PEOPLE DEPARTMENT PUBLIC WORKS v. CHEVALIER

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

The PEOPLE of the State of California, acting by and through the DEPARTMENT of PUBLIC WORKS, Plaintiff and Respondent, v. Stuart CHEVALIER, Leo L. Mushett, Sarah E. Mushett, James L. Mushett, doing business as Vulco Manufacturing Co., Richard C. Goodspeed, William A. Hyland, as Trustee, Bernard B. Fallon as Trustee, Edith G. Hyland, Helen G. Fallon, William F. Kaser, Siegel W. Judd, as Trustee under will of Ruth U. Goodspeed, deceased, Marijane Goodspeed Shaeffer, formerly Marijane Goodspeed, Robert C. Kirkwood, as State Controller, Doe Six to Doe One Hundred, Defendants.

Richard C. Goodspeed and William A. Hyland, as Trustee, individually and jointly, Appellants. The CITY OF LOS ANGELES, a municipal corporation, Plaintiff and Respondent, v. Richard C. GOODSPEED, William A. Hyland, as Trustee, Bernard B. Fallon, as Trustee, Doe One to Doe Twenty, inclusive, Defendants. Richard C. Goodspeed and William A. Hyland, as Trustee, individually and jointly, Appellants.*

Civ. 23013.

Decided: October 24, 1958

Paul R. Hutchinson, Vaughan, Brandlin & Baggot, Los Angeles, Richard C. Goodspeed, South Pasadena, for appellants. Roger Arnebergh, Peyton H. Moore, Jr., Los Angeles, for respondent City of Los Angeles. George C. Hadley, William H. Peterson, Charles E. Spencer, Jr., Los Angeles, for respondent.

The State of California sued various property owners, including appellants, to acquire for freeway purposes the extinguishment of their easement of access on 99th Street to Olive Street. No taking of land was involved, only a ‘right of access' (designated herein as Parcel 15 (amended)).

After a series of unsuccessful attempts on the part of the state to also acquire their land, the city of Los Angeles filed suit against appellants for the taking of an easement 60′ x 87′ over their property (designated herein as Parcel 1) for the purpose of opening and extending as a city street 99th to Broadway in order to provide access to properties landlocked by the closing of 99th Street by the state's construction of the Harbor Freeway.

The two cases were consolidated for trial. On the day of the hearing, plaintiff's motion to strike certain matters and ‘special defenses' alleged in the answers to both complaints was granted. Thereafter, the trial proceeded before a jury and it is from the judgment therein defendants appeal.

Defendants own a strip of unimproved land 441.63′ x 87′ fronting Broadway, between Century Boulevard, on which it faces, and 98th Street. Before construction of the freeway, defendants had access to Olive Street on the west over 99th Street which terminated on the west line of defendants' property. The state constructed the freeway approximately 100 feet west of defendants' land, eliminating Olive Street at that point. The freeway does not pass over any portion of defendants' property, but it does pass 98th and 99th Streets, closing each. This left the properties owned by third persons (4 or 5 houses) on 99th Street, between defendants' land and the freeway, completely landlocked and without access.

It was alleged by defendants that to provide an outlet for these properties, the state had available Lots 17, 18, 23 and 24, adequate to construct a collateral or service road without touching defendants' land, but that the state nevertheless sought to acquire Parcel 1 to open 99th Street through defendants' property to Broadway. The record discloses that the state, unable to acquire Parcel 1 for itself, entered into a written agreement with the city of Los Angeles (Freeway Agreement, Exhibit 9) dated June 7, 1956, wherein the city agreed to acquire Parcel 1 to open 99th as a city street over defendants' land to Broadway, taking an easement of 60′ x 87′ ending in a cul de sac on the west against the freeway.

Answering the state's complaint, after charging the State Highway Commission acted in bad faith, arbitrarily, fraudulently and in abuse of discretion, defendants denied that the city consented to the closing of 99th Street, declaring that the state closed defendants' right of access to Olive Street without authority from the city; and in substance, alleged that it was feasible to construct the freeway over 99th Street instead of closing it, and that it is the duty of the commission to limit the taking to that for which there is a public necessity and locate it in such a manner as will be most compatible with the greatest public good and least private injury to all; that the use, enjoyment and value of their land will be seriously impaired by the taking for freeway purposes; and that the taking is for the purpose of obstructing 99th Street and cutting off defendants' access rather than for any use in connection with the proposed freeway.

