City of Tiburon v. Northwestern Pac. R. Co.

• Decision Date: 06 February 1970
• Court: California Court of Appeals Court of Appeals
• Parties: CITY OF TIBURON, a municipal corporation, Plaintiff and Appellant, v. The NORTHWESTERN PACIFIC RAILROAD COMPANY, a corporation, and Michel Y. Demaurex, Defendants and Respondents. Civ. 25314.

Page 469

84 Cal.Rptr. 469

4 Cal.App.3d 160

CITY OF TIBURON, a municipal corporation, Plaintiff and Appellant, v. The NORTHWESTERN PACIFIC RAILROAD COMPANY, a corporation, and Michel Y. Demaurex, Defendants and Respondents.

Civ. 25314.

Court of Appeal, First District, Division 1, California.

Feb. 6, 1970.

Hearing Denied April 1, 1970.

Robert I. Conn, Richard H. Breiner, San Rafael, for appellant.

Lawrence L. Howe, San Francisco, for respondent Northwestern Pacific RR Co.

Philip E. Diamond, Landels, Ripley, Gregory & Diamond, San Francisco, for respondent Demaurex.

SIMS, Associate Justice.

Plaintiff, City of Tiburon, a municipal corporation, has appealed from a judgment of dismissal of its action for declaratory relief, and from an order denying its motion to reconsider and for leave to file a supplementary and first amended complaint. ¹ The order and judgment were both entered after the court had sustained without leave to amend the separate demurrers of the defendant Northwestern Pacific Railroad Company, as owner, lessor, optionor and grantor, and of the defendant Demaurex, as successor to the rights of a lessee, optionee and grantee from the railroad company of certain lands which the city alleged had been divided and subdivided in violation of state law and local ordinances.

The principal issue, as stated by the railroad, is whether the city's pleadings allege facts sufficient to show the existence of an actual and justiciable controversy with either of respondents, as distinguished from a controversy of either a moot, academic or hypothetical character. Other contentions raise the questions of (1) the propriety of granting either a prohibitory or mandatory injunction with respect to an alleged violation or threatened violation of the Subdivision Map Act (Bus. & Prof.Code, Div. 4, Pt. 2, Ch. 2, § 11500 et seq.) or of an applicable local ordinance; (2) the existence and extent of the power of a municipality to control the division of land other than into a 'subdivision' as defined by state law; (3) whether the city has an adequate remedy at law and, if so, whether that remedy precludes the granting of injunctive or declaratory relief; and (4) whether the granting of declaratory or injunctive relief would unwarrantedly involve the court in administrative processes.

It is concluded that the city has stated a cause of action entitling it to a declaration of the status of the lands referred to in the complaint; that the city's right to injunctive relief will, subject to the principles enunciated herein, depend upon the proof; that insofar as the court finds that land has been divided in violation of a local ordinance, as distinguished from the Subdivision Map Act it should determine the validity of such ordinance; that the existence of criminal sanctions and the right to self-help does not preclude resort to an application for declaratory relief and such injunctive relief as may be appropriate; and that the determination of the question of the right to regulate as distinguished from the determination of the validity of the specific design and improvement to be imposed upon the subject lands, does not unwarrantedly involve the court in the administrative process.

The facts pleaded

'Given the procedural posture of this case, we must accept as accurate the factual allegations of plaintiff's complaint. (Citations.)' (Endler v. Schutzbank (1968) 68 Cal.2d 162, 165, 65 Cal.Rptr. 297, 299, 436 P.2d 297, 299. See also, South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, 38 Cal.Rptr. 392; and Wilson v. Transit Authority (1962) 199 Cal.App.2d 716, 721, 19 Cal.Rptr. 59.)

In Wennerholm v. Stanford Univ. Sch. of Med. (1942) 20 Cal.2d 713, 128 P.2d 522, 141 A.L.R. 1358, the court ruled, 'Where a complaint is sufficient against a general demurrer, however, and any uncertainties or ambiguities in the pleading can be corrected by amendment, it is apparent that denial of leave to amend results in a disposition of the cause upon technical grounds alone. The plaintiff who has stated a cause of action in such a case is denied a trial on the merits of his action if any of the grounds of special demurrer are well taken, despite the fact that the deficiencies can be corrected. It has been held, under such circumstances, that denial of leave to amend constitutes an abuse of discretion even though it be conceded that the trial court had authority to sustain the special demurrer because of defects in the form of the pleading. (Citations.)' (20 Cal.2d 713, 718--719, 128 P.2d 522, 525. See also, Halsted v. County of Sacramento (1966) 243 Cal.App.2d 584, 586, 52 Cal.Rptr. 637; Burt v. Irvine Co. (1965) 237 Cal.App.2d 828, 848, 47 Cal.Rptr. 392; and C. Dudley De Velbiss Co. v. Kraintz (1951) 101 Cal.App.2d 612, 617, 225 P.2d 969.)

