Welcome to Abbott & Kindermann, Inc.’s April Real Estate Law Action News. This summary provides brief updates on recent real estate cases, legislation, and administrative actions in 2021. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.
- PREVIOUS MONTH’S UPDATE
To read the March 2021 Real Estate Action News post, click here: https://blog.aklandlaw.com/2021/03/articles/easements/march-monthly-real-estate-law-action-news/ .
- CASES PENDING AT THE CALIFORNIA SUPREME COURT
There are no cases pending at the California Supreme Court at this time.
- UPDATE
A. TAKINGS
- Felkay v. City of Santa Barbara (2021) 62 Cal.App.5th 30.
The Court of Appeal affirmed a jury verdict awarding property owner, Felkay, damages for inverse condemnation deriving from the City of Santa Barbara (“City”) denying Felkay’s coastal development permit. In the City’s defense, the City alleged that Felkay’s suit was not ripe because he failed to exhaust administrative remedies related to his coastal development permit because the owner was required to submit multiple permit applications seeking zoning variances and reduction of environmental impacts under the City Code. The trial court ruled that Felkay was not required to submit more than one coastal development permit addressing his different zoning variance requests and compliance with environmental impacts. In the trial court’s statement of decision the court held: “(1) Felkay’s claims were ripe, (2) he sought a variance or modification pursuant to Public Resources Code section 30010, (3) he was not required to pursue futile applications, (4) denial of the permit rendered the property unbuildable and deprived Felkay of all economic benefit of the property, and (5) the denial constituted a total taking of the property.” The trial court further held that a de facto taking occurred because the only remaining use of the property was as vacant land for recreation, parking, or to preserve views. The jury awarded Felkay damages at fair market value of $2.4 million plus $1M in attorneys fees.
The Court of Appeal affirmed the trial court’s ruling. On the inverse condemnation claim, the Court held that because of the City’s finding that the project would violate the City’s Local Coastal Plan Policy 8.2 regarding certain developments on coastal bluffs, the City had only two choices: (i) deny the permit and pay just compensation for inverse condemnation, or (ii) approve the permit. Since the City chose to deny the permit, Felkay was entitled to just compensation for inverse condemnation. On the ripeness defense, the Court held that the case was ripe for adjudication. The Court found that there was substantial evidence to establish that the City would have denied the permit anyway regardless of multiple applications. The Court further held that exhaustion was properly determined by the trial court because the City declined to issue a permit or review further permitting administratively and elected to move to trial proceedings. As such, the Court affirmed the trial courts proceedings and further awarded costs on appeal to Felkay.
- Kagan v. City of Los Angeles, 2021 U.S. Dist. LEXIS 27851 (C.D. CA., February 11, 2021).
Plaintiffs brought suit against the City of Los Angeles and Los Angeles Housing and Community Investment Department (“The City”) under alleged Takings and Due Process claims related to the City passing a Rent Stabilization Ordinance (“RSO”) that impacted Plaintiffs’ rental of an owned and operated duplex. The City filed a motion to dismiss in response to Plaintiffs’ claims. The RSO passed by the City was an ordinance intended to safeguard protected tenants from “excessive rental increases.” Protected tenants are those who are at least 62 years old or considered disabled or handicapped as defined under the state and federal code. Plaintiffs attempted to evict a tenant from their duplex who fell into the “protected tenant” classification. Thereafter, Plaintiffs sued the City to recover damages for Takings and Due Process claims. On the Takings claims, the Court held that Plaintiffs were aware of the RSO and had the option to withdraw the Property from rental housing use provided they give the Tenant one year’s notice, but they elected not to do so. As such, the Court granted the City’s motion to dismiss on the Takings claim. The Court then broke down the Due Process claims under both substantive due process and procedural due process analyses. The Court stated that the ordinance was rationally related to a legitimate government interest in protecting vulnerable tenants and therefore Plaintiffs’ substantive due process claims were dismissed. On the procedural due process claim, the Court stated that because Plaintiffs had adequate “post-deprivation remedies available” the motion to dismiss the procedural due process claim was granted.
