Berkeley Lawn Bowling Club v. City of Berkeley

• Decision Date: 03 October 1974
• Citation: 42 Cal.App.3d 280,116 Cal.Rptr. 762
• Court: California Court of Appeals Court of Appeals
• Parties: BERKELEY LAWN BOWLING CLUB, a California corporation, Plaintiff and Respondent, v. CITY OF BERKELEY, a municipal corporation, and Walter Toney, Defendants and Appellants. Neighborhood Committee for a Public Park et al., Intervenors and Appellants. Civ. 32541.

Page 762

116 Cal.Rptr. 762

42 Cal.App.3d 280

BERKELEY LAWN BOWLING CLUB, a California corporation, Plaintiff and Respondent, v. CITY OF BERKELEY, a municipal corporation, and Walter Toney, Defendants and Appellants Neighborhood Committee for a Public Park et al., Intervenors and Appellants.

Civ. 32541.

Court of Appeal, First District, Division 3, California.

Oct. 3, 1974.

Hearing Denied Nov. 27, 1974.

Donald P. McCullum, City Atty., Michael Lawson, Deputy City Atty., Kathryn L. Walt, Asst. City Atty., Berkeley, for defendants and appellants.

Dawn B. Girard, Carmen L. Massey, Henry Schroerluke, Berkeley, for intervenors and appellants.

Nichols, Catterton & Downing, Merton R. Downing and Dyer B. Pierson, Berkeley, for plaintiff and respondent.

HAROLD C. BROWN, Associate Justice.

This is an appeal from a judgment enjoining the City of Berkeley (hereinafter referred to as 'City') and its Director of Department of Parks and Recreation from interfering with the use of certain lawn bowling greens in the City by the Berkeley Lawn Bowling Club (hereinafter referred to as 'Club'). As will appear, we have concluded that the trial court correctly ruled in the Club's favor and that the judgment should be affirmed.

On August 22, 1963, the Club and the City entered into an agreement whereby the Club agreed to lease a clubhouse to be constructed by the City on City property at an estimated cost of $30,000. In consideration thereof, the Club agreed to pay $15,000 down and one-tenth of the balance of the construction cost of the clubhouse on an annual basis over a ten-year period. During the second ten-year period of the lease, the Club agreed to pay a rental of $600 per year. The Club further agreed that the clubhouse should be used by the Club solely as a lawn bowling clubhouse; that the Club would represent the City in lawn bowling activities; and that the Club would foster and promote lawn bowling activities in the City.

The lease made no mention of the maintenance of the bowling greens themselves, although they had been the subject of written agreements between the City and the Club in the past. The trial court found, and it is not disputed, that the first of a series of agreements between the Club and the City was entered into on September 25, 1930. At that time, the City granted the Club and its members the right and privilege of using the one lawn bowling green then in existence, sharing that right of use with the public, and granted the Club the use of space in a City building as a clubhouse at an annual rent of $150. Agreements similar in nature were signed at intervals with the last one extending for a term ending October 1, 1964.

The first lawn bowling green was completed in approximately 1930. Pursuant to an agreement dated August 9, 1960, between City and Club, the City constructed a second lawn bowling green and the Club paid $8,000 toward the cost of construction of approximately $18,000. Shortly after the completion of the second lawn bowling green, negotiations were entered into between Club and the City of construction of the clubhouse. Participating in these negotiations were Mr. Saalwachter, Director of Parks and Recreation in Berkeley, Mr. Hunrick, Assistant City Manager, and Mr. Schuyler, representing the Club. These three men testified at the hearing that the discussions centered primarily around the construction of the proposed clubhouse, the possibility of future construction of a third green, hours of use for greens and clubhouse, maintenance level of the greens and the general subject of stimulating further interest in lawn bowling. There was no suggestion that the City would not continue its past role of physical maintenance of the greens and the expense of that maintenance.

Since the execution of the lease, the Club has administered the use of the bowling greens and supervised the play on the greens as it had in the past. Membership in the Club has increased from approximately 90 in 1958 to approximately 170 at the time of the hearing. Membership is open to anyone, although the sport in general attracts older people. The Club maintains a membership committee which has been active in recruiting members and a coaching committee which instructs beginners. The Club provides all supplies for beginners other than shoes.

