City of Los Angeles v. Superior Court of L.A. Cnty.

• Decision Date: 12 April 2011
• Docket Number: No. B225082.,B225082.
• Citation: 194 Cal.App.4th 210,124 Cal.Rptr.3d 499,11 Cal. Daily Op. Serv. 4377,2011 Daily Journal D.A.R. 5273
• Court: California Court of Appeals Court of Appeals
• Parties: CITY OF LOS ANGELES, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Peter Plotkin et al., Real Party in Interest.

194 Cal.App.4th 210

124 Cal.Rptr.3d 499

11 Cal. Daily Op. Serv. 4377

2011 Daily Journal D.A.R. 5273

CITY OF LOS ANGELES, Petitioner,

v.The SUPERIOR COURT of Los Angeles County, Respondent;

Peter Plotkin et al., Real Party in Interest.

No. B225082.

Court of Appeal, Second District, Division 4, California.

April 12, 2011.

See 11 Miller & Starr, Cal. Real Estate (3d ed. 2001) §§ 30:17, 30:21; 8 Witkin, Summary of Cal. Law (10th ed. 2005) Constitutional Law, § 1235; Cal. Jur. 3d, Eminent Domain, § 341; Cal. Civil Practice (Thomson Reuters 2010) Real Property Litigation, § 15:129.

Carmen A. Trutanich, City Attorney, Kerrin Tso and Michael S. Kaplan, Deputy City Attorneys, for Petitioner.

No appearance for respondent.

Callahan, Rogers & Dzida and Joseph S. Dzida, for Real Party in Interest.

MANELLA, J.

Petitioner City of Los Angeles (the City) sought writ review of the trial court's grant of real parties' motion for summary adjudication. The court found that the City's creation of “condemnation blight” obligated the City to pay compensation to real parties in their action for inverse condemnation. To support their motion, real parties, who own properties located near the Los Angeles International Airport (LAX), established that the City has been buying properties in their neighborhoods through voluntary acquisition, relocating the residents and demolishing the structures, leaving the land vacant. Real parties did not, however, establish that the City had a plan to use the land acquired for a public purpose or that it intended to acquire their properties or any other properties in the area through condemnation. Accordingly, we conclude that real parties failed to establish entitlement to summary adjudication on their inverse condemnation claim.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Complaint

In July 2009, real parties Peter Plotkin, M & M Plotkin Enterprises, L.P., George Zayats, Jr., Genevieve Goldberg, G.P. Investment, the Peter & Masha Plotkin Memorial Foundation and Raymond R. Pablo brought suit against the City for “[i]nverse [c]ondemnation” and “[d]amages due to [c]ondemnation [b]light.” The complaint alleged that the City, acting by and through its Department of Airports (also known as Los Angeles World Airports or LAWA), announced an expansion plan for LAX into the nearby neighborhoods of Manchester Square and Belford where real parties owned parcels of real property.¹ The complaint further alleged that the City had “gone beyond mere planning” and had acquired most of the properties in those areas. According to the complaint, after purchasing a property, the City's practice was to raze any structures on it, or vacate and fence it. With respect to some properties, the City first allowed the structures to be used for fire department practice or for the filming of special effects, such as explosions and fires. Real parties contended that as a result of the City's activities, the value of their properties had diminished and that they had suffered a loss of rental income. Real parties also contended that the City had “gained de facto control over [their] property,” that it was “effectively the only buyer and market for the property,” and that it was “squeezing [real parties]” in order to “acquire [their] property on its own terms, on its own schedule and at its own convenience.”

In the prayer, real parties sought “damages in an amount according to proof” and “such other and further relief as the court deems just and proper,” but did not seek to require the City to purchase their properties for fair market value.

B. Motion for Summary Adjudication

1. Moving Papers

Real parties moved for summary adjudication. They identified the following two issues as ripe for resolution: (1) whether the City's creation of “condemnation blight” resulted in a duty to pay just compensation to real parties; and (2) whether real parties' inverse condemnation claim was barred by the statute of limitations.² To support summary adjudication of these issues, real parties established, or endeavored to establish, the facts set forth in the following paragraphs.

At some point, the City began to acquire properties in the Manchester Square/Belford areas.³ By the time this litigation commenced, the City had expended over $225 million acquiring Manchester Square properties and over $40 million acquiring Belford properties. By August 2008, it had acquired 72 percent of the multi-family dwellings in those areas; only 81 out of 286 remained in private hands. In addition, it had acquired 265 out of 279 single-family dwellings.