Their answers to the city's complaint were far more detailed and contained what the defendants designated ‘special defenses,’ alleging in part, that in finding and determining (a) that the public interest, convenience and necessity require the condemnation of Parcel 1 and the construction of the improvement in the manner proposed, (b) that Parcel 1 is necessary therefor and (c) that the improvement is planned and located in the manner which will be most compatible with the greatest good and least private injury, the city council—1—abused its discretion in that (a) it made no investigation of the desirability, feasibility, relative public interest, convenience, or probable relative cost of the two forms of access, or the necessity of opening 99th Street over defendants' land; (b) its finding and determination were made ‘pursuant to an agreement and conspiracy’ between the council and the State Highway Commission to accomplish the state's desire and intention to acquire defendants' land after the state failed to acquire it through attempted eminent domain proceedings; that the taking of defendants' land will accomplish no useful purpose of the city or public, but is ‘designed and intended wholly for the benefit and at the exclusive cost and expense of the California State Highway Commission as a means of providing an outlet for the properties presently fronting on 99th Street’; and that the ‘original plan’ of the commission for the Harbor Freeway called for a collateral or service street or road from 99th Street along the east edge of the freeway, and the intent and purpose of the ‘agreement and conspiracy’ between the city and the state is to take defendants' land as a substitute for the use of Lots 17, 18, 23 and 24 already owned, held and controlled by the commission and available for such use and purpose by the city; and (c) it refused to hear defendants' evidence, proposals and arguments in support of their contention that the public interest did not require the opening of 99th Street to Broadway and that the public interest, convenience and necessity required that access be provided according to the state's ‘original plan’; and that the city council—2—acted in bad faith, arbitrarily, negligently and fraudulently in that (a) the council made its finding and determination as to public interest, convenience and necessity under the direction, domination, control and the influence of the commission and the State Department of Public Works without any individual investigation or study as to desirability, feasibility, relative public interest, convenience and necessity or probable relative cost of the two forms of access (b) its finding and determination were made pursuant to an ‘agreement and conspiracy’ between the council and the commission to accomplish a purpose the state had been unable to effect, to wit: acquisition of defendants' land; and (c) acting in concert with and under the direction, domination, control and influence of the state, it refused to hear defendants' evidence and arguments that public interest, convenience and necessity required that access to 99th Street be provided according to the state's ‘original plan,’ over Lots 17, 18, 23 and 24 already under the control of and available to the state.

After receiving in evidence the city ordinance and commission resolutions authorizing the taking, the trial court ordered stricken the above portions of defendants' answers. The ruling on the motion appellants assign as error and contend that their ‘special defenses' presented a justiciable issue. We are in accord with their position and believe defendants properly alleged an affirmative defense which should be heard on its merits.

Respondents, defending the lower court's ruling, contend mainly that defendants have made no proper attack on the ‘public use’ for which the property is taken, and because ‘necessity’ is a legislative matter properly within the discretion of the condemning agency, the determination of which is made conclusive by statute and not subject to judicial review, defendants presented no defense in alleging abuse of discretion, fraud and bad faith on the part of the city council and the State Highway Commission.

The California Constitution (Art. I, Sec. 14) and the United States Constitution (Fifth and Fourteenth Amendments) place only two limitations on the exercise of the right of eminent domain—the taking must be for ‘public use,’ and ‘just compensation’ must be paid to the owner. The courts have consistently held that they create the only two judicial issues in eminent domain proceedings, and that the legislature has the exclusive right to decide all other questions involved in the taking of private property. University of Southern California v. Robbins, 1 Cal.App.2d 523, 37 P.2d 163.

