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Court of Appeal, Second District, Division 5, California.

SOUTH COAST REGIONAL COMMISSION, etc., Plaintiff and Appellant, v. Harold GORDON et al., Defendants and Respondents.

Civ. 45838.

Decided: April 02, 1976

Evelle J. Younger, Atty. Gen., Carl Boronkay, Asst. Atty. Gen., and Alan Robert Block, Deputy Atty. Gen., for plaintiff and appellant. Fadem, Berger & McIntire, A Professional Corporation by Michael M. Berger, Beverly Hills, for defendants and respondents.

This appeal is from a judgment denying appellant South Coast Regional Commission (Commission) a permanent injunction prohibiting respondent Gordon from building a ‘home’ within the coastal zone area defined by the Coastal Act.1 The action was brought by the Commission to prevent Gordon from completing his construction.

The facts are that Gordon became the owner of a lot in Malibu in December 1971. He had plans started during the escrow period. They were completed and filed for checking with Los Angeles County in September 1972. Also in that month, in anticipation of the plan approval, Gordon entered into an $8,000 contract for construction of a swimming pool. Geological and engineering fees were paid in October 1972, among other preparatory activities.2 On September 25, 1972, Gordon received approval from the County of Los Angeles Regional Planning Commission that the proposed word on the subject property complied with the environmental development guide. A building permit was approved to issue. On October 18, 1972, the evaluation of the environmental impact from the Department of Building & Safety concluded that the proposed work on the property would not have a significant effect on the environment. A permit for two seepage pits for sewage disposal and a permit for construction were approved for issuance upon proof of adequate percolation; this condition was satisfied in November 1972. The County Health Department approved the disposal system upon clearance of a County geologist. The pits were dug and approved long before January 22, 1973.3

The building permit was issued on January 22, 1973. Excavation for 12 caissons for foundation purposes, formation of the concrete were accomplished during January, after issuance of the building permit.4 Prior to and as a condition for the issuance of the building permit, Gordon had obtained a permit to install seepage pits and had done so; after completion, the County approved the installation prior to February 1, 1973. On March 27, 1973, the building permit was suspended.

While there is much evidence as to what work was done after February 1, 1973, for the purpose of dealing with the first contention on appeal, the above stated facts are sufficient.

The Commission argues that ‘The trial court erred in denying [its] motions for a summary judgment and judgment on the pleadings in that respondents should not be allowed to urge a claim of exemption as a defense to an action filed to enforce the permit requirements of the Coastal Act without having first sought such a determination from a Regional Coastal Commission.’ State of Calif. v. Superior Court (Veta Company, et al., Real Parties in Interest), 12 Cal.3d 237, 115 Cal.Rptr. 497, 524 P.2d 1281, is cited as authority for this contention. There, the court stated (at pp. 249–250, 115 Cal.Rptr. at p. 505, 524 P.2d at p. 1289):

‘Since the case will be remanded to the trial court for further proceedings, it is appropriate to discuss, for the guidance of the trial court on remand, Veta's contention that it is not required to obtain a determination from the Commission that its rights are vested as a predicate to seeking such a declaration from the court, and that the Commission has exceeded its powers in adopting regulations for determining claims of exemption. Veta asserts that the Commission has no power to determine whether a developer has acquired a vested right to develop its property without a permit, because that power is not expressly granted to the Commission by the Act and that, since the concept of vested rights has its roots in the Constitution, only courts may determine whether a developer has acquired a vested right.

‘We do not agree. The Act empowers the Commission to ‘[A]dopt any regulations or take any action it deems reasonable and necessary’ to carry out its provisions. (Pub.Resources Code, § 27240.) This grant of authority is sufficiently broad to empower the Commission to adopt the regulations in question, since among the provisions of the Act is section 27404, which sets forth standards for guidance in determining the acquisition of vested rights. Moreover, the mere fact that the concept of vested rights is rooted in the Constitution does not deprive the Commission of the power to make the initial determination whether a developer qualifies for an exemption, so long as appropriate judicial review of the Commission's determination is provided. The Commission has passed upon a large number of vested rights claims, and orderly procedure would seem to require that it be afforded the opportunity to make this determination as a predicate to an action for declaratory relief.'

