Harold A. TOSO et al., Respondents and Cross-Appellants, v. The CITY OF SANTA BARBARA et al., Appellants and Cross-Respondents.
This is an action filed by Toso individually and as agent of others against the City of Santa Barbara and all members of the city council who held office during the year 1974. The first cause of action seeks damages under section 1246.3 of the Code of Civil Procedure; the second cause of action seeks damages for inverse condemnation; the third cause of action seeks a writ of mandate to compel the city to grant to Toso a rezoning of the property involved; the fourth and fifth cause of action seek declaratory relief. After a trial, judgment was entered for the defendants on the first two causes of action and in favor of plaintiffs on the third, fourth, and fifth causes of action. The effect of the judgment in favor of plaintiffs was to vacate the proceedings hereinafter discussed that denied Toso a requested rezoning and to order the city to grant the rezoning requested.
The city has appealed from the judgment against it on the third, fourth, and fifth causes of action; Toso has appealed from the judgment against the plaintiffs and in favor of the city on the first and second causes of action.
While this appeal was pending, the plaintiffs other than Toso secured orders substituting themselves as parties appellant in place of Toso acting as their agent. The substituted parties then requested dismissal of the cross-appeal insofar as they were involved and we entered our order of dismissal in accordance with that request. As a result of those proceedings, we now have before us the city's appeal and a cross-appeal by Toso as an individual. We reverse the judgment adverse to the city on the third, fourth and fifth causes of action; we affirm the judgment in favor of the city on the first cause of action. We reverse the judgment in favor of the city of the second cause of action.
At the time of the events herein involved, Toso had an option to buy from his co-plaintiffs a tract of land in the City of Santa Barbara known as the Wilcox property. It was his desire and intent to develop that property as a resort hotel. The result of the events hereinafter described was that his request to rezone the property for that purpose was denied and in January of 1977, he allowed the option to expire unexercised.
In 1964, the City of Santa Barbara adopted a general plan showing the Wilcox property as a resort hotel with five dwelling units per acre. In 1965, the city zoning ordinance was amended to add a chapter providing for a resort hotel zone land zoned as RH also zoned as single and multiple family residential zone. The Santa Barbara zoning ordinance provides for zone changes by zoning amendments. The zoning ordinance provides for appeal to the city council and a public hearing following the denial of an application for a zone change.
Prior to Toso's application for rezoning, the city had permitted rezoning to RH zoning certain other property belonging to another person. This property which was granted rezoning already had a resort hotel on the premises. However, the city had also denied an RH rezoning application to W. Von Biskupsky, who wanted to build a resort hotel across the street from the Wilcox property. The city also denied the application to zone Loma Hacienda property for a resort hotel. The property surrounding the Wilcox property was zoned F-1 for single family residences at the time of plaintiff's rezoning application.
Toso knew that the city's general plan provided for a resort hotel on the Wilcox property when he secured the option to buy the property in 1973. In January of 1974, the city's environmental officer advised the City Park Director of an incipient movement to purchase the Wilcox property for a park. In February of 1974, Toso filed a rezoning application to change the zoning on the Wilcox property from E-1 and R-1 single family residences to RH resort hotel.
Citizens met with the Park and Recreation Director to discuss the purchase of the Wilcox property as a park, and sometime after that, the city had the Wilcox property appraised for value. After the City of Santa Barbara received a sum of money for settlement of an oil spill, the city placed the following proposition on the ballot: “Shall the City of Santa Barbara purchase the Wilcox property for open space use?” The planning commission had several meetings on the rezoning application, they found the resort hotel plot plan aesthetically satisfactory, but they denied Toso's application for resort hotel rezoning, finding that a commercial hotel in a single family area was an improper land use.
The voters in Santa Barbara approved the proposition favoring purchase of the Wilcox property, and the city attorney began negotiations with Toso's attorney for the purchase of the property.
Toso appealed the denial of the resort hotel rezoning application and, prior to the public hearing, the city council met in executive session with the city attorney to receive legal advice from him. A statement was prepared as a result of those sessions stating that the city council would divorce consideration of respondents' appeal on rezoning from the city's desire to purchase the Wilcox property. A public hearing was then held and respondent's rezoning application was once again denied.
The city attorney met with the city council and decided to inform Toso's attorney that the city was not interested in the property and that he was free to develop it as a residential subdivision. The city attorney advised Toso's attorney that the city did not intend to condemn the property.
Toso then filed his complaint in inverse condemnation, damages and writ of mandate. The city attorney met with the city council to prepare a draft of a resolution. Afterwards, the city council adopted Resolution 8111 stating nonintention to acquire the Wilcox property. The resolution also initiated proceedings to consider rezoning the property for a Planned Unit Development (PUD).
Trial in the action began. The planning commission approved rezoning of the Wilcox property to E-3 PUD and E-1 PUD, which allowed either single subdivision or a planned unit development residential project.
THE CITY'S APPEAL
The discussion below deals first with the city's appeal from that portion of the judgment that is not in its favor, including the order of the court to the city council to rezone the Wilcox property to permit a resort hotel.