Although what is a public use is, in the last analysis, to be determined by the court from the facts and circumstances of the case, ‘(T)he legislature must designate, in the first place, the uses in behalf of which the right of eminent domain may be exercised, and this designation is a legislative declaration that such uses are public, and will be recognized by courts * * *.’ Linggi v. Garovotti, 45 Cal.2d 20, at page 24, 286 P.2d 15, at page 18. City and County of San Francisco v. Ross, 44 Cal.2d 52, 279 P.2d 529; Kern County Union High School Dist. v. McDonald, 180 Cal. 7, 179 P. 180; University of Southern California v. Robbins, 1 Cal.App.2d 523, 37 P.2d 163. The declaration of the legislature that a specified use is public, although not conclusive on the courts, will be followed and given great weight, unless the legislative finding clearly appears to be erroneous and without reasonable foundation. Housing Authority of Los Angeles County v. Dockweiler, 14 Cal.2d 437, 94 P.2d 794.

In the face of their pleadings we do not believe defendants, in good faith, could question the ‘public use’ for which Parcel 15 (amended) and Parcel 1 were taken—state highways and city streets having long been declared ‘public uses' by the legislature and our courts. Sec. 104, Streets and Highways Code; Sec. 1238, Subdivision 3, Subdivision 6, Code of Civil Procedure; People v. Olsen, 109 Cal.App. 523, 293 P. 645; County of San Mateo v. Coburn, 130 Cal. 631, 63 P. 78, 621; Rindge Co. v. Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 67 L.Ed. 1186. They do, however, question the ‘public use’ in the particular application sought by plaintiffs, alleging that the opening of the 99th Street was for a private use, in that the taking of Parcel 1 would accomplish no useful purpose of the city or public, but was designed and intended for the sole benefit of the state ‘as a means of providing an outlet to the properties presently fronting on 99th Street easterly of the Harbor Freeway and to be cut off thereby.’ In brief, defendants charged that the state's ‘original plan’ called for a collateral road over other lots it had already acquired to serve as an access; and that instead, the city condemned defendants' property to aid the state in providing access for the landlocked properties and in escaping damages to defendants for having closed off their access to Olive Street by giving them, through the taking of their own property, frontage on and access over 99th Street.

Although it is true defendants alleged a private use, they likewise have alleged in the same pleadings the existence of a ‘public use’ by admitting first, that the taking of Parcel 15 (amended) was for state highway purposes and a part of the state's freeway plan and, second, in connection with Parcel 1, that there are houses owned by third parties on 5 lots to be served by the opening of 99th Street. What better public use could there be than that created by the opening of a street to the general public serving these 5 lots and to the owners and residents thereof who otherwise have no access? Under any of the tests used to determine whether a use is public, such a street clearly constitutes a public use. If it is the length of 99th Street, or that it ends in a cul de sac that concern defendants, a similar contention was made and rejected in Sherman v. Buick, 32 Cal. 241, 255, and Madera R. Co. v. Raymond Granite Co., 3 Cal.App. 668, 87 P. 27. In the latter case the court held that neither the length of the road nor the fact it is a spur bears any necessary relation to the question of public use.

Defendants' allegation that the taking of Parcel 1 was actually for the benefit of the commission and Department of Public Works is of little importance on the issue of public use, since the facts alleged disclose the taking for street purposes by these agencies in their governmental capacities, which in itself is not improper (Bettencourt v. State, 123 Cal.App.2d 60, 266 P.2d 201, 43 A.L.R.2d 545; Yonker v. City of San Gabriel, 23 Cal.App.2d 556, 73 P.2d 623).

Defendants have neither alleged, nor now contend, that the opening of 99th Street would never be applied to use by the public. They do not deny the city now intends to and will use the land as a public street, or that the proposed improvement is to be constructed as planned. Although they have charged the taking was for private use, they have not alleged, nor could they allege, it was exclusively for private use, for the ‘public use’ is manifest in their own pleadings. It is only when defendant can allege and prove an ‘exclusive’ private use that condemnation must be denied. City of Santa Ana v. Brunner, 132 Cal. 234, 237, 64 P. 287; County of San Mateo v. Coburn, 130 Cal. 631, 634, 63 P. 78, 621; Santa Ana v. Harlin, 99 Cal. 538, 541, 34 P. 224; Redevelopment Agency of City and County of San Francisco v. Hayes, 122 Cal.App.2d 777, 266 P.2d 105; Madera R. Co. v. Raymond Granite Co., 3 Cal.App. 668, 681, 87 P. 27.