Application of the foregoing rule dictates that the allegations of the city's proposed amended complaint be considered as well as the averments found in the original complaint. (See, Burt v. Irvine Co., supra, 237 Cal.App.2d at p. 849, 47 Cal.Rptr. 392.)

Each complaint sets forth the capacities of the parties, including the original lessee and optionee, Demaurex' predecessor, Tiburon Tidelands Co., a corporation, which, although named as a defendant in the action, is not a party to these proceedings. The city sets forth four ordinances it has adopted, commencing with and since its incorporation June 23, 1964, regulating the division of land within the city. The provisions of these ordinances, which are set forth at length as exhibits to the complaints, purport to embrace not only lands divided into subdivisions of five or more parcels as defined in the Subdivision Map Act (BUS. & PROF.CODE, S 11535 )² but also lands divided into any lesser number of parcels.

According to the allegations, on and before October 28, 1964, the railroad was the owner in fee of a single large parcel of real property containing approximately 49 acres more or less, including several acres of tidelands, and over 1,000 feet of shoreline, and situated in the center of the downtown central waterfront district of the city. In the original complaint it was alleged that the real property owned by the railroad was shown on the latest adopted county tax roll as a unit or contiguous units (see § 11535, fn. 2 above). This allegation is not found in the proposed amended complaint, but that document is replete with allegations that the lease, option and conveyances hereinafter referred to violated the Subdivision Map Act.

Both complaints refer to a lease with an option to purchase from the railroad to the tidelands company dated October 28, 1964. The lease, a copy of which is attached to the original complaint, is for a term of one year from September 17, 1964. The land which is the subject of the lease and option is referred to in the lease as shown on an attached print. No print is attached to the filed copy, but each of the complaints alleges that the lease described the leased property by setting forth a legal metes and bounds description of five separate and distinct parcels of property. Copies of these descriptions were filed with the original complaint. The lease grants the lessee the right to purchase for one price three parcels designated on the print ³ (allegedly three of the parcels described), and if that option is exercised the further option to purchase for a further single price the remaining two parcels (also described in the exhibit to the complaint). In the original complaint it is alleged that these parcels had not theretofore been shown as separate units on the county or state tax rolls or public records. ⁴ In the amended complaint it is alleged that the five parcels referred to in the lease and described in the complaint comprise approximately 200,000 square feet of land, and include 1,000 feet of shoreline, and approximately 13 acres of tidelands.

It is further alleged on information and belief that on or about September 13, 1965 the lessee purported to sell and assign its rights, including those under the option, to the defendant Demaurex and some 20 fictitious defendants; that the lessee at the same time delivered five deeds to Demaurex and others covering each of the five parcels referred to in the lease, and notified the railroad of the exercise of the option; and that in April 1966 the railroad conveyed its interest in the five parcels, and Demaurex and others thereupon acquired title to those parcels.

No application has ever been made to the city, nor has a permit of any type ever been issued for the division or subdivision of the lands referred to, either under the Subdivision Map Act, or under any of the city ordinances. It is alleged that each of the transactions--the lease-option, the transfer of rights, and the transfer of title-violates the state law and local ordinances; that each of the defendants had knowledge that the transactions were subject to such regulation and knowingly and wilfully disregarded the regulatory measures. In the proposed amended complaint it is alleged that the defendants conspired to evade the expense of complying with such design and improvements as might be required under the regulatory measures. From exhibits attached to the proposed amended complaint it appears that on February 10, 1966 the lessee filed an action against the railroad and its assignee for rescission of an assignment to Demaurex dated September 16, 1965; that on April 12, 1966 Demaurex, through his attorney, advised the railroad that he was insisting on receiving 'good and sufficient Grant Deeds,' one for each of the five parcels described in the agreement, and that the railroad would have to comply with 'all City, County and State Laws and Ordinances relating to the conveyances * * *,' noting that the city requires a permit for the conveyance of (really division into) two or more parcels; and that by declaration dated April 19, 1966, Demaurex' attorney represented to the court...