PATRICK MEDIA GROUP INC v. CALIFORNIA COASTAL COMMISSION

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Court of Appeal, Second District, Division 3, California.

PATRICK MEDIA GROUP, INC., Plaintiff and Respondent, v. CALIFORNIA COASTAL COMMISSION, Defendant and Appellant.

No. B056181.

Decided: March 27, 1992

Daniel E. Lungren, Atty. Gen., Roderick Walston, Chief Asst. Atty. Gen., Richard M. Frank, Acting Asst. Atty. Gen., Dennis Eagan, Supervising Deputy Atty. Gen., Nancy K. Chiu and J. Matthew Rodriquez, Deputy Attys. Gen., for defendant and appellant. Stall & Hamlin, Marnie Christine Cody and Richard Hamlin, Los Angeles, for plaintiff and respondent. Ronald W. Beals, Sacramento, as amicus curiae on behalf of plaintiff and respondent.

The California Coastal Commission (the “Commission”) appeals from a judgment entered against it and in favor of Patrick Media Group, Inc. (“PMG”), adjudging PMG entitled to compensation under Business and Professions Code sections 5412 and 5412.6 1 for the compelled removal of three off-site advertising structures belonging to PMG, as a condition of a coastal development permit issued by the Commission to PMG's lessor, Solana Beach Innsuites Joint Venture (“Solana”).   The trial court found, on PMG's motion for summary adjudication of issues, that the Commission was liable for compensation.   The parties then stipulated to the amount of damages payable by the Commission if the trial court's finding of liability were affirmed on appeal, and judgment was entered as provided in the stipulation.

We determine that the trial court correctly found the provisions of Business and Professions Code sections 5412 and 5412.6 applicable to the Commission's actions respecting PMG's advertising structures.   However, we shall conclude that PMG's exclusive remedy under those statutes was by way of administrative mandamus, as provided in Public Resources Code section 30801 and Code of Civil Procedure section 1094.5.2

As PMG failed to avail itself of this remedy, it was barred from bringing the action below.   We thus will reverse the judgment with directions that PMG's action be dismissed.

FACTUAL AND PROCEDURAL BACKGROUND

In April of 1978, PMG's predecessor in interest, Foster & Kleiser Outdoor Advertising (“Foster & Kleiser”), entered into a lease with Solana's predecessor, Solana Beach Properties, by which Foster & Kleiser was granted the right to maintain three outdoor advertising structures on Solana's property.   The lease had an original term of seven years, but contained a provision for automatic year-to-year renewals after the original seven years, subject to termination upon written notice by either party not less than sixty days before the end of the original term or the current year.   In addition, the lessor had the express right under the lease's terms to terminate the lease upon sixty days' written notice at any time if a building was to be constructed on the property.

At some time prior to December of 1985, Solana applied to the Commission for a coastal development permit for the construction of a 171–unit hotel with meeting rooms, a restaurant and bar, and a swimming pool on approximately 3.4 acres of a 24 acre site on the east side of Old Highway 101 in the community of Solana Beach, California.   The Commission took initial action on Solana's application on December 19, 1985.   As initially approved, the permit was to be issued on multiple conditions, including the condition that all off-site signs, including Foster & Kleiser's three advertising structures, be removed from the property prior to the commencement of construction.

On January 1, 1986, section 5412.6, providing that compensation must be paid when a governmental entity requires the removal of an advertising display as a condition for issuance of a permit, went into effect.   On March 11, 1986, the Commission gave final approval to Solana's permit with all its terms and conditions, including the condition that Foster & Kleiser's advertising structures be removed.3

It appears that Foster & Kleiser was not given advance notice of either the December 19, 1985 hearing at which Solana's permit was tentatively approved or the March 11, 1986 hearing at which final approval was granted.   Instead, Solana merely notified Foster & Kleiser in writing on April 1, 1986 that it was terminating Foster & Kleiser's lease, and requested that the advertising structures be removed by May 1, 1986.   Foster & Kleiser removed the structures on May 23, 1986.

On April 22, 1986, Foster & Kleiser wrote to the Commission.   In its certified letter, Foster & Kleiser apprised the Commission of the provisions of section 5412.6 and demanded compensation under the statute in the amount of $34,514, on grounds that the Commission's actions had forced Solana to terminate its lease.   On April 28, 1986, the Commission responded to Foster & Kleiser's letter, confirming that removal of the advertising structures was a requirement of the permit issued to Solana and stating that Foster & Kleiser would have to discuss the issue of compensation with Solana.

On August 25, 1986, Foster & Kleiser filed with the State Board of Control a formal claim for compensation under section 5412.6.   Shortly thereafter, in September of 1986, Foster & Kleiser's assets and liabilities were conveyed to PMG.4  On October 8, 1986 the Board of Control rejected Foster & Kleiser's claim for compensation under section 5412.6.   A notice of the rejection, as provided in section 913 of the Government Code was mailed to PMG's attorney on October 14, 1986.   PMG filed its complaint for compensation under section 5412.6 on February 24, 1987.

Upon PMG's motion for summary adjudication of issues, the trial court found as a matter of law that PMG was entitled to compensation from the Commission under sections 5412 and 5412.6.