A careful examination of their answers discloses that actually defendants' challenge is not to the ‘public use’ of the taking, but to the ‘necessity’ for the opening of 99th Street as a public city street. On the issues of ‘the public necessity of such proposed * * * public improvement’; ‘that such property is necessary therefor’; and ‘that such proposed * * * public improvement is planned or located in the manner which will be most compatible with the greatest public good, and the least private injury,’ section 1241, Code of Civil Procedure, and section 103, Streets and Highways Code, make the city ordinance and commission resolutions conclusive. Stratford Irr. Dist. v. Empire Water Co., 44 Cal.App.2d 61, 111 P.2d 957. There is no need for any showing of necessity on the part of the condemning body once the proper resolutions and ordinances have been presented. People v. Broome, 120 Cal.App. 267, 7 P.2d 757; Rindge Co. v. Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 67 L.Ed. 1186. Their effect was judicially recognized in County of Los Angeles v. Rindge Co., 53 Cal.App. 166, 168, at page 172, 200 P. 27 at page 30, affirmed Rindge Co. v. Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 67 L.Ed. 1186: ‘(W)hen the use is public, the necessity of appropriating any particular property therefor is not a subject of judicial cognizance, but one which appertains to the legislative branch of the government, and the right to so appropriate may be exercised by the state or such subordinate bodies to which by legislative grant the power is intrusted.’

Under ordinary circumstances, questions involving necessity, such as whether some other route should have been chosen instead of the one agreed upon, whether someone else's property should have been taken, or whether the condemning agency acted unwisely, exercising poor judgment, are answered by the conclusive effect of the resolution and ordinance under sections 103 and 1241, and are not subject to judicial review.

However, conceding this to be the law, appellants contend that once they have alleged fraud, bad faith, or an abuse of discretion on the part of the condemning body, the question of ‘necessity’ for the take becomes a judicial issue, and cite various authorities therefor. Respondents reject them on the premise that they are in conflict with the basic theory of the right of eminent domain. And so they seem to be. Through the years our courts have made it plain that the right of eminent domain is an inherent attribute of sovereignty limited only by constitutional provisions which create only two judicial questions, ‘public use’ and ‘just compensation,’ all other matters falling within the exclusive jurisdiction of the legislature. Strictly following this basic theory, it would seem, therefore, that the only fraud, bad faith, or abuse of discretion that can be raised as a judicial issue is that going to the determination of public use. The court, in People v. Olsen, 109 Cal.App. 523, 293 P. 645, one of the first cases in California attempting to define what could be attacked by a proper allegation of fraud, bad faith, or abuse of discretion, apparently tried to follow this theory. However, thereafter various cases arose dealing with this subject—some discussing it incidentally, others mentioning it indirectly, briefly and in general terms. In only a few was the direct issue involved. To add to the confusion the courts appear to have used the terms ‘public use’ and ‘necessity’ interchangeably. Their language is by no means clear, particularly when considered in conjunction with the long-declared principles of eminent domain. Now many California authorities hold that a resolution, although conclusive, may be attacked on the basis of fraud, bad faith or abuse of discretion (Orange County Water District v. Bennett, 156 Cal.App.2d 745, 320 P.2d 536; Los Angeles County Flood Control District v. Jan, 154 Cal.App.2d 389, 316 P.2d 25; Babcock v. Community Redevelopment Agency of City of Los Angeles, 148 Cal.App.2d 38, 306 P.2d 513; People ex rel. Department of Public Works v. Schultz Co., 123 Cal.App.2d 925, 268 P.2d 117; People v. Milton, 35 Cal.App.2d 549, 96 P.2d 159; San Benito County v. Copper Mountain Mining Co. of California, 7 Cal.App.2d 82, 45 P.2d 428; Beals v. City of Los Angeles, 23 Cal.2d 381, 144 P.2d 839; Erro v. City of Santa Barbara, 123 Cal.App. 508, 11 P.2d 890; City of La Mesa v. Tweed & Gambrell Planning Mill, 146 Cal.App.2d 762, 304 P.2d 803), but whether such attack is limited to ‘public use’ as contended by respondents, or embraces ‘necessity’ as urged by appellants, has not been too well settled. We are inclined toward the view expressed in People By and Through Department of Public Works v. Lagiss, 160 Cal.App.2d 28, 324 P.2d 926, decided after the trial of the instant case in the lower court. Although the court in the Lagiss case discussed ‘public use’ as well as ‘necessity,’ in holding that it was error to strike from defendant's answer allegations of bad faith, fraud and abuse of discretion on the part of the California Highway Commission, it stated, after citing the conclusive effect of the resolution under section 103, Streets and Highways Code, 160 Cal.App.2d at page 33, 324 P.2d at page 929: ‘This, of course, does not preclude a court from determining whether the use described in the resolution is a public use. Nor is the truth of the findings declared in the resolution immune from judicial inquiry if tainted by fraud, bad faith or abuse of discretion. City of La Mesa v. Tweed & Gambrell Planning Mill, 146 Cal.App.2d 762, 777, 304 P.2d 803; People ex rel. Department of Public Works v. Schultz Co., 123 Cal.App.2d 925, 941, 268 P.2d 117; People v. Thomas, 108 Cal.App.2d 832, 835–836, 239 P.2d 914.

