STRONG v. COUNTY OF SANTA CRUZ (1975)

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

Robert S. STRONG et al., Plaintiffs and Respondents, v. COUNTY OF SANTA CRUZ et al., Defendants and Appellants.

Civ. 33481.

Decided: February 18, 1975

Howard E. Gawthrop, County Counsel, Dwight L. Herr, Asst. County Counsel, County of Santa Cruz, Santa Cruz, for defendants and appellants. Alan J. Levin, Adams, Levin, Kehoe, Bosso & Sachs, Santa Cruz, for plaintiffs and respondents.

The superior court, in the proceedings below, concluded that the defendants County of Santa Cruz, its board of supervisors and its planning commission were estopped to deny the validity and continued existence of a ‘use permit’ issued to the plaintiffs and respondents Strong. Each of the defendants has appealed from the resulting judgment.

The relevant facts are found in the trial court's findings, as follows:

‘1. [Respondents] purchased a parcel of land on March 15 of 1972, fronting on Green Valley Road, Watsonville, California, having at the time of purchase the benefit of a use permit issued by the County of Santa Cruz authorizing the construction of a mobile home park with 177 mobile home spaces.

‘2. The use permit provided for construction of a mobile home park in two stages. . . . The use permit was ambiguous and purported to expire by its terms either on April 1, 1972, or on April 12, 1972.

‘3. [Respondent] ROBERT STRONG made known to the County planning Department his purchase of this property and his plans for construction of a mobile home park thereon; on April 7, 1972, the County issued to [respondent] a grading permit; on June 5, 1972, construction plans for submission to the State Department of Housing were approved by the County; on June 13, 1972, the County approved sewer hookups.

‘4. At all times here concerned, it was the policy of the County to deal reasonably rather than rigidly with expiration dates of use permits and to grant extensions as a matter of course provided the property owner was proceeding diligently with construction. [Respondents] were at all times proceeding diligently. . . .

‘10. Every act of the County set forth [above, and] had before the County's planning staff, Planning Commission and Board of Supervisors herein was predicated upon and acknowledged [respondents'] possession of a valid use permit. At no time prior to February 3, 1973 did the County base its claim of right to add additional conditions on the expiration of the permit but only on [respondents'] application for modification.

‘11. [Respondent] ROBERT STRONG is an experienced real estate developer. He was at all times aware of the applicable laws, ordinances and practices of the County having reference to planning and land development. He was at all times aware of the stated expiration date of his permit and of all the facts set forth [above].

‘12. [Respondents] purchased the subject real property in reliance on a valid existing Use Permit for 177 mobile home spaces, the authenticity of which was not then questioned or opposed.

‘13. In reliance upon a use permit for 177 mobile home spaces, and in reliance on each act and forbearance of the County set forth [above, respondents] expended in excess of $500,000.00 on the whole project (including purchase price of the land) and at least $50,000.00 for plans, electrical installations, deeper sewer trenches and other related items pertaining to preliminary work on Phase II. A reduction from 177 to 142 mobile home spaces would entail a loss of rental income to [respondents] of about $2,500.00 per month. Eighty-nine spaces had been completed and constituted Phase I. [Respondents] seek to complete Phase II for 88 spaces.

‘14. [Respondents'] reliance on [the] Use Permit . . . was justified and in good faith.’

The trial court found, in effect, that on or about January 9, 1973, the county refused to recognize the validity of the use permit, and imposed new and more burdensome conditions for the use of the land.

Contrary to appellants' contentions we observe these findings of fact to be supported by substantial evidence, in accordance with the standards of Green Trees Enterprises, Inc. v. Palm Springs Alpine Estates, Inc., 66 Cal.2d 782, 784, 59 Cal.Rptr. 141, 427 P.2d 805, and Foreman & Clark Corp. v. Fallon, 3 Cal.3d 875, 881, 92 Cal.Rptr. 162, 479 P.2d 362.

In its conclusions of law, among other things, the trial court determined that respondents had been acting pursuant to a valid use permit issued April 12, 1971, and that ‘The County of Santa Cruz, through conduct and ratification of [respondents'] plans, waived any right to insist on an application for extension of the use permit and is estopped to raise its contention, for the first time at trial, that [respondents] did not have a valid use permit.’ It further concluded: ‘Notwithstanding the provisions of Section 12.04.326 of the County Code, purporting to give the Board of Supervisors the power to amend a valid use permit at will, that section is nevertheless subject to constitutional rights of [respondents] that any amendments imposed by the County must not be in derogation of vested rights.’ ‘[Respondents] had vested rights in the existing use permit. No compelling public necessity was shown to justify abrogation of those rights.’

The appellants contend that the trial court's conclusion that they were estopped to deny the validity and continued existence of the use permit was erroneously drawn from its findings of fact.

The rule and rationale, concerning application of the doctrine of equitable estoppel against a governmental entity, were exhaustively considered by the state's Supreme Court in the recent case of City of Long Beach v. Mansell, 3 Cal.3d 462, 91 Cal.Rptr. 23, 476 P.2d 423.

There the court first pointed out the general rule for application of equitable estoppel, as follow (p. 489, 91 Cal.Rptr. p. 42, 476 P.2d p. 448): “Generally speaking, four elements must be present in order to apply the doctrine of equitable estoppel: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.' Keeping in mind the admitted generality of this formulation and the flexibility which is necessary to its proper concrete application within the broad equitable framework we have expressed, it may be said that the elements here stated are basic to the general doctrine of equitable estoppel as it exists in this and other jurisdictions.'