Appellant city's first argument is that the trial court erred in determining that the city council's denial of respondent's rezoning application was a quasi-judicial act reviewable under Code of Civil Procedure section 1094.5 rather than an act reviewable under Code of Civil Procedure section 1085. We agree. Toso, by his own language, sought to have the Wilcox property “rezoned” and he submitted a “rezoning” application for that purpose. Although granting a variance, a conditional use permit, or an exception to use is an administrative act, where rezoning is requested it is a legislative act. (Tandy v. City of Oakland (1962) 208 Cal.App.2d 609, 611, 25 Cal.Rptr. 429; Topanga Assn. For A Scenic Community v. County of Los Angeles (1974) 11 Cal.3d 506, 513, 113 Cal.Rptr. 836, 522 P.2d 12; Banville v. County of Los Angeles (1960) 180 Cal.App.2d 563, 570, 4 Cal.Rptr. 458.) Rezoning is accomplished by amendment of a zoning ordinance and by the same procedure as the original enactment, and therefore the city council's act in amending a zoning ordinance to exclude previously included property is a legislative and not administrative act. (Johnston v. City of Claremont (1958) 49 Cal.2d 826, 834, 323 P.2d 71.) Therefore, the court below erred in its conclusion that the denial of Toso's rezoning application was a quasi-judicial act rather than a legislative act.
The trial court below then exacerbated this error by applying Code of Civil Procedure section 1094.5 rather than Code of Civil Procedure section 1085 as a method of review. Review under Code of Civil Procedure section 1094.5 is not available where an agency is acting in a legislative capacity. (Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 35, 112 Cal.Rptr. 805, 520 P.2d 29.) Zoning is a legislative act reviewable under ordinary mandamus under Code of Civil Procedure section 1085.1 (Ensign Bickford Realty Corp. v. City Council (1977) 68 Cal.App.3d 467, 137 Cal.Rptr. 304.)
Appellant city's second contention is that the trial court erred when it substituted its judgment for that of the city council by ordering the city council to apply resort hotel zoning to the Wilcox property, and by finding that the Planned Unit Development zoning for the Wilcox property was null and void. Again, we agree with appellant city. In this state courts generally refuse to overturn the legislative bodies' refusal to rezone. (Tandy v. City of Oakland, supra, 208 Cal.App.2d 609, 25 Cal.Rptr. 429; Lockard v. City of Los Angeles (1949) 33 Cal.2d 453, 461, 202 P.2d 38; Sladovich v. Fresno (1958) 158 Cal.App.2d 230, 322 P.2d 565.) Denial of rezoning will be held valid unless there is no reasonable relation to the public welfare; and before the courts will interfere with a zoning ordinance, the plan must be arbitrary.2 (Lockard v. City of Los Angeles, supra, 33 Cal.2d 453, 461, 202 P.2d 38.) The sole issue on review of a zoning ordinance is whether or not there is any reasonable basis to support the legislative determination of the governing body, and the appellate court is not bound by the findings of the trial court if the record shows the question is debatable. (Ensign Bickford Realty Corp. v. City Council, supra, 68 Cal.App.3d 467, 137 Cal.Rptr. 304.) In zoning cases, findings of the trial court that property is suitable only for certain purposes is not controlling and the appellate court will reverse where the lower court substitutes its judgment for that of the local legislative body. (Lockard v. City of Los Angeles, supra, 33 Cal.2d 453, 462, 202 P.2d 38.)
In the case at bar, the lower court improperly substituted its judgment for that of the local legislative body on the issue of the propriety of resort hotel zoning for the Wilcox property. Since it appears that the reasonableness of the Santa Barbara City Council's zoning ordinance prohibiting a resort hotel was at the very least debatable and since a zoning ordinance is presumptively valid (see Ensign Bickford Realty Corp. v. City Council,supra, 68 Cal.App.3d 467, 137 Cal.Rptr. 304), the trial court below erred in ordering the city council to rezone the Wilcox property to permit a resort hotel. Since the Wilcox property is surrounded by other property zoned for single family residences, and since another property owner who had property across the street from the Wilcox property also had his application to rezone for a resort hotel turned down, we can not say that the zoning bodies' conduct herein was unreasonable. The PUD zoning authorized by the city council was at the least debatable, and therefore the lower court should not have substituted its judgment for that of the zoning body.
Appellant argues that, even if administrative mandamus under Code of Civil Procedure section 1094.5 was the proper remedy, the court improperly applied its independent judgment in reviewing the matter before it. As we have said before, it is our opinion that Code of Civil Procedure section 1085 was the proper remedy and not Code of Civil Procedure section 1094.5. Nevertheless we have answered the city's contentions in this matter.
A property owner acquires no vested right as against future zoning merely by purchasing real property (Anderson v. City Council (1964) 229 Cal.App.2d 79, 40 Cal.Rptr. 41), and by zoning the property the government makes no representation to the landowner that he will be exempt from the zoning laws in effect at the time he applies for his permit. (Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal.3d 785, 132 Cal.Rptr. 386, 553 P.2d 546.) Since the landowner had no vested right in the continuance of the zoning ordinance, even in a review under Code of Civil Procedure section 1094.5, the trial court is confined to evidence received by the administrative body, and the court may not reweigh the evidence. The court may only consider whether there is substantial evidence to sustain the finding. (See Rapp v. Napa County Planning Com. (1962) 204 Cal.App.2d 695, 697, 22 Cal.Rptr. 643.) Therefore, even if Code of Civil Procedure section 1094.5 had been the proper remedy, the trial court would not have been free to substitute its judgment.