In the instant case, however, on May 15, 1973, following the filing of a complaint for injunction and civil penalties, the superior court issued a temporary restraining order prohibiting Gordon from completing construction ‘without first obtaining a permit . . . from the . . . South Coast Regional Commission . . ..'5 On September 19, 1973, the court issued a preliminary injunction to the same effect, and it was drafted by the Attorney General's office. On May 15, 1974, Gordon sought to comply by applying to the commission for a permit in accordance with the court directive, though at all times Gordon considered his project to be exempt from the act. On June 10, 1974, the Regional Commission denied a permit, and Gordon appealed. On September 18, 1974, the (State) Commission determined that there was no substantial issue raised by the appellant (Gordon), and let stand the decision denying the permit. Immediately prior to the time of the trial setting conference in the instant enforcement action, the Attorney General raised the issue of no application for a permit.6

There can be no question but that the filing of the action by the Commission was proper absent a permit (Pub.Res.Code, § 27400), or an exemption (formerly Admin.Code, Tit. 14, § 13803)7 since there was, at all times after February 1, 1973, a prohibition against construction within the coastal zone. The temporary and preliminary injunctions were likewise proper for they were the tools for enforcement available to the Commission to obtain compliance with the Coastal Act. (Admin.Code, Tit. 14, § 13621.) In the broad sense, even the directive in the injunctions requiring Gordon to obtain a permit in compliance with section 27400 was correct, for the ‘exemption’ permit or declaration or certificate provided for under Administrative Code, Title 14, section 13801 (now, § 13701) is an administrative augmentation of the requirement to obtain a permit under sections 27400 et seq. The procedures are the same whether the application is for an exemption or for a permit; the only difference is the scope of the examination by the Commission. As stated in Veta, supra, and in REA Emterprises v. Calif. Coastal Zone Com., 52 Cal.App.3d 596, 125 Cal.Rptr. 201 the Commission ascertains the effect upon the ecological factors in ruling upon the granting or denying of a permit. When considering the application for exemption, at the time in question it was required that ‘the public hearing shall be conducted in the same manner as public hearings on permit applications but shall have as its purpose to enable the Regional Commission to make a determination whether or not the claim of exemption is valid.’ (Formerly, Admin.Code, Tit. 14, § 13802.) The Commission argues that this distinction in Commission consideration necessitates Gordon, even now, applying for an exemption. We have not been given the benefit of a view of the application filed by Gordon, but a fair reading of Veta does not compel the performance of an idle act. Here, the Commission brought this action approximately two months after the adoption of the exemption provisions in the Administrative Code. The Attorney General, in filing this action (and particularly, knowing the factual contentions of Gordon), impliedly contended that Gordon was not entitled to an exemption. He proceeded exactly as he had done in San Diego Coast Regional Com. v. See the Sea, Ltd., 9 Cal.3d 888, 109 Cal.Rptr. 377, 513 P.2d 129 (dec. Aug. 22, 1973). That case was determined adversely to the Commission's position, and an interest in the nature of a vested interest was established. After Gordon did exactly what the Commission, and the court by way of injunction, demanded (i. e., seek a permit), the Commission would have the trial court precluded from jurisdiction because Gordon filed for the wrong ‘permit.’

