Avco Community Developers, Inc. v. South Coast Regional Com.

• Decision Date: 25 August 1976
• Docket Number: No. 30514,30514
• Parties: , 553 P.2d 546 AVCO COMMUNITY DEVELOPERS, INC., Plaintiff and Appellant, v. SOUTH COAST REGIONAL COMMISSION et al., Defendants and Respondents. L.A.
• Court: California Supreme Court

Page 386

132 Cal.Rptr. 386

17 Cal.3d 785, 553 P.2d 546

AVCO COMMUNITY DEVELOPERS, INC., Plaintiff and Appellant, v. SOUTH COAST REGIONAL COMMISSION et al., Defendants and Respondents.

L.A. No. 30514.

Supreme Court of California,

In Bank.

Aug. 25, 1976.

As Modified on Denial of Rehearing Sept. 29, 1976.

Fulop, Rolston, Burns & McKittrick, Irwin M. Fulop, Lawrence R. Resnick, Beverly Hills, and Kenneth B. Bley, Los Angeles, for plaintiff and appellant.

Brobeck, Phleger & Harrison, Howard N. Ellman and Susan J. Passovoy, San Francisco, as amici curiae on behalf of plaintiff and appellant.

Evelle J. Younger, Atty. Gen., Carl Boronkay, Asst. Atty. Gen., Roderick Walston and Donatas Januta, Deputy Attys. Gen., for defendants and respondents.

John Roger Beers, Ballard Jamieson, Jr., Palo Alto, and Laurens H. Silver, Los Angeles, as amici curiae on behalf of defendants and respondents.

MOSK, Justice.

We are confronted with the apparently irreconcilable conflict between the interests of a land developer who seeks to avoid compliance with a recently enacted law regulating its project, and the interests of the public in assuring development of the property in a manner consistent with the requirements of current law. Specifically, we must decide whether the developer of a subdivision may acquire a vested right to construct buildings on its land without a permit from the California Coastal Zone Commission (the commission) if it has subdivided and graded the property and made certain improvements on the land, such as installing utilities, but had not applied for or received a building permit for any structures on the land before February 1, 1973.

Section 27400 of the California Coastal Zone Conservation Act of 1972 (Pub.Resources Code, § 27000 et seq.), hereinafter called the Act, provides that on or after February 1, 1973, any person desiring to perform any development within the coastal zone (§ 27104) must obtain a permit from the commission. Section 27404, at the time relevant to the events in the present case, qualified this requirement by allowing a builder to proceed after February 1 if he had obtained a vested right to do so by having secured a building permit and in good faith diligently commenced construction and performed substantial work in reliance thereon before the effective date of the Act. ¹ In San Diego Coast Regional Com. v. See the Sea, Limited (1973) 9 Cal.3d 888, 109 Cal.Rptr. 377, 513 P.2d 129, this court held that a builder who had obtained a building permit and performed substantial work thereunder prior to February 1, 1973, was exempt from the permit requirement of the Act.

Petitioner, Avco Community Developers, Inc. (Avco) owns 7,936 acres of land in Orange County which it is developing as the Laguna Niguel Planned Community. Of this total, 836 acres, known as the Capron property, was purchased by Avco in 1968. Approximately 473 acres of the Capron property lies within the coastal zone. Our concern in this proceeding is with 74 acres of the land within the permit area, designated as tract 7479.

In 1971, the county, at the instance of Avco, zoned 5,234 acres of the Laguna Niguel project, including tract 7479, as a 'Planned Community Development' containing a total of 18,925 residential units. The development was to proceed according to 'Planned Community District Regulations' enacted by the county. In 1972, a final map was approved for tract 7479, dividing it into 27 parcels, devoted largely to multiple residential uses. In that year the county issued a rough grading permit which did not refer to grading for any specific building site.

Avco undertook a number of studies for the development of the tract, and proceeded to subdivide and grade the property. By February 1, 1973, pursuant to approvals issued for such purposes by the county, Avco had completed or was in the process of constructing storm drains, culverts, street improvements, utilities, and similar facilities for the tract as well as for the remainder of the Capron property. Under the county's building code, a permit could not be obtained until grading had been completed. Avco had not completed the rough grading by February 1, 1973, and it neither submitted building plans for the tract nor obtained a permit to construct any structures. Before that date, the company had spent $2,082,070 and incurred liabilities of $740,468 for the development of the tract; it is losing $7,113.46 a day, largely due to loss of anticipated rental value, as a result of its inability to proceed with construction of buildings on the tract.