Appellant argues that, even assuming administrative mandamus was the proper remedy, the trial court erred in concluding that the city council abused its discretion. Appellant first asserts that the trial court erred in concluding that the city council did not proceed procedurally in the manner prescribed by law. The findings do not show procedural violations, and there is no showing of abuse of a discretion.
Appellants argue that the court erred in concluding that the city council's decision is not supported by the findings. The planning commission had several reasons to support its decision that the Wilcox property should not be rezoned to be a resort hotel. They believed a resort hotel would be an objectionable intrusion into a residential area and would cause an unwarranted decentralization of the motel-tourist industry. There is substantial evidence to support the decision of the city council to deny respondent rezoning application. Therefore the court erred in this finding.
Appellant argues that the court erred in concluding there was no substantial evidence to support the city council's decision to deny the rezoning application. There was testimony in the record that use as a resort hotel was inconsistent with family residential purposes and this was in itself substantial evidence to support the city council's decision to deny rezoning.
Appellant argues that, assuming that administrative mandamus was the proper remedy, the trial court erred in concluding that the city council did not grant respondent a fair trial. Respondent stipulated to no procedural due process violations, and there is no showing that the procedure itself was improper or unfair.
Appellant argues that the trial court erred in considering the motives or intentions of the city council in denying respondent's rezoning application.3 Again we agree with the city. The purposes or motives of the city officials in passing a zoning ordinance have long been held irrelevant to any inquiry concerning the reasonableness of that ordinance. McCarthy v. City of Manhattan Beach (1953) 41 Cal.2d 879, 264 P.2d 932 and Ensign Bickford Realty Corp. v. City Council, supra, 68 Cal.App.3d at page 478, 137 Cal.Rptr. 304, held that the motive of the city council in declining to amend its zoning ordinances is irrelevant.4 Although motives were inquired into in Kissinger v. City of Los Angeles (1958) 161 Cal.App.2d 454, 327 P.2d 10, in Kissinger the ordinance was not passed in a lawful manner, and in Smith v. County of Santa Barbara (1966) 243 Cal.App.2d 126, 130, 52 Cal.Rptr. 292 there was a claim of spot zoning. There are no similar claims in the case at bench and therefore the general rule that motives are not properly inquired into should apply.
Appellant argues that the trial court erred in concluding that the planning commission's approval of respondent resort hotel plot plan required the city to rezone the property for a resort hotel.
The approval of a plot plan did not require rezoning. (See Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal.3d 785, 132 Cal.Rptr. 386, 553 P.2d 546.)
In light of our conclusion that the trial court erred in directing a rezoning, we need not, and do not, consider the city's further contentions that the trial court erred in requiring testimony concerning the discussions between the council and the city attorney. We also need not, and do not, discuss the city's attack on certain findings by the trial court.
THE APPEAL OF TOSO
Toso has appealed from the denial of his claim for money damages. The facts relevant to that appeal are as follows:
Although in 1974 the Wilcox property was zoned for single family residences, the general plan showed a resort hotel symbol, and at that time the property was worth $4,700,000. Toso entered into an agreement to purchase the Wilcox property, and submitted to the city an application for RH overlay zoning. After that, city officials and various citizens groups began looking into purchase of the Wilcox property for a park. The Environmental Impact Report had the following statement: “If the approval is not obtained for that development, it may be expected that land costs will drop considerably, one estimate of cost if development is denied, at from $500,000 to $730,000, or from $7,692 to $15,538 per acre.” Environmental groups continued to urge the city to purchase the Wilcox property for a park, appraisals on the property were arranged, and the Director of Recreation and Parks said funds would be available for its purchase in 1975-1976. The rezoning application came up for a hearing, and the council voted to place the proposition calling for the purchase of the Wilcox property on the ballot in the next election. One of the councilmen urged immediate acquisition of the property on the grounds that waiting may increase the price. The city attorney asked Toso's attorney for the price of the property. A hearing was held on the denial of Toso's application for RH overlay zoning. The council in executive session decided Toso's asking price was too high. In a meeting, the city attorney said the vote of the people on the decision to purchase the Wilcox property was advisory only and not binding on the city. The city attorney said that the council could divorce itself from any desire to purchase property for a park, and could consider the matter of the zoning application on its merits. The city then told Toso they were no longer interested in buying the Wilcox property and that he was free to develop it as a residential subdivision. The city attorney dictated Resolution # 8111 which rezones the Wilcox property to a Planned Unit Development. Toso alleges that the zoning change to PUD caused the property's value to diminish to $600,000.
Since the judgment in this case the Regional Coastal Commission refused to accept Toso's application to proceed with the inn, and Toso's option to purchase the property has expired. Therefore, the lower court judgment ordering the city to rezone the Wilcox property was of no value to Toso, since he does not own the property. The mandamus portion of the judgment is therefore of no interest to Toso.