CONTENTIONS ON APPEAL

The Commission contends that PMG was not entitled to compensation under sections 5412 and 5412.6, because:  (1) Solana's permit, including the condition for removal of PMG's advertising displays, was issued before the effective date of section 5412.6;  (2) the project for which the permit was issued fell within an exception to section 5412.6 for projects “for the construction of a building or structure which cannot be built without physically removing the display”;  (3) sections 5412 and 5412.6 do not apply to actions of the Commission;  (4) the Commission is immune from the provisions of sections 5412 and 5412.6 pursuant to Government Code section 818.4;  (5) the removal of PMG's advertising displays was not compelled by the Commission's action, but by Solana's exercise of its right under PMG's lease to terminate the lease whenever a building was to be erected on the subject property.

In the alternative, the Commission contends that PMG waived any rights it may have had to compensation under sections 5412 and 5412.6 by failing to challenge the order to remove advertising displays by means of a petition for a writ of administrative mandamus, as required by Public Resources Code section 30801 and Code of Civil Procedure section 1094.5.

DISCUSSION

1. Sections 5412 and 5412.6 Apply to Actions by the Coastal Commission.

 A lawsuit under section 5412 or 5412.6 for compensation when a governmental agency compels the removal of an advertising display is an action sounding in inverse condemnation.   When the government, acting for the public welfare to preserve or restore aesthetic qualities of the landscape, orders an advertising display removed, there can be little doubt that a valuable property right belonging to the display's owner is “taken for public use,” and that the owner has a right under the Fifth Amendment of the United States Constitution and Article 1, section 19 of the California Constitution to be compensated.  Sections 5412 and 5412.6 constitute, in effect, a legislative determination that such is the case.

 In the case at bar, the Commission, acting under its mandate of protecting, maintaining, enhancing, and restoring the overall quality of the coastal zone environment (Pub.Resources Code, § 30001.5) 5 , ordered PMG's lessor, Solana, to remove PMG's advertising displays from Solana's property as a condition for issuance of a permit to build a hotel on a portion of the property.   This was plainly the kind of order that falls within the purview of section 5412.6, which provides that an order to remove an advertising display as a condition for issuance of a permit constitutes a “compelled removal” and requires compensation as provided in section 5412.   The Commission argues, however, that sections 5412 and 5412.6 do not apply to its actions, and that even if its actions are generally covered by those sections, the section did not require compensation to be paid under the specific facts of this case.

We find no merit in the Commission's arguments that the provisions of sections 5412 and 5412.6 do not apply to it.   It cannot be inferred from the absence of a specific reference to the Coastal Commission either in sections 5412 and 5412.6 or in the Outdoor Advertising Act as a whole that the Commission is beyond the reach of this statutory mandate.   By their terms, sections 5412 and 5412.6 apply to the laws, ordinances, and regulations of “any governmental entity.”  (§ 5412, ¶ 1.)   Specific references elsewhere in the Act to other governmental entities such as the Department of Transportation and local governments (see, e.g., §§ 5209, 5230, 5250), make clear that the Legislature knew how to limit particular provisions of the Act to particular agencies when it wanted to do so.   Clearly, where broader language is used, a broader application was intended.

Further, the legislative history of section 5412.6 does not support a conclusion that the section applies only to the Department of Transportation and to local governments, albeit that documents distributed to the legislators in support of the statute's enactment indicate that a significant factor motivating its introduction was the circumstance that local governments were attempting to circumvent section 5412 by compelling billboard removals through the exercise of their permit authority, rather than by “law, ordinance, or regulation.”  (§ 5412.) 6  It does not follow from the circumstance that local governments' actions motivated enactment of section 5412.6 that only local governments are covered by its provisions.   As we have already stated, the plain language of the statute indicates otherwise.

 It is axiomatic that when a statute's language is clear, its plain meaning should be followed.  (Great Lakes Properties, Inc. v. City of El Segundo (1977) 19 Cal.3d 152, 155, 137 Cal.Rptr. 154, 561 P.2d 244.)   Only when application of the statute's plain meaning would frustrate the manifest purpose of the legislation as a whole or would lead to absurd results is the plain meaning disregarded.  (Wells Fargo Bank v. Superior Court (Wertz) (1991) 53 Cal.3d 1082, 1098, 282 Cal.Rptr. 841, 811 P.2d 1025.)   No frustration of purpose or absurdity in result obtains here.   The manifest purpose of section 5412.6—assuring that the owners of advertising displays receive just compensation when displays are ordered removed for public purposes—is hardly frustrated by applying the statute to the Coastal Commission.   Nor would an absurd result follow from applying section 5412.6 to the Commission.   To the contrary, it would be absurd if the billboard owner's constitutional right to compensation for a taking of property for public use were subject to an exception when the taking is effected by the Commission, rather than another governmental entity.

