Allegretti & Co. v. County of Imperial

• Decision Date: 28 March 2006
• Docket Number: No. D045156.,D045156.
• Citation: 42 Cal.Rptr.3d 122,138 Cal.App.4th 1261
• Court: California Court of Appeals Court of Appeals
• Parties: ALLEGRETTI & COMPANY, Plaintiff and Appellant, v. COUNTY OF IMPERIAL, Defendant and Respondent.

42 Cal.Rptr.3d 122

138 Cal.App.4th 1261

ALLEGRETTI & COMPANY, Plaintiff and Appellant, v. COUNTY OF IMPERIAL, Defendant and Respondent.

No. D045156.

Court of Appeal, Fourth District, Division 1.

March 28, 2006.

Manatt, Phelps & Phillips, Michael M. Berger, Los Angeles; and Jeffrey L. Marcus, Westlake Village, for Plaintiff and Appellant.

Imperial County Counsel, Ralph Cordova, Joanne Yeager, El Centro; Rossmann & Moore, Antonio Rossmann, Roger B. Moore, San Francisco, David R. Owens, Palo Alto; Gibbs & Fuerst, Michael T. Gibbs, San Diego; Stephenson, Worley, Garratt, Schwartz, Garfield & Prairie and Donald R. Worley, San Diego, for Defendant and Respondent.

Bill Lockyer, Attorney General, Thomas Greene, Assistant Attorney General, J. Matthew Rodriquez, Joseph Barbieri and Tara L. Mueller, Deputy Attorneys General as Amicus curiae on behalf of Defendant and Respondent.

O'ROURKE, J.

Allegretti & Company (Allegretti) appeals a judgment entered under Code of Civil Procedure section 631.8 in favor of the County of Imperial (County) on Allegretti's inverse condemnation action seeking just compensation for County's alleged taking of Allegretti's right to use groundwater underlying its property. County had approved Allegretti's application for a conditional use permit to activate a well on its property on the condition, imposed under a County ordinance, that Allegretti extract no more than 12,000 acre/feet per year of water from the aquifer underlying its property. At the close of Allegretti's liability case, the trial court ruled there was no compensable taking and entered judgment on specific findings, inter alia, that County's restriction did not deprive Allegretti of all economically viable use of its property, and Allegretti had not shown County's regulation did not advance a legitimate state interest.

On appeal, Allegretti contends County's action was without jurisdiction and constituted a physical taking of its water rights, mandating just compensation under the federal and state Constitutions. Allegretti further contends that assuming County's action amounted to a regulatory taking compensation was mandated because (1) the regulation deprived it of all economically beneficial or productive use of its land; (2) the Penn Central¹ factors of economic impact, interference with investment-backed expectations, and character of the governmental action compel a finding that the regulation effected a taking; and (3) County's unauthorized action failed to substantially advance a legitimate state interest. Finally, Allegretti contends the trial court misapplied the law pertaining to temporary takings in reaching its conclusions, requiring reversal of the judgment.

We conclude County's actions, either during the course of the permitting process, in approving the permit with the use restriction, or in defending against Allegretti's inverse condemnation action, did not effect a physical or regulatory taking. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Allegretti owns property in Imperial County that overlies groundwater basins, which are accessed by Allegretti and its farmer tenant for irrigation purposes via deep-water wells and pumps. In October 1994, Allegretti filed with County an application for a conditional use permit to redrill an inoperable well, one of several existing wells on the property, so that it could add approximately 200 acres of land for crop production. Allegretti's tenant used the remaining operating wells to actively farm portions of the land between 1993 and 2004. In June 1997, County approved the conditional use permit for Allegretti's redrilling project subject to certain conditions, including one limiting Allegretti's draw of groundwater to 12,000 acre/feet per year from all production wells on site. Allegretti did not record the permit and it never took effect. Allegretti acknowledges there are no present restrictions on the use of water from its existing wells.

In November 1997, Allegretti sued County for inverse condemnation.² In part, it alleged County had no jurisdiction to require Allegretti to obtain a conditional use permit, and that a regulatory taking resulted from County's requirement that Allegretti obtain a permit and show reactivation of its well would not significantly or adversely affect either the environment or the groundwater basin.³ County successfully demurred to the complaint on the ground Allegretti had failed to seek a writ of administrative mandamus and thus it did not state a cause of action since County had jurisdiction under Imperial County Ordinance sections 56350 et seq. (hereafter the ordinance) to issue a conditional use permit for the well's reactivation.⁴ In an unpublished opinion on Allegretti's appeal of that order (Allegretti I, supra, D031154), we reversed the judgment. We concluded that although County had general regulatory authority to control Allegretti's use of the water underlying its property (Wat.Code, §§ 104, 105; see Baldwin v. County of Tehama (1994) 31 Cal.App.4th 166, 173, 175-182, 36 Cal. Rptr.2d 886), the record on appeal did not show County was acting on standards specific enough to permit it to limit Allegretti's groundwater use. (Allegretti I, supra, D031154.) The sole question resolved by our decision in Allegretti I was whether Allegretti was required to pursue a writ of administrative mandate before filing its action for inverse condemnation. (Ibid.)

