that, as we interpret relevant staff reports, the Commission had approved at least two homes on the same sloping north side of the road as Landgate’s parcel.   Those approvals are clear indications that but for the lot line adjustment issue, Landgate’s application to build the house and related structures on its property could and would, through the normal negotiation process, have been approved by February 1991 or shortly thereafter.   Instead, the Commission’s unlawful preoccupation with the lot line adjustment made it impossible for Landgate to move forward with an economically viable use of its property.   We thus reject the Commission’s suggestion that no taking occurred because Landgate could not establish their entitlement to a coastal permit.

II

Damages**

III

Code of Civil Procedure Section 1036 Expenses

On its cross-appeal, Landgate also contends the trial court erred in denying its request for attorney fees incurred in the writ of mandate proceeding.

After prevailing on its petition for writ of mandate in the trial court, Landgate moved for attorney fees and costs under Code of Civil Procedure section 1036 (hereinafter section 1036).   The trial court denied the attorney fees request and awarded $619.50 (of $63,647.18 requested) in costs.   We awarded Landgate its costs on appeal in its successful defense of the trial court’s ruling.   The Commission ultimately paid Landgate $1,434.01 for litigation costs arising from the mandate proceedings.

Following the damages trial, Landgate sought just under $403,000 in attorney fees ($266,100) and costs ($136,714.27) for the entire action pursuant to section 1036, including costs and $155,351 in attorney fees for the trial and appellate defense in the writ of mandate proceeding.   The trial court denied fees and costs for the writ proceeding and awarded Landgate $122,395.73 in attorney fees ($99,269) and costs ($23,126.73) incurred during the inverse condemnation proceeding.

At the time of the trial court’s determinations, section 1036 provided, as pertinent:  “In any inverse condemnation proceeding brought for the taking of any interest in real property, the court rendering judgment for the plaintiff by awarding compensation for such taking, ․, shall determine and award or allow to such plaintiff, as a part of such judgment ․, such sum as will, in the opinion of the court ․, reimburse such plaintiff for his reasonable costs, disbursements, and expenses, including reasonable attorney, appraisal, and engineering fees, actually incurred because of such proceeding.” 10  (Emphasis added.)

Landgate’s pleading in the trial court was titled, “Verified Petition for Writ of Mandate and Complaint for Declaratory Relief, Taking Without Just Compensation and Deprivation of Civil Rights.”  (Some caps. omitted.)   Landgate moved to “sever” the proceeding under Code of Civil Procedure section 598, so that the first two causes of action, for writ of mandate and declaratory relief, could be heard first, receiving calendar preference, and the remaining causes of action be tried, or otherwise addressed, in the normal course of events.11

Landgate says it was entitled to section 1036 costs and fees for the entire proceeding, including the writ of mandate proceeding, because success on its claim that the Commission had overstepped its jurisdiction and the consequent invalidation of the permit denial was, under California case law, a prerequisite to litigation of its right to damages.

The Commission does not dispute Landgate’s assertion that resolution of the mandate claim was a prerequisite to pursuing its inverse condemnation claim.12  Instead, the Commission says that Landgate’s argument is “irrelevant to the issue of reimbursement under section 1036” because the statutory language describes eligible expenses only as those “ ‘actually incurred’ in the inverse condemnation proceeding” and Landgate’s expenses in the mandate proceeding were not so incurred.   The statutory language actually provides that the specified expenses are to be reimbursed if “actually incurred because of [any inverse condemnation proceeding.]”  (Code Civ.Proc., § 1036, emphasis added.)

Since Landgate had to resolve the propriety of the permit denial before it could litigate whether that denial constituted a taking, entitling Landgate to just compensation, resolution of the mandate claim was part of the inverse condemnation proceeding and any statutory fees and costs incurred in resolving the mandate claim were “actually incurred because of” such proceeding.13  (Code Civ.Proc., § 1036.)

The Commission’s claim that the trial court did not abuse its discretion in denying the mandate expenses misses the mark.  Section 1036 provides that a court “shall determine and award or allow” such sum as will, in its opinion reimburse the plaintiff.  (Emphasis added.)   The section thus requires an award (Customer Co. v. City of Sacramento (1995) 10 Cal.4th 368, 390, 41 Cal.Rptr.2d 658, 895 P.2d 900);  the amount of the award is a matter of discretion.   On remand, Landgate will have to establish the reasonableness of its fees and costs.

The Commission also asserts that Landgate’s claim for fees and costs in the mandate proceeding is barred under the doctrines of res judicata and collateral estoppel.   We agree that to the extent Landgate was awarded and paid non-section 1036 costs in the mandate proceeding, and did not challenge the reasonableness thereof by filing a cross-appeal in the mandate proceeding, that issue is resolved.   However, in light of our holding that Landgate is entitled to section 1036 expenses for the mandate proceeding, on remand the trial court will review Landgate’s substantiation of those expenses to determine, in its discretion, whether Landgate has sufficiently identified those expenses and whether the amounts claimed are reasonable, pursuant to the statute.

