Buckley v. California Coastal Com.

• Decision Date: 01 December 1998
• Docket Number: No. B081544,B081544
• Citation: 68 Cal.App.4th 178,80 Cal.Rptr.2d 562
• Court: California Court of Appeals Court of Appeals
• Parties: , 98 Daily Journal D.A.R. 12,206 Peggy Ann BUCKLEY et al., Plaintiffs and Respondents, v. CALIFORNIA COASTAL COMMISSION, Defendant and Appellant. Peggy Ann BUCKLEY et al. Cross-complainants and Respondents, v. CALIFORNIA COASTAL COMMISSION, Plaintiff, Cross-defendant and Appellant

Page 562

80 Cal.Rptr.2d 562

68 Cal.App.4th 178, 98 Daily Journal D.A.R. 12,206

Peggy Ann BUCKLEY et al., Plaintiffs and Respondents, v. CALIFORNIA COASTAL COMMISSION, Defendant and Appellant.

Peggy Ann BUCKLEY et al. Cross-complainants and Respondents, v. CALIFORNIA COASTAL COMMISSION, Plaintiff, Cross-defendant and Appellant

No. B081544.

Court of Appeal, Second District, Division 2, California.

Dec. 1, 1998.

Review Denied Feb. 24, 1999.

Daniel E. Lungren, Attorney General of the State of California, Roderick E. Walston, Chief Assistant Attorney General, Jan S. Stevens, Senior Assistant Attorney General, Alan V. Hager, Supervising Deputy Attorney General, Joseph Barbieri, Matthew Rodriguez and Terry T. Fujimoto, Deputy Attorneys General, for Defendant and Appellant and for Cross-Defendant and Appellant.

Law Offices of Thomas M. Banks, Thomas M. Banks, Santa Monica, Shapiro, Rosenfeld & Close, Eliot G. Disner and Elizabeth E. Webb, Beverly Hills, for Plaintiffs and Respondents and for Cross-complainants and Respondent.

NOTT, J.

I.

The California Coastal Commission appeals from a judgment awarding $2,187,331.76 in damages, attorney fees and costs to respondents Peggy Ann and John Buckley for the taking of their property without compensation. ¹

We affirm the trial court's ruling that the Commission had no jurisdiction over the rear portion of the Buckleys' lot. However, the damage award is reversed because the evidence does not establish that the mistaken assertion of jurisdiction by the Commission amounts to a taking. (Landgate, Inc. v. California Coastal Com. (1998) 17 Cal.4th 1006, 73 Cal.Rptr.2d 841, 953 P.2d 1188.) For the reasons stated below, we also reverse the award of attorney fees.

II. FACTS AND PROCEDURAL HISTORY

In January 1988, the Buckleys purchased an undeveloped lot in Malibu, which was at the time an unincorporated area of the County of Los Angeles. The Buckleys intended to build a single-family residence on the lot, which is located in an established single-family residential community. They were informed by their real estate broker that the lot was exempt from review or regulation by the Commission for construction of a single family residence. The Buckleys paid $485,000 for the property, and they invested between $200,000 and $300,000 adding electricity, water, gas, a fence, a septic system, and a foundation for the garage to the property; and having the building and grading plans developed.

The lot is 2.75 acres, rectangular in shape, running lengthwise from east to west. The front portion of the lot is a level area of about 1.15 acres that descends into a steep ravine in the westerly or rear portion, covering about 1.6 acres. Before it was purchased by the Buckleys, significant road grading had occurred on the west portion of the lot, including a road cut along the slope of the ravine's north side wall.

In November 1988, the Buckleys retained a soils engineering firm. The geological engineer, Dale Glenn, testified that she first visited the site in 1988 with the soils engineer, who "indicated that there were some stability problems with the canyon and that in order to accomplish development of the site, that it would be very likely that the canyon would have to be filled in and that we needed a study in that canyon." However, Glenn described the original grading plan, trial exhibit 30, as a plan for grading the front portion of the lot. In her direct testimony, she was asked whether, as of February 27, 1990, "would it have been possible for the Buckleys to develop their property by simply grading the portion of the property shown in exhibit 30 and constructing the residence that was permitted in 1989?" Glenn replied, "Yes."

