ELLISON v. COUNTY OF VENTURA

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Court of Appeal, Second District, Division 6, California.

Raymond W. ELLISON, Plaintiff and Appellant, v. COUNTY OF VENTURA, Defendant and Respondent.

Civ. B035640.

Decided: January 24, 1990

Fairfield, McDonald, Sullard, Strauss & Roach and Denise L. Rothwell, Ventura, for plaintiff and appellant. Spray, Gould & Bowers and Susan B. Gans–Smith, Bruce Alan Finck, Ventura, for defendant and respondent.

A landowner alleges that a zoning ordinance is unconstitutional because it does not substantially advance legitimate state interests, and therefore constitutes a taking of property without just compensation.   The landowner has not shown that the ordinance places additional restrictions on the use of this property.   Furthermore, the property has doubled in value.   Under such circumstances, even if the ordinance is invalid, there is no taking.

FACTS

In April 1983 Raymond Ellison purchased a 145–acre parcel of land located north of the city of Ventura.   An 11–acre portion of the parcel is level, partially paved, and has built on it an industrial warehouse.   The remaining acres are rural and agricultural, eleven of which are orchard.   On this remaining portion of the land is a main house, guest houses, cabins, a meeting hall, and a lake.   At the time Ellison purchased the property, the warehouse was no longer in use.

Before escrow closed, Ellison requested the planning division of the Ventura County Resource Management Agency to send him a “presubmittal” letter with information about the property.   The agency sent Ellison a letter informing him that the property was zoned M–2 (limited industrial) and R–A–10AC (rural agricultural, 10–acre minimum), and was designated in the open space element of the County's general plan as rural and open space.   The letter included this statement:  “This letter does not waive any future zone changes, general plan amendments, or policy changes by the County of Ventura [County] or other local agencies that may affect the subject property.”

In August 1983, after noticed public hearings, the County adopted general plan amendment 82–3 (GPA 82–3), which classified the entire parcel as open space.

On February 27, 1985, Ellison filed in superior court a complaint for damages which was nearly identical to a complaint previously filed in federal court.   In the federal action filed against the County in June 1984, Ellison alleged that the County unconstitutionally changed the general plan classification of his property.   In January 1985, pursuant to a stipulation by the parties, the federal district court stayed the case pending state court resolution of issues of state law.  (Railroad Commission of Texas v. Pullman Co. (1941) 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971;  see Santa Fe Land Imp. v. City of Chula Vista (9th Cir.1979) 596 F.2d 838.)

After the complaint was filed in state court, on April 25, 1985, the County's Board of Supervisors adopted an ordinance which rezoned many properties so to be consistent with GPA 82–3.   Ellison's entire parcel was rezoned to open space, 160–acre minimum parcel size (O–S–160AC).

Ellison ultimately filed a third amended complaint in superior court seeking declaratory relief.   He alleged that GPA 82–3 and the zoning ordinance constitute a taking of private property without just compensation in violation of California Constitution, article I, section 19, and Government Code section 65912.1

In December of 1987 trial was held on the issue of whether GPA 82–3 and the rezoning ordinance were facially invalid, and constituted a taking of Ellison's property.   Ellison offered evidence that various elements of the general plan, as it existed at the time of the amendment and the rezoning, were inadequate.   The County objected to this evidence on the ground that the question of the validity of the general plan as a whole was beyond the scope of the pleadings.   The trial court received the evidence, reserving a ruling on the objection.

In its statement of decision, the court apparently sustained the objection because it found that evidence and argument offered by Ellison concerning the validity of the entire general plan were outside the scope of the pleadings, and the validity of a general plan could only be challenged by a writ of mandamus.   The court pointed out that a writ petition previously filed by Ellison was still pending on the same issues raised here concerning the validity of the general plan.

The court also found inter alia, that

—The market value of the property doubled between the time Ellison purchased the property and the time of trial, and the rezoning did not deny Ellison beneficial use of his property;

—The claimed defects in the general plan, even if true, bore no relationship or relevance to the restrictions imposed on the land by the zoning ordinance;  the zoning ordinance advanced a legitimate state interest;  and Ellison failed to show GPA 82–3 or the ordinance were invalid;

—Assuming arguendo that the rezoning was invalid, Ellison would still not be able to use the property under the former industrial zoning (M–2) because that was a nonconforming use which had terminated prior to his purchase of the property, pursuant to the County's valid 1973 general plan.

Ellison appeals, and in particular he seeks a determination by this court that the trial court erred in concluding that the various elements of the general plan, as they existed at the time of GPA 82–3 and the rezoning, were adequate.   He also disputes the other findings and conclusions of the trial court save one:  he concedes that the rezoning has not deprived him of all beneficial uses of the property.