We reject the Commission’s implicit argument that Landgate is barred from claiming section 1036 expenses because it did not claim its entitlement to them on a cross-appeal from the mandate action.   At that point, had Landgate made a section 1036 expenses claim to this court, we would have denied its request as premature, because Landgate had not yet shown a taking had occurred.   Landgate has now established the taking element and is entitled to section 1036 expenses in such reasonable amount as the trial court may find.

IV

Title 42, United States Code Section 1983***

DISPOSITION

We reverse (1) the award of property taxes and (2) the denial of Landgate’s request under section 1036 for costs and fees incurred in the writ of mandate proceeding.   The matter is remanded for the trial court’s determination of Landgate’s section 1036 expenses, including Landgate’s appellate defense of the trial court’s grant of the petition for writ of mandate.   In all other respects, the judgment is affirmed.   Landgate is awarded its costs on this appeal.

FOOTNOTES

1.   Landgate’s first amended petition/complaint, filed November 19, 1993, added Peter and Punte Bogart, who “owned and controlled” Landgate as plaintiffs.   The Bogarts held a life estate in the subject lot.   We refer to the Bogarts and Landgate collectively as “Landgate.”

2.   “ ‘Development’ means ․ the placement or erection of any solid material or structure;  discharge or disposal or any dredged material or of any gaseous, liquid, solid, or thermal waste;  grading, removing, dredging, mining, or extraction of any materials;  change in the density or intensity of use of land, including, but not limited to, subdivision ․ and any other division of land, including lot splits, ․;  construction, reconstruction, demolition, or alteration of the size of any structure․”  (Pub. Resources Code, § 30106.)

3.   Public Resources Code section 30627, subdivision (b)(3) provides:  “The basis of the request for reconsideration shall be either that there is relevant new evidence which, in the exercise of reasonable diligence, could not have been presented at the hearing on the matter or that an error of fact or law has occurred which has the potential of altering the initial decision.”

4.   The Commission relies on a number of noncompensable delay cases which we find factually driven and distinguishable or not binding on this court.   For example, in Del Oro Hills v. City of Oceanside (1995) 31 Cal.App.4th 1060, 37 Cal.Rptr.2d 677, the landowner/developer raised a facial challenge to a voter-enacted growth control ordinance which permitted only staged development.   The undisputed facts established that the property was eventually sold and used for the planned purpose.In Guinnane v. City and County of San Francisco (1987) 197 Cal.App.3d 862, 241 Cal.Rptr. 787, the landowner bought four, adjoining vacant lots in 1979.   In July 1980, the city planning commission and recreation and parks commission designated an area which included the lots for study for possible acquisition as a park.   The area was included in the recreation and open space element of the city’s master plan.   In September 1980, the landowner applied for a building permit to build four houses on his lots.   The planning department required preparation of an environmental impact report.   The Landowner hired a consultant to prepare the document.   In October 1981, the park study was completed and the two city agencies recommended purchase of only a portion of the subject area.   The area to be bought did not include the four lots.   Two months later, the planning commission amended the master plan to permit construction on lots not to be acquired, and the following month rescinded its requirement of an EIR for the landowner’s proposed project.   In connection with preparation of the negative declaration the planning department decided would suffice as environmental review, the department asked the landowner for certain supporting information.   It took the landowner more than three years to submit the information.   In October 1985, the city issued an amended negative declaration in response to public comment.   Meanwhile, the landowner had filed suit in 1982.   The landowner sued before the environmental review was completed and the record did not show whether any final action had been taken on the new building permit the landowner had filed after his original application had been cancelled because of his failure to supply information.   When the city’s motion for summary judgment was heard in February 1986, the new application had not yet been acted on.In Tabb Lakes, Ltd. v. U.S. (Fed.Cir.1993) 10 F.3d 796, the landowner began filling wetlands without a permit and then sued for compensation for an alleged taking when the United States Army Corps of Engineers issued a cease and desist order.   The appellate court held, inter alia, that the delay caused by the cease and desist order was neither extraordinary nor in bad faith and, even if the landowner’s ability to sell the property was affected by the order, the order only delayed development.  (Id. at p. 800.)In contrast, in this case, Landgate applied for a permit to build the house and was negotiating with Commission staff before the lot line adjustment issue arose.   Landgate had bought a lot approved by the County.   The Commission’s action, taken in excess of its jurisdiction, left Landgate not only unable to use its land but unable even to negotiate for a different project.