 Neither the Commission nor any other governmental agency is shielded by section 818.4 of the Government Code from an action in inverse condemnation.   That section shields government from tort liability for injuries caused by the issuance of a permit.  (Gov.Code, § 818.4.)   When government damages property in the course of a public project “as deliberately designed and constructed,” the owner has a right under the California Constitution to compensation.  (Belair v. Riverside County Flood Control Dist. (1988) 47 Cal.3d 550, 558, 253 Cal.Rptr. 693, 764 P.2d 1070;  Holtz v. Superior Court (1970) 3 Cal.3d 296, 311, 90 Cal.Rptr. 345, 475 P.2d 441;  Albers v. Los Angeles (1965) 62 Cal.2d 250, 263–264, 42 Cal.Rptr. 89, 398 P.2d 129;  see generally, 8 Witkin, Summary (9th ed. 1988) “Constitutional Law,” § 941;  Condemnation Practice in Cal. (Cont.Ed.Bar 1990 Supp.) p. 304.)   When, as here, the property is “taken” for the public use, compensation is a right provided by both the California and federal constitutions.   The citizen's state and federal constitutional rights to compensation for takings and damage “for public use” supersede government's statutory immunity for ordinary injury.  (Rose v. California (1942) 19 Cal.2d 713, 720, 123 P.2d 505;  Rose v. City of Coalinga (1987) 190 Cal.App.3d 1627, 1633, 236 Cal.Rptr. 124.)

 Nor does the circumstance that the Commission is without authority to exercise eminent domain render it immune from liability in inverse condemnation.   An agency's lack of authority to initiate eminent domain proceedings cannot deprive citizens of the constitutional right to just compensation when property is taken for public use by other means.  (Baker v. Burbank–Glendale–Pasadena Airport Authority (1985) 39 Cal.3d 862, 866–867, 218 Cal.Rptr. 293, 705 P.2d 866;  Marshall v. Department of Water & Power (1990) 219 Cal.App.3d 1124, 1139, 268 Cal.Rptr. 559.)

 Finally, Public Resources Code section 30010 expressly provides that it is the intent of the Legislature that neither the Commission nor any other agency acting pursuant to the Coastal Act may exercise its power to grant or deny a permit in a manner which will take or damage private property for public use, without paying compensation.7  Read in conjunction with section 5412.6, Public Resources Code section 30010 is open to no other interpretation than that the Legislature intended for compensation to be paid if the Coastal Commission attaches a billboard removal condition to a coastal permit.

We conclude, as we clearly must, that sections 5412 and 5412.6 apply to the Coastal Commission.

2. The Several Technical Grounds Asserted by the Commission Will Not Prevent Imposition of Liability Under Section 5412.6.

The Commission contends the permit was approved in December of 1985, a date before Business and Professions Code section 5412.6 became effective, and that for this reason the Commission had no obligation to pay compensation pursuant to the statute.  Section 5412.6 was enacted in July of 1985.   (Stats.1985, ch. 439, § 1, p. 1713.)   It thus became effective on January 1, 1986.  (Cal. Const., Art. 4, § 8, subd. (c).)  The record is ambiguous as to the date of approval of the Solana permit.   At the bottom of page one of the permit, December 19, 1985, the date on which the Commission originally voted to approve the permit, is designated as the “date of Commission action.”   At the top of the same page, however, there appears the stamped directive, “See subsequent page for Commission action.”   On page 15, the last page of the permit, March 11, 1986 is stamped in a space marked, “Commission Action On _.”  The action indicated is “approved with changes.”

 The issue of whether the permit was issued before or after the effective date of section 5412.6 was raised in the trial court.   We will therefore presume the trial court considered the question and determined that the permit issued in 1986.  (County of Santa Clara v. Superior Court (1971) 4 Cal.3d 545, 553, 94 Cal.Rptr. 158, 483 P.2d 774.)   This implied finding of fact by the trial court is supported by substantial evidence, and we are bound by it.  (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925, 101 Cal.Rptr. 568, 496 P.2d 480.)

 The Commission next argues that section 5412.6 did not require a payment of compensation to PMG, because section 5412.6 does not apply to a permit “for the construction of a building or structure which cannot be built without physically removing the display” (§ 5412.6), and the project for which the Solana permit was issued could not be built without physically removing PMG's billboards.   The argument is without merit.   The contention that Solana's project could not be built without removing the billboards is based upon the circumstance that the project was for a hotel oriented toward an ocean view, which would have been blocked by PMG's billboards.   While an obstructed view of the ocean might well interfere with Solana's intended use of the hotel once completed, it is not contended that the hotel literally could not be built without removing the billboards.   We can see no reason to construe the exception to section 5412.6 for projects which “cannot be built” without removing an advertising display more broadly than the statute's plain language requires.

The Commission finally contends that the permit condition did not “compel” removal of the signs, because the removal was occasioned by Solana's independent exercise of a provision in PMG's lease which allowed Solana to terminate the lease upon sixty days' notice if a structure were to be built on the property.   PMG contends it is entitled to compensation regardless of whether Solana would have exercised the lease provision in the absence of the permit condition.

In our view, the question of whether Solana would or would not have exercised the termination provision in PMG's lease, had the permit condition not been imposed, is a factual question that is relevant, indeed essential, to a determination of PMG's entitlement to compensation.   However, we need not reach the issue of the significance of the lease provision because, as we discuss below, we find that the PMG's action was barred by res judicata.   By failing to raise its entitlement to compensation under sections 5412 and 5412.6 in the proper forum, PMG lost the right to litigate the issue of whether the removal of its billboards was “compelled” within the meaning of section 5412.

