HUGHES DEVELOPMENT CORPORATION v. SOUTHERN CALIFORNIA EDISON COMPANY

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

HUGHES DEVELOPMENT CORPORATION, Plaintiff and Respondent, v. SOUTHERN CALIFORNIA EDISON COMPANY, Defendant and Appellant.

Civ. 56080.

Decided: December 27, 1979

John R. Bury, Robert J. Cahall, Tom P. Gilfoy and Jerry A. Brody, Rosemead, for defendant and appellant. William E. Dennis, Claremont, for plaintiff and respondent.

Southern California Edison Company, defendant and appellant (hereinafter referred to as ‘Edison’) appeals from a judgment, after court trial, awarding Hughes Development Corporation, plaintiff and respondent (‘Hughes'), $44,974.34 plus costs and interest as set forth therein. Said sum was, in effect, the return of monies which Hughes had paid Edison, under protest, for the cost of relocating electrical facilities in a public highway, when the City of Clarement demanded Hughes widen the highway abutting its property, as a condition to granting subdivision tract map approval to Hughes.

Edison argues that the trial court erred in giving back to Hughes the money that it had paid under protest in that:

1. The state law having preempted the field, the City of Claremont could not have demanded under its franchise with Edison, that Edison relocate its power facilities, and

2. Inasmuch as the relocation benefited Hughes in its housing development, Hughes is the only party obligated to bear the cost of relocation, since the relocation was triggered solely by conditioning Hughes' subdivision approval upon the widening of the highway containing Edison's existing power facilities.

The facts are not in dispute. The highway is a state highway located within the city limits of Claremont. Edison had electric facilities located therein for many years prior to the street widening involved in this matter.

The city in its franchise to Edison required that:

‘Section 12. The grantee of this franchise shall:

‘. . .

‘(d) remove or relocate, without expense to the City, any facilities installed, used and maintained under this franchise if and when made necessary by any lawful change of grade, alignment or width of any public street, way, alley or place, including the construction of any subway or viaduct by the City . . ..’

Sections 680, 681 and 690 of the Streets and Highways Code2 give the state its power to order relocation. Edison argues that the statutory scheme is such that, when Baseline Road became a state highway in 1933, all control over that highway and facilities contained therein became vested in the state.

It is agreed by both parties in this matter that the state neither demanded relocation nor specifically authorized the City of Claremont to demand relocation on the state's behalf.

The portion of Baseline Road subject to this widening and relocation did not come within the city's boundaries until late in 1966, although Edison had electrical facilities located in the same since 1917. The franchise with the above quoted condition was granted in 1942 by ordinance; and Hughes was granted approval to subdivide and improve its property in September of 1976.

When Edison was required to relocate its electrical facilities in 1976 on demand by Claremont and in accordance with the terms of the subject franchise, Edison demanded that the costs of relocation be paid by Hughes. The trial court ordered these returned to Hughes.

Turning to Edison's first contention, we find no merit in the argument that the state has either preempted the field or alternatively that the state has repealed, by implication, the ordinance granting Edison its conditional interest in the subject highway.

As pointed out by respondent, we are not at liberty to transform ‘may’ to ‘shall’ in section 680 in order to give foundational support to Edison's argument. The state has, no doubt, enormous powers with respect to the development of its highways, but permits co-equal jurisdiction in cities as seen in the language of section 680 quoted in full above and which provides in part:

‘Whenever a franchise shall have been granted by any county or city in any public highway which has been or is subsequently constituted a state highway, the department may enforce any obligations of the grantee or holder of such franchise in respect to the repair of the highway. . . .’ (Emphasis ours.)

Absent any provision to the contrary in the franchise, Edison was legally required to relocate its electrical facilities, upon demand by Claremont. (Southern Cal. Gas Co. v. City of L. A. (1958) 50 Cal.2d 713, 716, 329 P.2d 289.)

Further, section 676 of the Code provides for delegation of power to cities as follows: ‘The department may delegate to any city any of the department's powers, duties, and authority, other than those of approval, under this chapter as to any state highway, or any part thereof, within such city, and may withdraw any such delegation of authority.’

Although there is no express delegation in this case, there is also no evidence supporting Edison's claim that the state never authorized this relocation by implication. The absence of such evidence is no support for Edison's argument.

Both parties rely on differing interpretations of sections 680 et seq.3 of the Streets and Highways Code quoted above.

It is clear from the statutory scheme that the Legislature intended to create or extend rights within cities and counties in and under public highways belonging to the state. Again we find appellant arguing that ‘may’ be turned into ‘shall’; when plain reading of the statute shows that the Legislature contemplated, as a matter of practical reality, that there would be local and existing franchises, which could not be terminated by fiat of state law, without the attendant problems of inverse condemnation.

There is nothing incompatible about the city's action with respect to its franchise in the state's highway. (See concurring opinion of Justice Richardson re pre-emption and municipal affairs in Weekes v. City of Oakland (1978) 21 Cal.3d 386, 398, 146 Cal.Rptr. 558, 579 P.2d 449).

Turning to appellant's second argument, Edison cites the leading subdivision case of Ayres v. City Council of Los Angeles (1949) 34 Cal.2d 31, 207 P.2d 1, which upheld the right of the city to require a subdivider to make and pay for off site improvements, such as streets, sidewalks, planting and the like, as incident to obtaining approval to subdivide his property.

Since the Ayres case, the Legislature has seen fit to require subdividers to dedicate park land (or fees in lieu) as additional conditions of obtaining tract approval. (Gov.Code, § 66477.)