‘When defendant alleged that the commission acted in bad faith and abused its discretion by passing the resolution reciting a need for the whole of this parcel when it knew there was no need for a portion of it and had no plans for its use and did so to harass the defendant (and the other similar allegations recited earlier in this opinion), he clearly and specifically pleaded fraud, bad faith and abuse of discretion.’

Respondents urge that any judicial review of the findings of a condemning body on the matter of necessity will meet with abuse and delaying tactics of property owners whose only real complaint is that someone else's property should have been taken, or some other plan of construction should have been chosen, and could easily create a serious impairment of the construction of public improvements. This undoubtedly was the theory behind the action of the Legislature in making resolutions conclusive, but it should not preclude a challenge to findings based upon bad faith, fraud, abuse of discretion or arbitrary action. The truth of the findings declared in the resolution are not ‘immune from judicial inquiry if tainted by fraud, bad faith or abuse of discretion.’ People By and Through Department of Public Works v. Lagiss, 160 Cal.App.2d 28, 324 P.2d 926.

We conclude that defendants should have been permitted to plead their defense of bad faith, abuse of discretion, arbitrariness and fraud; and viewing defendants' pleadings as a whole, although inartfully drawn, we deem the affirmative defense in both cases to be sufficiently well pleaded to raise the issue involved.

The record before us discloses somewhat the circumstances surrounding the institution of the city's action—prior successive unsuccessful attempts of the state to take defendants' property. The state on June 13, 1955, in its original complaint, tried to condemn 60 feet of defendants' land. Defendants, contending that the proposed construction was wholly within the city, could not be part of the state highway, and the state had no authority to take the land, interposed a demurrer, which was sustained. A subsequent demurrer to the first amended complaint, in which the state sought to obtain the same property in the name of the city, was also sustained. Filing a second amended complaint, the state then declared it had been authorized by the city to acquire in its behalf defendants' land at state expense. On the ground that there was no right or power in the state to sue on the behalf of the city, a third demurrer was sustained. Finally the state abandoned its efforts to condemn defendants' land and filed its third amended complaint, limiting its taking to the extinguishment of defendants' easement of access over 99th Street to Olive. Shortly thereafter, condemnation proceedings were undertaken by the city of Los Angeles, pursuant to an agreement with the state, to condemn defendants' property for the state.