DISCUSSION

A zoning ordinance may unconstitutionally take private property in either of two ways:  if the ordinance denies an owner “economically viable use” of the land, or if the governmental action does not “substantially advance legitimate state interests.”  (Agins v. Tiburon (1980) 447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106;  see Goldblatt v. Town of Hempstead (1962) 369 U.S. 590, 594, 82 S.Ct. 987, 990, 8 L.Ed.2d 130.)

Ellison concedes that the County's actions do not meet the economic test for a taking.   Ellison instead offers this provocative argument:  (1) at the time of the rezoning, several elements of the general plan were defective, rendering the entire planning document invalid;  (2) because the general plan was invalid GPA 82–3 and the zoning ordinance adopted pursuant to it are also invalid;  (3) therefore, the rezoning of the property was arbitrary and capricious.   The rezoning thus could not “substantially advance legitimate state interests” (Agins v. Tiburon, supra, 447 U.S. at p. 260, 100 S.Ct. at p. 2141) and is therefore an unconstitutional taking of his property.

The County asserts that even though Ellison is arguing the legitimate state interest prong of Agins, he must show the property has lost some, if not all, of its value.   We disagree in part.   The owner need not show that the government's action has stripped the land of all its economic value or possible uses.

A pair of commentators describe this “legitimate state interest” prong as “an alternative, non-economic test for when there is a taking․  This Agins standard suggests that a taking may be present if the law causing the taking is not a proper use of the police power—in other words, if the purposes of the law are not ‘legitimate’ or, even if they are, if the law is not likely to accomplish or ‘advance’ these purposes.”  (Laitos & Westfall, Government Interference with Private Interests in Public Resources (1987) 11 Harvard Environmental L.Rev. 1, 66;  see also Penn Central Transp. Co. v. New York City (1978) 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631;  Goldblatt v. Town of Hempstead, supra, 369 U.S. at p. 594, 82 S.Ct. at p. 990.)

Nevertheless, even if a particular governmental regulation fails to “substantially advance legitimate state interests,” there cannot be a taking of private property unless something—a property right—is taken.   There must be an injury to some strand of an owner's “ ‘bundle’ of property rights” (Andrus v. Allard (1979) 444 U.S. 51, 65–66, 100 S.Ct. 318, 327, 62 L.Ed.2d 210), whether that injury be an adverse economic impact, a restriction on use, or physical invasion (see Penn Central Transp. Co. v. New York City, supra, 438 U.S. at p. 124, 98 S.Ct. at p. 2659).   Without such injury, the owner may challenge a government action as, for example, arbitrary and capricious, by way of a writ petition,2 but he cannot argue that the government “took” his property.

This injury requirement not only goes to the issue of damages, but is a preliminary consideration before courts examine the validity of the government's conduct in a takings case.   For example, in Nollan v. California Coastal Comm'n (1987) 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677, the Supreme Court held that a building permit condition requiring the Nollans to grant a public easement across their beach front property was an unconstitutional taking because it did not advance a legitimate public interest.

Before the high court even considered the validity of the condition, it first determined whether a property right was at stake.  (Nollan v. California Coastal Comm'n, supra, 483 U.S. at pp. 831–833, 107 S.Ct. at pp. 3145–3146.)   The high court noted that “ ‘the right to exclude [others is] “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” ’  [Citations.]”  (Id., at p. 831, 107 S.Ct. at p. 3145.)   If there had been no invasion of a property right, there would have been no need to decide whether there was a taking.

Also instructive is the recent case of Moore v. City of Costa Mesa (9th Cir.1989) 886 F.2d 260.   There the plaintiff, Moore, owned adjacent lots, using one for his residence and the other for a business.   He sought a zoning variance, so that he could construct a commercial building on the two lots.   The city issued the variance with the condition that he deed over to it approximately 10 percent of his property for a road widening project.   Moore challenged the condition and won a peremptory writ of mandamus from superior court ordering the condition be set aside because there was insufficient evidence supporting “any relationship between the proposed widening project and the expansion of Moore's business premises.”  (Id., at p. 261.)

Moore then sued in federal district court, seeking damages on the grounds that the three-year delay in obtaining a building permit was an unconstitutional taking.   In affirming the trial court's dismissal of the case, the federal court of appeal noted that “not all regulatory invasions of property rights amount to unconstitutional takings.”  (Moore v. City of Costa Mesa, supra, 886 F.2d at p. 263.)   The court held that “the conditional variance at issue here affected only a small portion of Moore's property.   Moore does not allege that his ongoing carpet contracting business was in any way adversely affected by the conditional variance․  While the California courts determined that the conditional variance invaded Moore's property rights, this was not an ‘invasion’ of sufficient magnitude to have denied Moore the ‘justice and fairness' guaranteed by the fifth and fourteenth amendments.   [Citation.]”  (Id., at p. 264.)