However, Edison fails to show where either statute or case law requires a subdivider, such as Hughes, to compensate a third party's relocation costs when such costs have not been made a condition of tract map approval by the city having jurisdiction. A different question and answer might well arise had the city required payment of the subject relocation costs by Hughes as a further condition of tract approval. No such question is now before us.

The trial court concluded based on the record before it and now before us that:

‘The Defendant breached its franchise agreement with the City of Claremont, by failing to move and relocate its 11 electrical feeder poles on Baseline Road, when demanded to do so by the City of Claremont, and by requiring Plaintiff to pay the sum of $55,000.00, less the sum returned to it of $10,025.62, or a total of $44,974.34, before Defendant would move and relocate the poles in question.’

Edison additionally argues that Hughes is analogous to a third party beneficiary by virtue of the franchise; and, therefore, Hughes is obligated to reimburse Edison for the benefit conferred (electrical services to its subdivision).

It is patent that Hughes, when it sought tract map approval from the City of Claremont in 1966, could not have been contemplated as a party beneficiary when the franchise was granted by ordinance adopted in 1942. There was no benefit conferred upon Hughes, then or now. Rather, Hughes conferred one upon Edison, when it tendered, under protest, the subject relocation costs. Edison is not entitled to retain such benefit as a matter of law. (Holmes v. Steele (1969) 269 Cal.App.2d 675, 678, 75 Cal.Rptr. 216.)

The judgment of the trial court is affirmed. Costs on appeal are awarded to respondent.

FOOTNOTES

FOOTNOTE.  

2.  Streets and Highways Code section 680 provides: ‘Whenever a franchise shall have been granted by any county or city in any public highway which has been or is subsequently constituted a state highway, the department may enforce any obligations of the grantee or holder of such franchise in respect to the repair of the highway. The department may require any person who has placed and maintained any pole, pole line, pipe, pipe line, conduit, street railroad tracks, or other structures or facilities upon any state highway, whether under such or any franchise, to move the same at his own cost and expense to such different location in the highway as is specified in a written demand of the department, whenever necessary to insure the safety of the traveling public or to permit of the improvement of the highway; provided, that no such change of location shall be required for a temporary purpose. The department shall specify in the demand a reasonable time within which the work of relocation must be commenced and the grantee or owner must commence such relocation within the time specified in said demand and thereafter diligently prosecute the same to completion. [¶] In case the owner fails to comply with any such demand, the encroachments specified in the demand become subject to the provisions of Article 3 of this chapter, except that no further notice is required.’ (Fn. omitted.) Streets and Highways Code section 681 provides: ‘Whenever a franchise shall have been granted by any county or city in any public highway heretofore or hereafter constituted a state highway, all of the rights of the grantor under such franchise, including the right to collect and receive tolls, charges or payments thereunder other than the rights transferred to the department by Section 680, are reserved to such county or city.’ Streets and Highways Code section 690 provides: ‘The department shall have the power to prescribe the location, within the limits of the state highway, of any physical property to be constructed or installed in, under, over or upon such state highway pursuant to any such franchise. Before constructing or installing any such physical property in any state highway, the holder of the franchise shall apply to the department, or its authorized agent, for a permit, and the department shall issue a permit, in which it may impose reasonable conditions as to location, method and manner of construction. All such physical property is subject to relocation in the cases and in the manner provided in Section 680.’

FN3. Brought also in issue are the following relevant Streets and Highways Code provisions: Streets and Highways Code section 682 provides: ‘Every city and county shall have power to grant franchises authorizing the exercise of any privilege in, along, across, under, though, over, and upon any state highway, or portion thereof, within its boundaries to the extent and in the manner that it shall have power to grant franchises authorizing the exercise of such privilege in, over, and upon city streets, or county highways, as the case may be, subject to the conditions and limitations provided in Sections 682 to 695, inclusive.’ Streets and Highways Code section 686 provides: ‘The department shall approve any franchise submitted for approval pursuant to Section 683 or 684 unless the department finds on the facts of the particular case that the exercise of the privilege proposed to be granted is incompatible with the primary use of the freeway or other state highway for vehicular traffic or with its improvement to serve its primary use.’ Streets and Highways Code section 692 provides: ‘Independently of or jointly with the grantor city or county, the department may enforce any obligation imposed by any franchise granted pursuant to Section 682 relating to the construction, reconstruction, improvement, repair, or maintenance of any state highway or portion thereof.’ (Emphasis ours.).  FN3. Brought also in issue are the following relevant Streets and Highways Code provisions: Streets and Highways Code section 682 provides: ‘Every city and county shall have power to grant franchises authorizing the exercise of any privilege in, along, across, under, though, over, and upon any state highway, or portion thereof, within its boundaries to the extent and in the manner that it shall have power to grant franchises authorizing the exercise of such privilege in, over, and upon city streets, or county highways, as the case may be, subject to the conditions and limitations provided in Sections 682 to 695, inclusive.’ Streets and Highways Code section 686 provides: ‘The department shall approve any franchise submitted for approval pursuant to Section 683 or 684 unless the department finds on the facts of the particular case that the exercise of the privilege proposed to be granted is incompatible with the primary use of the freeway or other state highway for vehicular traffic or with its improvement to serve its primary use.’ Streets and Highways Code section 692 provides: ‘Independently of or jointly with the grantor city or county, the department may enforce any obligation imposed by any franchise granted pursuant to Section 682 relating to the construction, reconstruction, improvement, repair, or maintenance of any state highway or portion thereof.’ (Emphasis ours.)

CRAHAN,1 Associate Justice. FN1. Assigned by the Chairperson of the Judicial Council.

LILLIE, Acting P. J., and HANSON, J., concur.

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