3. The Appropriate Procedure for Asserting PMG's Claim for Compensation Was Administrative Mandamus.

 The Commission correctly contends that the appropriate procedure for PMG to use in asserting its claim for compensation under section 5412.6 for a taking ordered by the Commission was administrative mandamus, and that PMG's failure to utilize that procedure within the appropriate time limits barred it from asserting the claim in this collateral action.  (Pub.Resources Code, § 30801;  Code Civ.Pro. § 1094.5;  State of California v. Superior Court (Veta) (1974) 12 Cal.3d 237, 248, 115 Cal.Rptr. 497, 524 P.2d 1281;  Rossco Holdings, Inc. v. State of California (1989) 212 Cal.App.3d 642, 660, 260 Cal.Rptr. 736;  Walter H. Leimert Co. v. California Coastal Com. (1983) 149 Cal.App.3d 222, 230, 233, 196 Cal.Rptr. 739.)   PMG contends it was not required to seek its remedy by way of administrative mandamus, because it did not own the land affected by the permit condition requiring sign removal, and because it did not contest the validity of the condition, but only sought compensation for the taking occasioned by it.   Neither the controlling statutory and judicial authorities nor the principles of public policy underlying them support this contention.

Sections 5412 and 5412.6 are not self-executing.   While those sections create the right to compensation for the forced removal of an advertising display by either legislative or administrative action, section 5414 prescribes the procedure to be used in any particular case to compel the removal of displays and to determine the compensation to be paid.   The procedure prescribed is that of the Eminent Domain Law, Title 7 of Part 3 of the Code of Civil Procedure, commencing with section 1230.010.  (§ 5414.)

 The Eminent Domain Law establishes elaborate procedures for direct condemnation proceedings, but is generally silent regarding procedures in inverse condemnation.   Inverse condemnation procedure is thus covered by the general procedural rules governing eminent domain proceedings when such rules are applicable (Highland Realty Co. v. City of San Rafael (1956) 46 Cal.2d 669, 683, 298 P.2d 15;  Aetna Life & Casualty Co. v. City of Los Angeles (1985) 170 Cal.App.3d 865, 877, 216 Cal.Rptr. 831;  see generally, 8 Witkin, Summary (9th ed. 1988) “Constitutional Law,” § 1060), and elsewhere, by the residual language of the relevant section of the Eminent Domain Law.  (Code of Civ.Proc., § 1230.040.)   That section provides that “[e]xcept as provided in this title, the rules of practice that govern civil actions generally are the rules of practice for eminent domain proceedings.”

 Generally, an inverse condemnation action that is based upon “damage” to property must be filed within three years of discovery of the damage.  (Code Civ.Proc., § 338, subd. (j).)  Actions based upon a “taking” of property generally must be filed within five years of the taking.   (Baker v. Burbank–Glendale–Pasadena Airport Authority, supra, 39 Cal.3d at p. 867, 218 Cal.Rptr. 293, 705 P.2d 866.   See generally, 8 Witkin, Summary of Cal. Law (9th ed. 1988) “Constitutional Law,” §§ 1060 et seq.;   Condemnation Practice in California (Cont.Ed.Bar Supp.1990) p. 247.)   No administrative claim, as is required by Government Code sections 900, and following, for most categories of claims against the government, is required prior to filing an action for inverse condemnation.  (Gov.Code, § 905.1.)

 Special procedural requirements apply where an inverse condemnation action is based upon a regulatory taking accomplished by an administrative agency.   In such cases, the proper procedure is that generally required when the validity or propriety of an action or determination by an administrative agency is challenged, that is, by way of a petition for administrative mandamus, as defined in section 1094.5 of the Code of Civil Procedure.   (State of California v. Superior Court (Veta), supra, 12 Cal.3d at p. 248, 115 Cal.Rptr. 497, 524 P.2d 1281;  Rossco Holdings, Inc. v. State of California, supra, 212 Cal.App.3d at p. 657, 260 Cal.Rptr. 736.   See generally, Condemnation Practice in California (Cont.Ed.Bar Supp.1990) pp. 299–305.)

 Where, as here, the Coastal Commission is the administrative agency whose action is challenged, the writ petition must be filed within sixty days after the Commission's decision or action has become final, rather than within the ninety days allowed for seeking judicial review of administrative decisions generally.  (Pub.Resources Code, § 30801;  Walter H. Leimert Co. v. California Coastal Com., supra, 149 Cal.App.3d at p. 233, 196 Cal.Rptr. 739.   Cf. Code Civ.Proc. § 1094.6, subd. (b).) 8  Failure to obtain judicial review of a discretionary administrative action by a petition for a writ of administrative mandate renders the administrative action immune from collateral attack.  (Rossco Holdings, Inc. v. State of California, supra, 212 Cal.App.3d at p. 660, 260 Cal.Rptr. 736.   See also City of Santee v. Superior Court (1991) 228 Cal.App.3d 713, 718–719, 279 Cal.Rptr. 22.)