On March 27, 1972, the City Council of Berkeley declared its intention to immediately convert the north green into a minipark and designate the south green as a public bowling facility. In a year's time, the council would then review the use to be made of the land occupied by the south green. This action followed a citizens' petition within the neighborhood in which the bowling greens are located and a determination that this land was the only neighborhood land available for a multi-purpose recreational area.

The trial court in considering the Club's action for injunctive relief found that 'It was the intent of both the CLUB and the CITY and the principal inducement for the construction of the Clubhouse that both bowling greens should remain adjacent to the Clubhouse and be available to CLUB members through the term of the said lease.

'That either through oversight or by tacit agreement the CLUB'S right to use the two lawn bowling greens was neither explicitly set forth in the said Clubhouse lease nor expressed in any further renewal agreements of any such rights at the expiration of the last greens use agreement.'

The court then concluded 'That plaintiff should be granted a Permanent Injunction against defendant, CITY OF BERKELEY, and WALTER TONEY, prohibiting the destruction of either of the two lawn bowling greens or harm to either green or other interference with the plaintiff's use and supervision of said greens, in the manner that plaintiff has used and supervised said bowling greens from the time of the completion of the second bowling green to date hereof.'

We do not agree with appellant's argument that there is insufficient evidence to support the finding that the 1963 lease was subject to an implied covenant which obligates the City to maintain the two bowling greens. 'In every contract there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract, which means that in every contract there exists an implied covenant of good faith and fair dealing.' (Universal Sales Corp. v. Cal. etc., Mfg. Co. (1942) 20 Cal.2d 751, 771, 128 P.2d 665, 677.) 'This covenant not only imposes upon each contracting party the duty to refrain from doing anything which would render performance of the contract impossible by any act of his own, but also the duty to do everything that the contract presupposes that he will do to accomplish its purpose. (Citations.)' (Harm v. Frasher (1960) 181 Cal.App.2d 405, 417, 5 Cal.Rptr. 367, 374.)

The trial judge clearly recognized this principle of law when he stated in his memorandum of decision the following: 'Thus, the court has concluded that it was the intent of the parties, and the principal inducement to the construction contract, that both bowling greens should remain adjacent to the clubhouse and available to club members throughout the term of the clubhouse agreement, and that either through oversight or by tacit agreement the Club's right to use of the greens was neither explicitly set out in the clubhouse lease nor embraced in any further renewal agreements at the expiration of the latest green use agreement. And if that was not, in fact, the intent of the City--if the City cherished a secret and undisclosed intent to withdraw the greens while encouraging the Club to commit itself to paying for clubhouse construction--the City should be estopped from taking advantage of the Club's vulnerability. This is equally true today as it would have been had the City attempted to change its position by removing one or both greens immediately after inducing the Club to pay for the clubhouse, as the passage of years has only lessened the enormity and not the nature of such a wrong.'

Appellant's arguments against imposition of an implied covenant in the agreement between the Club and the City are without merit. Appellant's position is that the Club has what it bargained for, the use of the clubhouse. From the fact, however, that the only use to which the clubhouse may be put is to facilitate lawn bowling and the only lawn bowling greens available are those involved in this dispute, it is inescapable that the Club cannot receive the intended benefit from the contract unless the bowling greens remain in existence. There is no evidence presented suggesting that the Club and City contemplated any other use of the clubhouse and the lease itself clearly provides for this exclusive use. It is a reasonable inference from the evidence, in fact the only reasonable inference, that the parties intended that the arrangements they had followed for 30 years should continue.

Intervenors contend that the Club has no legally protectable interest for the reason that the Club pays no possessory interest tax. Contract rights are no less protectable because they are not subject to a possessory tax.

In its reply brief, intervenors argue that the implied covenant to maintain the greens is invalid as an improper delegation of legislative authority and attempt to apply principles articulated in County of San Diego v. Cal. Water, etc., Co. (1947), 30 Cal.2d 817, 186 P.2d 124, a case inapposite to the problem before this court. In County of San Diego, the court stated 'that neither the doctrine of estoppel nor any other equitable principle may be invoked against a governmental body where it would operate to defeat the effective operation of a policy adopted to protect the public.' (At p. 826, 186 P.2d at p. 130) The court therein was involved with the exclusive statutory procedure by which public roads may be abandoned. There is no statutory...