Following remand, the matter proceeded to a bifurcated trial on Allegretti's inverse condemnation cause of action, with a first phase bench trial on liability to precede a second phase on the issue of just compensation. At the close of Allegretti's liability case, County moved for judgment under Code of Civil Procedure section 631.8. The court granted the motion. In its statement of decision, the court ruled, inter alia, County's application of section 56352 of the ordinance did not deprive Allegretti of all economically viable use of its property. The court found "[t]he sole evidence at trial was that a significant portion of the property is farmed by a tenant who is paying rent to [Allegretti] — there is no evidence that [Allegretti] has been denied all viable use of the property." The court further found "[Allegretti's] evidence failed to show that the conditions placed on issuance of the permit would have any economic impact at all. C[ounty] restricted total groundwater removal to 12,000 acre/feet per year as a condition to re-activating Well No. 3 — [Allegretti] offered no evidence that it had the ability to extract water in excess of 12,000 acre/feet absent the restriction." Finally, the court ruled Allegretti did not show County's regulation failed to advance a legitimate state interest.

The court entered judgment accordingly. Allegretti appeals.

DISCUSSION

I. Standard of Review

"The standard of review of a judgment and its underlying findings entered pursuant to [Code of Civil Procedure] section 631.8 is the same as a judgment granted after a trial in which evidence was produced by both sides. In other words, the findings supporting such a judgment `are entitled to the same respect on appeal as are any other findings of a trial court, and are not erroneous if supported by substantial evidence.'" (San Diego Metropolitan Transit Development Bd. v. Handlery Hotel, Inc. (1999) 73 Cal.App.4th 517, 528, 86 Cal.Rptr.2d 473.) "When the decisive facts are undisputed, however, the reviewing court is confronted with a question of law and is not bound by the findings of the trial court. [Citation.] In other words, the appellate court is not bound by a trial court's interpretation of the law based on undisputed facts, but rather is free to draw its own conclusion of law." (Ibid.)

Whether there was a compensatory taking is a question of law, and we are not bound by the lower court's interpretation of the evidence presented on the question below. (Yee v. Mobilehome Park Rental Review Bd. (1998) 62 Cal.App.4th 1409, 1418, 73 Cal.Rptr.2d 227; see also Bass Enter. Prod. C. v. United States (1998) 133 F.3d 893, 895 ["Whether a taking is compensable under the Fifth Amendment is a question of law based on factual underpinnings"].)

II. General Principles of Takings Law

The state and federal Constitutions guarantee real property owners "just compensation" when their land is "taken ... for public use...." (13 Cal Const., art. I, § 19; U.S. Const., 5th Amend.; Lingle v. Chevron U.S.A. Inc. (2005) 544 U.S. 528, ___, 125 S.Ct. 2074, 2081, 161 L.Ed.2d 876 (Lingle); Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 12-13, 34 Cal.Rptr.3d 588.) The Fifth Amendment's Takings Clause, made applicable to the states through the Fourteenth Amendment, does not prohibit the taking of private property, but instead places a condition on the exercise of that power. (Lingle, supra, 544 U.S. at p. ___, 125 S.Ct. at p.2080.) "In other words, it `is designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking.'" (Ibid.)

"The paradigmatic taking requiring just compensation is a direct government appropriation or physical invasion of private property." (Lingle, supra, 544 U.S. at p. ___, 125 S.Ct. at p. 2081.) But "government regulation of private property may, in some instances, be so onerous that its effect is tantamount to a direct appropriation or ouster and ... such `regulatory takings' may be compensable under the Fifth Amendment." (Lingle, supra, 544 U.S. at p. ___, 125 S.Ct. at p.2081.) Supreme Court precedents recognize two categories of regulatory action that generally will be deemed per se takings for Fifth Amendment purposes. (Ibid.) First, where government requires an owner to suffer a "permanent physical invasion" of his property — even as minor as cable lines and boxes bolted onto an apartment building's roof and exterior walls — it must...