STATE v. DOUD

Reset A A Font size: Print

Court of Appeal, Sixth District, California.

STATE of California, Petitioner, v. The SUPERIOR COURT of Monterey County, Respondent; John Francis DOUD, Trustee, Real Party in Interest.

No. H004227.

Decided: June 14, 1988

John K. Van De Kamp, Atty. Gen., Richard E. Martland, Chief Asst. Atty. Gen., Marvin Goldsmith, Sr. Asst. Atty. Gen., Tyler B. Pon, Supervising Deputy Atty. Gen., San Francisco, for petitioner. No appearance for respondent. Law Offices of Jess S. Jackson and Barbara R. Banke, P.C., San Francisco, for real party in interest.

This is a proceeding in eminent domain.   The trial court set aside the State of California's abandonment of the proceeding, and the State seeks a writ of prohibition or mandate to set aside that ruling and compel dismissal of the action.   For reasons we shall state, we have concluded that the trial court's decision lacks the evidentiary support required by Code of Civil Procedure section 1268.510 1 for setting aside the abandonment;  hence the writ of prohibition will issue preventing further proceedings on the complaint.   However, the landowner, real party in interest, Doud, may continue to prosecute his cross-complaint to recover any damages he can show to be the result of the pendency of the proceeding in eminent domain.  (See Klopping v. City of Whittier (1972) 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345.)

FACTS

This eminent domain action has been pending since December 16, 1980, when the State Department of Parks and Recreation (State) filed a complaint seeking to condemn 15 parcels of land in Monterey County (County) belonging to the Doud Trust (Doud) including a beach known locally as Garrapata Beach.   The land was to be acquired with bond issue funds which the voters approved in 1976 for parkland acquisitions.   On October 29, 1982, State abandoned the action as to all but two of the parcels.  (That abandonment is not in issue here.)

The parcels remaining subject to the complaint were (a) parcel 4035, approximately 123 acres bounded on the west by the Pacific Ocean and on the east by State Highway 1, running north and south for about two miles from Garrapata Creek to Soberanes Point in the Big Sur area of the County, and (b) parcel 4040, approximately nine and a half acres located immediately across the highway from the southern portion of parcel 4035.   Parcel 4035 includes Garrapata Beach.   Both parcels are included in a 2850–acre ranch owned by Doud.

The property was first appraised July 1, 1978, before filing of the eminent domain action.   Doud rejected the State's offers of $861,000 for parcel 4035 and $132,500 for parcel 4040.   The State Public Works Board on June 20, 1980, passed a Resolution of Necessity authorizing the acquisition by eminent domain.

The parties could not agree on the value of the parcels.   They continued settlement negotiations over several years.   It was difficult to establish value because coastal property in the Big Sur area had been subject to what was essentially a development moratorium since the voters approved the Coastal Zone Conservation Act (former Pub.Resources Code, § 27000 et seq.) on November 7, 1972.   In 1977, the California Coastal Act of 1976 (Pub.Resources Code, § 30000 et seq.) superseded the initiative measure and required the preparation of local coastal programs by local government entities.   Such programs were to be based on land use plans for coastal areas within the boundaries of a local jurisdiction.   The local entity, once it had approved a land use plan and had prepared a local coastal program, had to obtain certification from the appropriate regional coastal commission.  (Pub.Resources Code, §§ 30500, 30510.)   Then, after such certification occurred, a coastal landowner had to obtain a coastal development permit before developing his land.   (Pub.Resources Code, § 30604.)

The land use plan for the Big Sur area was not submitted for certification until 1984, and the County did not adopt a local coastal plan indicating permissible uses for property in the area until later that same year.   Immediately afterwards, on November 14, 1984, State filed an at issue memorandum seeking a trial setting for the condemnation action.   However, that memo was withdrawn at the request of Doud's counsel who had just substituted into the action.   Later at issue memos were filed by State in 1985, and trial dates obtained.

Doud's first counter offer during negotiations was on August 5, 1985, demanding $4.8 million.   This amount was four times the amount of State's offer and according to State greatly exceeded the balance remaining in the bond issue proceeds appropriated to fund the purchase.   The original appropriation in the 1976 Bond Act was the sum of $5,360,000.