Cross-respondent city argues that the appropriate remedy for arbitrary and discriminatory zoning is mandamus, not inverse condemnation. Although that statement is a correct statement of the law (HFH, Ltd. v. Superior Court (1975) 15 Cal.3d 508, 514, 125 Cal.Rptr. 365, 542 P.2d 237; Pan Pacific Properties, Inc. v. County of Santa Cruz (1978) 81 Cal.App.3d 244, 253, 146 Cal.Rptr. 428) under certain circumstances zoning regulations may be treated as a taking and the landowner may sue for damages in inverse condemnation. (Sneed v. County of Riverside (1963) 218 Cal.App.2d 205, 32 Cal.Rptr. 318; Peacock v. County of Sacramento (1969) 271 Cal.App.2d 845, 77 Cal.Rptr. 391.) Whether a zoning ordinance is so arbitrary or burdensome so as to constitute a taking is a question of fact to be determined by the trier of that issue.
The city argues that the fact that Toso failed to execute his option to purchase the Wilcox property does not affect the issue of whether the city's actions constitute a compensable damaging or taking. We agree. However, this proposition does not necessarily affect the city's position one way or other. Although it is true that Toso argued that mandamus is of no use to Toso since he no longer had any interest in the property, and although the city is also correct that whether or not Mr. Toso had an existing interest in the property is irrelevant in determining whether the city's acts constituted a taking, it does not follow from these two propositions that Toso's only remedy is mandamus. The city's reasoning that this conclusion follows from the above propositions is sophistry. As we have said above, under certain circumscribed circumstances, zoning actions may constitute a taking compensable in damages for inverse condemnation.
We distinguish this case from City of Walnut Creek v. Leadership Housing Systems, Inc. (1977) 73 Cal.App.3d 611, 140 Cal.Rptr. 690, which held that relief is properly denied where plaintiff's option expired prior to the filing of the condemnation action. That case had no rezoning that was excessively harsh while plaintiff held the option. In the case at bar, if there was an improper rezoning that was excessively arbitrary and burdensome while Toso held his option, Toso would not be denied damages simply because his option had expired.
Toso argues that the court improperly applied a standard of “physical taking” or total uselessness of the zoned property as those standards necessary for finding a taking for damages for inverse condemnation. The court drew the following conclusion of law:
“3. The actions, activities and decisions of the defendants, involving the Wilcox Property since February 6, 1974, did not result in a physical damaging of said property (as distinguished from market value depletion and marketability) as contemplated by the California Constitution, Article One, Section Nineteen (then Section Fourteen).”
A physical taking is unnecessary to a finding of damages in inverse condemnation, and a valid zoning ordinance may operate so oppressively as to amount to a taking giving rise to damages in inverse condemnation. (Eldridge v. City of Palo Alto (1976) 57 Cal.App.3d 613, 129 Cal.Rptr. 575) Although a mere diminution in the value of real property resulting from a proper exercise of the police power does not invalidate the action or require payment of damages (Dale v. City of Mountain View (1976) 55 Cal.App.3d 101, 127 Cal.Rptr. 520; Sierra Terreno v. Tahoe Regional Planning Agency (1978)79 Cal.App.3d 439, 144 Cal.Rptr. 776; Friedman v. City of Fairfax (1978)81 Cal.App.3d 667, 146 Cal.Rptr. 687; Orsetti v. City of Fremont (1978) 80 Cal.App.3d 961, 146 Cal.Rptr. 75), inequitable zoning action undertaken by a public agency as a prelude to public acquisition may result in damages. (HFH, Ltd. v. Superior Court (1975) 15 Cal.3d 508, 516-17, fn. 145 , 125 Cal.Rptr. 365, 371, 542 P.2d 237, 243. (See also Friedman v. City of Fairfax (1978) 81 Cal.App.3d 667, 676, 146 Cal.Rptr. 687; Pinheiro v. County of Marin (1976) 60 Cal.App.3d 323, 131 Cal.Rptr. 633.)
In the light of the above cases, two questions arise. The first question is whether the zoning is so arbitrary or burdensome as to constitute a compensable taking (Eldridge v. City of Palo Alto (1976) 57 Cal.App.3d 613, 129 Cal.Rptr. 575; Friedman v. City of Fairfax (1978) 81 Cal.App.3d 667, 146 Cal.Rptr. 687), or whether there was merely a diminution in market value as a result of down zoning, such that no cause of action arises. (Pinheiro v. County of Marin (1976) 60 Cal.App.3d 323, 131 Cal.Rptr. 633; Brown v. City of Fremont (1977) 75 Cal.App.3d 141, 142 Cal.Rptr. 46; Sierra Terreno v. Tahoe Regional Planning Agency (1978) 79 Cal.App.3d 439, 144 Cal.Rptr. 776.)
The second question is whether there are inequitable precondemnation activities on the part of the public agency.
We turn first to the question of whether the city used its zoning power to in effect take the land without paying for it. Public entities may not use their zoning power as a subterfuge to take land for public purposes without paying just compensation. (Pan Pacific Properties, Inc. v. County of Santa Cruz (1978) 81 Cal.App.3d 244, 146 Cal.Rptr. 428; see Eldridge v. City of Palo Alto (1976) 57 Cal.App.3d 613, 129 Cal.Rptr. 575.) In the case at bar, the city did not zone the land for open space use, or require that the land be developed with residences separated by large areas of open space. On the contrary, the city zoned the land for planned unit development. The plaintiff can not successfully claim that the city used the zoning power to in effect take the land for public purposes, without paying for it, since the owner of the land was free to develop it in accord with PUD zoning.
