194 594, 146 772 v. 1983 594 194 594 146 772, 13 394 Lain Western v. County of San Diego v. 28107

• Decision Date: 30 August 1983
• Citation: 146 Cal.App.3d 772,194 Cal.Rptr. 594,13 Ed. Law Rep. 394
• Court: California Court of Appeals Court of Appeals
• Parties: Page 594 194 Cal.Rptr. 594 146 Cal.App.3d 772, 13 Ed. Law Rep. 394 McLAIN WESTERN # 1, Plaintiff and Appellant, v. COUNTY OF SAN DIEGO, Defendant and Respondent. Civ. 28107. Court of Appeal, Fourth District, Division 1, California

Page 594

194 Cal.Rptr. 594

146 Cal.App.3d 772, 13 Ed. Law Rep. 394

McLAIN WESTERN # 1, Plaintiff and Appellant v COUNTY OF SAN DIEGO, Defendant and Respondent.

Civ. 28107.

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

Aug. 30, 1983.

Hearing Denied Nov. 10, 1983.

Donnelly, Clark & Chase and John A. Donnelly, Los Angeles, for plaintiff and appellant.

Joseph Kase, Jr., Acting County Counsel, Lloyd M. Harmon, Jr., Chief Deputy County Counsel and Bruce W. Beach, Deputy County Counsel, San Diego, for defendant and respondent.

LEWIS ^*, Associate Justice.

Plaintiff McLain Western # 1 (McLain) appeals a judgment on the pleadings and a judgment on the merits favoring defendants County of San Diego, Fallbrook Union School District and Fallbrook Union High School District (collectively referred to as County). Fallbrook Union High School District has been dismissed from this appeal.

McLain Western # 1 is a limited partnership formed to develop Pala Mesa Country Club Villas, a two-phase luxury condominium complex. Phase 1 consists of 66 units; 46 one bedroom and 20 two bedroom, while Phase II consists of 70 units; 42 one bedroom and 28 two bedroom. The condominiums adjoin the Pala Mesa Golf and Tennis Resort and were designed primarily to attract weekend or retirement home purchasers. However, leasing of the units was allowed and there were no covenants, conditions or restrictions barring residence by schoolage children.

Upon completion of Phase I, McLain sought a building permit for Phase II. At that time, the sales force which had been recruited for the total project was completing its work as to Phase I. The project had been financed and was accruing interests costs of $12,755.15 per month. Construction personnel had been hired for both phases. Total costs of delay on Phase II were approximately $30,000 per month. In May 1979, during the interim between Phases I and II, the School Facilities Act ¹ was enacted which allows certain conditions to be imposed on the issuance of a building permit where school overcrowding will result from the development. The purpose of the Act is to provide funding for interim school facilities to ease overcrowding caused by rapid residential development within each state school district. ²

Pursuant to San Diego Ordinance 5120, enacted in accordance with the Act, the County conditioned the issuance of the Phase II permit to McLain upon payment of an interim facilities fee of $141,853.60. ³ McLain requested exemption from the fee on grounds Pala Mesa, by its nature, would not cause the need for interim school facilities.

The $141,853.60 fee was calculated by a formula developed by the San Diego County Department of Education. (a) Residential developments are given either single family, multi family, or mobilehome classifications. The formula then uses census data, adjusted to reflect population characteristics within a specific school district to arrive at a pupil per unit yield factor for each classification. (b) Under the formula, Pala Mesa would be multi family and average .586 pupils per unit. The per student cost multiplied by the pupil yield factor and the number of housing units determines the facilities fee to be assessed.

McLain, after payment under protest and exhaustion of administrative remedies, brought an action for return of the fee on the grounds the fee was unreasonable in view of Pala Mesa's characteristics as an adult recreational and retirement complex. The trial court held the proper method of challenging a condition within a permit is by a writ of mandamus proceeding. The court also held, assuming McLain's suit for refund were proper, the fee assessed was reasonably related to the need for interim schools caused by the Pala Mesa development.

McLain first contends the law should allow developers to challenge a condition in a building permit after compliance with the condition and receipt of the benefits bestowed by the permit. In Pfeiffer v. City of La Mesa, 69 Cal.App.3d 74, 137 Cal.Rptr. 804, this court determined the proper method to challenge permit conditions is a mandamus proceeding. Compliance with the conditions waives the right to assert the invalidity of those conditions. (Id. at p. 78, 137 Cal.Rptr. 804.)

McLain concedes compliance with the facilities fee payment of $141,853.60 but asserts the payment was so coercive in nature as to make it involuntary. The delay of Pala Mesa Phase II pending a mandamus ruling would have costs of $30,000.00 per month. McLain was thus at an impasse with a large investment, unable to engage in the business of developing land. McClain asserts payment of a fee or tax in such circumstances is coercive and therefore involuntary. Thus, recovery should be allowed. (See Newport Bldg. Corp. v. City of Santa Ana, 210 Cal.App.2d 771, 26 Cal.Rptr. 797; Flynn v. San Francisco, 18 Cal.2d 210, 115 P.2d 3, 55 CALJUR 3d 315.)

The County asserts McLain had an adequate and expeditious judicial remedy in challenging the fee condition by mandamus proceeding, and that once the developer voluntarily accepts the condition by payment and receives the benefits of the permit he should be barred from later challenging the validity of the permit condition. (See Selby Realty Co. v. City of San Buenaventura, 10 Cal.3d 110, 109 Cal.Rptr. 799, 514 P.2d 111; County of Imperial v. McDougal, 19 Cal.3d 505, 138 Cal.Rptr. 472, 564 P.2d 14.)

Ordinarily, the developer will not be permitted to obtain the benefit of going ahead with construction and subsequently litigating the validity of one of the conditions of the permit. There are critical distinctions from tax cases where the taxpayer may or must pay and sue for refund. The taxpayer does not pay the tax to obtain the permission of the government to go ahead with a project, make a sale, or realize a gain. A tax is imposed on an event, condition, or occurrence that exists or has taken place, and at the point in time the tax is imposed, the taxpayer has no further ability to make an election that the tax not be due. In the case of a condition of a permit, whether by payment or a fee, construction of off-site improvements, dedication, or otherwise, the applicant has the ability to elect to decline the benefits of the permit, and the fee, construction or dedication are not required. The County requires and is entitled to certainty in its fiscal affairs and budget procedures, and once the developer has accepted the benefits of the permit by constructing the project he will not be permitted to sue for refund or cancellation or reimbursement of the cost of compliance with the permit conditions.

There is a further desirable effect of our continuing to adhere to the rule announced by this court in Pfeiffer. The decisions about fees to be imposed as conditions of permits are properly made by the County and the...