Also around this time, on August 13, 1985, Doud filed a cross-complaint for relief under the federal Civil Rights Act (42 U.S.C., § 1983) and in inverse condemnation (Cal.Const., art. I, § 19), alleging that since before 1972 the State has intended to take the subject property for public use by negotiation, formal condemnation or otherwise;  the State has therefore blighted the subject property by including it on its list of properties to be acquired.   Further, since December 21, 1980, the State has purposely delayed the prosecution of the eminent domain action so that “confiscatory regulations” could be implemented by the certification process before the Coastal Commission, to depress the value of the Doud family property.

Shortly after receiving Doud's $4.8 million offer, State communicated its belief that going forward with the eminent domain action would be futile except as a vehicle for a negotiated purchase, because State could not go to trial in the face of a possibility that the verdict could exceed the available acquisition funds.   The parties stipulated to vacate the trial date.   They also agreed to extend the statutory five-year period to bring the action to trial (§ 583.310), first to June 16, 1986, and then later to January 1, 1987.   Meanwhile they also explored a settlement involving purchase of land not included in the complaint.

After a settlement meeting in June 1987, State concluded the case could not settle within the limit of the existing appropriation.   It was not willing to risk a trial where the verdict could exceed available funds.   Hence it filed a notice of abandonment August 25, 1987.

Doud moved under section 1268.510 to set aside the abandonment.   After a hearing, the trial court granted the motion.   The trial court expressed the following reasons:  During the time this action in eminent domain has been pending the subject property was widely regarded as slated for inclusion in the adjacent state park.   It was so identified in the Big Sur Local Coastal Plan.   For that reason, the County denied Doud's requests for allocations for development of residential or visitor serving uses, although such uses were granted to other comparable landowners.   The State has continually led Doud and the public to believe it would acquire the property, as evidenced by newspaper publicity, negotiations, and the pendency of this action.   State has effectively by its conduct prevented the development of this property, and it is therefore inappropriate to require Doud to seek redress in a separate proceeding (the inverse condemnation/civil rights cross-complaint).   Accordingly the trial court set aside the abandonment under section 1268.510.

For the first time on motion for reconsideration, State argued the action should be dismissed because the five-year period to bring the action to trial had expired and the last extension of the period, to January 1, 1987, had passed.   The court denied reconsideration on March 1, 1988.   Its apparent reason was that State failed to raise that issue formally until reconsideration.

DISCUSSION

 The statute, section 1268.510, permits abandonment as of right (up until 30 days after final judgment) but the court may set aside the abandonment if it finds the position of the moving party has been substantially changed to his detriment in justifiable reliance upon the proceeding and he cannot be restored to substantially the same position as if the proceeding had not been commenced.

State argued in its points and authorities favoring abandonment that it no longer had sufficient money to pay for the land, and also, offered to stipulate to the continued vitality of Doud's cross-complaint which State argued would yield Doud any damages caused by the pendency of the condemnation action.   State maintains Doud cannot force it to purchase the property and has an adequate, separate remedy, the action on the cross-complaint, to restore it to “substantially the same position as if the proceeding had not been commenced.”  (§ 1268.510, subd. (b).)

Doud's counsel, however asserted irreparable injury because Doud did not exhaust administrative remedies against the County because of the pending condemnation.   Doud also contended that trespassers had become impossible to keep off the property because they have come to view it as part of the nearby state park, and because newspaper publicity of the condemnation has led the public to believe the State would acquire the property for that use.

The record does not show precisely what remedies Doud actually relinquished on account of the condemnation procedure.   The only evidence presented suggesting that the County would have afforded Doud more favorable treatment regarding permitted development of the property if the condemnation had not been pending is a declaration by John E. Doud, a beneficiary of the Doud family trust, saying that on numerous occasions he or the family attorney (Myron Etienne) requested of the County that it designate some residential or visitor serving uses of the Doud family property, but the County determined that it could only allow a maximum number of units to be developed on the Big Sur coast, that those units would have to be allocated among the various property owners, and that because the Doud family property was being condemned by the State of California, the County should not allocate any residential or other units to the property.