Next we examine the question of whether the zoning was so arbitrary or burdensome as to be a “taking” by the public entity. One method by which zoning has been held so arbitrary or burdensome as to constitute a taking is to deprive the owner of all beneficial use of the land. It has been held that, where the zoning deprives the owner of all beneficial use of the land, damages are proper. (Pinheiro v. County of Marin 60 Cal.App.3d 323, 131 Cal.Rptr. 633; Peacock v. County of Sacramento (1969) 271 Cal.App.2d 845, 77 Cal.Rptr. 391.) However, the question of whether the zoning ordinance is so arbitrary or burdensome as to constitute a taking is a question of fact to be determined by the trier of that issue (Eldridge v. City of Palo Alto (1976) 57 Cal.App.3d 613, 618, 129 Cal.Rptr. 575) and on appeal we look for substantial evidence to support the court's finding.
The case before us is clearly distinguishable from those cases where the government attempted to take plaintiff's space for public use without paying for the space. Plaintiff herein was free to purchase the land and develop it with units or residences. Plaintiff may not successfully claim either that he was deprived of all beneficial use or that the government effectively or pragmatically took the land for public purposes.
Although the case at bench is not a case where the zoning ordinance so completely and unreasonably prevents any beneficial use that the zoning amounts to a compensable taking6 (Peacock v. County of Sacramento, supra, (1969) 271 Cal.App.3d 845, 77 Cal.Rptr. 391), nor is this a case where a zoning regulation amounts to a taking because the government used the zoning power to take the land for public purposes without paying for it.7 The question remains in the case before us as to whether there was compensable inequitable zoning actions undertaken by a public agency as a prelude to acquisition. (HFH, Ltd. v. Superior Court, supra, (1975) 15 Cal.3d 508, 516, 517, fn. 14, 125 Cal.Rptr. 365, 542 P.2d 237; see also Pinheiro v. County of Marin (1976) 60 Cal.App.3d 323, 131 Cal.Rptr. 633.)
We now examine the remaining question: whether there were inequitable precondemnation activities (Klopping v. City of Whittier (1972) 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345) and, if so, whether the absence of a formal resolution of intent to condemn would act as a bar to the plaintiff's recovery. In the case at bench, the lower court's findings Nos. 17, 21, 22, 23 and 24 lead inexorably to the conclusion that such inequitable conduct as a prelude to public acquisition existed. These findings are:
“17. The vast majority of those members of the public speaking in opposition to the proposed Resort Hotel Plan were doing so for the purpose of furthering the City's acquisition of the Wilcox Property.
“21. Defendant City Council intended that denial of plaintiff's application would prevent any development of said property prior to defendant's acquisition of the property.
“22. Defendants' paramount consideration at all times was the acquisition of the Wilcox Property by a public agency as open space or as a park.
“23. Defendants had a conflict of interest in the conduct of the hearings on plaintiff's application, which conflict deprived plaintiff of a fair trial (hearing).
“24. Defendants had a personal bias and prejudice against plaintiff's interests which deprived plaintiff of a fair trial (hearing).”
Thus, the court below found that denial of plaintiff's application would prevent development of the property prior to defendant's acquisition of the property and that defendant's paramount concern was to acquire the property as open space. The court also found that defendant city had a conflict of interest in acting on plaintiff's zoning application and the court stated that the zoning denial was arbitrary, capricious, oppressive, unreasonable, and in bad faith. Therefore, it follows that the bad faith denial of Toso's rezoning application, when considered with the simultaneous efforts of the city to purchase the Wilcox property, amounted in its totality to the type of inequitable precondemnation activity contemplated by footnote 14 in the HFH, Ltd. case.
However, the record shows no resolution of intent to condemn. Although the Supreme Court in Jones v. People ex rel. Dept. of Transportation (1978) 22 Cal.3d 144, 148 Cal.Rptr. 640, 583 P.2d 165, declined to decide whether such a resolution was necessary, in that case the court found that there was no remaining beneficial use of the land, due to denial of access to the land. In the case at bar there was a beneficial use of the land, and therefore the case at bar is not strictly analogous to the ruling of the Jones case.
However, we do not think the absence of a resolution to condemn is necessarily crucial here.
In order to state a cause of action in inverse condemnation, the governmental activities must have gone beyond mere general planning or preliminary activities (Selby Realty Co. v. City of San Buenaventura (1973) 10 Cal.3d 110, 109 Cal.Rptr. 799, 514 P.2d 111), and this would be true where the plaintiff is trying to show either “unreasonable delay” or to show “other unreasonable conduct.” But in the case at bar there is governmental activity beyond mere general planning and preliminary activities. We have the ballot proposition, which although not equivalent to a resolution to condemn, went far beyond the mere “general planning” or mere “preliminary activities” that are not compensable. Although the ballot proposition did not require that the city council purchase the Wilcox property (because the city council had the last word on the decision to purchase), it was a governmental activity that went further than mere plot planning or designation of land for future acquisition or planning a route (see Jones v. People ex rel. Dept. of Transportation (1978) 22 Cal.3d 144, 148 Cal.Rptr. 640, 583 P.2d 165).