B. GENERAL REAL ESTATE
*There are no new cases in this section at this time.*
C. COMMON INTEREST DEVELOPMENTS
*There are no new cases in this section at this time.*
D. REAL ESTATE CONTRACTS & TRANSACTIONS
*There are no new cases in this section at this time.*
E. EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
- Husain v. California Pacific Bank (2021) 61 Cal.App.5th 717.
The Court of Appeal affirmed a decision by the trial court to grant a prescriptive easement to California Pacific Bank (“Bank”) over portions of Husain’s property. Husain acquired the property and shortly after filed an action against the Bank for quiet title. The trial court held that the Bank held prescriptive easements over the driveway, garbage area, garden, and parking spaces on Husain’s property. The Court of Appeal affirmed. The Court held that the record established that the Bank’s use of the property was “open, notorious, continuous, and adverse for an uninterrupted period of five years.” The Court further found that there was clear and convincing evidence that the Bank held several prescriptive easements over the property. It also concluded that Husain was fully aware of the prescriptive easement claims on the property through the initial disclosures to the property transaction, and he signed an indemnity agreement evidencing as such. Accordingly, the Court rejected the notion that it would be unfair for Husain to be subject to the easements obtained when he purchased the property. The Court of Appeal affirmed the lower court’s ruling and held that the Bank should recover its costs on appeal.
- Village Communities v. County of San Diego, 2021 U.S. Dist. LEXIS 20794 (S.D. CA., February 3, 2021).
Plaintiff, a real estate development company, filed suit against the County of San Diego (“Defendant or County”) for denying Plaintiff’s modifications to its proposed development project located in an unincorporated area of San Diego County. The County denied Plaintiff’s modified proposal after the County Planning Department determined that the modifications “substantially revised the proposed project and that staff had various concerns about its scope.” The area is in a high wildfire risk area and the modifications to the project proposal were over whether or not the County had legal authority to require fuel modification easement rights to allow for entry onto properties and control vegetation on 50 adjacent lots.
Plaintiff sought an administrative mandamus action against the County alleging four causes of action: (1) Takings; (2) Due Process; (3) Equal Protection; and (4) an Administrative Mandamus claim directing the County to approve the Project. The County moved to dismiss each claim. On the Takings claims, the Court found that Plaintiff’s claims, “plausibly state prima facie inverse condemnation and temporary takings claims based on the unconstitutional conditions doctrine.” As such, the Court denied the County’s attempt to dismiss the Takings Claims. On the Due Process claim, the Court held that Plaintiff had a viable claim for substantive due process because Plaintiff presented a reasonable claim as to whether the easements were “needless and redundant under existing authority.” The Court then held that Plaintiff had a viable Equal Protection claim because Plaintiff provided the Court with a list of other projects the County approved where there were no additional easements requested. On the Administrative Mandamus claim, the Court granted the County’s request for dismissal. The Court held that recently the Supreme Court held that a plaintiff no longer has an obligation to also seek mandamus relief in order to prosecute its takings claim. The Court further reasoned that because the sought after mandamus would infringe on the separation of powers by directing the County on how to exercise its discretion over the Project, the Court must deny the request for an administrative mandamus.
- Self v. Cher-Ae Heights Indian Community of Trinidad Rancheria, 2021 Cal. App. LEXIS 67 (January 26, 2021).
In a case involving tribal sovereign immunity to establish a public easement for coastal access, The Court of Appeal affirmed the trial court’s dismissal of the tribe’s quiet title action to establish a public easement for coastal access. The question before the Court was whether sovereign immunity barred quiet title actions for public easements pertaining to coastal rights of access on properties owned by Indian tribes. The Court of Appeal held that Congress did not extend the common law exception for state sovereign immunity to tribal immunity for land acquisition. As such, the Court found that tribal sovereign immunity bars quiet title actions such as those found in the facts of this case. The Court held that Plaintiffs’ arguments for a common law exception for “immovable property” was unmoving and unpersuasive. The Court stated that consistent with the decades of Supreme Court precedent before this Court, the Panel will defer to Congress to determine the limits of sovereign immunity. The Court found that Congress did not extend such a limit to tribal communities for the purposes of land acquisition under federal tribal policy. As such, the Court of Appeal affirmed the trial court’s dismissal of the tribe’s quiet title action.
William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.