In charging that the commission and city council acted in bad faith, arbitrarily, fraudulently and in abuse of discretion, defendants' pleadings and offer of proof presented, in effect, the following factual situation: that the state, which already had Lots 17, 18, 23 and 24 available for its use, originally planned, upon closing 99th Street in the construction of the Harbor Freeway, to give the landlocked properties access by way of a collateral road running north and south from 99th to 98th Streets over these lots without touching defendants' land; that after closing 99th Street, it decided to abandon its original plan to construct a street on property already under its control and instead to take 60 feet of defendants' property to open 99th Street to Broadway, thereby carving out of defendants' land two corner lots fronting 99th Street, to create an ‘improvement’ which would offset any severance damage and loss of access to the west over 99th Street to Olive by the closing of 99th Street; that having land already available for the outlet, the opening of 99th Street through defendants' property was not actually needed as a public street, but in accordance with its ‘plan’ and ‘scheme’ to defeat defendants' claim for damages, the state sought to condemn defendants' land, filing successive actions in condemnation, but having failed in its efforts to condemn on its own behalf and later on behalf of the city, the state thereupon by executing a freeway agreement asked the city to undertake the condemnation; that the city actually had no need or desire to open 99th Street over defendants' land as a public city street; that it acquiesced in the state's request to do so at state expense, relying solely upon its representations of need, and using its power of eminent domain only because the state could not do so; that pursuant to the state's request and in reliance thereon, without any investigation on its part to determine necessity and whether the proposed improvement was planned and to be located in the manner which would be most compatible with the greatest good and least private injury, and without considering any other recommendations and proposals than the state's request, the city council passed an ordinance declaring the public interest, convenience and necessity in connection with defendants' land and the proposed improvement, and that it was planned and located in the manner which will be most compatible with the greatest public good and least private injury.

It is obvious from the pleadings defendants do not seek to have the court enter the field of inquiry into honest differences of opinion in the resonable exercise of discretion, nor do they claim the council exercised its discretion unwisely, but charge that the council acted arbitrarily and in abuse of its discretion by failing to discharge its duties and exercise any discretion at all. In this connection defendants further alleged that without giving the matter of necessity any consideration, the council acted as a ‘tool’ or ‘rubber stamp’ for the state to aid it in accomplishing indirectly what it was barred from doing directly; that such a ‘conspiracy’ for the sole purpose of defeating defendants' claim for damages, constituted the taking a sham arising out of collusion and fraud perpetrated at the behest of the state; that the city not desiring or needing the land or the improvement was in bad faith in acquiescing to the state's request, without making an investigation and giving some consideration to the matter of necessity; that the city did not in good faith take the private property for the public good, but exercised its power arbitrarily without regard to its duties, and in bad faith for the purpose of accommodating the state as its ‘alter ego’ and as a subterfuge to permit it to evade its responsibilities.

As to the sufficiency of the pleadings, our attention has been directed to the Freeway Agreement between the state and city for the acquisition of defendants' property (Exhibit 9), the statutory provisions in the State and Highways Code for co-operation between city and state in relocating, closing and opening city streets in state highway construction, and judicial recognition of joint action in carrying out certain policies of the state. Watson v. Greely, 67 Cal.App. 328, 227 P. 664. Co-operation between city and state no matter how well recognized and approved would not justify a fraudulent declaration of an alleged public need and purpose that did not exist, or an act in eminent domain that was not bona fide.

Respondents contend that the failure and refusal of the council to consider alternate proposals and defendants' arguments against the taking, and holding a hearing on the matter, is of no import since defendants had no right to a hearing (County of Los Angeles v. Rindge Co., 53 Cal.App. 166, 168, 200 P. 27, affirmed Rindge Co. v. Los Angeles County, 262 U.S. 700, 43 S.Ct. 689, 67 L.Ed. 1186); that there can be no inquiry into the motives or reasons for declaring necessity (City of Santa Ana v. Brunner, 132 Cal. 234, 64 P. 287); and that defendants cannot insist on the use of any particular route or plan (Stafford v. People ex rel. Department of Public Works, 144 Cal.App.2d 79, 300 P.2d 231; and other cases), because these matters are within the discretion of the condemning body and not subject to judicial inquiry. Of course, in the absence of a showing of fraud, bad faith or abuse of discretion this is true, that when such issues are properly raised, these matters are subject to scrutiny by the courts.

It may well be that the trial court, after hearing defendants' evidence on the issue, will find it insufficient to support the charges, but it was error to deprive them of a hearing on the merits.

In view of the foregoing, we deem it unnecessary to discuss other points raised by appellant relating to the consolidation for trial of the state and city actions, the refusal of the trial court to give a series of instructions proposed by defendants, the form of verdict submitted to the jury and the refusal of the trial judge to permit in evidence defendants' proposed plan of improvement of their land.

The judgment is reversed.

LILLIE, Justice.

WHITE, P. J., and FOURT, J., concur.