Meanwhile, although they did not yet have grading plan approval, by August 15, 1989, the Buckleys had stockpiled fill dirt on the front portion of the lot. On that date, the Buckleys received a letter from the Commission stating that the property was located in the coastal zone, and that a coastal development permit was required for any development. On August 25, in response to the Buckleys' answer to its earlier letter, the Commission agreed that the County had the authority to exempt from coastal development permits development projects involving new single-family homes. ²

A subsequent letter from the Commission stated that because the rear portion of the lot was in an environmentally sensitive habitat area (ESHA), the rear portion was not part of the exemption. The Buckleys were informed that they could either seek a coastal development permit or submit to the Commission a valid exemption issued by the County. They were warned that if they chose the latter, they would not be allowed to develop the rear of the property where the ravine is located.

The Buckleys replied that they were not developing the rear portion of the lot and that if they decided to do so in the future, they would seek a coastal development permit.

The County issued the exemption on October 24, 1989. The Buckleys' plans for grading the front portion of the lot and building a residence of 15,000 square feet were approved by the County.

In the Fall of 1989, the Buckleys decided to sell the lot rather than build on it. They were advised by real estate brokers in the area that a dispute with the Commission would have a negative impact on the selling price. John Buckley testified that he was told that with a permit to build, the property was worth between $1.5 and 2 million.

The Buckleys' expert, Frederick Chin, a real estate consultant and appraiser, testified that the land value appreciated approximately 115 percent a year between January 1988 and May 1990; and that the lot was worth $1.3 million in May 1990.

A new grading plan, dated February 1990 and referred to as exhibit 31 at trial, was readied for submission to the County. It called for three building pads in the rear section of the lot: Two pads in the ravine and one on the ridge. The pads were to be for a garden, a riding ring or tennis court, and a guest house. The plan was submitted to the County in April 1990, but not submitted to the Commission until October 1990.

Dale Glenn testified that the new grading plan would have stabilized the ravine. However, she admitted on cross-examination that the plan was designed to increase usable space. She said, "The canyon was unstable, it needed to be stabilized, that was going to create a great expense for the Buckleys and to offset some of that expense, we recommended that they do a grading solution that would gain saleable or some usable land on the property as opposed to some other method which we hadn't explored even at that time ... for instance, soldier piles would put a great expense on the site and produce nothing." ³

In February 1991, the Commission's staff report recommended denial of the request because the development would be inconsistent with the ESHA policies of the California Coastal Act of 1976 (Pub. Resources Code, s30000 et seq.). Glenn testified that a few days after the rain in March 1991, just before the Commission's March 13 hearing on the permit application, she discovered a landslide condition on the lot. The Buckleys informed the commissioners that a landslide had developed in the ravine and that it threatened the adjacent properties. The Commission denied the application. The Buckleys did not appeal the Commission ruling.

Just after the Commission's denial, the County determined that the Commission had no jurisdiction over any portion of the lot. As testified to by Dale Glenn, the County approved the later grading plan, exhibit 31, on March 19, 1991. The Buckleys began grading the lot. The Commission sent a stop work order in March 1991 which stated: "RE: Grading in a canyon, outside the exclusion area with valid coastal development permit." The order notified the recipient "to stop all work. Any additional unpermitted work on this site will be considered ... a violation of the Coastal Act." Shortly after that, Malibu became an incorporated city, and a grading and construction moratorium was imposed on all city properties.

At some point, the Buckleys decided to grade the rear portion of the lot based on the County approval they received. In June 1991, the Commission again hand delivered a stop work order. The order notified the Buckleys "to stop all unpermitted work. No grading is permitted on this property. A Coastal Permit has not been issued for this project."

In August 1991, the Attorney General sent a letter to the attorney who represented the Buckleys at the Commission hearing. The letter stated that "the Commission denied their permit application to develop the rear portion of their lot.... Despite the denial and a stop work notice ... the Buckleys have continued to perform grading and filling on the site in violation of the Coastal Act."

In November, after a County geologist observed an unstable natural slope on the rear of the lot and the County ordered the Buckleys to abate the landslide that was occurring there, they resumed grading. They also filed for an emergency permit with the Commission on the basis that there was a landslide condition that needed immediate attention. An engineer from the Commission and a geologist from the City inspected the lot and concluded that the landslide condition did not pose an imminent threat but was a normal consequence of the rains. The engineer and the geologist also concluded that the grading plan submitted by the Buckleys was not the minimum necessary to mitigate the geological conditions. The Commission denied the emergency request on those grounds. The Buckleys continued grading from November 27, 1991, until the Commission issued the final stop-work order on December 5, 1991. It again stated that they had to "stop all unpermitted work. No grading or construction or landfill is permitted on this property. A Coastal Permit has not been issued for this project."

The Buckleys filed this...