Also, the Pinheiro court (Pinheiro v. County of Marin ) said, with the notable exception of precondemnation activities intended to freeze or lower the value of land, the motives of the city in passing a zoning ordinance are irrelevant. But we do have before us a case where the city was found to have acted in bad faith and where the city attempted to purchase property, so we have before us a case that comes under the “notable exception” briefly mentioned in Pinheiro.8 The ballot proposition, the news release, the public meetings, the television interviews concerning the city's intent to purchase the property, the conversations by the city council to the effect that the price would go up if there was development of the properties, all show precondemnation conduct and activity intended to freeze or lower the value of the property. These activities, directed towards the acquisition of plaintiff's property, are not mere plot planning for future use. The activities of the government were direct, specific, active attempts to acquire the property, and it was reasonable for Toso and others to believe the purchase was imminent.
Our conclusion that there may be a taking even without an ordinance actually condemning the property may be aided by certain language and reasoning in Concrete Service Co. v. State of California ex rel. Dept. Pub. Wks. (1969) 274 Cal.App.2d 142, 146, 78 Cal.Rptr. 923.9 That case reasoned that, although plotting or planning alone does not constitute a taking as damaging, when the plotting or planning is accompanied by other acts of the municipal authority that creates a situation so unusual and extraordinary as to create a taking, the owner may be entitled to damages although no ordinance was actually passed. In the case at bar the ballot proposition with its language calling for the purchase of the Wilcox property considered In combination with the city's failure to rezone in accordance with the plot plan for RH overlay,10 and considered with other conduct arranging for the purchase of the property, when viewed in its totality, provide such unusual or extraordinary activities, on the part of the municipality.
There is nothing improper in the city's desire to preserve for the public an open space park by buying or condemning the Wilcox property, nor is there anything improper in zoning the Wilcox property to preserve the existing character of the area. These activities are clearly proper exercises of police power. However, the city may not use its zoning police power to lower or freeze the value of the property prior to condemning it. (See Peacock v. County of Sacramento, supra, (1969) 271 Cal.App.2d 845, 77 Cal.Rptr. 391 and discussion in City of Walnut Creek v. Leadership Housing Systems, Inc. (1977) 73 Cal.App.3d 611 at 619, 620, 140 Cal.Rptr. 690.) The city should not be able to engage in unfair precondemnation activities that lower the value of such property, and then later abandon any plans to condemn or buy the property. And whether or not the ballot proposition amounts to a resolution to purchase or condemn11 would not affect our holding that the totality of the activity of the city amounted to the type of conduct that was compensable.
As in Jones v. People ex rel. Dept. of Transportation, supra, (1978) 22 Cal.3d 144, 148 Cal.Rptr. 640, 583 P.2d 165, we decline to decide whether a resolution to condemn was actually necessary. The activity here went way beyond mere general planning, and the city's conduct was found to be “oppressive,” “biased” and “arbitrary and in bad faith.” Under such circumstances, Mr. Toso should not be without a remedy. The ballot proposition, though advisory only and not a resolution to purchase, was sufficient, when considered with other governmental activities, to make Mr. Toso's embryonic rights viable, whether or not there was a resolution to condemn property. Plaintiff can show invasion of a property right directly affecting him to his injury; this is not a case where there is mere general planning and preliminary activities that do not give rise to liability for damages for inverse condemnation. (Selby Realty Co. v. City of Buenaventura (1973) 10 Cal.3d 110, 109 Cal.Rptr. 799, 514 P.2d 111; Smith v. State of California (1975) 50 Cal.App.3d 529, 123 Cal.Rptr. 745.)
Toso contends that he is entitled to recover damages in inverse condemnation under the provisions of section 1245.260 of the Code of Civil Procedure (formerly section 1243.1) which now reads as follows:
“(a) If a public entity has adopted a resolution of necessity but has not commenced an eminent domain proceeding to acquire the property within six months after the date of adoption of the resolution, the property owner may, by an action in inverse condemnation, do either or both of the following:
“(1) Require the public entity to take the property and pay compensation therefor.
“(2) Recover damages from the public entity for any interference with the possession and use of the property resulting from adoption of the resolution.
“(b) No claim need be presented against a public entity under Part 3 (commencing with Section 900) of Division 3.6 of Title 1 of the Government Code as a prerequisite to commencement or maintenance of an action under subdivision (a), but any such action shall be commenced within one year and six months after the date the public entity adopted the resolution of necessity.
“(c) A public entity may commence an eminent domain proceeding or rescind a resolution of necessity as a matter of right at any time before the property owner commences an action under this section. If the public entity commences an eminent domain proceeding or rescinds the resolution of necessity before the property owner commences an action under this section, the property owner may not thereafter bring an action under this section.
“(d) After a property owner has commenced an action under this section, the public entity may rescind the resolution of necessity and abandon the taking of the property only under the same circumstances and subject to the same conditions and consequences as abandonment of an eminent domain proceeding.