 Contrary to PMG's contention, the general rule requiring a challenge to an administrative action to be raised by way of administrative mandate applies whether (1) the challenger's claim is that the action was invalid and should be cancelled (State of California v. Superior Court (Veta), supra, 12 Cal.3d at p. 248, 115 Cal.Rptr. 497, 524 P.2d 1281;  Walter H. Leimert Co. v. California Coastal Com., supra, 149 Cal.App.3d at pp. 230–231, 196 Cal.Rptr. 739) or (2) the claim is that the action resulted in a taking of property from the challenger for public use and should be modified to provide for compensation (Rossco Holdings, Inc. v. State of California, supra, 212 Cal.App.3d at pp. 646, 656, 260 Cal.Rptr. 736;  California Coastal Com. v. Superior Court (Ham) (1989) 210 Cal.App.3d 1488, 1496, 258 Cal.Rptr. 567).   In either case, the essential underpinning of the challenge is the invalidity of the administrative action.   The gravamen of a challenge based upon inverse condemnation is that the administrative action was invalid insofar as it did not provide for payment of compensation.

 PMG's argument that it was not required to proceed by way of administrative mandamus because it was not contesting the validity of the permit condition, but rather, was seeking compensation for it, is substantially similar to the argument of the plaintiff in Rossco Holdings, Inc. v. State of California, supra.   The plaintiffs in Rossco filed an action claiming, among other relief, inverse condemnation damages for a “taking” that was allegedly occasioned by conditions imposed by the Coastal Commission upon the development of property owned by the plaintiffs.   The trial court sustained a demurrer to the action partly on the ground that the plaintiffs had failed to comply with Code of Civil Procedure section 1094.5 prior to, or in conjunction with, their inverse condemnation claim.  (212 Cal.App.3d at p. 646, 260 Cal.Rptr. 736.)   Relying upon the United States Supreme Court's decision in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles (1987) 482 U.S. 304, 107 S.Ct. 2378, 96 L.Ed.2d 250, the plaintiffs argued that their right to sue in inverse condemnation derived from the Fifth Amendment of the United States Constitution and thus could not be restricted or restrained by a state rule requiring it first to invalidate the conditions imposed by the Commission on their property.

We rejected that argument.   We held that First English only declared that a right to compensation existed under the circumstances at issue therein, that is, where a taking was temporary.  First English did not address the procedural means by which a claim for such compensation is asserted.  “Thus,” we concluded, “although the state can no longer insulate itself from payment of damages for a temporary taking, it does not follow that landowners no longer need to comply with the procedural steps required to contest the action of the administrative agency.”  (212 Cal.App.3d at p. 656, 260 Cal.Rptr. 736;  cf. California Coastal Com. v. Superior Court (Ham), supra, 210 Cal.App.3d at pp. 1495–1496, 258 Cal.Rptr. 567.)

Similarly, although sections 5412 and 5412.6 plainly declare that a right to compensation exists when government compels the removal of billboards, it does not follow that the owners of removed billboards are excused from established procedural requirements for asserting their claims for compensation.   Indeed, both the plain language and the history of section 5414 indicate the very opposite to be the case.

As originally enacted, section 5414 provided for special procedures to be utilized by a person entitled to compensation under sections 5412 and following, to compel such compensation to be paid.   Under those procedures, if a party entitled to compensation was unable to negotiate satisfactory compensation with an agency compelling removal of a billboard within 120 days after filing a claim, such party could file a complaint in the superior court within one year of the filing of the claim.  (See Stats.1970, ch. 991, § 2, p. 1777.)   In 1980, however, section 5414 was amended to delete the special procedures.   Stats.1980, ch. 1278, § 5, p. 4323.)   It now provides only that compensation for compelled removals is to be determined under the Eminent Domain Law.  (§ 5414.)   It thus reasonably follows that the Legislature intends that inverse condemnation actions brought under sections 5412 and 5412.6 would be governed by the same procedural requirements that govern inverse condemnation actions generally.

Important policy concerns underlie the requirement that inverse condemnation claims arising out of administrative actions, as well as other challenges to administrative actions, be raised by way of administrative mandamus.   A public agency's capacity to plan its actions in the public interest and to make reasonable and responsible allocations of resources that it holds in trust for the public requires that the agency be alerted promptly both when its decisions are questioned, and when, as a result of a particular decision, the agency may be liable for inverse condemnation damages.   Meaningful governmental fiscal planning would become impossible if persons were permitted to stand by in the face of administrative actions alleged to be injurious or confiscatory, and three or five years later, claim monetary compensation on the theory that the administrative action resulted in a taking for public use.  (Cf. California Coastal Com. v. Ham, supra, 210 Cal.App.3d at p. 1496, 258 Cal.Rptr. 567;  Air Quality Products, Inc. v. State of California (1979) 96 Cal.App.3d 340, 352, 157 Cal.Rptr. 791.)

