LITTON INTERN. DEV. CORP. v. City of Simi Valley

• Decision Date: 05 July 1985
• Docket Number: No. CV 82-6648-ER(Tx).,CV 82-6648-ER(Tx).
• Citation: 616 F. Supp. 275
• Parties: LITTON INTERNATIONAL DEVELOPMENT CORPORATION, Petitioner and Plaintiff, v. CITY OF SIMI VALLEY, the City Council of the City of Simi Valley, Robert O. Huber, Ann Rock, Clyde Evans, Vicky Howard and Greg Stratton, Respondents and Defendants.
• Court: U.S. District Court — Central District of California

616 F. Supp. 275

LITTON INTERNATIONAL DEVELOPMENT CORPORATION, Petitioner and Plaintiff, v. CITY OF SIMI VALLEY, the City Council of the City of Simi Valley, Robert O. Huber, Ann Rock, Clyde Evans, Vicky Howard and Greg Stratton, Respondents and Defendants.

No. CV 82-6648-ER(Tx).

United States District Court, C.D. California.

July 5, 1985.

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Paul R. Salerno of Cutler & Cutler, Los Angeles, Cal., for petitioner and plaintiff.

Bert Deixler of McCambridge & Deixler, Los Angeles, Cal., for respondents and defendants.

MEMORANDUM OPINION

RAFEEDIE, District Judge.

I. INTRODUCTION

This case came on for trial July 20, 1984 through July 25, 1984. Plaintiff Litton International Development was represented by Paul R. Salerno of Cutler & Cutler and defendant City of Simi Valley was represented by Bert Deixler of McCambridge & Deixler.

Plaintiff Litton International Development purchased a parcel of land in the City of Simi Valley in 1980 and, in 1981, was denied a permit to develop the property. According to the City the denial was because the proposed development was inconsistent with the City's General Plan. In 1982 the City amended its General Plan so that the parcel could only be used for residential development. Plaintiff challenges the City's 1981 and 1982 actions alleging the actions are unconstitutional or, alternatively, in violation of state law.

II. FACTS

In December 1980 plaintiff Litton International Development Corporation ("Litton") purchased a parcel of undeveloped land ("Litton parcel" or "parcel") of approximately four-and-one-half acres located at the southeastern corner of Erringer Road and Alamo Street in the City of Simi Valley ("the City") for $1,875,000. At the time of the purchase the Litton parcel's land use designation in the City's General Plan was General Commercial with a Hotel/Motel Node.¹

The first land use designation for the parcel, Convenience Commercial, had been adopted as part of the first General Plan for the City of Simi Valley in 1972. In 1980, the parcel's designation was changed to General Commercial with a Hotel/Motel Node.² On August 9, 1982 the final change in the land use designation occurred. By a vote of the City Council the General Plan was amended and the classification of the Litton parcel was changed to Intermediate Density Residential. It is this final change in the land use designation, and the events leading up to it, that are at issue in this litigation.

Litton first expressed interest in land in the City during mid-1980 when a Litton representative, Fulton Britt, approached the Director of the Department of Community Development for the City, Wayne Goldberg, and told Goldberg that Litton was looking for land to use for the construction of condominiums for temporary use by foreign students who would be trained at a nearby Litton facility. These condominiums would ultimately be sold for normal use as housing. Subsequently Litton modified its thinking and decided to construct a hotel that would first be used to house the foreign students and then be operated as a normal commercial hotel. Litton representatives and City planning officials met a number of times to discuss the proposed hotel development and, because of Litton's interest in facilitating a speedy approval of its plans and permits, Litton filed a "preapplication." (No. 80-9-22-57; Joint Exhibit No. 259 (hereinafter "Ex. ___")).

The preapplication process was designed by the City to expedite and encourage commercial development. Preapplication plans were not detailed and were submitted to the City for general comment so that developers could make modifications in their final development plans before formal approval was sought. The comments given during the preapplication process were advisory in nature.