“(e) Commencement of an action under this section does not affect any authority a public entity may have to commence an eminent domain proceeding, take possession of the property pursuant to Article 3 (commencing with Section 1255.410) of Chapter 6, or abandon the eminent domain proceeding.
“(f) In lieu of bringing an action under subdivision (a) or if the limitations period provided in subdivision (b) has run, the property owner may obtain a writ of mandate to compel the public entity, within such time as the court deems appropriate, to rescind the resolution of necessity or to commence an eminent domain proceeding to acquire the property.”
Section 1243.1, now repealed, reads as follows:
“In any case in which a public entity, as defined in Section 811.2 of the Government Code, which possesses the power of eminent domain establishes by resolution or ordinance the necessity to acquire a particular parcel or parcels of real property by eminent domain, and such public entity does not thereafter initiate, within six months, an action in eminent domain to take such parcel, the owner of the parcel may bring an action in inverse condemnation requiring the taking of such parcel and a determination of the fair market value payable as just compensation for such taking. In such inverse condemnation action, the court may, in addition, or in the alternative, if it finds that the rights of the owner have been interfered with, award damages for any such interference by the public entity. This section shall not affect a public entity's authority to do any of the following:
“(1) Institute a condemnation action.
“(2) Take immediate possession of the particular parcel of property sought to be condemned.
“(3) Rescind a resolution or ordinance which established the necessity to acquire a particular parcel of real property and abandon the condemnation action.”
His theory is that the approval by the voters of the ballot proposition above referred to amounted to the adoption of a resolution of necessity within the meaning of that section. If an actual resolution specifically authorizes condemnation of plaintiff's property Code of Civil Procedure section 1243.1 would have been dispositive of the case. (Smith v. State of California (1975) 50 Cal.App.3d 529, 123 Cal.Rptr. 745.) However, here there was merely a ballot proposition passed by the electorate and no actual resolution of condemnation.
The ballot before the People was not a resolution of necessity. It is clear that the city council desired, before proceedings to expend a large sum of money for a park or open space on the Wilcox property, to ascertain whether the voters at large would approve such an acquisition. To that end, they placed the issue on the ballot. When the votes were recorded, it appeared that only a small majority were in favor of that use of public funds.12 In light of that equivocal approval and the large sum involved, the council, acting on its own, decided to reject the park idea. We can see in the ballot proposition no more than advice by the voters,13 to be acted on or rejected by the council. Although the ballot proposition was not labeled “advisory” only, the ballot proposition was not the legal equivalent of a resolution of necessity and section 1245.260 does not aid Toso.14
Also, not only was the ballot proposition intended to be only advisory, two technical considerations make any conclusion that the voter action was the equivalent of the statutory required resolution legally impossible. (1) Prior to condemnation there must be two decisions one a decision that acquisition is desirable and second an express finding by the condemning authority that the taking of the particular property is “necessary” to accomplish a desired result. The ballot proposition, at best, went to the first of those steps; it in no way directed itself to the matter of “necessity” and it is only a formal finding of necessity that brings the statute into play.
The voter approval of the ballot proposition did not constitute a resolution or ordinance to acquire the Wilcox property by eminent domain within the meaning of Code of Civil Procedure section 1243.1 (now Code Civ.Proc., s 1245.260).
Toso argues that the city did not follow the statutory guidelines for dealing with proper methods of negotiating with a landowner (Gov.Code, ss 7260 et seq.), the Relocation Assistance Act.
The court did find in finding No. 13 that the city did not use diligence in concluding negotiations with the landowner and therefore the conduct of the city was inconsistent with the statutory guidelines for such negotiations. However, Toso's rights are not expanded by these sections of the Government Code. Failure to comply with Government Code section 7267 would not in itself create a cause of action in inverse condemnation. Government Code section 7267 by its own language only creates a guide to be followed to the greatest extent practicable.15
Toso argues that the fact that Toso's right to purchase the property expired should not preclude him from recovering for his loss. Where it was the precondemnation activities that ultimately caused the loss, the fact that the plaintiff no longer has the property does not necessarily bar him from recovery. (See Klopping v. City of Whittier, supra, 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345; Eldridge v. City of Palo Alto, supra, 57 Cal.App.3d 613, 129 Cal.Rptr. 575.) We distinguish this case from City of Walnut Creek v. Leadership Housing Systems, Inc. (1977) 73 Cal.App.3d 611, 140 Cal.Rptr. 690, which held that where a developer's option expires prior to the condemnation award, the developer was not entitled to a share of the award. In the City of Walnut Creek case, there were many distinguishing factors, including the fact that there was no invasion of property prior to the time the developer surrendered the option. The City of Walnut Creek court distinguished the case before it, from those cases where there was a change in zoning that was particularly harsh and possibly calculated to decrease any future condemnation award. (See pp. 619, 620, 140 Cal.Rptr. 690.) In the case at bar the oppressive, harsh and bad faith conduct occurred prior to the expiration of Toso's option and was very likely designed to decrease any possible future condemnation award.
The judgment on the first cause of action is affirmed; the judgment on the second, third, fourth and fifth causes of action is reversed. Cross-appellant Toso shall recover his costs on appeal.