 The foregoing reasons of policy require that not only landowners and permit applicants, but any parties aggrieved by the issuance, denial, or conditions of issuance of permits must be limited to the remedy of administrative mandamus.   An agency's interest in prompt notice of a challenge to its decisions is, after all, equally great, whether the party raising that challenge is a landowner, a permit applicant, or any other party.  (Air Quality Products, Inc. v. State of California, supra, 96 Cal.App.3d at p. 352, 157 Cal.Rptr. 791.)   Once aware of a challenge from whatever source, an agency can change or stay enforcement of the challenged action, remove or modify a challenged condition, or take other action to mitigate the claimed damages.   However, if persons affected by adverse administrative decisions—be they landowners, permit applicants, or others—were permitted to delay from three to five years in presenting monetary claims, the financial burden on government could become overwhelming.  (Cf. California Coastal Com. v. Ham, supra, 210 Cal.App.3d at p. 1496, 258 Cal.Rptr. 567.)

The requirement that claims for compensation for administrative takings be raised by means of a petition for administrative mandamus is also dictated by considerations of judicial economy, at least where, as here, such claims could and should have been presented to the administrative agency in the course of the proceedings leading to the action alleged to have resulted in a taking.   As another court explained in a slightly different context, “[T]o allow parties to circumvent the system of review provided under section 1094.5 would, in effect, undermine the authority and integrity of the hearing procedures which the administrative agencies are presently required to render.   The agencies have been vested with quasi-judicial authority to hold hearings, take evidence, and render a decision based upon findings of fact.  [Citations.]  The right to limited review of that decision by a reviewing court has also been provided.   (Code Civ.Proc., § 1094.5.)   To allow the parties to challenge every administrative decision with another trial de novo would be a waste of both administrative and judicial resources, and the administrative hearing would be nothing more than perfunctory gestures.”  (Eureka Teachers Assn. v. Board of Education (1988) 199 Cal.App.3d 353, 366, 244 Cal.Rptr. 240.)

4. The Commission's Failure to Provide to PMG's Predecessor Advance Notice of the Hearing on Solana's Permit Application Did Not Excuse PMG From Seeking Review of the Commission's Actions By Way of Administrative Mandamus.

PMG contends, however, that it was precluded from asserting its claim for compensation at the relevant administrative hearings, owing to the failure of the Commission to provide it with notice of the hearings.   PMG contends it was consequently excused from seeking judicial review of the Commission's actions by way of administrative mandamus.   We disagree.

 It must be observed that the failure to provide PMG with notice of hearings that affected its leasehold interest in Solana's property constituted a violation of express statutes and regulations governing Commission proceedings.   The Commission is required to hold hearings on applications for coastal development permits and to provide notice of such hearings to “any affected person.”  (Pub.Resources Code § 30621.)   In addition, a permit applicant is required to inform the Commission of affected parties so that the required notice may be given.  (Cal.Code of Regs., Tit. 14, § 13054.)   It does not follow, however, that the lack of advance notice to PMG of the Commission's hearings, although in violation of statutory and regulatory requirements, excused PMG from complying with important procedural rules for the review of discretionary Commission decisions.   This is so, because even though advance notice of the hearings was not provided, PMG was not in fact precluded from presenting its claim to the Commission.   Adequate post-hearing procedures were available through which the claim could, and thus should, have been asserted.

The statutes and regulations governing the Coastal Commission provide at least two means by which an action that has been taken by the Commission may be challenged by a party who did not receive timely notice of a hearing at which the action was taken.   First, under administrative regulations governing Commission proceedings, a party who did not have an opportunity to participate in a hearing by reason of inadequate notice has the right, after the hearing, to request that the Commission revoke any permit that was issued.  (Cal.Code of Regs., Tit. 14, § 13106.)   Alternatively, any party aggrieved by a Coastal Commission decision has the express right under section 30801 to seek immediate judicial review of the decision by petitioning for a writ of mandate.  Section 30801 defines an “aggrieved person” who is entitled to petition for mandamus as a person, presumably one damaged in a legally cognizable way, (1) who appeared at the Commission's hearing either in person or by a representative, (2) who otherwise made his or her concerns known prior to the hearing, or (3) who for good cause was unable to do either.   (Pub.Resources Code, § 30801;  Pillsbury v. South Coast Regional Com. (1977) 71 Cal.App.3d 740, 750, 139 Cal.Rptr. 760.)

The foregoing post-hearing procedures provide recourse for persons with legitimate grievances against Commission actions, the pendency of which had not been brought to their attention by advance notice.   At the same time, by providing for prompt resolution of such grievances, accommodation is made for the public agency's need for prompt notice of challenges to its decisions, and of inverse condemnation claims which may arise as the result of a decision.

 Under California law, res judicata applies both to claims actually litigated in a prior proceeding, and to claims which could have been litigated.  (California Coastal Com. v. Superior Court (Ham), supra, 210 Cal.App.3d at p. 1499, 258 Cal.Rptr. 567.)   Here, although PMG had no advance notice of the hearing on Solana's permit application, it had the right under section 13106 of the Commission's regulations to request revocation of the permit pending resolution of its claim for compensation.   In addition, PMG had the right under Public Resources Code section 30801 to litigate its right to compensation by way of a petition for a writ of mandate.   (Pub.Resources Code, § 30801.)   Having failed to avail itself of either of these available remedies, after receiving actual notice of the commission's action, the issue of its entitlement to compensation became res judicata upon expiration of its time to petition for the writ.