Litton's entire first preapplication process was completed during the Fall of 1980 before December 1980 when Litton purchased the parcel. While the City's reaction was generally favorable at this early stage of the process, Litton was or should have been aware that there were potential problems with the proposal. As Litton stated in its proposed Findings of Fact:

At that time (the fall of 1980) the thought did occur to Wayne Goldberg that a problem might arise from Litton's plans to build a hotel in two phases, the first phase (for the Interim Use to house the foreign students) being less than the 100-unit hotel the City wanted. The problem related to the Planning Commission's concern that any hotel on the Litton Parcel having a size under 100 units may not be approved on the ground it would undermine the market for a larger hotel having over 100 units and restaurant and banquet facilities. Wayne Goldberg and Barbara Schoetz of the Department of Community Development discussed this problem while they were reviewing the Litton preapplication; specifically Barbara Schoetz asked Wayne Goldberg whether she should mention this potential problem to Litton when the City responded to the preapplication, to which Wayne Goldberg responded, "Mention but don't over kill" (Trial Testimony of Wayne Goldberg and Exhibit 297-9).

Plaintiff's Amended Findings of Fact and Conclusions of Law, ¶ 18. Litton contends that these potential problems with the development were not made known to it during the preapplication process. This contention is partially refuted by the letter written by the City to Litton formally responding to the preapplication. In that letter Barbara Schoetz of the City's Department of Community Development informed Litton of a number of potential problems with the proposal. She discussed the potential for opposition from the Neighborhood Council because of the residential character of the parcels surrounding the proposed hotel and the potential for Planning Commission opposition because of the plan to construct the hotel in two phases. Though not using the most comprehensible sentence structure, Schoetz flagged these two potential problems. She wrote:

The use of the areas to the single family housing to the east and southeast will be of great interest to the Neighborhood Council as far as noise, lights and possible night-time disturbances to the residential area. The plan, as submitted, is unspecific as to these areas.

The Planning Commission, during a recent General Plan update, expressed a desire for a motel that would have a minimum 100 units, would offer banquet-room and restaurant facilities; they did not want to see the market for such undermined by a smaller facility that was of a small scale and did not offer these facilities. Your facility appears that with a future addition this desire will be realized, although the Commission may want an assurance via design that would not permit the second phase of the parcel to be used for a different use.

(Exs. 43, 297; letter from Barbara Schoetz, Urban Planner Department of Community Development to Mr. F.E. Britt, dated October 2, 1980, regarding Preapplication 80-9-22-57; emphasis added.)

Thus, at the earliest stages of the planning process, the two issues which ultimately derailed the Litton proposal — opposition from single family homeowners adjacent to the site and a concern that the Interim Use might undermine the market for construction of a major hotel — were pointed out to Litton.

On December 2, 1980 Litton purchased the parcel.

A second preapplication was filed January 13, 1981. (No. 81-1-13-04; Ex. 397). Unlike the first preapplication, this filing identified Litton as the applicant. The City responded to the preapplication by form letter on January 22, 1981. The Department of Community Development, after preliminary analysis "suggested that Litton give careful consideration" to some potential problems with the application. First, the Department recommended that a formal permit application not be submitted without changes because Litton needed to address questions concerning parking, architectural specifications, and the consistency of the proposal with the General Plan. Second, in the "comments" section of the form letter Department stated: "This project will likely preclude other hotel facilities in the future and must therefore meet Council policy concerning desired future facility (sic) along freeway corridor." (Ex. 44).

On May 1, 1981 Litton filed a formal application for a Commercial Industrial Planning Development Permit (hereinafter "permit") to build what it called a "hotel" on the parcel. (PD-S 469, Ex. 45). Robert Cottle, a planner from the City's Department of Community Development evaluated the application. During his review he suggested, and Litton agreed to, a number of modifications in the proposal. (e.g. Ex. 48). Ultimately Cottle recommended to his supervisors, Wayne Goldberg and Barbara Schoetz, that the application be conditionally approved. For a number of reasons, Cottle's supervisors disagreed with his recommendation. Their concerns related to the proposed Interim Use for the facility. Litton had proposed that initially fifty-three (53) rooms would be constructed which would be used for housing foreign (Saudi Arabian) students (hereinafter "Interim Use"). The Interim Use would last five years during which time the hotel facilities would not be open to the public. At the end of the five-year period Litton planned to construct forty-nine (49) additional rooms and the facility would then be operated as a normal commercial hotel. Among the Department of Community Development's ("Department") concerns was that the construction of the hotel on the Litton parcel would deter or preclude the construction of another hotel in the City while at the same time not providing any hotel facilities during the five-year Interim Use. The Department recommended to the Planning Commission that the application be denied as inconsistent with the City's General Plan and as detrimental to the needs of the community (i.e. the need for an operating hotel facility).

Litton...