Frisco Land & Mining Co. v. State of California

• Court: California Court of Appeals
• Writing for the Court: SIMS
• Citation: Frisco Land & Mining Co. v. State of California, 141 Cal.Rptr. 820, 74 Cal.App.3d 736 (Cal. App. 1977)
• Decision Date: 07 November 1977
• Parties: FRISCO LAND AND MINING CO., Plaintiff and Appellant, v. STATE of California, Defendant and Respondent. Civ. 39320.

Page 820

141 Cal.Rptr. 820

74 Cal.App.3d 736

FRISCO LAND AND MINING CO., Plaintiff and Appellant, v. STATE of California, Defendant and Respondent.

Civ. 39320.

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

Nov. 7, 1977.

Hearing Denied Jan. 4, 1978.

William G. Fleckles, Benjamin P. Bonelli, Greenbrae, for plaintiff and appellant.

Evelle J. Younger, Atty. Gen., Roderick Walston, Daniel J. Taaffe, Deputy Attys. Gen., San Francisco, for defendant and respondent.

SIMS, Acting Presiding Justice.

Plaintiff, the owner of a 650-acre subdivision, substantially all of which was embraced within the permit area of the coastal zone created by the California Coastal Zone Conservation Act of 1972 (Pub. Resources Code, §§ 27000-27650, particularly §§ 27100 and 27104), has appealed from an order granting the defendant State of California's motion for summary judgment and the judgment entered thereon. ¹ The plaintiff sought damages ² in inverse condemnation claiming that his land was taken by the state through the acts and omissions of the North Central Coast Regional Commission, a regulatory body created by the provisions of the coastal act.

The thrust of the subdivider's argument below and on appeal is that the state, through the passage of the coastal act and the subsequent acts and omissions of the regional commission, deprived it of the only use it had for its lands, that is, the sale of lots for the building of single family homes, and thereby took its property without the payment of just compensation. The trial court concluded on the record before it that the passage of the coastal act, although it affected the marketability of all projects within the permit area, did not constitute inverse condemnation; that the regional commission recognized the subdivider's vested right to complete the improvements in one unit of the subdivision; that the subdivider had no vested right to construct improvements on its lots; and that the conditions the regional commission proposed to and did impose on the construction of improvements on lands within the subdivider's holdings were reasonable and necessary to carry out the purposes of the coastal act. It also concluded that the subdivider was barred from seeking any relief because of a failure to exhaust its administrative remedies. ³ An examination of the undisputed facts, the purposes and provisions of the coastal act, and the precedents construing it reflects that the conclusions of the trial judge were correct. The judgment must be affirmed. We first set out the status of the subdivider's property as it existed prior to November 8, 1972, the effective date of the coastal act, and then review the various acts and omissions which he contends constituted a taking of his property.

Background

In March 1971 the subdivider acquired the subdivision known as Oceana Marin located at Dillon Beach in Marin County. The property included some unsold lots in units 3 and 4 and approximately 550 acres of undeveloped land. It was subject to an existing purchase money deed of trust in the principal sum of $330,000 which required payments of $60,000 per year on principal and interest. Tentative subdivision maps of units 5 and 6 covering the 550 acres of land had been approved by the Marin County Planning Commission on March 16, 1970.

The subdivider recorded the final subdivision map of unit 5 on March 3, 1972. The land was divided into 146 single family lots, and as a condition of recording the final map, the subdivider posted a $500,000 subdivision performance bond with the county to guaranty the installation of all subdivision improvements. Prior to the recording of the final map the subdivider applied for and secured permits from five agencies, and thereafter from three more. An assessment district was formed for unit 5 and $660,000 was raised by the sale of special assessment bonds to pay a part of the costs of installing domestic water, sewage disposal and electrical systems in that unit of the subdivision. The principal and interest payments, which were a lien on the land, amounted to approximately $90,000 per year. The subdivider expended about $270,000 on subdivision improvements, and, at the time of the adoption of the coastal act, was committed to the expenditure of $200,000 more in order to complete streets within the unit.

The time for filing the final subdivision map for the contemplated 174 single family lots in unit 6 had been extended to August 1973. During 1972 the subdivider proceeded with engineering work preparatory to recording such a final map.

Admittedly the plaintiff was subdividing the land in Oceana Marin for the purpose of selling lots to the public as residential building sites. It is not engaged in the business of building homes, had never constructed a house, and did not intend to do so at Oceana Marin.