 In view of the absence of notice to PMG of the Commission's hearing, its time to petition for mandamus could not be held to expire within sixty days of the Commission's final action.   However, PMG had at least second-hand knowledge of the permit condition by April 22, 1986, when it wrote to the Commission by certified letter, stated that the permit condition had been brought to its attention, apprised the Commission of the provisions of sections 5412 and 5412.6, and demanded compensation under the statutes.   PMG had direct and unequivocal notice both of the condition and of its full impact shortly after April 28, 1986, when the Commission confirmed by letter to PMG that its advertising structures were ordered removed as a condition of Solana's permit.   The Commission also stated in the letter that compensation would have to be discussed with Solana, conveying plainly enough that the Commission did not intend to comply with section 5412.6.   Allowing five days for mailing, PMG thus had notice of the effect upon it of the Commission's action by no later than May 3, 1986.   Had an administrative mandamus action been filed within sixty days of that date, it could not in fairness have been found to be time barred.

A mandamus action was not filed within such extended time period, however.   PMG took no action for over 60 days after May 3, 1986.   Indeed, it did nothing until August 25, 1986, when it filed an administrative claim with the State Board of Control preparatory to this collateral proceeding.   For the reasons discussed above, considerations of judicial economy and of broader public policy compel us to conclude such action was barred as res judicata.

In sum, issuance of Solana's permit was a discretionary administrative action of the Commission.   The permit and its separate conditions were thus reviewable under Public Resources Code section 30801 and Code of Civil Procedure section 1094.5, which serve interests of judicial economy, as well as the need of public agencies for the prompt resolution of all categories of challenges to their actions.   PMG's available and proper action was thus either to request that the Commission revoke Solana's permit pending resolution of PMG's claim for compensation under sections 5412 and 5412.6 or to file an immediate petition for a writ of administrative mandamus, challenging the billboard removal condition as invalid if imposed without providing for compensation.   As it failed to avail itself of either of these actions, PMG is barred from asserting its claim in any collateral proceeding.9

DISPOSITION

The judgment is reversed with directions that PMG's action be dismissed as barred by res judicata.   The Commission shall recover its costs on appeal.

I concur in this decision and in that portion of the opinion which holds that the action below of PMG was barred by res judicata.

FOOTNOTES

1.   Unless otherwise indicated, all code references are to the Business and Professions Code.Sections 5412 and 5412.6 are in chapter 2, consisting of sections 5200 through 5499.16 of Division 3 of the Business and Professions Code.   The chapter is cited as the Outdoor Advertising Act (Bus. & Prof.Code, § 5200) and will be referred to as such hereafter.Section 5412 provides in pertinent part as follows:  “Notwithstanding any other provision of this chapter, no advertising display which was lawfully erected anywhere within this state shall be compelled to be removed, nor shall its customary maintenance or use be limited, whether or not the removal or limitation is pursuant to or because of this chapter or any other law, ordinance, or regulation of any governmental entity, without payment of compensation, as defined in the Eminent Domain Law (Title 7 (commencing with Section 1230.010) of Part 3 of the Code of Civil Procedure), except as provided in Sections 5412.1, 5412.2, and 5412.3.   The compensation shall be paid to the owner or owners of the advertising display and the owner or owners of the land upon which the display is located.”Section 5412.6 provides as follows:  “The requirement by a governmental entity that a lawfully erected display be removed as a condition or prerequisite for the issuance or continued effectiveness of a permit, license, or other approval for any use, structure, development, or activity other than a display constitutes a compelled removal requiring compensation under section 5412, unless the permit, license, or approval is requested for the construction of a building or structure which cannot be built without physically removing the display.”

2.   Section 30801 is in Division 20 of the Public Resources Code, which is known as the California Coastal Act.  (§ 30000.)   Hereafter, Division 20 will be referred to as “the Coastal Act.”   See footnote 8, infra, for the full text of section 30801.

3.   The Commission contends the permit was approved in December of 1985, and on that basis argues that the Commission had no obligation to pay compensation pursuant to the statute, since the statute did not become effective until January 1, 1986.  (Cal. Const., Art. 4, § 8, subd. (c).)  However, the issue of whether the permit was issued before or after the effective date of section 5412.6 was raised in the trial court and we presume the trial court considered it and determined that the permit issued in 1986.  (County of Santa Clara v. Superior Court (1971) 4 Cal.3d 545, 553, 94 Cal.Rptr. 158, 483 P.2d 774.)   As we note below, this implied finding of fact by the trial court is supported by substantial evidence, and we are bound by it.  (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925, 101 Cal.Rptr. 568, 496 P.2d 480.)

4.   As a result of the transfer, PMG stands in Foster & Kleiser's shoes in all respects relating to this action.   Thus, to avoid confusion both entities will hereafter be referred to as “PMG”.