Under the exceptional circumstances here present, we agree with respondent Gordon that there had been reasonable compliance with the procedures outlined in the Coastal Act and in the Administrative Code to have constituted an exhaustion of administrative remedies. To hold otherwise would put form before substance, which is inappropriate both judicially and administratively. (See San Diego Coast Regional Com. v. See the Sea, Ltd., supra; cf., State of Calif. v. Superior Court (Veta), supra, 12 Cal.3d at 249, 115 Cal.Rptr. 497, 524 P.2d 1281.) It was suggested in argument that by so holding, a bad precedent would be pronounced and Commission policing would be necessitated. We see no such problem, for at most, the number of possible cases falling within this classification is limited by the prerequisite that construction would have had to commence prior to February 1, 1973. It is now three years later, so there should be no fear that there will be an inordinate number of possible cases filed which would require the prospective application of the rule of substantial compliance.

We necessarily reach the Commission's contention which involves the merits of the action. The contention as posed is: ‘Assuming arguendo that the trial court did have jurisdiction to decide whether respondents were exempt from the Coastal Act without a prior Commission determination, its decision was totally erroneous in that respondents neither possessed a vested right pursuant to traditional principles of vested rights as codified in Public Resources Code section 27404, nor performed ‘substantial lawful construction,’ as specified in See the Seal.'

We need not consider the ‘vested’ right portion of the foregoing contention, for an analysis of the ‘substantial lawful construction’ portion suffices to determine the issue.

See the Sea is on all fours with the instant case. There, the builder obtained his building permit on December 6, 1972. In the first week of January 1973, he demolished a motel on the site and, prior to February 1, 1973, spent $79,000 in construction,, also incurring finance charges. In the instant case, the building permit issued on January 22, 1973 for the construction of a residence, guest house, and cabana on an R–1 zoned lot. By February 1, 1973 the 12 caissons had been excavated and reinforced, and the concrete poured. In addition, as noted by appellant in its opening brief, ‘Also, on January 30, 1973, Roy Brothers apparently began to excavate the trenches for the foundational grade beams. The beams themselves were not approved until February 22, 1973. As of February 1, 1973, [Gordon] had expended approximately between $2,400 and $3,000 on the above construction costs following issuance of the building permit.'8 By these rough figures, it is established that the actual construction costs approximated 2.77% of the total cost of the project. When this percentage of the total cost is added to the costs of reconstruction necessities ($11,900), the actual expenditures as of February 1, 1973 approximated 9.55% of the total, and in addition thereto, an $8,000 swimming pool had been contracted for. Although the Commission argues that we must confine ourselves to the 2.77% figure in considering whether ‘substantial construction’ had been accomplished, we believe that the dollar cost of that construction is somewhat misleading. We have not computed the tons of cement and steel imbedded in the ground which make up the caissons, but certainly the very size and permanency thereof must be considered along with their costs. In addition, the digging and installation of the seepage pits had unquestionably been completed. We therefore cannot find that the trial court abused its discretion in determining that ‘substantial construction’ had been performed.9

The Commission argues, however, that for the See the Sea definition of ‘substantial construction,’ the construction must have been performed pursuant to a valid building permit. We agree. The error in the Commission's analysis of the validity of the Gordon permit is the misconstruction of the effect of a suspended permit and its reinstatement. It needs no case citation to reinforce the conclusion that a permit which is suspended and later reinstated is not a dead permit. The action in ‘suspending the permit’ merely stopped construction until compliance with the permit, or necessary permit corrections were accomplished. The Commission, however, argues that the permit as issued should never have been issued because construction in accordance therewith would have constituted a violation of the zoning laws. A great deal of testimony was elicited involving the multiple kitchens shown on the plans. Gordon maintained that all but one ‘kitchen’ were intended to be ‘wet bars' and that the plumbing and electrical power provided the ‘wet bar’ areas were to satisfy various hobbies of the ‘family’ members. As we understand the record and the trial judge's comments about the plans, Gordon's explanation is at best suspect. As the judge said, ‘The court is prepared to conclude at least tentatively that this set of plans was prepared like some government buildings are—for convertibility. I would have to be a blithering idiot to not come to the conclusion that there would be convertibility into multiple housing, but that per se doesn't show bad faith.’ The judge's observation is corroborated by an answer given by Gordon during direct examination in reference to the utilities adequate to service a kitchen: ‘So that I would have the options and be flexible and do the things that we could do in the future. There was scuttlebutt about zoning around, a possible change of zoning. I didn't know whether this would occur in a few years or in ten years, but it is so utterly cheap to do rough work at this time [during construction] rather than not to do it and have to do it later when it would be terribly costly that this was another reason another option which I wanted to retain.’