Like the landowner in Moore, Ellison has suffered no measurable detriment to any property rights he acquired when he purchased the land.   There was no physical invasion, nor a depression in market value.   The trial court found instead that the value of the property had more than doubled, from the purchase price of $1.2 million to at least $2.6 million by the time of trial.

Nor did the rezoning prohibit or restrict any beneficial use of the property which Ellison once enjoyed.   Ellison argues that when he bought the property, he intended to “continue” the light industrial use of the 11–acre portion then zoned M–2.   As the trial court found, however, at the time of purchase, the property was already zoned agricultural/open space.   The industrialzoning was a nonconforming use which had previously been extinguished.   Ellison purchased subject to that existing land use restriction and so would not have been able to lawfully engage in industrial activities even had the County not adopted the rezoning ordinance.   In short, nothing has changed.

Even if Ellison's use of the 11 acres had been affected by the rezoning, there was no taking.   In takings jurisprudence, courts consider the value and use of the property as a whole, and do not divide a single parcel into discrete segments to determine whether rights in a particular segment have been abrogated.  (Penn Central Transp. Co. v. New York City, supra, 438 U.S. at p. 130, 98 S.Ct. at p. 2662;  see also Moore v. City of Costa Mesa, supra, 886 F.2d at p. 264 [zoning actions which affect only a small portion of a property are not takings].)

Ellison also asserts that the property would be worth at least $1 million more today had it not been rezoned.   Speculation about lost profits is a “slender reed upon which to rest a takings claim” (Andrus v. Allard, supra, 444 U.S. at p. 66, 100 S.Ct. at p. 327), especially where one's investment has doubled in value despite the alleged taking.

Under such circumstances it does not matter that the allegedly invalid rezoning ordinance “downzoned” the property from a 10–acre minimum lot size to a 160–acre minimum lot size.   A property owner has no constitutionally protected right to subdivide, except where the owner has acquired a vested interest in developing the property.  (HFH, Ltd. v. Superior Court (1975) 15 Cal.3d 508, 516, 521, 125 Cal.Rptr. 365, 542 P.2d 237;  Save Oxnard Shores v. California Coastal Com. (1986) 179 Cal.App.3d 140, 151, 224 Cal.Rptr. 425.)

Ellison relies on Sederquist v. City of Tiburon (9th Cir.1984) 765 F.2d 756, to support his position that an illegal land use restriction may amount to an unconstitutional taking.   The plaintiffs in Sederquist argued that unlawful regulations and other actions by the city prevented them from applying for permits to develop their property.   The trial court dismissed the action on summary judgment, and the Court of Appeal reversed, holding in part that if the plaintiffs' allegations of law and fact are correct, the conditions imposed by the city were not “reasonably necessary” to advance legitimate state interests, and that “[if] the landowners can establish that situation, the City may have ‘taken’ the landowners' property.”  (Id., at p. 761.)   The Court of Appeal remanded the case to the district court for it to determine this and other mixed questions of law and fact, including whether the regulations deprived the owners of the economic use of their property.  (Id., at pp. 762, 763.)

Nothing in Sederquist conflicts with our holding here that in order to show the government has taken private property by a regulation which does not substantially advance legitimate state interests, the landowner must show more than the invalidity of the government's action.   The landowner must also show that something of value was taken.

Because of our holding, we need not consider the procedural and evidentiary issues raised on appeal.   Nor do we find, as requested by the County, that the trial court's decision here disposed of all causes of action raised by Ellison in his federal complaint.   Those causes of action were also raised by Ellison in his original and first two amended complaints in state court, and were successfully challenged by demurrer.   The captions of each of the state court complaints, however, declare that the case was stayed in federal court and transferred “for Resolution of ‘Local’ Zoning Issues.”   In the third amended complaint, Ellison purported to reserve all issues to federal court which are set forth in the federal complaint.   These include, among other things, alleged civil rights violations under 42 United States Code section 1983 for misrepresentation by the County.

Here we decide only the question of whether there was a taking;  whether Ellison properly reserved other issues first raised in federal court is a matter for that court.

The judgment is affirmed.   Ellison is to pay County's costs on appeal.

FOOTNOTES

1.   California Constitution, article I, section 19, states in part that “[p]rivate property may be taken or damaged for public use only when just compensation ․ has first been paid to ․ the owner.”   Government Code section 65912 states that a city or county may not “adopt, amend or repeal an open-space zoning ordinance in a manner which will take or damage private property for public use without the payment of just compensation therefor.   This section is not intended to increase or decrease the rights of any owner of property under the Constitution of the State of California or of the United States.”

2.   See Government Code section 65751;  Code of Civil Procedure section 1085.

GILBERT, Associate Justice.

STONE, P.J., and ABBE, J., concur.

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