Avco applied to the commission for an exemption from the permit requirements of the Act, claiming that it had a vested right to complete development, and, when its application was denied, sought a writ of mandate to compel the commission to grant the exemption. ² The trial court, after a hearing in which the evidence consisted entirely of the record of the proceedings before the commission, declined to issue the writ.

The court found that the approvals granted by the county for the development of tract 7479 led Avco to reasonably expect that it would be allowed to construct buildings on the tract 'without further discretionary governmental approval,' and that the subdivision improvements were installed in good faith reliance upon the county's actions. The court also found that Avco had a detailed plan for the buildings to be constructed on the tract. A model of the structures intended to be built on the tract had been completed in July 1971, and the court found that the maximum number, size and type of buildings 'allowable' on the tract could be ascertained by reference to the tract map, the planned community district regulations, and the model.

Although the court opined that fairness suggested Avco be allowed to complete development of the tract in accordance with the map, the regulations and the model, nevertheless because Avco did not have a building permit the trial court felt compelled to hold that it did not have a vested right to construct the buildings, and thus was not exempt from the permit requirement of the Act. The court cited Spindler Realty Corp. v. Monning (1966) 243 Cal.App.2d 255, 53 Cal.Rptr. 7, and San Diego Coast Regional Com. v. See the Sea, Limited, supra, 9 Cal.3d 888, 109 Cal.Rptr. 377, 513 P.2d 129, as controlling.

Avco asserts that it had a vested right to construct buildings on tract 7479, that the commission is estopped to claim otherwise, and that the Act is unconstitutional.

Vested Rights

It has long been the rule in this state and in other jurisdictions that if a property owner has performed substantial work and incurred substantial liabilities in good faith reliance upon a permit issued by the government, he acquires a vested right to complete construction in accordance with the terms of the permit. (Dobbins v City of Los Angeles (1904) 195 U.S. 223, 25 S.Ct. 18, 49 L.Ed. 169; Trans-Oceanic Oil Corp. v. City of Santa Barbara (1948) 85 Cal.App.2d 776, 784, 194 P.2d 148.) Once a landowner has secured a vested right the government may not, by virtue of a change in the zoning laws, prohibit construction authorized by the permit upon which he relied. Here Avco asserts that it had a vested right to construct buildings on tract 7479 without permission from the commission because prior to February 1, 1973, when the coastal permit requirement took effect, it spent large sums of money to construct subdivision improvements and grade the tract, in reliance on several county authorizations, and that these improvements were undertaken and approvals issued for the purpose of constructing buildings. Thus, Avco relies upon the doctrine of vested rights as defined in the common law and in the Act itself.

Vested Rights Under Common Law

Evaluation of this claim requires a determination of the point in the development process at which a landowner can be said to have acquired a vested right to construct buildings on his land. The commission contends, subject to an exception to be discussed Infra, that a builder may not acquire a vested right prior to the issuance of a building permit, whereas Avco asserts that in the context of a subdivision a developer's right to construct buildings vests when it has subdivided the land and installed subdivision inprovements such as roads and utilities pursuant to governmental authorization. Amicus curiae appearing on behalf of Avco (Oceanic California Inc. and Half Moon Bay Properties, Inc.) argue for an even earlier time of vesting in the case of a planned unit development, i.e., when such zoning is imposed on the developer's land.

In resolving this issue, we do not write on a clean slate. In Spindler Realty Corp. v. Monning, supra, 243 Cal.App.2d 255, 53 Cal.Rptr. 7, a builder whose property was zoned for multiple residential use, sought and obtained a grading permit and other approvals from the City of Los Angeles to prepare a building site. The permit did not refer to the number, size and type of buildings to be erected on the site. In good faith reliance on these permits, Spindler graded the property and submitted building plans for the construction of a high rise apartment complex. It spent over $300,000 for development costs. However, before the building plans were approved, the property was rezoned for single family residential use.

Spindler contended, as does Avco here, that it had acquired a vested right to build multiple dwellings on the lot because, in good faith reliance on the existing zoning and the permits issued by the city, it had incurred substantial expenses to develop and grade the property. The court held that while Spindler had a vested right to complete grading, it did not have a vested right to build the structures permitted by the prior zoning.

The court reasoned that Spindler knew when obtaining the grading permit that it would be required to secure a building permit in order to construct buildings, and that a grading...