As State notes, very limited development has been permitted in the coastal area of Big Sur.   Doud's property is zoned precisely the same as that of other large coastal landowners, and it would be highly speculative to assume from this record that the sole reason why Doud's property has not been zoned for development is because it was slated for inclusion in a state park.   According to the declaration of the deputy attorney general who negotiated with Mr. Etienne, counsel for Doud, during negotiations Mr. Etienne appeared frequently before the County officials to advocate Doud's position requesting more intense uses of the property, but to no avail.   The land is in the critical viewshed area, where no new development visible from Highway 1 is permitted.   Nor has it been shown that Doud cannot now obtain whatever development permits it claims it might have obtained previously.   The declaration of John E. Doud referred to above is not supported by any document emanating from the County showing that available development permits were allocated elsewhere because of the pending condemnation.

 More significantly, however, for present purposes, Doud does not satisfactorily explain why the remedy available to landowner under its cross-complaint in inverse condemnation is not adequate to redress any damages it has sustained because of the pendency of the eminent domain action.   It is already entitled to attorneys fees and costs in the condemnation action if State abandons the property.  (§§ 1268.610, 1268.620.)   In addition, in inverse condemnation it may recover damages for any diminution in market value of the property due to unreasonable conduct of the condemnor in connection with the condemnation proceeding.  (Klopping v. City of Whittier, supra, 8 Cal.3d 39, 52, 104 Cal.Rptr. 1, 500 P.2d 1345.)   As the Klopping court specifically says, the abandonment statute (former § 1255a, now § 1268.510), in cases where there has been no detrimental reliance, compensates the property owner for his expenses in defending the suit;  and additional damages, reflected by diminution in market or rental value of the property, may additionally be recovered where appropriate in inverse condemnation.  (Id. at pp. 56, 58, 104 Cal.Rptr. 1, 500 P.2d 1345.)   If Doud is correct in asserting that it has lost the opportunity to develop the property because of the pendency of the condemnation procedure, it does not demonstrate why it cannot recover damages for that lost opportunity under its cross-complaint.   Such a loss will clearly be reflected in a diminution of market value, which if provable, may be recovered in inverse condemnation under Klopping.

Because it will be a rare case where the damages due to pendency of condemnation proceedings cannot be recovered in inverse condemnation, it has been noted that “․ ‘[i]n California, unless the condemnor has done some additional act which would estop him, he can abandon with near impunity.’ ”   (City of Torrance v. Superior Court (1976) 16 Cal.3d 195, 203–204, fn. 5, 127 Cal.Rptr. 609, 545 P.2d 1313, quoting the Law Revision Commission;  quoted in Community Development Com. v. Shuffler (1988) 198 Cal.App.3d 450, 460, 243 Cal.Rptr. 719.)

In the City of Torrance case, the city was estopped from abandonment because it did so in order to compel dedication of the property instead at no cost to itself.   The court there found both unconscionable conduct on the part of the public entity, and also, irreparable harm because the property owner specifically purchased the property for development upon the representation the City would proceed with the condemnation of part of the parcel for a street.   (See City of Torrance, supra, 16 Cal.3d at pp. 200, 206, 127 Cal.Rptr. 609, 545 P.2d 1313.)   The Torrance court characterized the City's conduct there as a flagrant case of abuse of the power of abandonment “not to prevent acquisition of unwanted land but to force dedication of land still contemplated for public use.”  (Id. at p. 209, 127 Cal.Rptr. 609, 545 P.2d 1313.)   There is no such evidence here.   In fact, counsel for State here offered to stipulate that State will not again attempt to acquire the property by any means, for so long a period as the court deems necessary to protect Doud's interests.

As noted in the Community Development Com. case, supra, the element of detrimental reliance held to prevent abandonment in the cases is normally the condemnee's purchase or construction of replacement property.  (See Times–Mirror Co. v. Superior Court (1935) 3 Cal.2d 309, 44 P.2d 547;  McGee v. City of Los Angeles (1936) 6 Cal.2d 390, 57 P.2d 925;  discussion in Community Development Com., supra, 198 Cal.App.3d at p. 460, 243 Cal.Rptr. 719.)   Here, in contrast, Doud owned the property long before the condemnation action was filed and has not shown affirmative action taken in reliance on the pendency of the condemnation.