1. HFH, Ltd. v. Superior Court (1975) 15 Cal.3d 508, 513, fn. 5, 125 Cal.Rptr. 365, 542 P.2d 237 states that the remedy for discriminatory zoning is also under Code of Civil Procedure section 1085. But see Sladovich v. County of Fresno (1958) 158 Cal.App.2d 230, 322 P.2d 565.
2. The suggestion that zoning decisions by local zoning bodies are presumptively valid under all circumstances has been criticized in Fasano v. Bd. of Co. Commissioners (1973) 264 Or. 574, 507 P.2d 23.
3. Finding 21 and Finding 22 read:“21. Defendant City Council intended that denial of plaintiff's application would prevent any development of said property prior to defendant's acquisition of the property.“22. Defendants' paramount consideration at all times was the acquisition of the Wilcox Property by a public agency as open space or as a park.”
4. Under certain circumstances, motives of the city council may be relevant in determining whether a landowner is entitled to damages in inverse condemnation. That matter will be discussed in the second of the two appeals.
5. Footnote 14 from HFH, Ltd. reads as follows:“Neither Selby (Realty Co. v. City of Buenaventura, 10 Cal.3d 110, 109 Cal.Rptr. 799, 514 P.2d 111) nor this case presents the distinct problems arising from inequitable zoning actions undertaken by a public agency as a prelude to public Acquisition (Klopping v. City of Whittier (1972) 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345; Peacock v. County of Sacramento (1969) 271 Cal.App.2d 845, 77 Cal.Rptr. 391; or from zoning classifications invoked in order to evade the requirement that land Used by the public must be acquired in eminent domain proceedings (Sneed v. County of Riverside (1963) 218 Cal.App.2d 205, 32 Cal.Rptr. 318). Thus in Klopping the city in question made public announcements that it intended to acquire the plaintiff's land, then unreasonably delayed commencement of eminent domain proceedings, with the predictable result that the property became commercially useless and suffered a decline in market value. We held only that the plaintiff should be able to include in his eminent domain damages the decline in value attributable to this unreasonable precondemnation action by the city. The case thus in no way resembles the instant one, in which plaintiffs made no allegations that the city intends to condemn the tract in question.“Similarly in Peacock the county had refused to permit any development of the land in question (barring even the growth of most vegetation), while assuring the owner that the restrictions were of no consequence because the county intended to acquire the land for an airport. When, after denying the owner any use of his property for five years, the county renounced its intent to acquire the land, the Court of Appeal affirmed a trial court finding that ” ‘(t)he exceptional and extraordinary circumstances heretofore enumerated constituted a take (Sic ) of the subject property by inverse condemnation.’ “ (271 Cal.App.2d at p. 854, 77 Cal.Rptr. 391.) Again one sees that the down-zoning rises to a taking only in connection with inequitable precondemnation actions by the public agency.“Finally, the cases hold that a public agency may not use a zoning ordinance to evade the requirement that the state acquire property which it uses for public purposes. Thus in Sneed, the county, rather than acquiring land for an air navigation easement, simply enacted a zoning ordinance forbidding any structure or vegetation more than three inches high and proceeded to operate flights over the area thus restricted. The Court of Appeal held that the plaintiff had stated a cause of action in inverse condemnation. Unlike the instant case, Sneed involved a zoning ordinance creating an actual public use of the property.” (Italics in original.)
6. The property is zoned for PUD and can be developed for that purpose.
7. The city is not in effect using the property for open space or for a park, so there is not taking of the land for a public purpose.
8. We distinguish this case from City of Walnut Creek v. Leadership Housing Systems, Inc. (1977) 73 Cal.App.3d 611, 622, 140 Cal.Rptr. 690 which held that calling a bond election and urging passage to secure funds for a public purpose does not constitute a taking. We do not rely on the “ballot proposition” as a “taking.” The taking here was the “inequitable activities.”
9. But in that case there was an unequivocal expression of intent to condemn. In our case there is an expression of intent to purchase, but we can not say it is unequivocal.
10. There is no vesting of rights where tentative maps and plot plan have been approved. (People v. County of Kern (1974) 39 Cal.App.3d 830, 115 Cal.Rptr. 67.)
11. Calling a bond election and urging its passage to secure public funds for public purpose does not constitute a taking. (City of Walnut Creek v. Leadership Housing Systems, Inc. (1977) 73 Cal.App.3d 611, 622, 140 Cal.Rptr. 690.)
12. It was agreed at oral argument that the ballot proposition passed by only a small percentage of the total vote thereon.
13. Calling a bond election and urging passage to secure funds for public purpose does not constitute a taking. (See City of Walnut Creek v. Leadership Housing Systems, Inc. (1977) 73 Cal.App.3d 611, 622, 140 Cal.Rptr. 690.
14. The language of the statute requires a “resolution of necessity.” This question is to be distinguished from the question of whether or not a resolution of intent to condemn is necessary where plaintiff does not rely on the statute, but relies on rights developed under the case law.
15. Plaintiff's rights to damage are not expanded by section 7267. (See Gov.Code, ss 7270, 7274.)
KINGSLEY, Acting Presiding Justice.
JEFFERSON and ALARCON, JJ., concur.