It then stated (p. 493, 91 Cal.Rptr. p. 45, 476 P.2d p. 445): “[t]he doctrine of equitable estoppel may be applied against the government where justice and right require it”; and (pp. 496–497, 91 Cal.Rptr. p. 48, 476 P.2d p. 448): ‘After a thorough review of the many California decisions in this area, as well as a consideration of various out-of-state decisions, we have concluded that the proper rule governing equitable estoppel against the government is the following: The government may be bound by an equitable estoppel in the same manner as a private party when the elements requisite to such an estoppel against a private party are present and, in the considered view of a court of equity, the injustice which would result from a failure to uphold an estoppel is of sufficient dimension to justify any effect upon public interest or policy which would result from the raising of an estoppel.’

The high court recognized (p. 497, 91 Cal.Rptr. p. 48, 476 P.2d p. 448) that a distinction had often been made (1) ‘between those cases where the public entity to be estopped has the legal power to accomplish directly what the estoppel will accomplish indirectly, and, [2] on the other hand, those cases where the public entity does not have such power.’ As to the latter grouping of cases, some disagreement had previously existed whether equitable estoppel might ever apply,¹ while as to the former such estoppel will much more readily be found.

The foregoing distinction was well pointed up in the earlier decision in County of San Diego v. Cal. Water etc. Co., 30 Cal.2d 817, 826–827, 186 P.2d 124, 130. That case, q. v., held that where a public entity, or its official, acts in some manner forbidden by law or public policy, equitable estoppel will never allow such acts to stand, for such would “frustrate the purpose of its laws or thwart its public policy.” If such forbidden conduct were to be legitimized by estoppel, the court indicated, “then it follows as the night the day that the statute or charter provision can always be evaded and set at naught.” The same principle was tersely stated in Taylor v. Spear, 196 Cal. 709, 717, 238 P. 1038, 1041, in this manner: ‘What the Commissioners could not do directly they could not do indirectly, [by the application of equitable estoppel] because of these express limitations upon their powers.’ And, expressed differently, it has been consistently held that ‘the authority of a public officer cannot be expanded by estoppel’ (Boren v. State Personnel Board, 37 Cal.2d 634, 643, 234 P.2d 981, 986; Hill v. City of Los Angeles, 24 Cal.App.3d 18, 22, 102 Cal.Rptr. 251), at lest not ‘ordinarily’ (McNeil v. Board of Retirement, 51 Cal.2d 278, 285, 332 P.2d 281), and that a public entity's ‘compliance with the requirement of the statute cannot be waived or excused by estoppel’ (Farrell v. County of Placer, 23 Cal.2d 624, 629, 145 P.2d 570, 572).

On the other hand where the public entity is permitted by law and public policy to do the questioned act but refuses to do so, then in a proper case estoppel will much more readily be applied. For in such a case estoppel would frustrate no statutory or other lawful command or prohibition. (See City of Long Beach v. Mansell, supra, 3 Cal.3d 462, 497–498, 91 Cal.Rptr. 23, 476 P.2d 423; County of San Diego v. Cal. Water etc. Co., supra, 30 Cal.2d 817, 825–829, 186 P.2d 124; Taylor v. Spear, supra, 196 Cal. 709, 717, 238 P. 1038.)

An applicable ordinance of the County of Santa Cruz provided that a use permit, such as is here in question, might be amended, ‘whenever issued,’ by the county planning commission upon ‘the application of the permittee or his successor in interest . . . by the addition, deletion or modification of conditions or by the modification of any other part of the permit.’ It will be seen that we are concerned with the first of the two classes of cases considered by City of Long Beach v. Mansell, supra, 3 Cal.3d 462, 496–497, 91 Cal.Rptr. 23, 48, 476 P.2d 423, 448, i. e., ‘those cases where the public entity to be estopped has the legal power to accomplish directly what the estoppel will accomplish indirectly’. The lesser of the two standards for the application of equitable estoppel was therefore applicable.

It is said in Palo Alto Inv. Co. v. County of Placer, 269 Cal.App.2d 363, 366, 74 Cal.Rptr. 831, 833:

‘Equitable estoppel is available against the government where justice and right require it; existence of an estoppel is generally a question of fact for the trial court, whose determination is conclusive on appeal unless the opposite conclusion is the only one reasonably available from the evidence.’

(See also Driscoll v. City of Los Angeles, 67 Cal.2d 297, 305–306, 61 Cal.Rptr. 661, 431 P.2d 245.)

From the facts as found by the trial court, and applying the criteria of City of Long Beach v. Mansell, supra, 3 Cal.3d 462, 489, 91 Cal.Rptr. 23, 476 P.2d 423, it would appear (1) that the county of Santa Cruz was ‘apprised of the facts,’ (2) that respondents had a right to believe the county intended that its conduct be acted upon, (3) that respondents were ignorant of the true state of facts, i. e., that the county would act otherwise than as implied by its conduct (see Ware Supply Co. v. Sacramento Savings & L. Assn., 246 Cal.App.2d 398, 409, 54 Cal.Rptr. 674), and (4) that respondents relied upon the county's conduct to their injury. Further, the court could reasonably conclude that ‘the injustice which would result from a failure to uphold an estoppel is of sufficient dimension to justify any effect upon public interest or policy which would result from the raising of an estoppel.’

Since the trial court's finding of equitable estoppel was ‘reasonably available from the evidence,’ that conclusion is now, on this appeal, binding upon us.

It becomes unnecessary to consider other points raised by the parties.

The judgment is affirmed.

FOOTNOTES

1.  The court, however (3 Cal.3d, p. 500, 91 Cal.Rptr. p. 51, 476 P.2d p. 451), allowed such a claim of estoppel on the facts of that case, creating ‘an extremely narrow precedent for application in future cases.’

ELKINGTON, Associate Justice.

MOLINARI, P. J., and DEVINE, J.*, concur.