The conclusion of the trial judge—in substance, that Gordon was building two flats (a 4-unit building) so far as the form of the building, rough plumbing, and the electrical power were concerned, but was going to use the structure as single-family housing—is justifiable. Until more than one kitchen is installed, there is no zoning violation; so long as but a single family occupies the premises, there is no violation. So far as the permit to build is concerned, it was valid when issued in January, subject only to the corrections required in April, and construction and use conformity with the plans and zoning. The surmise of the Commission that Gordon will violate the law is nothing more than that—surmise—and will not support a finding that the trial judge erred in concluding the contrary.

The third requisite for ‘substantial construction’ as the Commission defines it in the light of See the Sea is ‘good faith.’ The Commission argues that Gordon could not have effected his ‘substantial construction’ in ‘good faith’ because the ‘construction’ took place just days before the February 1 effective date of the Coastal Act. We see no difference between See the Sea and the instant case so far as this contention is concerned. ‘Good faith,’ however should not be viewed in the narrow outlook espoused by the Commission. The trial court properly considered the totality of (1) the time (Gordon's project commenced in December 1971 and was continuous to February 1, 1973); (2) the cost (including all of the items heretofore listed as occurring in the pre-permit period, as well as ‘construction’ payments); and (3) construction (actual change in the land by virtue of building thereon).10 Under these facts, we concur with the trial court: good faith was established. Gordon obtained a lawful building permit and commenced substantial construction, in good faith, prior to the effective date of the Coastal Act. His ‘single family residence’ may prove to de an albatross around his neck in that he can be punished if he misuses the property by illegal modifications, or it the premises are used for multiple dwellings, and if he seeks a zone change, the Coastal Act stands in his way. However, Gordon made his choice, and it is not for us or the Commission to say he had no right to make that choice.11

The Commission also contends that Gordon is not entitled to the recovery of attorney fees, and that even if he were, the fees awarded to Gordon were unreasonable. Public Resources Code section 27428 provides:

‘Any person who prevails in a civil action brought to enjoin a violation of this division or to recover civil penalties shall be awarded his costs, including reasonable attorneys fees.’

The position of the tion of the Commission is unsupportable by any reasonable analysis of this provision. Here, there was an action to enjoin and to impose penalties. Gordon prevailed. His costs, including attorney fees, were established by substantial evidence, and were reasonable. He is entitled to the benefits of this section.

The judgment is affirmed. Costs to respondent.


1.  The act is entitled, ‘California Coastal Zone Conservation Act of 1972,’ and became law after an initiative measure was approved by the electorate on November 7, 1972. The act added Division 18 to the Public Resources Code, where it is set forth in sections 27000 through 27650.

2.  9/8/72: Permit from Department of Building & Safety Geology Division to conduct geological evaluation;9/11/72: Geological report submitted to Department of Building & Safety;9/12/72: Approval from Department of Building & Safety re site drainage;9/14/72: Soils report submitted to Department of Building & Safety;9/20/72: Water certificate from waterworks;9/25/72: Approval from County of Los Angeles Regional Planning Commission that the proposed work complies with environmental development guide. Building permit approved to issue;10/18/72: Evaluation of environmental impact from Department of County Engineer, Building & Safety Division (proposed work does not have significant effect on environment);11/1/72: Approval of Los Angeles County Health Department for sewage disposal system. (Approved upon clearance by County geologist);1/11/73: Approval from Department of Building & Safety, Geology Division;1/22/73: Final permit from Department of County Engineer, Building & Safety Division for construction of house and guest house;1/24/73: Permit from Department of County Engineer, Building & Safety Division approving electrical plans;1/26/73: Approval of County geologist of sewage disposal system;1/30/73: Final permit from Department of County Engineer, Building & Safety Division for construction of pool;1/31/73: Permit from Department of County Engineer, Building & Safety Division approving mechanical plans;1/31/73: Permit from Department of County Engineer, Building & Safety Division approving plumbing for swimming pool.