The sale of lots to the public in Oceana Marin commenced in June 1972, and by November 8, 1972, 20 lots in Unit 5 had been sold, and several lot owners were planning to build homes on their newly acquired property in the following spring.

Period November 8, 1972 March 1, 1973

The subdivider categorically states that on November 8, 1972, following the majority vote to adopt the coastal act, his lots immediately became unsaleable, and that no one knew whether the lots could be built on. It would be more accurate to state that all interested were put on notice of the provisions of section 27400, which provided in pertinent part: "On or after February 1, 1973, any person wishing to perform any development within the permit area shall obtain a permit authorizing such development from the regional commission . . ." Such was the purport of an "Amended Final Subdivision Public Report" which the State Department of Real Estate issued on January 26, 1973, with respect to unit 5 of Oceana Marin.

The subdivider, with justification, does complain that since the regional commission was not even organized until February 1973 it was impossible to obtain clarification regarding the use it could make of its property, and that its letter of inquiry on January 15, 1973, to a newly appointed member of the regional commission went unacknowledged and unanswered until March 1, 1973. In San Diego Coast Regional Com. v. See the Sea, Limited (1973) 9 Cal.3d 888, 109 Cal.Rptr. 377, 513 P.2d 129, the court ruled that the coastal act required a coastal permit for construction commenced after February 1, 1973, but did not require one for builders performing substantial lawful construction of their projects prior thereto. (9 Cal.3d at p. 890, 109 Cal.Rptr. 377, 513 P.2d 129. See also Environmental Coalition of Orange County v. Avco Community Developers, Inc. (1974) 40 Cal.App.3d 5l3, 522-523, 115 Cal.Rptr. 59.) The majority opinion recognized that financial hardship was caused by the coastal act, and attempted to minimize it as follows: "Had the act been intended to require a permit for completion of construction commenced before 1 February, the requirement would as a practical matter have resulted in a moratorium on all construction in the permit area. The built-in delays incident to the issuance of permits, which could exceed seven months (§§ 27420, 27423), would have necessitated work stoppages for all development along the California coastline after 1 February 1973 for a significant period (except the rare uncompleted projects commenced prior to 1 April 1972). Such interference with construction in progress, tantamount to a moratorium, would result in serious economic dislocations not contemplated by the act, its authors, or the voters. (P) Therefore, in the absence of language in the act imposing a moratorium, it is reasonable to conclude the voters intended none." (Id., 9 Cal.3d p. 892, 109 Cal.Rptr. p. 379, 513 P.2d p. 131, fn. omitted.)

Despite the ruling in the foregoing case, a property owner could only proceed at his peril in performing any development because the provisions of section 27404 only expressly exempted developments in which substantial work had been performed pursuant to a building permit, prior to April 1, 1972 (subsequently Stats. 1973, ch. 28, § 1, effective April 18, 1972, amended to Nov. 8, 1972) and the act provided severe civil penalties for its violation (§§ 27500 and 27501). It was subsequently held that an application for a claim for exemption as provided by the statewide coastal commission's rules was a necessary predicate to raising a vested right to an exemption in court. (South Coast Regional Com. v. Gordon (1977) 18 Cal.3d 832, 834 and 837, fn. 4, 135 Cal.Rptr. 781, 558 P.2d 867, distinguishing San Diego Coast Regional Com. v. See the Sea, Limited, supra ; and State of California v. Superior Court (Veta Company) (1974) 12 Cal.3d 237, 249-250, 115 Cal.Rptr. 497, 524 P.2d 1281; and Davis v. California Coastal Zone Conservation Com. (1976) 57 Cal.App.3d 700, 708, 129 Cal.Rptr. 417.)

The subdivider is entitled to challenge the constitutionality of the coastal act on its face even though it failed to make such a challenge before the regional commission at the time it applied for an exemption, or in its subsequent application for a permit. It cannot, however, challenge the constitutionality of the manner in which the provisions of the act were applied to him by the regional commission without having raised constitutional objections before that body. (State of California v. Superior Court (Veta Company), supra, 12 Cal.3d 237, 250-252, 115 Cal.Rptr. 497, 524 P.2d 1281.)

The question of the propriety of delaying any right to secure a permit for the period between November 1972 and February 1973, or the right to recover compensation for that delay, does not appear to have been expressly considered. Nevertheless, it is embraced within the principles that have sustained the validity of imposing a moratorium for a four year period to formulate a coastal plan, and that have denied the right of the property owner to recover damages for inverse...