In the City of Torrance case, the remedy of inverse condemnation was held to be inadequate because such an action would have entailed a new lawsuit, with attendant delay, which might have had the practical effect of forcing the landowner there to make the dedication which the City was demanding.  (City of Torrance v. Superior Court, supra, 16 Cal.3d at p. 208, 127 Cal.Rptr. 609, 545 P.2d 1313.)   Here, however, the cross-complaint in inverse condemnation is already on file, the state of the trial calendar in Monterey County will permit speedier trial than that of the Los Angeles County Superior Court would have in 1976 when Torrance was decided.   Further, delay in itself does not give State any strategic advantage such as the city tried to obtain in Torrance.   Accordingly, we perceive no inadequacy in such a remedy.

Doud argues that the State has used the forbidden tactic of attempting to lower the acquisition price by threat of abandonment, a technique expressly proscribed by Government Code section 7267.5, which forbids the public entity to “either advance the time of condemnation, or defer negotiations or condemnation and the deposit of funds in court for the use of the owner, or take any other action coercive in nature, in order to compel an agreement on the price to be paid for the property.”   However, the trial court did not make findings warranting an inference of coercion, and the record reveals a legitimate motive for the abandonment, namely, insufficient funds for the purchase.   It appears to us that State, realizing the property is worth more than it can afford, is attempting to save the public the expense of a useless trial.   We cannot fault its decision.

We conclude the trial court erred in setting aside the abandonment, because there is no showing here that Doud cannot be made whole through existing remedies other than that of compelling the State to carry out a purchase for which it has no available funds.   This conclusion makes it unnecessary for us to consider State's contention that the action must be dismissed under the five-year statute, section 583.310.2

Real party in interest has been notified that a peremptory writ in the first instance could be issued here, and it has filed opposition.   The peremptory writ of prohibition will issue in the first instance.  (Code Civ.Proc., § 1088;  Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 177–182, 203 Cal.Rptr. 626, 681 P.2d 893.)

DISPOSITION

Let a writ of prohibition issue as prayed, preventing any further proceedings on the complaint in eminent domain other than dismissal.   Real party in interest's cross-complaint will remain pending in accordance with the principles expressed in this opinion.

I respectfully dissent.

The statute we apply here, Code of Civil Procedure section 1268.510, vests in the superior court as trier of fact the discretion to decide whether the party moving to set aside an abandonment has demonstrated that he cannot be restored to substantially the same position as if the eminent domain proceeding had not commenced.   Our only discretion, as reviewing tribunal, is to decide whether substantial evidence supports that decision.

Here the trial court held a hearing, considered evidence and wrote a lengthy statement of reasons for setting aside the abandonment.   There is some evidence in the record to support that decision, consisting of declarations that but for the eminent domain proceeding, the property owner here might have secured more favorable development permits from the County.   No abuse of discretion appears here.

We should deny the writ, both to conserve judicial resources and to defer to the trial court's reasoned exercise of judicial power within its appropriate sphere.

FOOTNOTES

1.   All further statutory references are to the Code of Civil Procedure.

2.   The trial court would not consider this ground because it was raised for the first time on reconsideration.   However, the court may dismiss an action not brought to trial in five years on its own motion.   (§§ 583.360 and 583.310)  Doud's response to the five-year issue was to allege estoppel and impossibility, impracticality and futility, because there was an understanding between the parties that no action would be taken while the local coastal plan was not filed and also settlement negotiations were ongoing throughout this time.   It also argued that it could not force plaintiff (State) to come to trial at any time and certainly not after it decided to abandon.   It is certainly unusual for a plaintiff to be seeking a five-year dismissal, and not at all clear that the policies governing that statute should apply when it is the defendant who seeks to keep the suit alive.

AGLIANO, Presiding Justice.

BRAUER, J., concurs.