5.   It appears that Landgate tried to meet Commission staff’s concerns about the County-approved reconfiguration by modifying its original application, so that at the February 1991 meeting, the project included a request for Commission review of the reconfiguration.   We question whether, despite its apparent desire to comply with staff’s wishes, Landgate was in a position to rightfully ask for that review.   It did not own both of the original lots, and did not own any land south of the road.   Thus, the effect of its “reapplication” and, indeed, certain aspects of the staff report for the February 1991 meeting gave an unreal quality to the process with staff’s conclusion “that the least environmentally damaging site for development is on the coastal [south] side of [the road] and that the original lot configuration of long thin parcels extending across the road should not be altered.”

6.   According to the relevant staff report, project plan changes were:  “reduction in grading from 4300 [cubic yards] to 2983 [cubic yards], reduction in the size of fill slopes, change in the driveway entry design from a rectangular courtyard concept to a hammerhead turnaround, elimination of the guest house, relocation of the pool to up near the road, and elimination of a subterranean area of the residence.”   As we interpret this language, the grading reduction was thus largely the result of changing the driveway design, eliminating the guest house, relocating the pool, and eliminating a subterranean part of the house.We note as well that the final grading number was considerably higher than the approximately 500 cubic yards described by Landgate at the April 1991 Commission hearing when Landgate’s reconsideration request was denied.

FOOTNOTE.   See footnote *, ante.

10.   Effective January 1, 1996, section 1036 was amended, as relevant, to extend its application to “any appellate proceeding in which the plaintiff prevails on any issue in that proceeding.”

11.   Code of Civil Procedure section 598 grants a court discretion following notice and a hearing, upon written motion, timely made, to order “that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case” “when the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby.”“Severance is, in effect, the ‘flip side’ of consolidation:  i.e., it is the procedure whereby the court may order separate trials of issues or parties joined in a single action.  [¶] Where a separate trial is ordered on the issue of liability, the procedure is commonly referred to as ‘bifurcation.’   But it is still a severance and governed by the Code provisions applicable to severance.  (The objective of bifurcation ․ is to avoid wasting time and money on the trial of damages issues if the liability issue is resolved against the plaintiff.)  [Citation.]”  (Weil & Brown, Cal. Practice Guide:  Civ.Proc. Before Trial (Rutter 1996) Case Management & Trial Setting, § [12:406], p. 12(l )-76.)  Code of Civil Procedure section 598 bifurcation also “prevents possible prejudice to a defendant where a jury might look past liability to compensate a plaintiff through sympathy for his or her damages.”  (Id. at § [12:414], p. 12(l )-78.)

12.   Indeed, in the trial court, the Commission argued in support of its demurrer to all seven causes of action that “Landgate must establish the invalidity of the Commission’s action before seeking to recover on an inverse condemnation claim.”  (Some caps. omitted.)

13.   Because we hold that section 1036 requires reimbursement of attorney fees and costs incurred in the mandate litigation, we need not address the Commission’s assertion, predicated on a contrary conclusion, that the trial court was required to apportion between the mandate and inverse condemnation proceeding expenses.   We note, however, that none of the cases cited by the Commission addressed a situation where, as here, a landowner succeeded on a mandate claim for a taking by overregulation, a prerequisite to a later successful finding that a taking had occurred and an award of damages therefor.   Instead, the cited cases required allocation of attorney fees or attorney fees and costs (1) where the litigation involved inverse and direct condemnation, on one hand, and nuisance-personal injury claims, on the other, in which the appellate court remanded because it could not tell which attorney fees had been awarded on which claims (Greater Westchester Homeowners Assn. v. City of Los Angeles (1979) 26 Cal.3d 86, 160 Cal.Rptr. 733, 603 P.2d 1329 [airplane overflights, landowners’ lawsuits consolidated with City’s direct condemnation suits and bifurcated into condemnation and nuisance trials] ), (2) where a landowner’s claims of nuisance, negligence and trespass for flooding was bifurcated into liability and damages segments (Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 218 Cal.Rptr. 839), (3) where the appellate court affirmed a judgment based on a jury’s findings of liability and damages in landowner’s claims of inverse condemnation and nuisance for flooding and reversed and remanded only because the trial court improperly calculated the amount of prejudgment interest due on the damages award (Imperial Cattle Co. v. Imperial Irrigation Dist. (1985) 167 Cal.App.3d 263, 213 Cal.Rptr. 622), or (4) where a city’s direct condemnation and landowner’s inverse lawsuits were consolidated and then bifurcated into liability and damages phases (Los Angeles v. Waller (1979) 90 Cal.App.3d 766, 154 Cal.Rptr. 12 [appellate court addressed reasonableness of trial court’s section 1036 award] ).

FOOTNOTE.   See footnote *, ante.

ORTEGA, Acting Presiding Justice.

MIRIAM A. VOGEL and MASTERSON, JJ., concur.

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