Prior to 2007, the City had demolished “a minority” of the apartment buildings it had acquired in Manchester Square and Belford. In 2007, it announced in a newsletter that “the accelerated pace of demolitions in Manchester Square and Airport Belford” was “ ‘continu[ing]’ ” and that by midsummer, 150 apartment buildings would have been “ ‘cleared.’ ” The newsletter forecast that “ ‘by the end of 2008[,] all vacant structures owned by the Airport will have been demolished.’ ” ⁴ By August 2008, 50 percent of the structures acquired by the City in the two areas had been demolished.

In March 2009, the City circulated a flyer “displayed and available [to residents] from boxes at strategic locations in [Manchester Square and Belford].” It was entitled “Your Demolition Questions Answered,” and stated: “The Airport has a policy of demolishing all properties it purchases as a means of improving safety and security in Airport Belford and Manchester Square. The demolition of all Airport-owned vacant structures will be completed by May, weather permitting. As the Airport acquires additional properties, these structures will be grouped together and demolished in phases.” ⁵

Real parties sought to establish that the City's conduct “was deliberately intended and designed to result in blight, to encourage flight from these neighborhoods, and to reduce property values in the area so that the Airport could acquire the remaining parcels (including [real parties'] lands) more cheaply,” “imposed a direct and special interference on [their] propert[ies],” and “effectively froze the market for property in Manchester Square and Belford.” The evidence to support that the City deliberately intended to blight the areas consisted in part of the deposition of Airport acquisition program manager, Lourdes Romero, who had said that the Airport had allowed the employees of its outside management company to live in some of the buildings it acquired. Real parties contended this meant that “[t]he [City] did not have to vacate the buildings it acquired. It could have left the residents in place until its own plans were firmed up.” The statement of facts asserted that the City “could end the blight by simply restoring these neighborhoods to use” and that it could “rent the buildings it is now demolishing or it could develop uses on the demolished and vacated properties rather than leaving them vacant.” Real parties also presented evidence that prior to demolition, some of the structures on the acquired properties were used for police or fire training, that the City allowed film crews to use some vacated buildings to stage explosions and fires, and that the City did not always keep the vacated properties free from trash and debris or provide adequate landscape maintenance.

To support “direct and special interference with their properties,” real party Peter Plotkin prepared graphs showing that vacancies in the apartment buildings owned by real parties had gone from approximately three percent in June 2006 to close to 18 percent in May 2009. He stated that the vacancy rates “began to spike concurrently with LAWA's intensified activity [in 2007]” and that “[t]he spike in vacancy rates preceded the real estate recession which began in late 2008.” Plotkin further stated: “This is not the neighborhood that existed when I purchased the subject properties and built apartments on them during the 1960's through the 1980's. Anyone visiting Manchester Square now would see that the Airport has acquired huge swaths of properties and demolished the buildings on them. Anyone visiting Manchester Square now would also see that the activity is ongoing and that there is more to come.” The statement of facts also cited the staff report prepared in conjunction with Resolution No. 23654, which had stated that “the subject neighborhoods ‘have been significantly changed by’ [the Program]” due to the acquisitions and demolitions.

With respect to the inability to sell their property to third parties, the statement of facts conceded that real parties had not attempted to sell to outside buyers, but asserted without citation to evidence that “other buyers, knowing all of the facts (i.e. that LAWA had already bought up most of the property, and that the neighborhoods would be progressively blighted and abandoned) would take their business elsewhere.” The statement of facts quoted the staff report prepared in conjunction with Resolution No. 23654 to the effect that deferring purchase of the property at issue or discontinuing the Program could “[n]egatively affect the owner's ability to sell at this time” and “[r]esult in inverse condemnation claims.” ⁶

In the statement of facts, real parties asserted that “LAWA claims to have no plan to develop or use the properties at this time.” (Italics added.) Real parties did not, however, attempt to establish that this claim was false. To the contrary, the statement of facts repeatedly stressed that there was “no plan” for the properties the City acquired in Manchester Square and Belford, other than to eventually acquire all the properties in those two areas through the voluntary acquisition program and to demolish the structures. The statement of facts specifically quoted from the staff report prepared in conjunction with Resolution No. 23654, stating that there was no “ ‘specific plan for development [of the property within the Program...