3.  These seepage pits were 5 to 6 feet deep and 33 to 35 feet long.

4.  The caissons were drilled to depths of 24 feet to 14 feet, each with a diameter of 3 feet, belling out to a diameter of 5 feet at the bottom. There is considerable conflict in the evidence as to whether ‘foundation grade beam’ excavation had been accomplished prior to February 1, 1973, but we do not deem this item crucial to the determination of the basic issue of ‘substantial construction.’ The same is true as to the excavation for the swimming pool.

5.  The form of this order was drafted by the office of the Attorney General.

6.  The act recognizes that equitable considerations require protection for a property owner who was in the process of constructing a development at the time the act became effective: ‘If, prior to November 8, 1972, any city or county has issued a building permit, no person who has obtained a vested right thereunder shall be required to secure a permit from the regional commission; providing that no substantial changes may be made in any such development, except in accordance with the provisions of this division. Any such person shall be deemed to have such vested rights if, prior to November 8, 1972, he has in good faith and in reliance upon the building permit diligently commenced construction and performed substantial work on the development and incurred substantial liabilities for work and materials necessary therefor. Expenses incurred in obtaining the enactment of an ordinance in relation to the particular development or the issuance of a permit shall not be deemed liabilities for work or material.’ (Pub.Res.Code, § 27404.)

7.  The provisions of this section are now embodied in section 13702. Sections 13800 through 13809 were adopted March 17, 1973. The substance of these sections is now contained in sections 13700 through 13707 with no substantial change which might affect the problem before us. Sections 13700 through 13707 were adopted June 8, 1974. These sections are a part of the regulations included within sections 13001 et seq., whose purpose is outlined in section 13001 as follows: ‘These regulations supplement and interpret the California Coastal Zone Conservation Act of 1972, as it may be amended from time to time. No attempt has been made to reproduce in these regulations the definitions, policies, and other provisions found in the Act. Therefore, these regulations should be read together with the Act.’

8.  Accepting Gordon's statement that in May 1973 he had completed 80% of the construction at a cost of $85,000, we arrive at a total cost of building of around $108,000.

9.  See Dobbins v. Los Angeles, 195 U.S. 223, 25 S.Ct. 18, 49 L.Ed. 169; Kissinger v. City of Los Angeles, 161 Cal.App.2d 454, 327 P.2d 10; Trans-Oceanic Oil Corp. v. Santa Barbara, 85 Cal.App.2d 776, 194 P.2d 148.

10.  Judge Olson was correct when he concluded: ‘As to the first ‘bad faith’ contention, the court find that [all of the preparatory events described in our footnote 1, supra] occurred . . . [and while] [m]any of these events do not meet the ‘permit’ element required by the Supreme Court . . . they do supply strong evidence of good faith. Defendants did not run out at the last minute and scratch some dirt, put some sticks in the ground, and then claim they had commenced the project. They had been involved in the project for a significant period of time and had spent or incurred significant amounts of money. Because of the somewhat rigid (and in a realistic sense artificial) requirement of a building permit imposed by the Supreme Court, this Court cannot consider said facts in determining whether substantial lawful work occurred before February 1. However, with respect to the subjective element of good faith, the Court has considered said events and finds them to be significant.'

11.  The subdivisions of the three basic contentions which we have considered are answered by the foregoing analyses. We have examined each authority cited, and find that none of them is incompatible with the views which we have herein expressed.

STEPHENS, Associate Justice.

KAUS, P. J., and ASHBY, J., concur.