5.   Public Resources Code section 30001.5 provides as follows:  “The Legislature further finds and declares that the basic goals of the state for the coastal zone are to:“(a) Protect, maintain, and, where feasible, enhance and restore the overall quality of the coastal zone environment and its natural and artificial resources.“(b) Assure orderly, balanced utilization and conservation of coastal zone resources taking into account the social and economic needs of the people of the state.“(c) Maximize public access to and along the coast and maximize public recreational opportunities in the coastal zone consistent with sound resources conservation principles and constitutionally protected rights of private property owners.“(d) Assure priority for coastal-dependent and coastal-related development over other development on the coast.“(e) Encourage state and local initiatives and cooperation in preparing procedures to implement coordinated planning and development for mutually beneficial uses, including educational uses, in the coastal zone.”

6.   Section 5412.6 was introduced as Assembly Bill 943.   The report on the bill prepared by the Assembly Governmental Organization Committee analyzed the bill's import as follows:  “Current law requires payment of compensation to the owner of an outdoor advertising display that is compelled to be removed by a governmental entity by law, ordinance, or regulation.   ¶   This bill requires in addition that compensation be paid when the display is compelled to be removed as a condition or prerequisite for the issuance or continued effectiveness of a permit, license, or other approval for use of the property․  ¶  The measure appears to be a clarification of the legislative intent expressed in the Outdoor Advertising Act․”A legislative analysis prepared by the Department of Transportation essentially restated the foregoing analysis of the bill and added the following:  “This bill would prevent local governments from using development permits or licenses as the vehicle to order the removal of outdoor advertising displays.   Such action would be defined as a compelled removal requiring compensation.   ¶   Information we have indicates that some local entities have required the removal or relocation of outdoor advertising displays on portions of a parcel of property separate and apart from the portion being improved, as a prerequisite for the improvement permit.”

7.   Public Resources Code section 30010 provides as follows:  “The Legislature hereby finds and declares that this division is not intended, and shall not be construed as authorizing the commission, port governing body, or local government acting pursuant to this division to exercise their power to grant or deny a permit in a manner which will take or damage private property for public use, without the payment of just compensation therefor.   This section is not intended to increase or decrease the rights of any owner of property under the Constitution of the State of California or the United States.”

8.   Public Resources Code section 30801 provides as follows:  “Any aggrieved person shall have a right to judicial review of any decision or action of the commission by filing a petition for a writ of mandate in accordance with Section 1094.5 of the Code of Civil Procedure, within 60 days after the decision or action has become final.“For purposes of this section and subdivision (c) of Section 30513 and Section 30625, an ‘aggrieved person’ means any person who, in person or through a representative, appeared at a public hearing of the commission, local government, or port governing body in connection with the decision or action appealed, or who, by other appropriate means prior to a hearing, informed the commission, local government, or port governing body of the nature of his concerns or who for good cause was unable to do either.   ‘Aggrieved person’ includes the applicant for a permit and, in the case of an approval of a local coastal program, the local government involved.”

9.   Included in the October 8, 1986 letter of the State Board of Control rejecting PMG's administrative claim was the following warning, as required by Government Code section 913:  “Subject to certain exceptions, you have only six months from the date this notice was personally delivered or deposited in the mail to file a court action on this claim.   See Government Code section 945.6.   You may seek the advice of an attorney of your choice in connection with this matter.   If you desire to consult an attorney, you should do so immediately.”   Had this advisement been sent before the expiration of the time to file a petition for administrative mandamus, an issue would arguably arise as to whether the state had misled PMG into foregoing the proper remedy, and was thus estopped from objecting when the remedy seemingly recommended by the state's own notice was pursued.   Such was not the case, however.   The time to file the required administrative mandamus action had expired before PMG ever filed the claim to which the foregoing misadvice responded.Nor does it appear that PMG was misdirected by an unclear state of the law as to the proper action to be taken.   As of 1980, section 5414 provided that proceedings to obtain compensation under sections 5412 et seq. were to be under the Eminent Domain law, and section 905.1 of the Government Code provided that the claim procedures in sections 900 and following, the procedures PMG purported to utilize in this case, were not required prior to an action for inverse condemnation.   Even though it was not until 1989 that the courts in Rossco Holdings, Inc. v. Superior Court, supra, 212 Cal.App.3d 642, 260 Cal.Rptr. 736 and California Coastal Commission v. Superior Court (Ham), supra, 210 Cal.App.3d 1488, 258 Cal.Rptr. 567 applied to inverse condemnation actions the general rule that challenges to discretionary administrative actions must be raised by way of administrative mandamus, the general rule was sufficiently clear to give PMG notice of the appropriate procedure for its challenge.   As was noted in both Rossco and Ham, the decision of the California Supreme Court in State of California v. Superior Court (Veta), supra, 12 Cal.3d 237, 115 Cal.Rptr. 497, 524 P.2d 1281 established as early as 1974 that an administrative mandate action is a necessary procedural predicate to seeking inverse condemnation compensation based on a regulatory taking by an administrative agency.  (12 Cal.3d at p. 248, 115 Cal.Rptr. 497, 524 P.2d 1281;  212 Cal.App.3d at p. 657, 260 Cal.Rptr. 736;  210 Cal.App.3d at p. 1494, 258 Cal.Rptr. 567.)   Finally, as of 1986, Public Resources Code section 30801 provided that actions of the Coastal Commission were reviewable by administrative mandate.

CROSKEY, Associate Justice.

KLEIN, P.J., concurs.

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